HomeMy WebLinkAboutMN-IURAED-2018-09-14Approved: 11/13/18
108 E. Green St.
Ithaca, NY 14850
(607) 274-6565
MEETING MINUTES
ITHACA URBAN RENEWAL AGENCY
Economic Development Committee (EDC)
2:00 PM, Friday, September 14, 2018
Common Council Chambers, City Hall, Ithaca, NY
Present: Chris Proulx, Chair; Doug Dylla, Vice‐Chair; Leslie Ackerman; Heather Harrick
Excused: Charles Hamilton
Vacancies: 1
Staff: Nels Bohn; Charles Pyott; Anisa Mendizabal
City Staff: Pete Messmer (Parking Director); Tom Knipe (Deputy Director for Economic
Development); JoAnn Cornish (Director of Planning & Development); Jennifer
Kusznir (Economic Development Planner)
Guests: Stephen J. Smith (Common Council); Laura Lewis (Common Council)
I. Call to Order
Chair Proulx called the meeting to order at 2:00 P.M.
II. Agenda Additions/Deletions
None.
III. Review of Meeting Minutes: August 21, 2018
Ackerman moved, seconded by Dylla, to approve the August 21, 2018 minutes, with one minor
modification.
Carried Unanimously 4‐0.
IV. Green Street Garage Redevelopment Urban Renewal Project
A. Review of IURA Decision‐Making Process & Schedule
Bohn explained the purpose of the meeting is for the Committee to review, discuss, and
numerically rank the four applications, which will form the basis of its recommendation to the
IURA Board. The IURA Board will then review and discuss the rankings at its September 27th, 2018
meeting (including a Public Hearing), but will not make a formal decision on the preferred project
until October 25th, 2018. Assuming a decision is made at that time, the 90‐day Exclusive
Negotiation Agreement (ENA) period would begin (11/1/18‐2/1/19); and the Committee will
review the resulting draft Disposition and Development Agreement (DDA) at its February 12th,
2019 meeting, with the IURA Board scheduled to approve the DDA at its February 28th, 2019
meeting.
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September 14, 2018
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Finally, Common Council’s Planning & Economic Development Committee will hold another Public
Hearing on March 3rd, 2019 and vote to recommend approval of the DDA to Common Council,
which will make the final decision on April 3rd, 2019.
B. Review of RFP Evaluation & Selection Criteria
Bohn described the Evaluation & Selection Criteria (listed below), noting the “Developer
Qualifications & Experience” category has already been satisfied for every applicant through the
Submissions of Qualifications process. The only potential criteria or remaining issues that have
not yet been addressed relate to the Planning and Development Board’s Site Plan Review process
and any zoning‐related issues.
COMMUNITY BENEFITS: Calculation of social, economic, and physical community benefits resulting
from the project. The primary social benefit sought is an increase in the supply of affordable and
workforce housing. The extent to which the project includes such below‐market housing will
greatly impact community benefit scoring. New housing targeted to address other housing gaps
identified in the Tompkins County Housing Strategy, such as senior housing, condominium housing,
and supportive housing, provides a secondary housing benefit. Increasing the supply of market‐rate
housing in the downtown is also encouraged, but a project lacking below‐market housing will score
poorly. Other social benefits may include commitments to utilize local labor, construct a high energy
performance building, implement parking demand management plan, and pay employees a living
wage. Economic benefits may include job creation, commitment to shoulder the cost to repair or
replace aged public parking at the project site or a nearby location, and project elements that enhance
economic vitality of the downtown through the attraction of new residents, workers and visitors to
the downtown. Physical benefits may include provision of public open spaces, development of
street‐level active uses along Green Street, strengthening the public pedestrian connection(s)
between Green Street and The Commons, inclusion of public art, and accommodations in design
and operations to mitigate potential adverse impacts on adjacent businesses, buildings and historic
resources.
