HomeMy WebLinkAboutMN-IURAED-2015-02-13Approved: 3/10/15
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, Friday, February 13, 2015
Common Council Chambers, City Hall, Ithaca, NY
Present: Chris Proulx, Heather Harrick, Heather Filiberto, Leslie Ackerman, Jennifer Tegan
Excused: Doug Dylla
Staff: Nels Bohn, JoAnn Cornish, Charles Pyott
Guests: Gary Ferguson, Downtown Ithaca Alliance (DIA)
Scott Whitham, Whitham Planning & Design, LLC
Neil Patel, Lighthouse Hotels, LLC
Randy Marcus, Barney, Grossman, Dubow, Marcus, Orkin, & Tesi, LLP
I. Call to Order
Chair Proulx called the meeting to order at 3:09 P.M.
II. Agenda Additions/Deletions
None.
III. Public Comments (3‐minute maximum per person) ― None.
IV. Review of Meeting Minutes: December 11, 2014
Ackerman moved, seconded by Filiberto, to approve the December 11, 2014 minutes,
with no modifications. Carried Unanimously 4‐0.
(Tegan arrived at 3:11 p.m.)
V. Community Lending
A. Request by Downtown Ithaca Alliance (DIA) for Downtown Business B o o st
Program ― Program Amendment to 2014 Action Plan
Ferguson explained the proposal was conceived in response to the many comments and
expressions of frustration the DIA received from Commons merchants regarding the
construction delays associated with the Commons Repair & Renovation Project. A series
of meetings was held to understand their concerns and develop some solutions.
IURA EDC Minutes
February 13, 2015
Page 2 of 9
The purpose of the program is to help businesses that are struggling primarily due to the
construction. A DIA survey of downtown businesses helped determine the overall
situation in the downtown area and the outcome of the 2014 holiday season (55
respondents out of 150). There are a considerable number of struggling businesses.
Ferguson explained the program would provide marketing assistance to 20 downtown
businesses in a tangible, measurable way, resulting in a completed discrete marketing
project. The principal focus of the program is to enhance their social media and internet
marketing capacity. The program would provide both a short‐term and long‐term
benefit by working with the businesses one‐on‐one to identify a project they would like
to pursue that can be achieved with 10 hours of professional technical assistance (e.g.,
creating or updating a web site, creating a digital product or template, connecting with
social media, search engine optimization). The degree of complexity of each project
would vary according to each participant’s experience/skills/needs.
Bohn explained it could be a CDBG‐eligible activity, in the form of a micro‐enterprise
technical assistance program. The beneficiaries need to be low‐ to moderate‐income
owners of businesses with five or fewer employees including the owner. DIA believes
about 10 would qualify. The funding source would be the Revolving Loan Fund (RLF)
and would be allocated as part of the 2014 Action Plan, in the form of a $7,500 grant,
matched by $7,500 from the City’s Commons Reconstruction project.
Ferguson noted as soon as DIA has a sense the funds would be in place, it will create the
application and seek to launch the program by the end of March. The plan is to work
primarily with the locally‐based GORGES software, web site, and mobile application
development company, supplemented with other independent consultants who would
have slightly different skillsets and charge lower rates than GORGES.
Filiberto asked if participants would be required to pay a fee for the program. Ferguson
replied, no, although they would certainly have to pay for the actual implementation
and operating costs of the project they develop.
Filiberto recommended setting a fee, even if it is only $25‐50, to incentivize participants
to follow through with the project. She would also ask the applicants explicitly how they
anticipate their project would drive business to them, as well as require some kind of
follow‐up contact to provide feedback on how the program helped them.
Ackerman agreed about setting a fee. It would also make sense to determine how each
participant believes their project would be sustained by their business and remain
viable. They should demonstrate some capacity for implementing the project on an
ongoing basis. Ferguson replied he would do that and would be willing to set a $25 fee.
