AGENDA IURA EconomicDevelopmentCommittee 3:30PM,Tuesday,February9,2016 CouncilChambers,CityHall,Ithaca,NY

Ithaca Urban Renewal Agency

108 East Green Street Ithaca, New York 14850 (607) 274-6559 (607) 274-6558 (fax) AGENDA IURA EconomicDevelopmentCommittee 3:30PM,Tuesday,February9,2016 CouncilChambers,CityHall,Ithaca,NY

I. Calltoorder

II. Additionstoordeletionsfromtheagenda–introductionofnewmember III. Publiccomment(3minutemaximumperperson) IV. Reviewofmeetingminutes:December2,2015 V. NewBusiness A. RequestfromLAGRestaurant,LLCforloanassistanceforastartͲuprestaurantat404W. State/W.MLKJr.(CDͲRLF#40)Ͳresolution B. RequestfromSunnyDaysofIthaca,LLCforaloanmodification(CDͲRLF#37)Ͳresolution C. RequestfromSouthsideCommunityCenterInc.foratemporary6Ͳmonthsuspensionoflease obligationsat530W.BuffaloStreet–discussion VI. OldBusiness A. CommunityInvestmentTaxAbatementProgram(CIITAP)Ͳupdate B. HUDEntitlementGrant,FY2016processͲupdate VII. Reports A. IURAloanandleaserepaymentreport,December2015–review B. Loanpipeline C. Staffreport VIII. Adjournment(nextmeetingdate:3:30PM,Tuesday,March8,2016)

If you have a disability and require accommodations in order to fully participate please contact the Ithaca Urban Renewal Agency at 274-6550, at least 48 hours prior to the meeting. Ithaca Approved:X/X/15 Urban Renewal Agency

