Downtown Ithaca 25 Years Later

By Matt Dougherty

Believe it or not, construction cranes have not always towered hundreds of feet above Downtown Ithaca. In fact, there was once a time, not so long ago, when downtown suffered from a severe lack of investment from developers.

During a recent conversation, the Executive Director of the Downtown Ithaca Alliance Gary Ferguson told the Ithaca Times that most growth in the area wasn’t happening in the city’s downtown core.

“In the 1990s, the vast majority of regional growth was occurring outside of downtown. Little private investment found its way into downtown. Only the County made significant investments during this period by adding the Human Services and the Mental Health buildings to downtown.”

Ferguson said the increase in interest in suburban development was to blame.

“By the early 1990s it was becoming clear that downtown was changing, not because of new urban investment, but because of the ballooning suburban commercial and residential development.”

According to Joe Wetmore — who has been synonymous with the Downtown Ithaca Alliance (DIA) since its inception in 1997 — the DIA was created after years of non-investment in downtown which resulted in “a lot of empty storefronts.” Supporters of the Alliance thought of it as a way to increase investment downtown and to safeguard it from going down the same path as other upstate business centers, many of which suffered from increasing development in the suburbs.

Wetmore is the former owner of Autumn Leaves Used Books on the Commons and was the DIA parliamentarian and resident expert on the organization’s by-laws.

According to Wetmore, throughout the 1990s Ithaca was seeing more investment in outlying areas, such as nearWalMart and the then Pyramid Mall. He said downtown businesses “needed to organize ourselves to make downtown survive.”

The Pyramid Mall, now the Shops at Ithaca Mall, began to pose a threat to investment downtown back in the mid1970s. This threat prompted the creation of the Merchants Association, which advocated for the building of the Ithaca Commons, along with Center Ithaca and the Seneca and Green Street parking garages.

Ferguson said that these investments were able to keep downtown afloat for a moment, but that changed “when the national trend of department store closures reached Ithaca and downtown lost its key retail anchors in the 1990s.”

“It was at this point that a mayoral downtown advisory committee commissioned a study that recommended the creation of a business improvement district (BID) as a tool for revitalization and downtown management,” Ferguson said.

A BID is a type of taxing authority that can be created in New York State that allows property owners to organize and create a self-taxing district in which they tax everyone in the area and use those funds to promote a certain aspect of the area. For example, the City of Ithaca created a sidewalk district and people within that district are taxed for the maintenance of the sidewalks in front of their properties. These special districts can also be created to better manage things like road maintenance and waste management.

Wetmore said the first attempt to organize a business improvement district downtown failed as a result of objections from property owners saying that the district’s boundaries were too large. After the first vote failed, the district’s borders were changed to make the area of the BID smaller and the second vote passed without objection.

“Everyone could see that downtown was hurting in many ways,” Wetmore said.

According to local developer and author Mac Travis, “the first BID was 144 blocks from Stewart Avenue to Geneva Street and Court Street to Green Street. All of Downtown.”

Travis said that the first time around the group pledged publicly that they wouldn’t create the area without the support of 75% of people within the area.

When the vote was held only about 52% of residents were in support and it failed as a result.

Two years later, Travis said the group decided to consolidate the BID into 22 blocks.

“[It] was essentially the Commons and the surrounding two blocks,” he said. It went down to Geneva Street and up to just above Aurora Street…so that became a very manageable unit that was mostly property owners and stores.”

The DIA uses this BID to make downtown an attractive destination for both shoppers and merchants.

“[It helps to] clean up downtown and help with beautification, marketing events and properties to build up a base of information to say here’s why you ought to bring your business downtown,” said Wetmore.

Ferguson broke down the specific categories the DIA works on.

“The DIA generally works in five different areas: business retention and development; downtown operations and environmental enhancement; marketing, communications and promotions; special events; and transportation. The DIA also spearheads downtown strategic planning and project formulation.”

By law, the Board of Directors of the BID has to be 51% property owners, but Wetmore says that rule is a bit murky because “in a community like this, I own my property and I own my business. So which hat am I wearing?”

Wetmore said that the DIA has been a major reason why downtown has seen so much development in more recent years.

“…Part of what the DIA is doing is getting the community focused on how we can get more development out.”

And it has, according to Ferguson’s statistics over the past 25 years.

“Downtown tripled its size in total built square feet” by expanding from around one million square feet to an estimated three million square feet by 2024, he said. That has included three new hotels, a rebuilt Commons pedestrian mall and the addition of about 1,000 new housing units.

“I don’t know how you couldn’t consider that success of the organization because it’s clear that when they came in, that’s when the change happened,” said Wetmore.

Before the DIA began to advocate for downtown businesses, there were many reasons that disincentivized investing in development in the area. One of those was the higher price tag associated with downtown development — partially as a result of “staging costs”.

According to Wetmore, when projects are built in outlying areas like the mall or WalMart “they’ve got all these places to store the various components as they’re putting the project together. Whereas, in downtown, every beam that goes onto that building is picked up off the truck because there’s no place to store them because the building footprint takes up the entire lot.”

This forces downtown developers to rent out space in the countryside and “double truck” supplies to the construction site which significantly drives up costs.

In order to overcome these disadvantages, Travis said the DIA advocated to change zoning laws to allow for the height of buildings Downtown to increase as part of their second 10-year plan. The logic was simple.

“The higher the buildings are, the more you can ameliorate these costs over time because there is more space you can rent out,” Wetmore said.

The DIA has also supported the creation of a tax abatement program that incentivizes people to build and start businesses downtown.

Ferguson said the construction of the Hilton Garden Inn, Marriott Hotel and the redevelopment of a vacant warehouse into the Gateway Plaza were both helped by the DIA.

And as downtown has grown, so has the DIA. As a result of grant money and the increasing tax base within the DIA’s business improvement district, Wetmore said the DIA’s budget has drastically increased from what it was two decades ago.

In 1997 the DIA had two employees and a budget of $200,000. Today the organization’s budget has skyrocketed to more than $1.4 million, which funds a staff of 12 office professionals and eight ambassadors who are “tasked with implementing an annual work plan of 110 different programs, projects and activities, Ferguson said.

However, even as the DIA has seen more development come to downtown over the last two decades, more recently businesses have begun to show signs of struggle once again. Several businesses that have called downtown home for years — such as Waffle Frolic and the T-Shirt Store — have recently gone out of business, leaving a collection of vacant storefronts along the Commons.

Ferguson confirmed the seemingly growing number of vacancies.

“The greatest vacancies reside in the office sector” but “retail vacancies are also higher than normal.”

Filling those vacancies is one of the DIA’s goals for the current year.

“During 2023, the DIA will be actively working to fill vacancies and attract new businesses to the community. We will be commissioning a retail market study for both downtown and the entire City, seeking to determine how the past five or so years have changed the trajectory of retailing,” he said.

Wetmore has said that the DIA “is in a moment of change,” and that“the bigger issue now is trying to find tenants for stores that have closed down and are now vacant.”

According to Wetmore, buildings usually end up remaining vacant “not because the market can’t fill it, but because the property owner has apparently unrealistic expectations of how to fill it.”

When asked if it was possible for the DIA to convince landlords not to keep their properties vacant, Wetmore said that the organization had “no leverage” but that “persuasion is always better than leverage.”

“Do you want to be cornered and forced to do something or do you want someone to convince you that what they want is actually in your best interest too?”