HomeMy WebLinkAboutMN-IURAGOV-2014-06-14Approved: 7/18/14
108 E. Green Street
Ithaca
Urban
Renewal
Agency
Ithaca, New York 14850
(607) 274-6559
(607) 274-6558 (fax)
MINUTES
ITHACA URBAN RENEWAL AGENCY
Governance Committee (GC)
8:30 AM, Friday, June 20, 2014
Third Floor Conference Room, City Hall, Ithaca, NY
Present: Eric Rosario, Susan Cummings, David Whitmore, Kathy Schlather
Excused: None.
Vacancy: 1
Staff: Nels Bohn, Charles Pyott
Guests: Paul Mazzarella, Ithaca Neighborhood Housing Services (INHS)
Joseph Bowes, INHS
I. Call to Order
Chairperson Rosario called the meeting to order at 8:41 A.M.
II. Agenda Additions/Deletions ― None.
III. Public Comments (3‐minute maximum per person) ― None.
IV. Review of Meeting Minutes: April 4, 2014 & April 17, 2014
Whitmore moved, seconded by Cummings, to approve the April 4, 2014 and April 17,
2014 minutes, with no modifications. Carried Unanimously 3‐0
(Schlather arrived at 8:43 a.m.)
V. New Business
A. INHS Loan Request for Site Acquisition of Property Located at 210 Hancock Street
& 423 First Street for Future Affordable Housing Project
Bohn explained the request is for a short‐term loan to permit INHS to complete the
acquisition of the property and design the plans for a future mixed‐income housing
project. The proposed project possesses a considerable number of positive attributes
for housing development in that neighborhood.
IURA GC Minutes
June 20, 2014
Page 2 of 13
Bohn added there are very few site constraints and compatibility issues associated with
a housing project at this site (e.g., the site is surrounded by residential uses, it is close to
many commercial services, is connected to an intact sidewalk and road network, etc.).
The language of the resolution supports funding as a 50‐50 split between the IURA and
INHS, as a four‐year loan with a 12‐month option to renew, while INHS works out its
plans for the site. The collateral would be in the form of a second mortgage lien on the
property, which will yield a collateral value to the IURA equal to 10% of the appraised
value. The lien would be in the amount of the collateral value, which INHS may choose
to augment at some point with additional collateral.
Mazzarella stressed that afforable housing would be the main component of the
project, although INHS is also considering other uses, like market‐rate housing,
collaborating with the Sciencenter and/or Cornell Cooperative Extension of Tompkins
County (CCE), neighborhood commercial, etc. INHS will be launching an extensive site
plan design process that will result in a master plan for the whole block. The project
would be implemented in several phases.
Whitmore asked about the project’s anticipated housing density. Mazzarella replied
that INHS examined the zoning for the site and believes it could build up to 90 units,
with a height limit of 40 feet, but cautioned that no unit count has been established yet
(The B‐2a Use District is quite different from anything immediately nearby.) The project
would need to have a certain minimum density to make it financially feasible, given the
high purchase price.
Cummings asked if a collaborative design process would be established. Furthermore,
she would also like to ensure that owner‐occupied, for‐sale, low‐income housing would
be part of the project as well as affordable rental housing. She suggested that be a
condition of IURA funding.
Cummings also asked Mazzarella if INHS would be amenable to re‐zoning a portion of
the site for an exclusively residential use, so that in 20 years, for example, there is no
temptation for the site to be redeveloped for commercial use. Mazzarella replied by
noting that INHS often manages its for‐sale housing projects as part of its Community
Housing Trust ― through which INHS retains ownership of the land and then leases it to
the homebuyer ― which should address those kinds of concerns. Cummings replied
that sounds satisfactory and should be included in the resolution.
Mazzarella remarked he does not know if the site could be re‐zoned in the manner
Cummings suggests, so he would hesitate to formally commit to that. Cummings
explained she was just looking for a way to avoid one of the pitfalls of the City’s current
Zoning Code, which would make the site susceptible to consolidation.
IURA GC Minutes
June 20, 2014
Page 3 of 13
Bohn suggested adding a “Resolved” to address Cummings’ concern, although it would
not be a condition of the loan.
Mazzarella suggested formally declaring that the IURA would be a part of the design
process, as an alternative. He reiterated the design process will be as collaborative and
transparent as possible.
