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Home My WebLink AboutMN-IURAED-2011-01-11Ithaca Urban Renewal Agency Approved 2‐15‐11 108 East Green Street Ithaca, New York 14850 (607) 274-6559 (607) 274-6558 (fax) MINUTES IURA Economic Development Committee 3:30 PM, Tuesday, January 11, 2011 Council Chambers, 3rd Floor, City Hall, Ithaca, NY Present: Leslie Ackerman, Martha Armstrong, Doug Dylla, Jennifer Tegan Staff: Nels Bohn, Alice Vargo I. Call to order The meeting was called to order at 3:32 p.m. by Chairperson Dylla. II. Additions to or deletions from the agenda ‐ none III. Public comment IV. Review of Minutes for December 14, 2010 meeting Armstrong moved, seconded by Ackerman, to approve the December 14, 2010 minutes. Carried Unanimously V. New Business A. Community Lending ‐ Request from Argos Inn LLC to modify projected job creation resulting from IURA loan (CD‐RLF #29) Bohn reviewed the request to modify the job creation goal from 8 FTE jobs to 6.75 FTE jobs. He explained that through the bank underwriting process the borrower has developed a more conservative profit and loss statement regarding revenues in the bar, so he has eliminated the bar manager position. Avi Smith has reported that Tompkins Trust Company and the New York Business Development Council have verbally approved $960,000 in lending assistance to this project, said Bohn. Bohn reported that at 6.75 FTE jobs created as a result of a $100,000 CDBG loan results in approximately $15,000 of assistance per job created. The CDBG public benefit test requires no more than $35,000 of assistance for each job created, so the requested change is still well within HUD guidelines. Armstrong moved, seconded by Ackerman, the following: IURA EDC MInutes January 11, 2011 Page 2 of 4 CDRLF, Loan Assistance to Unity Inn LLC for Argos Inn Project – Revise Job Creation Projection Whereas, on September 21, 2010, the IURA approved a loan of $100,000 to Unity Inn LLC for a $1,669,000 project to acquire and renovate the historic McCormick‐Cowdry house located at 408 East State/MLK Jr. Street to an 11‐room inn with a public bar/lounge to be operated as the Argos Inn, and Whereas, the loan approval is conditioned upon (1) submission of a primary loan commitment in an amount sufficient to complete the project, and (2) creation of eight (8) full‐time equivalent (FTE) jobs, and Whereas, on January 6, 2011, Unity Inn, LLC submitted a request to revise the job creation projection to 6.75 FTE jobs, and Whereas, Avi H. Smith, sole member of Unity Inn LLC, reports that Tompkins Trust Company and the New York Business Development Council (NYBDC) have verbally informed him that they have approved loans totaling $960,000 through the Small Business Administration (SBA) 504 loan program for the project, and Whereas, during underwriting of the SBA 504 loan, Unity House LLC re‐evaluated the staffing plan and revised the job creation projection from 8 FTEs to 6.75 FTEs, and Whereas, Mr. Smith indicates that the primary reason for the reduced job creation goal is due to a conservative estimate of the amount of business the café/bar will generate, which consequently requires fewer employees than previously projected, and Whereas, at 6.75 FTE jobs created the project will generate one FTE job for every $15,000 of assistance, thereby meeting the CDBG public benefit test to generate at least one FTE job for every $35,000 of assistance, and Whereas, at their January 11, 2011 meeting the IURA Economic Development Committee reviewed this matter and recommends the following; now, therefore, be it RESOLVED, that the IURA hereby approves the January 6, 2011 request from Unity Inn LLC to modify the job creation goal for the Argos Inn project to 6.75 FTE positions and modify the job creation loan condition accordingly, and be it further IURA EDC MInutes January 11, 2011 Page 3 of 4 RESOLVED, that the Director of Community Development for the IURA is authorized to issue a letter to Unity Inn LLC to modify the IURA loan commitment is conditioned upon creation of 6.75 FTE jobs. Carried Unanimously B. 2011 HUD Entitlement Action Plan – Preliminary review of funding applications for economic development projects/programs Bohn explained the funding categories and different funding sources available. He requested that the Committee develop a recommendation to the IURA on economic development applications by the February 18, 2011 IURA meeting. Bohn explained that economic development projects are only eligible for funding from the Community Development Block Grant (CDBG) funding source. He noted that unless a project (1) creates permanent jobs, (2) provides technical assistance to microenterprises, or (3) constitutes a neighborhood economic development project carried out by a Community Based Development Organization (CBDO), it will be treated as a “public service” CDBG project. The total funding for all public service category projects cannot exceed 15% of the CDBG award, or approximately $133,000, reported Bohn. Given the IURA commitment to continue funding the multi‐year GIAC building rehabilitation at $500,000 in 2011, and the public service funding limit, he cautioned members that total funding for economic development projects is not likely to exceed $90,000. The committee discussed each of the following project proposals for eligibility, need, impact, cost per beneficiary and feasibility:  Rebuilding the Wall Work Readiness (RTW)  KTC "Next Steps" Training Program  JobsBuild Training Program  Entrepreneurship, Leadership and Business Development Lab (eLab)  Work Preserve Job Training Members noted pros and cons for each project and generated questions for staff to transmit to applicants. Bohn noted that the Kitchen Theatre project qualifies as a CBDO activity, so it isn’t subject to the public service cap. Members recognized that there would not be sufficient funding for all economic development proposals. There was agreement that eLab, with requested funding of $122,192, did not rate as high as the other proposals. Pending receipt of responses from applicants, initial Committee support was strongest for the Work Preserve Job Training project and a pilot version of the RTW project at approximately $30,000 if they could be document employer commitment to IURA EDC MInutes January 11, 2011 Page 4 of 4 interview their clients for job opportunities. Members agreed to continue the review at their next meeting when supplemental information would be available. VI. Staff Report A. December, 2010 loan repayment reports. Bohn reported that all loan and lease payments are up‐to‐date with the exception of Diane’s State Street Auto. She is scheduled to drop off her financial information today, said Bohn. B. Other ‐ none VII. Project updates A. Restore NY III Commons Upper‐Story Bohn reported that the Grant Disbursement Agreement between the City and ESD is now in place and that he has drafted pass‐through funding agreements for both Plantation Building LLC and Petrune. He noted that Plantation Building project has developed a funding gap as an investor to utilize the New York State historic tax credits cannot be secured under new rules established by New York State in 2010. Additionally, construction costs went $300K over budget. Management is developing a plan to address the funding gap that includes IURA participation for loan assistance to the new restaurant in the project. B. Petrune manufacturing (CD‐RLF application) Bohn reported that contractors are still working to repair fire damage, but Petrune plans to open next week. Second floor tenants will also return next week. C. Other In response to a question, Bohn reported that “Wildfire” restaurant has changed their name to “Delilah’s on Cayuga” because of another business chain in Illinois has the same name and complained that their customers were going to the incorrect website. VIII. Old and Other Business IX. Next meeting date: February 8, 2011 X. Adjournment The meeting was adjourned by consensus at 5:10 p.m. END Minutes prepared by A. Vargo, edited by N. Bohn j:\community development\admin files\minutes\edc\2011\1jan\minutes edc 1‐11‐11 nb edit.doc