HomeMy WebLinkAboutMN-IURAED-2013-07-15Approved: 10/8/13
108 E. Green Street
Ithaca
Urban
Renewal
Agency
Ithaca, New York 14850
(607) 274-6559
(607) 274-6558 (fax)
MINUTES
ITHACA URBAN RENEWAL AGENCY
Economic Development Committee (EDC)
3:00 PM, Tuesday, July 15, 2013
Common Council Chambers, 3rd Floor, City Hall, Ithaca, NY
Present: Doug Dylla, Heather Filiberto, Heather Harrick
Excused: Jennifer Tegan, Leslie Ackerman
Staff: Nels Bohn, Charles Pyott
Guests: Julie Crowley, President, Ithaca Coffee Company, LLC
Lisa Kerslick, Executive Vice‐President, Ithaca Coffee Company, LLC
I. Call to Order
Chairperson Dylla called the meeting to order at 3:12 P.M.
II. Agenda Additions/Deletions ― None.
III. Public Comments (3‐minute maximum per person) ― None.
IV. Review of Meeting Minutes: June 11, 2013
Filiberto moved, seconded by Harrick, to approve the June 11, 2013 minutes, with no
modifications. Carried Unanimously 3‐0.
V. Community Lending
A. Community Development Revolving Loan Fund ― Ithaca Coffee Company, LLC
Application for Loan Assistance to Establish Wholesale Coffee Roasting Operation at
702 Hancock Street
Bohn recapitulated the salient details of the application, noting the principal underwriting
concern is whether the applicant’s business activity can support the loan. Bohn noted that
IURA loan underwriting consultant, Rick Rickli (H. Sicherman & Co., Inc.), was initially
concerned the applicant would encounter trouble with the initial cost.
IURA EDC Minutes
July 15, 2013
Page 2 of 7
With some additional analysis, however, Rickli concluded there should be sufficient
additional net operating income generated by the roasting business (appr. $30,000/yr.) to
justify the loan. Bohn added that the loan would benefit the community (e.g., women‐
owned business, job creation, etc.). He is recommending it for approval.
Julie Crowley provided a general overview of the business, noting it has outgrown its
current space and really needs to relocate the coffee roasting part of its operation, to allow
it to expand its beer and tavern business. Crowley does not currently intend to use the
coffee roasting space for retail operation, although that would be feasible. Crowley plans
to rent the front of the 702 Hancock Street property as office space, which should
significantly help support the additional debt. (She has already received several
expressions of interest.) Crowley also stressed that the wholesale coffee business has
considerable growth potential.
Dylla asked if the applicant is comfortable with the challenge of handling multiple facilities.
Crowley conceded it would be a challenge; however, the company has already learned a
considerable amount from its earlier expansion, from one, to two sites. The company has
a good management team that would be closely monitoring the entire operation.
Dylla observed that the company’s wholesale coffee customers are mostly local. Crowley
responded that two of its largest customers are actually not local. In fact, the new roasting
operation would serve as an excellent strategic launching point for expanding the
company’s non‐local business.
Bohn indicated the count of jobs created is usually measured over the first two years, but
the 3.75 figure listed on the original draft of the resolution spanned the first three years.
That figure has now been adjusted. The resolution language was also clarified regarding
the living wage policy. The original resolution language could conceivably have required
the applicant to create only living wage jobs. Overall, Bohn concluded, the loan would
provide a mixture of different benefits to the community.
Dylla asked if the company was certified as a woman‐owned business with the state Office
of Minority/Women‐Owned Businesses. Bohn replied, no.
