Loading...
HomeMy WebLinkAboutMN-IURA-2021-12-16Approved: 1/27/22 108 E. Green St. Ithaca, NY 14850 (607) 274-6565 MINUTES ITHACA URBAN RENEWAL AGENCY 8:30 A.M., Thursday, December 16, 2021 Members: Mayor Svante Myrick, Chair; Karl Graham; Chris Proulx; Tracy Farrell, Vice-Chair; Laura Lewis, Common Council Liaison Excused: Eric Rosario Staff: Nels Bohn; Anisa Mendizabal; Charles Pyott; Lisa Nicholas Guests: None. I. Call to Order Chair Myrick called the meeting to order at 8:35 A.M. II. Agenda Additions/Deletions None. III. Public Comments None. IV. Review of Meeting Minutes: October 28, 2021 Farrell moved, seconded by Proulx, to approve the meeting minutes, with no modifications. Carried Unanimously: 4-0 V. Economic Development Committee (EDC) A. Technical Assistance Funding Request: Buffalo Street Cooperative, Inc. (BSB) Proulx explained that the Committee and BSB discussed the prospect of hiring a business consultant to further develop and broaden BSB’s business plan. After considerable work/research, BSB identified a consultant with significant experience with food co-ops; so BSB is exploring the possibility of establishing a book café and further developing its co-op ownership model. BSB plans to submit four separate types of potential business models to the consultant, Seven Roots, to help it best determine how BSB can move forward. The proposed technical assistance grant of $4,400 would come from Urban Development Action Grant (UDAG) funds, which are more flexible than standard HUD Entitlement Program funds in terms of how they are used. BSB will share the outcomes of the consultant’s report with the IURA. IURA Minutes December 16, 2021 Page 2 of 12 Proulx moved, seconded by Farrell: Technical Assistance to Buffalo Street Cooperative, Inc. (BSB) WHEREAS, Buffalo Street Cooperative Inc., dba Buffalo Street Books (BSB), applied for loan assistance in the 2021 HUD Entitlement Grant funding process to fund an events and community outreach coordinator as a means to improve financial operations, and WHEREAS, BSB is a long-standing, bookstore business located at 215 N. Cayuga St. that was purchased by community members in 2011, and WHEREAS, the IURA raised questions about the BSB’s proposed approach to achieve financial sustainability and satisfy job creation requirements, did not recommend the project for funding in the 2021 Action Plan, and encouraged continued consultation regarding the business model, and WHEREAS, in October 2021, BSB management consulted with the IURA Economic Development Committee (EDC) resulting in the EDC encouraging BSB to submit a funding request for technical assistance to hire a qualified business consultant to review BSB’s business model to expand revenues in a manner consistent with their mission, and WHEREAS, BSB has selected a qualified business consultant who has submitted a proposal for technical assistance services, and WHEREAS, retention and growth of an independent bookstores is critical to the health and success of downtown and contributes to the physical, social, economic, and cultural life of Ithaca, and WHEREAS, at their December 14, 2021, meeting the EDC reviewed this matter and recommends the following action; now, therefore, be it RESOLVED, that the IURA hereby approves a technical assistance grant in an amount not to exceed $4,400 to Buffalo Street Cooperative, Inc. to hire Seven Roots to conduct an operational review of Buffalo Street Books, including an analysis of growth opportunities for feasibility and to determine the best path forward for financial feasibility, and be it further RESOLVED, that funding shall derive in the first instance from miscellaneous revenues held in the Urban Development Action Grant (UDAG) account, which fund had a balance of $143,831 as of 12/10/21, and be it further RESOLVED, if the IURA issues a future loan to BSB to implement the business plan, then the funding shall derive from the CD-RLF account, and be it further RESOLVED, that the IURA Chair, subject to review by IURA legal counsel, is authorized to execute an agreement to implement this resolution. Carried Unanimously: 4-0 IURA Minutes December 16, 2021 Page 3 of 12 B. Loan Application: Finger Lakes ReUse, Inc. (FLRU) Proulx explained that FLRU, a long-time IURA grant recipient, recently requested additional financial assistance from the IURA for job retention to enable it to weather the challenges of the past 1½ years. While it has benefited from a massive influx of donated materials over that time, it also needs sufficient staff to process and inventory the materials. Bohn’s 12/15/21 memorandum to the IURA Board provides a good summary of the issues involved with the funding request, as excerpted below: The Economic Development Committee (EDC) met on December 14th and reviewed a $150,000 request from Finger Lakes ReUse Inc. (FLRU) for a forgivable loan to retain 5 FTE jobs. The EDC did not adopt any resolution on the matter and plans to continue discussion in January after FLRU has adopted a 2022 operating budget. No action on this item is recommended at the 12/16/21 IURA meeting. In many ways, FLRU is a community economic development dynamo. They now have 80 employees who each earn a living wage. FLRU has a long history of hiring people facing barriers to stable employment. 