HomeMy WebLinkAboutMN-IURA-2013-07-25Approved: 9/5/13
108 East Green Street
Ithaca
Urban
Renewal
Agency
Ithaca, New York 14850
(607) 274-6559
(607) 274-6558 (fax) ax)
MINUTESMINUTES
ITHACA URBAN RENEWAL AGENCY
Common Council Chambers, City Hall
8:30 A.M., Thursday, July 25, 2013
Members: Karl Graham, Tracy Farrell, Chris Proulx (also serving as Common Council Liaison)
Excused: Svante Myrick, Eric Rosario
Others: None
Staff: Nels Bohn, Sue Kittel, Charles Pyott
Guests: Julie Crowley, President, Ithaca Coffee Company, LLC
Lisa Kerslick, Executive Vice‐President, Ithaca Coffee Company, LLC
Public: None
I. Call to Order
Myrick called the meeting to order at 8:35 A.M.
II. Agenda Additions/Deletions
None.
III. Public Comment
None.
IV. Review of Draft Meeting Minutes: March 21, 2013, May 1, 2013, & June 27, 2013
Graham moved, seconded by Farrell, to approve the March 21, 2013, May 1, 2013, and June 27,
2013 meeting minutes, with no modifications.
Carried Unanimously 3‐0
V. Economic Development Committee (EDC) Report
A. Community Development Revolving Loan Fund ― Application from Ithaca Coffee Company, LLC
for Loan Assistance to Establish Wholesale Coffee Roasting Operations at 702 Hancock Street
Bohn recapitulated the salient details of the application, noting that the applicant is seeking funds to
expand the company’s current coffee‐roasting and wholesale operations. The principal underwriting
concern is whether the applicant’s business activity can support the loan. IURA loan underwriting
consultant, Rick Rickli (H. Sicherman & Co., Inc.) concluded there should be sufficient additional net
operating income generated by the roasting business & expanding selling area at the Triphammer
branch where coffee roasting is now based to justify the loan.
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Bohn remarked that the loan would benefit the community (e.g., women‐owned business, job
creation, etc.) and he is recommending it for approval.
Farrell asked if the salaries for the jobs that would be created have been projected. Bohn replied, yes,
although not every job would be paid a living wage (however, there would be health insurance for all of
them). Two of the jobs would pay ~$15/hour, a quarter of the jobs would pay over $15/hour, while the
remainder of the jobs would fall in the $10‐12/hour range.
Farrell inquired into any potential environmental impact of the new facility on its immediate
surroundings, especially odors. Crowley replied that discussions have taken place with City staff about
that particular issue. It is not anticipated there would be a problem. At the current Triphammer Road
location, the applicant never experienced any problems. The smoke stack was situated on the west
side of the building, giving it the necessary height and constant airflow to mitigate any impact. The
applicant also intends to replace the coffee roaster it will be using, within 18 months, which would
burn off the emissions. In addition, there are no residential properties in the immediate area at 702
Hancock Street.
Graham asked if there were any known environmental issues associated with the former fuel storage
site at 702 Hancock Street. Crowley replied the NYS Department of Conservation (DEC) had issued a
letter in 2011, acknowledging site remediation actions and stating that no further action would be
required. The primary lender, Tompkins Trust Company, is also requiring certain assurances.
Proulx asked the applicant to summarize its current growth and future growth targets. Crowley replied
that over the last year, the Gateway location has experienced tremendous growth. The Triphammer
Road location has also experienced very strong growth over the last 18‐24 months (appr. 15%) and will
also be adding some tavern space.
Proulx asked if the applicant would be increasing its wholesale capacity as a result of the new facility.
Crowley replied, yes, it expects to continue significantly diversifying its wholesale capacity.
Farrell asked if the applicant provided proof of financing. Bohn replied, yes.
