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HomeMy WebLinkAboutMN-IURAED-2023-03-14 108 E. Green St. Ithaca, NY 14850 (607) 274-6565 MEETING MINUTES ITHACA URBAN RENEWAL AGENCY Economic Development Committee (EDC) 3:30 P.M., Tuesday, March 14, 2023 Common Council Chambers, 108 E. Green St., Ithaca, NY 14850 Present: Chris Proulx, Chair; Leslie Ackerman; Donna Fleming; Chuck Schwerin (virtual) Excused: None. Vacancies: 2 Staff: Nels Bohn; Charles Pyott Guests: Gary Ferguson, Downtown Ithaca Alliance (DIA) Tom Knipe, City Deputy Director for Economic Development I. Call to Order Chair Proulx called the meeting to order at 3:32 P.M. Proulx proposed, pursuant to the IURA “Use of Videoconferencing for Meetings of IURA Board & Committees” policy, adopted May 26, 2022, and due to the extraordinary circumstances associated with the current inclement weather, that Chuck Schwerin be permitted to participate in the meeting remotely. No objections were raised. Proulx moved, seconded by Schwerin. Carried Unanimously: 3-0 II. Agenda Additions/Deletions None. III. Public Comments (3-minute max. per person) None. IV. Review of Meeting Minutes: February 14th, 2023 Fleming moved, seconded by Schwerin, to approve the minutes, with no modifications. Carried Unanimously: 3-0 V. 2023 HUD Entitlement Grant: Review of Economic Development Funding Applications A. Finger Lakes ReUse, Inc., Building Quality Career Paths Through ReUse B. Historic Ithaca, Inc., Work Preserve Job Training/Placement C. GIAC, Inc., Hospitality Employment Training Program (HETP) D. Friends of Ithaca Farmers Market, Inc., Shared Kitchen Ithaca (SKI): Food Product Micro-Enterprise Development E. Black Hands Universal, Inc., BHU Pre-Apprenticeship Program F. IURA Economic Development Revolving Loan Fund Approved/Adopted: 5/9/23 EDC Meeting Minutes March 14, 2023 Page 2 of 10 App. No. Project Applicant Request Project Summary 10 Building Quality Career Paths Through ReUse Finger Lakes ReUse, Inc. (FLRU) $116,599.70 Funding towards staff wages/benefits, participant stipends, and work gear for job training for low- and moderate-income (LMI) populations (including the unemployed, disabled, formerly incarcerated, youth, and individuals in recovery), and placement of at least 15 LMI adults with employment barriers into permanent unsubsidized positions. 11 Work Preserve Job Training: Job Placements Historic Ithaca, Inc. $67,500.00 Funding for staff salaries leading to job placements of 6 LMI individuals (e.g., youth, adults, homeless, formerly incarcerated, people with disabilities/mental illness, people with barriers to employment, new entrants to workforce), following job-readiness training. 12 Hospitality Employment Training Program (HETP) Greater Ithaca Activities Center, Inc. (GIAC) $70,000.00 Staff, supplies, stipends, and professional fees to train 20 and place 14 LMI adults with employment barriers (e.g., people with disabilities, formerly incarcerated, homeless, recovering addicts, immigrants, single parents) into hospitality and office/administrative positions. 13 Shared Kitchen Ithaca (SKI): Food Product Micro- Enterprise Development Friends of Ithaca Farmers Market $47,800.00 Funding towards (1) staff salary for 24-hour direct business technical assistance for each of 10 LMI micro-enterprises and (2) 50% rent subsidy for use of licensed shared commercial kitchen at 700 W. Buffalo St. for 260 hours (5 hrs./wk. average utilization). 14 BHU Pre-Apprenticeship Program Black Hands Universal, Inc. $70,000.00 Funding towards salaries/stipends, materials, protective gear, certifications, and paperwork to provide 3-5 LMI youth, formerly-incarcerated, and BIPOC individuals with hands-on training in different trades and skilled-labor fields, giving them basic skills necessary to obtain jobs with local trades/unions, City of Ithaca. Tompkins Co., and the private sector, and resulting in the permanent employment. # Economic Development Loan Fund IURA $140,000.00 Capitalize loan fund for business loans resulting in job creation. Schwerin explained he reviewed all the applications from a cost-effectiveness perspective and calculated that HETP was ~$12,000/placement, Building Quality Career Paths Through ReUse was ~$17,000/placement, and Work Preserve Job Placements was ~$36,000/placement. His overarching concern is how the programs evaluate their outcomes on an ongoing basis. He believes they should conduct a quantitative analysis a year or more after each placement. Post-placement