HomeMy WebLinkAboutMN-IURA-2019-02-28Approved: 3/28/19
108 E. Green St.
Ithaca, NY 14850
(607) 274-6565
MINUTES
ITHACA URBAN RENEWAL AGENCY
Common Council Chambers, City Hall
8:30 A.M., Thursday, February 28, 2019
Members: Svante Myrick, Chair; Karl Graham; Chris Proulx; Eric Rosario
Excused: Tracy Farrell, Vice‐Chair; Laura Lewis (Common Council Liaison)
Staff: Nels Bohn; Anisa Mendizabal; Charles Pyott; JoAnn Cornish
Guests: Diane Cohen, Finger Lakes ReUse, Inc. (FLRU)
I. Call to Order
Chair Myrick called the meeting to order at 8:34 A.M.
II. Agenda Additions/Deletions
No changes were made to the agenda.
III. Public Comment (3‐min. maximum per person)
DAN HOFFMAN remarked on the future of the IURA‐owned land in the Cherry Street Industrial Park,
noting that a long sequence of decisions were made by the IURA’s predecessors that assumed the
highest and best use for the land would be industrial, neglecting the possibility of leaving it in its
natural state. The IURA, however, is now the steward of the land and has a responsibility to re‐
examine prior assumptions and possibly identify another use for the land. Unlike in prior decades,
wooded land is no longer presumed to be a wasted resource, since it provides wildlife habitats,
opportunities for enriching human interactions with the natural environment, and a carbon sink
for climate change mitigation. The nearby Waterfront Trail is a wonderful amenity, and the
extension of the Black Diamond Trail is a tremendous opportunity for the City. There are better
ways to enhance the land than industrial uses.
LISA STRAYER also remarked on the future of the IURA‐owned land in the Cherry Street Industrial
Park, noting she lives adjacent to it and regularly enjoys seeing wildlife, like bald eagles and foxes.
She grew up playing in the woods there, which is one of few remaining woods accessible to
children in the City, who do not have other means of interacting with nature. Ideally, she would
like to see some of the land dedicated as a children’s garden, but there are numerous ways of
transforming the land into more of a public good.
IV. Review of Meeting Minutes: January 24, 2019
Graham moved, seconded by Proulx, to approve the January 24, 2019 minutes with no
modifications.
Carried Unanimously 4‐0
IURA Minutes
February 28, 2019
Page 2 of 11
V. Economic Development Committee (EDC)
A. State Theatre of Ithaca, Inc. Request for Loan Extension (PB‐RLF #2)
Proulx explained that the IURA issued a $458,500 loan on March 5, 2009 to the State Theatre of Ithaca
(STI) for acquisition and operation of the historic 1,600‐seat theatre, which would otherwise have been
shuttered. The loan carries an interest rate of 2% with level monthly payments of $1,741.96 due, to
amortize the debt over 30 years, and with a balloon payment due at the end of Year #10 on April 1,
2019 for the outstanding principal balance. STI has been repaying the loan on a monthly basis, with a
current outstanding principal balance of $347,788.29. The proposed loan conditions would remain the
same, with just one added requirement that STI set up an automatic loan repayment system with its
bank. The theatre has generally been very successful, hosting over 85 events each year, attended by
approximately 50,000 patrons and generating an estimated $2.5 million of economic activity. Bohn and
the Committee both recommended the loan be extended 10 years.
Graham asked about the theatre’s recurring late loan repayments. Bohn replied that the condition of
the loan extension is that the theatre will need to establish an automated/electronic payment
schedule, which it has agreed to do.