Moved by Harrick, seconded by Filiberto:
CD‐RLF ― Loan Assistance to Ithaca Coffee Company, LLC for Expansion of
Wholesale Coffee‐Roasting Operation at 702 Hancock Street
WHEREAS, on June 12, 2013 Ithaca Coffee Company, LLC (ICC), applied for a
$100,000 IURA loan to assist in an $395,000 project to acquire and renovate the
property at 702 Hancock Street to house wholesale coffee roasting operations, and
IURA EDC Minutes
July 15, 2013
Page 3 of 7
WHEREAS, ICC has two retail locations (Triphammer Marketplace at 2255
Triphammer Rd. and Gateway Commons at 311 E. Green Street) offering fresh
roasted coffee, gourmet foods, craft beers and beer on tap and also sells roasted
coffee wholesale, and
WHEREAS, the purpose of the project is to relocate coffee roasting operations from
the Triphammer store to allow for expansion of the tavern facility and expand ICC
wholesale operations, including coffee roasting and custom labeled packaged
products, and
WHEREAS, the primary objectives of the Community Development Revolving Loan
Program (CD‐RLF) is provision of direct financing for economic development
activities to create employment opportunities, facilitate the expansion of business
activity within the City of Ithaca and expansion of the City’s commercial and
industrial tax base, and
WHEREAS, the project is projected to create 3 (three) full‐time equivalent (FTE)
employment positions, of which at least 51% will be filled by low‐ and moderate‐
income persons, and
WHEREAS, the proposed use of project funds is:
$345,000 property acquisition
$50,000 building improvements
$395,000 Total, and
WHEREAS, the proposed sources of project funds is:
$260,500 bank loan
$100,000 IURA
$34,500 equity
$395,000 Total, and
WHEREAS, CD‐RLF financing policy establishes maximum loan amount of $100,000
for a non‐ retail business project provided the project creates at least one FTE job for
every $35,000 of loan assistance, and
WHEREAS, the IURA particularly seeks to assist projects that generate living wage
jobs ($12.62/hour plus health benefits), fill vacant buildings, and assist Minority and
Women‐owned businesses (M/WBEs), and
WHEREAS, ICC projects approximately 25% of the employment positions created will
earn over $15/hour, and the remaining positions will earn $10‐$12/hour with
employer paid health insurance available, and
IURA EDC Minutes
July 15, 2013
Page 4 of 7
WHEREAS, the building at 702 Hancock Street has been vacant for several years, and
WHEREAS, ICC is a women‐owned business, and
WHEREAS, ICC met job creation goals and fully repaid a $60,000 IURA loan issued in
2007 to assist in the opening of the downtown Ithaca Coffee Company retail store at
Gateway Commons, and
WHEREAS, the proposed project will locate in an existing building and IURA funding
will not be used for any construction activities, therefore the project is a
categorically excluded activity pursuant to 24 CRF 58.35(b)(4) of the National
Environmental Protection Act (NEPA) and the loan constitutes a Type II action under
the City of Ithaca Environmental Quality Review Ordinance, and is not subject to
further environmental review, and
WHEREAS, at their July 15, 2013 meeting, the IURA Economic Development
Committee reviewed the loan application, a credit analysis prepared by H.
Sicherman & Co., Inc. and applicable provisions of the IURA Economic Development
Policy Guidelines and Operating Plan, and recommend the following; now, therefore,
be it
RESOLVED, that the IURA hereby approves a loan from the Community
Development Revolving Loan Fund (CD‐RLF) in accordance with the loan application,
and supplemental submissions, subject to the following terms:
Borrowers: Ithaca Coffee Company LLC
Loan Amount: Up to $100,000
Project: Acquisition of building at 702 Hancock Street, Ithaca, NY to house coffee
roasting operation and production.
Total Project Cost: $395,000
Projected Use of IURA
Funds:
Property acquisition. Funds may not be used for building renovation
expenses.
Term: 20 years (240 months)
Interest Rate: 3.5% annually, reset to 2.5% upon submission of satisfactory job reports
documenting that the job creation goal has been achieved for two
consecutive quarters and borrower is in compliance with all other terms
of the loan agreement.
Repayment: Interest‐only payments for 3 months, then level monthly principal and
interest payments due to fully amortize the loan over the remaining 237
month term (approximately $585/month).
IURA EDC Minutes
July 15, 2013
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A
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Collateral: 1. 2nd mortgage lien on property located at 702 Hancock Street,
Ithaca, NY behind only a mortgage lien by Tompkins Trust Company
2. 2nd lien on all business assets of Ithaca Coffee Company, LLC to
include accounts, inventory, furniture, fixtures and equipment now
owned or hereinafter acquired, behind only a lien by Tompkins
Trust Company
Guarantor(s): 1. Personal guarantees of Julie A. Crowley, individually.
2. Corporate guarantee of Triphammer Liquor, Inc.
Job Creation Requirement: Creation of at least 3 (three) FTE employment positions of which at least
51% must be held by low‐ and moderate‐income persons.
Conditions: 1. Proof of bank financing commitment in sufficient amount to
complete the project.
