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HomeMy WebLinkAboutMN-IURAED-2022-06-07Approved: 7/19/22 108 E. Green St. Ithaca, NY 14850 (607) 274-6565 MEETING MINUTES ITHACA URBAN RENEWAL AGENCY Economic Development Committee (EDC) 3:30 P.M., Tuesday, June 7, 2022 Present: Chris Proulx, Chair; Doug Dylla, Vice-Chair; Leslie Ackerman; Charlotte Hamilton Excused: None. Vacancies: 2 Staff: Nels Bohn; Charles Pyott Guests: Amy Reading, Buffalo Street Books (BSB) John Guttridge, Urban Core, LLC I. Call to Order Chair Proulx called the meeting to order at 3:32 P.M. II. Agenda Additions/Deletions None. III. Public Comments (3-minute max. per person) None. IV. Review of Meeting Minutes: May 17, 2022 Ackerman moved, seconded by Dylla, to approve the minutes, with no modifications. Carried:3-0 Abstained: 1 V. New Business A. Reaffirm Cherry Street Extension Urban Renewal Project Bohn explained the purpose of the proposed resolution is to re-submit the developer’s (Urban Core, LLC) February 6, 2020 application for designation as a “Qualified and Eligible Sponsor” to acquire 6 acres of undeveloped land owned by the IURA on Cherry Street and reaffirm the Committee’s support for the project, in light of the amount of time that elapsed since it was originally proposed (just before the global COVID-19 pandemic outbreak). Even though the IURA Board adopted a resolution at the time designating Urban Core, LLC as the project sponsor and authorizing execution of an Exclusive Negotiation Agreement (ENA), no agreement was ever executed. The developer, however, remains very interested in pursuing the project. IURA EDC Meeting Minutes June 7, 2022 Page 2 of 8 Guttridge added that Urban Core’s original plans changed due to COVID-19. Although the project team continued to work on some aspects of the project, it was largely back-burnered because of the pandemic. The current project proposal is virtually identical from a programmatic perspective, including job-creation, light manufacturing, and locally farmed food products in the hospitality, horticulture, and beverage manufacture/retail sectors, and collaboration with other Cherry Street businesses. The project is very similar to what Urban Core has done with its other projects (e.g., Press Bay Alley & Court), with a focus on small/micro-enterprises. It would also include a small-scale open site hotel, reminiscent of Firelight Camps. Dylla asked about the timing of the project. Guttridge replied he assumes it will follow a similar timeline as the original proposal: a 180-day negotiating period and proceeding immediately thereafter. Once the land has been purchased, the process should take 18-24 months. Ackerman asked Bohn if he anticipates any obstacles to the project. Bohn replied, none he is aware of. Zoning regulations remain the same, which do not permit any residential uses. The Black Diamond Trail (BDT) continues to expand and the pedestrian bridge is scheduled for construction in early Spring 2023. Guttridge noted one potential risk he would like to highlight relates to the relatively recent appraisal, which determined the parcels’ value at $400,000 (subject to the construction of a road to provide access to each of the parcels). Urban Core originally anticipated $400,000-$500,000 for its construction budget. Since then, both land values and construction costs have drastically increased, which could place pressure on the project. While he does not expect a hand-out in terms of the land value, the appraisal is four years old, so he has questions about to how minimize the risk to Urban Core. Bohn remarked obtaining an updated appraisal would certainly add clarity to the issue, although it could take up to four months. The Exclusive Negotiation Agreement (ENA) could include strategies to address Guttridge’s concerns. It may be possible to expedite the appraisal process, including splitting the cost. Since it is a negotiation process and if there are specific Public Benefits the IURA/City would like the project to include, those could be accounted for as part of the sale price. A seller-financing arrangement could also be devised to make the project work. Guttridge responded all those options sound reasonable. He would be happy to split the appraisal cost. He believes the project would already provide numerous Public Benefits. Proulx noted the Committee could begin by examining the Public Benefits identified for prior projects (e.g., local labor; job-creation; environmental sustainability/energy efficiency; parking demand management; Living Wage commitment; public open spaces; pedestrian connections; public art, etc.) and determine which of them would be relevant to this project/site. Once that has been done, the Committee could assign a specific financial value to each Public Benefit. Bohn agreed that would be a reasonable approach. Proulx noted the Committee always has the option of extending the ENA’s term, if need be, if time becomes an issue. IURA EDC Meeting Minutes June 7, 2022 Page 3 of 8 Dylla moved, seconded by Hamilton: Reaffirm Designation of Urban Core, LLC as Sponsor & Approve Exclusive Negotiation Agreement (ENA) to Potentially Acquire IURA Land at Cherry Street Industrial Park WHEREAS, on February 6, 2020, Urban Core, LLC (Urban Core) submitted an application to be designated as a “qualified and eligible sponsor” (Sponsor) to acquire 6 acres of undeveloped land at the southerly end of Cherry Street owned by the IURA, containing the following tax parcels: • #100.