HomeMy WebLinkAboutMN-IURAED-2020-06-16Approved: 8/18/20
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, June 16, 2020
Present: Chris Proulx, Chair; Doug Dylla, Vice‐Chair; Leslie Ackerman
Excused: Charles Hamilton
Vacancies: 2
Staff: Nels Bohn; Charles Pyott
Guests: None
I. Call to Order
Chair Proulx called the meeting to order at 3:30 P.M.
II. Agenda Additions/Deletions
None.
III. Review of Any Public Comments Received
None.
IV. Review of Meeting Minutes: April 14, 2020
Ackerman moved, seconded by Dylla, to approve the minutes, with no modifications.
Carried Unanimously: 3‐0
V. Green Street Garage Redevelopment Urban Renewal Project
A. Western & Center Sections of Project Site: Asteri (Vecino Group NY, LLC) ― Update
Bohn explained the project remains on schedule and is expected to complete its Environmental Review
shortly, before going to the Board of Zoning Appeals (BZA). The Planning & Development Board has
responded very positively to the project’s structure and design. Today’s meeting materials include
considerable information on the affordable housing component and conference center, which remains
within budget. Vecino is aiming to receive NYS funding by year’s end. NYS has indicated affordable
housing funding remains a priority and is considered an essential component of the State’s budget, with
funds already having been set‐aside for the purpose. Common Council has had several opportunities to
reconsider its approval of the project and conference center, in the midst of the COVID‐19 economic
downturn, which it has not done. Since the project will take three years to complete, there is a significant
amount of time for improvement in the hospitality sector’s economic outlook. Were the conference
center suddenly removed from the project scope, the affordable housing component would then be
placed at risk.
IURA EDC Meeting Minutes
June 16, 2020
Page 2 of 6
B. Eastern Section of Project Site: Rothschild Building (Ithaca Properties, LLC) ― Disposition &
Development Agreement (DDA)
Bohn explained the goal of the meeting is for the Committee to review and become comfortable with the
DDA. Bohn expects there may be some further back‐and‐forth between the IURA and the developer
regarding the language, terms, and conditions. The IURA Board will either adopt the unexecuted version
of the DDA in June 2020, or remand it back to the Committee for further review. The DDA is largely very
consistent with how the developer has described the project, including the workforce housing component.
Once the IURA Board adopts the DDA, the agreement will need to go to Common Council for approval
(including a Public Hearing), by which time the Environmental Review will need to have been completed.
The IURA Board would then execute the final version of the DDA.
IURA EDC Meeting Minutes
June 16, 2020
Page 3 of 6
The Committee walked through and reviewed each section of the DDA.
Ackerman remarked the term “workforce housing” seems largely meaningless. It would be clearer and
more accurate to replace it with a term like “housing that is affordable for people earning ≤80% of Area
Median Income (AMI).” Proulx suggested employing the term “below market‐rate housing.” Bohn agreed
to edit the DDA accordingly.
Bohn noted the “VII. CONTINGENCIES FOR SALE AND PURCHASE” section really lies at the heart of the
agreement.
Proulx wondered if a cap would be placed on the reimbursements listed under “1.,” of section “B.
Contingencies to be Met by Developer:”
“[…] Developer shall reimburse reasonable and documented legal costs incurred by businesses with
whom the Developer entered into negotiations on a plan to mitigate involuntary business
displacement due to the then‐proposed urban renewal project.”
Bohn replied, no, although that may be something that could be negotiated.
Ackerman recalled there were unresolved issues between the developer and Sunny Days of Ithaca, in
particular. Bohn replied the developer subsequently modified the project proposal, so the retail tenants
would no longer be dislocated; however, the tenants did incur legal costs associated with the developer’s
original proposal and the mitigation plan required by the IURA.
Bohn noted he knows one business incurred legal costs of $2,550, but he would be surprised if the other
businesses incurred costs higher than that. Bohn added he does not believe Common Council would be
likely to approve the DDA without some assurance the issue has been equitably resolved amongst the
parties.
