This could be a tough fight, but the project does have a lot of local backing (from the Ithaca Journal):
IDA to weigh fate of tax breaks for Marriott hotel
County-level board considers abatements under city program promoting downtown density
A rendering viewed of the proposed Ithaca Marriott as seen from the corner of State/Martin Luther King Jr. and Aurora Streets. / COOPER CARRY / URGO HOTELS
6:56 PM, Mar 17, 2013
The fate of the 159-room, 10-story Marriott hotel proposed for the east end of the Commons may lie now with the board of the Tompkins County Industrial Development Agency.
The board plans to decide Wednesday evening if it will grant a package of tax abatements to the project developer under a city program aimed at luring development downtown.
The hotel is seen as a potential anchor for The Commons and a boost to not just the tax base, but the city’s tourism industry.
Some local advocates, however, have urged that the breaks not be given without a promise from the developer to pay a certified living wage to all employees and to use local construction workers, also paid at the prevailing scale. The development company has so far not been willing to make such promises, according to its application for the incentives program.
Hotel Ithaca LLC, with Bethesda, Md.-based Urgo Hotels as the company that would own and operate the hotel, are applying for the city program’s enhanced abatement program.
The program forgives 100 percent of the added value of the property in its first year, 90 percent the second, 80 percent the third and so forth for 10 years until at the end of the period, the owner would be responsible for the full value. The abatements would apply to city, county and Ithaca City School District taxes.
The estimated abated taxes in the period would be $3.6 million, with $3.4 million in new taxes paid, according to the company’s application. The company is also applying for abatements on construction-related sales tax and the mortgage recording tax.
“The project’s not economically feasible without the abatement,” Urgo principal Kevin Urgo said in an interview Friday.
The application estimates total construction costs of $32 million, with revenues by the third year of about $11.25 million and a profit of $3.5 million.
At last Tuesday’s IDA public hearing on the abatements, pledges for living wages, local construction labor and prevailing wages for construction workers were sought by an array of individuals and organizations. On hand were the Tompkins County Workers Center and local affiliates of the United Auto Workers, Brotherhood of Carpenters and Joiners of America, and International Brotherhood of Electrical Workers.
The Rev. Rich Rose, pastor of First Baptist Church of Ithaca, sought measures to ensure the hotel management would not evade the pledge by keeping employees below 30 hours a week. Stacey Black, membership coordinator of IBEW Local 241, said local workers spend money locally.
Urgo Hotels Director of Development Mathew Jalazo said Tuesday the company agreed to pay $11.31 an hour to housekeeping staff.
Urgo said the company will pay competitively.
“I know that we will pay a competitive wage rate that the market dictates, and that may equal whatever you’re talking about,” Urgo said. “That’s the way it works in our country.”
The incentives application asks if a developer is willing to pay a liveable wage as determined by Alternatives Federal Credit Union, whose wage studies are widely cited as a Tompkins County benchmark. Its most recent liveable wage was $11.67 an hour.
The developer expects 75 permanent full-time jobs by its second year in operation, according to the abatements application.
Among those in favor were Downtown Ithaca Alliance Executive Director Gary Ferguson, who said the hotel could put 50,000-60,000 people a year on the Commons. He said the last four new hotels in Tompkins County were not built downtown and thus were out of the IDA’s purview.
The site is the most expensive place to build it in the county, and the hotel needs help “getting over the finish line,” Ferguson said.
Also endorsing the abatements were developer Mack Travis, who said the hotel company working with the Marriott chain could decide to go elsewhere in Tompkins County, and noted the Village of Lansing’s incentive program remains simpler than the city’s.
Tompkins County Chamber of Commerce President Jean McPheeters noted hotels generate sales and room taxes as well as property taxes. Together with a planned expansion and added meeting space at the Holiday Inn about three blocks away, downtown could have critical mass for a new level of conferences and conventions, she said.
In November, Common Council adopted a simplified policy for its downtown density incentive package with only three stated criteria.
To qualify under the new criteria, a project must result in an expected increased in assessed value of the property of at least $500,000, rise at least three stories or be a major restoration of an existing structure, and be a redevelopment of a registered brownfield contamination site or be within the city’s density district.
Return on investment is not to be more than 20 percent in each of its first five years. The downtown density district is barbell-shaped, extending from just east of the Tuning Fork intersection east of The Commons to the Cayuga Inlet waterfront, connected by a narrow swath between Green and Seneca streets.
Kevin Urgo said he believes the community will be proud of the hotel when it’s complete.
“This is the upscale, full-service hotel, beautifully designed, it’s a gorgeous building, beautiful interior designs ... lovely restaurant, lounge, bar, beautiful lobby,” Urgo said. “It’s just an amenity that doesn’t exist in the marketplace.”
Here's the link: