HomeMy WebLinkAboutMN-IURAED-2013-02-12Approved: 3/14/13
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, February 12, 2013
Common Council Chambers, 3rd Floor, City Hall, Ithaca, NY
Present: Leslie Ackerman, Heather Filiberto, Jennifer Tegan
Excused: Doug Dylla
Vacancy: 1
Staff: Nels Bohn, Charles Pyott
Guests: Gary Ferguson, Executive Director, Downtown Ithaca Alliance (DIA)
Karen Parkes, Vice President, Commercial Lending, Tompkins Trust Company (TTC)
I. Call to Order
Vice‐Chairperson Ackerman called the meeting to order at 3:43 P.M.
II. Agenda Additions/Deletions ― Bohn suggested adding agenda items to discuss a recent
contract extension request for the Tompkins Community Action (TCA) JobsBuild job
training program, as well as an update on the status of the Urban Outfitters CD‐RLF Priority
Business loan. No objections were raised.
III. Public Comments (3‐minute maximum per person) ― None
IV. Review of Meeting Minutes: December 18, 2012
Filiberto moved, seconded by Tegan, to approve the December 18, 2012 minutes, with
no modifications. Carried Unanimously 3‐0
IV. HUD Entitlement Program
A. Review of Proposed Program Design for Downtown Retail Corridor Support
Program (Project #9, CDBG 2012)
Bohn indicated that staff is preparing to finalize the Downtown Retail Corridor Support
Program contract, but first wants to ensure the program’s design matches committee
members’ expectations. He noted also that the program sponsor scaled the program
back from its original scope.
IURA EDC Minutes
February 12, 2013
Page 2 of 7
When the IURA originally approved the loan, Bohn remarked, it made it clear that the
program needs to generate the kind of data that would enable the IURA to evaluate its
success. IURA staff recommends that: (1) the program needs to demonstrate the basic
eligibility of the businesses involved (e.g., low‐ to moderate‐income); and (2) the
program establishes a set of well‐defined outcomes to determine if it was worth
funding, and would be worth funding again. Bohn observed that section 1D. of the
program proposal contains a number of generalized, difficult‐to‐quantify objectives.
Bohn then asked EDC members for their feedback, so that he can return to the program
sponsors and finalize the contract.
Filiberto suggested the IURA ask the program sponsors to generate the measurable
outcomes from the eight “key components” listed under “Assessment” in the proposal.
Bohn agreed.
Tegan asked if the businesses identified in the proposal committed formally to the
project. Bohn replied the IURA will in fact be asking the project sponsors for written
commitment from those businesses.
Tegan noted the quality of the measurable outcomes associated with each of the
businesses should help determine which businesses get selected in the first place.
Ackerman cautioned the program represents a large time commitment for the business
owners. Bohn indicated he would definitely bring that point up with the program
sponsors. He thanked the committee for its feedback.
B. Review of Proposed FY 2013 CDBG Project for IURA Participation in Ithaca Commons
Loan Program to Assist Businesses Impacted by Commons Repair & Upgrade Project
Bohn noted that this agenda item is a preview of a possible 2013 funding application, as
part of the Downtown Ithaca Alliance’s (DIA) ongoing work on the Commons repair and
upgrade project, which will put large portions of the Commons out of commission in
Spring‐Fall 2013. Given the extent to which the project is expected to negatively affect
retail traffic, the DIA has been collaborating with Tompkins Trust Company on a financial
assistance plan for downtown retail businesses.
Gary Ferguson, Downtown Ithaca Alliance (DIA) Executive Director, walked through a
presentation of the assistance plan, noting that downtown retail businesses specifically
asked for program of its kind. Tompkins Trust Company (TTC) subsequently stepped
forward to determine if it could structure a loan program to meet their needs and then
launched the program that is in place today. Ferguson noted, however, that bringing
the IURA assistance to bear would help reach even more businesses (for those
businesses which may have some collateral‐oriented challenges).
IURA EDC Minutes
February 12, 2013
Page 3 of 7
Karen Parkes, TTC, noted that the program launched on February 1, 2013. All
downtown businesses are eligible. It is a 5‐year line of credit loan, with interest‐only
payments dues for the first 24 months, then terming over the remaining 36 months.
Parkes noted that most TTC loans of this kind come with an interest rate of prime rate,
plus 2%; however, this loan will only charge prime (3.25%). With a cap of $50,000, most
loans are anticipated to be between $20,000 and $50,000. For the collateral, TTC
usually prefers to sit in 1st lien position; however, for this particular program it is willing
to sit in 2nd lien position. The loans would also be eligible for a Small Business
Administration (SBA) guarantee, for qualifying businesses.
Ferguson noted the DIA has already allocated some funds to offset the SBA fees, to
make the program more attractive to businesses.
Filiberto asked if there were a cap on the total amount of money in the program or the
number of loans. Parkes replied, no, although she originally envisioned approximately
10 loans, at $50,000 each; however, it would not be a problem if it turns out to be 20
loans.
Filiberto asked if TTC would be asking the IURA to set aside $50,000 to meet the
collateral requirements. Parkes replied, yes. Filiberto asked how much TTC would be
looking for. Parkes replied, approximately $100,000 (up to 50% of an individual loan),
for those businesses that meet all TTC underwriting standards except for collateral
requirements and do not qualify for a 50% SBA loan guarantee.
Tegan asked which situations Parkes envisions IURA funds to be necessary for. Parkes
replied, if the business already has an SBA loan from another bank and is not eligible for
another SBA loan.
Bohn noted that although it would not be making a return on its loans, the IURA would
benefit by helping local businesses. He asked Parkes about the restrictions on the use of
the funds and whether refinancing would be permitted. Parkes replied that refinancing
would only be permitted if a business has an existing line of credit. There are no other
restrictions, other than the funds would need to be used as operating capital.
Ackerman asked Bohn what category of IURA funding assistance would likely be used.
Bohn replied this still needs to be determined, but probably either RLF or CDBG. The
eligibility requirements would need to be looked at and he would encourage any
program to be structured to ensure that TTC had funds at risk even after any guarantee.
Filiberto remarked she thinks the proposal would be a good partnership.
IURA EDC Minutes
February 12, 2013
Page 4 of 7
Seeing no disagreement, Bohn noted it appears the committee is encouraging DIA to
moved forward with its proposal.
Ackerman asked if there were any limitations on how long loan recipients businesses
need to have been in business for. Parkes replied that would need to be determined on
a case‐by‐case basis; although TTC plans on being as flexible as possible.
C. Tompkins Community Action (TCA) JobsBuild Jobs Training Program
Bohn reported that the IURA received a request for a contract extension on the
Tompkins Community Action (TCA) jobs training program. The $30,000 project was
designed to provide a stipend for full‐time job training for three young adults, in either
weatherization or early childhood development; however, it has not worked out as
planned. There have been a considerable number of drop‐outs and incompletes. TCA is
now seeking a one‐year extension of the program, focusing exclusively only on the early
childhood development portion of the program.
Tegan asked what would happen if the IURA does not grant the extension. Bohn replied
that the IURA would pay out existing expenses and simply make the rest of the funds
available for other projects.
In examining the program’s record, Tegan observed, it seems that TCA may not have
been proactive enough. Bohn remarked that the IURA has in fact had good experiences
working with TCA in other contexts (especially with housing), but that this program has
not achieved the outcomes identified in their funding application.
At this point, Tegan suggested it may be better to concede the program has not been
successful and reallocate the remaining funds. Bohn responded that is a valid
suggestion. It is worth noting, however, that the narrowed focus on early childhood
development would likely be a better direction for TCA. Bohn added that another
option is for IURA to enable the current trainees to complete the program and simply
not fund the third one.
In retrospect, Ackerman observed, funding a program designed to provide training in
two completely different areas, like weatherization and early childhood development,
may not have been the best use of funds. Bohn responded that may very well be the
case and the IURA may want to keep that in mind in the future.
