HomeMy WebLinkAboutMN-IURA-2011-02-24Ithaca
Urban
Renewal
Agency
Approved June 23, 2011
108 East Green Street
Ithaca, New York 14850
(607) 274-6559 59
(607) 274-6558 (fax) (607) 274-6558 (fax)
MINUTES MINUTES
ITHACA URBAN RENEWAL AGENCY ITHACA URBAN RENEWAL AGENCY
Council Chambers, City Hall Council Chambers, City Hall
Thursday, February 24, 2011 Thursday, February 24, 2011
Regular Meeting Regular Meeting
Members: Susan Cummings, Doug Dylla, Tracy Farrell, Carolyn Peterson Members: Susan Cummings, Doug Dylla, Tracy Farrell, Carolyn Peterson
Others: J.R. Clairborne (9:15 a.m.), Common Council liaison to IURA; Theresa Halpert Others: J.R. Clairborne (9:15 a.m.), Common Council liaison to IURA; Theresa Halpert
Staff: Nels Bohn, JoAnn Cornish, Sue Kittel, Alice Vargo Staff: Nels Bohn, JoAnn Cornish, Sue Kittel, Alice Vargo
Guest: Sunit “Lex” Chutintanarond, owner of Mia Noodle Bar and Restaurant, Inc. Guest: Sunit “Lex” Chutintanarond, owner of Mia Noodle Bar and Restaurant, Inc.
I. Call to Order I. Call to Order
Chairperson Peterson called the meeting to order at 9:26 A.M. following adjournment at 9:26 A.M. of the
3rd continuation of the January 27, 2011 IURA meeting.
Chairperson Peterson called the meeting to order at 9:26 A.M. following adjournment at 9:26 A.M. of the
3rd continuation of the January 27, 2011 IURA meeting.
II. Additions to or deletions from the agenda ‐ None II. Additions to or deletions from the agenda ‐ None
III. Public comment ‐ None III. Public comment ‐ None
IV. Approval of meeting minutes for January 27, 2011: Farrell moved, seconded by Dylla, to approve
the minutes of the January 27, 2011 meeting. Carried Unanimously.
IV. Approval of meeting minutes for January 27, 2011: Farrell moved, seconded by Dylla, to approve
the minutes of the January 27, 2011 meeting. Carried Unanimously.
V. Economic Development Committee V. Economic Development Committee
A. Request for loan assistance from Mia Noodle Bar and Restaurant, Inc. to establish and operate a
new restaurant at 130‐132 E. MLK Jr./State Street
A. Request for loan assistance from Mia Noodle Bar and Restaurant, Inc. to establish and operate a
new restaurant at 130‐132 E. MLK Jr./State Street
Dylla reviewed the Economic Development Committee’s underwriting on the loan application and
its recommendation. He noted that Mr. Chutintaranond has a very strong track record of restaurant
business success. He noted the restaurant is projected to create eighteen full‐time positions of
which at least nine positions will be paid a living wage and several other will receive tips.
Dylla reviewed the Economic Development Committee’s underwriting on the loan application and
its recommendation. He noted that Mr. Chutintaranond has a very strong track record of restaurant
business success. He noted the restaurant is projected to create eighteen full‐time positions of
which at least nine positions will be paid a living wage and several other will receive tips.
Dylla moved, seconded by Farrell, the following: Dylla moved, seconded by Farrell, the following:
CD‐RLF – Loan Assistance tor Mia Noodle Bar & Restaurant, Inc. CD‐RLF – Loan Assistance tor Mia Noodle Bar & Restaurant, Inc.
