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HomeMy WebLinkAboutMN-IURA-2024-01-26Approved: 3/22/24 108 E. Green St. Ithaca, NY 14850 (607) 274-6565 MINUTES ITHACA URBAN RENEWAL AGENCY BOARD 8:30 A.M., Friday, January 26th, 2024 Common Council Chambers, Third Floor (City Hall) 108 E. Green St., Ithaca, NY 14850 Members: Chris Proulx, Chair; Karl Graham, Vice-Chair; Robert Cantelmo (Mayor); Donna Fleming; Ducson Nguyen (Common Council Liaison) [virtual] Excused: Shaianne Osterreich Vacancies: 1 IURA Staff: Nels Bohn; Anisa Mendizabal; Charles Pyott [virtual] City Staff: Lisa Nicholas Guests: None. I. Call to Order Chair Proulx called the meeting to order at 8:32 A.M. II. Agenda Additions/Deletions None. III. Public Comments None. IV. Review of Meeting Minutes: December 15, 2023 (postponed) V. Governance Committee (GC) A. Procurement — Independent Contractors 1. COMMUNITY DEVELOPMENT CONSULTING: H. Sicherman/The Harrison Studio Fleming explained that the four proposed resolutions extend the IURA’s current professional services contracts for an additional year. Fleming moved, seconded by Graham: 2024 Procurement of Community Development Consulting Services — H. Sicherman/The Harrison Studio WHEREAS, the contract with H. Sicherman & Company, Inc./The Harrison Studio (Sicherman) providing community development consulting services, including loan underwriting, expires on February 29, 2024, and IURA Minutes February 23, 2024 Page 2 of 11 WHEREAS, in accordance with IURA procurement policy and regulations contained in 2 CFR Part 200 for procurement of professional services, the IURA selected Sicherman through a Request for Proposals (RFP) selection process in 2021, and WHEREAS, whereas per applicable procurement regulations, a contractor selected through an initial competitive selection process may be renewed for up to two additional one-year terms without undertaking a new competitive selection process, and WHEREAS, a proposed 2024 contract would constitute the second one-year extension of the base independent consultant contract, and WHEREAS, Sicherman submitted a proposal to continue providing community development services to the IURA in 2024 at the following hourly rates: • $185/hour – Harry Sicherman • $145/hour – Michael Thomas (loan underwriting), and WHEREAS, the 2024 rates represent a 0% increase from the current contract rates, and WHEREAS, IURA staff is highly satisfied with the quality of services provided by Sicherman, and WHEREAS, the 2024 IURA budget authorized a total of $10,000 for community development and loan underwriting services, and WHEREAS, on January 19, 2024, the Governance Committee reviewed this matter and recommended the following action; now, therefore, be it RESOLVED, that IURA Chair is hereby authorized, upon review of IURA legal counsel, to execute a one- year contract extension for independent contractor legal services with H. Sicherman & Company, Inc./The Harrison Studio, at a maximum hourly rate of $185 per hour with the total amount not to exceed $10,000, and be it further RESOLVED, that the source of such funds for community development consulting services shall be derived from a variety of funding sources, including, but not limited to, CDBG and HOME funds, and expenses shall be billed to the appropriate source of funds for which the services were performed. Carried Unanimously: 4-0 2. LEGAL SERVICES: Mariette Geldenhuys, Attorney & Mediator Fleming moved, seconded by Graham: 2024 Procurement of Independent Legal Services: M. Geldenhuys WHEREAS, the contract for independent legal services with Mariette Geldenhuys, Attorney-at-Law (Geldenhuys) expires on February 29, 2024, and IURA Minutes February 23, 2024 Page 3 of 11 WHEREAS, in accordance with IURA procurement policy and regulations contained in 2 CFR Part 200 for procurement of professional services, the IURA selected Geldenhuys through a Request for Proposals (RFP) selection process in 2021, and WHEREAS, per applicable procurement regulations, a contractor selected through an initial competitive selection process may be renewed for up to two additional one-year terms without undertaking a new competitive selection process, and WHEREAS, a proposed 2024 contract would constitute the second one-year extension of the base independent consultant contract, and WHEREAS, Geldenhuys submitted a proposal to continue providing legal services to the IURA in 2024 at a maximum billing rate of $245 per hour, a 2.1% increase from the current contract rate of $240 per hour, and WHEREAS, the IURA staff is highly satisfied with the quality of legal services provided by Geldenhuys, and WHEREAS, the 2024 IURA budget recommended a total authorized contract amount of $22,000 for legal services; WHEREAS, on January 19, 2024, the Governance Committee reviewed this matter and recommended the following action; now, therefore, be it RESOLVED, that IURA Chair is hereby authorized, upon review of IURA legal counsel, to execute a one- year contract extension for independent contractor legal services with Mariette Geldenhuys, Attorney and Mediator, at a maximum hourly rate of $245 per hour with the total amount not to exceed $12,000, and be it further RESOLVED, that the source of such funds for legal services shall be derived from a variety of funding