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Home My WebLink AboutMN-IURA-2014-08-28Approved: 9/24/14 108 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, August 28, 2014 Members: Svante Myrick, Eric Rosario, Karl Graham, Ellen McCollister (Common Council Liaison) Excused: Tracy Farrell, Chris Proulx Staff: Nels Bohn, Charles Pyott Public: None I. Call to Order Chair Myrick called the meeting to order at 8:39 A.M. II. Agenda Additions/Deletions None. II. Public comment (3‐minute maximum per person) None. IV. Review of Draft Meeting Minutes: July 24, 2014 Rosario moved, seconded by Graham, to approve the July 24, 2014 meeting minutes, with no modifications. Carried Unanimously 3‐0 V. Economic Development Committee (EDC) A. Request from Italthai, LLC to Execute Mortgage Subordination Agreement with Lender to Facilitate Consolidation, Refinancing, & Extension Loan Bohn explained the applicant is seeking to refinance the existing debt on his businesses, Zaza's Cucina and Mia Tapas Bar & Restaurant (and both buildings), for which he originally received a series of loans from M&T Bank and the IURA. He has just received a $1.15M, 20‐year term loan commitment from Chemung Canal Trust Company, which he intends to use to pay off his M&T Bank debt and his IURA loan on the Plantation Building. He is asking the IURA to subordinate its loans to the other loans. IURA Minutes August 28, 2014 Page 2 of 6 Bohn noted that in the worst‐case scenario Chemung Canal could conceivably foreclose on one of the properties and the IURA collateral could be wiped out, so the EDC is recommending that the IURA’s collateral be distributed between the two properties. The combined value of the applicant’s assets is $2M, so there is plenty of collateral between both properties. Bohn recommended approval of the resolution, conditioned on a Mortgage Modification Agreement that the IURA collateral be distributed between the two properties. The third IURA loan would be repaid. (The final loan is a $900,000 Restore NY grant, which is a 30‐year loan to the developer at 0% interest and no payments due until year #30, so the Chemung Canal loan will be paid off prior to the first loan payment due on this loan. All three loans would be subordinate to the new Chemung Canal loan. Rosario remarked it is smart to distribute the collateral among both properties. Graham asked if the EDC expressed any other concerns. Bohn replied, no; the collateral was the main concern. The committee was very supportive of trying to work with the applicant, especially given all the challenges associated with the impacts of the City’s Commons Repair and Renovation Project. Rosario moved, seconded by Graham: Subordination Agreement for ItalThai, LLC Consolidation Loan (HODAG #16, CD‐RLF #31, Gateway #4, & Restore NY Loan) WHEREAS, on July 29, 2014, Lex Chutintaranond of ItalThai, LLC submitted a request to subordinate several IURA mortgage liens to Chemung Canal Trust Company (Bank) to facilitate a consolidation loan, and WHEREAS, on August 26, 2014, Lex Chutintaranond submitted a supplemental request to subordinate an additional IURA mortgage lien, and WHEREAS, the Bank has committed to issue a 20‐year consolidation, refinancing and extension loan subject to first mortgage liens on properties located at 622 Cascadilla Street (ZaZa’s Cucina) and 130‐132 E. State/MLK Jr. Street (Mia’s), and WHEREAS, the IURA has issued the following four loans to corporations controlled by Mr. Chutintaranond: IURA loan #1 Plantation Building – upper story housing (HODAG #16) Borrower: Ithalthai LLC Outstanding principal balance: $71,126.19 Final due date: 2031 Collateral: ‐ subordinate mortgage lien on 130‐132 E. State St. behind M&T IURA Minutes August 28, 2014 Page 3 of 6 IURA loan #2 Mia Noodle Bar (CD‐RLF #31) Borrower: Mia Noodle Bar, Inc. Outstanding principal balance: $59,895.64 Final due date: 2018 Collateral: ‐ subordinate mortgage lien on 622 Cascadilla St. ‐ 3rd security lien on restaurant assets behind M&T and TCIDA ‐ Personal guarantees of S. Chutintaraond & F. Cervesa IURA loan #3 Plantation Building Restore NY (Gateway #4) Borrower: Ithathai LLC Outstanding principal balance: $9,498.93 Final due date: 2014 Collateral: ‐ subordinate mortgage lien on 622 Cascadilla St. ‐ subordinate mortgage lien on 20 Rosina Dr., IURA loan #4 (assigned to IURA from City of Ithaca) Restore NY Loan in Lieu of Grant Borrower: Italthai LLC Outstanding principal balance: $900,000 Final due date: first and final payment due 2041 Collateral: ‐ subordinate 3rd mortgage on 130‐132 E. State Street WHEREAS, proceeds from the consolidation loan will pay off M&T debt and IURA loan #3, and WHEREAS, Italthai LLC requests the IURA subordinate its mortgage liens securing IURA loans #1, #2 and #4 to the Bank, and WHEREAS, Italthai LLC and Mia Noodle Bar, Inc. are current on IURA debt repayment, and WHEREAS, foot traffic