NEW YORK EMPOWERMENT ZONE CORPORATION Meeting of the Directors Wednesday, November 12, 2014 at 10:30 A.M. 36th floor Conference Room Empire State Development Corporation 633 Third Avenue New York, NY 10017 AGENDA KENNETH ADAMS, CHAIR – CALL MEETING TO ORDER I. CORPORATE ACTION TAB A. Approval of Minutes of June 30, 2014 Meeting. 1 B. Authorization of Matters Recommended by Bronx Overall Economic Development Corporation (“BOEDC”) 1. BOEDC Administrative Budget – A $725,000 administrative budget for 2 fiscal year 2015. C. Authorization of Matters Recommended by Upper Manhattan Empowerment Zone Development Corporation (“UMEZ”) 1. Victoria Tower – A $10,000,000 loan to finance the hotel construction to 3 be franchised under the Marriott Renaissance at 233 West 125th Street. 2. Grameen America, Inc. – A $500,000 loan to provide micro‐loans to 4 low‐income entrepreneurs from its new Harlem location on 127th Street. 3. UMEZ Marketing – A $120,000 grant to support its marketing, 5 communications, and promotions efforts in support of economic revitalization in Upper Manhattan for fiscal year 2015. D. Authorization of Matters Recommended by New York Empowerment Zone Corporation (“NYEZC”) 1. NYEZC Administrative Budget – Authorization of $495,070 administrative 6 budget for fiscal year 2013. II. SECRETARY’S REPORT FOR INFORMATION ONLY 1. Report on Empowerment Zone Funds Disbursed to BOEDC, 7 UMEZ and NYEZC III. OTHER BUSINESS KENNETH ADAMS – MOTION TO ADJOURN MEETING NEW YORK EMPOWERMENT ZONE CORPORATION MEETING OF THE DIRECTORS 633 Third Avenue 37th Floor Conference Room New York, New York June 30, 2014 10:30 a.m. ATTENDANCE: Kenneth Adams, Chair, ESD, President & CEO, Alicia Glen, Vice‐Chair, NYC Deputy Mayor Economic Development Javier Lopez, Designee, Congressman Jose E. Serrano’s Office Geoffrey Eaton, Designee, Congressman Rangel’s Office Marlene Citron, President, BOEDC Kenneth Knuckles, President & CEO, UMEZ Marion Phillips, Corporate Secretary, NYEZC OTHERS PRESENT: Jasmine Baker, ESD Kim Bryan, NYC Law Department Destiny Burns, ESD Steven Cohen, ESD Hope Knight, UMEZ Joe Middleton, UMEZ Verdery Roosevelt, UMEZ Amanda Septimo, Cong. Serrano’s Office Barry Smith, UMEZ Cheryl Simmons‐Oliver, Cong. Serrano’s Office Sonam Velani, NYC Office of the Mayor Robert White, ESD ALSO PRESENT: The Public The Press Toby Salinger, Commercial Observer P R O C E E D I N G S Chairman Adams greeted all present and introduced Vice‐Chair Alicia Glen, NYC Deputy Mayor. Chairman Adams: I would like to call to order the meeting of the New York Empowerment Zone Corporation for today, Monday, June 30th, 2014. All meetings of the New York Empowerment Zone Corporation Directors are public meetings and members of the public are, indeed, welcome to ask questions after each of the presentations. Those questions should be focused on the matters raised by the presentations themselves. Two minutes are allotted for comments from individuals and up to four minutes to individuals representing organizations. Following a question and answer period, a motion will be made and a vote will be cast. The first item on the agenda is the approval of the minutes of the December 18th, 2013 meeting of the Directors. Chairman Adams asked if any of the Directors had any questions, comments or corrections for the minutes. Director Cintron cited several updates. Chairman Adams and the rest of the Directors agreed that the vote to approve the minutes with corrections would occur at the end of the meeting, once Mr. Geoffrey Eaton has arrived to vote. BOEDC Administrative Budget Director Cintron presented the BOEDC Administrative Budget for fiscal year 2015. The request was for $725,000, an increase over previous years. The increase reflects astronomical increases in fringe benefits and special medical coverage that previous budgets had not. It also reflects the fact that there is an increased interest among businesses to relocate to the Bronx especially after the fiscal crisis. This increased interest includes New York City companies moving to other boroughs as they've run out of space, international companies that are coming in our direction because of their interest in doing business within the State of New York and current Bronx businesses looking to expand. Additional increases in the budget are due to costs associated with complying with ABO reporting. Vice Chair Glen asked if the increase in staff salaries, which the vast majority of the increase is comprised of, is salary increases or additional personnel. Director Cintron responded that it was not an increase in salary, but the amount of work that's being done by BOEDC staff in the Empowerment Zone. NYEZC Board Meeting Minutes ‐ June 30, 2014 Page 2 of 18 Vice Chair Glen then asked whether the head count has increased. Director Cintron responded no. Vice Chair Glen asked Director Cintron to explain why the dollar amount for salaries increased 18 percent while there