IURA EDC Minutes
February 13, 2015
Page 3 of 9
Moved by Tegan, seconded by Harrick:
2014 Action Plan ― Program Amendment #3:
Downtown Business Boost Program
WHEREAS, the Downtown Ithaca Alliance (DIA) requests $7,500 in CDBG funds to
support the Downtown Business Boost program intended to upgrade social media and
internet business marketing of at least 20 downtown street level businesses to retain
and grow existing businesses, and
WHEREAS, reconstruction of the Ithaca Commons pedestrian mall is entering its third
year of construction and DIA seeks to mitigate the adverse impact of on‐going
construction on downtown businesses, and
WHEREAS, results of January 2015 DIA survey completed by 55 businesses indicate that
foot traffic and sales in 2014 declined from 2013 for most downtown businesses, and
WHEREAS, approximately two‐thirds of surveyed retailers reported that sales revenues
were down in 2014 at a time period when overall sales tax revenue in the city increased,
and
WHEREAS, CDBG funds must be used to meet a national objective, such as benefit to
low‐ and moderate‐income persons, defined as a person earning no more than 80% of
the area median income, adjusted for family size, and
WHEREAS, direct technical assistance to micro‐enterprise businesses owned by low‐ and
moderate income (LMI) persons is an eligible CDBG activity, and
WHEREAS, a microenterprise is defined as a business having five or fewer employees,
one or more of whom owns the business, and
WHEREAS, DIA anticipates that at least 10 of the 20 downtown business participants in
the program will qualify as LMI microenterprises, and
WHEREAS, the program will offer up to ten (10) hours of professional technical support
services to each participant business to accomplish a discrete project to better utilize
social media and/or the internet to market the business, and
WHEREAS, CDBG funds will be matched by $7,500 and in‐kind services valued at over
$5,000, and
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February 13, 2015
Page 4 of 9
WHEREAS, the IURA is authorized by the Citizen Participation Plan governing the HUD
Entitlement Grant program to adopt non‐substantive amendments to the Action Plan,
and
WHEREAS, a change to use of CDBG funds for a new activity that is allocated $25,000 or
less is not considered a substantial amendment to the Action Plan and can be approved
by the IURA, and
WHEREAS, $100,000 in funds earmarked to provide partial loan guarantees to
downtown businesses through the Downtown Construction Loan Program (#3, 2013)
remains unobligated, and
WHEREAS, as of 12/31/14, an unobligated balance of $1,011,000 is available in the
Community Development Revolving Loan Fund (CD‐RLF), and
WHEREAS, the Economic Development Committee discussed this matter at it December
12, 2014 and February 13, 2015 meetings and recommended the following; now,
therefore, be it
RESOLVED, that the Ithaca Urban Renewal Agency hereby approves the following non‐
substantive program amendment to the 2014 Action Plan:
Project name: Downtown Business Boost
Subrecipient: Downtown Ithaca Alliance
Amount: up to $7,500
Match funding: at least $7,500
Funding source: Community Development Revolving Loan Fund
CDBG eligibility: Provide technical assistance to owners of microenterprises per §570.201(o)
National objective: Low‐ and moderate‐income (LMI) limited clientele
Use of
CDBG
Funds:
Technical assistance to at least 10 businesses that qualify as LMI
micro‐enterprises. A LMI micro‐enterprise is a business that has 5
or fewer employees, including owner(s), and where the owner(s)
earn 80% or less of the area median income adjusted for family
size.
Outcome: 20 downtown microenterprise businesses accomplish discrete
projects to improve on‐line business marketing of street‐level
downtown businesses through the internet and/or social media.
Carried Unanimously 5‐0.
IURA EDC Minutes
February 13, 2015
Page 5 of 9
B. IURA Loan Repayment Report
None.
C. Loan Pipeline Review
Bohn indicated there are no currently pending loan requests, except for the prospective
women’s shoe retailer he reported on last month.
Bohn added the following comments:
• The Hotel Ithaca downtown conference center project is still in the process of
moving forward.
• The IURA received an inquiry about the Cherry Street Industrial Park land, regarding
a possible relocation of a business from outside the city.