to businesses on The Commons have been adversely impacted by two years of construction on The Commons, and WHEREAS, to remain minimally secured, the sum of the IURA outstanding loan balances due within the next 20 years and the new bank lien must remain below the appraised value of the property securing IURA debt (100% Loan‐to‐Value), and WHEREAS, separate Loan‐to‐Value (LTV) calculations for each loan yield the following LTV: • IURA loan #1, 130‐132 E. State Street: 89% • IURA loan #2, 622 Cascadilla Street: 177%, and IURA Minutes August 28, 2014 Page 4 of 6 WHEREAS, a LTV above 90%‐95% requires additional collateral and/or security to meet prudent underwriting standards, and WHEREAS, there is sufficient collateral value available between both parcels to secure all IURA loans, but currently only each IURA loan is only secured by a lien on a single property, and WHEREAS, at their August 12, 2014 meeting, the IURA Economic Development Committee reviewed this matter and recommends the following; and WHEREAS, Economic Development Committee members were polled by email regarding the supplementary request to subordinate the mortgage securing IURA loan #4 and unanimously recommend approving the supplemental request; now, therefore, be it RESOLVED, that the IURA hereby approves the request from Italthai, LLC to subordinate IURA mortgage liens on properties located at 130‐132 E. State/MLK Jr. Street and 622 Cascadilla Street (securing IURA loans #1, #2 and #4) to facilitate issuance of a consolidation loan by Chemung Canal Trust Company subject to the following conditions: 1. IURA loan #1 (HODAG #16)– Italthai LLC shall enter into a Mortgage Modification Agreeement spreading the mortgage lien securing this loan to include the real property located at 622 Cascadilla Street as collateral, and 2. IURA loan #2 (CD‐RLF #31) – Mia Noodle Bar, Inc. shall enter into a Mortgage Modification Agreement spreading the mortgage lien securing this loan to include the real property located at 130‐132 E. State/MLK Jr. Street as collateral, and 3. that loan proceeds from the consolidation loan pay off IURA loan #3 (Gateway #4) in full, and be it further RESOLVED, that the IURA Chairperson, subject to review by IURA legal counsel, is authorized to execute documents to implement this resolution. Carried Unanimously 3‐0 B. Appointment of Economic Development Committee Chairperson Bohn explained that the EDC agreed to elect Proulx as the Vice Chairperson and recommend Doug Dylla as Chairperson. IURA Minutes August 28, 2014 Page 5 of 6 Graham moved, seconded by Rosario: 2014 Appointment of IURA Economic Development Committee Chairperson WHEREAS, IURA By‐laws provide that the committee membership shall elect its own committee Vice‐Chairperson and nominate a candidate for committee Chairperson for consideration by the Agency, and WHEREAS, per the Bylaws, an Agency member shall fill either the committee Chairperson or committee Vice‐Chairperson position, and WHEREAS, officers of each committee serve a one‐year term, but continue to hold office until their successor is selected or appointed, and WHEREAS, the current Committee Chairperson and Vice‐Chairperson are Doug Dylla and Chris Proulx, respectively, and WHEREAS, at their August 12, 2014 meeting, the IURA Economic Development Committee elected Chris Proulx as Committee Vice‐Chairperson and nominated Doug Dylla as Committee Chairperson; now, therefore, be it RESOLVED, that the IURA hereby appoints Doug Dylla as Chairperson of the IURA Economic Development Committee. Carried Unanimously 3‐0 C. Committee Vice‐Chairperson Report Bohn reported on the status of the Stone Quarry Apartments project at 400 Spencer Road (2013 IURA Action Plan, HUD Entitlement Grant, Project #1), noting a draft of an updated Environmental Assessment report is expected to be completed and submitted to HUD by the end of week. The final decision on whether it is acceptable or needs to be amended is expected to be issued the following week. IURA Community Development Planner Lynn Truame has been working assiduously to review all the recent public comments regarding the project and determine if they have any merit. Ithaca Neighborhood Housing Services (INHS) is also generating an updated Environmental Management Plan (EMP) for the NYS Department of Environmental Conservation (DEC). Bohn indicated there is are no formal IURA financial report to review at this time, since both the Contracts Monitor and Accountant have been on vacation; however, all the loans are currrent, except the Argos Inn. IURA Minutes August 28, 2014 Page 6 of 6 VI. Other New/Old Business A. IURA Chairperson Report None. B. Common Council Liaison Report None. C. Staff Report None. D. Next meeting Date: 8:30 AM, Wednesday, September 24, 2014 VII. Adjournment The meeting was adjourned by consensus at 8:59 A.M. — END — Minutes prepared by C. Pyott, edited by N. Bohn.