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Home My WebLink AboutMN-IURAED-2010-12-14Ithaca Urban Renewal Agency Approved January 11, 2011 108 East Green Street Ithaca, New York 14850 (607) 274-6559 (607) 274-6558 (fax) MINUTES IURA Economic Development Committee 3:30 PM, Tuesday, December 14, 2010 Present: Leslie Ackerman, Martha Armstrong, Doug Dylla, Excused: Jennifer Tegan Staff: Nels Bohn, Alice Vargo I. Call to order The meeting was called to order at 3:35 p.m. by Chairperson Dylla. II. Additions to or deletions from the agenda ‐ None III. Public comment (3 minute maximum per person) ‐ None IV. Review of Minutes for October 12, 2010 meeting Motion by Armstrong, seconded by Ackerman, to approve the October 12, 2010 minutes as written. Carried Unanimously. V. New Business A. Request from Plantation Building LLC to subordinate an IURA mortgage on property located at 20 Rosina Drive to facilitate refinancing (gateway proceeds, project #4). Bohn introduced the request and reported that the refinancing and requested subordination will not materially impact the IURA collateral position as the IURA will remain in second lien position behind a first lien mortgage of approximately the current amount. Armstrong moved, seconded by Ackerman the following: Subordinate IURA Mortgage on Property Located at 20 Rosina Drive (Gateway Proceeds, project #4) Whereas, on July 22, 2010, the Ithaca Urban Renewal Agency (IURA) approved a $490,000 loan to Plantation Building LLC to redevelop the vacant Plantation Building located at 130-132 MLK/W. State Street, and Whereas, the loan was secured in part by a 2nd mortgage lien on property located at 20 Rosina Drive, Ithaca, NY, behind a 1st mortgage held by M&T Bank with a balance of $428,000, and IURA EDC Minutes 12‐14‐10 Page 2 of 5 Whereas, the owner of 20 Rosina Drive proposes to refinance debt on this property encumbered by the IURA mortgage to take advantage of a lower interest rate, and Whereas, the lender, M&T Bank, has agreed to refinance the property with a $417,000 loan provided they have a 1st lien mortgage position, and Whereas, the requested loan subordination will not adversely impact the IURA’s collateral position securing the IURA loan to Plantation Building LLC as the IURA would remain as 2nd mortgagee behind a 1st mortgage of $417,000, and Whereas, at their December 14, 2010 meeting, the Economic Development Committee reviewed this matter and recommended the following; now, therefore, be it RESOLVED, that the IURA hereby agrees to subordinate the IURA mortgage held on property located at 20 Rosina Drive, Ithaca, NY to M&T Bank in an amount not to exceed $417,000, and be it further RESOLVED, that the IURA Chairperson, upon the advice of IURA legal counsel, is hereby authorized to execute all necessary and appropriate documents to implement this resolution, including, but not limited to, a subordination agreement. Carried Unanimously 3‐0 B. Request from Mack Travis for consent to transfer property and subordinate an IURA mortgage on property located at 209 W. MLK/W. State Street to facilitate refinancing & estate planning (PB‐LF, project #2 State Theatre of Ithaca) Bohn reported that Mack Travis would like to refinance and transfer the property at 209‐217 W. State/MLK Jr. Street (Family Medicine Building) from Mack Travis to a newly formed limited liability company, 209 State Street Associates, LLC, with the Carol G. Travis Irrevocable Trust as its sole member, as part of estate planning. He noted that the 209‐217 W. State/MLK Jr. property provides security for the IURA loan to State Theatre of Ithaca, Inc. If approved, the IURA will effectively retain its current collateral position, said Bohn. Armstrong moved, seconded by Ackerman the following: Consent to Transfer Property and Subordinate an IURA Mortgage on Property Located at 209‐217 MLK/W. State Street (PB‐LF, #2) Whereas, on January 22, 2009, the Ithaca Urban Renewal Agency (IURA) approved a loan to State Theatre of Ithaca, Inc. to acquire and operate the State Theatre, and IURA EDC Minutes 12‐14‐10 Page 3 of 5 Whereas, the IURA loan was secured in part by a 2nd mortgage lien on property located at 209‐217 MLK/W. State Street (AKA Family Medicine Building) owned by Mack Travis, with a 1st first mortgage lien in the amount of $398,000 held by Savings Bank of the Finger Lakes, and Whereas, Mack Travis proposes to refinance and transfer the property encumbered by the IURA mortgage for estate planning purposes, and Whereas, Mack Travis requests IURA consent to transfer the property from Mack Travis to 209 State Street Associates, LLC, a newly formed limited liability company with The Carol G. Travis Irrevocable Trust as its sole member, and Whereas, Mack Travis further requests the IURA to subordinate its $458,500 mortgage to a 1st mortgage