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HomeMy WebLinkAboutMN-IURAED-2021-08-18Approved: 10/12/21 108 E. Green St. Ithaca, NY 14850 (607) 274-6565 MEETING MINUTES ITHACA URBAN RENEWAL AGENCY ECONOMIC DEVELOPMENT COMMITTEE (EDC) 3:30 P.M., Wednesday, August 18, 2021 Common Council Chambers, 108 E. Green St., City Hall Present: Chris Proulx, Chair; Doug Dylla, Vice-Chair; Charlotte Hamilton; Leslie Ackerman Excused: None Vacancies: 2 Staff: Nels Bohn; Charles Pyott Presenters: Finger Lakes Development Steve Flash, Finger Lakes Development of Ithaca, LLC I. Call to Order Chair Proulx called the meeting to order at 3:30 P.M. II. Agenda Additions/Deletions None. Proulx noted Ackerman would be recusing herself during the Committee’s review of the Inlet Island Urban Renewal Project’s Exclusive Negotiation Agreement, since her employer, Ithaca Neighborhood Housing Services (INHS), is involved with the project. III. Public Comments (3-minute max. per person) None. IV. Review of Meeting Minutes: June 8, 2021 Dylla moved, seconded by Hamilton, to approve the minutes, with no modifications. Carried Unanimously:4-0 IURA EDC Meeting Minutes August 18, 2021 Page 2 of 10 V. New Business A. Community Lending — Request from 209 W. State Street Associates, LLC for IURA Consent to Subordinate IURA Mortgage Lien on 209 W. State St. to Facilitate Refinancing (PB-LF #2 State Theatre of Ithaca, Inc.) Bohn explained the proposed resolution is associated with the IURA’s 2009 loan to The State Theatre of Ithaca, Inc. (STI). At that time, the IURA had collateral for both the theatre building itself and a second mortgage lien on the property located at 209-217 W. State Street, owned by Mack Travis (the President of the theatre’s Board at the time). 209 State Street Associates, LLC is now seeking to refinance its first mortgage loan on 209-217 W. State Street and requests the IURA’s consent to subordinate the IURA’s own mortgage lien to the new loan. The theatre has been making regular loan payments over the past 10 years, with a remaining balance of $326,576.52. Over that time, the theatre has demonstrated its financial stability, while also making various improvements to the building, currently assessed at $1,850,000. The IURA would remain in a fairly secure collateral position. Bohn recommended approving the resolution. Ackerman moved, seconded by Dylla: Consent to Subordinate IURA 2nd Mortgage on Property Located a 209-217 W. M.L.K., Jr./State Street (PB-LF #2, State Theatre) WHEREAS, on January 22, 2009, the Ithaca Urban Renewal Agency (IURA) approved a loan of $458,500 to State Theatre of Ithaca, Inc. (STI) to acquire and operate the State Theatre, and WHEREAS, the IURA loan is secured by the following collateral: • 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. WHEREAS, 209 State Street Associates, LLC seeks to refinance the first mortgage loan on 209-17 W. State Street, and requests the IURA consent to subordinate its mortgage lien to the new loan not to exceed the lesser of $675,000 or 75% of appraised value, and WHEREAS, as of June 30, 2021, the outstanding principal balance of the STI loan is $326,576.52, and WHEREAS, the assessed value of the State Theatre property at 117 W. State Street is $1,850,000, and WHEREAS, the appraised value of the property located at 209-217 W. State St. is estimated to exceed $900,000, and WHEREAS, the estimated collateral value of the mortgages securing the IURA loan after proposed refinancing is substantially more than the outstanding loan balance, and IURA EDC Meeting Minutes August 18, 2021 Page 3 of 10 WHEREAS, at its August 18, 2021 meeting, the Economic Development Committee reviewed this matter and recommended the following; now, therefore, be it RESOLVED, that the IURA hereby consents to subordinate its existing subordinate mortgage on the 209- 217 W. State Street property (also known as the Family Medicine Associates building) to new financing from the existing first mortgage lender Tompkins Trust Company in an amount not to exceed $675,000, 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 intercreditor agreement. Carried Unanimously: 4-0 B. Tompkins County Economic Recovery Strategy — Discussion Bohn reviewed the Tompkins County Economic Recovery Strategy planning document, which was developed both as an immediate response to the COVID-19 pandemic and to serve as a roadmap to guide long-term planning and recovery. Stakeholder input came from discussions with the Economic Recovery Cabinet, Economic Development Resource Providers Group, Economic Development Collaborative, Ithaca Area Economic Development, and the Tompkins County Housing and Economic Development