Bohn observed that Condition #2 already mentions that. Cummings responded that she
would like more specificity than that (e.g., a blueprint for the planning process in the
form of some sort of written documentation). She would like to avoid the situation that
occurred with the Spencer Road Stone Quarry Apartments project. Some mention
should be made about how INHS will communicate with the immediate neighborhood.
Bohn asked if the INHS Request for Qualifications lays out any preliminary design
guidelines. Mazzarella replied, no. INHS is purely seeking input at this point and is
looking for others to propose the details of the process. He reiterated that INHS is
absolutely committed to involving the neighborhood in the process.
Cummings asked what local associations could be engaged in the process. Mazzarella
replied he knows the Fall Creek Civic Association is active. Whitmore added there is no
active Northside neighborhood equivalent. (The Northside neighborhood group is only
semi‐periodically active.)
Rosario observed that INHS will need to return for further funding, at which point a
more defined process could be identified.
Bohn noted there will also be reporting and notification opportunities. The IURA would
be in a position to advocate for changes to the process.
Cummings indicated she is concerned with the process before those steps are made.
Given the likelihood of the proliferation of informal word‐of‐mouth communication
about the project, she would like everyone on INHS staff to know what the specific plans
would be, so INHS can communicate effectively about it.
Mazzarella noted that INHS would hire a design team that can identify the public
process in detail. He believes INHS will need to perform some early concept planning to
develop several alternative design scenarios, before going public. Receiving public input
before then would probably not provide much value. For example, there are certain
physical and regulatory constraints that will need to be considered (e.g., flood zone
considerations, zoning requirements, etc.), so some rudimentary early planning needs to
take place before engaging the public.
IURA GC Minutes
June 20, 2014
Page 4 of 13
Cummings responded that she would just like to see a defined message that could be
communicated to people. Mazzarella replied that he understands.
Rosario noted the Committee could add a “Resolved” about the IURA’s strong
preference for owner‐occupied affordable housing and articulating its reasoning (e.g.,
referring to the Action Plan). Bohn replied the existing language already describes the
IURA’s interest in promoting neighborhood stability and addressing the owner‐occupied
housing shortage. The point could also be made that, since major public funding
streams available for housing generally support the rental housing market, the project
would be a valuable opportunity to promote owner‐occupied housing.
Cummings asked how many owner‐occupied housing units the project would include.
Mazzarella replied that, given the early stage of development, he would be reluctant to
identify a specific number of units. Cummings remarked the project would at least need
a minimum level of density to make it feasible.
Mazzarella responded that the project represents a singular opportunity to take this
large site and plan its development in a highly comprehensive way ― that is both dense
and enhances the neighborhood.
Cummings remarked it is a rare opportunity to firmly incorporate owner‐occupied
housing into a specific project, so she believes it needs to be specified and included in
the resolution. Doing so, however, would not preclude making changes to the project, if
it is determined that approach cannot work.
Rosario suggested including language that the project must include for‐sale housing.
Mazzarella noted that Condition 3 could include “[…] and for‐sale housing.” Rosario and
Cummings both agreed to that.
Bohn remarked that the use of the funds is limited to affordable rental housing projects,
so that must also be included in the resolution.
Schlather indicated she could not vote for language that states the project “must
include” for‐sale housing.
Cummings moved, seconded by Whitmore, to include language that the project must
include for‐sale housing in the resolution.
Approved 3‐1
Schlather opposed.
IURA GC Minutes
June 20, 2014
Page 5 of 13
Rosario asked if language about reporting requirements should be inserted. Bohn
replied that could easily be incorporated under the Reporting section more explicitly
than is currently mentioned (e.g., “Submission of draft outline of community
engagement process prior to finalization.”).
Schlather asked if INHS believes it has the organizational capacity to manage both this
project and the former Tompkins County Public Library project. Mazzarella replied, yes.
It would just be a matter of identifying the appropriate timing for both projects.
Whitmore asked what timeline the project would follow. Mazzarella replied it would be
at least two years before anything is started. INHS is interested in leasing some of the
existing space on a short‐term basis before then.