108 E. Green Street Ithaca, New York 14850 (607) 274-6559 NOTE: Minutes were generated using an audio-recording only, so all attributions (607) 274-6558 (fax) may not be accurate. DRAFTMINUTES ITHACAURBANRENEWALAGENCY EconomicDevelopmentCommittee(EDC) 3:30PM,Wednesday,December2,2015 CommonCouncilChambers,CityHall,Ithaca,NY Present: DougDylla,HeatherHarrick,JenniferTegan,LeslieAckerman,ChristineLam Excused: ChrisProulx Staff: NelsBohn Guests: None I. CalltoOrder ChairDyllacalledthemeetingtoorderat3:31P.M. II. AgendaAdditions/Deletions None. III. PublicComments(3Ͳminutemaximumperperson)͸None. IV. ReviewofMeetingMinutes:July21,2015 Ackermanmoved,secondedbyTegan,toapprovetheJuly21,2015minutes,withno modifications.CarriedUnanimously5Ͳ0. V. NewBusiness A. RequestfromCareyBuildingAssociates,LLCforNonͲExclusiveUtilityEasement Across320Ͳ324E.StateStreet(ProposedHiltonCanopyHotelSite) BohnannouncedtheIURAreceivedarequestfromCareyBuildingAssociates,LLCforan easementtobringutilitiesfromSenecaWayintotheCareyBuilding.CareyBuilding Associates,LLCiscoordinatingitseffortswithLighthouseHotels,whichhasconsented totheeasement;andtheeasementhasbeenlaidoutinawaythatmeetstheneedsof bothparties.Itwouldprohibitconstructionabovetheundergroundeasementarea, whichwillhaveareasonablysignificantimpactonfuturedevelopmentpotentialand landusefortheproperty.Theproposedeasementwouldnotobstructordelaythe HiltonCanopyHotelprojectinanyway. IURAEDCMinutes December2,2015 Page2of10 BohnnotedtheIURAcurrentlyhasapurchaseandsaleagreementinplacewiththe HiltonCanopyHotel(LighthouseHotels),sohisonlyconcernwouldbetheimpactthe easementwouldhaveiftheIURAdidnotcloseonthatagreement,withalarge easementcuttingthroughbothproperties.BohnaskedLighthouseHotelsforanupdate onwheretheHiltonCanopyHotelprojectcurrentlystandswithfinancingand construction.Hereceivedverbalconfirmationthatfinancingat80%ofprojectcostis nowinplaceandtheprojecthasbeenthoroughlypricedout.Constructioncostsended upbeingsignificantlyhigherthananticipated,soLighthouseHotelsspentseveral monthsofvalueͲengineeringtoreducethem.Theprojectisexpectedtoclosein January2016. BohnnotedthereissomerisktotheIURA,shouldthehotelprojectnotmoveforward. TheeasementisbeinggrantedtoNYSEGanditwouldbepossibletorelocateit,if necessary—butatthecostofrelocationexpenses.Oneoftheeasement’sbenefitsis thatitwouldremoveoverheadwiresandplacethemunderground,whichwouldbea definiteenhancementforthedowntownarea.Itwouldalsoincludeanelectricalservice upgrade. Bohnrecommendedapprovingtheeasementrequest,subjecttocertainconditions: preservationofundergroundstormwaterdrainagefacilities;commitmenttoremovalof overheadwires;terminationofanyotherexistingeasements;assurancethatthe CommunitySchoolofMusicandArts(CSMA)willnotbenegativelyimpactedbythe easement;andwrittenconfirmationofLighthouseHotels’expectationtoclose. Dyllaaskediftheeasementwouldallowotherutilitiestousetheundergroundutility space.BohnrepliedthatitwouldbeopentoNYSEG,Verizon,TimeWarnerCable,and theFingerLakesTechnologiesGroup. BohnaddedthatheaskedCareyBuildingAssociates,LLCwhytwoseparateeasements crossingintothepropertyareneeded,andiftheycouldbeconsolidatedintoasingle easement.Thatremainsanoutstandingquestion. MovedbyHarrick,secondedbyLam: ApproveaUtilityEasementAcrossPropertyLocatedat 320Ͳ324E.StateStreettoRelocateUtilitiesUnderground WHEREAS,CareyBuildingAssociates,LLC,ownerofpropertylocatedat314Ͳ320E. State Street, requests the IURA to grant an underground utility easement to New YorkStateElectricandGas(NYSEG),Verizon,TimeWarnerCable,andFingerLakes Technologies Group across property located at 320Ͳ324 E. State Street to provide electricandcommunicationutilitiestoservetheCareyBuilding,theproposedHilton Canopyhotelproject,andanyotherpropertyadjoiningtheeasement,and IURAEDCMinutes December2,2015 Page3of10 WHEREAS, the route of the proposed underground easement will follow the approximaterouteofexistingoverheadelectriclines,and WHEREAS, on July 2, 2015, the IURA executed an agreement to convey title to propertylocatedat320Ͳ324E.StateStreettoLighthouseHotels,LLCtoundertakean approvedurbanrenewalprojecttoconstructasevenstoryHiltonCanopyhotel,and WHEREAS, conveyance of the parcel from the IURA to Lighthouse Hotels, LLC is subjecttosatisfactionofthefollowingconditions: 1. Acquisitionofadjacentproperty(taxparcel#69.Ͳ1Ͳ8); 2. Proofofprojectfinancing; 3. Issuanceofabuildingpermit,and WHEREAS,theutilityeasementwillprohibitstructurestobebuiltwithinthelimitsof theeasement,whichcouldimpairthevalueofthepropertyifLighthouseHotels,LLC doesnotacquiretheproperty,and WHEREAS, Lighthouse Hotels, LLC has provided a verbal project status report that construction cost has been finalized, a project financing commitment has been secured,andacquisitionoftheadjacentpropertyandissuanceofabuildingpermitis scheduledtooccurinthe1stquarterof2016,and WHEREAS, Lighthouse Hotels, LLC has provided written consent for the proposed easements;and WHEREAS,relocationofutilitiesundergroundimprovesthephysicalcharacteristicsof theurbanrenewalarea;and WHEREAS, at their December 2, 2015 meeting, the Economic Development Committeeconsideredthismatterandrecommendedthefollowing;now,therefore, beit RESOLVED, that the IURA Chairperson is hereby authorized, subject to review by IURA legal counsel, to execute an easement agreement to grant a nonexclusive easement to NYSEG, Verizon, Time Warner Cable, and Finger Lakes Technologies Groupforundergroundutilitiesacrosspropertylocatedat320Ͳ324E.GreenStreet (tax parcels #69.Ͳ1Ͳ1.3 and #69.Ͳ1Ͳ6.2) subject to satisfaction of the following conditions: 1. Provisionforcontinuedrightstomaintainanyexistingmunicipalwaterandsewer facilitieswhichcrosstheeasementarea; 2. Commitmentthatexistingutilitiesandtelecommunicationoverheadwiresat320Ͳ 324E.Statewillberelocatedunderground; IURAEDCMinutes December2,2015 Page4of10 3. TerminateanyportionofanyexistingNYSEGeasementat320Ͳ324E.StateStreet foroverheadutilitiesandremovaloftheexistingutilitypole; 4. ConfirmationfromCareyBuildingAssociates,LLCthattheCommunitySchoolof Music and Arts (CSMA), as an adjoining property owner to the easement who currently receives utility service from the overhead wires to be removed, will have rights to access underground electric and communication utilities in the easement at no cost to CSMA, and provided that any reasonable cost of such relocationbepaidbyCareyBuildingAssociates,LLC; 5. SubmissionfromLighthouseHotels,LLCofaCanopyhotelprojectstatusreport confirmingsatisfactoryprogresstowardsatisfyingtheconditionscontainedinthe saleagreementtoacquirepropertylocatedat320Ͳ324E.StateStreetfromthe IURA,andbeitfurther RESOLVED,thatIURAlegalcostsassociatedwiththisrequestshallbepaidbyCarey BuildingAssociates,LLC. CarriedUnanimously5Ͳ0 B. RequestfromCayugaGreen,LLCforVariousApprovalstoFacilitateRefinancingof CayugaGreenPlace,Locatedat131Ͳ135E.GreenSt.(CayugaGreen—PhaseII) BohnnotedtheIURAapprovedasimilarresolutioninJuly2015;however,theinitial lenderdidnotultimatelycloseonthatagreement.CayugaGreen,LLCsubsequently identifiedanewlender,FirstNiagaraBank,whichisaskingforfirstlienontheproperty (UrbanOutfitters)theIURAsoldtoCayugaGreen,LLC.ItisalsoaskingtheIURAtoallow CayugaGreen,LLCtograntleaseholdmortgagestoFirstNiagaraBankforthelease interestinthegroundfloorofCayugaStreetGarage(Coltivare,MerrillLynch)and Cinemapolis.BohnindicatedhedoesnotbelievethereisariskfortheIURAtograntthe leasesascollateral.ThetransactionwouldalsoenabletheIURA’sUrbanOutfittersloan tobepaidoff.CayugaGreen,LLChassatisfiedthegoalsoftheprojectandmetallits obligations.IthasalsoremainedcurrentonallitsIURAdebtthroughoutthelifeofthe loan. MovedbyTegan,secondedbyHarrick: CayugaGreenPhaseII—RequestfromCayugaGreen,LLCforVariousIURA ApprovalstoFacilitateProjectRefinancing(Parcels‘E’) WHEREAS,CayugaGreen,LLC,seekstorefinanceprojectdebtontheCayugaGreen Placeprojectlocatedat131Ͳ135E.GreenStreet(Property),alsoknownasParcelEof theCayugaGreenproject,andseeksIURAapprovaltosubordinateanIURAloanto newfinancing,and IURAEDCMinutes December2,2015 Page5of10 WHEREAS,proposed project refinancing in July through Rialto Mortgage Financing, LLCdidnotproceedtoclosing,and WHEREASCayugaGreen,LLChasnowsecuredaloancommitmentfromFirstNiagara Banktorefinanceprojectdebt,and WHEREAS, the IURA sold the Property to Cayuga Green, LLC in 2007 and issued a $760,000loanforaportionofthepurchaseprice,whichloanissecuredbya5thlien mortgageontheProperty,and WHEREAS,CayugaGreen,LLCsuccessfullycompletedanurbanrenewalprojectatthe Propertybyconstructingandoccupyinga90,000squarefoot,mixedͲuseresidential projectwithgroundfloorcommercialuse,includingUrbanOutfitters,and WHEREAS,in2009theIURAissueda$100,000loantoCayugaGreen,LLCresultingin UrbanOutfittersexecutingaleasetooccupygroundfloorspaceattheProperty,and WHEREAS,FirstNiagaraBankrequiresthattheIURAsubordinateitspromissorynote andmortgagetoitsfirstmortgageasaconditionoffinancing,and WHEREAS, First Niagara Bank further requires IURA consent to assign and/or mortgage leasehold interest in the following leases between the IURA and Cayuga GreenLLCtoFirstNiagaraBankascollateraltosecuretheproposedloan: x CayugaGreenLeaseAgreement,Parcel“A”GroundFloorofCayugaGarage,July 1,2006(tenants:MerrillLynch&TC3Foundation’sColtivare), x CayugaGreenLeaseAgreement,PortionofGroundFloorofGreenGarage,July 24,2007(tenant:Cinemapolis),and WHEREAS,underproposedrefinancing,theIURAmortgagewillmoveupfrom5thlien positionto2ndlienpositionbehindonlyamortgagelienheldbyFirstNiagaraBankin theprincipalamountof$12,500,000,and WHEREAS, the IURA’s existing 5th lien mortgage is subordinated to mortgage liens totalingover$12,500,000,sotheIURAcollateralpositionwillnotbeimpaired,and WHEREAS, Cayuga Green, LLC also proposes paying off the IURA Urban Outfitters loanatthetimeofrefinancing,whichcarriedaprincipalbalanceof$54,207.55asof October31,2015,and WHEREAS,thismatterwasdiscussedattheDecembermeetingoftheIURAEconomic Development Committee, which recommends the following action: now, therefore beit IURAEDCMinutes December2,2015 Page6of10 RESOLVED,theIURAherebyapprovesanagreementtosubordinateitsmortgageon realpropertylocatedat131Ͳ135E.GreenStreettoFirstNiagaraBank,conditioned