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HomeMy WebLinkAboutMN-IURAED-2012-12-18Approved: X/X/12 108 E. Green Street Ithaca, New York 14850 (607) 274-6559 (607) 274-6558 (fax) DRAFT MINUTES ITHACA URBAN RENEWAL AGENCY Economic Development Committee (EDC) 3:30 PM, Tuesday, December 18, 2012 Common Council Chambers, 3rd Floor, City Hall, Ithaca, NY Present: Doug Dylla, Ayana Richardson, Leslie Ackerman, Martha Armstrong Excused: Jennifer Tegan Staff: Nels Bohn, Charles Pyott Guests: Scott Whitham, Scott Whitham & Associates Neil Patel, Lighthouse Hotels, LLC Jagat Sharma, Jagat Sharma Architect I. Call to Order Chairperson Dylla called the meeting to order at 3:40 P.M. II. Agenda Additions/Deletions ― Dylla suggested adding an agenda item to discuss requiring entrepreneurial training for more inexperienced funding applicants. No objections were raised. III. Public Comments (3-minute maximum per person) ― None IV. Review of Meeting Minutes: November 13, 2012 Ackerman moved, seconded by Richardson, to approve the November 13, 2012 minutes, with two minor modifications. Carried Unanimously 3-0 IV. Property Disposition A. Request from Lighthouse Hotels, LLC to Be Designated Qualified & Eligible Sponsor to Be Eligible to Acquire Properties at 320-24 E. State Street Through Negotiated Sale for Purpose of Undertaking Urban Renewal Project Bohn introduced the action by noting that the IURA has the authority under State law to negotiate terms for a proposed property disposition, whereas the City does not. He noted that part of the parking lot next to the Community School of Music and Arts (CSMA) is owned by the City and part is owned by the IURA, so the proposed resolution is necessary to designate a sponsor. Ithaca Urban Renewal Agency IURA EDC Minutes December 18, 2012 Page 2 of 8 Bohn remarked that it is the IURA which structures the proposed sale, but Ithaca Common Council approval would be required to finalize it. The City would also need to formally determine whether the property could/should be designated surplus City property. Bohn observed that many steps are involved and the entire process can be somewhat protracted. At the end of the process, the action would return to the IURA for the proposed sale and a 90-day negotiation period. At this juncture, Whitham presented an overview of the salient details of the request. He noted the applicant has been working with Travis Hyde Properties and Joe Daly on the written agreements. The proposed project would comprise a new 6-story hotel, the State Street façade of which would include retail space. Sharma walked through some basic architectural details of the proposed project: • Brick, with limestone details • Metal panels • Green materials, with composite panels • Cornice detailing • Drop-off plaza • Penthouse Patel remarked approximately 40% of the building’s capacity would be extended-stay rooms, which would be more residential in nature and oriented towards the affordable, middle-tier segment of the market. The proposed parking would only serve about 30% of the rooms and a valet service would also be included. Dylla asked if any meeting space would be provided. Patel replied, yes, on the second floor (appr. 6,700 square feet). Dylla asked if the applicant would need a zoning variance. Patel replied, no. Whitham added that the operating premise is that the Seneca Street garage would serve as the primary alternate parking facility for the project. Dylla asked what the relocation options are for the existing businesses on the site. Patel replied that the applicant has been looking at those existing leases and will be giving the existing businesses the first option to fill one of the spaces in the building. The applicant will also be searching for other available spaces for the retailers. Ackerman asked what provisions are being made to assist the retailers, on the IURA’s own part. Bohn replied that, had it been a Federal loan, the IURA would have been obligated to provide relocation assistance; however, in this case, there is no requirement. Having said that, the IURA has a history of helping and protecting local businesses, so some provisions could be made to that end. IURA EDC Minutes December 18, 2012 Page 3 of 8 Bohn added that the proposed resolution does contain language that indicates that some potential responses to mitigate any business dislocation caused by the project would be included in the negotiations. Bohn noted that he had also held some initial discussions with the Downtown Ithaca Alliance (DIA) about that specific issue and the DIA indicated it would help. Bohn noted that the proposed ground-floor retail spaces would be significantly smaller than the spaces the retailers currently lease. Another consideration is that the rents the current retailers pay are extremely low and have not increased in a considerable time. Bohn concluded by noting that the Site Plan Review process would also be examining a variety of issues associated with the project (e.g., road access, parking, architectural design review, etc.). Richardson moved, seconded by Armstrong: Property Disposition, 320-24 E. MLK, Jr./E. State Street – Designate Lighthouse Hotels LLC as a Qualified and Eligible Sponsor Whereas, Lighthouse Hotels, LLC (Lighthouse) has submitted application to be designated a “qualified and eligible sponsor” (Sponsor) to acquire two parcels located at 320-324 E. MLK Jr./E. State Street, currently utilized as a 32-space public parking lot (Municipal Parking Lot), and Whereas, Lighthouse proposes to develop a $16 million, downtown, six-story, 92- room Hampton Inn & Suites that is projected to create 33 full-time equivalent employment opportunities, and Whereas, Lighthouse proposes wages to employees above the pay ranges paid at other hotels they operate, with the lowest wages projected at $9.50/hour, 131% of minimum wage ($7.25/hr.), or about 74% of the local living wage ($12.78/hr.), and Whereas, the proposed 30,400 square foot (SF) project site includes the following four parcels: (1) 3,267 SF - tax map #69.