Graham moved, seconded by Proulx:
CD‐RLF ― Loan Assistance to Ithaca Coffee Company, LLC for Expansion of Wholesale Coffee
Roasting Operation at 702 Hancock Street
WHEREAS, on June 12, 2013 Ithaca Coffee Company, LLC (ICC), applied for a $100,000 IURA loan
to assist in an $395,000 project to acquire and renovate the property at 702 Hancock Street to
house wholesale coffee roasting operations, and
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WHEREAS, ICC has two retail locations (Triphammer Marketplace at 2255 Triphammer Rd. and
Gateway Commons at 311 E. Green Street) offering fresh roasted coffee, gourmet foods, craft
beers and beer on tap and also sells roasted coffee wholesale, and
WHEREAS, the purpose of the project is to relocate coffee roasting operations from the
Triphammer store to allow for expansion of the tavern facility and expand ICC wholesale
operations, including coffee roasting and custom labeled packaged products, and
WHEREAS, the primary objectives of the Community Development Revolving Loan Program (CD‐
RLF) is provision of direct financing for economic development activities to create employment
opportunities, facilitate the expansion of business activity within the City of Ithaca and expansion
of the City’s commercial and industrial tax base, and
WHEREAS, the project is projected to create 3 (three) full‐time equivalent (FTE) employment
positions, of which at least 51% will be filled by low‐ and moderate‐income persons, and
WHEREAS, the proposed use of project funds is:
$345,000 property acquisition
$50,000 building improvements
$395,000 Total, and
WHEREAS, the proposed sources of project funds is:
$260,500 bank loan
$100,000 IURA
$34,500 equity
$395,000 Total, and
WHEREAS, CD‐RLF financing policy establishes maximum loan amount of $100,000 for a non‐
retail business project provided the project creates at least one FTE job for every $35,000 of loan
assistance, and
WHEREAS, the IURA particularly seeks to assist projects that generate living wage jobs
($12.62/hour plus health benefits), fill vacant buildings, and assist Minority and Women‐owned
businesses (M/WBEs), and
WHEREAS, ICC projects approximately 25% of the employment positions created will earn over
$15/hour, and the remaining positions will earn $10‐$12/hour with employer paid health
insurance available, and
WHEREAS, the building at 702 Hancock Street has been vacant for several years, and
WHEREAS, ICC is a women‐owned business, and
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WHEREAS, ICC met job creation goals and fully repaid a $60,000 IURA loan issued in 2007 to
assist in the opening of the downtown Ithaca Coffee Company retail store at Gateway Commons,
and
WHEREAS, the proposed project will locate in an existing building and IURA funding will not be
used for any construction activities, therefore the project is a categorically excluded activity
pursuant to 24 CRF 58.35(b)(4) of the National Environmental Protection Act (NEPA) and the loan
constitutes a Type II action under the City of Ithaca Environmental Quality Review Ordinance, and
is not subject to further environmental review, and
WHEREAS, at their July 15, 2013 meeting, the IURA Economic Development Committee reviewed
the loan application, a credit analysis prepared by H. Sicherman & Co., Inc. and applicable
provisions of the IURA Economic Development Policy Guidelines and Operating Plan, and
recommend the following; now, therefore, be it
RESOLVED, that the IURA hereby approves a loan from the Community Development Revolving
Loan Fund (CD‐RLF) in accordance with the loan application, and supplemental submissions,
subject to the following terms:
Borrowers: Ithaca Coffee Company LLC
Loan Amount: Up to $100,000
Project: Acquisition of building at 702 Hancock Street, Ithaca, NY to
house coffee roasting operation and production.
Total Project Cost: $395,000
Projected Use of IURA
Funds:
Property acquisition. Funds may not be used for building
renovation expenses.
Term: 20 years (240 months)
Interest Rate: 3.5% annually, reset to 2.5% upon submission of satisfactory
job reports documenting that the job creation goal has been
achieved for two consecutive quarters and borrower is in
compliance with all other terms of the loan agreement.
Repayment: Interest‐only payments for 3 months, then level monthly
principal and interest payments due to fully amortize the loan
over the remaining 237 month term (approximately
$585/month).
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Collateral: 1. 2nd mortgage lien on property located at 702 Hancock
Street, Ithaca, NY behind only a mortgage lien by Tompkins
Trust Company
2. 2nd lien on all business assets of Ithaca Coffee Company,
LLC to include accounts, inventory, furniture, fixtures and
equipment now owned or hereinafter acquired, behind
only a lien by Tompkins Trust Company
Guarantor(s): 1. Personal guarantees of Julie A. Crowley, individually.
2. Corporate guarantee of Triphammer Liquor, Inc.
Job Creation Requirement: Creation of at least 3 (three) FTE employment positions of
which at least 51% must be held by low‐ and moderate‐income
persons.
Conditions: 1. Proof of bank financing commitment in sufficient amount
to complete the project.