upon pay off of the IURA’s Urban Outfitter loan to Cayuga Green, LLC, and be it further RESOLVED, that the IURA further grants consent to Cayuga Green LLC to assign and/ormortgagetheirinterestinthefollowingleasestoFirstNiagaraBanktosecure theproposedloan: x CayugaGreenLeaseAgreement,Parcel“A”GroundFloorofCayugaGarage,July 1,2006, x CayugaGreenLeaseAgreement,PortionofGroundFloorofGreenGarage,July 24,2007,andbeitfurther RESOLVED,thattheIURAChairperson,uponadviseoftheIURAAttorney,ishereby authorized to execute all necessary and appropriate documents, including but not limited to subordination agreements, nonͲdisturbance agreements and estoppel certificates,toimplementthisresolution,andbeitfurther RESOLVED,thatIURAlegalfeesassociatedwiththisrequestshallbepaidbyCayuga GreenLLC. CarriedUnanimously5Ͳ0 C. ReviewofProposedReformstoCityofIthacaCommunityInvestmentIncentive TaxAbatementProgram(CIITAP) BohnnotedtheCommitteenowhastheopportunitytoprovidefeedbackonthe recentlyproposedCIITAPrevisions.Sincelaunchingin2000,theprogramhasgone throughseveraliterations,fromsimpletomorecomplex,butwiththesameunderlying goalofprovidingfinancialincentivesformultiͲstorydevelopmentinthedowntown core.Thefirstiterationoftheprogramwassimple,withonlyafeweligibilitycriteria.It wassubsequentlymodifiedtoinclude48differentcommunitybenefits,withprojects providing23communitybenefitsreceivingthefullincentive.Thisseconditerationof theprogram,however,waswidelyperceivedastoocomplexandconfusing.The programwasthenmodifiedonceagaintoafarsimplerprogram.Thecurrentprogram doesnotincludemanyeligibilityrequirements.Bohnstressedthatthetaxabatement onlyappliestotaxesontheincreasedvalueofagivenproject,sothereisnoreduction intheexistingtaxonaproperty.Iftheapplicantcandemonstratefinancialneed,they canalsoreceiveanadditional1Ͳ3yearsoftaxabatement,foratotalofupto10years. (Everyprojectthathasreceivedapprovalhasdemonstratedthatneed.) IURAEDCMinutes December2,2015 Page7of10 BohnexplainedthatCIITAPdoesnotcurrentlyprovideanyfinancialincentivesor requirementsforprovidingextracommunitybenefits,beyondthe“BasicEligibility Criteria.”Inacknowledgmentofthis,theMayorappointedaworkinggrouptoexamine thebestapproachforreformingtheprogramandincludingincentivesforenhanced benefits.Theproposedrevisionsincludeseven“BasicEligibilityCriteria”fora7Ͳyear abatement:ProjectSizeRequirement;ProjectDensityRequirement;ProjectLocation Requirement;MunicipalCompliance;SustainabilityandEnergyRequirement;Diversity andInclusion;andLocalConstructionLabor.Threenew“EnhancedEligibilityCriteria” havebeenproposedfora12Ͳyearabatement:LocalLabor;EnergyStandardsand Sustainability;andLivingWages.Thegoalwastokeepthestandardprogramthesame, butprovideafurtherabatementbenefitperiod,ifthedevelopermeetsthe requirements.Theworkinggroup’sproposalwasreviewedatarecentPlanning& EconomicDevelopmentCommitteemeeting,whichproducedconsiderablediscussion andcriticism. Harrickaskedifthegoalofachievingdensityinthedowntowncorecouldnowbesaidto havebeenmet.Bohnrepliedthatsomepeoplebelieveithasbeen.Whentheprogram wasoriginallyconceived,therehadbeennomajornewinvestmentinthedowntown corefornearly20years.Theargumentcouldcertainlybemadethatthedowntown economyisnowvitalandcompetitiveenoughthatataxabatementprogramisno longerwarranted. Ackermanobservedtheredefinitelyappearstobeconsiderableinterestbydevelopers inthedowntowncoreinrecentyears.IftheCitycontinuestoofferthiskindofvaluable incentiveprogram,thenitshouldbeaskingdeveloperstoprovideadditionalcommunity benefits. Harricksuggestedtheprogramcouldbeusedtotargetspecifickindsofprojects(e.g., conferencecenter)thathavebeendeterminedtohaveaparticularstrategicvalueto thecity,ratherthansimplycontinuingtoincentivizemanyofthesamekindsofprojects thecityhasseeninrecentyears. Dyllaagreedwiththeunderlyingobjectiveoftheprogram,aswellastheimpetusto simplifytheoverallapproach;however,hewouldprefertoseetheenhancements structuredasrequirements,ratherthanoptions.Affordablehousingshoulddefinitely beoneofthem. Ackermanagreedsomeoftheproposedenhancementsshouldbebasicrequirements. Lamnotedthereisinsufficientavailabledatafrompastandexistingprojectstobeable togaugeagivenproject’smeasurableuseoflocallabororpaymentoflivingwages.She isskepticalthereisenoughaccurateandreadilyavailableinformationonhandtojustify someoftheproposednewrequirements. IURAEDCMinutes December2,2015 Page8of10 Bohnrepliedthatwaspartofthemotiveforbeginningtoaskdeveloperstotrackthings liketheiruseoflocallabor.Oncemoreaccuratedatahasbeencollected,theCitycould betterdeterminewhataparticularbaselinestandardshouldbeandwhatthreshold abovethatbasicstandardneedstobemetfortheenhanced12Ͳyearabatement.Bohn notedthatprovidingdevelopersasetofoptionsfromwhichtochooseensurestheydo notriskpursuingagoaltheymaynotultimatelybeabletoachieve.Headdedthatone ofthereasonstheproposedlistisfairlyshortisduetopastprojectsbeingencumbered bymultiplepeople/interests,allaskingfordifferentbenefits,whichendedupbecoming tooonerousandcomplex.Theworkinggroup,therefore,proceededontheassumption thathavingarelativelyshortlistwouldbemoreeffective.Certainly,otherbenefits,like affordablehousingoraconferencecenterproject,couldstillbewidelyconsideredtobe communitybenefits. Ackermanobservedthe“Diversity&Inclusion”basiceligibilitycriterionispeculiar,since itdoesnotseemtodemandanythingsubstantive.Bohnrepliedthattheworkinggroup putconsiderablethoughtintothatcriterion,butitisdifficulttoquantifyandimplement. Amorerobustrequirementwasdiscussed,likeacommitmenttohireandretainhardͲ toͲemploypeople,butitwasdetermineditwouldbetoodifficultfortheIDAto implement. TegannotedtheCitymaynotberealisticenoughintermsofidentifyingwhatis plausible/possible.MoreeffortneedstobemadetogeneratebetterͲdefinedand measurablerequirements.Therequirementsthatareultimatelyselectedshouldbethe mostmeasurableandfeasibleones. Bohnrespondedthatthefeasibilityofagivenrequirementisnotsomuchofaproblem, ifitisamongseveraldifferentoptionsprovidedtodevelopers. Ackermanreiterateditwouldbebesttopushdeveloperstoprovidesomething meaningfulinexchangefortheCity’scontinuingtoprovidesuchsignificanttax abatements. D. HUDEntitlementGrant—DraftFY2016EconomicDevelopmentFunding ApplicationProcess BohnannouncedtheIURAwillbesolicitingfundingapplicationsbeginninginJanuary2016. Thisyear,IURAstaffaretryingtocustomizethedifferentapplicationstoeachspecificuse (housing,publicfacility,publicservice,economicdevelopment).Henotedmanyofthe applicationsintheEconomicDevelopmentfundingcategoryareforprograms(e.g., downtownbusinessloanpool),ratherthanspecificprojects,sinceitisdifficultformost projectstowaitthe8monthsbetweenbeingapprovedandactuallyreceivingthefunding. Inrecentyears,EconomicDevelopmentprogramshaveprimarilybeenjob training/placementprograms. IURAEDCMinutes December2,2015 Page9of10 DyllainquiredintotheIURA’slessonslearnedfromitsjobtraining/placementprograms. BohnrepliedthatIURAstafflearnedconsiderablymoreoverthepastyear.Forexample, theLearningWeb’sSupportedEmploymentprogramwasnotassuccessfulasoriginally anticipated,largelybecausetheorganizationmisunderstoodthenatureoftheclientsit wouldbeworkingwith.Clientsendedupneedingayearofpositive/stableworkhistory, beforeevenbeingconsideredforplacementattheCayugaMedicalCenter.Asaresult, mostoftheprogramfundingwasspentonthosekindsofeffortsandnotplacingclientson theentryͲlevelcareerpaththeprogramwasintendedfor.Otherjobtraining/placement programs,likeHistoricIthaca’sWorkPreserveprogram,GIAC’sHospitalityEmployment TrainingProgram(HETP),andtheFingerLakesReUseReSETprogram,ontheotherhand, werenotasambitiousastheLearningWeb,butachievedsomegoodoutcomes.Allof theseorganizationsareawarethatjobplacementhasbecomeanincreasinglyimportant focusfortheIURA. VI. OldBusiness A. NYUpstateRevitalizationInitiative:SouthernTierPlan—Update Bohnnotedthat12/10/15istheawardannouncementdate,forNewYorkConsolidated FundingApplication(CFA)andUpstateRevitalizationInitiativewinners. B. NYSDepartmentofTransportation(DOT)MaintenanceFacilityRedevelopment FeasibilityStudy—Update BohnreportedtheCitycompletedtheprincipalphaseofthefeasibilityanalysisfor relocatingtheDOTmaintenancefacilityatthewaterfronttoavacantpropertyin Dryden,NY.Theanalysisincludedinformationonhowmuchtherelocationwouldcost, aswellashowmuchthecurrentsitecouldbesoldfortodefraysomeoftherelocation costs.BohnnotedtheDOTdefinitelywantstoconsolidateitsCortlandandTompkins Countyfacilities,butithasnotyetcommittedanyfundingofitsownfortherelocation. Theresultsofthefeasibilityanalysisindicateitwouldcost$10Ͳ14Mtocompletethe relocationandidentifiedthelikelyvalueofthewaterfrontlotataround$2M.The feasibilityanalysisalsoexaminedoptionsforusingthewaterfrontlotforanexpansion oftheIthacaFarmer’sMarketoperations.Thenextphaseoftheprojectisforthe consultanttodevelopanRFPrequestforinteresteddevelopersforthesite—however, thatiscontingentontheDOT’sdecisiontopayforsomeoralloftherelocationcost. VII. Reports A. IURALoan&LeaseRepaymentReport:October2015 BohnreportedtheBandwagonBrewPubandStateTheatrearebothnowcurrent.The Art&Foundremainsdelinquentandademandletterhasbeenmailedtothem.The IURAissecuredbythestore’sinventoryandtheowner’spersonalfinancialguarantee. BohnalsoindicatedtheIURAhasbeenrepaidforentireArgosInnloan. IURAEDCMinutes December2,2015 Page10of10 BohnreportedthattheCarpenterBusinessParkpropertyrecentlysoldtoabuyer, generallybelievedtobeMaguireFord,whichhasbeenlookingtoexpand.TheCity’s ComprehensivePlandefinedthatpartofthecityasafocusareawiththeintentto connectthewaterfronttotheNorthsideneighborhood,whichanautodealershipwould notbecompatiblewith.CommonCouncilwilllikelydiscusswhatzoningwouldbe appropriateforthatarea(currentlyzonedas“Industrial”). B. LoanPipeline Bohnreportedthataclimbingwallcompanymaybeinterestedinalocationinthecity. Inaddition,afarmͲandͲproducebusinessandarestaurantarebothinterestedin establishingalocationindowntownIthaca. C. StaffReport None. VIII. Adjournment Themeetingwasadjournedbyconsensusat5:10P.M. — END— MinutespreparedbyC.Pyott,editedbyN.Bohn. j:\communitydevelopment\adminfiles\minutes\edc\2015\edcminutes12Ͳ02Ͳ21Ͳ15Ͳdraft.doc Proposed Resolution IURA Economic Development Committee February 9, 2016

