HomeMy WebLinkAboutMN-IURAED-2019-07-23Approved: 10/15/19
108 E. Green St.
Ithaca, NY 14850
(607) 274-6565
MEETING MINUTES
ITHACA URBAN RENEWAL AGENCY
Economic Development Committee (EDC)
3:30 P.M., Tuesday, July 23, 2019
Common Council Chambers, City Hall, Ithaca, NY
Present: Chris Proulx, Chair; Doug Dylla, Vice‐Chair; Leslie Ackerman; Charles Hamilton
Excused: None
Vacancies: 2
Staff: Nels Bohn; Charles Pyott
Guests: Molly Chiang, Vecino Group of New York, LLC
I. Call to Order
Chair Proulx called the meeting to order at 3:31 P.M.
II. Agenda Additions/Deletions
None.
III. Public Comments (3‐min. maximum per person)
ANDRE GARDINER, Board of Directors, Downtown Ithaca Alliance (DIA), spoke as on his own behalf
regarding the Green Street Garage Redevelopment Urban Renewal Project. He supports the proposal
with the most housing, which would more than justify additional construction time and any aesthetic
concerns involved with having a taller building. 15,000 people commute in and out of the County every
day (with an average commute time of 40 minutes), over half of whom want to live in the City, Town, or
Lansing, with the remainder not being able to afford to live closer to/in the City. As a result, increasing
the availability of affordable housing should be the City’s primary focus with this project.
JOSEPH WETMORE, Autumn Leaves Used Books, spoke regarding the Green Street Garage Redevelopment
Urban Renewal Project, noting he also supports providing as much affordable housing as possible. He
also advocates for the inclusion of a conference center. While he personally appreciates the prevalence
of ‘construction fatigue’ among downtown businesses and residents, and the short‐term impact
constructing a larger building would represent, the city desperately needs more housing, especially low‐
income housing, in the city center. Furthermore, the larger building would have a more solid frame,
with a longer life‐cycle, ultimately providing a longer‐term, more financially sound, and more
sustainable use of the site.
IURA EDC Meeting Minutes
July 23, 2019
Page 2 of 10
BRETT BOSSARD, Executive Director, Cinemapolis, spoke regarding the Green Street Garage
Redevelopment Urban Renewal Project, noting the prospect of a long‐term closure of the theatre risks
being catastrophic to its operations, since it would jeopardize its relationships with film distributors. As
a result, identifying one or more temporary screening locations during the closure, with at least two
screens, would be crucial. Although he appreciates construction‐related safety concerns, the theatre
generally does not operate during construction hours. He urged the developers and the City to identify
strategies to allow access to the theatre over at least some of the construction period.
DENISE KATZMAN spoke regarding the Green Street Garage Redevelopment Urban Renewal Project, noting
she strongly opposes the closure of Cinemapolis. Having worked in media distribution, she knows the
theatre’s distributors would find other outlets, which would be catastrophic. Any agreement
negotiated between the City and the developer should allow Cinemapolis to remain open.
IV. Committee Members’ Response to Public Comments
None.
V. Review of Meeting Minutes: June 23, 2019
Dylla moved, seconded by Ackerman, to approve the June 23, 2019 minutes, with no modifications.
Carried Unanimously: 4‐0.
VI. New Business
A. Request from State Theatre of Ithaca, Inc. for Modification to Loan Extension Approved on
February 28, 2019 (PB‐LF #2)
Bohn explained the IURA approved a 10‐year extension of the loan, several months ago. Some
additional information subsequently came to light, regarding Mack Travis’ retirement from the theatre’s
board of directors. As a result, the theatre requests Mr. Travis’ personal financial guarantee be
released. The theatre has paid down the loan significantly and the IURA also has collateral on two other
mortgages, so the loan should remain well‐secured without the personal financial guarantee.