PROJECT CONCEPT: The proposal’s ability to incorporate the preferred programmatic elements in the
project in a manner that will improve the social, economic and physical characteristics of the site and
the surrounding area. Preferred programmatic elements are:
Housing units specifically designed to appeal to a diverse demographic, including a substantial
number of units to be affordable to low and/or middle income households;
Street‐level active uses along Green Street;
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September 14, 2018
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At least 450 parking spaces open to the public, of which at least 90 will be available for short‐term
parking;
Retention of the Cinemapolis movie theatre and the public walkway between Green Street and The
Commons; and
A conference Center.
The IURA is also open to consider alternative development programs that creatively address
community housing needs and satisfy existing parking demand and projected parking requirements
from the proposed project. Proposals that seek to acquire only a portion of the site are expected to
have a proportionally reduced project scope.
FINANCIAL CAPACITY & PROJECT FEASIBILITY: Financial capacity is the demonstrated ability of the
developer to fund predevelopment expenses, secure project financing and meet equity investment
requirements for the proposed project. The extent to which the following submissions are complete
and based on reasonable inputs and assumptions that demonstrate a well‐researched and financially
successful project increases a project’s financial feasibility:
Project plan;
Marketing plan;
Financing plan, including project budget and projects revenues and expenses.
In addition, the project’s compliance with land use regulations and building codes increases a project’s
feasibility to secure entitlements.
DEVELOPER QUALIFICATIONS & EXPERIENCE: The qualifications and experience of the developer
team, including investors, project managers, and construction and design teams involved. A highly
qualified development team should demonstrate experience in the successful development, operation
and management of a mixed‐use project of comparable size and scale.
FINANCIAL TERMS PROPOSED: The project’s ability to achieve financial benefit to the City through
direct economic benefits. Direct benefits may include the land purchase price offered by the developer,
generation of new City property tax or revenues, private sector capital investments in lieu of public
investments to improve existing, or construct new, public parking, and financial subsidy to construct
and/or operate a conference center. Indirect economic benefits, such as attracting new residents or
visitors who may increase revenues at downtown businesses, are not considered under this criterion.
Proulx asked if the Committee should also consider project concept‐ and design‐related issues, or
whether it should restrict itself to programmatic elements. Bohn replied the Committee should
restrict itself to considering programmatic elements.
Harrick recalled when the Committee discussed the Newman/Visum proposal with the applicants
she understood there would be space for a conference center, but she sees it listed as “No” on the
“Comparison of Green Street Garage Property Redevelopment Proposals” chart. Bohn replied he
listed it as “No,” since the project could not accommodate the conference center in a contiguous
30,000‐square‐foot area without significant modification to the physical project.
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September 14, 2018
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C. Review of Written Comments Received from Stakeholders
Proulx remarked the Committee received numerous comments and letters about the project from
various members of the community, organizations, and other groups (e.g., Tompkins County
Planning and Sustainability Department, Tompkins County Strategic Tourism Planning Board,
Historic Ithaca, Inc.). If the Committee would like to discuss any of those submissions, it should do
so at this time.
Dylla noted the Historic Ithaca letter captures several important design goals that the project
should: “reflect a human scale; be responsive to context with compatible building design; offer
pedestrian comfort at ground level with street level interest; maximize pedestrian connectivity
through block connectivity; achieve good design while using appropriate cladding materials; and
aim for sustainability.”
D. Input from City Staff
Messmer expressed concern that the selected project not be allowed to interfere with long‐term
strategic management of the City’s public parking inventory. The City has only just started the
process of generating a parking demand study, including parking inventory cost and revenue data,
using a consultant to come up with the most comprehensive analysis possible. He would like the
garage’s public parking capacity to continue to be operated by the City. The City needs to strike a
careful balance between the public’s needs and the increased demand being placed on local
parking infrastructure, which would be more difficult if the Green Street Garage were privately
operated. Messmer likes the Vecino Group proposal that ‘sandwiches’ the parking in an enclosed
space, thereby reducing maintenance costs, since it would not be so heavily exposed to weather
and salt. He also likes the Newman/Visum proposal since it confines the parking to a stand‐alone
structure, which would probably simplify parking operations and maintenance.
Dylla asked about the level of parking demand for the Cayuga Street Garage. Messmer replied its
occupancy remains high, although he does not have exact figures with him. Bohn added it
regularly operates with 6 of its 8 levels occupied.