Committee. The City’s Deputy Director for Economic Development Tom Knipe worked actively on the project. Bohn wanted to make sure the Committee is aware of the initiative, as it moves forward. Some proposed projects may come before the IURA for funding over the next few years. No action is required by the Committee today. Common Council will be considering funding requests associated with the initiative (listed on the following page) as part of its annual budget deliberations and submit its recommendations to the Mayor. (continued on next page) IURA EDC Meeting Minutes August 18, 2021 Page 4 of 10 Dylla asked if the “Route 13/5th Street Infrastructure” project would be focused only on Fifth Street. Bohn replied, no. When the large recent waterfront projects were being developed (i.e., Guthrie Medical Group/City Harbor, Cayuga Medical Center), the Department of Transportation (DOT) said that Route 13 is not performing at a normal standard and would require mitigation measures, like complete sidewalk access or a 3-way intersection with pedestrian improvements. Any proposed improvements would be connected to the whole corridor and would need to satisfy DOT. The City has also been pursuing a BUILD grant to redesign the whole corridor. Hamilton recommended the Economic Recovery Strategy focus more on technological commercialization with local universities to leverage what the local technology-based community is best at doing: incubating and starting new businesses. Ithaca has some of the largest research institutions and budgets in the world, but there is not enough support for creating local companies based on those technologies. IURA EDC Meeting Minutes August 18, 2021 Page 5 of 10 Ackerman suggested focusing on training people in construction-related trades and connecting small contractors with larger construction projects. The construction industry has become increasingly desperate to find skilled employees. There should be more opportunities for robust partnerships with the construction industry to create skilled jobs in the community (which would also be exportable, since there are plenty of other regions facing the same problem). Proulx noted there are a few items he does not understand about the slides. Some projects on some of the slides do not appear on the funding request chart (e.g., conference center). Similarly, there are discrepancies between some of the totals on the chart and the totals on the slides. He wondered if it would not be better to invest larger amounts in more impactful projects, rather than distribute the funds to a variety of smaller projects. For example, he is not sure how much sense it makes to spend $600,000 on the “Micro-Mobility – Bikeshare” project, but only $250,000 on the “Workforce Re-Entry Program.” Hamilton agreed with Proulx regarding the proposed funding level for the bikeshare project. Nor is she convinced of the value of the “Office Recruitment Program” and “Cluster Tech Business Center Growth & Attraction” program. She would also like to see more of a focus on equity (especially in sectors that perform poorly in terms of diversity and inclusion, like construction and technology), including expanding economic development opportunities to smaller and under-served businesses. Ackerman agreed. Proulx observed there is also no mention on the chart of local labor representation. Dylla agreed with Proulx’s suggestion to invest larger amounts in more impactful projects. C. Ithaca Farmers Market (IFM) Improvements — Update Bohn noted that no action on this agenda item is required by the Committee, but it will eventually require action by the IURA Board, since the City leases the IFM site to the IURA, which then sub-leases it to IFM. Any physical changes to the site will require IURA Board approval. IFM is proposing to create a four- season portion of building and will make a presentation to Common Council in September 2021. Bohn will meet with IFM leadership to gather more information on the project and ensure Common Council is amenable to the project, before any IURA action. The project remains very early in its development process; and many issues remain unresolved. (continued on next page) IURA EDC Meeting Minutes August 18, 2021 Page 6 of 10 Dylla remarked he has observed significant parking and traffic issues at IFM, since COVID-19. He likes the proposed improvements conceptually, but in the short-term IFM should address the parking/traffic situation, which is especially serious, even treacherous, on weekends. IFM should have parking monitors to control parking and traffic. He suggested IFM negotiate a lease with the Department of Transportation (DOT) to open up additional