CD-RLF #40 - Loan Assistance to LAG Restaurant Group, LLC for a start-up restaurant at 404 W. State/W. MLK Jr. Street

Whereas, on December 21, 2015, LAG Restaurant Group, LLC (LAG) applied for a $40,000 IURA loan to assist in a $150,000 project to establish a new restaurant at 404 W. State/W. MLK Jr. Street, titled “The Rook Food & Drink”, and

Whereas, the Rook is a 49-seat upscale American restaurant offering a full menu, late night dining and a full service bar, located in the former home of the Fine Line Bistro that closed in May 2015, and

Whereas, LAG is owned and operated by equal partners Lila Donaruma, Autumn Greenberg and Gentry Morris, and

Whereas, the primary objective of the Community Development Revolving Loan Program (CD-RLF) is provision of direct financing for economic development activities that create employment opportunities, facilitate the expansion of business activity within the City of Ithaca and expand the City’s commercial and industrial tax base, and

Whereas, the project is projected to create eight (8) full-time equivalent (FTE) employment positions, of which at least 51% will be filled by low- and moderate-income persons, and

Whereas, the proposed use of project funds is: $50,000 Leasehold improvements $18,454 Kitchen equipment $22,543 Restaurant furniture, fixtures and equipment (FF&E) $16,770 Soft costs and fees $22,233 Pre-opening expenses, including opening inventory $20,000 Working Capital $150,000 Total, and

Whereas, the proposed sources of project funds is: $50,000 Private loan (33%) $40,000 IURA (27%) $60,000 Equity (40%) $150,000 Total, and

Whereas, IURA loan proceeds will be used to refinance a private bridge loan used to purchase kitchen equipment, restaurant FF&E and working capital, and

Whereas, CD-RLF financing policy establishes maximum loan amount of $150,000 for retail business project and requires at least one FTE job be created for every $35,000 of loan assistance, and

1 Whereas, the IURA particularly seeks to assist projects that generate living wage jobs ($13.77/hour plus health benefits or $14.34 w/o health benefits), fill vacant storefronts, and assist Minority and Women- owned businesses (M/WBEs), and

Whereas, the project does not commit to pay workers a living wage as defined by AFCU, and

Whereas, the storefront at 404 W. State/W. MLK Jr. has been vacant for 8 months, and

Whereas, the new business is 66% woman-owned, and

Whereas, the proposed project will locate in an existing building and IURA funding will not be used for any construction activities, therefore the project is a categorically excluded activity pursuant to 24 CRF 58.35(b)(4) of the National Environmental Protection Act (NEPA) and the loan constitutes a Type II action under the City of Ithaca Environmental Quality Review Ordinance, and is not subject to further environmental review, and

Whereas, at their February 9, 2016 meeting, the IURA Economic Development Committee reviewed the loan application, a credit analysis prepared by H. Sicherman & Co., Inc. and applicable provisions of the IURA Economic Development Policy Guidelines and Operating Plan, and recommend the following; now, therefore, be it

RESOLVED, that the IURA hereby approves a loan from the Community Development Revolving Loan Fund (CD-RLF) in accordance with the loan application and supplemental submissions, subject to the following terms:

Borrower: LAG Restaurant, LLC dba The Rook Restaurant, a New York State limited liability company established in 2015 (tax ID: #47-4823999

Project: Establishment of a new restaurant at 404 W. State/W. MLK Jr. Street, Ithaca, NY.

Use of IURA Funds: Refinancing of private bridge loan used to purchase kitchen equipment, restaurant FF&E, and working capital

Total Project Cost: $150,000

Loan Amount: Up to $40,000

Interest Rate: 3.50% annually, reset to 2.50% upon satisfaction of job creation goals for two consecutive quarters and borrower remains in compliance with all other terms of the loan agreement

Term: 72 months

Repayment: Interest-only payments for 3 months, then level monthly payments of principal and interest in order to fully amortize

2 the loan over the remaining 72 month term (approximately $616.74).

Collateral: 1. 1st lien security interest on all business assets of the borrower LLC to include accounts, inventory, furniture, fixtures and equipment now owned or hereinafter acquired, 2. Execution of an inter-creditor agreement with the private lender subordinating both the lien priority and debt service payment to the IURA loan.

Guarantor(s): 1. Personal guarantees of Lila Donaruma, Autumn Greenberg and Gentry Morris, joint and several. 2. Financial guarantee of an additional credit-worthy guarantor(s) (acceptable to the IURA) to enhance the collateral position.

Job Creation Requirement: Creation of at least eight (8) FTE employment positions of which at least 51% must be held by low- and moderate- income persons.

Reporting: 1. Annual submission of accountant-prepared federal and NYS tax returns 2. IURA job reporting 3. Documentation of project match funding

And be it further,

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 advise of IURA legal counsel, is hereby authorized to execute all necessary and appropriate documents to implement this resolution.

j:\community development\loans\cd-rlf\40-rook\reso iura edc rook 2-9-16.doc

3 Ithaca Urban Renewal Agency Loan Review – The Rook Restaurant

CD-RLF #40 IURA Economic Development Committee January 21, 2016

Borrower: LAG Restaurant, LLC dba The Rook Restaurant, a New York State limited liability company established in 2015 (Tax ID: #47-4823999)

Address: 404 West State Street, Ithaca, NY 14850

Ownership/ Management: Lila Donaruma, Member and 33.3% owner Gentry Morris, Member and 33.3% owner Autumn Greenberg, Member and 33.3% owner

Business: A new full-service restaurant

Project Address: 404 West State Street Ithaca, NY 14850

NAIC#: 722511 - full service restaurants

Website: www.rookfoodanddrink.com

Loan Request

Loan Amount: $40,000

Use of Proceeds: Bridge loan refinancing used for start-up costs

Term: 72 Months

Interest Rate: 3.50% with a rate reset to 2.50% upon satisfaction of job creation goals

Repayment: Monthly payments of principal and interest of $616.74 in order to fully amortize the loan over 72 months and subject to a revised P&I amount upon rate reset.

Loan Collateral: General security interest on all business assets including accounts, inventory, furniture, fixtures and equipment now owned or hereafter acquired.

Personal Guarantors: Lila Donaruma, Gentry Morris and Autumn Greenberg, joint and several

Loan Application

LAG Restaurant, LLC. dba The Rook Restaurant is requesting a $40,000 loan for the purpose of refinancing a bridge loan used for various start-up expenses, including acquiring new fixtures, restaurant equipment and purchasing inventory. The Borrower has received private term financing in the amount of $50,000 and the bridge loan from David and Deborah Osherow, the parents of one of the principals, Autumn Greenberg.

Community Development Revolving Loan Fund

The primary objectives of the Community Development Revolving Loan Program (CD-RLF) are to provide direct financing for economic development activities to create employment opportunities for low- and moderate-income persons, facilitate the expansion of business activity within the City of Ithaca and expansion of the City’s commercial and industrial tax base.

The Project

The Rook is a 49-seat upscale American restaurant opening on January 19th in Ithaca's west end in the former home of Fine Line Bistro at 404 W. State Street. The restaurant will offer a full menu, late night dining options, and a full service bar. Entrees will be in the $12 to $25 range, with a selection of small plate options. The 12-seat bar will offer cocktails, a wine list, and 6 beers on tap. The target customer is age 28 to 45 seeking quality food in a casual atmosphere. The principals also expect to see steady business from patrons of the Kitchen Theatre (across the street) as well as the State Theater (2 blocks away).

The Rook will operate in 2000 square feet of leased space that had been the location of the Fine Line Bistro. LAG Restaurant, LLC has executed a three year lease with a three year renewal option. Monthly rent is $2,000 for the first and second years, rising to $2,200 in the third year. The owner of the property is Maria Pirro of Lansing, NY.

Total project costs are estimated to be $150,000. These costs have been funded by $60,000 of borrower equity (each owner/member contributed $20,000) and by two privately-funded loans, totaling $90,000 from David and Deborah Osherow of Shokan, New York. Mr. and Ms. Osherow funded a $50,000 loan (closed on 10/27/15) with a term of 10 years and an interest rate of 5.50%. The Osherows also funded a $40,000 short-term bridge loan (closed on 11/27/15) with

a 6-month term (matures on 5/27/16) and monthly interest-only payments at 5.50%. Although the Osherows had intended to secure the loans with a general security filing on all LAG Restaurant, LLC assets, the lien has not been filed according to Ms. Donaruma. LAG is requesting that the IURA take-out the Osherows’ bridge loan. As collateral, the IURA would have a senior lien on all LAG assets perfected by a general security filing as well as the personal guarantees of the three principals.

Uses & Sources of Funds

The total project cost is estimated to be $150,000, consisting of the following:

Private Loan / IURA Borrower Total D. & D. Osherow Loan Equity Leasehold Improvements 50,000 50,000 Kitchen Equipment 18,454 18,454 Restaurant FF&E 1,546 20,996 22,542 Soft Costs & Fees 16,771 16,771 Pre-Opening Expenses 22,233 22,233 Working Capital 20,000 20,000 Total 50,000 40,000 60,000 150,000

Management

The Rook will be owned and operated by partners Gentry Morris, Lila Donaruma, and Autumn Greenberg, and they expect to hire 8 full-time employees for a total of 11 new positions.

Head Chef Gentry Morris is well known in Ithaca as the chef-owner of Belly, a pop-up restaurant that operated at local bar Lot 10 from 2013-2014. Since then, Mr. Morris has been the sous chef at Le Cafe Cent Dix, regarded as one of Ithaca’s finest French restaurants. A graduate of Western Culinary Le Cordon Bleu, Mr. Morris has more than 10 years of experience in the restaurant industry.