Dylla moved, seconded by Ackerman:
Modification to Loan Extension ― State Theatre of Ithaca, Inc. (PB‐LF #2)
WHEREAS, on February 28, 2019, the IURA approved a 10‐year extension of the $458,500 loan issued
to the State Theatre of Ithaca, Inc. (STI) in 2009 for acquisition of the historic State Theatre, and
WHEREAS, on June 26, 2019, STI requested the existing collection collateral and financial guarantees
securing the loan be modified in recognition of 10 years of successful operations and loan
repayments which reduce the need for the original amount of loan security, and
WHEREAS, STI specifically requests release of the limited personal guarantee of M. and C. Travis, and
IURA EDC Meeting Minutes
July 23, 2019
Page 3 of 10
WHEREAS, as of June 30, 2019, the outstanding principal balance of the loan is $340,775.80, and
WHEREAS, the IURA loan is secured by the following collateral and financial guarantees:
1st mortgage lien on the State Theatre building property located at 117 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 assessed value of the State Theatre property is $1,850,000, and
WHEREAS, the assessed value of the property located at 209‐217 W. State is $700,000, and
WHEREAS, the estimated collateral value of the mortgages is in excess of 150% of the outstanding
loan balance, and
WHEREAS, STI has established an automatic payment system to make timely loan payments and is
current on IURA loan payments, and
WHEREAS, the IURA Economic Development Committee reviewed this matter at its June 23, 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 release
all personal financial guarantees on the State Theatre of Ithaca, Inc. loan originally issued on March
5, 2009 (PB‐LF #2), 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.
Carried Unanimously: 4‐0
B. Annual Selection of Economic Development Committee Officers
Bohn explained this is the annual process whereby the Committee selects a Vice‐Chair and nominates a
Chairperson. One of the two officers must be an IURA Board member, so Proulx would need to serve in
one of the two roles.
Ackerman moved, seconded by Hamilton:
Selection of 2019 IURA Economic Development Committee Officers
WHEREAS, IURA by‐laws provide that the committee membership shall elect its own committee Vice‐
Chairperson and nominate a candidate for committee Chairperson for consideration by the Agency,
and
IURA EDC Meeting Minutes
July 23, 2019
Page 4 of 10
WHEREAS, per the by‐laws, an Agency member shall fill either the committee Chairperson or
committee Vice‐Chairperson position, and
WHEREAS, officers of each committee serve a one‐year term, but continue to hold office until their
successor is selected or appointed, and
WHEREAS, the current Committee Chairperson and Vice‐Chairpersons are Chris Proulx and Doug
Dylla, respectively, now, therefore be it
RESOLVED, that Chris Proulx be nominated as Chairperson of the IURA Economic Development
Committee, and be it further
RESOLVED, that Doug Dylla be elected as Vice‐Chairperson of the IURA Economic Development
Committee.
Carried Unanimously: 4‐0
VII. Green Street Garage Redevelopment Urban Renewal Project
A. Western & Center Sections of Project Site
VERSION 1 ― ORIGINAL CONCEPT: 11 stories, 218 affordable units, 2‐story 49,000 SF conference
center, 350 parking spaces (excludes east section of garage)
VERSION 2.1 ― EXCLUDES CONFERENCE CENTER: 8 stories, 173 affordable units, 1‐story 9,000 SF
commercial (light‐gauge steel construction like City Centre)
VERSION 2.2 ― EXCLUDES CONFERENCE CENTER: 12 stories, 273 affordable units, 1‐story 9,000 SF
commercial (structural steel construction like Harold’s Square)
1. Extension of Exclusive Negotiation Agreement (ENA) [Vecino Group ENA Submission]
Bohn explained he has been working with the developers on several significant as‐yet‐unresolved issues
associated with the project, so he recommends extending the ENA deadline. No objections were raised.
Hamilton moved, seconded by Ackerman:
Amendment #2 to Exclusive Negotiation Agreement (ENA):
Green Street Garage Redevelopment Urban Renewal Project
WHEREAS, on December 13, 2018, the IURA designated Vecino Group of New York, LLC as the
preferred developer for the urban renewal project to redevelop the Green Street Garage, and
WHEREAS, on April 11, 2019, the IURA executed an Exclusive Negotiation Agreement (ENA) with
Vecino Group of New York, LLC (Vecino), and
IURA EDC Meeting Minutes
July 23, 2019
Page 5 of 10
WHEREAS, the ENA is intended to translate Vecino’s conceptual mixed‐use development project to
finalize a term sheet to define the project and developer’s responsibilities, define seller and buyer
contingencies, resolve feasibility issues, and address pre‐identified negotiation issues, and
WHEREAS, on May 23, 2019, the IURA approved an amendment to approve a 30‐day extension of the
ENA schedule, and
WHEREAS, pursuant to the current ENA, the IURA is scheduled to submit a proposed Disposition and
Development Agreement (DDA) to Vecino by July 30, 2019 for a 10‐day review period to accept or
submit a counter‐offer, and
WHEREAS, IURA staff is still developing preliminary draft terms for the DDA and a second extension
would allow the draft DDA to consider responses by Vecino, the IURA, and IURA legal counsel to
incorporate into proposed DDA, and
WHEREAS, Vecino does not object to a second 30‐day extension of the ENA schedule, and
WHEREAS, at its July 23, 2019 meeting, the IURA Economic Development Committee considered this
matter and recommended the following; now, therefore, be it
RESOLVED, that the IURA hereby authorizes a second 30‐day extension of the time schedule
contained in the Exclusive Negotiation Agreement between the IURA and Vecino Group of NY, LLC,
and be it further
RESOLVED, that the revised schedule for submission of the proposed Disposition and Development
Agreement is August 29, 2019, and be it further
RESOLVED, that the IURA Chairperson is authorized, subject to review by IURA legal counsel, to
execute Amendment #2 to the Exclusive Negotiation Agreement.