sources, including, but not limited to, CDBG and HOME funds, and expenses shall be billed to the appropriate source of funds for which the services were performed. Carried Unanimously: 4-0 3. LEGAL SERVICES: Law Offices of Sharon M. Sulimowicz Fleming moved, seconded by Graham: 2024 Procurement of Independent Legal Services: S. Sulimowicz WHEREAS, the contract for independent legal services with the Law Offices of Sharon Sulimowicz (Sulimowicz) expires on February 29, 2024, and IURA Minutes February 23, 2024 Page 4 of 11 WHEREAS, in accordance with IURA procurement policy and regulations contained in 2 CFR Part 200 for procurement of professional services, the IURA selected Sulimowicz through a Request for Proposals (RFP) selection process in 2021, and WHEREAS, per applicable procurement regulations, a contractor selected through an initial competitive selection process may be renewed for up to two additional one-year terms without undertaking a new competitive selection process, and WHEREAS, a proposed 2024 contract would constitute the second one-year extension of the base independent consultant contract, and WHEREAS, Sulimowicz submitted a proposal to continue providing legal services to the IURA in 2024 at a maximum billing rate of $225 per hour, a 12% increase from the contract rates over the past two years, and WHEREAS, IURA staff is highly satisfied with the quality of legal services provided by Sulimowicz, and WHEREAS, the 2024 IURA budget authorized a total of $22,000 for legal services WHEREAS, on January 19, 2024, the Governance Committee reviewed this matter and recommended the following action; now, therefore, be it RESOLVED, that IURA Chair is hereby authorized, upon review of IURA legal counsel, to execute a one- year contract extension for independent contractor legal services with The Law Office of Sharon M. Sulimowicz, at a maximum hourly rate of $225 per hour with the total amount not to exceed $6,000, and be it further RESOLVED, that the source of such funds for legal services shall be derived from a variety of funding sources, including, but not limited to, CDBG and HOME funds, and expenses shall be billed to the appropriate source of funds for which the services were performed. Carried Unanimously: 4-0 4. LEGAL SERVICES: Krin Flaherty, Attorney-At-Law Fleming moved, seconded by Graham: 2024 Procurement of Independent Legal Services: K. Flaherty WHEREAS, the contract for independent legal services with Krin Flaherty (Flaherty) expires on February 29, 2024, and WHEREAS, in accordance with IURA procurement policy and regulations contained in 2 CFR Part 200 for procurement of professional services, the IURA selected Flaherty through a Request for Proposals (RFP) selection process in 2021, and IURA Minutes February 23, 2024 Page 5 of 11 WHEREAS, per applicable procurement regulations, a contractor selected through an initial competitive selection process may be renewed for up to two additional one-year terms without undertaking a new competitive selection process, and WHEREAS, a proposed 2024 contract would constitute the second one-year extension of the base independent consultant contract, and WHEREAS, Flaherty submitted a proposal to continue providing legal services to the IURA in 2023 at a maximum billing rate of $250 per hour, a 25% increase from the current contract rate of $200 per hour to cover increased insurance expenses, and WHEREAS, prior year invoicing show less than four hours have been billed per year, and WHEREAS, the IURA staff is highly satisfied with the quality of legal services provided by Flaherty, and WHEREAS, the 2024 IURA budget authorized a total of $22,000 for legal services; now, therefore, be it WHEREAS, on January 19, 2024, the Governance Committee reviewed this matter and recommended the following action; now, therefore, be it RESOLVED, that IURA Chair is hereby authorized, upon review of IURA legal counsel, to execute a one- year contract extension for independent contractor legal services with Krin Flaherty, at a maximum hourly rate of $250 per hour with the total amount not to exceed $4,000, and be it further RESOLVED, that the source of such funds for legal services shall be derived from a variety of funding sources, including, but not limited to, CDBG and HOME funds, and expenses shall be billed to the appropriate source of funds for which the services were performed. Carried Unanimously: 4-0 B. Committee Vice-Chairperson Report None. VI. Economic Development Committee A. Community Lending: Loan Assistance Request from S&J Ithaca, Inc. DBA Franco’s Pizzeria (CD-RLF #48) Proulx explained that Franco’s Pizzeria applied for $50,000 in loan assistance from the IURA to relocate and expand its operations, which is anticipated to create at least 2.0 FTE employment positions. Proulx moved, seconded by Fleming: Loan Assistance to S&F Ithaca, Inc. (d/b/a Franco’s Pizzeria) CD-RLF Project #48 WHEREAS, on December 4, 2023, S&F Ithaca, Inc. (“Borrower”) applied for $50,000 in loan assistance from the IURA to relocate and expand Franco’s Pizzeria to 527 W. State Street, Ithaca, NY, and IURA Minutes February 23, 2024 Page 6 of 11 WHEREAS, the primary objective of the Community Development Revolving Loan Fund (CD-RLF) is provision of direct financing for economic development