HomeMy WebLinkAboutMN-IURAED-2013-08-27Approved: 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)
3:30 PM, Tuesday, August 27, 2013
Common Council Chambers, 3rd Floor, City Hall, Ithaca, NY
Present: Doug Dylla, Heather Filiberto, Heather Harrick, Jennifer Tegan
Excused: Leslie Ackerman
Staff: Nels Bohn, Charles Pyott
Guests: Ken Schon, Principal, Bloomfield/Schon + Partners
I. Call to Order
Chairperson Dylla called the meeting to order at 4:07 P.M.
II. Agenda Additions/Deletions ― None.
III. Public Comments (3‐minute maximum per person) ― None.
IV. Review of Meeting Minutes: July 15, 2013
(Deferred until the next meeting.)
V. Property Disposition
A. Cayuga Green Project — Request from Cayuga Green II, LLC to Re‐Establish
Purchase & Sale Contract to Purchase Parcel ‘D’ (Tax Parcel Map 81.‐2‐4), Located at
217 S. Cayuga Street, to Construct Housing Project Containing at Least 30 Rental
and/or For‐Sale Housing Units Located Adjacent to Cayuga Garage
Bohn recapitulated the salient details of the request to convey ownership of a half‐acre
parcel to Cayuga Green II. In development for 5‐6 years, the project has been the subject
of a number of purchase and sale agreements, which were approved, bult not ultimately
closed, due primarily to financial reasons. Bohn explained it is a difficult site, due to its
shape, lack of street frontage, and a buildable area requiring a single‐corridor design. In
addition, much like other parts of dowtown, the soil conditions are either unkown or poor.
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August 27, 2013
Page 2 of 9
Bohn indicated, however, that the developer now believes he has a financially feasible
project with a committed source of funding. The proposed sale agreement is very similar
to prior agreements. Comprising at least 45 units, the project would not be eligible for tax
abatements, so it would be fully taxable market‐rate housing. The developer is the
City’s/IURA’s preferred developer for the site. The purchase and sale agreement would
require the developer to demonstrate that he can begin construction by 12/31/13. If the
project does not proceed in a timely manner he recommends marketing the site to other
developers.
Schon stressed that the developer is now ready to move forward on the project, which had
been stalled by the poor quality of the underlying soil. The developer identified a quiet
piling process – auger grouted steel displacement piles ‐ which will cost an additional
$200,000‐300,000. As a result, the developer reduced the footprint of the building and
increased the building height to seven stories to spread the fixed foundation costs over
more units. The project’s structural engineers are ready to proceed and would seek the
initial Building Permit in October‐November 2013.
Dylla asked what the schedule for the project would be. Schon replied he hopes it would
receive modified Site Plan Approval, this evening, from the Planning and Development
Board. Bohn added the IURA Board would also need to approve it at its next meeting, as
well as Common Council.
Schon remarked he has spent significant additional funds on soil investigations and
structural engineering consulting fees, so he is eager to keep moving forward.
Dylla asked if the developer felt confident he could meet the 12/31/13 deadline. Schon
replied, yes.
Filiberto asked if the project’s financing is in place. Schon replied, yes, he has a letter of
intent from one lender and has been in discussion with a couple of other lenders.
Filiberto observed that Bohn indicated the project has been difficult to complete. Given
that the City and Tompkins County Industrial Development Agency (IDA) just launched the
newly revised Community Investment Incentive Tax Abatement Program (CIITAP), she
wonders why the agreement would not include tax abatement. Bohn replied that,
although the agreement does not explicitly prohibit tax abatement, it would require
Payment‐in‐Lieu‐of‐Taxes (PILOT) to pay the City the value of any tax abatements obtained.
He explained the project was originally conceived and designed as a condominium project,
which would have been ineligible for tax abatement. Later, when the project was
redesigned as a rental project, the developer indicated he would be willing to comply with
that original requirement if the IURA did not change other terms of the agreement. Bohn
stressed it would be a great benefit to the City to have the project fully taxable.
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August 27, 2013
Page 3 of 9
Bohn noted that a revised draft of the agreement was prepared, which permits a 45‐day
extension at the IURA Chair’s discretion, since it is conceivable the issuance of the Building
Permit would take longer than anticipated. Bohn also clarified that the Building Permit
mentioned in the agreement is the permit for the foundation.
Filiberto asked if there were any other factors outside the developer’s control, like the
Building Permit, that the committee should be aware of. Bohn replied, as long as the
developer submits the plans by November 1, 2013, he foresees no such problems.
Filiberto asked if it would be possible to add a further 30‐day extension option, if Site Plan
Approval is delayed. Bohn replied, yes, although the Site Plan Approval is not within the
critical path for the project.
Tegan asked if the property value has changed since the project was first proposed. Bohn
replied the assessed value has not changed (although no independent appraisal has been
done). He reiterated that the major financial benefit to the City/IURA is not the final
purchase price, but the addition of a $7 million building to the tax rolls.