25% of their workforce were receiving public assistance prior to being hired. FLRU diverts over 700 tons of materials annually away from the waste stream. FLRU also works with several service agencies to provide furnishings and household goods to outfit apartments for persons lacking household goods and furnishings. Through the pandemic they have continued to increase sales by 20%/year at reuse stores and the volume of materials received has soared. The pandemic restrictions and health warnings also resulted in the loss of much of their volunteer workforce that was critical to receiving, sorting, and processing recyclables. Volunteer workers were replaced with new employees that increased the payroll of FLRU. Without increased financial support, FLRU will need to make staff reductions in 2022. Complicating matters is a CDBG prohibition on loans to non-profits except for property acquisition and construction activities, so FLRU is not eligible for a loan from the ED loan fund to retain jobs. However, FLRU is eligible for CDBG assistance to a Community Based Development Organization (CBDO) to carry out a community economic development project. In 2020 and 2021 the IURA funded FLRU to carry out job training/placement programs as a CBDO. Approximately $70K-$100K is potentially available to reprogram from job training to job retention without disrupting delivery of job training services as the COVID pandemic slowed implementation of job training activities. It will assist the EDC if the IURA provides general guidance on how to approach the FLRU funding request. Following are options for IURA consideration moving forward on the funding request based upon the following common financial assistance framework: Amount: $150,000 Form of Assistance: Forgivable Loan CDBG Eligibility: CBDO special activity carrying out a community economic development project resulting in job retention of low/mod income persons at no more than $35K/job Funding Sources: Reprogram $75K from 2020 FLRU job training award plus $75K reprogrammed from ED loan fund (current ED loan balance is $230K) Outcomes/Goal: Job retention of 5 FTEs held by low/mod persons and achievement of $2.3M in 2022 earned revenues Interest Rate: 0% Term: 2 years IURA Minutes December 16, 2021 Page 4 of 12 Repayment: No repayment due if 5 FTE jobs retained for 18 months. If jobs not retained, full repayment of 1/5 of loan for every job not retained is due at the end of the loan term. Collateral/Security: None Proulx remarked the Committee expressed three primary reservations about the funding assistance: (1) FLRU does not want a loan (even if forgivable), but a grant, due to the current state of its balance sheet and concerns about how additional debt would appear to other prospective funders; (2) IURA’s loan fund is a valuable resource and FLRU’s financial projections do not show adequate positive cashflow by the end of 2022, so the funding assistance would come with a not inconsiderable amount of risk to the IURA; (3) funding assistance to FLRU from the loan fund also involves an opportunity cost, using funds that would otherwise be used to earn additional income to fund another future project and stimulate new economic activity. Proulx added the Committee had limited time at its last meeting to fully discuss the best possible funding option; so it was mutually agreed to resume discussion in January 2022, which also enabled the proposal to be discussed beforehand by the full IURA Board and provide guidance to the Committee. Farrell asked if the minimum timeframe for the retention of the jobs is one year. Bohn replied the IURA usually requires evidence of sustained job-creation/retention over two consecutive quarters. In this case, the intent would be for FLRU retain the jobs for at least one year, although FLRU asked that it be for the shortest possible period, due to the balance sheet issue mentioned earlier. (Bohn had initially proposed 1½ years.) Proulx noted FLRU appears to be exploring alternative staffing structures and efficiencies, but that process has not been completed, complicating the situation from the IURA’s perspective, if other jobs could potentially be impacted. Nicholas asked how unusual the current proposal is in comparison to how the IURA normally operates. Bohn replied there are some common components to