Proulx asked if the Vecino Group’s ‘sandwiched’ parking configuration would not complicate
managing the parking garage’s lifecycle in some ways. Messmer replied, possibly. He had actually
been concerned about that issue. He would like the applicant to provide more detailed
information about its maintenance plan and anticipated parking lifecycle costs.
Dylla noted several applicants suggested overall parking demand would decrease in the future. He
asked if Messmer agreed with that. Messmer replied, although that would be a desirable
outcome, it would need to be proactively managed and heavily promoted.
Dylla asked how the parking garage’s lifecycle would be affected by the differences in the
applications (e.g., refurbishment vs. new construction). Messmer replied the Engineering Division
would be best suited to answering that question.
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September 14, 2018
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Proulx noted he wondered how the parking infrastructure would be affected by whether it is
situated under/over other parking, or under housing units. He suggested the Engineering Division
provide a technical analysis of that particular issue.
Smith asked if there has been any significant recent decline in demand for City parking garages.
Messmer replied, not since he has been working for the City. It has remained reasonably
consistent.
Cornish stressed the Planning Department’s greatest concern is the high cost to the City of
repairing the garage, if the chosen project does not sufficiently address the garage’s structural
integrity issues. The Planning Department also believes including the conference center will be a
very important component for the success of the City’s economic development strategy. She
expressed concern with any project that situates public parking over a private building (similar to
how parking is currently situated over a portion of the Rothschild Building), which can be legally
complicated and potentially costly to the City. Cornish indicated she does not foresee parking
demand decreasing significantly in the near future, especially with all the new housing being
constructed downtown. Current parking capacity should be retained as consistently as possible
during construction of the project. (The City may also be forced to make significant repairs to the
Seneca Street Garage relatively soon, which would further complicate the situation.)
Proulx asked if the City would be responsible for maintaining the parking in the Vecino Group’s
‘sandwiched’ parking scenario. Bohn replied the Vecino Group planned to annually allocate
$190,000 for maintenance, but he is not sure from the application if that would be paid to the City
or not. At the end of the 30‐year term, the parking would be conveyed back to the City.
Dylla asked Cornish how many downtown housing units will be completed in the coming year.
Cornish replied approximately 250 (not including some planned development along the West
State Street corridor).
Knipe remarked the City has been an active stakeholder/partner in developing the 2017 “Ithaca
Conference Center Market and Feasibility Study” (Hunden Strategic Partners). The second phase
of the study is currently being planned and will be ready to proceed, once the IURA selects the
preferred developer. The stakeholders continue to view the Green Street Garage site as the single
best opportunity for a conference center in the foreseeable future. If the selected project does
not include a conference center, there would significant delay and additional risk in terms of
exploring other downtown sites.
Harrick observed the Harold’s Holdings proposal includes an alternative configuration for the
conference center space, which did not necessarily seem ideal. She asked if the City has assessed
unconventional or alternative approaches to a conference center space. Knipe replied, yes. One
feature the conference center space would need, to be financial viable, is a sufficiently large pre‐
function area, which an unconventional or alternative design would not provide. As a result, there
has been little interest in an unconventional or alternative conference center approach.
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September 14, 2018
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Dylla asked why phase two of the feasibility study needs to be so site‐specific. Knipe replied phase
two needs detailed financial and infrastructural information to generate a pro forma financial
analysis. The choice of partner will also be critical to the conference center’s success. Without a
defined site, it would be very difficult to approach potential funders and partners. The City really
needs to have all those kinds of details in place.
Dylla asked which other cities Ithaca competes against, as a meeting venue. Knipe replied,
primarily Saratoga and Lake Placid, but also Syracuse, Rochester, Buffalo, and Corning.
Dylla asked if Ithaca’s relatively limited transportation options constrain its ability to host large
meetings and conferences. Knipe replied a 2003 feasibility study by Pinnacle Consulting did cite
that as an obstacle; however, phase 1 of the 2017 study concluded Ithaca has grown considerably
in its destination appeal.