Whereas, on January 10, 2011, Mia Noodle Bar and Restaurant, Inc. (Mia) applied for $100,000 of
loan assistance to start up and operate a new restaurant in the Plantation Building located at 130‐
132 E. MLK Jr./State Street, and
Whereas, on January 10, 2011, Mia Noodle Bar and Restaurant, Inc. (Mia) applied for $100,000 of
loan assistance to start up and operate a new restaurant in the Plantation Building located at 130‐
132 E. MLK Jr./State Street, and
Whereas, Mia is owned 50%/50% by Sunit “Lex” Chutintanarond and his wife, Flaminia Cervesi,
who are also the managing members of the ItalThai LLC, the owners of the Plantation Building, and
Plantation Building LLC, who is undertaking the building renovation project with assistance though
the Restore NY III grant program, and
Whereas, Mia is owned 50%/50% by Sunit “Lex” Chutintanarond and his wife, Flaminia Cervesi,
who are also the managing members of the ItalThai LLC, the owners of the Plantation Building, and
Plantation Building LLC, who is undertaking the building renovation project with assistance though
the Restore NY III grant program, and
IURA Minutes
February 24, 2011 Regular Meeting
Page 2 of 8
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 need for the loan results from a funding shortfall in the Plantation Building
redevelopment project due to problems securing an equity investor to fully utilize Federal and New
York State historic rehabilitation tax credits (RTCs) generated by the project, and
Whereas, the project structure assumed RTCs would generate a $680K equity investment, but after
2010 New York State legislative changes to the program no investor for the NYS RTCs can be
secured, and the Federal RTC investment will only realize a $315K equity investment up front,
resulting in a $365K funding gap, and,
Whereas, Plantation Building LLC management proposes to fill the funding gap from the following
sources:
$135K equity from Plantation LLC member
$130K increased bank loan
$100K reallocation of equity pledged to Mia restaurant project
$365K
Whereas, filling the funding gap for the building rehabilitation project will create a $100K gap in the
Mia restaurant project, thereby creating the need for IURA loan assistance, and
Whereas, the proposed uses of project funds are:
$250,000 machinery & equipment
$50,000 furnishings
$ 50,000 interior fit‐up construction
$50,000 inventory & supplies
$50,000 training and start‐up costs
$50,000 working capital
$500,000 Total, and
Whereas, the proposed sources of project funds are:
$300,000 Bank
$50,000 Tompkins County Area Development
$50,000 Landlord improvements
$100,000 IURA
$500,000 Total, and
Whereas, the project is projected to create eighteen (18) full‐time equivalent (FTE) employment
positions of which at least 51% will be filled by low‐ and moderate‐income persons, and
Whereas, nine (9) of the employment positions to be created are projected to earn wages of at
least $13/hour, in excess of the $12.11/hour “living wage”, and
IURA Minutes
February 24, 2011 Regular Meeting
Page 3 of 8
Whereas, 2.5 FTE dishwasher positions will be created at $9/hour and the remaining employment
positions receive tip income, and
Whereas, CD‐RLF financing policy establishes maximum loan amount of $50,000 for a retail
business and $100,000 for a non‐retail business except where the IURA determines that the project
will result in an extraordinary degree of public benefit, and
Whereas, CD‐RLF financing policy establishes an eligibility threshold for loans to restaurants, and
Whereas, the project implements IURA policy to create new employment opportunities, facilitate
expansion of business activity, expand the commercial tax base, and occupy formerly vacant upper
floor space on the Commons, and
Whereas, at their February 10, 2011 meeting, the IURA Economic Development Committee
reviewed the loan application, the credit analysis prepared Robert Deemer Jr. of H. Sicherman &
Co., Inc. and applicable provisions of the IURA Economic Development Policy Guidelines and
Operating Plan, and recommended the following; now, therefore, be it
RESOLVED, that the IURA hereby determines that the project satisfies CD‐RLF eligibility
requirements for loan assistance to a restaurant because of the project’s public benefits and the
capacity/experience of the borrower, and
RESOLVED, that the IURA hereby approves an IURA loan from the Community Development
Revolving Loan Fund in accordance with the loan application, and the following terms:
Borrower: Mia Noodle Bar & Restaurant, Inc., a NYS corporation
created in 2008
Loan Amount: Up to $100,000
Project: Start up and operation of restaurant at 130‐132 E. MLK
Jr./State Street, Ithaca, NY
Total Project Cost: $500,000
Projected Use of
IURA Funds:
Furnishings, fixtures and equipment
Term: 7 years and 3 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
IURA Minutes
February 24, 2011 Regular Meeting
Page 4 of 8
amortize the loan over the remaining 7 year term
(approximately $1,344/month @ 3.5%).
