HomeMy WebLinkAboutMN-IURA-2010-10-28Approved 12 /17/2010 Ithaca
Urban
Renewal
Agency
108 East Green Street
Ithaca, New York 14850
(607) 274-6559 59
(607) 274-6558 (fax) (607) 274-6558 (fax)
MINUTESMINUTES
ITHACA URBAN RENEWAL AGENCY
8:30 AM, October 28, 2010
Present: Susan Cummings, Doug Dylla, Tracy Farrell, Carolyn Peterson
Excused: J.R. Clairborne
Staff: Nels Bohn, JoAnn Cornish (8:43), Alice Vargo
Public: Amelia Kermes, Mustafaa Ali
I. Call to Order
The meeting was called to order by Chairperson Peterson at 8:35 a.m.
II. Additions to or deletions from the agenda
Cummings requested adding a discussion of the Challenge Building site re‐zoning.
III. Public comment – None
IV. Approval of meeting minutes of and July 22, 2010 and September 23, 2010
Farrell moved, seconded by Cummings, to approve the minutes of the September 23, 2010
meeting with corrections. Carried Unanimously.
The July 22, 2010 minutes were not included in agenda packet.
VI. Neighborhood Investment Committee
A. HUD Entitlement Program
1. Request by Southside Community Center, Inc. to revise the project scope and extend
the schedule for the RIBs building renovation project (#10, 2007 CDBG)
Following dialog with Mustafaa Ali, RIBs Coordinator, and Board discussion, Farrell
moved, seconded by Dylla the following:
HUD Entitlement Grant – Request by SSCC to Revise Project Scope and Extend
the Schedule for the RIBs Building Renovation Project (project #10, 2007 CDBG)
Whereas, on February 10, 2010, the Southside Community Center (SSCC) submitted a
request to revise the project scope for the RIBs Building Renovation project at 530 W.
Buffalo Street (project #10, 2007 CDBG) and extend the deadline to expend CDBG funds,
and
IURA Minutes
October 28, 2010
Page 2 of 12
Whereas, on June 26, 2008 an IURA funding agreement was executed with SSCC to
undertake a project to renovate the vacant former pump station building at 530 W.
Buffalo Street for use by Recycle Ithaca Bicycles (RIBs), a program of the SSCC, and
Whereas, based on cost estimates procured by SSCC, CDBG funds were earmarked for
the following uses:
$5,800 Masonry repair
$3,900 Roof repair
$2,000 Gas heater
$10,000 Storage shed
$5,000 Deck & stairs
$26,700 Total, and
Whereas, subsequent investigation and cost quotes revealed that (1) additional building
renovations are necessary to comply with the NY State Building Code, (2) roof repair
needs are more extensive than originally projected, and (3) the exterior fence and gate
needs is in need of upgrading to ensure long‐term durability, and
Whereas, SSCC’s desired building renovation project includes the following scope based
on price quotes at Davis‐Bacon wage rates:
$17,057 New roof installation (including roof insulation)
$9,470 Interior insulation and drywall
$5,800 Perimeter fencing & gate
$2,869 Hand railings at two stairways
$2,836 Interior painting
$2,418 Insulation of storage/work area
$2,207 Parapet & coping repairs
$3,000 Construction management (IURA)/contingency
$ 135 Gas‐fired heater (completed)
$ 415 Building permit
$46,207 Total, and
Whereas, SSCC has agreed to assume responsibility for completing the following
repairs/renovations:
$2,869 Hand railings at two stairways,
$2,836 Interior painting,
$2,418 Insulation of storage/work area
$8,123 Total, and
Whereas, the projected total project cost is $54,330, which resulted in a funding gap of
approximately $20,000, and
Whereas, on April 28, 2010, the IURA deferred action on the request pending
documentation of RIBs programming activity and low/mod income beneficiaries during
the summer, and the outcome of efforts to secure additional project funding, and
IURA Minutes
October 28, 2010
Page 3 of 12
Whereas, 2010 RIBs Summer programming at 530 W. Buffalo Street consisted of an
“Open‐Shop” three days a week and “Hands‐on Bicycle Maintenance & Repair Clinic”
once a week with the following staffing:
RIBs Program Coordinator – 25 hours/week
Program Assistant – 10 hours/week
Shop Mechanic‐ 10 hours/week, and
Whereas, RIBs will offer the following programming through the Fall:
Open‐Shop: Saturdays, 11 AM – 3 PM