-1-3, 324 E. MLK Jr./E. State Street, IURA (2) 8,320 SF - tax map #69.-1-6.2 at 320-24 E. MLK Jr./E. State Street, City of Ithaca (3) 13,112 SF - tax map #69.-1-8 at 310-312 E. MLK Jr./E. State Street, Daley Enterprises (4) 5,706 SF - tax map #69.-1-7 at 314-320 E. MLK Jr./E. State, Carey Building Assoc. LLC, and Whereas, the property sought includes one parcel owned by the Ithaca Urban Renewal Agency (IURA) and one parcel owned by the City of Ithaca, and IURA EDC Minutes December 18, 2012 Page 4 of 8 Whereas, the project site is located within the Urban Renewal Project Boundary area, and Whereas, the Ithaca Urban Renewal Agency (IURA) is only authorized to dispose of property to a specific buyer if such buyer is designated as an eligible and qualified sponsor (Sponsor) per section 508 of General Municipal Law and the sale is approved by Common Council, and Whereas, a proposed Sponsor is evaluated in accordance with adopted IURA land disposition procedures that seek to determine if the proposed Sponsor is qualified and capable of fulfilling the objectives of the project for property disposition, and Whereas, IURA evaluation criteria for Sponsors include: • Financial status and stability • Legal qualification to operate in the State of New York and to enter into contracts with regard to the disposition, use, and development of land in questions • Previous experience in the financing, use, development and operation of projects of a similar nature • Reputation and proof of fair, reputable and ethical business practices and a record devoid of convictions Whereas, the primary objective of the Urban Renewal Plan (Plan) is to improve the economic, social and physical characteristics of the project neighborhood, and Whereas, one objective of the Plan is “expansion and diversification of the economic base of the community to provide the employment opportunities needed by its residents and to strengthen the tax base”, and Whereas, Hitesh T. Patel, President, and Neil H. Patel, CEO, are the principal members of Lighthouse and report that Lighthouse, or its affiliates, owns and operates the Hampton Inn located at 337 Elmira Rd., Ithaca, NY as well as Hampton Inn hotels in Clay, Seneca Falls and Buffalo (under construction), and Whereas, a 12/17/12 inspection of City records show that Lighthouse’s Ithaca Hampton Inn is operating in full compliance with all applicable permits and regulations, and is current on all tax obligations, and IURA EDC Minutes December 18, 2012 Page 5 of 8 Whereas, Lighthouse’s successful record of developing and operating four similar hotels in New York state, including the Ithaca Hampton Inn, suggests they possess the skills, resources and capacity to complete the proposed project, though financial statements for Lighthouse have not been received yet, and Whereas, the proposed project has the potential to improve the economic, social and physical and characteristics of the project neighborhood, and Whereas, designation of a Sponsor allows the IURA to negotiate terms for a proposed property disposition that must then be approved by the City of Ithaca Common Council following a public hearing on the proposed terms of the disposition, and Whereas, the IURA Economic Development Committee considered this matter at their December 18, 2012 meeting and recommended the following; now, therefore, be it 1. RESOLVED, that the IURA hereby determines that Lighthouse Hotels LLC has satisfactorily demonstrated its qualifications and capacity to successfully undertake a project to develop an appropriate in-fill urban hotel project located along the northern side of the 300 block of E. MLK Jr./E. State Street, and therefore designates the aforementioned entity as a “qualified and eligible sponsor” eligible to acquire tax parcels #69-1-3 and #69.-1-6.2, and be it further, 2. RESOLVED, that the IURA hereby recommends that the Common Council and Board of Public Works make the City-owned tax parcel #69.-1-6.2 available for redevelopment and approve transfer of the parcel to the IURA for the purpose of structuring a proposed sale for consideration by the Common Council, and be it further 3. RESOLVED, that the IURA hereby authorizes acceptance of tax parcel #69.-1- 6.2 upon Common Council authorization of transfer of the parcel, and be it further 4. RESOLVED, that the IURA Chairperson, subject to review by IURA legal counsel, is authorized to execute a 90-day exclusive negotiating agreement with the Sponsor for the purpose of structuring a proposed purchase and sale agreement to convey tax parcels #69.-1-3 and #69.