Reporting: 1. Annual submission of in‐house profit & loss statement and
balance sheet verified by accountant‐prepared federal and
state income tax returns
2. IURA job reporting, including reporting on wage levels of
jobs created
3. Documentation of project match funding
And be it further,
RESOLVED, that the Director of Community Development for the IURA is authorized to issue a loan
commitment letter in accordance with this resolution, and be it further
RESOLVED, that the IURA Chairperson, upon the advise of IURA legal counsel, is hereby authorized
to execute all necessary and appropriate documents to implement this resolution.
Carried Unanimously 3‐0
B. Report on NYS Consolidated Funding Application Process ― Round #3
New York State Consolidated Funding Applications (CFA)
Bohn explained that the CFA process takes place once a year. All applications are due on 8/12/13,
with decisions made in early‐ to mid‐November. The City is applying for funding of the following
projects:
o Application to NYSERDA Cleaner, Greener Communities Program for TIGER V APPLICATION
SUPPLEMENTATION, which the City submitted earlier in the year. It would provide the City with
~$1.8M in funding for the state portion of the TIGER V match, including a downtown transit
connection to Ithaca College, Cornell University, and the airport.
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o Application to Empire State Development Fund for STREETSCAPE IMPROVEMENTS in greater
downtown area (on Cayuga Street, from Seneca Street through to Holiday Inn), to transform it
into more of a pedestrian‐friendly, urban promenade area. The City is asking for ~$1.2M in
improvements, including an expanded arts trail, improvements to the aging streetscape around
the Commons, replacement of the deteriorated Courthouse bridge across Six Mile Creek, and
one or two additional as‐yet‐unfunded features of the Commons repair and renovation project.
o Replacement of BRINDLEY STREET BRIDGE (~$2.2M), which is functionally obsolete, as an economic
development project, including widening the bridge, adding sidewalks, and improving safety.
o CASS PARK IMPROVEMENTS, focusing on some needed roof and ceiling upgrades.
o Feasibility study for NYS DEPARTMENT OF TRANSPORTATION FACILITY RELOCATION. The State originally
committed to relocating it, years ago, but then reneged.
VI. Neighborhood Investment Committee (NIC) Report
A. Property Disposition: Authorize Disposition of 402 South Cayuga & 203 Third Street to INHS
Farrell indicated that NIC received two proposals for both properties, which the committee then
scored. The Ithaca Neighborhood Housing Services (INHS) proposal was rated the highest and
would include 4 new owner‐occupied townhomes at 402 South Cayuga Street (to be permanently
affordable), as well as a single‐family home on Third Street (which is a small lot, with a significant
number of challenges associated with it).
Farrell moved, seconded by Proulx:
Property Disposition: 402 South Cayuga & 203 Third Street – Authorize Sale to Ithaca
Neighborhood Housing Services, Inc.
WHEREAS, the Ithaca Urban Renewal Agency has acquired parcels at 402 South Cayuga Street
(tax parcel # 93.‐6‐7) and at 203 Third Street (tax parcel # 35.‐5‐16) and has undertaken a process
to return these vacant parcels to residential use, and
WHEREAS, there were two responses to the request for proposals issued for each of these
parcels, and
WHEREAS, the Neighborhood Investment Committee of the IURA reviewed the responses and
evaluated them according to a scoring system developed for the purpose, and
WHEREAS, the proposals from INHS were scored highest for both properties, and
WHEREAS, INHS proposes to develop four new owner occupied town homes at 402 South Cayuga
Street which will be affordable to low‐income homebuyers, and
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WHEREAS, INHS proposes to construct a single family home which will be affordable to a low‐
income homebuyer at 203 Third Street, and
WHEREAS, the project site is located within the Urban Renewal Project Boundary area, and
WHEREAS, the Ithaca Urban Renewal Agency (IURA) is only authorized to dispose of property to a
specific buyer if such buyer is designated as an eligible and qualified sponsor (Sponsor) per
section 508 of General Municipal Law and the sale is approved by Common Council, and
WHEREAS, a proposed Sponsor is evaluated in accordance with adopted IURA land disposition
procedures that seek to determine if the proposed Sponsor is qualified and capable of fulfilling
the objectives of the project for property disposition, and
WHEREAS, IURA evaluation criteria for Sponsors include:
• Financial status and stability
• Legal qualification to operate in the State of New York and to enter into contracts with
regard to the disposition, use, and development of land in questions
• Previous experience in the financing, use, development and operation of projects of a similar
nature
• Reputation and proof of fair, reputable and ethical business practices and a record devoid of
convictions
WHEREAS, one objective of the Urban Renewal Plan (Plan) is improvement of the residential
environment through redevelopment, rehabilitation, conservation, and new construction to
assure every family in Ithaca a decent home within its economic means improve the economic,