Novice Clinic: Tuesdays and Thursdays, 10 AM – 12 PM
Intermediate/Advanced Clinic: Tuesdays and Thursdays, 4 PM – 7 PM, and
Whereas, SSCC has allocated $1,500 for new shop tools, bicycle equipment and office
supplies for the RIBs program, and
Whereas, SSCC reports from May 25, 2010 to August 5, 2010, a total of 104 new
members were registered for the RIBs program, of which 88 members are LMI
beneficiaries (58 are City LMI residents), and
Whereas, on June 2, 2010, the City of Ithaca approved $650,000 of funding for Capital
Project #515 Water & Sewer – First Street Stormwater and Site Improvements, of which
$20,000 is being made available for improvements to the 530 W. Buffalo Street facility,
and
Whereas, available funding is now sufficient to complete the project from the following
sources:
$26,700 CDBG
$20,000 City Capital Project #515
$ 8,123 Southside Community Center
$54,823 Total, and
Whereas, the Neighborhood Investment Committee, reviewed this matter at their
September 24, 2010 meeting; now, therefore, be it
RESOLVED, that the IURA hereby approves an extension of the schedule to expend
CDBG funds to June 20, 2011 and a revised project scope, budget and funding sources as
identified above.
Carried 3‐1 (Cummings opposed)
Cumming stated she opposed the proposed use of CDBG funds to make building
improvements as the deferred maintenance on the City‐owned building at 530 W.
Buffalo should be paid for by the City and the action fails to support capacity building for
the RIBs program to become independent from the Southside Community Center.
IURA Minutes
October 28, 2010
Page 4 of 12
2. Program amendment to reallocate funds from the 421 Second Street Renovation
project (#9, 2009 HOME)
Farrell reviewed HUD concerns regarding the operations of the project sponsor,
Community Housing of Ithaca, Inc. (CHI), as a fully functioning not‐for‐profit
organization with capacity to satisfactorily implement and oversee housing projects.
Farrell noted that the current condition and rental use of the property at 421 Second
Street is not negatively affecting the neighborhood. Cummings noted that CHI has had
good outcomes from their projects, but their management capacity is lacking. Peterson
asked if CHI had been informed of the proposed resolution. Bohn responded that CHI
was informed in writing prior to the NI Committee meeting. Cummings expressed
interest in supporting an alternative model whereby a for‐profit contractor seeks IURA
assistance to rehabilitate and/or construct affordable housing with CHI playing a
support role, rather than as developer and owner.
Farrell moved, seconded by Cummings, the following:
Reprogramming of 2009 # 4 funds‐ 421 Second Street
Whereas, at the monitoring visit by officials from the U.S. Department of Housing and
Urban Development in July of 2009 certain concerns regarding the operations of
Community Housing of Ithaca, Inc (CHI) were identified, and
Whereas, HUD staff made recommendations at that time about steps which could be
taken to ensure CHI’s compliance with all HUD regulations and ongoing success of the
organization, and
Whereas, the Ithaca Urban Renewal Agency (IURA) directed staff to work with the IURA
attorney to develop a plan for addressing the concerns raised, and
Whereas, on October 13, 2009, a letter was issued to Community Housing of Ithaca
outlining initial steps the organization needed to take to address the issues, and
Whereas, that letter stipulated that the IURA “will not provide any further funding for
CHI projects, including the 421 Second Street renovation project (2009 HOME)” until the
requirements set forth in the letter had been met, and
Whereas, based on the lack of a sufficient response by CHI, the IURA passed a resolution
on January 28, 2010, putting the project funds on hold until the IURA attorney and HUD
were satisfied that a fully functioning not for profit organization was in place to
implement and oversee the project, and
Whereas, Community Housing of Ithaca was notified of this action by the Agency on
February 1, 2010 and supplied with a copy of the resolution and a letter signed by
Chairperson Peterson, and
