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HomeMy WebLinkAboutMN-IURAED-2022-02-08Approved: 3/8/22 108 E. Green St. Ithaca, NY 14850 (607) 274-6565 MEETING MINUTES ITHACA URBAN RENEWAL AGENCY ECONOMIC DEVELOPMENT COMMITTEE (EDC) 3:30 P.M., Tuesday, February 8, 2022 Present: Chris Proulx, Chair; Doug Dylla, Vice-Chair; Leslie Ackerman; Charlotte Hamilton Excused: None. Vacancies: 2 Staff: Nels Bohn; Charles Pyott Guests: Tom Knipe, City Deputy Director for Economic Development Chuck Schwerin, Ithaca Area Economic Development (IAED) Roger “Rod” Rotondi, Food Entrepreneur & Project Consultant 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-minute max. per person) None. IV. Review of Meeting Minutes: January 11, 2022 Ackerman moved, seconded by Dylla, to approve the minutes, with no modifications. Carried Unanimously:4-0 V. New Business A. Shared Commercial Kitchen Feasibility Study Knipe explained there is a new window of opportunity to determine the feasibility of a local commercial kitchen, as further described in his February 1, 2022 memo to the Committee, excerpted below: The purpose of this memo is to request $5,000 in flexible IURA funding for a feasibility study for a shared commercial kitchen in Ithaca’s West End, to be matched by a $16,000 pro-bono consultant contribution. I will attend your February 8th meeting along with Chuck Schwerin, Ithaca Area Economic Development, and Roger Rotondi, food entrepreneur and project consultant, to discuss this opportunity. Since March 2021, the City of Ithaca Office of Economic Development, in collaboration with the Downtown Ithaca Alliance, Ithaca Area Economic Development and Rev Ithaca Startup Works, has been working on developing an action plan to support the growth of small scale manufacturing businesses in downtown commercial areas in the City. The IURA and Cornell University each provided match funding in the amount of $7,500 to support this work. The action plan has now been drafted, and I look forward to sharing it with you and others and to begin implementing it within the next few weeks. IURA EDC Meeting Minutes February 8, 2022 Page 2 of 6 In developing the action plan, the need for a shared commercial kitchen became clear. A number of the food- product-based businesses we interviewed identified access to a licensed commercial kitchen to process their product at scale was a factor limiting their next stage of growth and profitability. This need has been further corroborated by discussions with the Alliance for Manufacturing and Technology, New York State Ag & Markets, Ithaca Farmers Market, Small Business Development Center, and others. But the barriers to establishing a successful shared commercial kitchen in Ithaca initially seemed steep. “Where is there a suitable facility that could be put together without large cost and difficulty?” “Who locally has the unique mix of skills and experience to help establish and manage such a facility?” Absent clear answers to these two critical questions, we were preparing to put the shared commercial kitchen concept on the back burner in our action plan. This winter, potential answers to those two key questions emerged, and we started to give the idea of developing a large shared commercial kitchen serious thought. There appears to be a moment of opportunity where there is an alignment of available space and local interest and capacity. The attached narrative further describes this confluence of circumstances. This project holds potential to transform the food product sector in Ithaca and to become a meaningful economic development project with lasting value. A feasibility study is the needed next step. I believe that with your support for this study, we can further clarify the market, test assumptions, refine financial projections and put together a conservative budget and operations and management plans that will be necessary to secure major funding from other partners for implementation. Knipe introduced Rotondi, a food entrepreneur with considerable experience, who can speak further to Committee about the proposal in more detail. There would be considerable benefit to the City associated with a commercial kitchen, although there are admittedly a number of potential risks. Rotondi remarked the project development team has been communicating with the Ithaca Farmers Market (IFM), which is establishing its own Friends of Ithaca Farmers Market non-profit. IFM is the natural and appropriate partner for the project. Even though shared commercial kitchens are virtually non-existent in the immediate area, there is a great deal of local support for small, food-oriented businesses, although food manufacturing remains underdeveloped. Schwerin added the feasibility study should examine a variety of business models across the country, to help identify the ones that stand the greatest chance of success in Ithaca. Ackerman remarked she has long been involved in food-related businesses and very much supports the proposal. She noted the proposal uses a few terms that are not necessarily equivalent (e.g., “commercial kitchen,” “food manufacturing,” “commercial kitchen incubator”). She noted there are only so many ways to scale-up food manufacturing. She added it would be important to consider the many different varieties of possible kitchens. Knipe explained there are at least two ideas currently being considered: (1) rehabilitating a downtown food hall