evaluations should be a priority for all the programs. Proulx remarked Historic Ithaca’s program is probably the most difficult and labor-intensive to implement, followed by FLRU and GIAC. Bohn added HETP is probably closer in structure and curriculum to a job-readiness program than the other two, although it is hard to compare the different programs. (Ackerman arrived at 3:40 p.m.) Fleming noted the quality of job placements is also an issue she is interested in. During the Neighborhood Investment Committee (NIC) meeting, one committee member questioned how realistic the “Shared Kitchen Ithaca (SKI): Food Product Micro-Enterprise Development” would end up becoming. She recommended reviewing that application more closely. Ackerman remarked the SKI project did garner considerable interest from potential clients and would support so many different types of food businesses. Schwerin asked if he is permitted to discuss the SKI project. Bohn recommended against it, as a potential conflict of interest, since Schwerin was so actively involved in developing the project when he worked for Ithaca Area Economic Development (IAED). Proulx agreed. Bohn remarked one thing distinguishing the SKI project from the others is that it is a micro-enterprise assistance program. There is no expectation or requirement that it create any new jobs per se. The IURA would employ other metrics to evaluate its success. EDC Meeting Minutes March 14, 2023 Page 3 of 10 Proulx noted the SKI project does not exclusively benefit LMI individuals, like the other programs. It is simply creating a centralized commercial kitchen space. Its value is more about the broader economic development impact it may have on the local community. At this point in the meeting, Proulx suggested the Committee review NIC’s funding recommendations: Neighborhood Investment Committee (NIC) Recommendations App. No. Project Applicant Funding Request Funding Recommendation Difference 10 Building Quality Career Paths Through ReUse Finger Lakes ReUse, Inc. $116,599.70 $78,595.00 -$38,004.70 11 Work Preserve Job Training: Job Placements Historic Ithaca, Inc. $67,500.00 $67,500.00 $0.00 12 Hospitality Employment Training Program (HETP) Greater Ithaca Activities Center, Inc. $70,000.00 $54,320.00 -$15,680.00 13 Shared Kitchen Ithaca (SKI): Food Product Micro-Enterprise l Friends of Ithaca Farmers Market $47,800.00 $32,500.00 -$15,300.00 14 BHU Pre-Apprenticeship Program Black Hands Universal, Inc. $70,000.00 $0.00 -$70,000.00 # Economic Development Loan Fund IURA $140,000.00 $140,000.00 $0.00 Fleming noted that NIC accepted Community Development Planner Anisa Mendizabal’s suggestion to award Ithaca Neighborhood Housing Services’ (INHS) “The Beacon” housing project a forgivable Housing Development Action Grant (HODAG) loan of $199,900.00. Bohn added the IURA periodically awards applicants HODAG funding up-front as a demonstration to other funders of its commitment to a project. If INHS is successful in securing all other funds for The Beacon, it could apply to the IURA in 2024 for HUD Entitlement Program funds. Bohn noted the agenda materials include an updated analysis of the job-placement programs’ recent unexpended balances and a revised chart summarizing the three programs’ prior performance. EDC Meeting Minutes March 14, 2023 Page 4 of 10 Bohn remarked there seem to be some opportunities for reducing IURA funding for the three programs, although FLRU requested more funds than it has in prior year and more than the other organizations. Proulx noted the IURA could fully fund both the Economic Development Loan Fund and the SKI project and still have funds left over. Ackerman observed the IURA has rarely awarded the three programs their full funding requests in prior years. It is difficult to determine if the unexpended funds are due to organizations requesting more in their applications than they needed (in which case the IURA could award them less in 2023); or whether it is truly a case of unanticipated delays or their not submitting reimbursement requests to the IURA as quickly/regularly as they should have been (in which case cutting funding would negatively impact them). It is not clear how direct the relationship is between IURA funding and program outcomes. Bohn noted FLRU has a paid Apprenticeship program, which tends to perform better in terms of job placements. FLRU reprogrammed its 2021 funds to go towards a forgivable loan, so it is just starting the process of spending the $61,934.65 from its 