Why do some cities grow and thrive? Why do some cities languish and decline?
Our city—Ithaca, New York—is a small city now grown to 30,000 residents. It is home to Cornell University and Ithaca College, Morse BorgWarner, numerous high-tech companies, a public library, a historic preservation society, many parks, many waterfalls—an intellectual, industrial haven carved out of the gorges and hills early in the 1800s—on Cayuga Lake, in the heart of the Finger Lakes district.
Today you can drive from one side to the other in less than ten minutes. If traffic is backed up for more than three minutes, it’s considered a traffic jam. Twenty-one thousand students on East Hill at Cornell University, six thousand on South Hill at Ithaca College, and another twenty-five hundred at the downtown extension campus of Tompkins Cortland Community College, double our population most of the year and keep Ithaca young, exciting, and lively. The stability of these institutions of higher education, together with the glacial topography, five major waterfalls, and the local high-tech industries, have pushed Ithaca to the top of the list of desirable places to live, work, and raise a family. Ithaca is known as the “Enlightened City,” so-called by the Utne Reader in 1997. A New York State Senator on a visit to Ithaca some years ago, referred to our city as the “Crown Jewel” in upstate New York.
Making a difference is not out of the realm of possibility in Ithaca. Ithaca is a small pond, but its opportunities and problems are not dissimilar to most small cities in America. It has its suburban sprawl, industries that have both supported and polluted, and suburban malls that have sapped the vitality from downtown. It has politics and bureaucracy, zoning, rules for historic preservation, developers and gadflies. It has a Department of Planning and Development, and its local “BID”—Business Improvement District.
The merchants, tenants, property owners, mayors, and members of the City Council have joined together to create a force for change in central downtown. Cornell University has joined forces with the City in bringing hundreds of employees to the downtown. New theatres, parking garages, restaurants, hotels, and businesses—including many major apartment and office buildings—have all been developed within the last fifteen years.
What follows is the story of “Shaping a City.” Each generation has its turn to do this; it is no different in your city. Ithaca today has built on the successes and failures of those who have gone before; and it has added a planning juggernaut in the form of its Business Improvement District.
This story is written from the point of view of a real estate developer, property owner, and one of the founding members of our local Business Improvement District—or, as it is now called, the Downtown Ithaca Alliance.
The story will give you a behind-the-scenes look at the projects and principles of development that have turned Ithaca from a small quiet hamlet into a bustling and successful business hub, a small city downtown that attracts researchers and start-up companies. One that draws full-time residents, from the bank president to the low-income wage earner, a city recognized to have more restaurants per capita than New York City, a city rated by numerous sources as one of the best small cities in America.
Ithaca could easily be regarded as a microcosm for all cities. From understanding Ithaca, perhaps one can come to better understand one’s own city and the forces at work for growth and economic sustainability. Who are the players? What needs to be done? What are the forces driving growth and development? How is it going to happen in your city, with your projects?
Having developed numerous real estate projects in Ithaca since the early 1970s, and having researched many cities in my role as president of Ithaca’s Business Improvement District, I suggest that the forces at work in the development of Ithaca, New York, are to be found, and can be applied anywhere in our country—in cities both large and small.
Ithaca, New York, January 2018The years from 1971 to 1975 were a watershed for Ithaca, New York. A transition was taking place that would affect Ithaca’s downtown for the next four decades. The idea had started with Urban Renewal in the late ’60s. The mayor and downtown businessmen were determined to save downtown from economic collapse. A new shopping mall on the outskirts of town threatened to draw stores and customers from the main street of downtown to the suburbs. In 1971, urban consultants, Parsons, Canfield, and Stein had been hired to help the city develop a plan. Their idea called for a small pedestrian plaza to be built in the heart of downtown at the intersection of Tioga and State Streets. A pedestrian plaza, they reasoned, might well be the financial salvation for downtown. A few full-scale pedestrian malls had already been built in cities like Boulder, Colorado and Burlington, Vermont, to counteract the draw of the suburban malls and keep their downtowns as vibrant as possible in the face of growing competition.
In a series of public meetings led by then Mayor Ed Conley, it was decided: Ithaca would build not just the small pedestrian plaza recommended by the consultants, but a full-scale pedestrian mall replacing the main street on three full blocks in the heart of downtown. The City would bond to raise the money for its construction. The bonds would be paid back by charges to property owners in a special “assessment district" created within a two-block zone surrounding the area known as State and Tioga Streets, three blocks of which were selected to be restricted from vehicular traffic and would be designated as a pedestrian mall, “The Ithaca Commons.”
When Thys (pronounced “Tace”) Van Cort was interviewed and hired for the position of planning director in the fall of 1972, the City had already made the decision to build a pedestrian mall. His first major assignment—Get It Done! The following is his story of how he did just that, how he—got it done!