lien in the amount of $398,000 to be held by Tompkins Trust Company, and Whereas, the requested loan subordination does not adversely impact the IURA’s collateral position securing the loan to the State Theater of Ithaca, Inc, as the IURA would remain as 2nd mortgagee behind a 1st mortgage of $398,000, and Whereas, at their December 14, 2010 meeting, the Economic Development Committee reviewed this matter and recommended the following; now, therefore, be it RESOLVED, that the IURA hereby consents to the transfer of property located at 209‐ 217 MLK/W. State Street from Mack A. Travis to 209 State Street Associates, LLC and agrees to subordinate the IURA mortgage to the Tompkins Trust Company in an amount not to exceed $398,000, and be it further RESOLVED, that IURA Chairperson, upon the advice of IURA legal counsel, is hereby authorized to execute all necessary and appropriate documents to implement this resolution, including, but not limited to, executing a consent and subordination agreement. Passed Unanimously 3‐0 C. Common Council repeal of apprenticeship policy & guidance to IURA regarding job training & placement programming (2011 Action Plan). The Committee reviewed City of Ithaca Common Council documents including adopted resolutions (1) repealing the apprenticeship policy and (2) reaffirming job training as a priority community development need and encouraging the IURA to include effective job training and placement programs in future recommended Action Plans for allocating CDBG funding. IURA EDC Minutes 12‐14‐10 Page 4 of 5 VI. Staff Report A. Potential job training & placement funding proposals, 2011 Action Plan Bohn briefly discussed several potential economic development projects that IURA staff have discussed with sponsors who are considering submission of a CDBG funding application for job training and small business assistance, including a job training program sponsored by Kitchen Theatre Company Inc., a work readiness and job placement program sponsored by Calvary Baptist Church, continuation of a job training program by Significant Elements, and a technical assistance program for existing businesses sponsored by Cornell Cooperative Extension and the Ithaca Downtown Alliance. Bohn noted that job training and placement programs are categorized as “public service” activities, which are limited to 15% of the CDBG award. Economic development projects that (1) create jobs, (2) provide microenterprise assistance or (3) are carried out by a Community Based Development Organization (CBDO) undertaking a community economic development project are exempt from the 15% public service cap. He reported that the Kitchen Theatre Company, Inc. has recently been designated as a CBDO by the IURA. B. October & November loan repayment reports Bohn reviewed the October and November financials. Diane’s State Street Auto is now four months in arrears he reported and she has agreed to come in to talk with Bohn about her financial status. Cayuga Green LLC missed their November loan payment on the Urban Outfitters loan, but made other lease and loan payments to the IURA. All other borrowers and tenants are current. Dylla encouraged close monitoring of Diane’s loan. C. Other The Committee reviewed the June 30, 2010 financials for the State Theatre of Ithaca, Inc. (STI) and noted that revenues, at $487,000, were down significantly from projections, but that unearned income exceeded projections. Overall, the net loss was approximately $40K larger than projected. Bohn noted that STI has fulfilled their job creation goal and the interest rate on the loan has been readjusted to 2.5%. Dylla suggested that the Committee continue to monitor annual financials on this project and request a copy of the management letter from the auditor and 2011 projections. VII. Project updates A. Argos Inn (CD‐RLF, project #29) Bohn reported that Avi Smith has indicated that Tompkins Trust Company has verbally approved a SBA 504 loan for the project subject to NYBDC approval. IURA EDC Minutes 12‐14‐10 Page 5 of 5 B. Petrune manufacturing (CD‐RLF application) Bohn reported that Petrune is planning to reopen in January following the November fire. On an interim basis Petrune will operate at the Holiday store on the Commons. VIII. Old and Other Business Bohn reported that the $1.15 million Restore NY III Grant Disbursement Agreement has been approved by the Empire State Development Corp. to assist the Plantation and Petrune building redevelopment projects. IX. Next meeting date: January 11, 2011 Leslie noted that she may have difficulty attending the January meeting. X. Adjournment The meeting was adjourned by consensus at 4:20 p.m. End Minutes prepared by A. Vargo, edited by N. Bohn j:\community development\admin files\minutes\edc\2010\12 december\minutes edc 12‐14‐10 nb edit.doc