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Home My WebLink AboutMN-IURAED-2012-05-08Approved 6/19/12 Ithaca Urban Renewal Agency 108 E. Green Street Ithaca, New York 14850 (607) 274-6559 (607) 274-6558 (fax) MINUTES ITHACA URBAN RENEWAL AGENCY Economic Development Committee (EDC) 3:30 PM, Tuesday, May 8, 2012 Common Council Chambers, 3rd Floor, City Hall, Ithaca, NY Present: Doug Dylla, Leslie Ackerman, Martha Armstrong, Ayana Richardson Absent: Jennifer Tegan Staff: Nels Bohn, René Funke, Charles Pyott Guests: None I. Call to Order Chairperson Dylla called the meeting to order at 3:39 P.M. II. Agenda Additions/Deletions – None III. Public Comments (3‐minute maximum per person) – None IV. Review of Meeting Minutes: April 3, 2012 & April 10, 2012 Richardson moved, seconded by Ackerman, to approve the April 3, 2012 and April 10, 2012 meeting minutes, with no modifications. Carried Unanimously 4‐0. V. Community Lending A. Request from Plantation Building, LLC for Loan Modification #1 (Gateway Project #4, Plantation Building, Commons Upper‐Story Housing Project) Bohn indicated the request is for a modification of the IURA's Plantation Building $490,000 bridge loan to a two‐year term loan on the remaining principal balance of $29,432, with $1,000 monthly payments (beginning August 1, 2012) and a balloon payment due after 24 months for the remaining principal balance. The 3.5% interest rate would remain unchanged. The request is the result of cost overruns for the project, including unexpected additional costs to comply with the historic rehabilitation tax credits. Bohn is comfortable with the request, given the owner’s strong collateral position; and he noted the owner also approached Tompkins County Area Development (TCAD) with a similar request for comparable terms. IURA EDC Minutes May 8, 2012 Page 2 of 6 Ackerman asked if any conceivable rationale exists for not approving the request, to which Bohn replied, only perhaps that it is always possible the loan would be paid in less than 24 months. Armstrong moved, seconded by Richardson: Loan Modification #1 to Plantation Building, LLC Loan (Gateway #4) Whereas, on October 6, 2010, the IURA issued a $490,000 loan at a 3.5% interest rate to Plantation Building, LLC for renovation of the Plantation Building located at 130‐132 E. State/E. MLK Street payable upon receipt of Restore NY grant funds, and Whereas, approximately $460,000 of the loan has been repaid and a loan balance of $29,432.14 remains as of March 31, 2012, and Whereas, per correspondence dated April 30, 2012, Plantation Building, LLC requests modification of the loan to repay the loan over 24 months with monthly payments of $1,000 and a balloon payment due at the end of the term for the remaining balance due, and Whereas, Plantation Building, LLC indicates that cost overruns on the project resulted in their ability to repay the loan as originally planned, and Whereas, the Plantation Building, LLC loan is secured by the following collateral: • 2nd mortgage lien on property located at 20 Rosina Drive, Ithaca, NY, • 2nd mortgage lien on property located at 622 Cascadilla Street, Ithaca, NY, • Personal guarantees by Sunit Chutintaranond and Flaminia Cervesa, • Corporate guarantees by ItalThai, LLC and ZaZa’s Cucina, Inc., and Whereas, at their May 8, 2012 meeting, the Economic Development Committee reviewed this matter and recommended the following; now, therefore, be it RESOLVED, that the IURA hereby agrees to modify the Plantation Building, LLC loan (Gateway #4) to retire the outstanding principal balance ($29,432.14 as of 3/31/12), per the following terms: Term: 24 months Interest Rate: 3.5% per annum Repayment: $1,000 per month with balloon payment due at maturity for the remaining balance due, and be it further IURA EDC Minutes May 8, 2012 Page 3 of 6 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, including, but not limited to, a loan modification agreement. Carried Unanimously 4‐0. B. Executive Session ― Discuss Request from Mack Travis for Loan Assistance to Undertake Urban Renewal Project (Including Proposed Acquisition of Property for Which Publicity Would Substantially Affect Value) Bohn explained that a confidential closed‐door Executive Session is generally called for whenever publicity may adversely affect a prospective property acquisition associated with an IURA loan application. The confidentiality of the session is guaranteed, until such a time as the reason for the session has passed. Executive Session discussion should be strictly limited to that subject for which it was called. Once an Executive Session is adjourned, committee participants return to the public meeting room, re‐ open the public session, and report any action(s), if any, resulting from the Executive Session. The Executive Session was deferred to end of meeting. C. Loan Pipeline Bohn indicated the Neighborhood Pride grocery store project appears to be moving forward. The project owners informed the City’s Deputy Director for Economic Development that they recently crossed another threshold and expect to be closing on their loan within two weeks. It is anticipated that once this has taken place, the project owners would apply to