The initial idea for a pedestrian mall had come from David Taube, a member of the board of Historic Ithaca and one of the principals at the local firm HOLT Architects, but after consultation with the mayor and leaders on the Planning Board, Thys was directed to orchestrate the extensive search process for an architecture firm. This search resulted in the City’s hiring the local firm of Anton EgnerEgner Architectural Associates, LLC. Egner designated Bob Leathers, a well-known local professional architect to be in charge of the job and also retained Marvin Adleman, a professor of landscape architecture at Cornell to assist with the project.
Immediately after hiring the new architect, Thys approached the mayor to suggest the formation of a client committee for the project. The committee’s responsibility would be to advise the architect on the design of the project, to help sell the project to the general public, to make sure that the various constituencies in downtown would have their voices heard in the design process, and to keep the public aware of the progress of the project. In addition, the committee was to advise Thys and the planning staff on the scheme that would be developed for paying for the pedestrian mall.
This committee was made up of representatives from the Planning Board, Common Council, and the Board of Public Works, plus key members of the Downtown Businessmen’s Association, the Downtown Businesswomen’s Association, the Area Beautification Council, and Historic Ithaca. Mayor Conley appointed Thys to chair this Mall Steering Committee.
At first, Thys started holding closed meetings, which was possible then, because New York State did not yet have an “open meetings” law. However, this troubled him—he felt that having open meetings and press coverage was important, since this was a project that the committee would ultimately have to sell to the general public, the Common Council, and the Board of Public Works. He discussed his concerns with members of the committee, and the decision was made that thereafter, all meetings were to be open to the public and that the press should be invited.
As Thys describes it, “There were two competing visions for the pedestrian mall—one was that it should be a museum piece to be enjoyed in silent reverence; the other was that it should be the center of a three-ring circus where stuff would happen, and people would come to have fun. This was my analysis, and as you can tell from my somewhat biased description, I was in the three-ring circus camp. The museum folks won out with the ban on dogs, but the circus people got the children’s playground.”
“Battles were fought,” Thys said. “My department and I faced almost universal resistance from the other departments in City Hall. The Department of Public Works was certainly not in favor of such a harebrained idea, the Legal Department couldn’t be bothered, and the controller was openly hostile. Compromises were made, but all in all the design process proceeded apace, and the design was completed by March of 1974, nine months after the architect was hired.
“The project was put out to bid in April 1974 by the Board of Public Works. Bids were received in May and came in below budget. The base bid was just under $700,000, the low bidder being a firm which had an excellent reputation—Streeter Construction out of Elmira. Ultimately, the total cost of the mall, including soft costs such as architecture, engineering, legal, and financing, came in at $1.135 million. The mall was about 55,000 square feet, thus it was built for $12.70 a foot, hard cost.”
Thys had taken the project to Common Council and the Board of Public Works multiple times during the development process. Each time there was a risk that a down vote would stop it dead in its tracks. Any down vote could bring the project to a halt, so it had to be successful over and over again!
At the time the City started the design of the Commons, there was no legal authorization under the laws of the state of New York that would allow borrowing for construction of a pedestrian mall. Municipalities in the state of New York cannot bond for any capital improvement without specific legislative authority being given for such borrowing by the New York State legislature. This meant that a city could bond for construction of a street, sidewalk, all kinds of buildings, sewers, water systems, parks, fire trucks, etc., but to bond for a pedestrian mall, according to state law, the project would have to be divided into its constituent parts: paving, sidewalks, electrical service, water mains, storm sewers, sanitary sewers, benches, pavilions, trees, and other plantings. Each of these components had its own period of probable usefulness. The term of the bonds for each of these elements would have been different. Thys found himself in a position that to fund the project, he would have to write enabling legislation that would allow the City of Ithaca to bond for the entire capital project.
Thys describes overcoming this hurdle: “I hired two very bright student interns for the summer of 1973. Wayne Merkelson and John Kirkpatrick took on the job of trying to develop both a financing scheme for the project and the legal authorization for its bonding. During the fall and winter these students researched what other enabling legislation looked like and drafted a law for consideration by the state legislature. By March 1974, when it seemed clear that this was more than just a harebrained idea, all of a sudden the city controller realized that we might actually pull this thing off. He then engaged the City’s bond counsel in New York City to draft legislation. Looking back on it, our attempt at writing the legislation was rather amateurish but nonetheless a noble effort by a bunch of young go-getters. The legislation was sent to Albany, passed by both houses, and signed by the governor. Another huge hurdle had been overcome. We were again in business.”
The last major piece was the design of the financial formula by which owners or merchants would be charged for the construction of the mall. The Common Council had decided early in the process that the downtown owners and merchants would have to pay the lion’s share of the cost of the project. Thys recounted that he and his intrepid interns set about trying to come up with a scheme for this undertaking. There were all kinds of things they had to consider. Does the formula favor the big property owners or the small? How important was it that it be easy to administer versus equitable? For example, a benefit assessment based on foot traffic into each store would probably be the most equitable, as those who benefited most would pay the most. On the other hand, a formula based on foot traffic would be almost impossible to administer. Other bases of benefit would be far easier to administer. Those included lot size, front footage, or some percentage of assessed valuation. There are rules they had to know as well, and they were doing this without benefit of counsel. Benefit assessments cannot be based solely on assessed value; they could, however, be based on a formula that combines assessed value and another factor.