IURA Minutes
October 28, 2010
Page 5 of 12
Whereas, on February 17, 2010 a packet of materials was submitted by CHI discussing
the relevant issues and partially addressing the concerns, and
Whereas, in response to this lack of a complete and satisfactory response to the issues,
a meeting was held on April 28, 2010 between IURA staff, consultant Harry Sicherman,
IURA Attorney Mariette Geldenhuys and CHI board member Chuck Guttman to discuss
steps to be taken to resolve the conflict of interest and not‐for‐profit status issues
identified by HUD as a concern, and CHI members agreed to take the necessary
corrective steps, and
Whereas, no further progress was made after this meeting, a letter was issued on
August 13, 2010 listing seven requirements necessary to satisfy the stipulations in the
January 28, 2010 resolution and
Whereas, on September 10, 2010, materials were received from CHI discussing the
issues at hand and noting that there had not been an official meeting of the Board since
their February 17, 2010 meeting, and
Whereas, most of the required remedies identified in the August 13, 2010 letter require
action of the CHI Board, and
Whereas, the CHI Board met on June 8, 2010 but no quorum was present, no action was
taken and the meeting consisted primarily of reports from the three board members
present, two of whom are CHI’s attorney and his law partner, and
Whereas, CHI met on September 28, 2010 and provided minutes to the IURA, but the
minutes are substantially similar to the minutes submitted for the June 8, 2010 board
meeting causing the IURA to be concerned that there is no active participation by and
discussion among board members at the board meetings, particularly in regard to the
issues identified as a concern of the IURA and HUD, and
Whereas, the board met only three times in 2009, and twice in 2010 (once without a
quorum), which casts doubt on the level of control and oversight the board exercises
over the operations and assets of the corporation, and
Whereas, the documentation submitted by CHI purports to address the list of items
provided by the IURA, but the IURA has concluded that CHI is not a well‐functioning not‐
for‐profit corporation, managed and overseen by the active participation of a viable
board of directors; and
Whereas, this issue was discussed at the NI Committee meeting on September 24, 2010,
and
Whereas, the direction of the NI committee is to reallocate the 2010 # 4 HOME funds
totaling $38,425 and make it available for the 2011 Grant cycle, and
IURA Minutes
October 28, 2010
Page 6 of 12
Whereas, it was noted at the NI committee that there are many indicators that a viable
not‐for‐profit housing organization is not emerging from the current organization of CHI,
that the budget for the 2009 project is now 2 years old and that 421 Second Street is
occupied and is not negatively impacting the neighborhood, and
Whereas, the status of Community Housing of Ithaca and the recommendation to
reallocate the 2009 funds was reviewed at the October 8, 2010 Neighborhood
Investment Committee meeting and reaffirmed at that time, now therefore be it
Resolved, that the IURA finds that the issues identified in the 10/13/09 letter have not
been satisfactorily resolved, and be it further
Resolved, that the $38,425.00 of HOME funds allocated for project # 4 of the 2009
Action Plan will no longer be available for this project and these funds will be made
available for appropriate projects in the 2011 Grant process.
Carried Unanimously 4‐0
3. Program amendment to reallocate funds from the Rt. 13 Pedestrian Crossings project
(#8, 2010 CDBG) – resolution
Farrell reported that implementation of this project has been delayed and will not be
ready for funding before late 2011 so it makes sense to reallocate this funding from the
2010 Action Plan to a future Action Plan. Peterson expressed concern that the proposed
resolution did not clarify that the intent was to delay funding rather than terminate
funding. By consensus, the Agency referred this matter back to the Neighborhood
Investment Committee to clarify the proposed resolution.