Moved by Proulx, seconded by Rosario:
Loan Extension ― State Theatre of Ithaca, Inc. (PB‐LF #2)
WHEREAS, on January 30, 2019, the State Theatre of Ithaca, Inc. (STI) submitted a request for an
extension of their loan with the IURA in lieu of the balloon payment due, and
WHEREAS, on March 5, 2009, the IURA issued a $458,500 loan to STI for acquisition and operation
of the historic 1,600‐seat State Theatre, which was scheduled to close, and
WHEREAS, STI is a New York State not‐for‐profit corporation with offices at 105 West State Street,
Ithaca, NY, whose mission is to enhance the cultural life of Ithaca and the Finger Lakes by
preserving, operating, and promoting the historic State Theatre as an active venue for national,
international, and community performances and programming, and
WHEREAS, the loan carries an interest rate of 2% with level monthly payments of $1,741.96 due to
amortize the debt over 30 years, with a balloon payment due at the end of Year #10 on April 1,
2019 for the outstanding principal balance, and
WHEREAS, as of January 31, 2019, the outstanding principal balance remaining was $347,788.29,
and
WHEREAS, STI has successfully operated the State Theatre for ten years, including meeting job
retention/creation goals and investing over $1.5 million to improve the theatre, and
IURA Minutes
February 28, 2019
Page 3 of 11
WHEREAS, the State Theatre hosts over 85 events each year, attended by approximately 50,000
patrons, that generate an estimated $2.5 million of economic activity in Tompkins County, and
WHEREAS, STI financially operates at a very modest net profit level and has frequently incurred
penalty fees on late loan payments, and
WHEREAS, STI remains one month past due as of January 31, 2019 and pledges to set up an
automatic loan payment system with its bank, and
WHEREAS, STI projects it will generate sufficient net operating income to service IURA debt service
payments at the current monthly rate, and
WHEREAS, the IURA loan is secured by the following collateral and financial guarantees, which
provide a value that significantly exceeds the outstanding principal balance of the loan:
1st mortgage lien on the State Theatre building located at 107 W. State Street;
2nd mortgage lien on property located at 209‐17 W. State Street;
$200,000 limited personal guarantee of M. and C. Travis, and
WHEREAS, the IURA Economic Development Committee reviewed this matter at its February 19,
2019 meeting, and recommends the following; now, therefore, be it
RESOLVED, that the IURA hereby approves the request from State Theatre of Ithaca, Inc. to extend
the loan for an additional 10‐year term at the current interest rate of 2% and monthly payments of
$1,741.96 on condition that the borrower sets up an automatic payment system to make timely
monthly loan payments, and be it further
RESOLVED, that the Loan Agreement shall be amended to include a positive covenant requiring
the borrower to establish and continue an automatic loan payment through a financial institution
to make timely monthly loan payments on this loan, where failure to comply with the covenant
shall constitute an event of default, and be it further
RESOLVED, that IURA Chairperson, upon the advice of IURA legal counsel, is hereby authorized to
execute all necessary and appropriate documents to implement this resolution, including, but not
limited to, executing an amended Loan Agreement.
Carried Unanimously 4‐0
B. Finger Lakes ReUse, Inc. (FLRU) Request: Program Amendment to ReUse Center Expansion Project
(2018 #12)
Proulx explained the proposed expansion of a construction materials warehouse on the ReUse Center
property ultimately failed to proceed, primarily due to the cost of complying with requirements for
construction in a 100‐year flood zone. FLRU is also now confronted with a February 28, 2019 deadline
for making a $1.5 million balloon payment to the seller of the 213 Old Elmira Road property.
IURA Minutes
February 28, 2019
Page 4 of 11
Proulx noted the IURA originally committed $100,000 in 2018 from its Urban Development Action
Grant (UDAG) fund to serve as bridge financing for the project, which would ultimately have been
funded with CDBG funds. At this time, however, FLRU faces an impending loan foreclosure if it defaults
on the balloon payment, resulting in the potential loss of the property and job losses of at least 3 full‐
time equivalent (FTE) positions held by low/moderate‐income (LMI) persons. The proposed Program
Amendment would employ $100,000 in CDBG funds for site acquisition costs, allowing the retention of
the 3 FTE positions. The critical component of the acquisition is the bank financing, along with
additional FLRU fundraising and cash‐on‐hand, leaving a financing shortfall of $100,000, which the
IURA would provide. The proposal would safeguard the investments the IURA and the community have
made in the ≈25‐person facility. IURA funding would take the form of a 0%‐interest 20‐year forgivable
loan.
Cohen remarked that FLRU has been paying special attention to its projected debt service coverage
ratio and loan‐to‐value (LTV) ratio. FLRU probably erred in how it presented its original loan proposal
to the banks. They are now working with a financial consultant to package their loan application. FLRU
recently received a 60‐day extension from its creditor on the balloon payment; so it would like to
request a modification of the deadline cited in the IURA resolution. Cohen added that FLRU has been
unnecessarily pessimistic about its growth. It has consistently demonstrated more than 20% annual
revenue growth, so it would certainly be able to service its debts.
Bohn responded part of the reason the IURA’s March 29, 2019 deadline was established was because
of the IURA’s timeline for finalizing its 2019 Action Plan. Bohn recommended tying the deadline to the
IURA Board’s April 18th, 2019 meeting date.