into a modern food hub with on-site shared kitchen facilities, specializing in prep for restaurant-type food services, food trucks, and/or catering; or (2) establishing multiple shared kitchens that would complement each other. In either case, the venture will require achieving a minimum scale to be financially sustainable. Another opportunity may be to mobilize the local ‘food rescue’ community, which is looking for better ways to process rescued food for food kitchens/pantries. The feasibility study would need to explore all these issues. IURA EDC Meeting Minutes February 8, 2022 Page 3 of 6 Rotondi remarked the development team has been looking into all kinds of food-related enterprises and does not plan to exclude any type of food-business model from its analysis. Hamilton asked what Rotondi’s personal long-term plan is for his involvement in the project and if he could cite some examples of the most common ways these kinds of initiatives fail. Rotondi responded he has no plans to relocate, so he is committed to the project. In terms of the most common ways these projects fail, there are actually many different models that have been tried unsuccessfully. One of the most common is they end up burdened with too many overhead costs and become too ambitious, trying to implement too many in-house operations; however, if the project is kept exceedingly simple to begin with and gradually developed over time, it should be successful. He has already investigated models that would likely work best for the Ithaca community. Dylla expressed enthusiastic support for the concept. Dylla moved, seconded by Hamilton: Shared Commercial Kitchen Feasibility Study WHEREAS, the IURA received a $5,000 funding request to conduct a feasibility study for a shared commercial kitchen project in Ithaca’s West End, to be matched by a $16,000 pro-bono consultant contribution, and WHEREAS, in March 2021, the IURA provided match funding for ReCast City services to assist the City of Ithaca develop a small-scale manufacturing strategy and action plan for the greater downtown area, and WHEREAS, a collaborative effort including the City Economic Development Office, Ithaca Area Economic Development (IAED), the Downtown Ithaca Alliance (DIA), and Rev:Ithaca Startup Works led research and development of the strategy, and WHEREAS, the strategy and action plan are now in draft form with the final Growing Small Scale Manufacturing in Downtown Ithaca: An Action Plan document scheduled for release in March 2022, and WHEREAS, the draft strategy and action plan find there is a strong need for shared kitchen facilities to support food-product businesses start and grow, and recommends pursuing feasibility of such a facility, and WHEREAS, the available lease of an appropriate commercial kitchen facility presents a time-sensitive opportunity for evaluating feasibility of the project, and WHEREAS, identification of both a potential non-profit sponsor and a qualified local consultant, who agrees to conduct much of the feasibility analysis on a pro-bono basis, overcomes two major obstacles for the project, and WHEREAS, a feasibility study is not an eligible CDBG economic development project as the study does not directly create jobs for low- and moderate-income (LMI) persons, or directly assist microenterprises owned by LMI persons, though establishment of a shared commercial kitchen it is anticipated to lead to job creation for LMI persons, and IURA EDC Meeting Minutes February 8, 2022 Page 4 of 6 WHEREAS, development of a feasibility study for a shared commercial kitchen facility is an eligible use of program income from the closed-out Section 17 small landlord rental assistance program, which allows the funds to be used for activities authorized at 24 CFR 570, including planning activities at 24 CFR 570.205, and WHEREAS, as of February 2022, the balance in the Section 17 account was approximately $63,000, and WHEREAS, at its February 8, 2022 meeting, the IURA Economic Development Committee reviewed this matter and recommended the IURA approve the funding request as a means to expand economic opportunities for City residents and diversify the economy; now, therefore, be it RESOLVED, that the IURA hereby allocates up to $5,000 for a feasibility study for a shared commercial kitchen project located in the West End neighborhood, and be it further RESOLVED, the IURA Chairperson is hereby authorized, upon review by IURA legal counsel, to execute an agreement with Ithaca Area Economic Development (IAED) to secure professional consulting services to prepare a feasibility study for a shared commercial kitchen facility, and be it further RESOLVED, the source of such funds shall be derived from the Section 17 account, and RESOLVED, that the IURA shall be provided with a copy of the feasibility study. Carried Unanimously: 4-0 B. HUD 2022 Action Plan Development: Review of Funding Applications Project Sponsor Request Summary Green Job Opportunities Through Reuse Training Finger Lakes ReUse, Inc. $61,934.65 Funding for job training for LMI populations and placement of at least 8 LMI adults with employment barriers into permanent unsubsidized positions. Work Preserve Job Training: Job Placements Historic Ithaca, Inc. $67,500.00 Funding for staff salaries and participant stipends leading to job placements of 5 LMI individuals (e.g., youth, adults, homeless, formerly incarcerated, people with disabilities/mental