Tegan moved, seconded by Filiberto:
Contract Extension and Modification
for Jobs Build Training Program (#15, CDBG 2011)
IURA EDC Minutes
February 12, 2013
Page 5 of 7
Whereas, The 2011 Action Plan included $30,000 for Tompkins Community Action’s
(TCA’s) Jobs Build program to provide stipends for at least 3 trainees to complete a
year‐long job training program in either weatherization or early childhood education,
including attainment of several certifications and credentials, and
Whereas, despite persistent efforts, the weatherization track has not proven to be a
successful venue to train and retain entry level workers with significant barriers to
employment, and
Whereas, the early childcare track has also not met expectations but it is projected to
complete training of two workers to attain unsupported employment by September 30,
2013, and
Whereas, the program schedule has expired and TCA requests a contract extension to
deliver the program, and
Whereas, in a meeting on January 17, 2013 between IURA staff member Sue Kittel and
Tompkins Community Action’s Deputy Director Carrie Berman, TCA requested a
modification to their agreement to focus solely on the early education track and
eliminate the weatherization employment track and extend the time frame to complete
performance to September 30, 2013, and
Whereas, the Economic Development Committee considered this matter at their
February 12, 2013 meeting and recommends extending the program schedule to allow
the two existing participants to complete training and discontinue further funding for a
third participant, and
Whereas, the Economic Development Committee recommends the following contract
modifications; now, therefore, be it
RESOLVED, that the IURA hereby authorizes the following contract modifications to the
TCA Jobs Build Training program contract (#15, 2011 CDBG):
1. Extend the contract completion date to September 30, 2013;
2. Authorize a program modification to focus job training solely on the early
education employment field;
3. Reduce the program outcome from 3 to 2 low/mod income youth (ages 18‐25)
trainees completing JobsBuild training, including supervised work experience,
and attainment of certifications & credential as identified in the TCA program
design;
4. Reduce maximum CDBG remuneration to TCA from $30,000 to $20,000;
5. Reduce match funding requirements by one‐third, and be it further
IURA EDC Minutes
February 12, 2013
Page 6 of 7
RESOLVED, that the 2011 Action Plan be amended to recognize this resolution, and be it
further
RESOLVED, that the $10,000 of CDBG funds no longer committed to the JobsBuild
Training program be made available for allocation in the 2013 Action Plan, and be it
further,
RESOLVED, that the IURA Chairperson, subject to review by legal counsel, is authorized
to execute all necessary documents to implement this resolution.
Carried 3‐0
VI. Community Lending
A. Review of January 2013 Lease & Loan Report
Bohn reported that a few of the loans are past due and staff has been in touch with all
the delinquent parties. Bohn remarked that Diane’s Downtown Automotive missed a
payment (the first time it has done so since being refinanced), although he has no more
information to provide on it at this time.
Bohn noted that the Finger Lakes Wine Center is continuing to work on establishing a
relationship with a third party to reinvigorate the Center.
B. Loan Pipeline
None.
C. Urban Outfitters
Bohn noted that, while the Urban Outfitters loan is current, an issue arose with the HUD
reporting requirements associated with the project. HUD requires complete job
creation numbers, which were included as a requirement in the IURA loan agreement
with the developer. Urban Outfitters, however, is only agreeing to release a very limited
amount of its staffing and payroll information. IURA staff is currently trying to resolve
the situation. If the situation is not resolved, the IURA may consider substituting non‐
CDBG (e.g., UDAG) funds for the CDBG funds. Filiberto recommended using UDAG funds
on condition that the interest rate be increased. Tegan agreed. Bohn noted that is
something that he would further explore and recommended to the IURA.
VII. Other Business
A. Review of AFCU Business CENTS Annual Report
IURA EDC Minutes
February 12, 2013
Page 7 of 7
Bohn noted that the AFCU Business CENTS Annual Report was recently completed.
Among other findings, the report showcased the recent success in bringing in new
storefront businesses to the downtown area.
B. Staff Report
None.
VIII. Adjournment (Next Meeting Date: 3:30 PM, Tuesday, March 12, 2013)
The meeting was adjourned by consensus at 5:00 P.M.
— END —
Minutes prepared by C. Pyott, edited by N. Bohn.