-2-1.21 • #100.-2-1.23 • #100.-2-1.24 • #100.-2-1.25 • #100.-2-1.26, and WHEREAS, the IURA adopted a resolution designating Urban Core, LLC as a Qualified and Eligible Sponsor to undertake an Urban Renewal Project for sites located at the southerly end of Cherry Street and further authorized execution of an Exclusive Negotiation Agreement, and WHEREAS, on March 13, 2020, the President of the United States declared a national emergency concerning the coronavirus disease 2019 (COVID-19) pandemic, and WHEREAS, progress on the Urban Renewal Project paused for the pandemic, which has extended into mid-2022, and WHEREAS, Urban Core, LLC has resumed interest in the project and seeks to execute an exclusive developer agreement, and WHEREAS, the original submitted project proposal from Urban Core, LLC was projected to create at least 25 full-time equivalent (FTE) jobs in the hospitality, horticulture and beverage manufacture/retail sectors, expand and diversify the economic base of the community and provide employment opportunities, thereby furthering the goals and objectives of the Urban Renewal Plan, and WHEREAS, the current project continues to include hospitality, beverage manufacture/retail and a horticulture/agriculture uses and generate similar economic activity, though business partners have evolved since 2020, and WHEREAS, proposal contains the same anchor similar uses but with different business partners, and WHEREAS, the IURA Economic Development Committee considered this matter at its May 17, 2022, meeting and recommended the following; now, therefore, be it IURA EDC Meeting Minutes June 7, 2022 Page 4 of 8 RESOLVED, that the IURA hereby reaffirms its findings, designation, and approvals from its February 27, 2020 meeting to designate Urban Core, LLC a Qualified and Eligible Sponsor for an urban renewal project located at the southerly end of Cherry Street and authorize the IURA Chairperson to execute a 180-day Exclusive Negotiation Agreement (ENA) with the Sponsor. Carried Unanimously: 4-0 B. Buffalo Street Books (BSB): Review Results of Strategic Analysis — Report Reading explained there are four take-aways from the Seven Roots report. One recommendation is for BSB to streamline its operating structure/costs, before it initiates any other projects; however, BSB actually plans to simultaneously launch several projects to add/diversify its revenue streams. To reduce expenses, BSB will consult with the Onondaga Small Business Development Center. The report was very helpful in identifying target numbers for increasing profit in other areas, like used books. Another helpful suggestion from the report was to create and implement a strategic marketing plan to showcase new product lines and initiatives, possibly in conjunction with the Dyson School of Applied Economics and Management. The fourth helpful recommendation is what the report terms “planned giving,” although Reading described it as BSB “sustainers” (i.e., people who donate on an annual basis), which BSB has implemented for a few years and plans to broaden to include annual fiscal sponsorships by individuals through local organizations. BSB also plans to look at the report’s target number for increasing used book sales. Currently, BSB receives used books as donations, which provide a 100% profit. In thinking about how to increase used book sales, Reading reached out to Finger Lakes ReUse, Inc. (FLRU), which seems very excited about partnering with BSB. The second major strategy BSB will pursue is to transform the currently unused DeWitt Mall reading room into an event space that could potentially generate profits almost immediately. BSB will partner with Nothing Nowhere to open a coffee/tea bar in the reading room, which appears to be a popular idea with customers. Reading would also like to explore if Nothing Nowhere could be defined as a priority business under the IURA’s Priority Business Loan Fund (PB-LF). IURA EDC Meeting Minutes June 7, 2022 Page 5 of 8 Hamilton recalled an earlier conversation about opening a restaurant or food service, and whether that had changed. Reading replied Café DeWitt was purchased by new owners, one of whom happens to be a partner in