social and physical characteristics of the project neighborhood, and
WHEREAS, redevelopment of these vacant parcels advances this Urban Renewal Plan goal, and
WHEREAS, INHS’ successful record of developing affordable housing in Ithaca spans over 36 years
and includes nearly 200 projects demonstrating that they possess the skills, resources and
capacity to complete the proposed projects, and
WHEREAS, the proposed terms of sale for the property are as follows:
402 South Cayuga Street
o Sale price: $29,000.00
o Outcome: 4 new owner‐occupied residences affordable to a household earning up to 80% of
area median income adjusted for household size
o Conformance with the proposal received by the IURA from INHS dated April 25, 2013
o transfer of property contingent upon site plan approval and issuance of a building permit
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203 Third Street
o Sale Price; $17,000.00
o Outcome: one new affordable owner‐occupied single family home (affordable to a
household earning up to 80% of area median income adjusted for household size)
o Conformance with the proposal received by the IURA from INHS dated April 25, 2013
o transfer of property contingent upon site plan approval and issuance of a building permit,
and
WHEREAS, the Ithaca Urban Renewal Agency Committee considered this matter at their July 25,
2013 meeting and recommended the following; now, therefore, be it
RESOLVED, that the Common Council of the City of Ithaca hereby determines that Ithaca
Neighborhood Housing Services, Inc. has satisfactorily demonstrated its qualifications and
capacity to successfully undertake a project to develop owner‐occupied housing at 402 South
Cayuga Street and 203 Third Street and therefore designates INHS as the “qualified and eligible
sponsor” eligible to acquire tax parcels # 93.‐6‐7 (402 S. Cayuga St.) and # 35.‐5‐16 (203 Third St.),
and be it further
RESOLVED, the Council approves the sale of the two properties to Ithaca Neighborhood Housing
Services subject to the following conditions:
402 South Cayuga Street
o Sale price: $ 29,000.00
o Outcome: 4 new owner‐occupied residences affordable to a household earning up to 80% of
area median income adjusted for household size
o Conformance with the proposal received by the IURA from INHS dated April 25, 2013
o transfer of property contingent upon site plan approval and issuance of a building permit
o Common Council approval of the proposed disposition
203 Third Street
o Sale Price; $17,000.00
o Outcome: one new affordable owner‐occupied single family home (affordable to a
household earning up to 80% of area median income adjusted for household size)
o Conformance with the proposal received by the IURA from INHS dated April 25, 2013
o transfer of property contingent upon site plan approval and issuance of a building permit,
and be it further
o Common Council approval of the proposed disposition, and be it further
RESOLVED, that the Mayor, subject to advice of legal counsel, is authorized to execute
agreements to implement this resolution.
Carried Unanimously 3‐0
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B. Property Disposition: Recommend Sale Through Realtor of 213‐215 West Spencer Street & 701
Cliff Street
Farrell indicated the committee was not as fortunate with the response to the Spencer Street and
Cliff Street properties. It may be that the Cliff Street property would be suitable for a single‐family
house (the current structure will be demolished). The current proposal is to send the action back to
Common Council, work with a professional realtor, and reduce some of the development
stipulations to the use of the properties.
Graham moved, seconded by Proulx:
Property Disposition: 213‐215 West Spencer Street & 701 Cliff Street
WHEREAS, the Ithaca Urban Renewal Agency has signed purchase and sale agreements with the
City of Ithaca for parcels at 213‐215 West Spencer Road and 701 Cliff Street and has undertaken a
process to return these vacant parcels to residential use, and
WHEREAS, there were no responses to the request for proposals issued for either of these
parcels, and
WHEREAS, the Common Council stipulated that 213‐215 West Spencer Street incorporate fully
taxable housing in the form of an architecturally compatible multi‐unit residential development,
including affordable housing if feasible, and
WHEREAS, the Common Council stipulated that 701 Cliff Street be redeveloped as multi‐unit
residential development (which includes a duplex) which is fully taxable, and
WHEREAS, with these stipulations the properties are not seen as feasible redevelopment sites,
and
WHEREAS, the IURA Neighborhood Investment Committee considered this matter at their May
10, 2013 meeting and recommended the following; now, therefore, be it
RESOLVED, that the IURA hereby recommends that the City of Ithaca Common Council remove
these development stipulations for the properties at 213‐215 West Spencer Street and 701 Cliff
Street and allow the IURA property to sell these two properties through a realtor with no
stipulations as to final use, and be it further
RESOLVED, that the IURA Chairperson is authorized, subject to advice of IURA legal counsel, to
execute agreements to implement this resolution, including but not limited to a real estate
brokerage agreement, purchase and sale agreements and conveyance of deeds.