• The City is getting closer to acquiring the U. S. Coast Guard’s Inlet Island site
• The former Ithaca Gun Factory site is virtually entirely cleaned‐up.
Bohn noted he just received a request from a guarantor of the Lot 10 loan, who put up
her personal vehicle as collateral and is now asking to be released from it. She is no
longer associated with the business. The Lot 10 loan is current and the business seems
past the potentially risky stage of its development. Bohn will submit the request to the
IURA Board for its review.
VI. Urban Renewal Project
A. Redevelopment of Property Located at 320‐324 E. State/E. M.L.K., Jr. Street ―
Authorize Purchase Agreement with Lighthouse Hotels, LLC
Bohn explained that the proposed resolution would authorize the sale of the property,
subject to the conditions imposed on the project by the IURA and Common Council.
Some of the IURA’s original concerns have already been resolved. The project has
almost completed the Site Plan Review process and obtained Planning and Development
Board approval; and meets the design standards the Committee previously discussed
and agreed on. Once the IURA agrees to the terms of the sale, the action would go to
Common Council. There are two major remaining unresolved issues: (1) the purchase
price; and (2) loading/unloading and parking spaces.
On‐the‐Job Training
Whitham noted that on p. 2, it refers to the following condition:
“Offer the hotel as a job training site for participants in the Hospitality Employment
Training Program (HETP). The hotel shall make at least one on‐the‐job training
opportunity available per HETP class for each of the first 5 years of operation of the
hotel. Such training opportunity shall require no out‐of‐pocket expense to be paid by
the hotel.”
IURA EDC Minutes
February 13, 2015
Page 6 of 9
Whitham remarked the wording of this particular condition surprised the applicant. It
sounds great in concept, but the extent to which that would be possible would depend
on each class of students and other factors.
Marcus agreed that the applicant is committed to the principle of the condition, but a
strict quantitative requirement of one person per class may not be practicable,
depending on variables like size of class, number of openings, etc.
Filiberto agreed that she could imagine a situation in which, for example, HETP would
have 5 people in one class who are all pursuing the bar certification, and the hotel will
not have a bar.
Marcus suggested simply deleting the reference to “at least one” on‐the‐job training
opportunity.
Ackerman observed that making on‐the‐job training opportunity “available” does not
necessarily mean someone would accept it; so it does not seem like it should be an
issue.
Marcus responded it would still be helpful to clarify the expectations. Proulx agreed the
IURA should ensure the requirement is clear.
Bohn noted the language could be changed to indicate that it is anticipated to be “at
least one” or “in no case requiring more than two per year,” for example; but the
condition should at least establish some degree of commitment being agreed to.
Filiberto noted every business needs to have the right to modify its staffing, based on a
variety of factors. She suggested qualifying the condition with “to the extent
practicable.”
Marcus noted it would be helpful if the Committee could give the applicant more
information on how the condition would be enforced and how it would know if it is in
compliance or not. Bohn responded the IURA has an employment reporting system for
job creation (a quarterly form), which is essentially a snapshot of the payroll, which
would be in place until the job count has been achieved and sustained for two quarters.
Patel asked what would happen if the hotel’s market deteriorates to such an extent that
it could not fulfill the employment condition. Bohn replied that these issues have arisen
in the past: the penalty would simply be to retain the reporting requirement for a longer
period of time. If employment reaches a stable plateau below the goal, then the
employer may request the IURA to revise the employment goal. He indicated that the
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February 13, 2015
Page 7 of 9
Committee has considered extenuating circumstances in the past and has changed its
requirements where the employer has documented good faith effort to meet the goal
and/or financial hardship.
Marcus noted the applicant would be more comfortable with the condition if, for
example, it were only in place for a year after the applicant achieves the goal of 16 full‐
time employment positions. And the applicant would prefer if language could be added,
like “best efforts” or “is committed to the best outcome,” etc.
Proulx noted the City is giving up a public asset and adding an additional requirement.