the IURA for a loan. Bohn remarked that probably the most significant potential imminent change to the loan pipeline will grow out of the Downtown Ithaca Alliance “Race for the Space” retail business incentive competition, which received 27 proposals. It is Bohn’s understanding that 5‐6 of the proposals are very strong applications and those who are not selected may seek IURA financial assistance to pursue their business projects. A decision on the winner of the contest is expected in late May 2012. VI. FY2012 HUD Entitlement Program A. Develop Recommended Conditions & Outcome Measurements for Various Projects: 1. eLab Downtown Retail Corridor Support 2. Ithaca Food Works Kitchen 3. Cinemapolis Digital Conversion IURA EDC Minutes May 8, 2012 Page 4 of 6 Bohn explained that the purpose of the agenda item is to develop recommendations to the IURA to clarify the terms and conditions of financial assistance to be provided to economic development projects included in the FY12 Action Plan and additionally review and establish expected outcomes from each project. Bohn indicated that IURA Contracts Monitor, René Funke, was asked to attend this meeting because she develops and monitors the funding contracts for each project. Cinemapolis Digital Conversion Dylla remarked that the Cinemapolis Digital Conversion description, in the draft “Outcome Measurements & Conditions for ED Projects Included in the F12 Action Plan” memorandum, should indicate that the $50,000 IURA loan that is listed would only be made if/when the project owner independently raises $65,000 of its own funding. eLab Downtown Retail Corridor Support Dylla asked if the IURA would be providing direct salary/wage compensation for any of the projects, to which Bohn replied, yes, in the case of the eLab Downtown Retail Corridor Support program. He added it would make sense, for that project, to enumerate the kind of additional information the IURA would like to require from the applicant, before the contract is executed. Richardson noted the IURA should seek to establish some kind of baseline for each business assisted, such as monthly sales or payroll. Funke remarked that part of the contract monitoring process would include collaborating with the co‐sponsor, Cornell Cooperative Extension (CCE), to regularly track the work that is being done on the project. She added that the IURA would probably want to ensure it receives something more detailed than a simple timesheet. Ackerman asked if IURA funding is still be allocated for work by Sarah Reistetter‐Akiri of Cornell Cooperative Extension (CCE) identified in the original grant application. Bohn replied that the sponsor has eliminated funding for CCE staff in response to the reduced funding awarded to the project by the IURA. Bohn believes the applicant may still be hoping the CCE would express an interest in funding Reistetter‐Akiri’s work itself. Ithaca Food Works Kitchen Richardson asked how the IURA would define “satisfactory,” in the context of the “satisfactory operations plan” listed in the terms and conditions. Bohn responded that the IURA would use its judgment that the project is well‐planned and feasible in reviewing the operations plan. He indicated that the purpose of this requirement is to underwrite that the kitchen will be financially viable after opening so that projected job creation will be achieved. IURA EDC Minutes May 8, 2012 Page 5 of 6 Dylla asked where the 10/15/13 deadline for the applicant’s satisfying the list of conditions came from, in item #2. Bohn replied the date was derived from a combination of the applicant’s input, schedule for notice of grant applications to be submitted and the IURA’s needs. No other comments were made. As a result, Dylla indicated the memorandum was now ready to forward to the full IURA. B. Debriefing on Project Selection Process ― Comment to IURA (deferred to next meeting) V. Community Lending [cont.] B. Executive Session ― Discuss Request from Mack Travis for Loan Assistance to Undertake Urban Renewal Project [cont.] Richardson moved, seconded by Ackerman, to go into executive session to discuss a matter regarding proposed acquisition of property for which publicity would substantially affect value: The Executive Session was opened at 4:03 p.m. Carried Unanimously 4‐0. ― E XECUTIVE S ESSION ― Dylla moved, seconded by Richardson, to end the executive session and resume the regular meeting: The Executive Session was adjourned at 5:04 p.m. Carried Unanimously 4‐0. Dylla reported that no formal action was taken in Executive Session; however, it was noted that IURA Committee members may be contacted via telephone or e‐mail, as necessary, prior to the full upcoming IURA meeting, regarding the potential project. IURA EDC Minutes May 8, 2012 Page 6 of 6 VII. Other New/Old Business A. Annual Election of Committee Vice‐Chairperson & Recommendation to IURA of Chairperson (deferred to next meeting) B. Staff Report (deferred to next meeting) C. Review of Loan & Lease Payment Reports (deferred to next meeting) VIII. Adjournment (next meeting date: 3:30 PM, Tuesday, June 12, 2012 The meeting was adjourned by consensus at 5:04 P.M. — END — Minutes prepared by C. Pyott, edited by N. Bohn.