Carried Unanimously 3‐0
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D. Committee Chairperson Report
Farrell remarked that INHS Executive Director Paul Mazzarella presented a great report on housing,
at the last committee meeting. (She will wait until the Mayor is present to report on it further.)
Farrell noted that the City Committee on Unsafe Buildings will be meeting to evaluate current City
policies, what is working, not working, and so on.
VII. Governance Committee (GC) Report
A. Advocacy Letter Regarding Federal Budget Priorities
Bohn noted that the GC has been considering taking an advocacy position for some time, regarding the
current Federal budget, resulting in the draft letter before the IURA today. The brief letter addresses
concerns that Republicans are drastically reducing housing programs (e.g., reducing CDBG by almost
50%) and it encourages New York’s 23rd Congressional District’s Representative, Tom Reed, not to vote
for the current bill (“T‐HUD”).
Graham asked if any coordinated action with other organizations is planned. Bohn replied, yes, he is
trying to coordinate with other entitlement communities (e.g., Jamestown, Elmira, Dunkirk, etc.) Bohn
noted that Common Council was cc:ed on the letter.
Farrell suggested inviting Representative Reed to a site visit of IURA projects. Bohn replied that could
certainly be done.
Proulx moved, seconded by Graham:
Authorize IURA Correspondence to Oppose Budget Cuts to CDBG Funding
WHEREAS, the IURA administers U.S. Department of Housing & Urban Development grants
awarded to the City of Ithaca, including CDBG and HOME grants, and
WHEREAS, the U.S. House and Senate appropriations committees are developing budget bills for
FY 2014, and
WHEREAS, the U.S House Appropriations Committee has passed a budget bill that reduces CDBG
funding by almost 50%, and
WHEREAS, the members of the Governance Committee support sending advocacy
correspondence to federal elected officials and has had an opportunity to comment on the draft
letter; now, therefore, be it
RESOLVED, that the IURA hereby authorizes the Chairperson to execute and send the attached
letter opposing federal budget cuts to the CDBG program.
Carried Unanimously 3‐0
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B. Committee Chairperson Report
None.
C. Review of IURA Financials: June 2013
Grants
Bohn noted the spend‐down ratio remains extremely low and all grant programs are performing well.
Loans
Bohn reported that four loan payments are listed as past due on the report, although two of those
have since been paid (The State Theatre & The Bandwagon Brew Pub).
Bohn indicated the Argos Inn project is not current ― it is still trying to close the historic tax credit
financing portion of the project, at which time it will be able to open. It has been a tortuous and
complicated process, involving four separate attorneys.
Diane’s Downtown Auto has also missed a payment. Staff will be contacting the owner to determine
what the situation is.
Leases
Bohn reported all lease payments are current.
Kittel observed that the IURA is funding 21 new projects in 2013‐2014, which is a great number of
projects, but it will also require a considerable amount of work, tracking, and oversight, which may
affect the spend‐down ratio.
Graham asked about the status of the eLab Downtown Retail Support Project program. Kittel replied
that the program sponsor recently submitted a report, which was incomplete. It has been taking
significant staff time to achieve full compliance.
D. Committee Chairperson Report
None.
VIII. Other New/Old Business
A. IURA Chairperson Report
None.
B. Common Council Liaison Report
None.
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C. Staff Report
Kittel announced that staff is waiting for HUD’s final authorization to move forward with the 2013
Action Plan grants, which should have taken place by the next IURA meeting.
Farrell asked about the bond issuance. Kittel replied that the NHI bond funding program is being
reinvigorated. It will not be known at the outset, however, how much funding will be available.
Staff will issue a notice very shortly that funds will be available to redevelop deteriorated owner‐
occupied housing.
Proulx asked about the status of the Ithaca Marriott Hotel project. Bohn replied that the
construction pricing turned out to be higher than anticipated. The final City action associated with
the project is negotiating the parking agreement for hotel guests, which will go before Common
Council. The agreement is to have shared parking for both hotel and hourly users.
D. Next Meeting Date: August 22, 2013
X. Adjournment
The meeting was adjourned by consensus at 9:23 A.M.
Minutes prepared by C. Pyott, edited by N. Bohn.
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