Carried Unanimously: 4‐0
2. Draft Disposition & Development Term Sheet ― Discussion
Proulx suggested the Committee first review the key components of the original core project proposal,
and then review and compare the two alternative proposals. No objections were raised.
Bohn reported he has been actively working with Vecino Group New York, LLC (“Vecino”) on narrowing
down the sets of remaining questions and issues raised in response to the most recent project
submission. Considerable time was spent working out the details of the conference center and
exploring various financing approaches for it.
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July 23, 2019
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Bohn remarked at least one funding application for the conference center will be submitted to New
York State (Upstate Revitalization Initiative), which will serve a critical role in the conference center’s
financial viability. The developers have been consulting with the State about its overall interest in the
project, and its timelines and benchmarks. The State strongly recommends submitting the application
in the first quarter of 2020, given the extraordinary demand for funding. The developers are also
waiting for the project’s residential market‐demand study to be completed, but the general
understanding is that Ithaca possesses a strong housing market.
Bohn explained additional time was spent identifying the desired housing unit specifications. Compared
to the 9% NYS Low‐Income Housing Tax Credits (LIHTC) award, there is more flexibility in the 4% award,
in terms of minimum required housing standards. Nonetheless, the City would like to ensure
satisfactory housing quality standards for the project. By and large, the project would comply with the
9% LIHTC standards (e.g., counter space, windows, bedroom size), as detailed in the NYS HCR Design
Handbook. The degree of accessibility would also be same as the 9% LIHTC standard; so all housing
units would be visitable, with many or most of them adaptable.
Ackerman asked if Vecino would hold accessible units open until they are filled, if no tenants happen to
be immediately available to fill them. Chiang replied it would probably be somewhat of a balancing act,
depending on when and how the lease‐up process unfolds. Vecino would most likely not hold the
accessible units, but would more likely reshuffle the availability and accessibility of units in the building.
The property management company would also have good understanding of the demand for accessible
or special‐needs units. It would ultimately be the property management company’s responsibility.
Bohn walked through several project components for which some issues need to be reviewed. He
pointed out the resident storage units would be alcoves, not closets with doors. There would also be a
large bulk‐storage room in each of the units (probably preferable to having bulk‐storage elsewhere in
the building).
Bohn noted one issue raised previously by the Committee and IURA Board relates to the property
management company’s (CRM Rental Management, Inc.) organizational capacity, qualifications, and
experience. He and the developers discussed ideas for ensuring high‐quality management of the
property. The Draft Disposition and Development Term Sheet lists the following six Residential Property
Management items for consideration (p.4):
1. Minimum management fee: the greater of $XXX,000/year or 6.1% of gross residential rents
(projected to be at least $125,000/year for the 218 unit project)
2. On‐site management office: required
3. On‐site superintendent residential unit: required
4. Minimum on‐site staffing level: XXX hours/week
5. Annual consultation with IURA on property management performance at IURA’s option
6. Required resident and adjacent property owner survey conducted within 12‐24 months of opening,
with joint IURA/Vecino meeting to review responses
IURA EDC Meeting Minutes
July 23, 2019
Page 7 of 10
Chiang added the project’s supportive services partner, Springbrook, would also have 1‐3 full‐time
equivalent (FTE) staff overseeing the supportive housing portion of the project.
Proulx asked about the process for approving CRM Rental Management, Inc. (CRM). Bohn replied the
initial choice would be the IURA’s; and the IURA would need to be consulted, if there were any future
changes.