Cohen replied FLRU should be able to confirm its own timeline by the end of March 2019, so she does
not foresee any problems meeting the new IURA deadline.
Graham disclosed that his employer, Alternatives Federal Credit Union (AFCU), may make a loan to
FLRU and already has a current loan with the organization; however, he is personally not involved in
any of those decisions.
Moved by Proulx, seconded by Rosario:
HUD Program Amendment ― Finger Lakes ReUse, Inc.,
Modify Use of Funding for Property Acquisition in Lieu of Building Expansion (CDBG #13, 2019)
WHEREAS, on February 1, 2019, Finger Lakes ReUse, Inc. (FLRU) submitted a request to modify the
use of $100,000 in funding assistance committed in the 2018 HUD Action Plan from expansion of
the ReUse Center to acquisition of the ReUse Center property at 214 Old Elmira Rd., Ithaca, NY,
and
IURA Minutes
February 28, 2019
Page 5 of 11
WHEREAS, the proposed expansion of a building materials warehouse on the ReUse Center
property failed to proceed due to the cost of complying with requirements for construction within
a 100‐year flood zone, and
WHEREAS, on February 28, 2019, a $1.5 million balloon payment is due to pay a seller’s note per
the purchase and sale agreement executed in 2014 between FLRU and Grand Cheese, Inc., and
WHEREAS, FLRU faces an impending loan foreclosure if it defaults on the balloon payment,
resulting in job losses of at least three (3) FTE jobs held by low/moderate‐income persons, and
default on the mortgage loan leading to foreclosure, and
WHEREAS, FLRU is in the process of securing financing and contributions to pay off the 5‐year
balloon payment due to the seller, and
WHEREAS, a total of $1,807,600 is required to refinance an existing renovation loan and close on a
$1,575,000 bank loan to acquire the property with a 20‐year mortgage, and
WHEREAS, the projected uses of funds are:
$1,500,000 Balloon payment due to Seller
$274,930 Payoff renovation loan
$32,670 Loan closing costs
$1,807,600 Total, and
WHEREAS, the projected sources of funds are:
$1,575,000 Bank loan
$96,600 FLRU cash equity on‐hand
$36,000 Fundraising
$100,000 IURA
$1,807,600 Total, and
WHEREAS, the original HUD CDBG project was categorized as an eligible CDBG economic
development activity that meets the low/moderate‐income national objective through projected
job creation, and
WHEREAS, due to uncertainty of project implementation, the original project funding was
committed from Urban Development Action Grant (UDAG) Program Income funds acting as a
bridge loan until CDBG funds could be allocated in the 2019 Action Plan, and
WHEREAS, the proposed modified project is also categorized as an eligible CDBG economic
development activity that meets the low/moderate‐income national objective through retention
of at least three (3) full‐time equivalent (FTE) jobs held by low/moderate‐income persons, and
WHEREAS, the proposed bank loan is projected to require monthly loan payments of $10,835
($130,020 annually), and
IURA Minutes
February 28, 2019
Page 6 of 11
WHEREAS, FLRU has significantly increased revenues from merchandise sales by 54% to over $1.25
million since 2016, although FLRU management projects the need to continue to raise unearned
income to generate positive cash flow until 2025, when earned income is projected to meet all
operating expenses and debt service, and
WHEREAS, for the foreseeable future, FLRU will rely on fundraising to close an operating deficit
and is not in a financial position to pay principal and interest on an IURA loan, and
WHEREAS, FLRU is a certified living wage employer with over 25 employees, and
WHEREAS, the UDAG program income account has a balance of $144,169 as of 1/31/19, and
WHEREAS, FLRU is a New York State not‐for‐profit corporation with a mission to improve the
community, economy, and environment through reuse and operates two reuse centers to receive,
process, and resell over 175 tons per year of materials, and
WHEREAS, the IURA Economic Development Committee reviewed this matter at its February 19,
2019 meeting, and recommends the following; now, therefore, be it
RESOLVED, that the IURA hereby approves the requested Program Amendment to use funding
assistance committed in the 2018 Action Plan for acquisition of the ReUse Center property located
at 214 Old Elmira Road, and be it further
RESOLVED, that the IURA hereby approves a loan from the UDAG Program Income fund, intended
as a bridge loan until CDBG funds recommended to be allocated in the 2019 HUD Action Plan
become available, subject to the following terms:
Borrower: Finger Lakes ReUse, Inc., a New a New York State not‐for‐profit
corporation
Loan Amount: Up to $100,000
Funding Source: UDAG program income bridge loan until CDBG funds become
available
Project: Acquisition of property located at 214 Old Elmira Rd., Ithaca, NY.