parking, even charging a modest fee for parking and operating a shuttle service from the DOT site. Ackerman noted that encouraging people not to drive as much as possible, would be really great, especially in combination with other mitigation measures. IFM leadership has also done a good job of reaching out to various people in the community who have connections in the food, farming, infrastructure, and transportation sectors. Proulx added that IFM could also improve its trash management operations, during high-volume times. (Ackerman departed at 4:05 p.m.) IURA EDC Meeting Minutes August 18, 2021 Page 7 of 10 D. Inlet Island Urban Renewal Project, Exclusive Negotiation Agreement (ENA) — Review Bohn reported the IURA Board resolution was brought before Common Council, which discussed it in some detail. Several Common Council members wanted to ensure Inlet Island would be attractive to local residents, so the following condition was added to the resolution: “Commitment from Developer to include active ground floor uses without reducing affordable housing.” Bohn explained the purpose of today’s meeting is for the Committee to agree on a final draft Exclusive Negotiation Agreement (ENA) to recommend to the IURA Board, conditioned on Common Council’s eventual approval of the Disposition and Development Agreement (DDA). Bohn drafted the initial version of the ENA, which Flash subsequently inserted suggested changes into. Proulx observed Flash’s suggested changes on page 1 of the ENA appear to be simple clarifications. The suggested changes on page 2, under “C. Period of Negotiations,” are more substantive. Proulx asked if Flash is saying he would like to start the clock only after all the appraisals have been received from the IURA. Flash replied, yes. The actual negotiation process should not commence before the appraisals have been received. Finger Lakes Development (FLD) will need to refine its proposal, before the appraiser knows what to appraise. The land values, for example, would be different for parking uses vs. buildings. It will take several months to get the appraisal process started, since FLD wants enough time to refine its proposal. FLD also wants clarification from Common Council about the issue of ground-floor activation, since that conflicts with parts of the original proposal. IURA EDC Meeting Minutes August 18, 2021 Page 8 of 10 Bohn remarked that the appraisals will identify the Fair Market Value (FMV) of each parcel, which would then be discounted according to environmental remediation and other costs. The IURA will engage the appraiser, once the ENA is fully executed. Adjustments can then be made to the appraised values, based on the costs of any amenities, which would be part of the negotiation process. Flash expressed concern the appraisals would calculate the FMVs only according to the highest and best use of each parcel, since that would conflict with the project as currently proposed. Proulx noted the quicker the IURA can identify starting property values, the better. The parties can always negotiate any changes to those values to develop a financially feasible project. Flash discussed step 2, regarding Department of Environmental Conservation (DEC) confirmation of its willingness to convey DEC-owned Tax Parcel #43.-1-5 (508 Taughannock Blvd.) to the City. Since that parcel contains the Coast Guard Auxiliary and is owned by the State, it would first have to be purchased by the City; and presumably the City would not want to pay the full value, if there is any environmental contamination. The City should work with FLD to obtain a formal determination from DEC that there is no environmental contamination on that site, as part of that appraisal process. Bohn agreed that appraisal would need to be conducted separately. The State may very well not provide a formal determination that there is no environmental contamination on the site, in which case the City may need to obtain the authority to go onto the property and conduct its own environmental investigation. Proulx asked how Bohn proposes accomplishing step 1, about obtaining clarification from Common Council about the ground floor activation issue. Bohn replied Common Council wanted that to be a formal commitment by the developer, so the IURA should try to obtain a specific definition of “active ground floor uses.” He is not sure, however, if the IURA will be able to get clarification on the issue, because he suspects Common Council will respond to the details of what is being proposed. Flash remarked if “active ground floor uses” is meant to include ground-floor retail in The Stays building (which is how one Common Council member appeared