Proulx asked what a typical property management contract duration would be for this kind of project.
Chiang replied she is not absolutely certain, but she would obtain the answer.
Chiang remarked, in response to Ackerman’s prior concerns, all housing units would be fully adaptable,
meaning they would all have sufficient clearances (e.g., door openings) and other features, so they
could relatively easily be converted with some light construction and modification.
Bohn explained the City’s principal obligation to the project would be to convey the property and serve
as the lessee for the parking garage.
Bohn noted construction impact mitigation for Cinemapolis is an important element of the project.
Temporary closure of the theatre would certainly be required (~150 days). Building Code requirements
would need to be complied with. Vecino and Cinemapolis are collaborating to identify alternative
locations for at least two screens during the theatre’s closure. The IURA may need to make that a
condition for final project approval. The Draft Disposition and Development Term Sheet lists the
following elements of the Cinemapolis Mitigation Plan:
Cinemapolis to be paid normal and reasonable operating expenses, including but not limited to rent,
payroll, and debt service, projected at $55,000/month during any required closure and is included as
a development cost for the parking component at $330,000 for up to 6 months.
If closure exceeds 6 months, developer responsible to pay Cinemapolis operating expenses from the
developer fee.
Developer identification of temporary alternative location(s) for screening at least two movies/night
during the closure period.
Following closure period during garage construction, Developer will not obstruct public access to
Cinemapolis during its normal operating hours.
Developer will pay Cinemapolis $XXX for each Friday or Saturday, and XXX for each other additional
day that the public cannot access Cinemapolis during its normal operating hours after the initial
closure period.
Dylla asked what the project timeline is anticipated to be. Chiang replied it is difficult to identify
precisely; however, she would envision all financing would be in place by Spring/Summer 2021.
Bohn noted the parking component of the project would be that the developer builds/reconstructs the
garage, which the City would then lease over 30 years (~$700,000/year). The final figure would depend
on grant funding and the interest rate that could be secured.
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July 23, 2019
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Bohn added the City will require the right to exercise the option to reacquire the parcel at the end of
the lease term. There also needs to be a contingency plan, if the project’s financing ends up being too
expensive (e.g., providing the City with option to use its general obligation debt, rather than private
financing).
Proulx asked when the developers would lock in their financing agreements and terms. Bohn replied,
that has not yet been determined, but there will be a framework in the Disposition & Development
Agreement for that.
Bohn noted the City asked for an additional cab in the garage’s elevator shaft, which Vecino agreed to.
Bohn noted even though the project would be privately financed, it would still need to comply with all
public facility requirements (e.g., Davis Bacon prevailing wages).
Dylla asked who would be responsible for maintenance functions. Bohn replied the details remain to be
worked out. The City would be responsible for general ongoing maintenance of the garage; however,
any structural maintenance issues would be Vecino’s responsibility.
Dylla asked what the maintenance costs are for the existing garage. Bohn replied the Cayuga Street
Garage would probably be the best model to refer to. He can provide the Committee with those
figures.
Dylla suggested adding a separate category in the Disposition and Development Term Sheet for
maintenance. Bohn replied he would add that.
Bohn remarked the ideal situation would be for the City to have an owner‐representative to ensure
Building Code compliance and adherence to other requirements. The City representative should have
the right to review every project document and be able to reject anything inconsistent with the original
approved project and site plans. Bohn added that, if there were any cost savings over the course of the
project, the City should receive credit for a portion of those savings (e.g., lower lease rate). The existing
equipment in the garage would not be subject to the sale.
Proulx observed the last critical piece of information in planning the project is when the viability of the
conference center has been determined. Bohn replied the current deadline for that decision has been
suggested to be 2/28/20, in part because the status of the NYS funding application will not be known
until around that time.
Proulx responded he would much prefer setting a deadline of 1/31/20 for that determination. No
objections were raised.
Proulx noted the Committee should discuss the two alternative options. He asked if anything had
changed substantively, since the last time they were discussed. Bohn replied, no. He added the IURA
did receive comments from various individuals and organizations, most of whom expressed support for
the larger of the two alternatives.