Collateral: 1. 2nd mortgage lien on property located at 20 Rosina
Drive, Ithaca, NY
2. 3rd security lien on all restaurant equipment, behind
only M&T Bank and Tompkins County Area
Development Corp.
Guarantor(s): Personal guarantees of Sunit Chutintaranond and
Flaminia Cervesi, each individually.
Conditions: 1. Creation of at least eighteen (18) full‐time equivalent
employment positions of which at least 51% must be
held by low‐ and moderate‐income persons.
2. Payment of living wages ($12.11/hour) to at least 9 FTE
employment positions not dependent on tip income.
3. Annual submission of federal income taxes and profit
& loss statement for Mia Noodle Bar & Restaurant, Inc.
And be it further
RESOLVED, that the IURA hereby waives the maximum $50,000 loan amount from the CD‐RLF for
this application in recognition of exceptional public benefits resulting from the project, including:
Establishment of an anchor business for a $3.2 million rehabilitation project converting a
partially vacant downtown building into a mixed‐use building containing retail, office and
housing uses;
Rehabilitating of a 4‐story, historic downtown Commons building in accordance with the
Secretary of the Interior’s standards for historic rehabilitation;
Generation of more than $25,000 annually in sales tax revenue to the City;
Establishment of a minority‐ and woman‐owned business; 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.
Carried Unanimously 4‐0
B. Request for loan assistance from Domenica Brockman dba Petrune and Justin Hjortshoj to
establish and operate Petrune manufacturing on upper floors at 126‐128 E. MLK Jr./State Street
Dylla reviewed that loan funding is requested to establish textile production on the vacant upper
floors of the Petrune building. He reported that the Economic Development Committee discussed
this loan application at several meetings and requested additional information to understand the
business impact of the October fire in the building.
Dylla moved, seconded by Cummings, the following:
IURA Minutes
February 24, 2011 Regular Meeting
Page 5 of 8
CD‐RLF – Loan Assistance for Petrune light manufacturing project
Whereas, on October 4, 2010, Domenica Brockman & Justin Hjortshoj applied for $35,000 of loan
assistance to develop a textile manufacturing division of Petrune as a component of a $390,000 real
estate development project to renovate vacant upper floors of the Petrune building located at 126‐
128 E. MLK Jr./State Street, and
Whereas, supplemental information was received through January 2011, and
Whereas, Domenica Brockman is the sole proprietor of Petrune, and Domenica Brockman and
Justin Hjortshoj, husband and wife, jointly own the Petrune building, 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 light manufacturing project was developed after an original upper story
redevelopment project to create three rental housing units was unable to secure lender financing,
and
Whereas, a fire occurred in the basement of the Petrune building in mid‐October 2010 requiring
closure of the building and insurance proceeds have been sufficient to complete building repairs
and clean‐up of fire damage to reoccupy the building in January 2011, and
Whereas, a funding gap of at least $35,000 in project financing is projected, and
Whereas, the proposed uses of project funds are:
$260,000 demolition and construction
$50,000 architect fees & soft costs
$ 50,000 equipment & finish work
$30,000 working capital
$390,000 Total, and
Whereas, the proposed sources of project funds are:
$250,000 Restore NY grant
$25,000 insurance proceeds
$80,000 equity and/or private loan
$35,000 IURA
$390,000 Total, and
Whereas, the project implements IURA policy to create new employment opportunities, facilitate
expansion of business activity, expand the commercial tax base, and occupy formerly vacant upper
floor space on the Commons, and
Whereas, CD‐RLF financing policy establishes maximum loan amount of $50,000 for a retail
business and $100,000 for a non‐retail business except where the IURA determines that the project
will result in an extraordinary degree of public benefit, and
IURA Minutes
February 24, 2011 Regular Meeting
Page 6 of 8
Whereas, the light manufacturing project is projected to create one and one‐half (1½) full‐time
equivalent (FTE) employment positions, of which at least 51% will be filled by low‐ and moderate‐
income persons, thereby meeting the CDBG public benefit test to generate at least one FTE job for
every $35,000 of assistance, and
Whereas, all new full‐time positions are projected to receive at least $12/hour with one silk
screening position to be provided with employer‐paid health insurance benefits, and
Whereas, at their February 10, 2011 meeting, the IURA Economic Development Committee
reviewed the loan application, the credit analysis prepared Robert Deemer Jr. of H. Sicherman &
Co., Inc. and applicable provisions of the IURA Economic Development Policy Guidelines and
Operating Plan, and recommended the following; now, therefore, be it
RESOLVED, that the IURA hereby approves an IURA loan from the Community Development
Revolving Loan Fund in accordance with the loan application, and the following terms:
Borrower: Domenica Brockman dba Petrune, a NYS sole
proprietorship established in 2001 and Justin
Hjortshoj and Domenica Brockman, each
individually
Loan Amount: Up to $35,000
Project: Start up and operation of light manufacturing
division of Petrune to produce textiles at 126‐128
E. MLK Jr./State Street, Ithaca, NY
Total Project
Cost:
$390,000
Projected Use of
IURA Funds:
Professional fees, FF&E, and working capital
Term: 5 years and 3 months
Interest Rate: 3.5% annually, reset to2.5% 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 3months, then level
monthly principal and interest payments due to
fully amortize the loan over the remaining 5 year
term (approximately $637/month @ 3.5%).