4. Program amendment to reallocate funds from the 100 W. Seneca Redevelopment
project (#3, 2010 HOME)
Moved by Farrell, seconded by Cummings, the following:
Reallocation of funds from HOME 2010 #3 ‐ 100 W. Seneca Street
Whereas, $200,000 in HOME funds have been allocated for the 100 W. Seneca Street
project (2010 #3), and
Whereas, the 100 W. Seneca Street project (2010 #3) cannot be implemented because
it was not awarded the necessary tax credit to fully fund the project, and
Whereas, the Neighborhoods Investment Committee reviewed this matter at their
October 8, 2010 meeting and recommended the following; now, therefore, be it
RESOLVED, that funding for the 100 W. Seneca Street project (2010 #3) be reallocated
to a part of the 2011 grant process.
IURA Minutes
October 28, 2010
Page 7 of 12
Peterson noted that it is her understanding that INHS is seeking to reapply for New York
State funding in 2011 for this project and that several previously funded IURA‐assisted
projects have taken more than one year to implement, so she wanted to understand the
rationale for the resolution. She also expressed concern that the resolution could be
interpreted as removing IURA support for the project. Farrell responded that the
proposed resolution recognizes the fact that the project was unsuccessful in 2010 to
secure essential funding through New York State for the project so it is not currently
feasible to implement. She noted that INHS can bring a revised project forward for
possible funding through the upcoming 2011 Action Plan process when it will be
compared against all other projects seeking funding assistance.
Vote 2‐2 , Motion Fails
Aye ‐ Farrell and Cummings
Nay ‐ Dylla and Peterson
B. Committee Chairperson report ‐ none
VII. Economic Development Committee
A. Restore NY Round III, Downtown Commons Upper Story Housing, request from Justin
Hjortshoj and Domenica Brockman, DBA Petrune, for modification the upper story
rehabilitation project at 126‐128 E. State/MLK Street from residential use to
commercial/production use.
Dylla reviewed the proposed modification to the Petrune project for renovating the 3rd and
4th floor to production and commercial uses. He reported that Petrune was unable to
secure bank financing for the residential project, in part due to a concern that property
taxes would increase significantly upon project completion. Dylla commented that the
revised project meets the Restore NY requirements to fully rehabilitate upper floors of the
building and will create 2 jobs to manufacture locally‐produced, hand‐printed fabric.
Cummings indicated that the community benefits in numerous ways from projects that
support businesses that own the building where they operate their business, as the business
has a long‐term interest in surrounding neighborhood.
Dylla moved, seconded by Farrell, the following:
Restore NY Round III –
Downtown Commons Upper Story Housing –
Modification to Project at Petrune Building, 126‐128 E. State/MLK Street
Whereas, the City of Ithaca submitted a $2.5 million Restore NY III application to the Empire
State Development Corporation for funding assistance to rehabilitate three downtown
buildings, and
Whereas, the City was awarded $1.15 million through Restore NY III for rehabilitation of the
following buildings:
IURA Minutes
October 28, 2010
Page 8 of 12
$900,000 Plantations: 130‐132 E. State/MLK Street
Sponsors: Lex Chutintaranond & Flaminia Cervesi, managing members
$250,000 Petrune: 126‐128 E. State/MLK Street
Sponsors: Domenica Brockman & Justin Hjortshoj
Whereas, the City authorized the IURA to administer and implement the Restore NY III
grant, and
Whereas, Justin Hjorshoj and Domenica Brockman dba Petrune, have been unable to secure
bank financing for their project to renovate upper floors for two market‐rate apartments
and one affordable apartment, and
Whereas, Petrune proposes to modify their project to renovate the vacant upper floors of
the their building for production and commercial use in lieu of housing, thereby reducing
the overall project cost and eliminating the need for a large bank loan, and
Whereas, the revised project will position Petrune for continued growth and is projected to
create at least 2 full‐time equivalent jobs and significantly localize Petrune’s supply chain
thereby reducing the amount of inventory purchased from international sources, and
Whereas, at their September 21, 2010 and October 12, 2010 meetings, the IURA Economic
Development Committee reviewed this matter and recommended the following; now,
therefore, be it
RESOLVED, that the IURA hereby approves to the Common Council that the sponsor’s
request to modify their Restore NY Round III project to renovate the third and fourth floors
of the Petrune Building for production and commercial use, and hereby recommends to
Common Council.