Dylla recalled originally seeing a reference to the conference center hosting 10‐12 small‐ or
medium‐sized conferences a year, but it seems there has been a significant increase in the
anticipated impact. Knipe replied the initial projections were conservative. The total number of
events is anticipated to be approximately 200 per year (e.g., conventions, conferences, consumer
shows, corporate events, special events, banquets/weddings).
Ackerman asked how long it would take to achieve that level of use. Knipe replied there would be
a five‐year ramp‐up period before that number could be reached.
Ackerman asked what the initial operating loss would be. Knipe replied probably $200,000‐
$300,000 per year. The stakeholders would need to investigate which funder(s) would be most
appropriate to cover that loss. In other communities, the tourism industry itself has often
underwritten operating losses.
Harrick asked if there are any projections on the proportion of state vs. regional vs. national
meetings the conference center would be anticipated to host. Knipe replied he could provide
much of that information now. The phase 1 portion of the study also contains some of that
information.
Proulx observed the conference center is not anticipated to create much, if any, parking demand.
But he wondered if it would not in fact create at least some net additional parking demand. Knipe
replied, yes. There would likely be a modest amount of additional parking demand.
Proulx asked what alternative uses the conference center space could be employed for, in a worst‐
case scenario, if it turns out to be financially infeasible in five years. Cornish replied, given the
large amount of space involved, it could easily be converted to offices. It could also conceivably
be converted to housing units, although the City typically does not encourage situating housing on
street‐level. It could also be converted to retail use. The City would prefer to see a dynamic,
activated ground floor.
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September 14, 2018
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Bohn reported he met with City Controller Steve Thayer to discuss the applications. Thayer
particularly wants the City to avoid the cost of parking repairs/construction (approximately $15M).
He did not express a preference for any single proposal. Although the Ithaca‐Peak Development
proposal would generate the most revenue for the City, it would provide fewer public parking
spaces. Thayer would prefer any project with a financing plan that does not require the City to
issue general obligation debt.
Proulx asked if the Vecino Group proposal to lease parking spaces back to the City is reasonable.
Messmer replied he believes it is a reasonable number, which the City could recoup from parking
revenue.
E. Review of Developer Responses to IURA Requests for Clarifications
HAROLD’S HOLDINGS, LLC (“LITTLE COMMONS”)
Bohn reported the applicant clarified the project site would extend all the way up to the existing
ramp that serves City Hall, with an access drive to the existing businesses to the north.
Dylla observed developing the eastern portion of the garage was not included in the project scope.
Bohn replied the RFP clearly indicated that was not an absolute requirement, although obviously
the City would need to address that issue. The applicant stated it would offer the City $2 million
to be used towards construction/renovation of the eastern portion.
Proulx noted the proposal does not include the photovoltaic solar arrays in its financing plan.
Bohn replied the applicant has not committed to solar arrays at this time, but continues to explore
that component. If the applicant chooses to include it, the Worley Parsons company would
engineer and install the arrays, but the City would be responsible for entering into the power
purchase agreement.
Dylla wondered if the smaller construction scale and building materials would in fact enable the
project to employ more local labor, as the applicant suggested. Bohn replied he knows there is a
large local wood‐framing construction company. Although he does not have the technical
expertise to definitively say, the project’s size and building materials do suggest there would be
more opportunity for employing local labor.
Dylla asked if the applicant’s negotiations with GreenStar Natural Foods Market remain in an early
stage. Bohn replied, he believes so. He did not receive any additional information from the
applicant about the feasibility of including GreenStar in the project.
VECINO GROUP NEW YORK, LLC (“ASTERI ITHACA”)
Proulx asked Bohn to explain the difference between the proposed 4% Low‐Income Housing Tax
Credits (LIHTC) financing process and the 9% process.
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September 14, 2018
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Bohn replied the City and IURA are more familiar with the 9% process, which is always highly
competitive. The applicant’s proposed 4% tax credit subsidy is a “by right” approach that should
reduce the feasibility risk. The applicant was just awarded that same tax credit subsidy for a 157‐
unit housing project in Saratoga Springs. The applicant indicated it has never been denied the 4%
tax credit subsidy.