activities that create employment opportunities, facilitate the expansion of business activity with the City of Ithaca and expand the commercial and industrial tax base, and WHEREAS, a food and beverage business is only eligible for CD-RLF loan assistance if the business derives 35% or less of revenues from sale of alcoholic beverages and scores at least 100 points on the IURA restaurant eligibility worksheet that evaluates risk and community benefit characteristics, and WHEREAS, the restaurant business is projected to derive less than 35% of revenues from sale of alcoholic beverages and received a staff score of over 100 points on the IURA restaurant eligibility worksheet, and WHEREAS, the proposed uses of project funds are: $80,000 Construction/Buildout $20,000 Furniture, Fixtures and Equipment $20,000 Inventory/Supplies $50,000 Working Capital (payroll, utilities, rent, marketing, misc.) $170,000 Total, and WHEREAS, the proposed sources of project funds are: $120,000 Equity $50,000 IURA $170,000 Total, and WHEREAS, the IURA Economic Development Policy Financing Guidelines and Operating Plan for the Priority Business Loan Fund requires creation at least one full-time equivalent (FTE) job for every $35,000 of loan assistance and sets a maximum loan amount of $100,000 for retail businesses, and WHEREAS, the project is anticipated to create at least 2.0 FTE employment positions, resulting in $25,000 of loan assistance per job created/retained, and WHEREAS, an environmental review record has been created documenting that the interior renovation project complies with the National Environmental Protection Act (NEPA), and WHEREAS, positive risk factors include: 1. Ownership has operated the business at a similar location for seven years with a history of positive financial performance and growing revenue. 2. Buildout of the new location is complete, and the business has re-opened to the public. 3. The project will create opportunities for increased revenues with additional seating, ADA access, an expanded kitchen and storage facilities, and ability to accept on-line orders, with a relatively modest increase in rent and other costs. 4. The Borrower funded the buildout and FF&E purchases with their own equity, and the IURA loan will represent only 29% of total project costs. 5. Management has relevant experience with both owners having operated restaurants in the past. IURA Minutes February 23, 2024 Page 7 of 11 WHEREAS, negative risk factors include: 1. The business utilizes rudimentary financial systems to track past, current, and projected revenues and expenses. 2. Collateral is modest; 3. Financial guarantees of owners offer minimal support for loan repayment; 4. There is robust competition in the market from other pizzerias; and WHEREAS, the IURA’s independent loan analyst categorized the loan to represent a minimal credit risk to the IURA, and WHEREAS, at its January 19, 2024 meeting, the IURA Economic Development Committee reviewed the loan application and the credit analysis prepared by Michael Thomas, Vice President, Harrison Studio, and recommend the following action; now, therefore, be it RESOLVED, that the IURA hereby approves a loan from the CD-RLF in accordance with the loan application and supplemental submissions, subject to the following terms: Borrower: S&F Ithaca, Inc. a New York State domestic corporation established in 2016 Loan Amount: Up to $50,000 Project: Relocation and Expansion of Franco’s Pizzeria at 527 W. MLK Jr./State Street, Ithaca, NY. Total Project Cost: $170,000 Projected Use of IURA Funds: Working capital incurred after December 31, 2023, including but not limited to payroll, rent, utilities, and other operating expenses. Funds cannot be used towards any expenses, such as construction, covered by The Davis-Bacon Act that would trigger prevailing wage requirements. Term: Interest-only payments for four (4) months followed by a five- year term. Amortization: 60-months amortization (after interest-only period) IURA Minutes February 23, 2024 Page 8 of 11 Interest Rate: 6.375% per annum (75% of current Prime rate). Rate is reduced by 50 basis points to 5.875% annually when borrower establishes and continues an automatic loan payment through a financial institution to make timely level monthly payments on the loan beginning with initiation of level monthly loan repayments. The interest rate shall be reduced by 100 basis points upon: (1) submission of satisfactory job reports documenting that the job- creation goal has been achieved for two consecutive quarters; and (2) compliance with all other terms of the loan agreement. Repayment: Interest-only payments for four (4) months, then level monthly payments of principal and interest to fully amortize the loan over 60 months (approximately $975/month based upon the 6.375% interest rate stated above, and subject to a revised P&I amount upon any rate reset. Loan Collateral: General UCC 1st security interest filing on all business assets, including equipment, inventory, furnishings, and fixtures now owned or hereafter acquired located at 527 West MLK Jr./State Street, Ithaca, NY. Personal Guarantor(s): 1. Cheryl Evola 2. Francesco Evola Job Creation: Creation of at least 2.0 (two) full-time equivalent (FTE) jobs of which at least 51% shall be filled by low- and moderate-income persons. Loan Conditions: 1. Borrower to provide proof of equity contributed to the project prior to disbursement of any loan funds. Compliance to be determined by the Director of Community Development. Reporting: 1. Annual company Federal tax returns. 