Carried Unanimously
B. High‐Tech Business Loan Underwriting Guidelines, CD‐RLF, amendment to IURA Economic
Development Financing Policy Guidelines and Operating Plan
Dylla reviewed modifications made in the proposed guidelines to address concerns raised by
Agency members.
Dylla moved, seconded by Peterson, the following:
Establish High‐Tech Business Loan Underwriting Guidelines – CD‐RLF
Whereas, the start‐up and growth of high‐tech businesses leveraging Cornell University
research will diversify and strengthen the local economy and create skilled production
employment positions with the potential for significant additional job growth, and
Whereas, the IURA directed the Economic Development Committee to develop loan
guidelines for high‐tech businesses, and
IURA Minutes
October 28, 2010
Page 9 of 12
Whereas, at their May 11, 2010, June 8, 2010 and October 12, 2010 meetings the Economic
Development Committee discussed this matter and recommended the following; now,
therefore, be it,
RESOLVED, that the IURA hereby amends its IURA Economic Development Policy Guidelines
and Operating Plan, which governs IURA economic development financial assistance
programs, as follows:
SECTION 9. SPECIFIC PROGRAM ELIGIBILITY REQUIREMENTS, STANDARDS AND
LENDING POLICIES FOR INDIVIDUAL PROGRAMS
(note: additions shown as underlined text, deletions shown as strikethrough text)
9.1 Community Development Revolving Loan Fund (CD‐RLF).
(a) Maximum Amount of Financing. $40,000.00 $50,000.00 for a retail business;
$75,000.00 $100,000.00 for non‐retail business for expansion, startup or job
retention resulting in the creation of multiple jobs, particularly jobs which will
provide for higher wages, benefits and training, and which will lead to the
diversification of Ithaca’s economic base. The above listed maximum amount of
financing may be exceeded in instances where the IURA determines that the
expanded business activity will likely result in an extraordinary degree of public
benefit.
(b) Ineligible Activities. Financial assistance shall not be undertaken to an “adult
entertainment establishment,” as defined by City of Ithaca municipal code, or any
business that derives more than 35% of revenues from the sale of alcoholic
beverage to consumers. Furthermore, financial assistance to restaurants,
nightclubs, bars and similar businesses are not eligible activities to be undertaken
with financing unless such activity scores at least 100 points on the “CD‐RLF
Worksheet for Determining Eligibility for Restaurants” as determined by the IURA
(see Exhibit D – CD‐RLF – Loan Eligibility Policy for Restaurants and Similar
Businesses).
(c) CDBG National Objective. Assisted activities must meet at least one of the
following national objectives of the CDBG program:
Benefit low‐ and moderate‐income persons, or
Prevent or eliminate slums or blight.
Assisted activities benefiting low‐ and moderate‐income persons include, but are
not limited to, the creation or retention of at least one employment opportunity
meeting the requirements outlined in Section 3.1 of the Plan. Assisted activities
preventing or eliminating slums or blight must document that the assisted activity
will result in the elimination or prevention of slums or blight and, if addressing
slum/blight on a spot basis, that the assisted activity was limited to addressing
specific condition(s) that posed a public health and safety threat to the public in
general, including but not limited to remediating brownfield conditions.
IURA Minutes
October 28, 2010
Page 10 of 12
(d) High‐tech business guidelines. The start‐up and growth of high‐tech businesses
leveraging regional research and other innovative technologies will diversify and
strengthen the local economy and create skilled production employment positions
with the potential for significant additional job growth, but traditional loan
underwriting does not satisfactorily analyze risk and reward of early stage high‐tech
businesses. Due to the unique characteristics and opportunities of pre‐revenue
high‐tech businesses, the following special guidelines shall apply to early stage high‐
tech business loan applications:
(1) Term: not to exceed 5 years
(2) Interest Rate: transaction specific depending on risk, may range up to 10%, plus
warrants
(3) Match Funding: a minimum 3:1 match of equity investments from other
qualified, professional investors in the business
(4) Security/Collateral: Transaction specific, no minimum loan‐to‐value standard is
required. Personal guarantees may be sought when appropriate.
