HomeMy WebLinkAboutMN-IURA-2013-05-01Approved: 7/25/13
Ithaca
Urban
Renewal
Agency
108 East Green Street
Ithaca, New York 14850
(607) 274-6559
(607) 274-6558 (fax) ax)
MINUTESMINUTES
ITHACA URBAN RENEWAL AGENCY
Common Council Chambers, City Hall
3:30 P.M., Wednesday, May 1, 2013
Members: Eric Rosario, Svante Myrick, Karl Graham
Excused: Tracy Farrell, Common Council Liaison Chris Proulx
Others: None
Staff: Nels Bohn, JoAnn Cornish, Sue Kittel, Charles Pyott
Public: None
I. Call to Order
Chairperson Myrick called the meeting to order at 3:42 P.M.
II. Agenda Additions/Deletions
None.
III. Public Comment
None.
III. Review of Draft Meeting Minutes: March 29, 2013
Rosario moved, seconded by Graham, to approve the March 29, 2013 minutes, with one minor
modification.
Carried Unanimously 3‐0
V. HUD Entitlement Program
A. Adoption of Proposed 2013 Action Plan
Bohn reported that the Beechtree Care Center declined the IURA’s offer for financial assistance. As
documented in his 5/1/13 memorandum to the IURA, Bohn now recommends removing Beechtree
from the proposed 2013 Action Plan and substituting it with the demolition of 701 Cliff Street
property. He noted the IURA recently issued RFPs for several properties, and received a few
responses, but there was no interest in the 701 Cliff Street property (probably because of its poor
structural condition). Kittel added that the property is condemned and highly deteriorated, so
finding a buyer to make it into a suitable multi‐family for‐sale dwelling was highly unlikely.
IURA Minutes
May 1, 2013
Page 2 of 11
Myrick asked about what would happen, once 701 Cliff Street has been demolished. Kittel replied
she would like to take a little time to consider the options for the site, before bringing it before
Common Council.
Rosario asked if there might not be another city property in greater need of demolition than 701
Cliff Street. There are many other vacant dilapidated properties in the city. Bohn responded that
the IURA/City is the owner of 701 Cliff Street and bears the responsibility for addressing this
dilapidated building as a priority. One benefit of demolition is that the IURA could then explore
alternative uses for the property.
Graham asked who owns the property. Bohn replied the City owns it, but voted to convey it to the
IURA.
Myrick agreed with Rosario that something should be done about the other vacant dilapidated
properties in the city.
Graham moved, seconded by Rosario:
2013 Action Plan – HUD Entitlement Program
WHEREAS, the City of Ithaca is eligible to receive an annual formula allocation of funds to meet
community development needs through the HUD Entitlement program from the Community
Development Block Grant program (CDBG) and the Home Investment Partnerships program
(HOME) funding sources, and
WHEREAS, the City submits an Action Plan each year to HUD to access the Entitlement Program
funding allocated to the City, and
WHEREAS, the 2013 Action Plan identifies a specific list of budgeted community development
activities to be funded from the 2013 HUD Entitlement allocation, and
WHEREAS, the allocation level of the 2013 Entitlement Program is anticipated to be as follows:
$644,062 CDBG
$446,009 HOME
$1,090,071 Total, and
WHEREAS, $142,000 in program income is projected to be received from loan repayments in
program year 2013, which funding is also allocated as part of the 2013 Action Plan, and
WHEREAS, additional funds of $165,514 remain from the 2012 HOME program and will be
allocated to eligible projects via this 2013 Action Plan, and
IURA Minutes
May 1, 2013
Page 3 of 11
WHEREAS, additional CDBG funds are available and are being allocated via the 2013 Entitlement
Grant as follows:
Recaptured funds from 2011 $10,000
Program Income from sale of $30,000
the Court St. Shelter (a 1984
CDBG project)
Reallocation of prior‐year $100,000
Program Income
Total $140,000, and
WHEREAS, the IURA utilized an open and competitive project selection process for development
of the 2013 Action Plan in accordance with the Citizen Participation Plan, and
WHEREAS, the IURA adopted a Proposed Action Plan at their March 29, 2013 meeting by
consensus and now wishes to formalize that action with a resolution, now, therefore be it
RESOLVED, that the IURA hereby adopts the attached table titled the ‘IURA Proposed Action
Plan’ – dated April 15, 2013 and forwards it to the Common Council for review and recommends
its approval for allocating a projected 2013 HUD Entitlement award along with the additional
funds available, as listed above, and be it further,
RESOLVED, that the Urban Renewal Plan shall be amended to include activities funded in the
adopted 2013 Action Plan, and be it further,
RESOLVED, that upon authorization from the Common Council, the IURA agrees to administer
and implement the 2013 Action Plan activities in accordance with applicable regulations.
