November 14, 2013

Proposed Tax Abatement Draws Ire of Some City Residents

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City residents expressed concerns at a public hearing Thursday over a proposal to give the developers expanding downtown Ithaca’s Holiday Inn a tax abatement.

Lenroc LP, on behalf of the Holiday Inn at 222 South Cayuga St., is applying for abatements on sales taxes and mortgage recording taxes. The sales and mortgage recording abatements are valued at $207,806 and $5,000 respectively, according to an Ithaca Journal article.

Lenroc LP claims that the Holiday Inn is in danger of becoming completely nonfunctional without renovations, and that without the tax abatements, the hotel may lose business. Plans to renovate the hotel with new guest rooms and a conference center have been already delayed to avoid temporarily closing the hotel, according to the Journal.

Theresa Alt, a staff member of Tompkins County Workers’ Center and one of approximately 15 people who attended the meeting, said she disapproves of the proposed abatements. Alt said that a “quick look at the application” showed that, should the IDA grant the abatements and facilitate Inn renovations, there would be no increased property value or additional jobs available for city employees.

Alt said that many workers at the Holiday Inn are working for unlivable wages, a point that was revisited several times throughout the hearing by other attendees. Alt also mentioned that the contractor proposed for the project is from Buffalo, not Ithaca.

Alt said that her research and reflection on the project led her to think, “Why in the world is this application even here?”

Alt’s concerns were echoed by other attendees, who said local labor should be used for the renovation work.

Pete Meyers, director of the Tompkins County Workers’ Center, said that he would rather see local businesses receive such tax abatements than a corporate business like the Holiday Inn. Meyers also criticized the idea that the contractor for the project would not be local, saying that if the IDA grants the abatements and Lenroc goes through with the project, they “should use local labor in construction.”

But other attendees supported the project, saying that the renovation would be a good investment.

Gary Ferguson, executive director of the Downtown Ithaca Alliance, said that improving the Holiday Inn would be a significant investment for the Ithaca community. Ferguson has previously said that the expansion of a conference center in a downtown Ithaca hotel would help reduce empty rooms during the weeks and draw visitors to Ithaca.

“It’s a key decision to reinvest in this property,” he said.

Ferguson added that the proposed conference center in the Inn has “been a community goal and objective for a long time,” and that it would be “making good use of existing infrastructure.” Ferguson went on to say the project “is extremely important to [the Downtown Ithaca Alliance].”

Bruce Stoff, director of the Ithaca/Tompkins County Convention and Visitors Bureau, also supported the proposed renovations to the hotel, saying the renovation to the Holiday Inn would be “a good investment.”

Stoff said that the purpose of the IDA’s incentive program is “to incentivize business owners to do something that’s hard to do” and suggested that this purpose would be met by granting the requested tax exemptions to the hotel.

“It’s incredibly important to keep this property fresh and modernized,” he said.