(5) Living Wage: Required for all full‐time jobs created as result of the loan
(6) Portfolio Risk: Loan balances to early‐stage high‐tech businesses shall not
exceed 25% of the IURA’s CDBG loan portfolio
(7) Other Underwriting Considerations:
Applicant’s past record of obtaining early stage financing, including
competitive federal and state funding.
Linkage to research and resources.
Strategy for retaining economic benefits in the City of Ithaca in the event
the company is relocated by private investors.
Stage of development for commercializing technology is appropriate for
debt financing: prototyping, product development, pilot production, full
volume production.
6.5 Loan Review. Each loan application will be evaluated based upon the information
detailed in Section 6.3. In addition, the Economic Development Committee, or any
IURA designated review committee, and the IURA will consider the following criteria:
(a) Number of jobs created;
(b) Quality of the jobs created (including full/part‐time status of jobs created and
opportunities for promotion);
(c) CDBG funds per job created;
(d) Funding commitments from other sources;
(e) Public benefit;
(f) Impact on tax base;
(g) Neighborhood impact;
(h) Whether the compensation package (including wages and benefits) offered to
new full‐time employment positions is competitive within the regional labor
market for the peer industry sector; and addresses the City’s “living wage” policy
(attached hereto as Exhibit E);
IURA Minutes
October 28, 2010
Page 11 of 12
(i) Owner equity contribution;
(j) Amount of private funds leveraged; and,
(k) Level of commitment to hire local youth, minorities and other groups with
elevated unemployment rates; and,
(l) Consistency with City of Ithaca and IURA plans and policies.
Carried Unanimously
A. City of Ithaca financial audit
Cummings reported that the Committee met with IURA Bookkeeper, Jill Sage to review the
2008 City Audit with a focus on those portions involving finances under IURA management.
She reported that the 2009 City Audit is scheduled to get underway in November.
B. Increase work week for the Contract Monitor I position from 25 hours/week to 35
hours/week
Bohn announced that the Contracts Monitor II has announced her intention to retire
effective December 31, 2010. Cummings stated that Ms. Van Leuken has been an
extraordinarily dedicated employee with incredible institutional history and thanks her for
her service to the IURA. Given the staff transition, she recommended increasing the work
week for the recently hired Contracts Monitor I, who seeks full‐time employment.
Cummings moved, seconded by Farrell, the following:
Increase Authorized Work Week for Contract Monitor I Position
Whereas, Contract Monitor staffing of the IURA is in a planned transition period for
succession, and
Whereas, the Contract Monitor has announced plans to retire, and
Whereas, increasing the Contract Monitor I position from 25‐hours per week to 35‐hours
per week is critical to maintain sufficient contract monitoring capacity given the existing
work load and the upcoming retirement, and
Whereas, an increase in the work week will result in increased personnel costs of
approximately $250 per week or $13,000 per year, and
Whereas, retirement of the Contract Monitor will result in decreased personnel costs of
approximately $50,000 per year; now, therefore, be it
Resolved, that effective November 1, 2010, the authorized work week for the Contract
Monitor I position is hereby authorized to be increased from 25‐hours per week to 35‐hours
per week (full time).
Carried Unanimously 4‐0
IURA Minutes
October 28, 2010
Page 12 of 12
C. Review of September 2010 IURA financials
Following review, the September 2010 financials were accepted.
D. Committee Chairperson report
Cummings commented that the proposed Challenge area rezoning from B‐4 to CBD is
contrary to the Agency’s mission to build stable neighborhoods that attract private
investment. She indicated opposition to a rezoning that would allow a 60‐foot building
immediately adjacent to the historic lower East Seneca Street neighborhood that has seen a
transition to owner‐occupancy recently.
VIII. New/Old Business
A. Next meeting date: December 17, 2010
IX. Motion to Adjourn
The meeting was adjourned at 10:37 a.m. by consensus
END
Minutes prepared by A. Vargo, edited by N. Bohn
j:\community development\admin files\minutes\iura\2010\9september\9‐23‐10 iura minutes nb edit.doc