Reporting: 1. Annual submission of in‐house profit & loss statement and balance
sheet verified by accountant‐prepared federal and state income tax
returns
2. IURA job reporting, including reporting on wage levels of jobs
created
3. Documentation of project match funding
And be it further,
RESOLVED, that the Director of Community Development for the IURA is authorized
to issue a loan commitment letter in accordance with this resolution, and be it
further
RESOLVED, that the IURA Chairperson, upon the advise of IURA legal counsel, is
hereby authorized to execute all necessary and appropriate documents to
implement this resolution.
Carried Unanimously 3‐0
B. June 2013 Lease & Loan Repayment Report
Loans
Bohn noted three loan recipients are delinquent.
Diane’s Downtown Auto did not make its two promised payments. The owner did make
a triple payment the month before, which caught her up to just one month behind.
Bohn indicated he would call the owner and find out the status of her payments.
IURA EDC Minutes
July 15, 2013
Page 6 of 7
The Argos Inn is past due, likely due to funds tied‐up with the historic tax credit
financing package the owner has yet to close on.
The State Theatre was also initially listed on the report as past due, but it has now paid
up and is current.
The Bandwagon Brew Pub is late (not for the first time). Bohn noted it is probably not a
major issue of concern: it has never been more than a month late.
Regarding the defunct Finger Lakes Wine Center, Bohn indicated the Committee will
need to determine how it would like to proceed. The IURA will most likely need to
formally write off the loan, which will need to be done in strict conformance with IURA
accounting and reporting policies.
Leases
Bohn indicated all lease payments are current.
C. Loan Pipeline Report
Bohn indicated that a high‐end shoe and handbag retail business expressed interest in
the space next to the new Sarah’s Patisserie on Seneca Street, in the Hilton Garden Inn,
and may seek IURA loan financing. The owners need another month, however, to
prepare their submission.
Bohn remarked there has also been considerable interest in the former Blue Stone Bar and
Grill space on Aurora Street. (Blue Stone may not be re‐opening after all, as initially
anticipated, after its fire.)
VII. Staff Report
New York State Consolidated Funding Applications (CFA)
Bohn remarked the CFA process takes place once a year. All applications are due on
8/12/13, with decisions made in early‐ to mid‐November. The City is applying for the
following projects:
o Application to NYSERDA Cleaner, Greener Communities Program for additional
support of the TIGER V application, which the City submitted earlier in the year. It
would provide the City with the funding for the state portion of the TIGER V match.
IURA EDC Minutes
July 15, 2013
Page 7 of 7
o Application to Empire State Development Fund for streetscape improvements in the
greater downtown area, to transform it into more of a pedestrian‐friendly urban
promenade area. The City is asking for $1.5M in improvements, including an
expanded arts trail, improvements to the aging streetscape around the Commons,
replacement of the deteriorated Courthouse bridge across Six Mile Creek, and one
or two additional features for the Commons repair and renovation project, which
have not yet been funded.
o Application for feasibility study to relocate NYS Department of Transportation
facility currently located next to the Farmer’s Market. (The State originally
committed to relocating it, years ago, but then reneged.)
Argos Inn
Bohn reported the project has gone over‐budget by about $500,000. The owner does,
however, have access to $600,000 in historic tax credits, which he has been trying to
close on, since April 2013. The current closing date is expected to be 7/22/13, so by the
end of the month, the owner’s financial shortfall should be resolved.
Ithaca Food Works Community Kitchen
The applicants did not receive funding from the Appalachian Regional Commission.
Although they did receive some bridge‐loan support from a local foundation, they now
have to decide how they are going to proceed, without a primary source of funding. The
IURA funding commitment expires on October 15, 2013, if no matching funds are
identified. Bohn has asked the applicants for an update.
eLab Downtown Retail Support Project
The IURA finally signed the contract with the sponsor, Cornell Cooperative Extension of
Tompkins County, and a progress report is expected by the end of the day today. It
does not appear there is a lot activity taking place with the program, right now,
however. Staff has been closely monitoring the project.
Bohn concluded by noting that Common Council member Chris Proulx will be serving on
EDC and on the IURA Board.
IX. Adjournment (Next Meeting Date: 3:30 PM, Tuesday, Sep. 10, 2013)
The meeting was adjourned by consensus at 3:49 P.M.
— END —
Minutes prepared by C. Pyott, edited by N. Bohn.