it, as well as some components unique to this particular situation. Typically, job-retention activities are associated with funding assistance designed for a specific economic development purpose (e.g., assistance to Cinemapolis to purchase digital film equipment). It is not common for it to simply be used for staff salaries. In this case, FLRU is making the argument that it would achieve long-term sustainability after the positions are retained. Proulx observed FLRU is in large part a victim of its own success, with its enormous and increasing influx of donated materials, but it is difficult to determine from FLRU’s financial statements the extent to which its retail operations are genuinely sustainable. FLRU is essentially asking the IURA to plug a whole in its operating costs, which is due to some degree of inefficiency and not the lack of capital investment. Farrell wondered if FLRU’s use of volunteers would be part of its staffing structure study. Bohn replied he knows FLRU has been focusing on examining the volunteer coordinator position and clarifying which management structure would best support the volunteers. IURA Minutes December 16, 2021 Page 5 of 12 Lewis observed FLRU also received funding from the County to produce a business operations assessment, which seems positive. She asked if the IURA knows any more about that initiative. Bohn replied FLRU will do not have access to that funding until 2022 and it constitutes the final payment from the County. Graham asked if FLRU is being compensated for the deconstruction work it has been doing recently. Bohn replied he does not believe there is any form of cash compensation. FLRU simply wants to harvest salvageable materials. Graham asked if the job-retention requirement would be specifically tied to the five staff positions. Bohn replied, yes; it would be tied to the five positions (as required by CDBG) and the IURA would need to identify the positions before providing any funding assistance. Myrick indicated he would be willing to risk some funding assistance, at some level. Graham remarked he is leaning towards providing funding assistance, since FLRU’s sales are projected to continue increasing and the five positions are essential for processing materials and increase sales. In his view, the risk seems relatively low for the IURA, so he would support providing the entire amount as proposed. Farrell noted she would lean closer to providing half the requested assistance. Proulx remarked he is probably the most pessimistic about the proposal. He would really like to understand from FLRU in greater detail precisely what would be required to get through this pinch-point to a sustained level of growth. He would also like to know which aspects of FLRU’s operations are not sustainable. The Committee will continue to discuss the proposal at its next meeting. Proposed Resolution Loan Assistance to Finger Lakes ReUse, Inc. to Carry Out Community Economic Development Project WHEREAS, on December 8, 2021, Finger Lakes ReUse, Inc. (FLRU) applied for $150,000 in loan assistance from the IURA to retain 5 jobs held by low- and moderate-income persons at their recycling and retail facility located at 214 Elmira Rd., Ithaca, NY and meet their $2.3M revenue sales target in 2022 to continue sustainability and growth of FLRU operations, and WHEREAS, FLRU requests the IURA to repurpose $75,000 of 2020 CDBG funds awarded to FLRU for job training/placement activity to a job retention forgivable loan to retain at least 2 Full-Time Equivalent (FTE) jobs at the Ithaca ReUse Center located in Ithaca, and WHEREAS, FLRU further requests an additional $75,000 in loan funds as a forgivable loan to retain three additional jobs, and WHEREAS, FLRU is a non-profit corporation employing over 40 persons whose mission is to enhance community, economy and the environment through reuse, and WHEREAS, FLRU activities divert over 700 tons of materials from landfills through their reuse operations and retail stores, and provides job skill training and experience to under-employed, low-income persons experiencing barriers to employment, and IURA Minutes December 16, 2021 Page 6 of 12 WHEREAS, FLRU is an IURA-designated Community Based Development Organization (CBDO), and WHEREAS, eligible CDBG activities must be both a listed eligible activity and meet a national objective, and WHEREAS, retention of jobs held by low- and moderate-income persons meets a national objective when job loss would occur but for provision of CDBG assistance, and WHEREAS, CDBG economic development loan assistance to non-profit subrecipients under 24 CFR 570.203 is limited to acquisition, construction, or rehabilitation activities, therefore FLRU’s proposed activity is not an eligible use of economic development loan funds, and WHEREAS, FLRU’s proposed