Nothing Nowhere, so there would be no concerns about potential competition. The Nothing Nowhere/BSB joint venture would primarily benefit the bookstore financially. Ackerman asked about the key tension from the report that Reading mentioned: streamlining BSB’s operating structure/costs vs. initiating other projects. She wondered how much BSB plans to focus on streamlining its operating structure/costs. Reading responded BSB would certainly explore how to achieve that, although it has unsuccessfully attempted to do so in the past. Unfortunately, the report was not very specific about how to address the problem, partly because Seven Roots does not have particular expertise about the bookstore industry. The main item BSB could potentially focus on is the cost of books, which should not be as high as 62%. But there are many other components of its operating structure/costs which BSB simply cannot control, so it needs to broaden/diversify its revenue streams. Bohn asked about the report’s emphasis on increasing sidelines sales. Reading replied those would comprise a variety of non-book sales (e.g., stationery, journals, art supplies, jewelry, cards, candles, tea/coffee blends, book totes, accessories, etc.). Ackerman asked if BSB crunched the numbers in terms of building its membership base by providing discounts, and whether BSB would really come out ahead by doing that. Reading replied although BSB did not succeed with similar efforts in the past, it would like to explore some best models for achieving that. It may involve charging an annual membership fee (requiring an amendment to its by-laws). Ackerman asked if BSB has considered something along the lines of a ‘working membership’, similar to what GreenStar Cooperative has done, which could provide additional low-cost labor. Reading replied, yes, BSB has considered the possibility and currently has a volunteer corps. IURA EDC Meeting Minutes June 7, 2022 Page 6 of 8 Dylla asked which book genres sell best for BSB. Reading replied, she believes, literary fiction, young adult fiction, and perhaps politics/current events. Dylla suggested exploring promoting cookbook sales, including used books, which could be promoted to draw more people into the store. He also recommended offering free coffee/tea for people enrolling in the membership program. Proulx noted now would be a good time to respond to Reading’s earlier question about the Priority Business Loan Fund (PB-LF). Bohn remarked the IURA operates the separate Community Development- Revolving Loan Fund (CD-RLF) that does not require a business to be a Priority Business, which could provide loan assistance and would only require demonstrating job-creation, while benefiting low- and moderate-income (LMI) individuals. Hamilton noted her business just joined the Tompkins County Chamber of Commerce, which operates a program that identifies workplaces willing to provide job-training opportunities for people in addiction recovery. The bookstore tea/coffee shop would seem an ideal place for that. C. East Hill Fire Station Urban Renewal Project 1. Designate 311 CA Associates, LLC (Philip Proujansky) As Qualified & Eligible Sponsor Hamilton disclosed her business leases space from Integrated Acquisition & Development Corporation (IADC), which Proujansky has an ownership interest in. She does not personally see it as a conflict of interest, since it is a standard 10-year commercial lease not under active negotiation. Bohn agreed, unless there is some measurable financial benefit involved, it should not be considered a conflict of interest requiring Hamilton to recuse herself. Proulx explained the first step for the Committee is to designate 311 CA Associates, LLC as a Qualified & Eligible Sponsor for the Urban Renewal Project. At its June 2022 meeting, Common Council authorized the transfer of the East Hill Fire Station’s 309 College Avenue property and assignment of option to the IURA. Hamilton asked if the City conducted a detailed analysis of the two responses from 311 CA Associates, LLC and Visum Development Group to the Request for Expressions of Interest (RFEI). Bohn replied, yes. City staff recommended selecting the 311 CA Associates proposal, ultimately resulting in the current Option Agreement. If the IURA determines Visum Development Group’s proposal is superior, however, the next step would be to suspend any further action on the Option Agreement. An internal City analysis of the two proposals does exist, which Bohn believes will be reviewed at the Committee’s July 19, 2022 meeting. Bohn emphasized that designating 311 CA Associates, LLC does not preclude designating Visum Development Group. Hamilton remarked she would be more comfortable inserting another “Whereas” in the proposed resolution, explaining that two proposals were received and considered. No objections were