Proulx observed the Vecino Group application is the only one that provides a rent reduction to
Cinemapolis during the construction period. Bohn replied that is correct; however, he
subsequently explained to the Vecino Group that waiving the City/IURA rent would alleviate only
approximately 30% of Cinemapolis’ rent obligation, since another entity owns a large part of the
lease. The Vecino Group could waive approximately $35,000, representing the City/IURA portion.
ITHACA‐PEAK DEVELOPMENT, LLC
Proulx remarked the applicant eventually committed to increasing the amount of affordable
housing. Bohn replied that is correct. The applicant increased the affordable housing units from
41 to 60 studio/1‐bedroom/2‐bedroom units (approximately 15% of all units) at an average rent
based on 75% Area Median Income (AMI) ― however, the applicant is also now requesting an
additional 30% tax abatement, in addition to a Payment‐in‐Lieu of Taxes (PILOT) agreement, on
the full‐market value of the housing, over a 30‐year period.
Bohn added the applicant also increased its conference center space to 30,000 square feet.
NEWMAN DEVELOPMENT GROUP, LLC & VISUM DEVELOPMENT GROUP, LLC
Harrick asked if there is any further information about the project’s conference center space.
Bohn replied the applicant indicated it would acquire the air rights above the parking on the east
side of the garage, which could accommodate the conference center as part of a second phase in
the project.
Harrick noted she has heard considerable support for the proposal; however, she remains
skeptical how feasible it would be to complete the conference center, within a reasonable amount
of time.
Ackerman observed the 20,000‐square‐foot conference center space could be increased, if it
included more than one floor. Bohn replied that is possible, although it would most likely affect
the massing of the building and/or the housing and retail components.
Proulx observed not all the proposed amenities are included in the financing plan. Bohn replied
the applicant did agree to commit a minimum of $500,000 to improvements to the public plaza.
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September 14, 2018
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F. Rating & Ranking of Proposals ― Recommendation to IURA
1. Harold’s Holdings, LLC (“Little Commons”) click to view proposal
2. Vecino Group New York, LLC (“Asteri Ithaca”) click to view proposal
3. Ithaca‐Peak Development, LLC click to view proposal
4. Newman Development Group, LLC & Visum Development Group, LLC click to view proposal
Proulx suggested the Committee discuss each proposal separately and then tally the rankings. No
objections were raised.
HAROLD’S HOLDINGS, LLC (“LITTLE COMMONS”)
Ackerman noted she likes the project’s human‐oriented scale, its community‐focused uses, and
public spaces. Its major drawback is that it provides less new housing. It also does not fully
address the parking situation or conference center.
Dylla agreed with Ackerman’s comments. He likes the greater use of local labor; and the design
seems most appropriate for the community. He agreed it provides less new housing and does not
fully address the parking situation.
Harrick noted the purchase‐price offer has some appeal. She also liked the alternative conference
center space and concept. She agreed with the other prior comments.
Proulx agreed it is the only proposal to offer to purchase the site, although $2M will not go very
far towards off‐setting the City’s parking‐related costs. Furthermore, the viability of the
alternative conference center space depends entirely on whether it could be successfully
implemented. In examining all the criteria, the project definitely seems to have some gaps.
VECINO GROUP NEW YORK, LLC (“ASTERI ITHACA”)
Harrick indicated the applicant’s community involvement approach was particularly appealing.
The proposal also has the necessary housing, parking, and conference center components. She is
confident in the 4% Low‐Income Housing Tax Credits (LIHTC) financing. The proposal possesses
many positive characteristics, although it is disappointing it is not a local/regional company.
Ackerman remarked she appreciates the affordable housing focus. She likes the applicant’s other
projects and the proposal’s inclusion of housing for residents with special needs. The Vecino
Group also seems to possess all the values that are most compatible with the Ithaca community,
which compensates for it not being a local/regional company.
Dylla noted the proposal is especially robust in terms of the affordable housing component. It also
seems well thought‐out and includes a fast construction timeline. Like Ackerman, he appreciates
the applicant’s values and branding. His only concerns would be the leasing of parking back to the
City, the uncertainty with the conference center space, and the reliance on grant funds.
