TCWC Organizes On Tax Abatements to Major Corporations and Developers: A Living Wage; Diversity in Hiring; and Local Labor Should Be Requirements

Editor’s Note: As many of you will remember, the Tompkins County Workers’ Center (TCWC) mobilized numerous people to speak out at Tompkins County Development Agency meetings in mid-March 2013 to speak out against the utter simplicity that major corporations have these days in Ithaca and Tompkins County in obtaining multi-year tax abatements for their projects. In March, the case we spoke up about was the Hotel Ithaca project that would carry a deluxe brand of a Marriott Hotel on The Commons, just behind Madeline’s Restaurant situated in a small space abutting Green St.

Many of you will not know that the City of Ithaca smoothed the way to making tax subsidies to such corporations exceedingly easier in November 2012 through its CIITAP Program (Community Investment Incentive Tax Abatement). The City of Ithaca’s prior program differs from the current program in two ways: not only did the CIIP (Community Investment Incentive Program) include a development’s commitment to providing community benefits as a consideration in qualifying for a tax abatement, but it also required the endorsement of Common Council. Under the City’s CIITAP Program, a developer need only show that the project fulfills three requirements: 1) an increase in assessable property value of $500,000; 2) that the building be 3 storys or restore a current building; and 3) is located in the specified zone which targets downtown, West State/MLK Jr. Street, and the West End/Inlet Island areas.

It is the position of the TCWC that no corporation should get such multi-year tax abatements unless they can demonstrate that everyone involved with the proposed business project meet three criteria: 1) everyone involved with the building of the project, as well as those that will be working in the finished product, will be making a Living Wage as defined and updated by Alternatives Federal Credit Union every two years; 2) that the developers and the finished product will have a Diversity Hiring Plan in place; 3) that local labor will be utilized in a majority fashion in the building of the project.

The following is a letter that Ithaca City Councilperson, Cynthia Brock (1st Ward) sent to the City’s Planning and Economic Development Committee in advance of its August 14th, 2013 meeting. The letter is urging the City to reexamine the review and input process in place in the current CIITAP Program, and to consider the recent Hotel Ithaca project, and the community’s demand for tax abatements to be tied to a developer’s commitment to benefit the local community in terms of wages, equal opportunity and labor.

I requested this discussion [with the City of Ithaca’s Planning and Economic Development Committee] following the ARGO Hotel/Marriott Hotel process which was approved by TCAD in March 2013. To date, ARGO/Marriott is the first and only project to utilize the CIITAP, after its adoption by Council in October 2012. I am grateful that Council will have this opportunity to review and comment on our impressions and experience with the CIITAP process prior to the Holiday Inn CIITAP application which, as I understand, is coming forward shortly.

I feel there are several shortcomings with the existing CIITAP process – namely:
1) the lack of opportunity to receive feedback from the developers to questions and concerns brought forward in the public hearing,
2) the lack of information made available to Council on the project application
3) without developer feedback, and without access to information contained in the developer’s CIITAP application prior to the public hearing or approval by the City, there is a lack of opportunity to provide productive input of community interests and expectations at the initial stages of the negotiation process between TCAD and the developer. In the case of URGO/Marriott, I feel this resulted in community outcry, and feeling of frustration with the loss of transparency, accountability and oversight into public processes.

While the CIITAP program is designed to incentivize development in the urban core, residents, community members and elected officials have questioned the CIITAP and how it does little to ensure that every day residents and workers of the city and county will see any benefit from the over $4.6 million in tax abatements received by URGO/Marriott Hotels, in terms of quality jobs, equitable employment opportunities, or environmental commitment, while conversely guaranteeing the project developers a 20% return on investment.

With the URGO/Marriott project, it should be noted that the various taxing entities will lose the following amounts of money as a result of this tax abatement from this project: Tompkins County: $728,000 (property and mortgage recording tax), the City at $1,300,859, the school district at $1,686,084, and sales tax abatements of $892,000 over ten years. It is also estimated that as a result of this project, municipalities will receive $3,412,460 in new taxes ($630,056 County; $1,211,779 City; and $1,570,625 school) over ten years.