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, 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. Carried Unanimously: 4-0 IURA Minutes February 23, 2024 Page 9 of 11 B. Inlet Island Urban Renewal Project: Authorize Procurement of Due Diligence Services for Potential Land Acquisition Proulx explained that the proposed resolution would enable the IURA to conduct due diligence activities, including but not limited to subsurface investigation of land ($5,000-$10,000 in anticipated costs) potentially to be acquired from NYSDEC for the Inlet Island Urban Renewal Project. Proulx moved, seconded by Graham: Procurement of Due Diligence Services: Inlet Island Urban Renewal Project WHEREAS, on June 24, 2021, the IURA selected Finger Lakes Development, LLC (“FLD”) as a qualified and eligible sponsor (“Preferred Developer”) to undertake an Inlet Island urban renewal project subject to the City of Ithaca Common Council (“Common Council”) authorization to transfer City-owned lands to the IURA via a contingent option agreement, and WHEREAS, on August 4, 2021, the Common Council authorized transfer of certain City-owned lands on Inlet Island to the IURA to prepare a proposed urban renewal project, and WHEREAS, on August 28, 2021, the IURA authorized execution of an ENA with FLD, and WHEREAS, an Exclusive Negotiation Agreement (“ENA”) structures negotiations and responsibilities between the IURA and Preferred Developer to develop a proposed Disposition and Development Agreement (“DDA”) to convey real property to the Preferred Developer to undertake a specified development project, and WHEREAS, on October 27, 2022 the IURA conditionally approved FLD’s development program and authorized submission of an IURA Disposition and Development Agreement (DDA) for execution by FLD, and WHEREAS, the DDA acts as an agreement binding the Preferred Sponsor to undertake the approved urban renewal project according to an agreed-upon time schedule and for the IURA to convey IURA lands upon Common Council approval, following public hearing, and WHEREAS, the approved development program requires a lands transaction to occur between the IURA/City and the NYS Department of Environmental Conservation to acquire property located at 508 Taughannock Blvd, and WHEREAS, agreement from DEC that it conceptually consents to convey 508 Taughannock Blvd. to facilitate the urban renewal project is required prior to the Preferred Developer’s endorsement of the DDA, and WHEREAS, negotiations with DEC have resulted in a draft term sheet for lands transactions that involve potential acquisition of lands from DEC, and IURA Minutes February 23, 2024 Page 10 of 11 WHEREAS, it is prudent to undertake due diligence activities, including subsurface investigation, prior to committing to acquire lands controlled by DEC, and WHEREAS, expenses incurred to conduct due diligence may be reimbursed from sale of lands for the urban renewal project, and WHEREAS, the IURA Economic Development Committee reviewed this matter at their January 23, 2024 meeting and recommended the following action: now, therefore, be it RESOLVED, that the IURA Chair is hereby authorized, upon review of IURA legal counsel, to execute an agreement(s) to conduct due diligence activities, including but not limited to subsurface investigation of land potentially to be acquired from NYSDEC for the Inlet Island urban renewal project, and be it further RESOLVED, that funding for appraisal services shall derive from the non-CDBG funding account for reimbursement upon sale of property. Carried Unanimously: 4-0 C. Committee Chairperson Report Proulx remarked the Committee discussed the variety of economic development loan programs that the IURA supports and the different policies that govern each program. At some point in the near future, the Committee is planning to review the policies and determine if any changes may need to be made to them. VII. Other/Old Business A. IURA Financials Review: December 2023 Bohn reported there are no significant outstanding loan payment delinquencies. Liquid State Brewing Company paid its loan off early. All lease payments are also in good standing, except Southside Community Center (SCC). Bohn reviewed the Grants Summary, explaining that the left-hand “On Schedule” column calls out any projects that are not on schedule and may need attention. Steady progress on each project continues to be made, except for Urban Bus Stop Upgrade Project and GIAC Gymnasium Gym Renovations project. One area of potential concern is the CDBG timely expenditure deadline, which requires that any unexpended CDBG funds cannot exceed 1.5 times the most recent annual HUD CDBG Award, by June 1st of each year. B. Reports: IURA Chairperson, Mayor, Common Council Liaison, & Staff IURA Chairperson None. Mayor’s Report None. IURA Minutes February 23, 2024 Page 11 of 11 Common Council Liaison Report None. Staff Report None. VIII. Adjournment The meeting was adjourned at 10:19 A.M. — END — Minutes prepared by C. Pyott, edited by N. Bohn.