Schlather moved, seconded by Cummings:
Loan Assistance to INHS for Property Acquisition of 210 Hancock Street
WHEREAS, on May 29, 2014, Ithaca Neighborhood Housing Services, Inc. (INHS)
requested IURA financial assistance to purchase property located 210 Hancock Street
and 423 First Street, Ithaca, NY for a future affordable housing project, and
WHEREAS, a purchase contract was executed on May 27, 2014 to acquire the
property at $1,600,000 plus pay‐off of the $100,000 IURA loan for the Neighborhood
Pride grocery store project, and
WHEREAS, INHS estimates closing costs of $100,000, bringing the total acquisition
cost to $1,800,000, and
WHEREAS, Community Housing Capital (CHC) has issued a loan commitment to
advance a loan of up to $1,530,000 (90% of 1.7 million) to INHS to be adjusted to
90% of a newly ordered appraised value, leaving a funding gap of at least $270,000,
and
WHEREAS, INHS requests an IURA interest‐only loan equal to 50% of the gap between
the final CHC loan amount and the $1,800,000 total acquisition cost, up to $300,000,
and
WHEREAS, INHS further requests the loan be structured as an interest‐only loan at
2% interest for 4 years with an option to renew for a 12‐month extension, and
IURA GC Minutes
June 20, 2014
Page 6 of 13
WHEREAS, INHS pledges a 2nd mortgage on the property as collateral to secure the
IURA loan, and
WHEREAS, INHS proposes to develop a mixed‐use/mixed‐income project that is
projected to include affordable rental and for‐sale housing, and
WHEREAS, the project site encompasses the full city block bounded by Lake Avenue
and Hancock, First, and Adams Streets that is zoned B‐2a, a zoning designation that is
appropriate for a mixed‐use project that is primarily residential in character, and
WHEREAS, INHS plans to conduct an collaborative planning process to design a
project for the site that will include engagement with the neighborhood and
stakeholders, and
WHEREAS, the project has the potential to greatly improve the physical, social and
economic characteristics of the former Neighborhood Pride grocery store site, and
WHEREAS, INHS indicates that the property will remain taxable for property taxes
during the term of the loan, and
WHEREAS, the IURA administers the HODAG proceeds fund, which originally derived
from the 1984 Eddygate Housing Development Grant (#NY009HG401), and had an
unobligated fund balance of $502,602.63 as of June 18,2014, and
WHEREAS, HODAG proceeds may be used to “support the construction, rehabilitation
or operation of real property to be used primarily for low and moderate income
residential rental purposes,” and
WHEREAS, by IURA policy, the HODAG proceeds are to be used to make loans to
assist affordable rental housing projects that will be repaid to recapitalize the fund to
enable the IURA to make additional loans for affordable housing projects, and
WHEREAS, this request was discussed at the June 20, 2014 meeting of the IURA
Governance Committee, which recommends the following action; now, therefore, be
it
RESOLVED, the IURA hereby approves a loan to INHS subject to the following terms and
conditions:
IURA GC Minutes
June 20, 2014
Page 7 of 13
Loan Amount:
Up to $300,000.00 but not to exceed any of the
following:
1. 50% of the funding gap between the final CHC loan
amount and the $1,800,000 total acquisition cost,
and,
2. 100% Loan‐to‐Value of collateral pledged.
Borrower:
INHS, or a subsidiary entity controlled by INHS
Use of Funds: Acquisition of property located at 210 Hancock Street
and 423 First Street, Ithaca, NY to be used for a mixed‐
use, mixed‐income project to include affordable rental
housing.
Loan Type: Acquisition loan
Source of Funds:
HODAG proceeds
Interest Rate:
2%
Term: 48 months with an option to renew for an additional 12
months.
Amortization: No
Repayment: Interest only payments due monthly with repayment of
the full principal balance due and payable at the end of
the loan term.
Prepayment: Borrower may repay the loan at any time during the
term without penalty.
Collateral: 2nd mortgage lien on the project property behind only a
1st mortgage lien held by Community Housing Capital.
Match: INHS equity match at least equal to the IURA loan
amount.
Conditions: 1. Property shall remain taxable for property taxation
during the term of the IURA loan.
2. INHS shall commit to conduct a collaborative
planning process to design a project for the site
that will include engagement with the
neighborhood and stakeholders, including the
IURA.
3. The proposed future project must include affordable
IURA GC Minutes
June 20, 2014
Page 8 of 13
rental housing and for‐sale housing as components
of the mixed‐use, mixed‐income project.
Reporting: 1. Submission of the draft outline of the proposed
community engagement process for developing the
project master plan prior to finalization.