Carried Unanimously 3‐0
VI. Economic Development Committee (EDC)
A. Request from ItalThai, LLC for IURA Support to Assign City Loan of Restore NY Grant Funds from
City to IURA
Bohn reported that the EDC is recommending the IURA act to ask Common Council to assign the
ItalThai’s Restore NY loan to the IURA for it to manage and administer, at the request of the
property owner. Bohn added that the owner will seek to convert the loan back to a grant, at a
future time, once the tax credit period has expired.
IURA Minutes
May 1, 2013
Page 4 of 11
Graham inquired into the cost of administering the grant ― he does not see how that cost would be
covered with 0% interest. Bohn replied the IURA would administer the loan and it would then be
owed the full amount after 30 years. Any additional costs could be charged to the borrower when
any future modification requests have been agreed to. At this time, however, there are no
significant costs for the IURA. Bohn stressed that the primary benefit of the project is to showcase it
as a viable downtown development project. It has been very successful in every other way (i.e.,
converting the original dollar store, adding affordable dwelling units, converting the upper floors to
living units, etc.).
Rosario moved, seconded by Myrick:
Restore NY3, Downtown Commons Upper Story Housing ― Recommendation to Assign Loan
of Restore NY Funds to ItalThai LLC from the City of Ithaca to the IURA
WHEREAS, in 2009 the City of Ithaca (City) received a grant award of $1.15 million from the
Empire State Development Corporation through the Restore NY program to complete upper
story redevelopment of the Plantation Building and the Petrune building (located at 126‐128
and 130‐132 E. MLK/E. State Street), located within the urban renewal project boundary area.
WHEREAS, $900,000 of assistance was earmarked to ItalThai, LLC (managing member Sunit
“Lex” Chutintaranond) in the form of a grant to fill a financial gap in a proposed $2.5 million
redevelopment of the Plantation building at 130‐132 E. MLK Street, and
WHEREAS, the City authorized the Ithaca Urban Renewal Agency (IURA) to administer and
implement the Restore NY3 grant, and
WHEREAS, a City/ItalThai, LLC Restore NY pass through grant agreement was developed to
provide for payment of a $900,000 grant to ItalThai, LLC upon completion of the project, which
agreement was executed by the City on January 10, 2011, and
WHEREAS, in 2011 specialized tax credit legal counsel, Cannon, Heyman & Weiss, informed
ItalThai, LLC that injecting Restore NY3 funding from the City into the project as a grant would
reduce the eligible tax basis of the project thereby decreasing the amount of tax credits
available to investors and resulting in a financial gap for the project, and
WHEREAS, a critical component of the financing plan for the $2.5 million project was to leverage
federal and state historic tax credits generated by the project into investor equity of over
$550,000, and
WHEREAS, injecting Restore NY3 financial assistance into the project in the form of a loan does
not reduce the eligible tax basis, and
IURA Minutes
May 1, 2013
Page 5 of 11
WHEREAS, as the project financing relied on attracting at least $550,000 in equity through
historic tax credits, ItalThai, LLC did not execute the Restore NY pass through grant agreement
and requested that Restore NY funding from the City be provided in the form of a $900,000 loan
at 0% interest with no payments due until the end of a 30‐year loan term as a means to
maximize equity attracted through historic tax credits, and
WHEREAS, on April 25, 2011 the City and ItalThai, LLC executed an agreement to loan $900,000