Lila Donaruma is a longtime hospitality professional, with 15 years of experience across a multitude of operations. She is a graduate of the Hospitality Management program at Fairleigh Dickinson University. Over the years she has worked as a restaurant manager, bartender, server, wine director, and catering director in venues ranging from a 28-seat high end restaurant to a 150-seat casual establishment. Most recently, she has served as the operations manager of local boutique hotel, Argos Inn, where she focused on personnel, bookkeeping and finance. Ms. Donaruma will be responsible for front of house management as well as accounting and finance.

Autumn Greenberg is a 2004 graduate of Ithaca College with a degree in Organizational

Communications, Advertising and Public Relations. She also has over 10 years of experience in the hospitality industry and has been a member of the opening staff at three local restaurants and bars. Most recently, Ms. Greenberg has worked a bartender at Bar Argos at the Argos Inn. With her background in interactive media management and design, Ms. Greenberg also brings extensive web, social media and marketing experience to the team. She will be involved in front of house management, as well as marketing, and building and maintaining the Rook’s website and social media presence.

Business Plan

The Rook plans to partner with the nearby Kitchen Theatre Company. The restaurant will certainly benefit from the theater’s regular audience seeking nearby dining options both before and after the show. Ad placements in the theater's programs as well as cross promotion via handouts will promote the flow of theater patrons to the Rook. Catering events will further our ties with the theater’s audience.

A strong web presence will be established before opening. A mobile-friendly website has been built and is ready to launch. Facebook, Twitter, and lnstagram accounts have already been created and are drawing likes and followers. Positive word-of-mouth reviews will also be vital to the restaurant's success. The owners’ established ties in the community give them a jump start here. They also intend to supplement their marketing efforts with paid advertising placements on radio and in print. Local media options will be carefully analyzed to reach the Rook’s target demographic audience. Ms. Greenberg has 7 years of professional experience with the Cayuga Radio Group and this background will help management make informed and targeted media buys.

Financial Projections

The projections were prepared by The Rook’s three owners based on their experience in other Ithaca restaurants. The Rook plans to be open 5 days per week, serving dinner Tuesday through Saturday from 5:00 PM until midnight. In 2016, they estimate that the 49-seat restaurant will serve 245 customers per week with an average bill of $43/customer. The total sales projection of $861M by year-end is very aggressive and is based on projected capacity being achieved as soon as The Rook opens on January 19, 2016. We think that this is highly unlikely and overly optimistic.

Projected Income Statement

Projected Income Statement (as Presented by Borrower)

FYE 2016 2017 2018 ($000) Sales Food 560 616 660 Beverage 302 332 355 Total Sales 862 948 1,015

Cost of Goods Sold Food COGs 157 28% 172 28% 185 28% Beverage COGS 75 25% 83 25% 89 25% Total Cost of Goods Sold 232 27% 255 27% 274 27%

Gross Profit 630 73% 693 73% 741 73%

Expenses Wages & Benefits 408 408 408 Lease/Rent Expense 24 24 24 Operating Expenses 50 51 51 Depreciation/Amortization 14 14 14 Total Expenses 496 58% 497 52% 497 49%

Net Operating Income 134 16% 196 21% 244 24%

Interest Expense (4) (4) (4)

Net Income Before Taxes 130 15% 192 20% 240 24%

+ Deprec/Amort 14 14 14 + Interest Expense 4 4 4 - Owner's Distribution 0 0 0 Cash Flow/EBITDA 148 17% 210 22% 258 25%

Annual Debt Service (Full Year P&I) Private Loan 7 7 7 IURA Loan 7 7 7 Total Debt Service 14 14 14

Debt Service Coverage 10.6 15.1 18.5 Cashflow Surplus/(Shortfall) 134 196 244

Adjusted Revenue Projections: Breakeven Analysis

The analyst has reduced projected sales by 20% annually to achieve a breakeven debt service coverage ratio as shown in the following table. While this projection is still aggressive for a start-up restaurant, achieving sales of $340/square foot, we think that this revenue levels could be reached, given the strong reputation of the three owners in the Ithaca community. At $340/SF, this sales level still places The Rook in the “High Profit” category for full-service restaurants according to Baker Tilly, a nationally known restaurant consulting firm.

FYE 2016 2017 2018 ($000) Sales Food 442 65% 486 65% 535 65% Beverage 238 35% 262 35% 288 35% Total Sales 680 748 823

Cost of Goods Sold Food COGs 124 28% 136 28% 150 28% Beverage COGS 60 25% 65 25% 72 25% Total Cost of Goods Sold 183 27% 202 27% 222 27%

Gross Profit 497 73% 546 73% 601 73%

Expenses Wages & Benefits 408 408 408 Lease/Rent Expense 24 24 24 Operating Expenses 50 51 51 Depreciation/Amortization 14 14 14 Total Expenses 496 73% 497 66% 497 60%

Net Operating Income 0 0% 49 7% 104 13%

Interest Expense (4) (4) (4)

Net Income Before Taxes (4) (1%) 45 6% 100 12%

+ Deprec/Amort 14 14 14 + Interest Expense 4 4 4 - Owner's Distribution 0 0 0 Cash Flow/EBITDA 15 2% 63 8% 118 14%

Annual Debt Service (Full Year P&I) Private Loan 7 7 7 IURA Loan 7 7 7 Total Debt Service 14 14 14

Debt Service Coverage 1.1 4.6 8.5

Cashflow Surplus/(Shortfall) 1 50 104

Projected Debt Service

Debt service is projected to consist of two components: a $50,000 term loan from Deborah and David Osherow and the $40,000 IURA loan. The two loans will result in total annual debt service of $14M, based the rates and terms shown in the following table:

Private Loan IURA Total Debt D. &D. Osherow Loan Financing Purpose Term Loan Term Loan Borrower LAG Restaurant, LLC LAG Restaurant, LLC Principal 50,000 40,000 90,000 Interest Rate Basis Fixed Fixed Interest Rate 5.50% 3.50% Amortization Period 120 72 Term 120 72 Monthly Payment 542.63 616.74 1,159.37 Annual Payment 6,511.58 7,400.83 13,912.41

Employment

The Rook expects to create 11 new full-time equivalent positions within the first 2 years of operation according to information submitted in the loan application as follows:

Job Title Hour/Week Salary/Hourly Wage Health Insurance Head Chef 40 $50,000/year No Managers (2) 40 $50,000/year No Cooks (2) 40 $14/hour No Servers (2) 40 $7.50/Hour + Tips No Bartender 40 $7.50/Hour + Tips No Busser 40 $7.50/Hour + Tips No Prep Cook 40 $13/hour No Dishwasher 40 $10/hour No

Note: The IURA interest rate may be reduced to 2.50% upon achieving employment projections.

More than half of these jobs will be available to low and moderate income individuals based on the requisite skills, education, and experience required for those positions. The company will be briefed regarding the hiring and reporting requirements of the CDBG program.

Personal Financial Statements

The three restaurant’s owners have submitted personal financial statements dated December 17, 2015 which shows the following assets, liabilities and liquidity:

Donaruma Morris Greenberg Assets Cash 5,000 500 2,900 Marketable Securities 9,340 5,400 18,425 Retirement Accounts 0 0 10,845 Automobiles & Personal Property 4,000 0 16,300 Real Estate Owned 0 0 180,000 Total Assets 18,340 5,900 228,470

Liabilities Loan from Related Party 0 20,000 0 Mortgage Loan 0 0 86,800 Total Liabilities 0 20,000 86,800

Net Worth 18,340 (14,100) 141,670

Combined Liquidity Cash on Hand 8,400 Marketable Securities 33,165 Retirement Accounts 10,845 52,410

Personal Credit Reports

Equifax reports were obtained for the three owners. The reports show credit scores of 802 for Autumn Greenberg and 798 for Lila Donaruma, both excellent cores. No FICO score was available for Gentry Morris. No liens, judgments or derogatory payment information were reported for any of the three.

Risk Assessment

Positive Factors:

x The Rook Restaurant will be managed by three experienced restaurant professionals who have been employed in the local restaurant and hospitality industry for the past five years. x Head Chef Gentry Morris has developed a strong following at several local restaurants (Le Café Cent Dix, Belly Pop Up Kitchen and Mercato Bar & Kitchen) over the past five years. x The Rook’s location had been a popular restaurant with good access to other downtown entertainment venues. x The Rook will generate additional pedestrian traffic for the downtown entertainment district and will fill a vacant retail space.

Negative Factors:

x A start-up restaurant involve a high degree of risk. x The sales projection for 2016 is extremely aggressive and the restaurant will need to immediately establish a dedicated clientele to succeed. x Access to additional working capital is very limited. x Even in a senior lien position, collateral is insufficient to secure the IURA loan. x The value of the personal guarantees of the three principals is minimal.

Recommendation

Start-up restaurants involve an extremely high degree of risk. Although the principals have worked in the restaurant business for several years, none of the three has previous experience as restaurant owners. Furthermore, the available collateral is inadequate to secure the IURA loan.