Dylla asked about the range of anticipated rents. Schon replied, from roughly $1,100 to
$2,200 per month (for small 1‐bedroom units to 2½‐bedroom units).
Harrick asked if there would be any studio units. Schon replied, yes, on the lower levels,
facing Six Mile Creek and overlooking the public library.
Harrick asked about how the foundation and soil would be handled. Schon replied, the
developer would proceed essentially as though there were no soil there at all, employing a
highly secure process. Harrick asked if the new piling process has been used in other
buildings in the area. Schon replied that he is sure it has.
Dylla asked about any sustainability‐oriented features of the building. Schon replied that
the project is being designed as LEED ‘light’ (i.e., to build it as though it were LEED‐
certifiable, but without paying the $200,000 certification fee).
Dylla asked the applicant how much demand is projected for the rental units. Schon
replied there is actually a fairly strong market for them, in part because the market supply
has essentially been suppressed over the past few years for a number of reasons.
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August 27, 2013
Page 4 of 9
Moved by Filiberto, seconded by Tegan:
Cayuga Green Project, Approval of 4th Amendment to Purchase &
Sale Contract for Parcel ‘D’
WHEREAS, on June 27, 2012, Cayuga Green II, LLC submitted a request for a 6‐month
extension of the purchase and sale contract (Sales Contract) between the Ithaca
Urban Renewal Agency (IURA) and Cayuga Green II, LLC for purchase of Parcel ‘D’
(tax map parcel #81.‐2‐4) of the Cayuga Green project, and
WHEREAS, Parcel ‘D’ is an approximately ½ acre, triangular‐shaped parcel located
between the Cayuga Garage and the Six Mile Creek Walk, and
WHEREAS, the Sales Contract agrees to a sales price of $270,000 and obligates the
purchaser to undertake a project “anticipated to consist of construction of no less
than 30 rental and/or for‐sale housing units located adjacent to the Cayuga Garage
or such other uses approved by Seller and the Common Council of the City of
Ithaca”, and
WHEREAS, to enforce the future land use obligation, the Contract requires the
purchaser to satisfy the following seller contingencies prior to June 30, 2012 as a
condition of conveyance of the property:
1. Submit proof of final site development plan approval for a project containing at
least 30 housing units;
2. Submit proof of issuance of a building permit for the project;
3. Submit proof that all project financing has been secured to complete the
project, and
WHEREAS, the purchaser did not satisfy all of the above‐listed seller contingencies
by June 30, 2012, and
WHEREAS, the purchaser has submitted revised project plans to the City of Ithaca
Planning & Development Board and indicated they have received an acceptable loan
proposal to finance the project from a regional lending source, and
WHEREAS, the purchaser has revised the project to eliminate a ground floor
commercial use, reduce the building footprint to provide a required 10‐foot rear
yard along the Six Mile Creek Walk, and now proposed construction of a 39‐unit,
loft‐style, residential rental project, including 1‐bedroom, 2‐bedroom and 3‐
bedroom units, and
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August 27, 2013
Page 5 of 9
WHEREAS, on August 28, 2012, the City of Ithaca Planning & Development Board
granted modified site plan approval for the project, and
WHEREAS, the purchaser indicated they have invested almost $200,000 in project
predevelopment costs to date, and
WHEREAS, each request to extend the Sales Contract results in a delay to realize
anticipated public benefits of the project, including revenues from permit fees,
property taxes, and parking fees, and requires staff and legal resources to
administer, and
WHEREAS, Cayuga Green II, LLC, seeks no property tax abatements for this market‐
rate project, and
WHEREAS, under §507 of Article 15 of General Municipal Law, the IURA’s proposed
disposition of real property requires Common Council approval following a public
hearing, and
WHEREAS, contingent upon Common Council approval, the IURA approved a 4th
amendment to the Sales Contract subject to the following terms and conditions:
4. The purchaser’s deadline to satisfy seller contingencies to secure final site plan
approval, project financing and issuance of a building permit is extended to
December 31, 2012, and
5. Inclusion of a requirement for payment of a $20,000 non‐refundable deposit
toward the purchase price and/or City of Ithaca building permit fees be paid
upon signing the amendment, which shall be retained by the seller in the event
seller contingencies are not satisfied by December 31, 2012, and
WHEREAS, a public hearing on the proposed amendment to the Purchase and Sale
Contract was held on September 12, 2012, and
WHEREAS, the City wishes to facilitate the construction of additional housing units in
downtown Ithaca that will expand the range of housing opportunities and increase
the property tax base, and
WHEREAS, a negative declaration was issued for an earlier 7‐story version of the
project pursuant to the City Environmental Quality Review Ordinance, and
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August 27, 2013
Page 6 of 9
WHEREAS, the revised 4‐story loft‐style residential project and the action of
approving the proposed 4th amendment to the Sales Contract for parcel ‘D’ are no
less protective of the environment than the previously‐approved Contract and site
plan, therefore requiring no additional environmental review, and
WHEREAS, the revised 4‐story project and the action of approving the proposed 4th
amendment to the Sales Contract is no less protective of the environment than the
previously approved project, therefore no additional environmental review is
required; now, therefore, be it
RESOLVED, that the City of Ithaca Common Council hereby approves a 4th
amendment to the Purchase and Sale Contract with Cayuga Green II LLC for Parcel
‘D’ (tax map parcel # 81.‐2‐4) subject to the following terms and conditions:
6. The purchaser’s deadline to satisfy seller contingencies to secure final site plan
approval, project financing and issuance of a building permit is extended to
December 31, 2012, and
7. Inclusion of a requirement for payment of a $20,000 non‐refundable deposit
toward the purchase price and/or City of Ithaca building permit fees be paid
upon signing the amendment, which shall be retained by the seller in the event
seller contingencies are not satisfied by December 31, 2012.