2. Periodic submission of plans documenting progress
of the collaborative design process for development
of the proposed mixed‐use. Mixed‐income project
and copies of reporting documents sent to CHC.
3. Submission of documentation of match funding.
RESOLVED, that the IURA Director of Community Development is authorized to issue
a loan commitment in accordance with the terms of this resolution, and be it further
RESOLVED, that the IURA Chairperson, upon the advice of the and IURA Attorney, is
hereby authorized to execute all necessary and appropriate documents to implement
this resolution, including, but not limited to, executing loan agreement documents.
Carried Unanimously 4‐0
B. Neighborhood Housing Initiative (NHI) Fund
Cummings asked what role INHS plays in the affordability and related homeowner
occupancy requirement of projects it is not directly involved in, and whether INHS has
ever discussed making its organizational expertise available for other projects.
Mazzarella replied INHS is committed to doing so and has done so already with some
projects (e.g., EcoVillage). INHS is definitely willing to share its expertise. Mazzarella
remarked that one problem INHS has encountered is how to ensure that whatever
mechanism for affordability that is used be transferrable to subsequent buyers. Even
deed restrictions do not always ensure that.
Cummings agreed that would be worth examining in depth in order to determine how it
could be more effectively enforced.
Rosario asked if the Committee could take up this agenda item again before it goes
before Common Council. Bohn replied, yes.
C. Draft Advocacy Letter Regarding Federal Funding of CDBG & HOME Programs
Bohn explained the rationale for the draft letter included in the meeting packet. There
is considerable concern with the adoption by the U. S. House of Representatives of a bill
that would cut 30% of HOME funding (62% in cuts since 2010). The letter encourages
Senators Gillibrand and Schumer to fight to maintain CDBG and HOME funding.
IURA GC Minutes
June 20, 2014
Page 9 of 13
Cummings suggested strengthening the letter (e.g., “massive drop in funding”). She also
indicated she is uncomfortable with the phrase “[…] maintain at least level funding.”
She would recommend asking for a complete restoration of funding, returning it to pre‐
2010 levels, but supporting nothing less than the minimum. She added she does not
personally recognize the need to cut all programs to share in deficit reduction efforts, as
mentioned in the last paragraph. Some programs should be considered to be absolutely
sacred and should not be cut. Moreover, CDBG and HOME funding has already been
eviscerated. Rosario agreed that is a good point.
Cummings added that the first paragraph could be strengthened, to mention the
massive program cuts over the past number of years, the impacts to programs and
people, etc. Bohn cautioned that additional wordsmithing would only provide so much
benefit. It is the central message that is going to count and the Senate is scheduled to
debate the HUD budget very soon. He asked if the Committee would agree to authorize
the letter to be sent as soon as possible, since the next IURA Board meeting would be
too late. There were no objections.
Whitmore moved, seconded by Schlather:
Letter Opposing FY2015 Budget Cuts to CDBG and HOME Programs
WHEREAS, on June 20, 2014, the Ithaca Urban Renewal Agency’s (IURA) Governance
Committee agreed that HOME Investment Partnerships Program (HOME) funding is
absolutely critical for creating affordable housing and that Community Development
Block Grant (CDBG) funding is essential for redeveloping housing, providing safe
neighborhoods, as well as spurring economic development, and
WHEREAS, what has been proposed by the U.S House of Representatives in its
FY2015 budget would drastically curtail the IURA’s ability to pursue any of the vital
aforementioned activities, and would have a devastating impact on low‐income
families in the Ithaca community, now therefore be it
RESOLVED, that the IURA Governance Committee authorizes the letter entitled
“Oppose FY2015 Budget Cuts to the CDBG and HOME Programs” to be signed by the
Mayor/IURA Chairperson and sent as soon as possible, given that the next IURA
Board meeting will be too late for the letter to have any impact, and be it further
RESOLVED, that the IURA asks the U.S Congress to support restored funding of at
least $3.1 billion for CDBG and $1.0 billion for HOME.
Carried Unanimously 4‐0
IURA GC Minutes
June 20, 2014
Page 10 of 13
IURA GC Minutes
June 20, 2014
Page 11 of 13
(Whitmore departed at 9:37 a.m.)