We recommend that IURA loan approval be subject to the following conditions: x The owners obtain additional credit-worthy guarantor(s) to enhance its collateral position. x Approval of the IURA loan be subject to subordination in both lien priority and in debt service payment of the privately-funded term loan due to David and Deborah Osherow to the IURA loan. An inter-creditor agreement would be executed among the LAG Restaurant, LLC, the personal guarantors, the Osherows, and the IURA to reflect this understanding. x The Rook’s principals should attempt to secure a working capital facility or additional outside investment or subordinated debt through family and friends.

With those qualifications, we recommend approval of the loan to the Rook Restaurant.

Recommended Loan Structure

x Borrower: LAG Restaurant, LLC dba The Rook Restaurant, a New York State limited liability company

x Use of Funds: The refinancing of a private bridge loan used to purchase kitchen equipment and dining room furnishings and fixtures

x Loan Amount: $40,000

x Interest Rate: 3.50% with a rate reset to 2.50% upon satisfaction of job creation goals

x Loan Term: 72 Months

x Repayment Terms: Monthly payments of principal and interest of $616.74 in order to fully amortize the loan over 72 months and subject to a revised P&I amount upon rate reset.

x Loan Security: General security interest on all business assets including accounts, inventory, furniture, fixtures and equipment now owned or hereafter acquired.

x Personal Guarantees: Lila Donaruma, Gentry Morris and Autumn Greenberg, joint and several

x Special Condition: We are recommending that the privately-funded term loan due to David and Deborah Osherow be subordinated both in lien priority and in debt service payment to the IURA loan, and that the debt subordination include the IURA’s right to prohibit payments on the private loan(s) at any time without cause. An inter-creditor agreement shall be executed among the LAG Restaurant, LLC, the personal guarantors, the Osherows, and the IURA to reflect this understanding.

x Financial Reporting: The Borrower shall annually submit accountant-prepared federal and New York State tax returns.

Prepared by: Richard Rickli, Vice President H. Sicherman & Company, Inc. January 21, 2016

11/21/00 TABLE A – The Rook Restuarant

CD-RLF Eligibility of Loan Assistance to Restaurants1 Worksheet (100 points required for eligibility) Category Points Applicant Score 1. LOCATION OF PROPOSED BUSINESS: A. Entertainment District 25 B. BID Downtown District 25 C. West State Street Corridor 35 35 D. West End 5 Subtotal: 2. TYPE OF PROJECT: A. Assist an operating restaurant business 40 Subtotal: 3. PUBLIC BENEFIT OF PROJECT: A. Minority-owned Business 40 B. Women-owned Business 15 15 C. Creates/Retains many jobs (1 FTE/$5,000 assistance) 15 15 D. Creates multiple jobs with health benefits 25 E. Creates multiple jobs paying “living wages” 30 F. Utilizes vacant underutilized building space 10 10 G. Directly implements City plans (e.g., upper story tenant in a mixed use 25 West End project) H. Fills underserved market niche or need identified by the neighborhood 25 I. Significantly enhances Ithaca’s position as a tourist destination 15 Subtotal: 4. CAPACITY/EXPERIENCE OF BORROWER: A. No operating experience (20) B. Ownership interest in a successful restaurant business 25 C. Held management position in successful restaurant 15 15 D. CEO program graduate or similar education/experience 5 E. Ownership & management in non-restaurant business 10 Subtotal: 5. BONUS UNDERWRITING FACTORS: A. Equity contribution or subordinated financing to IURA loan exceed 25% of 20 20 project cost B. Collateral value of hard assets pledged exceeds 50% of loan amount 20 (government securities, stocks, bonds, real estate, etc…) C. Personal guarantee(s) pledged are adequate to secure loan 20 TOTAL SCORE: 110

1 Note that “similar businesses” includes, but is not limited to a: tavern, dance club, night club, brew pub and wine bar. An “adult entertainment establishment,” as defined by municipal code, or a business that derives more than 35% of revenues from the sales of alcoholic beverage is ineligible for loan assistance.

IURA Economic Development Committee Proposed Resolution February 9, 2016

Sunny Days of Ithaca, LLC, 1st Amendment to Loan Agreement (CD-RLF #37)

WHEREAS, Sunny Days of Ithaca, LLC (Sunny Days) submitted a request to modify loan repayment terms to make interest-only payments on the loan through 2016, and

WHEREAS, on May 2, 2014 the IURA issued a $50,000, 60-month, loan to Sunny Days of Ithaca, LLC (Sunny Days) for a $125,000 project to open a retail business at 123 S. Cayuga Street, and December 30, 2013, and

WHEREAS, the IURA loan is secured by a third lien on all business assets and personal guarantees of the two owners, and

WHEREAS, Sunny Days is current on repayment of the IURA loan and has achieved their job creation goal, and

WHEREAS, the outstanding principal balance on the loan is $37,199.38 as of 12/31/15, and

WHEREAS, revenues at the business have increased significantly in 2015 but lags original financial projections, and

WHEREAS, management has taken pro-active steps to reduce operating expenses and is working with a financial advisor to devise short- and long-term plans for the business, and

WHEREAS, the requested modification would temporarily reduce monthly loan payments due from $888.37 to approximately $77, and

WHEREAS, at their February 9, 2016 meeting the Economic Development Committee members reviewed this matter and recommended the following; now, therefore, be it

RESOLVED, that the IURA hereby authorizes a modification to loan repayment terms of the Sunny Days of Ithaca LLC loan agreement to authorize interest-only payments due on the loan for ten (10) months and to extend the term of the loan ten (10) months with resumption of the original monthly principal and interest payments due to amortize the loan following expiration of the interest-only period, 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.

j:\community development\loans\cd-rlf\37-sunny days\resolutions\reso iura edc loan modification 2-9-16.doc

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

)) $!/ (%(# (*%( %+*) %##+$ */$*( (%(# (*%(2)) *7# "2%# March 19, 2007 Updated 2/2/16

Synopsis of (Sub-)Lease Terms 530 W. Buffalo Street, Ithaca, NY (Tax Parcel #59.-3-22)

Owner City of Ithaca (“City”)

Landlord Ithaca Urban Renewal Agency (“IURA”)

Tenant Southside Community Center, Inc., (“SSCC”), a domestic not-for-profit corporation with principal offices located at 305 South Plain Street, Ithaca, NY 14850

Lease Premises Tax parcel #59.-3-22 located at 530 W. Buffalo Street, Ithaca, NY, subject to unrestricted access by the City of Ithaca, or its assigns, to access, maintain and repair existing utility facilities on the premises. Public utilities located at the southwest corner of the premises include a below-grade sewage pump station and an above-grade traffic signal controller cabinet. Lease premises are approximately 4,450 square feet in size and include an existing 1,050 square foot masonry building.

Use of Premises Premises shall be used only for the Recycle Ithaca’s Bicycles (“RIBs”) program, a non-profit community bike shop and youth program operated by SSCC that provides refurbished bicycles in exchange for work and offers bicycle repair classes

Term Lease date: June 30, 2008 Original term: 5 years Renewals: two 5-year renewals at Tenant’s option up to a total lease period of 15 years (2023).

Rent Base rent: 1st year - $4,800, due in monthly rental payments of $400. Thereafter, base rent + consumer price index (CPI) adjustment (2016 rent:$436/month)

Additional rent: Tenant responsible for all taxes, insurances, maintenance, utilities, special assessments, fees, and miscellaneous expenses of Landlord associated with Tenant’s use of the property.

1 Condition of Premises Premises shall be leased to Tenant in “as is” condition unless otherwise specified. A new gas service to the building, with separate metering, has been installed. Electric service is in place to serve the building off the existing pump station panel. Building lacks operational plumbing.

Tenant Improvements Tenant has inspected the building and developed a detailed plan and budget for building repairs and improvements. The proposed FY 2007 Action Plan for the City of Ithaca HUD Entitlement grant program earmarks $26,700 of CDBG funding for building improvements to the lease premises, including roof repair and insulation, masonry repairs, and installation of a wall-mounted gas heater unit. Tenant has committed match funding valued at over $24,000 for other building improvements and professional services as further specified in its HUD Entitlement grant application.

Tenant is encouraged to improve the building and grounds of the premises at its own cost, but shall obtain prior written consent of the Landlord for any permanent or substantive improvements or modifications not explicitly shown on the approved site plan. Any structural alteration in, or addition to, the building or property shall also require prior written consent of the Owner. Improvements to the building and site, such as plumbing, lighting, electrical, HVAC, fire detection and suppression systems, and fencing shall revert to Landlord at expiration of term or at termination of the lease.

Up to a maximum of 50% of the monthly base rent payment due may be eligible for abatement in exchange for Landlord-approved tenant improvements, costly repairs, or structural inspections of the lease premises, including such tenant improvements completed by Tenant prior to execution of the lease agreement. A ‘costly repair’ is defined as any repair project costing $600 or more. Improvements funded from CDBG funds are not eligible for rent abatement. In no case shall the cash rent payment due from Tenant be reduced to less than $200 per month.