in grant funds awarded to the City of Ithaca to ItalThai, LLC, which loan is secured by a mortgage
on the project property, and
WHEREAS, at that time, ItalThai, LLC indicated they intended to seek City approval in the future
to forgive this loan upon satisfactory completion of the project in recognition of the project’s
public benefits and that the City had originally agreed to provide Restore NY3 funds in the form
of a grant to the developer, and
WHEREAS, the mixed‐use project has been successfully completed with a new ground floor
restaurant, 16 FTE new jobs created, 1,100 SF of office space, and 8 new housing units created
of which two are occupied by low‐and moderate‐income households at affordable rents, and
WHEREAS, both the Restore NY and federal and state historic tax credit programs have
minimum 5‐year compliance periods and the Restore NY program includes a “clawback”
provision requiring repayment of grant funds to NYS in the event the project property is sold in
the first 5 years, and
WHEREAS, total project debt on the Plantation Building is approximately $1.7 million as of 2013,
which exceeds the appraised value of the finished project, thereby impeding ItalThai’s
borrowing capacity to refinance and consolidate existing debt or take out new line‐of‐credit or
term debt, and
WHEREAS, the Restore NY loan, as currently structured, creates a significant obstacle to the
ItalThai LLC financing repairs and building improvements during the 30‐year term of the Restore
NY3 loan, and
WHEREAS, the IURA developed the Restore NY3 funding application, administered the Restore
NY3 funds, loaned additional funds to the project to close financing gaps, regularly monitors the
project and manages a loan portfolio of approximately $4 million, and
WHEREAS, the IURA is better positioned than the City to administer the Restore NY3 loan and
analyze future requests to modify collateral requirements and forgive the loan to financially
stabilize the project and facilitate future reinvestment in the property while ensuring not more
than a reasonable financial return on the owner’s equity investment, and
IURA Minutes
May 1, 2013
Page 6 of 11
WHEREAS, any assignment of the loan would transfer liability for compliance with regulatory
requirements, including the “clawback” provisions of the Restore NY3 program to the IURA, and
WHEREAS, Section 503‐a of GML authorizes assignment of the Restore NY3 loan from the City to
the IURA, and
WHEREAS, at their April 9, 2013 meeting the IURA Economic Development Committee reviewed
this matter and recommends the following; now, therefore, be it
RESOLVED, that the IURA recommends that the City of Ithaca assign to the IURA the $900,000
Restore NY3 loan to ItalThai, LLC, for the Plantation Building project located at 130‐132 E. MLK
Jr./E. State Street, and be it further
RESOLVED, that the IURA Chairperson, subject to review by IURA legal counsel, is authorized to
execute any agreement to accept assignment of the loan, and be it further
RESOLVED, that ItalThai, LLC be responsible to pay any and all costs to implement an assignment
of the loan.
Carried Unanimously 3‐0
B. Cherry Street Industrial Park ― Request from Precision Filters, Inc. to Grant Leasehold
Mortgage for Financing Purposes
Bohn reported that the revised resolution has been reviewed by the IURA attorney. Precision Filters
is seeking to refinance its mortgage and acquire a line‐of‐credit on the property. They want to offer
the building as collateral for a loan from Tompkins Trust Company; and, per the lease agreement,
they require IURA approval. This request is consistent with what the IURA has done in the past and
Bohn recommended it be approved.