Total Project Cost: $1,807,600
Projected Use of IURA
Funds:
Property acquisition
Term: 20 years
Interest Rate: 0.0%.
IURA Minutes
February 28, 2019
Page 7 of 11
Repayment: No repayment is due provided property continues to be owned
and operated by Finger Lakes ReUse as a reuse center. The loan is
due and payable in full upon conveyance of the property during
the loan term.
Loan Collateral: Mortgage lien on property located at 214 Old Elmira Rd.
subordinated only to the principal lender for the project.
Personal Guarantor(s): None
Job Creation/Retention
Requirement:
Retention of at least three (3) FTE jobs held by low‐ and moderate‐
income persons.
Loan Disbursement: Loan disbursement shall not occur until full project funding is
secured in an amount sufficient to repay the balloon payment due.
Conditions: 1. Documentation of retention of at least three (3) jobs held by
low/moderate‐income employees prior to execution of the
loan agreement.
2. Submission to the IURA by April 18, 2019 of a bank loan
commitment in an amount sufficient to complete the project.
3. Completion of NEPA environmental review by staff.
Reporting: 1. Annual submission of accountant‐prepared Federal and New
York State tax returns.
2. Quarterly IURA job reporting of jobs retained for 2 years.
3. Documentation of project Match Funding.
And be it further,
RESOLVED, that the IURA hereby agrees to subordinate its mortgage liens on the property located at
214 Old Elmira Rd. to the primary lender, 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 advice of IURA legal counsel, is hereby authorized to
execute all necessary and appropriate documents to implement this resolution.
Carried Unanimously 4‐0
C. Committee Chairperson Report
None.
IURA Minutes
February 28, 2019
Page 8 of 11
VI. Neighborhood Investment Committee (NIC)
A. 2019 Ithaca Neighborhood Services, Inc. (INHS) Community Housing Development Organization
(CHDO) Designation
Graham reported that neither IURA staff nor the Committee identified any problems with the
application.
Moved by Graham, seconded by Rosario:
2019 Designation of Ithaca Neighborhood Housing Services, Inc. (INHS)
as Community Housing Development Organization (CHDO)
WHEREAS, the Ithaca Urban Renewal Agency (IURA) has been designated by the City of Ithaca as
the Lead Agency to develop, administer and implement the HUD Entitlement Grant program,
including funds received through the HOME Investment Partnerships (HOME) program, and
WHEREAS, grant recipients under the HOME program are termed Participating Jurisdictions (PJs),
and
WHEREAS, PJs must reserve not less than 15% of their HOME allocation for investment in housing
to be developed, sponsored, or owned by Community Housing Development Organizations
(CHDOs), and
WHEREAS, each PJ must annually identify CHDOs that are capable of carrying out projects to
address priority housing needs identified in the Consolidated Plan, and
WHEREAS, a CHDO is a specific type of community‐based non‐profit organization as defined in 24
CFR §92.2, and
WHEREAS, on January 16, 2019, Ithaca Neighborhood Housing Services, Inc. (INHS) submitted
materials documenting its qualifications and requested renewal of its designation as a CHDO by the
IURA, and
WHEREAS, at its February 8, 2019 meeting, the Neighborhood Investment Committee of the Ithaca
Urban Renewal Agency compared the submitted materials against CHDO criteria and recommends
the following; now, therefore be it
RESOLVED, that the IURA, acting in its capacity as the Lead Agency for the Participating Jurisdiction
of the City of Ithaca, hereby renews its designation of Ithaca Neighborhood Housing Services, Inc.
as a CHDO for the 2019 Action Plan.
Carried Unanimously 4‐0
IURA Minutes
February 28, 2019
Page 9 of 11
B. Committee Chairperson Report
Graham reported the Committee has been slightly concerned about the INHS Mini‐Repair Program’s
not meeting its targets, so the Committee agreed to extend the program end‐date by 120 days to
enable INHS to meet its targets. The Committee discussed the program with Loralee Morrow from
INHS, who indicated the organization has been advertising the program to attract more beneficiaries.
Graham reported the Committee also met with Danielle Harrington from Tompkins Community Action
to discuss the organization’s role in addressing homelessness in the city.
VII. Other New/Old Business
A. Cherry Street Industrial Park Expansion: Procure Supplemental Geotechnical Engineering Services
Bohn reported that John P. Stopen Engineering, LLP recommended eight more soil test pits and further
geotechnical analysis to refine its conclusions in determining the feasibility of a single‐story building at
the site on a “floating” foundation and provide guidance on the cost premium associated with such a
foundation.