2022 funding award. All three programs are in similar situations in terms of progress in spending 2022 funds. Also worth noting is that Historic Ithaca spent its Paycheck Protection Program (PPP) funds to fund its staff, which slowed its use of IURA funds. Proulx suggested discussing the BHU application. It is the second time BHU has applied for IURA funding. NIC did not recommend funding the program. It is not clear from the application that the program would not duplicate any of the services/outcomes of the other programs. Nonetheless, it would be good to fund a new organization, which is working with a different population and targeting different skills and industries. EDC Meeting Minutes March 14, 2023 Page 5 of 10 Bohn noted BHU is only just starting to implement its 2022 “Pre-Apprentice Program Work Services” ($12,000.00) project. BHU did say it has had some success so far, with five placements. Admittedly, the program design in its 2023 application is not as clearly described as those of other projects. Ackerman remarked the lack of clarity in the BHU application is her greatest concern with the program. Otherwise, she would be more interested in funding it. Bohn added there is also the HUD-related question of whether joining a union is equivalent to job creation. Fleming noted the Committee also still does not know how BHU performed in administering the City’s separate funding awards to it. There seem to be too many open questions with the program. Proulx asked how NIC calculated its $32,500.00 recommendation for the SKI project. Bohn recalled it represents 50% of the cost of leasing the space (not paid by the micro-enterprises). Proulx recommended fully funding the SKI project at $47,800.00 to get it off the ground in its first critical year of operation and in recognition of its broader potential economic development impact. The Committee could then subtract the $15,300 difference from one or more other programs. Ackerman agreed with Proulx about the SKI project’s potential to stimulate broader economic development activity. The major impediment for getting micro-enterprise food businesses off the ground is obtaining a shared commercial kitchen space, which is relatively easy to resolve. Proulx added that since it is a start-up operation, the risk of it not achieving its goals, if underfunded, becomes greater, so he would be willing to take the higher risk and fully fund it. Fleming responded the food industry is notoriously difficult to break into and earn sufficient income. Proulx replied it is precisely because it is so difficult to break into that a sufficient investment in it could make it more likely to succeed. The other three programs do not directly contribute to local economic growth to the same extent. Proulx suggested fully funding the SKI project at $47,800.00 ($15,300.00 more than NIC recommended), which seems to leave two options: (1) reducing Historic Ithaca’s funding by the entire $15,300.00, leaving the program with $52,200.00; or (2) reducing all three programs by some amount. Ackerman recommended splitting the $15,300.00 reduction between Historic Ithaca and the Economic Development Loan Fund. In that case, Proulx suggested, the Committee could split the $15,300.00 reduction, so the Economic Development Loan Fund is reduced by $8,000.00 and Historic Ithaca by $7,300.00. EDC Meeting Minutes March 14, 2023 Page 6 of 10 Ackerman moved, seconded by Proulx: Proposed Recommendations App. No. Project Applicant Funding Request Funding Recommendation Difference 10 Building Quality Career Paths Through ReUse Finger Lakes ReUse, Inc. $116,599.70 $78,595.00 -$38,004.70 11 Work Preserve Job Training: Job Placements Historic Ithaca, Inc. $67,500.00 $60,200.00 -$7,300.00 12 Hospitality Employment Training Program (HETP) Greater Ithaca Activities Center, Inc. $70,000.00 $54,320.00 -$15,680.00 13 Shared Kitchen Ithaca (SKI): Food Product Micro-Enterprise l Friends of Ithaca Farmers Market $47,800.00 $47,800.00 $0.00 14 BHU Pre-Apprenticeship Program Black Hands Universal, Inc. $70,000.00 $0.00 -$70,000.00 # Economic Development Loan Fund IURA $140,000.00 $132,000.00 -$8,000.00 In Favor: Ackerman, Proulx Opposed: Fleming Recused: Schwerin Bohn remarked, even though there were two votes in favor of the proposed recommendation, they do not represent the required majority of the Committee’s four members, so the recommendation has not been formally adopted by the Committee. V. Community Lending A. Density District Priority