Rosario moved, seconded by Myrick:
Consent to Leasehold Mortgage on Premises Leased to
Precision Filters Inc. at 240 Cherry Street
WHEREAS, the Ithaca Urban Renewal Agency (IURA) leases property in the Cherry Street
Industrial Park located at 240 Cherry Street, Ithaca, NY, to Precision Filters, Inc. (PF) pursuant to
a 99 year lease dated October 20, 1980, and
WHEREAS, Precisions Filters is in the process of arranging financing with Tompkins Trust
Company (TTC) for refinancing of existing debt and to secure additional working capital for
continued operations at the Cherry Street Industrial Park, and
IURA Minutes
May 1, 2013
Page 7 of 11
WHEREAS, as a condition of such financing the lender requires Precision Filters, Inc. to grant to
the lender a collateral mortgage on the leasehold interest of Precision Filters, Inc. and
WHEREAS, the lease agreement between the IURA and Precision Filters, Inc. requires the IURA
to consent to such mortgage, which approval shall not be unreasonably withheld, and
WHEREAS, Precision Filters, Inc. is current on all payments due to the IURA; now, therefore, be it
RESOLVED, that the IURA hereby consents to Precision Filters, Inc. granting up to a $1,400,000
collateral mortgage to Tompkins Trust Company on the interest of Precision Filters, Inc. in the
lease between the IURA and Precision Filters, Inc., dated October 20, 1980, and such mortgage
to contain such terms and conditions as Precision Filters, Inc. may approve, its execution of such
mortgage to be due evidence of such approval, and a copy of such mortgage to be provided to
the IURA within five business days of the date of closing; and be it further,
RESOLVED, that the Chairperson, subject to review by IURA legal counsel, is hereby authorized
to execute such consent, acknowledgement, certificate, estoppel notice, and any other
agreements deemed appropriate to implement this resolution, and be it further
RESOLVED, that any IURA legal expenses incurred on this matter be paid by Precision Filters, Inc.
Carried Unanimously 3‐0
VII. Governance Committee (GC)
A. 2011 City Audit Schedule Report
Rosario reported that the audit resulted in a lack of any findings for the IURA, which was great. The
City’s audit, on the other hand, resulted in some findings and recommendations for improvement.
Overall, however, the City’s audit was clean, as well.
Bohn indicated the 2012 audit should be completed in September 2013 (although this depends
significantly on the City Controller’s workload).
Rosario noted it is gratifying to see the IURA in complete compliance with the State’s Public
Authorities Law (PAL).
Kittel announced it has come to her attention the IURA will not be monitored in 2013, for the first
time in 10 years, representing a considerable savings of staff time (appr. 2 wks.)
IURA Minutes
May 1, 2013
Page 8 of 11
B. Review of IURA Financials: March 2013
Grants Summary
Rosario reported that the IURA continues to benefit from a great spend‐down ratio, despite the fact
that some 2012 allocations have not yet been spent.
Loans
Rosario indicated the loans report is also in good shape, with the exception of Argos Inn, where
there has been some confusion on billing.
The only significant past‐due loan payment was for Diane’s Downtown Auto, for which a meeting
with the owner will be scheduled to address the problem.
Bohn indicated he would like to schedule a special meeting for all IURA committee chairpersons to
review the audit.
C. Committee Chairperson Report
None.
VIII. Neighborhood Investment Committee (NIC)
A. Accept Conveyance of 701 Cliff Street from City of Ithaca
Graham introduced the resolution, noting the subject had already been discussed to some extent,
earlier in the meeting. He asked how the demolition cost projection had been generated. Kittel
replied it was based on a comparable past project. (Bohn added that the IURA estimate assumes all
demolition debris will be treated as asbestos, as a precaution.)