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July 23, 2019
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Ackerman observed Ithaca Neighborhood Housing Services (INHS) brought up several new points in its
letter. Bohn conceded that INHS stressed the value of a more diverse set of targeted income levels;
however, the proposed project already includes a fairly wide set of income targets: 50%, 60%, and 80%
of Area Median Income (AMI). Bohn noted INHS also argues that Ithaca is a small housing market and
the lease‐up process could be reasonably lengthy, so it expressed concern the number of units would be
too high; however, recent affordable housing projects have seen high demand and long waiting lists.
Chiang added the 16‐20 supportive housing units would have subsidized rents targeted at/below 30%
AMI.
Bohn remarked the housing‐market study still needs to be completed, which NYS will review. NYS will
evaluate the project by the size of its capture rate. (The Arthaus project’s capture rate, for example,
was 2%.) Capture rate is the percentage of age, size, and income‐qualified renter households in the
primary market area that a property must capture to fill the units. Capture rate is calculated by dividing
the total number of units at the property by the total number of age, size, and income‐qualified renter
households in the primary market area.
Chiang noted the NYS HCR cut‐off for the capture rate is 20%.
Hamilton remarked, given that the developer is bearing the risk and the high housing demand in the
community, he believes the larger of the two alternatives (VERSION 2.2) would be best.
Ackerman agreed VERSION 2.2, with the greatest number of units, would be best.
Dylla indicated he would lean the other way. VERSION 2.2 appears too large in scale and height,
especially considering the size of the immediately adjacent Harold’s Square project. He would prefer
VERSION 2.1.
Proulx remarked, originally, he leaned towards VERSION 2.1, since he was concerned about the actual
demand for so many units in a specific configuration/style, at that location. But, he observed, were the
project a market‐rate project and the developers were confident they could lease as many units, the
City/IURA would probably approve it with little concern. As a result, he is now leaning towards VERSION
2.2.
Proulx asked about the height differences of the different options. Chiang replied the conference
center version would be 140 feet. VERSION 2.2 would be closer to 150 feet. VERSION 2.1 would be a little
over 100 feet.
Ackerman observed, given that the City/IURA is prepared to approve a taller building with the
conference center, she sees no reason it should object to the comparably tall VERSION 2.2.
Proulx recapitulated the Committee’s non‐binding recommendation:
VERSION 2.2: Proulx, Hamilton, Ackerman
VERSION 2.1: Dylla
IURA EDC Meeting Minutes
July 23, 2019
Page 10 of 10
B. Eastern Section of Project Site ― Update
Bohn reported the proposed project for the Eastern Section has been progressing. The developer has
been meeting with consultants and financiers in an effort to refine the project. The IURA has also
arranged for an appraisal of the air rights, which should be completed by August 30th. The developer
expressed some interest in exploring low‐income/affordable housing, through the Community
Investment Incentive Tax Abatement Program (CIITAP), if financially viable.
VIII. Old/Other Business
A. IURA Loan & Lease Payment Report: June 2019
Bohn reported virtually all HUD Entitlement Program projects are progressing well, including prior slow
projects. Only the following two projects are experiencing delays at this time:
2018 Project 1: Neighbor to Neighbor Homeowner Rehab (CDBG)
2018 Project 18: Domestic Violence Center Renovation (CDBG)
Bohn noted the Neighbor to Neighbor project has been delayed, partially because of some leadership
and staffing changes. It is admittedly not a high‐capacity organization, due to its small size and reliance
on volunteers. The project should recommence in earnest this Summer. He believes INHS has referred
some potential projects to Neighbor to Neighbor, which is also examining potential projects at Nate’s
Floral Estates. Neighbor to Neighbor also collaborates regularly with the Office of the Aging.
Bohn explained the Domestic Violence Center is waiting for funding from the State’s Dormitory
Authority of the State of New York (DASNY), which usually seems to take a long time, and which has
delayed the project. Mendizabal will be following up with the center’s Executive Director. To a large
extent, the delay is beyond its control, since it needs sufficient funding on‐hand to hire a contractor.
Bohn reported all loan repayments are current, except for the Finger Lakes School of Massage, which
represents the first time it has been delinquent since the school’s recent much‐publicized management
and accreditation crisis. Bohn has asked for an update on the situation from the school.
Bohn reported all lease payments are current, except the Ithaca Farmers’ Market, which only just
submitted its payment.
B. Staff Report
None.
IX. Adjournment
The meeting was adjourned by consensus at 5:05 P.M.
— END —
Minutes prepared by C. Pyott, edited by N. Bohn.