Carried Unanimously 4‐0
B. Cherry Street Industrial Park — Request by Lessee to Purchase 245 Cherry Street
Bohn announced that he received an inquiry from the attorney representing Jay Gould,
who leases property at 245 Cherry Street, which has been vacant ever since Gould
moved his business to Lansing. Gould’s intention is to move his business back to the
Cherry Street location and acquire the building. He is requesting approval to purchase
the property early, under the existing 23‐year lease/purchase agreement. In the past,
Bohn noted, the IURA has agreed to these kinds of requests, on a discretionary basis.
Bohn’s sense is that the building has been grossly underused over the past four years
and by‐and‐large the sale would probably benefit the City/IURA. Bohn is recommending
asking for the sale price, as well as the rent that would have been due (appr. 5 years).
Bohn noted that Gould’s plan is to expand the building and his operations, although the
IURA does not yet have enough documentation about his plans to take action.
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August 27, 2013
Page 7 of 9
Tegan asked how much the rent is. Bohn replied, $1,140/year, which is very modest. If
the proposal were accepted, it would give Gould site control, freedom from having to
pay rent, and alleviate any obligation to seek IURA approval for any mortgage placed on
the property.
Bohn remarked that the IURA recently approved a similar proposal for the EMF
Corporation’s vacant lot, which involved a similar kind of analysis.
Filiberto asked how many employees Gould’s business currently has. Bohn replied he
believes approximately 12 (based on his knowledge several years ago). He plans on
getting more information on the proposed investment, staff count, etc.
Dylla asked if the IURA is aware of any other promising prospects for the property.
Bohn replied that the IURA could not sell the property, as long as the lease continues to
be paid, over the lease term. He added that, if the lessee does not decide to buy it at
the end of the lease term, the property would simply revert to the IURA in 2018.
Filiberto asked what the IURA’s long‐term goals currently are for the Cherry Street
Industrial Park. Bohn replied that the plan has always been to increase the tax base,
increase the number of jobs, and expand the manufacturing base in Ithaca (which
represents a very small percentage), so anything which would achieve those goals.
Dylla indicated it sounds like the IURA should move forward with the proposal. Bohn
replied he would get more information and return to the committee.
VI. Community Lending
A. Review of July 2013 Lease & Loan Repayments Report
Argos Inn
Bohn noted that the owner closed in early August 2013, has been accepting customers,
and will fully open in October 2013. The owner believes he will be in a position to be
current on his IURA loan, after a couple of weeks of operation. The owner has been
unable to make any payments, ever since the delay for closing on his tax credits (which
took far longer than Bohn would ever have projected).
Diane’s Downtown Auto
Bohn indicated he has been trying to reach the owner and plans on writing a default
letter to say the IURA will proceed with collection on the loan, barring any changes in
the status of the account. He noted it does seem like the business is viable and active.
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August 27, 2013
Page 8 of 9
State Theater
Bohn noted the theater is a month late in its payments; however, this tends to be the
time of year when it has the most difficulty covering all its costs. He would expect it to
be current very shortly.
e2e
Bohn noted that e2e has been current, except for its most recent payment. The
company has recently made a number of major changes to its business model and
operations, which it says it has a great degree of confidence in.
― EXECUTIVE SESSION ―
Filiberto moved, seconded by Tegan, to open the Executive Session at 4:54 p.m.
Carried Unanimously 4‐0
No action was taken during the Executive Session.
― Executive Session concluded at 5:10 p.m. ―
eLab Downtown Retail Corridor Support
Bohn indicated eLab has made some progress in moving forward and identified four
businesses it will be working with (Big Time Barber Shop, KoKo Ithacuts, The Art &
Found, and Jenn & Andy’s). eLab has established a system through which it will work 2‐
2½ hours/week with the business owners to establish a series of goals. It is currently in
week four of a 21‐week program.
B. Update on Various IURA‐Assisted Community Lending Projects
None.
C. Loan Pipeline Report
None.
VII. Staff Report
A. Staff Report
None.
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August 27, 2013
Page 9 of 9
VIII. Other Business
None.
IX. Adjournment (Next Meeting Date: 3:30 PM, Tuesday, Oct. 8, 2013)
The meeting was adjourned by consensus at 5:12 P.M.
— END —
Minutes prepared by C. Pyott, edited by N. Bohn.