Rosario moved, seconded by Graham:
Accept Conveyance of Property at 701 Cliff Street Property from the City
WHEREAS, on May 2, 2012, the City of Ithaca Common Council authorized the transfer of 701
Cliff Street, Ithaca, NY (tax parcel #38.‐3‐7) to the Ithaca Urban Renewal Agency (IURA) for
disposition to a qualified sponsor for residential development in the event TCAction was not
awarded a YouthBuild grant utilizing the property, and
WHEREAS, TCAction did not receive a 2012 YouthBuild grant award, and
WHEREAS, Common Council has expressed an interest in post‐sale use of the property which will
enhance the City’s tax base, expand the supply of affordable housing, and be architecturally
compatible with the surrounding neighborhood, and
IURA Minutes
May 1, 2013
Page 9 of 11
WHEREAS, the IURA is interested in facilitating an appropriate community development project
at 701 Cliff Street, and
WHEREAS, municipalities are generally not authorized to negotiate sale terms for real estate
with a pre‐identified buyer, but urban renewal agencies are authorized to implement certain
property dispositions with a qualified and eligible sponsor to undertake an urban renewal
activity if conducted in accordance with procedures identified at Section 507 of General
Municipal Law (GML), and
WHEREAS, Section 507 of GML authorizes the sale of real property by an urban renewal agency
to a qualified and eligible sponsor at negotiated sale terms provided the disposition complies
with the following requirements:
• real property is located within an urban renewal project area and the property disposition
will further the goals and objectives of the Urban Renewal Plan
• a notice is published in a newspaper of general circulation disclosing the identity of the
proposed buyer or lessee, the proposed use of the property, and essential terms and
conditions of the proposed sale or lease, and
• a public hearing is conducted on the proposed property disposition not less than 10
days after publication of the notice, and
• the proposed sale or lease of the property is approved by the governing body, and
WHEREAS, the project site located at 701 Cliff Street is within the Urban Renewal Project
boundary, and
WHEREAS, the Common Council has offered the following guidance for the disposition of the
Cliff Street property:
• Sales price: an amount at least equal to pay all outstanding City, School and County taxes
and any other City liens due and all expenses of the City and IURA associated with
conveyance
• Use: multiple unit residential development, preferably affordable and owner‐occupied, for‐
sale units
• Tenure: owner‐occupied or rental housing; now, therefore, be it
RESOLVED, that the IURA hereby accepts the conveyance of 701 Cliff Street (tax parcel #38.‐3‐7)
for the purpose of facilitating an urban renewal project that will improve the physical, social and
economic characteristics of the site and its vicinity, and be it further
RESOLVED, that the IURA acknowledges the guidance provided by the Common Council
regarding the disposition of the property, including:
• Sales price: an amount at least equal to pay all outstanding City, School and County taxes
and any other City liens due and all expenses of the City and IURA associated with
conveyance
IURA Minutes
May 1, 2013
Page 10 of 11
• Use: multiple unit residential development, preferably affordable and owner‐occupied, for‐
sale units
• Tenure: owner‐occupied or rental housing, and be it further
RESOLVED, that the IURA shall be reimbursed for any reasonable expenses associated with
implementing the conveyance of the property from the City, managing and holding the
property, developing proposed disposition agreements, and implementing the conveyance of
the property to a qualified and eligible sponsor, and be it further,
RESOLVED, that the IURA Chair is hereby authorized to execute any and all agreements and
documents necessary to implement this resolution.
Carried Unanimously 3‐0
B. Committee Chairperson Report
None.
IX. Other/New/Old Business
A. IURA Chairperson Report
Former Ithaca Gun Factory Site
Myrick noted that the IURA should find out in approximately 2 weeks if it will be granted the old
Ithaca Gun site clean‐up grant from the EPA. (There are several indications it will.)
Bohn indicated he recently met with the site’s developer, which has enrolled in the brownfields
clean‐up program and will now be eligible for tax credits on project expenses. The developer has
received 2‐3 proposals for redevelopment and has been examining several options with his
consultants. (It would probably be developed as owner‐occupied for‐sale dwelling units, in the form
of a condominium association or similar type of housing project.)
Bohn also announced that the soil investigation has been completed and there will be a short
presentation at the next Community Advisory Group meeting.
B. Common Council Liaison Report
None.
IURA Minutes
May 1, 2013
Page 11 of 11
C. Staff Report
Bohn reported that the IURA has received all the RFP responses for all tax‐foreclosed properties.
There were two applicants for the Cayuga Street property, but none for either the Cliff Street or
Spencer Road properties.
Bohn indicated that the Petrune project (another Restore NY project) has been completed and the
owners are writing a summary of the results. They have leased the upper floor space to Rescue
Pets, a custom‐made plush toy business with several employees.
D. Next Meeting Date: April 25, 2013
X. Adjournment
The meeting was adjourned by consensus at 4:20 P.M.
Minutes prepared by Charles Pyott; edited by N. Bohn