Thys says, “In the end we chose a formula that was easy to administer and, as it turned out, relatively regressive. We chose the formula based on front footage with a correction for depth. If you had a very deep store you would pay more than you would if you had a very shallow store, but the basis of the formula was front footage. There was also a correction for corner properties. In addition to charging those buildings along the Commons, there was a lesser charge for properties on the blocks leading up to the ends of the Commons, based on the notion that they too would benefit from the construction of this improvement but to a lesser extent than the projects directly fronting on the pedestrian mall. As it turns out, this was a relatively regressive formula favoring the large owners over the small property owners. We didn’t really like that idea, but when we ran the numbers for a more progressive formula, the charges for the big owners were so high that we were afraid they would rebel and kill the project.
“I would note,” he says, “that we did this work before the invention of computer spreadsheets. Every iteration of every scheme had to be calculated by hand with an adding machine. Wayne was great, he could punch the keys without looking at the keyboard! Dozens of iterations and tens of thousands of keystrokes later, we had a working formula.
“Our formula was accepted by the Common Council, and the tax benefit assessment was designed based on our formula. Eighty-five percent of the cost of the Commons was assigned to the tax benefit district. The other 15 percent was considered to be public improvements like sewers and water mains that the city would have paid for anyway.”
Now Thys was at the eleventh hour with a great bid and the project fully funded, when, as he says, “Suddenly a bunch of people got cold feet. Construction of a new two-story building for the Rothschild’s department store and the 450-space Green Street parking garage were about to begin at exactly the same time as the pedestrian mall. People were concerned, particularly the merchants, that so much disruption would have extremely negative consequences for the businesses on State Street.”
Thys and members of his committee lobbied heavily to move ahead, believing it was better to get the disruption over quickly rather than spread it out over several years. He was also extremely concerned—a concern that he shared with the mayor and the rest of the leadership—that if they did not go now with a good bid, the project would never get done. If they had to wait and bid it again the following year, the City would probably not get as good a bid, and the opposition to the project might have grown.
Thys tells how he and Mayor Conley went to a tumultuous meeting where one speaker after another condemned the project, or the timing, or both, as well as attacking them personally, but they stuck to their guns. A few days later they went back to the Common Council, where one of the council members predicted that half the businesses surrounding the construction site would be closed by the end of construction. At the final hour, a vote was held and the Council approved the project. Construction started, and three blocks of the street in the heart of downtown were demolished in a matter of days.
Then the City was sued. The grounds for the suit were that Thys and his committee had not given legal notice that the street was going to be closed. As Thys says, “The judge, seeing that the street was already torn out, sensibly ruled that there might not have been legal notice within the letter of the law, but that the actual notice such as newspaper articles, letters to all the property owners and merchants, etc., constituted an abundant and sufficient actual notice.” They were free to proceed.
Construction started in June of 1974. Less than six months later, by Thanksgiving, the project was 85 percent complete, all the paving was in, and the project was buttoned up for the winter. All that remained to be done in the spring was the completion of some of the pavilions, some of the benches, and plant materials.
Miraculously few stores closed in downtown during the construction process. Merchants were enthusiastic about the possibility of a pedestrian mall as a way to improve their business. The public maintained loyalty to their favorite stores and continued to brave the walkways and gravel piles caused by the construction. Only two businesses closed during construction, and Thys said that it was the consensus among the merchants that these businesses closed because they were not good retailers, for the street was never closed for business throughout the entire construction period.
The years 1971 to 1975 were indeed watershed years for Ithaca. The Ithaca Commons has had a positive impact on downtown vitality year after year. It changed Ithaca’s downtown for the next four decades and beyond. It is truly representative of the fits and starts often surrounding progress on public/private projects still today. It was built in a spirit of cooperation, and when necessary, intense drive and belief in the good that would result. It was Thys’s first project in a career that would extend for another thirty-five years as Ithaca’s director of Planning and Development.
Closing off the central three blocks of State and Tioga Streets, installing paving, benches, pavilions, trees, a fountain—meant that business could be conducted as one walked along the Commons, shopped in the specialty stores, ate in the restaurants. Children could play on the playground and in the fountain. Performers could perform in the pavilions. No dogs. No bikes. But it was as pleasant and welcoming a place as one could imagine.
It took two years total to complete the project. Most of the stores survived, and some new national chains moved into town. The Commons formally opened in 1975 and was an instant success. As a response to the enclosed suburban mall, Ithaca had constructed an outdoor pedestrian mall that, despite its four to five months of winter, kept the downtown alive and active. It was an exemplary response to intense new competition from the suburban mall.
(Photo not uploaded)
Photo courtesy of the History Center of Tompkins County—State Street in Ithaca, New York, c. 1950.