Tompkins County Industrial Development Agency Administration provided by TCAD 1. CALL TO ORDER TOMPKINS COUNTY INDUSTRIAL DEVELOPMENT AGENCY BOARD OF DIRECTORS MEETING 2. PRIVILEGE OF THE FLOOR 3. BUSINESS Thursday, June 8, 2017 4:00 5:30 PM Legislative Chambers Governor Daniel D. Tompkins Building 121 E. Court Street, Ithaca NY AGENDA Old Business Page # Mecklenburg Solar Supplemental Resolution 2 Enfield I Community Solar Supplemental Resolution 6 Harold s Holdings, LLC Final Approval Determination of Financial Need Memo 10 Energy Efficiency at Harold s Square Memo 12 Inducement Resolution 14 Public Hearing Minutes 21 Agency Project Agreement 25 2016 TCIDA Annual Audit Acceptance and Certification of PARIS Report Solar Policy Discussion/Approval Draft Solar Policy 33 4. STAFF REPORT 5. APPROVAL OF MEETING MINUTES April 13, 2017 & May 11, 2017 35 6. ADJOURNMENT Next Meeting: July 13, 2017 401 E. MLK Jr., Street, Suite 402B, Ithaca, New York 14850 phone: (607) 273-0005 fax: (607) 273-8964 1
SUPPLEMENTAL RESOLUTION (Mecklenburg Solar, LLC Project) A regular meeting of the Tompkins County Industrial Development Agency was convened on Thursday, June 8, 2017 at [ : ] p.m. The following resolution was duly offered and seconded, to wit: Resolution No. [ ] SUPPLEMENTAL RESOLUTION OF THE TOMPKINS COUNTY INDUSTRIAL DEVELOPMENT AGENCY (THE AGENCY ) (i) SUPPLEMENTING THAT CERTAIN INDUCEMENT RESOLUTION ADOPTED ON MAY 11, 2017 ACCEPTING THE APPLICATION OF MECKLENBURG SOLAR, LLC AND AUTHORIZING THE AGENCY TO PROCEED WITH THE PROJECT AS DESCRIBED THEREIN AND HEREIN AND (ii) MAKING A DETERMINATION PURSUANT TO THE NEW YORK STATE ENVIRONMENTAL QUALITY REVIEW ACT WHEREAS, by Title 1 of Article 18-A of the General Municipal Law of the State of New York, as amended (the GML ), and Chapter 535 of the Laws of 1971 of the State of New York (hereinafter collectively called the Act ), the TOMPKINS COUNTY INDUSTRIAL DEVELOPMENT AGENCY (hereinafter called the Agency ) was created with the authority and power to own, lease and sell property for the purpose of, among other things, acquiring, constructing and equipping civic, industrial, manufacturing and commercial facilities as authorized by the Act; and WHEREAS, MECKLENBURG SOLAR, LLC (hereinafter called the Company ) desires to acquire, construct and equip upon approximately 13 acres of real property leased by the Company at 1732 Mecklenburg Road in the Town of Enfield, Tompkins County, New York (currently designated as Town of Enfield tax parcel number 4.-1-8.32) (the Land ) a 1.8-megawatt community solar array to be used to generate electricity that will allow residential subscribers to receive renewable energy that will offset traditional power sources for the equivalent of 200-300 homes (hereinafter called the Project ); and WHEREAS, pursuant to Section 859-a of the GML, at 10:00 a.m. on May 10, 2017 at the Enfield Community Building, located in the Town of Enfield at 182 Enfield Main Road, Enfield, New York, the Agency held a public hearing with respect to the Project and the proposed financial assistance (the Financial Assistance ) being contemplated by the Agency (the Public Hearing ) whereat interested parties were provided a reasonable opportunity, both orally and in writing, to present their views; and WHEREAS, pursuant to the New York State Environmental Quality Review Act, Article 8 of the Environmental Conservation Law and its implementing regulations adopted pursuant to at 6 N.Y.C.R.R. Part 617, as amended (collectively referred to as SEQRA ), the Agency constitutes 2
a State Agency and it must therefore satisfy the applicable requirements set forth in SEQRA, as necessary, prior to making a final determination whether to undertake the Project; and WHEREAS, the Town of Enfield Planning Board (the Planning Board ), conducted an uncoordinated review of the Project pursuant to SEQRA, which resulted in the Planning Board classifying the Project as an Unlisted Action pursuant to SEQRA and the issuance of a negative declaration by the Planning Board dated July 6, 2016 (the Negative Declaration ); and WHEREAS, on May 11, 2017 the Agency adopted an inducement resolution (the Initial Inducement Resolution ) whereby the Agency, among other things, (i) consented to and affirmed the status of the Planning Board as Lead Agency within the meaning of, and for all purposes of complying with SEQRA, (ii) determined that the proceedings undertaken by the Planning Board as Lead Agency under SEQRA with respect to the Project satisfies the requirements of SEQRA, (iii) ratified and confirmed said proceedings and (iv) determined that all of the provisions of SEQRA that are required to be complied with as a condition precedent to the approval of the financial assistance contemplated by the Agency with respect to the Project and the participation by the Agency in undertaking the Project had been satisfied, among other things; and WHEREAS, because the Planning Board conducted an uncoordinated review (as such quoted term is defined under SEQRA) of the Project pursuant to SEQRA, the Agency must conduct an uncoordinated review (as such quoted term is defined under SEQRA) of the Project and adopt independent findings pursuant to SEQRA; and WHEREAS, the Agency wishes to supplement the Initial Inducement Resolution in order to include its uncoordinated review (as such quoted term is defined under SEQRA) of the Project pursuant to SEQRA and to adopt its independent findings pursuant to SEQRA. NOW, THEREFORE, BE IT RESOLVED BY THE MEMBERS OF THE TOMPKINS COUNTY INDUSTRIAL DEVELOPMENT AGENCY AS FOLLOWS: Section 1. The Project involves an