illness, people with barriers to employment, new entrants to workforce), following job- readiness training. Hospitality Employment Training Program (HETP) Greater Ithaca Activities Center, Inc. $100,000.00 Staff, supplies, stipends, and professional fees to train 10 and place 8 LMI adults with employment barriers (e.g., people with disabilities, formerly incarcerated, homeless, recovering addicts, immigrants, single parents) into hospitality and office/administrative positions. Pre-Apprentice Program Black Hands Universal $31,300.00 Funding to develop coalition of construction businesses, trades, and skilled laborers for hands-on training enabling 60 qualified LMI graduates to enroll in apprenticeship programs. IURA EDC Meeting Minutes February 8, 2022 Page 5 of 6 Bohn explained he is recommending the Committee review Black Hands Universal’s Pre-Apprentice Program proposal since, even though it is not an Economic Development application, it has economic development implications. Proulx observed the other three, long-standing program applications appear virtually unchanged from prior years. Bohn noted FLRU requested significantly less funding in 2022 than in prior years. He remarked it would be helpful to understand from FLRU the reasons its most recent job-placement outcomes were not as high as anticipated. Bohn observed HETP currently appears to have enough funding from PY2020 and PY2021 to sustain it through 2023, so there may be an opportunity to scale down its 2022 funding award without negatively impacting its operations. In addition, since HETP’s funding request largely goes towards staffing costs, it could relatively simple to scale down. Bohn noted the $120,000 tentatively allocated to the Economic Development Loan Fund is a place-holder, based on projected loan repayments (although it is a relatively conservative number). Dylla suggested reducing the Economic Development Loan Fund allocation slightly to ensure the IURA can fund the three long-standing programs to the greatest possible extent. Bohn agreed that would probably be a reasonable approach. Ackerman agreed. Proulx suggested it may helpful to examine the average loan fund balance over, say, five years, before making a final decision on how much to allocate to it in 2022. 1. Disclosure of Any Conflicts of Interest None. 2. Committee Recommendation/Comments to IURA Ackerman noted she would like to know more about what specific outcomes are anticipated for the Black Hands Universal (BHU) Pre-Apprentice Program. It did not seem clear from the application. She wondered what pre-apprenticeship means precisely, in terms of tangible benefits. She also did not see from the application that BHU has established concrete community connections to ensure the apprenticeships actually materialize. Bohn agreed those would be good questions to ask. He does not believe BHU committed to a specific number of apprenticeships. And some of the partners BHU identified as being critical to the project did not submit supporting documentation or commitment letters of any kind. Dylla recalled in the past, when a new program like this one is proposed, the first question the IURA tends to ask is if it could somehow be incorporated into another well-established IURA program. Bohn replied IURA Community Development Planner Anisa Mendizabal does routinely encourage that type of approach with potential applicants. Proulx noted he could not quite determine whether BHU is attempting to target an entirely different population, not currently served by other programs, or whether it is targeting a different outcome for the same population. Bohn responded that is another question to ask at the public hearing. IURA EDC Meeting Minutes February 8, 2022 Page 6 of 6 Dylla indicated he would be somewhat hesitant to fund the Pre-Apprentice Program, until the IURA has more information about outcomes, organizational capacity, and program partnerships. Ackerman agreed. She very much likes the concept, but would like to see a tighter connection between the program and tangible, sustainable outcomes. Bohn observed it appears BHU is proposing 15 stipends, so that would seem to be its tangible numeric outcome. The IURA could ask how many of those 15 are projected to advance into apprenticeships. Hamilton indicated she is generally supportive of the application, since it serves an under-served population, in a region with an under-supply of skilled trades. There is just a lack of clarity with some aspects of the application. Proulx agreed. VI. Other Business A. IURA Financials Review: December 2021 Bohn reported all CDBG and HOME projects are in good standing in terms of expenditures and overall progress, with the exception of a few slow moving CDBG-CV projects (e.g., Salvation Army’s homeowner mortgage payment assistance project). All loan payments are current, except the Canopy Hotel, which owes interest-only payments for one month in 2020, and Diane’s Downtown Auto, which had otherwise been doing well for several years. Tompkins Community Action also had a problem with mail service, but he does not believe that should be a serious issue. Lease payments are also in good standing, with the exception of the Ithaca Farmers Market (IFM), because the City inadvertently cashed a check intended for the IURA. VII. Adjournment The meeting was adjourned by consensus at 4:41 P.M. — END — Minutes prepared by C. Pyott, edited by N. Bohn.