use of funds is eligible as a Special Activity carried out by a Community-Based Development Organization (CBDO) authorized at 24 CFR 570.204 to implement a community economic development project if the FLRU board continues to meet CBDO composition requirements, and WHEREAS, a project that “increases economic opportunity, principally for low- and moderate-income persons, or that are expected to create or retain businesses or permanent jobs within the community” qualifies as an eligible community economic development project, and WHEREAS, FLRU’s project will retain jobs essential for achieving FLRU’s goal to increase earned revenues to $2.3M in 2022 as a means to sustain and grow FLRU operations and jobs, and WHEREAS, the applicant has provided financial information in the draft 2022 budget that reasonably documents the job positions to be retained will be terminated without financial assistance, and WHEREAS, it is prudent to use public funds for job retention activities only when jobs retained are projected to remain financially sustainable, and WHEREAS, the following jobs are projected to be retained as a result of requested financial assistance: If $75,000 loan (2 jobs) If $150,000 loan (5 jobs) • Building Materials Specialist • Building Materials Specialist • Assistant Manager • Assistant Manager • Warehouse Assistant (2) • Project Coordinator WHEREAS, each of the above positions is held by low- and moderate-income persons, and WHEREAS, the proposed uses of project funds are: $218,332 Salary/Wages & Benefits $218,332 Total, and WHEREAS, the proposed sources of project funds are: $68,332 FLRU revenues $150,000 IURA $218,332 Total, and WHEREAS, the applicable CDBG public benefit standard for economic development projects requires at least one FTE job be retained for every $35,000 of loan assistance, and WHEREAS, if the project will retain two FTE jobs, then the maximum loan assistance available is $70,000, and WHEREAS, FLRU is a certified living wage employer, and IURA Minutes December 16, 2021 Page 7 of 12 WHEREAS, FLRU has secured funding from Tompkins County to complete a business operations assessment in early 2022 to improve business efficiencies, and WHEREAS, job positions to be retained appear to be sustainable if 2022 earned revenues of $2.3 million are achieved and 2022 expenses before depreciation do not exceed $2.85 million, and WHEREAS, as an economic activity not associated with new construction the activity qualifies at 58.35(b)(4) as a Categorically Excluded from the National Environmental Protection Act (NEPA), but is subject to Federal flood hazard regulations, and WHEREAS, at its December 14, 2021 meeting, the IURA Economic Development Committee reviewed the loan application and recommends the following action; now, therefore, be it RESOLVED, that the IURA hereby approves a community economic project to be carried out by a CBDO pursuant to 24 CFR 570.204 in accordance with the loan application and supplemental submissions, subject to the following terms: Borrowers: Finger Lakes ReUse, Inc. as a Community-Based Development Organization Loan Amount: Up to $70,000 Project: Carry out a community economic development project resulting in job retention of at least two (2) FTE jobs held by low- and moderate-income persons at the Ithaca ReUse Center located in the City of Ithaca to sustain and grow job opportunities. Total Project Cost: $101,500 Projected Use of IURA Funds: Wages and Salaries. Interest Rate: 0.0% Term: 2 years Repayment: No repayment due and loan forgiven provided borrower complies with quarterly job reporting documenting the job retention goal has been achieved for two consecutive quarters and the positions remain filled through June 2023. If the job retention goal is not achieved, then the full loan balance is due and payable at the end of the loan period. Loan Collateral: None Personal Guarantor(s): Personal guarantee required from an individual or individuals determined by the IURA to possess sufficient net worth and liquidity to secure the loan. Job Creation/Retention: Retention of at least two (2) FTE employment positions held by low- and moderate- income persons. Loan Conditions 1. Submission of adopted FLRU 2022 budget with a positive net ordinary income based on earned revenues of approximately $2.3 million. 2. Confirmation that the FLRU Board satisfies CBDO composition requirements. 3. Submission of personal financial statement of a personal guarantor possessing sufficient net worth and liquidity to secure the loan. IURA Minutes December 16, 2021 Page 8 of 12 4. Common Council approval of a substantial amendment to the 2020 HUD Entitlement Action Plan to reallocate funds from the FLRU ReUse Job Skills Training and Employment Connections activity to fund this loan. Reporting: 1. Annual company Federal tax returns and annual internally prepared financial statements. 