raised. IURA EDC Meeting Minutes June 7, 2022 Page 7 of 8 Hamilton moved, as amended, seconded by Ackerman: Designate 311 CA Associates, LLC As Qualified & Eligible Sponsor for East Hill Fire Station Urban Renewal Project WHEREAS, on June 3, 2022, 311 CA Associates, LLC (Applicant) submitted an application to be designated a “Qualified and Eligible Sponsor” to potentially acquire the East Hill Fire Station property located at 309 College Avenue through a negotiated disposition process in accordance with urban renewal law, and WHEREAS, in response to a Request for Expressions of Interest (RFEI), issued on February 5, 2021, for an Urban Renewal Project at 309 College Avenue, the City of Ithaca (City) received two proposals from 311 CA Associates, LLC (Applicant) and Visum Development Group, and WHEREAS, the City of Ithaca (City) entered into an option agreement with the Applicant dated February 22, 2022 (“Option Agreement”) that permits, but does not require, the City to sell 309 College Avenue to Applicant in exchange for two parcels located at 403 Elmwood Avenue and 408 Dryden Road in addition to cash consideration of $5.1 million dollars to be paid to the City on the terms contained within the Option Agreement, and WHEREAS, on June 2, 2022, the City approved transfer of 309 College Avenue to the IURA, and assignment of the Option Agreement to the IURA, for the purpose of structuring a proposed disposition agreement for consideration by the City of Ithaca Common Council, and WHEREAS, Section 507 of General Municipal Law authorizes disposition of real property without auction or sealed bid via an urban renewal process, and WHEREAS, 309 College Avenue is located within the IURA Urban Renewal Project Boundary Area, and WHEREAS, pursuant to Section 508 of General Municipal Law, the IURA may designate a Qualified and Eligible Sponsor to purchase or lease property from the IURA to undertake an urban renewal project, subject to a determination that a Sponsor meets the following IURA evaluation criteria: • Financial status and stability • Legal qualifications to operate in the State of New York and to enter into contracts with regard to disposition, use, and development of land in question • Previous experience in financing, use, development, and operations of projects of a similar nature • Reputation and proof of fair, reputable, and ethical business practices and record devoid of convictions, and WHEREAS, 311 CA Associates, LLC registered with the New York State Department of State as a domestic limited liability company in 2018 and is authorized to legally operate in New York State, and IURA EDC Meeting Minutes June 7, 2022 Page 8 of 8 WHEREAS, per the Option Agreement, the prospective Sponsor has committed to deliver a letter of credit to the City in the amount of $4,500,000 to secure full payment of the purchase price, and WHEREAS, per the Option Agreement, the Applicant verifies ownership control of property located at 403 Elmwood Avenue and 408 Dryden Road, which properties are assessed at $2.5 million, and WHEREAS, the Sponsor team is led by Philip Proujansky who has extensive development and financing experience in Tompkins County as Managing Partner of the Integrated Acquisition and Development Corporation, including the Catherine Commons, College Circle, and the Breazzano Center projects, and WHEREAS, at its June 7, 2022 meeting, the IURA Economic Development Committee reviewed submitted qualifications and compared them to the IURA Sponsor evaluation criteria and recommended the following; now, therefore, be it RESOLVED, the IURA hereby finds 311 CA Associates, LLC satisfies IURA sponsor criteria and designates 311 CA Associates, LLC as a “Qualified and Eligible Sponsor” to potentially undertake an urban renewal project involving potential acquisition of 309 College Avenue. Carried Unanimously: 4-0 2. 309 College Avenue Site Visit Bohn explained he has been working to identify a time to visit the site, ideally with the Fire Chief, who is available on Mondays and Fridays. The site visit should be conducted shortly before the Committee’s July 19th, 2022 meeting. Bohn will also ask IURA Board members regarding their availability. VI. Old/Other Business A. Staff Report Bohn announced he will be out-of-office from June 10th-27th. Proulx reported Eric Rosario recently resigned from the IURA Board, so there are now a number of Board and Committee vacancies to fill. All recommendations of candidates are welcome. Hamilton asked about the two individuals she recommended for the Committee in the past: Heather Sanford and Shaianne Osterreich. Bohn replied Osterreich is currently in the process of submitting an application. He will also contact Sanford. VII. Adjournment The meeting was adjourned by consensus at 5:18 P.M. — END — Minutes prepared by C. Pyott, edited by N. Bohn.