Bohn noted the “4. Payment‐In‐Lieu of Taxes Contingency” language was included in the DDA since the
developer anticipates Payment‐in‐Lieu of Taxes (PILOT), given that it is agreeing to provide affordable
housing. Strictly speaking, the paragraph could conceivably be removed, since it is not a contingency from
the City’s/IURA’s perspective; and the City will always have the right to sign the lease agreement.
Bohn noted that “5. Workforce Housing Preliminary Calculation Contingency” states that the developer
would commit to a minimum of 10% rental housing units reserved for workforce housing, which “shall be
increased upwards toward the 20% workforce housing goal to the extent increasing workforce housing
units allows the project to retain a 5‐year average cash‐on‐cash return of at least 8% on cash equity
invested in the project.”
Bohn suggested the language could probably be changed to revert back to citing an 8‐year average cash‐
on‐cash return, rather than a 5‐year average.
IURA EDC Meeting Minutes
June 16, 2020
Page 4 of 6
Proulx asked what the cash‐on‐cash return would be, in real terms. Bohn replied assuming it is a $100M
project, with probably 30% cash equity required, it would be approximately $2.4M per year (on average),
on a $30M investment. If the developer can exceed 8%, then more workforce housing would be added, up
to 20% of the housing units.
Ackerman asked, assuming the developer can in fact exceed 8% return, how the corresponding number of
additional required workforce housing units over 10% would be calculated. Bohn replied it a sensitivity
analysis would be conducted, by incrementally adding one more housing unit to the financing formula until
the project’s return dips under the 8% threshold. Bohn added the IURA does not yet know all the financial
variables involved (i.e., cash equity, interest rate/debt service, loan amount), which is one reason the DDA
includes an “IX. OPEN BOOKS” section, requiring the developer to share all financial documents related to
the project.
Bohn noted the purpose of the “XII. PREVAILING WAGES ON PARKING CONSTRUCTION” section is to
ensure the developer incorporates NYS prevailing wages into its budget for the public parking component
of the project, should the NYS Department of Labor require prevailing wages.
Bohn remarked a termination date for the agreement (January 31, 2022) should be added to the DDA, for
clarity’s sake, under section “E. Possession and Closing.”
Bohn noted the Project Term Sheet requires the project’s compliance with the City’s Green Building Policy
(if codified) and that all employees at the project site are paid a “living wage” (as determined by
Alternative Federal Credit Union).
Proulx observed the Housing Component Terms portion of the term sheet does not require the workforce
housing units to include finishings similar to those of the market‐rate units. Bohn replied that is a good
point, although he is not certain it is necessary to require the units to be absolutely identical in terms of
finishings.
Ackerman suggested the Workforce Housing Minimum Commitment be amended to require the workforce
housing units to have the same access to building amenities as the market‐rate units (in addition to sharing
the same lobby entrance). Bohn replied that is a good point. He can certainly add that to the agreement.
Dylla moved, seconded by Ackerman:
Conditional Approval of Disposition & Development Agreement
East Section of Green Street Garage Mixed‐Use Urban Renewal Project
WHEREAS, on October 4, 2017, the City of Ithaca Common Council authorized transfer of the Green
Street Parking Garage property located at 120 E. Green Street (Tax Parcel #70.‐4‐5.2) to the IURA, via
an option agreement, for the purpose of structuring a proposed property sale and development
agreement with a preferred developer to undertake an urban renewal project subject to approval by
the Common Council; and
IURA EDC Meeting Minutes
June 16, 2020
Page 5 of 6
WHEREAS, the IURA seeks urban renewal projects that improve the social, physical, and economic
characteristics of the project site area and expand access to quality affordable housing; and
WHEREAS, on June 27, 2019, the Ithaca Urban Renewal Agency designated Ithaca Properties, LLC
(Ithaca Properties) as the preferred developer, and qualified and eligible sponsor pursuant to Section
507 of General Municipal Law, to potentially acquire the eastern portion of Tax Parcel #70.‐4‐5.2,