2. Job retention/creation reporting. 3. Documentation of project Match Funding. And be it further, RESOLVED, that the IURA hereby approves a substantial amendment to the 2020 Action Plan to reprogram funding from the ReUse Job Skills Training & Employment Connections activity to the FLRU community economic development project resulting in job retention , and 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. C. Committee Chairperson Report Proulx reported the Committee continued its discussion with the Inlet Island project developer about activation of the project’s ground-level components. Overall, it was a good discussion. The developer changed the traffic flow design; and there was considerable discussion about integrating the Cayuga Waterfront Trail (CWT) with the project’s various components. The developer seems committed to designing the project to comply with Common Council’s ground-level activation request. VI. Neighborhood Investment Committee (NIC) A. Salvation Army CDBG-CV Emergency Assistance Program: Contract Extension Graham explained the proposed resolution provides a contract extension for the mortgage payment assistance program. This is the first IURA-funded project the Salvation Army has undertaken. It is currently working with at least one LMI household and marketing its program to identify more homeowners. The Salvation Army is hopeful it would be able to meet its goals. The Committee was satisfied it has been taking the appropriate steps to meet the goals. Lewis asked how confident the Committee is that the new May 28th, 2022 deadline is realistic. Graham replied it believes the Salvation Army is taking the correct steps to complete the program, but there remain several unknown factors that could delay the program. IURA Minutes December 16, 2021 Page 9 of 12 Graham moved, seconded by Farrell: Salvation Army CDBG-CV Emergency Assistance Program: Contract Extension WHEREAS, as part of the amended 2019 HUD Entitlement Annual Action Plan for the City of Ithaca, the Salvation Army was awarded $20,000 for the “COVID-19 Emergency Assistance Program,” to provide mortgage assistance to four LMI homeowners suffering from impacts of the coronavirus global pandemic, and WHEREAS, in a letter dated July 5, 2021, the Salvation Army requested a 120-day extension, and WHEREAS, the Director of Community Development granted a 120-day extension to November 28, 2021, and WHEREAS, to date, the Salvation Army is working with partner agencies to market their program and identified one homeowner seeking mortgage assistance, and WHEREAS, Salvation Army has hired an outreach worker whose duties will include identifying three more LMI homeowners in need, and WHEREAS , in a letter dated November 3, 2021, the Salvation Army requested a further extension of 180 days to May 28, 2022 to expend or return funds, and WHEREAS, the IURA Neighborhood Investment Committee reviewed this matter and recommends the following; now therefore, be it RESOLVED, that the IURA hereby authorizes a time extension to May 28, 2022 of the funding agreement with the Salvation Army for the “COVID-19 Emergency Assistance Program”, and be it further RESOLVED, that the IURA Chair is authorized to execute a contract amendment(s) to implement this resolution. Carried Unanimously: 4-0 B. Committee Chairperson Report Graham reported the Committee continues to search for someone to fill the new Committee vacancy. VII. Other Business A. Standardize Security Deposit Assistance Programs: Catholic Charities (CCTT) Bohn explained the proposed resolution was not reviewed by the Neighborhood Investment Committee (NIC), due to time limitations, although Mendizabal did discuss it with each of the Committee members. IURA Minutes December 16, 2021 Page 10 of 12 Mendizabal explained that CCTT currently has four active security deposit assistance contracts with the IURA, each with its own specific set of requirements, which can make it challenging to operate them. The Federal and State eviction moratoria delayed expenditures of funds. In order to expedite expending the funds and maintain a certain degree of uniformity across the programs, CCTT proposed converting all its contracts to permit providing full security deposits to all applicants, which would also provide a greater level of financial assistance to those households. Graham moved, seconded by Proulx: Standardize Security Deposit Assistance Programs Operated by Catholic Charities WHEREAS, Catholic Charities of Tompkins/Tioga Counties (CCTT) has four (4) active City of Ithaca HUD Entitlement Awards for tenant-based security deposit assistance programs: YEAR SOURCE FUNDS REMAINING as of 11/30/21 (and % of total contract amount) Portion of Household’s Security Deposit Funded by