AUBURN — More than six years after securing a tax break from the city to rehabilitate 20 downtown properties, an Auburn developer is close to embarking on the final stage of an expanded overall project.
JBJ Real Property, run by the Bartolotta family, is planning a $5 million project to renovate seven houses on John Street and build a number of new dwellings along Arterial East to develop one big apartment complex on the outskirts of the city's downtown district. The family's redevelopment project was included in the city of Auburn's winning Downtown Revitalization Initiative application and is vying for part of the $10 million grant from the state. The project requested $1.1 million in the original application, but how much funding the project will receive — if it is chosen to be funded at all — will ultimately be decided by the Department of State in the spring.
During an interview with The Citizen in late September, Joe Bartolotta of JBJ said the project will be completed in two phases and the first phase — the rehabilitation of preexisting homes on John Street — will move forward with or without DRI funding and will hopefully begin before the end of the year.
"We've wrestled with the way that entry point to the downtown business district looks and it's kind of old and in need of an update," Joe Bartolotta said. "We feel that the more residential occupancy in downtown, the more support that will lend to the businesses downtown and that will help to continue to spur the momentum of economic development that's recently been enjoyed downtown."
The seven John Street properties, Joe Bartolotta said, will be "completely transformed" into 16 loft apartments. On the exterior, the homes will have new siding, windows and roofs. Inside, the units will be fitted with new HVAC systems, electrical and plumbing. Anthony Bartolotta said the developers are trying to "save as much of the original aesthetics and architectural detail as possible for each house."
JBJ is also planning on other amenities for the complex, including a community room, courtyard, workout room and plenty of off-street parking.
The second phase of the project — the new construction along Arterial East — is what the Bartolottas are hoping to utilize DRI funding for, Joe Bartolotta said. They plan to build six apartment buildings with four one- or two-bedroom units in each building.
The developers are still deciding on how much rent they will charge once the apartments are finished. Joe Bartolotta said there is a need for "clean, neat, quality housing" downtown at a variety of price points for a variety of different demographics.
In May 2012, the Bartolottas received a 15-year payment in lieu of taxes agreement from the Auburn Industrial Development Agency to redevelop not only the seven John Street properties, but also 13 other properties on State Street, East Genesee Street and Dill Street in the city. The PILOT exempted the developers from any payments for the first two years of the agreement. Currently, the property tax assessments on the 20 downtown properties are frozen at the $3 million pre-investment rate that was determined in 2012. In 2018, those same 20 properties were assessed at over $4.8 million, but the developers are continuing to pay property taxes based on the 2012 assessment.
JBJ's current PILOT payment is $131,155 a year, which is divided among the city, county and school district. Without the tax break, the developers would have had to pay nearly $188,000 for the 20 properties, based on 2018 property assessments, according to Cayuga Economic Development Agency Executive Director Tracy Verrier.
For the final three years of the PILOT, from 2024 to 2027, the assessments will go up to $6.7 million and the payments will increase by 33 percent of the full taxable amount each year until they reach the full value.
Under the PILOT, the Bartolottas have redeveloped 13 other properties, raising the combined value of those properties nearly $2 million since 2012. They are eager to get started on the John Street properties, Joe Bartolotta said, "so we can allow the PILOT to start working for us."
Since the PILOT freezes the properties' assessed values at pre-construction values, the developers are essentially paying the same amount of taxes on the John Street block it would be had they not received a PILOT.
JBJ acquired most the property along Arterial East from John Street to Fulton Street and one house on North Fulton Street several years ago when the development company was considering forgoing the residential redevelopment project and pursuing a commercial business on that block. However, that commercial opportunity fell through and the family went back to their original plan, but expanded the scope to include the newly acquired property. Joe Bartolotta didn't offer more details on the specifics of the commercial deal, but said it would have "completely transformed and reconfigured that whole block."
The failed commercial endeavor is the reason the John Street redevelopment project has taken so long to get off the ground, Joe Bartolotta said. JBJ had originally planned to start the housing project in 2014.
Christina Selvek, the director of capital projects and grants for the city of Auburn, said the city included the Bartolottas' plan in its DRI application in 2017 and 2018 because the project will "transform the John Street neighborhood and give it the lift it needs."
"It's important because John Street is the eastern gateway into downtown and the BID area," Selvek said. "It's a state route that takes people from route 90 to the lakefront. The city supports any efforts to rehabilitate the housing stock."
The Bartolottas agree that their project is much needed in the area and hopes it will continue the renaissance downtown Auburn has seen over the last decade.
"We came of age, my brother (Anthony) and I, in the late '80s and '90s when Auburn was a bit of a ghost town and we've seen a lot of great things happen in the last decade and if the near past is any indication of what the next decade is going to look like, I think we can expect a lot of growth here in downtown and more importantly, beyond there," Joe Bartolotta said. "We hope this will have a ripple effect that will continue into the neighborhoods and transcend the entire city in the years to come. That's the hope."