Business Loan Fund (PB-LF): Downtown Ithaca Alliance (DIA) Recommendation to Revise List of Priority Businesses — Discussion Bohn announced that DIA has recommended revising the list of Priority Businesses for the City of Ithaca Density District, enumerated in the IURA Economic Development Loan Policy, to include some or all of the ones they enumerated. EDC Meeting Minutes March 14, 2023 Page 7 of 10 2022 DIA Recommendation to IURA: Priority Businesses Family Attractions (esp. pre-teen, teen attractions, family fun centers, arcades) Active/Interactive Apparel Wine Bar Polish Cuisine Seafood Restaurant 24-Hour Restaurant Artisanal Manufacturing Minority-Owned/BIPOC/Women-Owned Business Veteran-Owned Business Childcare General Store Home Furnishings Lifestyle Brand Ferguson explained there has been a steady erosion of the traditional retail core in Ithaca. Retail business has become progressively harder to successfully operate. If the size and variety of traditional retail businesses in the downtown core drop below a certain threshold, residents and visitors will begin to stop associating it as a retail center. The DIA’s Business Retention and Development (BRD) Committee created the list to target new types of businesses, which tend to be difficult to develop without additional funding and technical assistance. EDC Meeting Minutes March 14, 2023 Page 2 of 10 Knipe stressed the PB-LF is a very valuable program for the City to be able to provide local financing to targeted businesses. He will be working with a consultant over next few months to analyze the commercial district, create an inventory of existing retail businesses, and produce specific recommendations for further development. The current list should not be considered final at this stage. Some categories and terms need further translation. The following three categories are probably the most important: • Family Attractions • Artisanal Manufacturing • Home Furnishings Knipe added he is not sure what the terms “unrepresented” or “essential goods and services” mean in the existing list. They could be more specifically defined. EDC Meeting Minutes March 14, 2023 Page 3 of 10 Bohn suggested the Committee also reconsider the prohibition on loans to businesses deriving more than 35% of their revenues from sales of alcoholic beverages. He also recommended redefining the maximum financing limitation. Ackerman wondered if childcare would really be a financially viable business in the downtown area, given the high rents. Ferguson responded having childcare downtown would situate it where people need it the most. Fleming remarked, given the promotion of higher density downtown, people need greater access to grocery stores and even something as simple as a shoe-repair store or other sustainably-oriented businesses. EDC Meeting Minutes March 14, 2023 Page 4 of 10 Proulx suggested, rather than making the Priority Businesses list burdensomely over-specific, it may be best to revise the Economic Development Loan Policy’s objective statement. Four major types of objectives seem to have emerged from today’s discussion (e.g., retaining retail, diversifying the economy, essential services for downtown residents, supporting under-represented business owners), as well as succession planning for downtown businesses that have proven successful. “Objective: Induce the creation and start-up and expansion of specific priority business enterprises that have been defined by the community as highly desirable and/or enterprises that substantially increase foot traffic thereby strengthening the real estate market in the Density District to support businesses that provide daily goods and services to local residents. The program intends to meet this objective through direct financing to businesses with the understanding that attracting such business enterprises is likely to require stronger incentives than are available from other private or public sources and are likely to involve higher than normal risk and flexible lending policies to accomplish its objective.” Ackerman suggested distinguishing between “target” businesses and “priority” businesses. VI. Old/Other Business A. IURA Financials Review: February 2023 Bohn reported all loan repayments are current. Bohn reported only the Southside Community Center (SCC) lease payment is delinquent. B. Staff Report None. C. Other Business None. VII. Adjournment The meeting was adjourned by consensus at 5:15 P.M. — END — Minutes prepared by C. Pyott, edited by N. Bohn.