located at 120 E. Green Street, Ithaca, NY, for the purpose of undertaking an urban renewal project to
develop an in‐fill, mixed‐use project; and
WHEREAS, Developer proposes to purchase an approximately 192’ x 119’ property at the eastern
section of the Green Street parking garage site located at 120 E. Green Street, Ithaca, NY (“Project
Site”) to undertake an urban renewal project, subject to Common Council approval, and
WHEREAS, the Project Site consists of air rights above a privately‐owned ground‐floor commercial use
and contains two elevated public parking decks constructed in 1974; and
WHEREAS, on December 23, 2019, the IURA endorsed the Developer’s proposed urban renewal project
program that includes reconstruction of two public parking decks and nine to ten levels of rental
housing, of which at least 10% of the units shall be occupied and affordable to households earning up
to 80% of Area Median Income; and
WHEREAS, on March 26, 2020, the City of Ithaca Board of Public Works found that the proposed sale
and leaseback of reconstructed public parking as incorporated into the Project does not adversely
impact City of Ithaca public works and that continued ownership of the Project Site is surplus for
municipal purposes; and
WHEREAS, on April 1, 2020, the City of Ithaca Common Council approved a proposed contingent
purchase agreement with the Developer for conveyance of the Project Site with conveyance
contingent upon Common Council approval of a Disposition and Development Agreement; and
WHEREAS, on May 11, 2020, the IURA, City of Ithaca, and Developer executed the Purchase Agreement
– Eastern Section of Green Street Garage Urban Renewal Project Site (“Contingent Purchase
Agreement”); now, therefore, be it
RESOLVED, that the IURA hereby conditionally approves the Disposition and Development Agreement
(DDA) for the East section of the Green Street Garage Mixed‐Use Urban Renewal Project, dated June
16, 2020, subject to completion of environmental review and Common Council approval; and be it
further
RESOLVED, that the IURA hereby authorizes and directs the IURA Director of Community Development,
subject to review by IURA legal counsel, to submit the Agreement to Ithaca Properties, LLC for their
execution or counteroffer; and be it further
IURA EDC Meeting Minutes
June 16, 2020
Page 6 of 6
RESOLVED, should Developer’s counteroffer consist of amendments that do not materially alter the
IURA‐approved DDA in the opinion of the IURA Chair, such requested amendments or similar
amendments shall be incorporated into the DDA; and be it further
RESOLVED, should Developer’s counteroffer consist of amendments that materially alter the IURA‐
approved DDA in the opinion of the IURA Chair; the IURA shall consider and vote on requested
amendments; and be it further,
RESOLVED, the DDA shall be amended to incorporate recommendations of IURA legal counsel or any
amendments requested by Developer’s legal counsel that are acceptable to IURA legal counsel.
Carried Unanimously: 3‐0
VI. Other/New/Old Business
A. IURA Loan & Lease Payment Report: May 2020
Bohn reported all loan repayments are current, except Finger Lakes School of Massage, as previously
reported. GreenStar Cooperative Market was originally delinquent (interest‐only), but is now current.
Ithaca Downtown Associates (Canopy Hotel) is also delinquent (2 mos.). Bohn has made inquiries with
them.
Bohn reported all lease payments are current, as of today. The IURA is working with Cinemapolis and
Coltivare, two tenants of Bloomfield/Schon, which has agreed to provide the IURA with delayed
Cinemapolis and Coltivare rent payments, while also discounting their rents for a certain number of
months.
B. Staff Report
Bohn reported the COVID‐19 Small Business Resiliency Fund (SBRF) assisted 80 micro‐enterprises/small
businesses. It also secured $84,000 in additional funds, thereby helping another 24 businesses.
Bohn reported the IURA Board and Common Council approved the 2020 Action Plan, including
$255,917.61 for the Economic Development Loan Fund (EDLF).
Bohn reported he has been communicating with a potential loan applicant, Verdigree Collective, a women‐
owned and ‐operated commercial construction business that is exploring financing options for returning to
normal business operations, in the wake of the COVID‐19 crisis.
VII. Adjournment
The meeting was adjourned by consensus at 4:50 P.M.
— END —
Minutes prepared by C. Pyott, edited by N. Bohn.