Graham asked whether the IURA is in fact obligated to sell the land for an industrial use, or whether it
could dedicate it as a natural area. Bohn replied the IURA certainly has the authority to determine the
best use for the land.
Myrick noted it makes sense at this time to conduct the additional soil samples, before making any
decision, although he certainly appreciates what today’s public speakers expressed about maintaining the
site as a natural wooded area.
Proulx remarked that once the additional soil sampling and analysis have been completed, the IURA
should examine the overall costs vs. benefits for various uses of the land.
Moved by Rosario, seconded by Graham:
Procure Supplemental Geotechnical Engineering Analysis for Cherry Street Expansion Area
WHEREAS, the proposed sale of a portion of a 6‐acre parcel owned by the IURA located at the end
of Cherry Street (the Site) to Emmy’s Organics, Inc. (Emmy’s) fell through, due in part to adverse
soil conditions, and
WHEREAS, initial analysis by Emmy’s engineer suggests soil conditions may require specialized and
expensive foundations for the proposed building, parking lot, and public roadway that could make
the project financially infeasible, and
WHEREAS, a subsequent peer engineering review conducted by John P. Stopen Engineering, LLP
(Stopen) indicated a ridged floating mat foundation and integrated building floor can reasonably
support a single‐story light industrial building at the Site following some specialized site
preparation, but indicated that analysis of additional soil test pits would be prudent to refine the
analysis, and
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February 28, 2019
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WHEREAS, the IURA desires to inform prospective purchasers of the development sites about how
soil conditions impact building construction and development costs at the Site, and
WHEREAS, at the IURA’s request, Stopen submitted a $5,900 lump‐sum proposal to conduct eight
(8) soil test pits and geotechnical analysis to refine its analysis to determine feasibility of single‐
story building construction at the Site on a “floating” foundation and provide guidance on the cost
premium associated with such foundation, and
RESOLVED, that the IURA hereby authorizes up to $5,900 to procure John P. Stopen Engineering,
LLP to provide supplementary geotechnical engineering analysis of the soil conditions in the Cherry
Street Industrial Park expansion area, and be it further
RESOLVED, that funding shall derive from the Cherry Street Industrial Park account, which had a
balance of $86,714.44 as of January 31, 2019, and be it further
RESOLVED, that the FY2019 IURA Budget be amended to increase expenses and revenues to
reflect IURA‐approved and actual procurement of geotechnical engineering services, projected as
follows:
Increase Expense: Other Independent Contractors ― $9,521.90
Increase Revenue: Industrial Parks Account #14 ― $9,521.90, and be it further
RESOLVED, that the Chairperson is authorized to sign any and all documents to implement this
resolution.
Carried Unanimously 4‐0
B. City Prevention of Sexual Harassment Policy ― Acknowledgement
Myrick noted the City’s policy was recently revised. All major boards and committees that convene in
City Hall are required to sign the acknowledgment.
Bohn added the City’s policy is very similar to the IURA’s own recently adopted policy.
C. Review of IURA Financials: January 2019
Bohn reported most grant activities are progressing on schedule. The Spencer Road Sidewalks Project,
although listed as not being on schedule, has actually been completed, but the IURA is still waiting for a
voucher for it. There is a dispute between the contractor and the City, which should hopefully be
resolved soon. The Chartwell House and Homeowner Rehab projects are both moving forward. In
terms of the Urban Bus Stop Project, TCAT has hired new staff to work on the project and has a plan in
place.
Bohn reported all loan payments are current, except The State Theatre, which actually just made a
double payment. All lease payments are also current.
IURA Minutes
February 28, 2019
Page 11 of 11
D. IURA Chairperson Report
None.
E. Common Council Liaison Report
None.
F. Staff Report
Bohn reported that the “IURA Job Readiness, Training, & Placement Programs Comparative Outcomes
Summary (2013‐2018)” included in today’s meeting packet provides a numeric analysis of the IURA’s
job‐readiness, training, and placement programs over the past few years, including successful long‐
standing programs, like Historic Ithaca’s Work Preserve Program and Greater Ithaca Activities Center’s
(GIAC) Hospitality Employment Training Program (HETP).
VIII. Adjournment
The meeting was adjourned by consensus at 9:30 A.M.
— END —
Minutes prepared by C. Pyott, edited by N. Bohn.