IURA Minutes
February 24, 2011 Regular Meeting
Page 7 of 8
Collateral: 3. 1st security lien on all assets of Petrune sole
proprietorship, including accounts, inventory,
furniture, fixtures and equipment now owned or
hereinafter acquired.
4. Assignment of rents and leases covering property
located at 126‐128 E. MLK Jr./State Street, Ithaca,
NY.
Guarantor(s): 1. Personal guarantees of Domenica Brockman and
Justin Hjortshoj, each individually, unless waived
upon advice of IURA legal counsel as not providing
additional substantial security.
Conditions: 4. Creation of at least one and one‐half (1 ½) full‐
time equivalent employment positions of which at
least 51% must be held by low‐ and moderate‐
income persons.
5. Annual submission of federal income taxes and
profit & loss statement for the Petrune
manufacturing division.
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.
Carried Unanimously 4‐0
C. Committee Chairperson report
Dylla reported that an effort is underway for a community buy‐out of Buffalo Street Bookstore after
they announced their plans to close. Bohn reported that he has been asked by Gary Weissbrot
whether the IURA would consider assigning its loan to a new ownership entity to facilitate the
community buy‐out. He noted that primary collateral in all likelihood would be limited to the
inventory of books, which has held constant at approximately $200,000. Agency members
indicated they were open to considering an assignment of the loan upon completion of due
diligence and understanding how the new community‐based ownership will work in operation.
Cummings was very supportive of the community buy‐out model.
VI. Neighborhood Investment Committee
A. Committee Chairperson report ‐ none
VII. Governance Committee
A. Review of January 2011 IURA financials
Bohn reviewed highlights of the January financials noting progress to expend funds for several 2007
and 2008 CDBG and HOME projects. The agency accepted the financials.
B. Committee Chairperson report ‐ none
IURA Minutes
February 24, 2011 Regular Meeting
Page 8 of 8
VIII. New/Old Business
A. IURA Chairperson Report
Peterson reported that the County Planning Commissioner has instituted new standards for
development projects referred to the County Planning Department for review of inter‐municipal or
countywide impact pursuant to GML 239m that apparently requires certain new housing projects
to include affordable housing. Actions of the Planning Board or BZA that act contrary to the
County Planning Commissioner’s recommendation require a majority plus one vote of the body.
She reported that there was no advance notice of the policy change.
B. Staff Report – none
C. Other New/Old Business
Cummings requested that the Deputy Director of Economic Development make periodic reports on
City economic development issues to the IURA, such as Emerson redevelopment and local business
development opportunities.
Dylla noted that he would be traveling for the month of March and will miss the next meeting.
IX. Motion to Adjourn
By consensus the meeting was adjourned at 11:45 A.M.
END
Minutes prepared by A. Vargo, edited by N. Bohn
j:\community development\admin files\minutes\iura\2011\2feb\4 ‐2‐24‐11 iura min reg meet nb edit.doc