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September 14, 2018
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Proulx agreed with all the prior comments, but noted the project would probably produce the
least annual revenue to the City of all the projects.
ITHACA‐PEAK DEVELOPMENT, LLC
Dylla noted the proposal provides the most parking and the greatest overall number of housing
units ― albeit with the least number of affordable housing units. It also fully replaces the parking
garage and is fully self‐financed. But he is not sure if the tower element is particularly desirable in
the downtown area.
Proulx remarked the applicant made significant improvements, compared to its first proposal. But
the programmatic concept of the mixture of housing units does not seem entirely well thought
through. The project’s financing package is probably the most viable of all the proposals, since it
does not rely so much on public funding. He also likes the flexibility associated with the parking
component.
Ackerman agreed the applicant improved the project by increasing the number of affordable
housing units, but it still remains the weakest application by far in that respect; and considerable
pressure was required by the Committee to achieve that.
Lewis asked if the applicant reached out to INHS (or similar organization), as the other applicants
did. Bohn replied it did initially reach out to INHS, but ultimately decided it would manage the
affordable housing component itself, although it would be required to work with the IURA or
another organization to ensure compliance.
Lewis asked if there is any more information about how the applicant has managed housing in
other projects. Bohn replied he did not follow up with the applicant about that particular issue,
although that would be a part of the negotiation process.
NEWMAN DEVELOPMENT GROUP, LLC & VISUM DEVELOPMENT GROUP, LLC
Proulx noted the project’s community benefit component is strong, even though the affordable
housing units are smaller. The workforce housing component also appears to fill a need and the
treatment of the eastern portion of the parking garage is good. He is concerned the project
requires additional funding sources, which could be a potential risk. Although the project’s overall
financing plan is fairly strong, there is some question about the feasibility of obtaining the 9% Low‐
Income Housing Tax Credits (LIHTC) financing, which could delay or even eliminate the affordable
housing component.
Harrick asked if there is any more information about the likelihood of the project’s receiving the
9% Low‐Income Housing Tax Credits (LIHTC) funding. Bohn replied INHS has a strong record in
that respect, but it is a highly competitive process, so there are no assurances.
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September 14, 2018
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Harrick remarked the project is the most versatile, which is positive, although perhaps more
difficult to assess. It contains many desirable components and the applicant is local.
Ackerman noted she does not like the project’s large scale and would prefer to see a less imposing
design. She is also concerned about the separation of the affordable and non‐affordable housing
components. The project does, however, address many of the items the IURA has been looking
for.
Bohn clarified the applicant did commit to ensuring that the affordable and non‐affordable
housing units would be identical in function and appearance.
Smith asked if there would be separate entrances to the affordable and non‐affordable housing
components. Bohn replied, yes. The affordable housing component is required to be free‐
standing and operationally independent, so it needs to have its own entrance.
Dylla indicated he liked the art park community space, as well as the air rights for a conference
center space. On the other hand, the building’s massing seems overwhelming. He likes the local
nature of the development team; and the project does satisfactorily address the affordable
housing and parking components.
The Committee proceeded to rank the applications (including those of absent Committee
member, Charles Hamilton), as follows:
Proulx suggested it will be important to convey some of the Committee’s qualitative observations
and assessments to the IURA Board, and not merely the numeric scores. He asked if there is any
consensus on the desirability of the conference center.
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September 14, 2018
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Harrick responded she personally supports the conference center concept, but there seems to be
conflicting information about whether it would genuinely be a net benefit to the community. As a
result, it has been more difficult to evaluate the projects.
Ackerman asked what timeframe is associated with the phase 2 conference center study. Knipe
replied it would begin on November 1st, 2018 and should be completed in 3 months.
V. Other Business
A. IURA Loan & Lease Payments Report: August 2018
Bohn noted the all lease and loan payments are current, except the Finger Lakes School of
Massage loan payment.
B. Staff Report
None.
VI. Adjournment
The meeting was adjourned by consensus at 3:52 P.M.
— END —
Minutes prepared by C. Pyott, edited by N. Bohn.