Any future tenant improvements for which Tenant seeks rent abatement shall require prior written approval of the Landlord. The reasonable direct costs for completing such improvements, as determined by the Landlord, shall be applied as a partial rent abatement following satisfactory submission of cost documentation by the Tenant. Rent abatement shall not exceed 50% of the monthly base rent payment due, but the cost of such improvements may be accumulated and used against future base rent due. Under no circumstances will the value of Tenant improvements, costly repairs or structural inspections be reimbursed to the Tenant as a cash payment.

Repair & Maintenance Tenant, at its own expense, shall be responsible for upkeep, maintenance and repair of the building and exterior premises, including repair of any pre-existing deficiencies. Tenant shall keep and maintain all windows, doors and exterior nonstructural walls in good, orderly, clean and safe condition. Any broken windows shall be replaced within 45 days of glass breakage. At all times the Tenant shall maintain the exterior of the building and grounds in a neat and orderly fashion and in accordance with the approved site plan.

Structural Inspection Tenant shall have a structural inspection conducted of the building every two years by a licensed structural engineer until a structural engineer determines such inspections are required less frequently. The findings

2 and any recommendations of such inspection shall be submitted to the Landlord. Tenant must diligently implement within a reasonable time period any recommendations of the structural engineer as a condition of continued occupancy. Tenant must immediately vacate any portion of the premises deemed unsafe.

Structural Elements and Building Systems Tenant is responsible for maintenance and repair of all structural elements of the building including but not limited to the roof, interior and exterior walls, foundation, sidewalk, drainage systems and any building systems, including any future heating system, hot water heaters, plumbing, air conditioning and air ventilation.

Compliance with Approved Site Plan At all times use of the premises shall comply with the site plan approved by the City of Ithaca Department of Planning & Development.

Outdoor Storage All exterior storage shall be prohibited unless reasonably screened from public streets and adjacent residential uses by fencing or landscaping and in accordance with the approved site plan.

Tenant Insurance Tenant shall carry liability insurance coverage for the premises in the amount of at least $1,000,000 with the City and IURA named as additionally insured. Tenant shall carry “all risk” insurance on the Property insuring the real property improvements at replacement cost.

Utilities Tenant shall be responsible for payment of all utility charges associated with its use of the premises (or for reimbursement to the Landlord or Owner for same if utility billing practices or metering do not allow direct billing to Tenant).

Assignment of Lease Lease is non-assignable without consent of Landlord, which consent may be withheld or granted at Landlord’s sole discretion. It is anticipated that any request to assign the lease would result in renegotiation of the base rent.

Termination of Lease Tenant may terminate the lease at any time upon 30 days written notice to Landlord. Landlord may terminate this lease if: (1) premises are deemed to be unsafe, or (2) a continued violation of lease terms by the Tenant following a 30-day period to cure violation after receipt of written notice of violation from Landlord to the Tenant.

END

Prepared by N. Bohn

j:\staff\nels\iura\property disposition\530 w buffalo - ribs\lease synopsis 530 w. buffalo st - 3-19-07 - cc adopted on 5-2-07.doc

3 LOAN REPAYMENTS DUE TO IURA December 2015

an Pymt y 'd tus e PymtRec rginal Lo ear inal Due Date onth aid oan Balance ta O Y F % M P L S Dat GOSC Cascade Plaza$ 665,000 2004 2025 2$ 3,364.13 $ 3,364.13 $ 354,564.72 Current 12/01/15

Entitlement Loans Diane's Downtown Auto-revised 5/3/12$ 80,000 2006 2026 4$ 449.85 $ 944.68 $ 45,926.06 Current 12/04/15 Cedar Creek(90K HOME/10K HODAG)**$ 100,000 2008 2038 5 N/A N/A$ 142,076.88 Int. Only Pmts. subject to cash flow N/A Breckenridge Place$ 400,000 2012 2053 1 N/A N/A$ 440,025.76 Int. only pmts. due subject to cash flow N/A TOTAL ENTITLEMENT LOANS$ 580,000 $ 449.85 $ 944.68 $ 628,028.70

CD-RLF Wildfire Restaurant #26$ 95,000 2009 2016 3$ 1,271.01 $ 1,271.01 $ 11,295.02 Current 12/01/15 Mama Goose/Mimi's Attic$ 40,000 2010 2016 3$ 720.11 $ 720.11 $ 718.36 Current 12/01/15 e2e Materials$ 100,000 2010 2017 9$ 3,179.97 $ 6,359.94 $ 76,494.89 Current - Paid through 2/1/2016 12/09/15 Mia Noodle #31$ 100,000 2011 2018 3.5$ 1,262.63 $ 1,262.63 $ 40,224.12 Current 12/01/15 Art & Found$ 15,000 2012 2021 3$ 125.00 $ - $ 8,848.73 Past Due - owes June thru December 2015 05/22/15 Cinemapolis/7th Art$ 50,000 2013 2017 1$ 41.67 $ 83.34 $ 50,000.00 Int Only - Current through 2/1/2016 12/01/15 Ithaca Coffee Roasting Facility$ 100,000 2013 2033 2.5$ 537.42 $ 537.42 $ 92,618.47 Current 12/11/15 Sunny Days$ 50,000 2014 2019 2.5$ 888.37 $ 888.37 $ 37,199.38 Current 12/01/15 TOTAL CD-RLF LOANS$ 550,000 $ 8,026.18 $ 11,122.82 $ 317,398.97

CD-RLF Priority Business State Theatre$ 458,500 2009 2019* 3$ 1,741.96 $ 1,829.05 $ 389,449.61 Past Due - owes December 2015 12/15/15 Bandwagon Brewery ($50,000 loan)$ 40,000 2010 2015 3$ 720.50 $ 2,935.25 $ - Paid Off 12/15/15 JG McGuire/Lot 10 $ 64,500 2012 2017 4$ 1,169.95 $ 1,169.95 $ 29,091.36 Current 12/15/15 Finger Lakes Massage Group*****$ 150,000 2015 2023 3.5$ - $ - $ 25,501.57 First Interest payment Due February 2016 N/A TOTAL CD-RLF PRIORITY BUSINESS$ 713,000 2014$ 3,632.41 $ 5,934.25 $ 444,042.54

Non-CDBG Cayuga Green$ 847,083 2007 2038 5.5$ 4,881.04 $ 4,881.04 $ 757,948.12 Current 12/07/15 Italthai (Restore NY grant)$ 900,000 2014 2044 0$ - $ - $ 900,000.00 N/A N/A The Lofts on Six Mile Creek*****$ 260,000 2014 2029 4$ 2,023.70 $ 2,023.70 $ 250,635.03 Current 12/09/15 TOTAL NON-CDBG$ 2,007,083 $ 6,904.74 $ 6,904.74 $ 1,908,583.15

UDAG Cayuga Green/Urban Outfitters$ 67,050 2013 2023 4$ 678.85 $ 678.85 $ 53,209.57 Current 12/07/15 TOTAL UDAG LOANS$ 67,050 $ 678.85 678.85$ 53,209.57

HODAG Plantation Building-HODAG$ 80,000 2010 2031 2$ 422.04 $ 422.04 $ 65,897.38 Current 12/01/15 Breckenridge Place$ 600,000 2012 2043 2$ 2,217.72 $ 2,217.72 $ 570,207.66 Current 12/01/15 210 Hancock & 423 First Street***$ 157,326 2014 2018 2$ 262.21 $ 262.21 $ 157,326.00 Int Only - Current 12/04/15 TOTAL HODAG LOANS$ 837,326 $ 2,901.97 $ 2,901.97 $ 793,431.04

HOME Permanent Loan phase commenced 11/1/2015. 2% Interest compounds annually. Interest payments subject Stone Quarry Apartments, LLC****$ 358,000 2014 2046 3 N/A 0.00$ 383,100.55 to cash flow. N/A

TOTAL IURA LOAN PORTFOLIO $ 5,777,459 $ 25,958.13 $ 31,851.44 $ 4,882,359.24 $ 2,023.70 Less The Lofts pmt paid directly to IURA

$ 29,827.74 Agrees to M&T Statement

Notes * State Theatre's loan has a balloon payment due in 2019 ** Cedar Creek's first Interest Only payt. due 1/1/11 - yearly payt. subject to available cash flow *** 210 Hancock's has a principal balloon payment due at the end of the loan in 2018 **** Stone Quarry's loan has a 24 month const period at 3%/Permanent Loan will start at the end of the const. period at 2%. No payments are due during the const. period. Interest compounds annually. Interest payments in permanent phase are subject to cash flow. Balloon payment of principal and all interest owed due in 2046. *****Finger Lakes Massage Loan was disbursed 1/8/2016. First 6 months Interest Only payments due beginning 2/1/2016. Interest Rate 3.5%. LEASE PAYMENTS DUE TO IURA December 2015

e d t ' rly Fe e y ee rl us Las .Rec ee F a t e onthlyF uart a ayt Project M Q Ye St Dat P