to portray it), that is not something FLD could commit to. He is also concerned about the ramifications of incoming Common Council members and their own interpretations of “active ground floor uses.” Proulx observed Common Council amended the “WHEREAS” in a manner that suggests the IURA imposed the “active ground floor uses” condition itself, when that was not the case. Proulx agreed with Flash that the “active ground floor uses” term is too broad and the intent is not clear. Perhaps the IURA could return to Common Council with a revised version of the resolution, to clarify the nature of that particular commitment by the developer. For example, it could state: “Commitment from Developer to explore including active ground floor uses without reducing affordable housing.” Hamilton recommended modifying the ENA to address the concern and not delay the process. Bohn replied, while the IURA could certainly change the ENA, if it conflicts with Common Council expectations it may not gain its approval. IURA EDC Meeting Minutes August 18, 2021 Page 9 of 10 Flash proposed approaching Common Council again 45 days after the ENA is executed. Proulx agreed. Dylla suggested identifying alternate ways of phrasing “ground floor activation” (e.g., referring to public activities). Bohn noted the ENA does contains an “IV. Issues to Be Resolved” section. The Committee could add the ground floor activation issue to that section. Hamilton agreed. Dylla remarked the milestones table is not entirely clear to him. Flash replied the number of days in each step represents the number of days after the prior step, although the first three steps are simultaneous/concurrent. Hamilton suggested clarifying that step 5 takes place 30 days after step 4. Proulx proposed separating the second part of the table entirely, beginning with step 5. Proulx asked if there are any issues or concerns with the “C. Essential Terms & Conditions” section. Bohn replied he is fine with “1.” and “2.” But “3.” is beyond the scope of the IURA's authority, since it commits the City to being “responsible to provide sufficient utilities and existing roadway.” Flash explained he added the sentence about the City being responsible to provide sufficient utilities and existing roadway to emphasize that the developer would not be responsible for designing and constructing all the infrastructure. Hamilton suggested, rather than stating the City would be responsible to provide the utilities and roadway, adding the following wording to the end of the first sentence: “subject to provision of sufficient municipal utilities and the existing roadway.” Bohn indicated he does not see a problem with that change. Proulx observed pages 6-7 again appear to contain routine clarifications. Bohn noted page 7 contains the “IV. Issues to Be Resolved” section, which is where the Common Council’s condition about “active ground floor uses” could be addressed, as well as any issues concerning the DEC and the Coast Guard Auxiliary site. Hamilton recommended also submitting a resolution to Common Council requesting clarification of the “active ground floor uses” issue. Flash suggested “ground-level” would be a better term, since both the Ithaca Neighborhood Housing Services (INHS) and ‘hometel’ buildings are not permitted to have commercial uses on the ground floor. Proulx proposed the following language: “The developer agrees to commit to develop strategies and programming on Inlet Island to enhance ground-level activity and attract residents to Inlet Island.” IURA EDC Meeting Minutes August 18, 2021 Page 10 of 10 Hamilton proposed adding a reference to including “public access to amenities.” Hamilton moved, seconded by Dylla, to adopt the Exclusive Negotiation Agreement (ENA), as amended: Carried Unanimously: 3-0 V. Other Business A. IURA Financials Review: June 2021 Bohn reported that the Grants Summary shows all CDBG and HOME projects are in good standing, in terms of expenditures and progress on those projects. Most loan payments are current. All lease payments are current, as of today. Bohn added the IURA is waiting to access its 2021 HUD Entitlement Program and additional CDBG-CV funding. Once that occurs, all those projects will be added to the report. Bohn reported the INHS Founders Way Rental Housing Project is well underway. The Founders Way For- Sale Townhomes component of the project, however, has been running into major cost overruns. INHS is not yet sure if it can close the gap. It has asked the County for additional funding support. B. Staff Report None. VI. Adjournment The meeting was adjourned by consensus at 5:06 P.M. — END — Minutes prepared by C. Pyott, edited by N. Bohn.