-1-6.2 to the Sponsor to undertake an urban renewal project, and be it further IURA EDC Minutes December 18, 2012 Page 6 of 8 5. RESOLVED, any proposed purchase and sale agreement shall be subject to approval by both the IURA and the Common Council, and be it further 6. RESOLVED, the IURA identifies the following issues to be included in negotiations with the Sponsor: • Price (fair market value), including non-refundable deposit • urban design, especially ground level streetscape on E. MLK Jr./E. State Street • potential responses to mitigate loss of public parking to adjacent enterprises • potential responses to mitigate any business dislocation caused by the project • translating wage and job creation projections to wage and job commitments • transfer of property contingent upon site plan approval and issuance of a building permit Carried 2-1 Opposed: Ackerman B. Other Bohn reported on the current status of the sale of the Cherry Street parcel. He indicated that the abstract and title have been finalized, and a draft purchase agreement has now been sent to the City. He noted that the IURA attorney specifically asked that any squatters on the property be relocated from the site, which the City is now considering. VI. HUD Entitlement Program A. Development of FY 2013 Action Plan ― Review of Process & Application Forms Bohn reported that the FY 2013 Action Plan and funding process will generally follow the same calendar schedule employed last year; however, the process has changed to include all IURA committees, in the form of a Committee of the Whole. He noted that the Stone Quarry Apartments project has already been approved, so a considerable amount of the housing funds have already been allocated. The IURA has also tentatively committed to a City pedestrian crossing improvement project. Dylla suggested that the IURA require that any funded job training programs be connected to specific job placement and retention objectives. Richardson noted that she had spoken to the facilities program at Ithaca College, which continues to seem like a promising avenue to explore. IURA EDC Minutes December 18, 2012 Page 7 of 8 Ackerman observed that the problem with many job training programs is they are too limited in their focus. Bohn remarked that, while there have been no formally documented job placements, this is simply because none of the programs claimed they would place any of their program participants in jobs ― however, the application form will now include all that kind of information. Dylla noted that the IURA should stress that the job training programs should seek to collaborate with a specific workforce partner (e.g., Workforce NY’s One-Stop Center). Armstrong observed that most of the job training programs the IURA has funded in the past may more accurately be characterized as job readiness programs, resembling more of a public service or socially-oriented kind of program. Armstrong added that the city already has agencies which do job placement, and do it well, which could be relied on. B. 2011 & 2012 Economic Development Project Updates Bohn remarked that every project is moving forward apace ― except for the eLab Downtown Retail Corridor Support Program, co-sponsored by the Cornell Cooperative Extension of Tompkins County (CCE). As noted in the report before the Committee, both a September 13, 2012 commitment letter, requiring a response, and a November 5, 2013 mailing of documents required to prepare the project contract remain unanswered. A second letter, extending the deadline until December 1, 2013, was also sent, but which was also unanswered. (Both letters were mailed to Cooperative Extension and hand-delivered to Eldred Harris at Diaspora.) Bohn added that a IURA staff site visit on November 1, 2013 determined that Eldred Harris had not yet met with the Cooperative Extension to develop project guidelines, etc. At this juncture, staff is recommending giving the program one more opportunity to respond, by late January 2013, before the funding offer is officially withdrawn. VII. Other Business A. Review of November 2012 Lease & Loan Report Bohn reported that Cinemapolis (which recently hired a capable executive director) is waiting to obtain its landlord’s waiver, so it can sign the loan agreement. Bohn noted that the State Theatre is behind one month on its repayment, which should represent an issue of major concern, given its record of payments. Bohn also noted that Diane’s Downtown Auto is now current on its obligations. IURA EDC Minutes December 18, 2012 Page 8 of 8 B. YTD Economic Development Accomplishments Toward IURA Performance Goals Dylla remarked that the IURA is ahead of its goals in four different categories; however, the living wage goal is a little behind. Armstrong asked which programs are projected to have actually created permanent jobs. Bohn replied, only one project, the Neighborhood Pride project. Dylla asked about the Status of the Argos Inn project. Bohn replied that it has been significantly delayed by the tax credit process; however, it is anticipated it will receive the tax credits in January 2013. He added that the project also is anticipated to have created permanent jobs. Finally, regarding the proposed meeting space center in the former Masonic Temple, Bohn noted that the potential applicant is scheduled to make a formal offer to the property owner tomorrow. C. Common Council Actions of Interest to EDC Deferred until the next meeting. D. Staff Report None. VIII. Adjournment (Next Meeting Date: 3:30 PM, Tuesday, January 18, 2013) The meeting was adjourned by consensus at 4:56 P.M. — END — Minutes prepared by C. Pyott, edited by N. Bohn. j:\community development\admin files\minutes\edc\2012\12dec\edc minutes 12-18-12 - draft.doc