Contract Exceptions 2019 HOME $5,174.70 (8% of $64,000) Partial ($500; $750 if 3- bedroom or larger) 5 full deposits to Housing for School Success families 2019 CDBG-CV $9,672.00 (39% of $25,000) Full security deposits for COVID-affected applicants n/a 2020 HOME $66,821.42 (13% of $76,416.48) Partial ($500; $750 if 3- bedroom or larger) 5 full deposits to Housing for School Success families and OAR Re-Entry referrals 2021* HOME $74,000 (0% of $74,000) Full security deposit for every applicant 5 full deposits for Housing for School Success families will continue to be set aside *2021 contract has not been executed; would need project modification to extend contract date rather than contract extension. and, WHEREAS, State and Federal eviction moratoria prompted by the coronavirus global pandemic resulted in slower than anticipated expenditure of CCTT’s various security deposit awards, and WHEREAS, CCTT’s 2019, 2019 CDBG-CV, and 2020 contracts have needed, or will need, by December 31, 2021, extensions to accommodate slowed demand, and WHEREAS, CCTT has requested necessary extensions and contract modifications to continue distribution of security deposits to those in need, and WHEREAS, CCTT requests the amount of assistance provided to tenants be set at the full security deposit for all CCTT-administered security deposit programs, and IURA Minutes December 16, 2021 Page 11 of 12 WHEREAS, CCTT’s CDBG-CV and 2021 projects specify full security deposits; changing all security deposit programs to be full deposits will improve equity among beneficiaries, assist the most vulnerable households secure housing, and promote administrative efficiency, and WHEREAS, extending CCTT’s 2020 and 2021 contract expirations to June 30, 2023, is appropriate to address temporary reduced demand for security deposits during eviction moratoria; therefore, be it RESOLVED, that the IURA hereby approves CCTT’s request to unify the amount of security deposit assistance provided across all IURA-assisted CCTT security deposit assistance programs to permit full payment of the security deposit, and be it further RESOLVED, that the number of projected beneficiary households be revised for the 2019 and 2020 security deposit programs to reflect higher assistance per household beneficiary, and be it further RESOLVED, in recognition of eviction moratoria, termination dates for completion of the 2020 and 2021 security deposit programs be extended to June 30, 2023, and be it further RESOLVED, that the IURA Chair, upon review IURA legal counsel, is authorized to execute agreements to implement this resolution. Carried Unanimously: 4-0 B. IURA Financials: November 2021 Bohn reported all HUD Entitlement Program grant projects are generally progressing well. The Grant Summary now includes the IURA’s 2021 HUD Entitlement Program activities. There has been some concern the IURA will not be able to meet the June 1st, 2022 CDBG spend-down ratio deadline. As of today, the IURA needs to expend $309,368.23 to meet satisfy the requirement, so this is something staff will be monitoring closely. CDBG-CV funds do not count towards the spend-down ratio. Bohn reported all loan repayments are now current, with one minor exception: The Canopy Hotel. Bohn reported all leases are current, as of today, except for the Ithaca Farmers Market (IFM), which is one payment late. C. IURA Chairperson Report None. D. Common Council Liaison Report Lewis reported four Common Council members will be retiring at the end of the month, so next year will represent an adjustment for both new members and the Council as a whole. IURA Minutes December 16, 2021 Page 12 of 12 Lewis reported that 110 low- and moderate-income (LMI) caregivers who qualify will be randomly selected to participate in the Mayors for a Guaranteed Income (MGI) program and receive $450 per month for one year. Applicants must be primary unpaid caregivers, defined broadly to include people who spend significant unpaid time caring for children (including parents) or caring for an aging or disabled adult. Mendizabal has been working very hard to develop the program. E. Staff Report Bohn reported NYS announced its Consolidated Funding Application (CFA) awards and the Ithaca Farmers Market (IFM) received $339,150 to develop the site (e.g., enhanced pavilion and grounds; ADA access; bus/shuttle services) to transform the market into a year-round waterfront destination. $500,000 was also awarded to the Friends of Stewart Park to redevelop the splash park. The County has been working on its facilities planning and recently agreed to sell its Sears Street properties to Ithaca Neighborhood Housing Services (INHS) for affordable housing. VIII. Adjournment The meeting was adjourned by consensus at 10:10 A.M. — END — Minutes prepared by C. Pyott, edited by N. Bohn.