were no salary increases or addition to the headcount. Director Cintron explained that the Bronx Empowerment Zone budget reflects the percent of staff time allocated to the Empowerment Zone. Salaries have not increased but the amount of time spent on the empowerment zone has increased along with the percentage paid by the empowerment zone. Vice Chair Glen asked for the amount of the overall BOEDC budget and what percentage is covered by the Empowerment Zone. Director Cintron advised that she did not know the exact number but explained that more that 70 percent of her salary is covered by the empowerment zone and 100 percent of the Empowerment Zone Executive Director. Vice Chair Glen requested the staff head count and overall budget for BOEDC. Director Cintron agreed. Vice Chair Glen stated that she is uncomfortable with approving the budget without context with respect to the entire operation. Chairman Adams acknowledged the Vice Chair’s concern and recommended holding off on the budget increase until ABO compliance has been resolved. He referred to an ESD grant that is pending approval based upon compliance with the Authorities Budget Office (ABO). He said he does not feel that the Directors are in a position to grant an increase. He suggested continuing the operating budget at the current level for six months, the amount of time he estimates for BOEDC to become fully compliant with ABO and to satisfy the broader questions the Vice Chair has. The Vice Chair stated that there is possibility of considering a broader budget at that time. Director Cintron stated that compliance with ABO would occur in three months and proposed meeting again at that time. Chairman Adams agreed that the ABO requirements were not too demanding and stated he hoped the $85,000 budget increase would be enough to cover additional accounting, auditing and legal expenses. NYEZC Board Meeting Minutes ‐ June 30, 2014 Page 3 of 18 Director Cintron added that the legal funds actually have more to do with collections issues and asked if there was any reason why the Directors would meet again in three months. Chairman Adams left it up to the Directors, and confirmed that BOEDC could become compliant with ABO and respond to the Vice Chair’s concerns within 90 days. He then made it clear that meeting within 90 days would not guarantee that the Directors would approve a budget increase of $85,000 but that the possibility was up for discussion. He then asked the other Directors for their points of view. Vice Chair Glen felt the request seems reasonable to get compliant with ABO and be able to provide a more holistic view of what the overall operating budget and headcount of the organization and in the meantime discuss other things of interest including the agenda moving forward and the administrations priorities. Chairman Adams then made a motion to support a budget for BOEDC at the 2014 fiscal year's funding levels (of $639,000 annually) for the next 90 days, during which time the staff of BOEDC will make its best efforts to become fully compliant with ABO reporting standards and, also, provide broader budget information at the request of the Deputy Mayor and the ESD. We'll do that together and we'll review that and then we'll have a basis for further discussion in about 90 days. Director Cintron wanted the record to reflect that $639,000 was the actual spending, and less than the amount that was approved for fiscal year 2014. Vice Chair Glen also requested that BOEDC’s materials presented to the NYEZ Directors include quarterly spending and comparisons to the amount budgeted as a balance sheet would reflect. Chairman Adams added that the case for an increase should be accompanied by greater detail on the basis for the increase including healthcare and ABO compliance. Chairman Adams entertained a motion for approval of BOEDC’s budget at the annual rate of $639,000 for a ninety day period Vice Chair Glen seconded. The abbreviated budget for BOEDC was approved by unanimous vote. Now the staff of the Upper Manhattan Empowerment Zone Development Corporation will present various initiatives proposed by their office. Futuro Media Group Verdery Roosevelt presented the Futuro Media Group initiative for a one year capacity building grant of up to $150,000. The total project cost is $495,020 and organization will NYEZC Board Meeting Minutes ‐ June 30, 2014 Page 4 of 18 leverage $345,020 in additional support from the Ford Foundation for a leverage ratio of 1 to 2.3. Funds will be used to support strategic planning, a full‐time director of development, consultants for outreach and fund raising activities and specialized fund raising software. The Futuro Media Group was established in 2010 by the award‐winning journalist, Maria Hinojosa, to foster diversity and innovation in the public media, nurture the development of multi‐ cultural journalists and encourage civic engagement, particularly among the Latino population.