ITHACA, NY (607NewsNow) — Ithaca’s school board seeks more time.

In a letter to the Tompkins County Industrial Development Agency, the board requested a pause to the SouthWorks project until a comprehensive analysis on impact to the district is completed.

The letter outlined several concerns raised by the Board of Education:

● As members of the Board of Education, we are stewards of the District’s fiscal health.
● The District is responsible for providing every child residing in the District with a free, high-quality public education.
● Approximately 70% of the District’s revenue comes from local property taxes.
● Development that brings children but contributes little or no property tax revenue is a concern.
● Based on the proposed configurations of the 230 units, we estimate that 150 children will attend District schools.
● At our approximate marginal tuition cost of $25k per child, the total cost to the District could approach $4M per year if those children are new to the District.
● We recognize that our revenue is based on development of the community as a whole, e.g., projects in Collegetown might pay property taxes with few or no children.
● Nonetheless, even at its approximate assessed value of $12M, this project would generate about $180k in school taxes, the equivalent of about seven students.
● The developers propose a PILOT payment of 12% of NOI, which would presumably result in school taxes well below the $180k.
● The developer has significant control over the first-year NOI. E.g., the developer could increase operating costs, such as security patrols, and reduce revenue, such as parking fees, to ensure a first-year NOI close to zero.
● This tax amount would increase by only 2% per year for 30 years, well below typical tax bill increases, ensuring a reduction in relative taxes over time.
● Thus, whereas most TCIDA projects migrate to full tax bills after 7 or 10-year abatement, this project would pay little to no taxes for 30 years.
● The District receives none of the sales tax revenue that this project could potentially generate.
● It is our fiduciary duty to express caution and request a pause of this project pending the information requested below.

The district has requested a year-by-year comparison that shows:

1. Full school taxes at projected assessed value.
2. ICSD’s actual share of the proposed PILOT.
3. Estimated school taxes forgone each year.
4. Assumptions for net operating income, vacancy, rent growth, expenses, and management fees.
5. Expected number of school-age children by unit type.
6. Anticipated school assignments and transportation requirements.
7. Treatment of future assessments, refi nancing, ownership changes, and expansion.
8. Audit rights and annual access to certifi ed project fi nancial statements.
9. Clawback or renegotiation provisions if aff ordability restrictions are reduced or project fi nances outperform projections.
10. Whether a minimum annual school payment or per-unit school impact payment is possible instead.
11. The loss of state education aid to Tompkins County, to the extent that children drawn from rural districts, which receive ~70% per-child state aid, are moved to ICSD, which receives only 30% per-child state aid.

The IDA has a public hearing on the project tomorrow at 11 a.m.