Cherry Street Industrial Park

Moro Design

Quarterly Lease - Jan., April, July, Oct.$ 465.00 Current 10/23/15 Yearly Maintenance Fee - July$ 300.00 Current 07/22/15

Evaporated Metal Films

Yearly Maintenance Fee - July$ 236.80 Current 08/07/15

Precision Filters Yearly Maintenance Fee - July$ 375.00 Current 07/13/15

Cayuga Green

Allpro Parking - air rights lease Past due - owes December 2015 (December's payment was received on 1/6/2016. Will be reflected Monthly Lease$ 2,763.42 on January's statement) 12/01/15

Cayuga Green-Parcel A ground floor Monthly Lease$ 6,357.97 Past due - owes December 2015 11/06/15

Cinemapolis

Monthly Lease-rate change on 5/1/15$ 3,111.38 Past due - owes December 2015 11/06/15 Qrtly Maint Fee- Jan., April, July, Oct.$ 275.38 Current 10/05/15 (Maint Fee rate change on 7/1/15)

Other Leases

Southside Community Center-RIBS Past due - owes December 2015 (December's payment was received on 1/4/2016. Will be reflected Monthly Lease -New rate 7/1/15 $ 436.00 on January's statement) 12/18/15

Farmer's Market/Steamboat Landing Quarterly Lease - June, Aug., Oct., Dec.$ 8,030.75 Current 12/16/15 IURA Grants Summary December 2015 ON TOTAL # SCHEDULE UNEXPENDEDHUDENTITLEMENTACTIVITIES SPONSER BUDGET EXPENDED UNEXPENDED %SPENT

2013CDBGActivities 2467 ok 23.0IthacaFallsOverlookSiteCleanup IURA 25,000.00 0.00 25,000.00 0% Total 503,507.09 372,507.09 25,000.00 95%

2013HOMEActivities 2013EXPENDITUREDEADLINEDATEIS6/30/2018 2472 complete 2.0HomeownerRehab(includes$100,0002012Unallocated) INHS 100,000.00 100,000.00 0.00 100% 2473 ok 4.0HousingScholar.(incl$49,513.602012Unalloc&.40PrevUnalloc) LearningWeb 78,000.00 75,380.91 2,619.09 97% 2476 ok 24.0HousingFirst TompkinsComm.Action 20,000.00 11,750.00 8,250.00 59% Total 218,230.90 207,361.81 10,869.09 95% ok OnTargetfor6/30/2018HOMEExpenditureDeadline

2014CDBGActivities 2491 ok 2.0HomeownerRehab INHS 123,260.00 0.00 123,260.00 0% 2501 ok 3.0MiniRepair INHS 30,000.00 29,270.04 729.96 98% 2499 ok 10.0WorkPreserveJobTraining HistoricIthaca 82,500.00 70,288.64 12,211.36 85% 2498 ok 8.0HospitalityEmploymentTrainingProgram6 GIAC 118,865.00 92,208.90 26,656.10 78% 2497 ok 11.0LakeStreetBridge CityofIthaca 30,000.00 0.00 30,000.00 0% 2495 complete 13.0SupportedEmployment LearningWeb 39,078.31 39,078.31 0.00 100% 2494 ok 14.0ImmigrantServices CatholicCharities 16,000.00 12,000.00 4,000.00 75% 2014CDBGActivities(continued) NO 18.0BusinessBoost IthacaDowntownAlliance 7,500.00 0.00 7,500.00 0% complete 9.0CommunityReUse&TrainingCenter FingerLakesReuse 105,000.00 105,000.00 0.00 100% 2502 ok 7.0EDLoanFund IURA 142,127.40 0.00 142,127.40 0% Total 694,330.71 347,845.89 346,484.82 50%

2014HOMEActivities 2485 NO 1.0CommunityHousingTrust INHS 273,869.00 0.00 273,869.00 0% 2484 ok 17.0HOMEGrantAdministration IURA 44,177.00 44,053.69 123.31 99.72% 2483 ok 4.0SecurityDepositAssistanceProgram2 CatholicCharities 35,150.00 34,900.00 250.00 99% 2482 ok 5.0HousingScholarshipProgram LearningWeb 58,958.90 2,616.90 56,342.00 4% 2481 ok 6.0HousingFirst TCAction 30,000.00 0.00 30,000.00 0% Total 442,154.90 81,570.59 360,584.31 18%

2015CDBGActivities 2521 ok 1.0HancockStreet INHS 250,403.50 0.00 250,403.50 0% 2522 ok 2.0Minirepair INHS 35,000.00 0.00 35,000.00 0% 2531 ok 6.0TemporaryRampLoanProgram10 FingerLakesInd.Center 20,000.00 0.00 20,000.00 0% 2532 ok 7.0HospitalityEmploymentTrainingProgram11 GIAC 109,417.00 11,636.61 97,780.39 11% 2523 ok 8.0WorkPreserveJobTrainingProgram HistoricIthaca 87,500.00 0.00 87,500.00 0% 2524 ok 9.0SpencerRoadSidewalks CityofIthaca 100,000.00 0.00 100,000.00 0% 2525 ok 10.02Ͳ1Ͳ1/I&RService HumanServicesCoalition 20,000.00 7,660.62 12,339.38 38% 2526 ok 11.0BuildingfortheFuture SouthsideCommunityCenter 23,577.00 0.00 23,577.00 0% 2527 ok 12.0ImmigrantServices CatholicCharities 16,000.00 0.00 16,000.00 0% 2528 complete 13.0A+TuitionAssistance BJMEnrichmentProgram 17,410.00 17,410.00 0.00 100% 2529 ok 14.0ReSETJobTrainingExpansion FingerLakesReUse 23,759.00 0.00 23,759.00 0% 2530 ok 15.0CDBGGrantAdministration IURA 134,329.20 18,933.03 115,396.17 14% Total 837,395.70 36,343.03 781,755.44 7%

2015HOMEActivities 2511 ok 1.0210HancockStreet INHS 206,922.50 0.00 206,922.50 0% 2512a ok 3.0SecurityDepositAssistanceProgram CatholicCharities 40,000.00 0.00 40,000.00 0% 2517 ok 4.0HousingScholarshipProgram LearningWeb 24,600.00 0.00 24,600.00 0% 2514 ok 5.0HousingFirst TCAction 30,000.00 0.00 30,000.00 0% 2512b ok 3.aHomeUnitInspectionsforSecurityDeposits CatholicCharities 4,000.00 0.00 4,000.00 0% 2516 ok 16.0HOMEGrantAdministration IURA 36,866.10 0.00 36,866.10 0% 2806 ok Unallocated2015HOME N/A 26,272.40 0.00 26,272.40 0% Total 368,661.00 0.00 368,661.00 0%

ok CDBGSpendDownRatio(mustbelessthan1.5by7/16): 1.069 IURA Grants Summary December 2015 ON TOTAL # SCHEDULE UNEXPENDEDHUDENTITLEMENTACTIVITIES SPONSER BUDGET EXPENDED UNEXPENDED %SPENT

CDBGSpendDownRatio=totalunexpendedCDBGfunds/mostrecentannualCDBGaward

TotalUnexpendedHUDEntitlementFunds CDBGActivities 718,096.12 CDBGProgramIncomeActivities 435,144.14 HOMEActivities 740,114.40 TotalUnexpendedHUDEntitlementFunds 1,893,354.66

Notes: 1.Fundedactivitiesnotshownhavebeencompleted. Ithaca Urban Renewal Agency

108 East Green Street Ithaca, New York 14850 (607) 274-6559 To: IURAGovernanceCommittee From: NelsBohn,DirectorofCommunityDevelopment RE: FY16OmnibusSpendingBillEnacted Date: January5,2015 TheFY16OmnibusAppropriationsBillsignedintolawonDecember18,2015establishesfunding levelsfortheCDBGandHOMEprograms.DuetothewillingnessofSenateminorityDemocratsto filibusterindividualRepublicanappropriationbillsandathreatenedPresidentialveto,amajor reductionintheHOMEfundingwererestoredintheOmnibusspendingdeal. Omnibushighlights: Program FY15 FY16 FY16 FY16 (inmillions) Enacted House Senate Omnibus CDBG 3,000 3,000 2,900 3,000 Entitlement HOME 900 767 66 950 U.S.SenatorsSchumerandGillibrand,aswellasU.S.CongressmanReed,allvotedinfavorofthe Omnibusbill. ThebillalsoretainedauthorityfortheNationalHousingTrustFund(NHTF)thatRepublicans soughttodivert.NHTFfundswillbeallocatedintheformofablockgranttoeachstateforthe purposeofincreasingandpreservingthesupplyofrentalhousingforExtremelyLowIncome(ELI) households(30%ofAreaMedianIncome)andVeryLowIncome(VLI)households(50%ofAMI). ThefundiscapitalizedbyanannualassessmentonFreddieMacandFannieMaesalesvolumeand establishesadedicatedsourceofpermanentfundingforaffordablehousingnotsubjecttothe annualappropriationprocess.Itisprojectedthat$19millioninfundingwillbeallocatedtoNYSin 2016throughtheNHTF.