The question really is whether it is the right condition to place on the sale, in the first
place. To state that the City only wants full‐time jobs created for a limited period of
time does not achieve the longer‐term intent.
Living Wage
Filiberto observed the living wage standard is revised every two years, which would
mean a significant commitment for the applicant. Bohn replied the hotel would have a
year to adjust to changes in the living wage.
Ackerman indicated she does not believe the living wage requirement is onerous.
Whitham responded that the concern is how much the AFCU rate is likely to change.
The State minimum wage seems a more stable standard.
Proulx noted that the living wage standard is superior to the State minimum wage,
which is subject to unpredictable political considerations.
Bohn suggested a cap could be placed on the wage increase, in any given year. Proulx
responded that seems reasonable.
Appraisal
Marcus remarked the applicant is also very concerned with the $1.8M appraisal
amount, which came as a shock in comparison to the prior $500,000 appraisal
(performed only a few years ago). He observed the appraisal mentions the easement
from State Street, north into the property, and the air rights, both of which remove a
substantial amount footage from the possibility of development. The shape of the
property is also more difficult to develop than the shape of the property next door,
which is being purchased for $2M, but is somewhat larger and not encumbered with any
restrictions. The difference between the $1.8 and $2M just does not make sense.
Bohn agreed he was surprised by the appraisal amount; however, zoning restrictions
were recently loosened on the parcel, which had an impact on the price. The parcel also
has street frontage unlike the neighboring parcel to be acquired. He suggested one
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February 13, 2015
Page 8 of 9
possibility would be to explore owner financing to finance a portion of the land sale.
Bohn spoke to the Mayor about that, who indicated he is willing to consider it.
Ackerman asked what options the applicant would have to obtain a second opinion on
the appraisal amount. Bohn replied that would be a complicated process, significantly
delaying the project.
(Harrick departed at 4:32 p.m.)
Filiberto suggested the City may be able to reduce the interest rate, if it increased the
owner financing.
Marcus remarked it would need to be a better rate than a bank’s. Patel suggested
setting it at the Federal home loan rate.
Bohn noted that the parcel is split between the City and the IURA. (The IURA portion is
appraised at $415,000.) He could not speak to what the City may consider agreeing to.
One way or the other, the action cannot move forward until the issue has been
resolved. He suggested he consult with the City Controller and the applicant return to
the Committee in March on this issue. Whitham agreed to do so.
Marcus asked if the applicant could we anticipate getting approval at the March
meeting, assuming the changes to the terms as discussed have been made.
Bohn and Ackerman replied, yes.
Loading/Unloading & Parking Spaces
Whitham remarked the applicant’s other concern is one of the parking‐related
conditions:
“Publicly designate two (2) on‐site parking spaces available for public use from 11 AM
to 4 PM daily at parking rates no higher than on‐street parking meters in the vicinity.”
Whitham noted that the applicant has worked very closely with City Parking Director
Frank Nagy regarding the capacity of the City garages (both of which are very close to
the hotel). Whitham cannot envision realistically adding any more surface parking.
Tegan noted she does not think the applicant’s position is unreasonable. Filiberto
agreed.
Proulx observed the consensus of the Committee appears to be to remove the two‐
space requirement.
IURA EDC Minutes
February 13, 2015
Page 9 of 9
VII. Staff Report
A. Governance Committee Discussion on IURA Strategic Plan
Bohn reported that the Governance Committee recently initiated a discussion of
strategic planning for identifying future funding opportunities to off‐set reductions in
federal funding support for the CDBG and HOME programs. The Committee discussed
several options presented by Bohn, one of which was to reallocate the Revolving Loan
Fund (RLF) balance to issue loans for CDBG‐eligible uses.
B. Project Updates
None.
VIII. Adjournment (Next Meeting Date: 3:30 PM, Tuesday, March 10, 2015)
The meeting was adjourned by consensus at 4:52 P.M.
— END —
Minutes prepared by C. Pyott, edited by N. Bohn.