C. IURA Staffing Update
Bohn reported that the IURA now has 3.6 FTE staff. Lynn Truame is working as the full‐
time Community Development Planner, while the Contracts Monitor remains a full‐time
position. Accountant Kim Cooke has been hired for 22 hours per week (the same as her
predecessor). Truame has been working very hard on developing the 5‐Year
Consolidated Plan, a draft of which should be ready for the next IURA meeting, which
will include a Public Hearing.
VII. Other Business
A. Project Updates
Bohn reported that the Cayuga Place II project is moving forward and has just broken
ground. The sale of that property will generate $18,000 in annual income for the IURA
over the next 15 years.
Bohn announced that the Coltivare Culinary Center is also moving forward with
construction and will be accepting students in Fall 2014. It represents a $6M investment
by Tompkins‐Cortland Community College (TC3) in the ground level of the Cayuga
Garage.
Bohn noted the IURA Economic Development Committee (EDC) recently reviewed a
proposal for a developer seeking to purchase a parking lot on East State Street to build a
6‐story Hampton Inn & Suites hotel. An earlier iteration of the project was not
approved, since it would have demolished the Carey Building. EDC imposed a condition
on the project design that it not include an Exterior Insulation and Finishing System
(EIFS). The EDC would like to see more durable building materials that ensure a high
asset value for the building. Bohn noted the next step will be for the City to determine if
it is interested in selling its own portion of the site to the developer.
B. IURA & Common Council Actions of Interest to Committee
None.
C. Review of IURA Financials ― April & May 2014
Bohn reported that IURA projects continue to move forward, with good spend‐down
ratios.
IURA GC Minutes
June 20, 2014
Page 12 of 13
Route 13 Pedestrian Crossing Project
Bohn reported that the project has made very good progress. The City has finalized the
site acquisition, obtained approval of the railroad operator, and obtained the NYS
Department of Transportation’s approval of the construction plans. Bidding out the
project is scheduled for later this summer.
Schlather observed that the Security Deposit Program funds have not all been
expended. Bohn replied that the program sponsor has had beneficiaries in the pipeline
for the remaining funds and therefore cannot be given any more funds until it has spent
the original funds. Because of the timing of the IURA funding process, the program
sponsor will not have access to new funding until October 2014 (later than usual).
Loan Repayments
Bohn reported that the Bandwagon Brew Pub, the State Theatre, and the Argos Inn
were all late; however, the Bandwagon and State Theatre made recent payments. Bohn
has just written to the owners of Bandwagon and Argos Inn and asked for a meeting to
discuss the issue.
Cummings asked about the status of the annual City financial audit and whether the City
Chief of Staff ever helped coordinate the process, as was suggested at one point. Bohn
replied, no, he did not; however, soon after that suggestion was made the City
completed its work, so the audit was submitted without any need for further follow‐up.
However, while the audit in 2012 was ultimately completed, still ended up being nine
months late, which is not acceptable.
There was unanimous concern expressed by the Committee members that this pattern
of late submission (since 2004) should not continue.
Bohn noted this year’s audit should be completed by September 2014 to meet HUD’s
deadline. The auditors have already been on‐site and begun their work.
Cummings noted it seems as though the Chief of Staff should still be involved in the
process. Bohn replied the IURA could begin by asking the City to identify its schedule for
completing the 2013 audit.
D. IURA & Common Council Actions of Interest to Committee
Bohn reported that the 2014 IURA Action Plan was formally adopted by Common
Council.
IURA GC Minutes
June 20, 2014
Page 13 of 13
Regarding the bond issuance, Bohn reported he has been talking with Bond Counsel
regarding programmatic changes endorsed by the IURA. His goal is to gain Bond
Counsel authorization for changes that do not trigger re‐authorization of the bonds or
extensive legal or tax research, which would delay approval and increase legal expenses.
He indicated that preliminary input from Bond Counsel suggests that the programmatic
changes do not appear to constitute a change in use.
E. Staff Report
Bohn announced that HUD will be performing one of its periodic monitoring visits, July
22‐24, 2014. For every visit, HUD identifies a different component of IURA operations to
monitor. This time, they will be examining its economic development loans.
VIII. Adjournment (Next Meeting Date: 8:30 AM, Friday, July 18, 2014)
The meeting was adjourned by consensus at 10:24 A.M.
— END —
Minutes prepared by C. Pyott, edited by N. Bohn.