Unlisted Action (as such quoted term is defined under SEQRA). The Planning Board has issued a Negative Declaration with respect to the Project. The review is uncoordinated (as such quoted term is defined under SEQRA). The Agency, acting as an Involved Agency, having undertaken a thorough and comprehensive review of the Negative Declaration, Parts 2 and 3 of the Short Environmental Assessment Form, prepared by the Planning Board and dated July 7, 2016, and the materials presented by the Company, including, but not limited to, Part 1 of the Short Environmental Assessment Form, prepared by the Company and dated May 11, 2016, and related documents delivered by the Company to the Agency, as well as other representations made by the Company to the Agency in connection with the Project, (i) determines that the Project is an unlisted action (as such quoted term is defined under SEQRA), (ii) finds that the Project will result in no major impacts and, therefore, will not have a significant effect on the environment (as such quoted term is defined under SEQRA) and thus determines that no environmental impact statement (as such quoted term is defined under SEQRA) need be prepared for this Unlisted Action and (iii) further determines that that all of the provisions of SEQRA that are required to be complied with as a condition precedent to the approval of the Financial Assistance contemplated by the Issuer with Error! Unknown document property name.error! Unknown document property name.error! Unknown document property name. 2 3
respect to the Project have been satisfied. The Agency s determination constitutes a negative declaration (as such quoted term is defined under SEQRA) and the Agency hereby ratifies the Negative Declaration issued by the Planning Board. Section 2. Unless amended by the terms hereof, the Agency ratifies, confirms, reaffirms, restates and incorporated herein by reference as if set forth herein in their entirety, the findings made in the Initial Inducement Resolution and hereby reapproves the Project and the Financial Assistance. Section 3. The officers, employees and agents of the Agency are hereby authorized and directed for and in the name and on behalf of the Agency to do all acts and things required and to execute and deliver all such certificates, instruments and documents, to pay all such fees, charges and expenses and to do all such further acts and things as may be necessary or, in the opinion of the officer, employee or agent acting, desirable and proper to effect the purposes of the foregoing resolutions and to cause compliance by the Agency with all of the terms, covenants and provisions of the documents executed for and on behalf of the Agency. Section 4. All actions heretofore undertaken by the Agency and the Company as agent of the Agency are ratified and approved and the Agency and the Company, as agent of the Agency, are hereby authorized to continue to undertake the Project. Section 5. These Resolutions shall take effect immediately. The question of the adoption of the foregoing Resolutions was duly put to a vote on roll call, which resulted as follows: Yea Nay Abstain Absent James P. Dennis [ ] [ ] [ ] [ ] Martha Robertson [ ] [ ] [ ] [ ] Svante L. Myrick [ ] [ ] [ ] [ ] Will Burbank [ ] [ ] [ ] [ ] Grace Chiang [ ] [ ] [ ] [ ] Jennifer Tavares [ ] [ ] [ ] [ ] Richard T. John [ ] [ ] [ ] [ ] The Resolutions were thereupon duly adopted. Error! Unknown document property name.error! Unknown document property name.error! Unknown document property name. 3 4
STATE OF NEW YORK ) COUNTY OF TOMPKINS ) SS: I, the undersigned Assistant Secretary of the Tompkins County Industrial Development Agency, DO HEREBY CERTIFY: That I have compared the annexed extract of minutes of the meeting of the Tompkins County Industrial Development Agency (the Agency ), including the resolution contained therein, held on June 8, 2017, with the original thereof on file in my office, and that the same is a true and correct copy of the proceedings of the Agency and of such resolution set forth therein and of the whole of said original insofar as the same relates to the subject matters therein referred to. I FURTHER CERTIFY, that all members of the Agency had due notice of said meeting, that the meeting was in all respects duly held and that, pursuant to Article 7 of the Public Officers Law (Open Meetings Law), said meeting was open to the general public, and that public notice of the time and place of said meeting was duly given in accordance with Article 7. I FURTHER CERTIFY, that there was a quorum of the members of the Agency present throughout said meeting. I FURTHER CERTIFY, that as of the date hereof, the attached resolution is in full force and effect and has not been amended, repealed or modified. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the Agency this day of June, 2017. Svante L. Myrick, Secretary Error! Unknown document property name.error! Unknown document property name.error! Unknown document property name. 4 5
SUPPLEMENTAL RESOLUTION (NY Enfield I, LLC Project) A regular meeting of the Tompkins County Industrial Development Agency was convened on Thursday, June 8, 2017 at [ : ] p.m. The following resolution was duly offered and seconded, to wit: Resolution No. [ ] SUPPLEMENTAL RESOLUTION OF THE TOMPKINS COUNTY INDUSTRIAL DEVELOPMENT AGENCY (THE AGENCY ) (i) SUPPLEMENTING THAT CERTAIN INDUCEMENT RESOLUTION ADOPTED ON MAY 11, 2017 ACCEPTING THE APPLICATION OF NY ENFIELD I, LLC AND AUTHORIZING THE AGENCY TO PROCEED WITH THE PROJECT AS DESCRIBED THEREIN AND HEREIN AND (ii) MAKING A DETERMINATION PURSUANT TO THE NEW YORK STATE ENVIRONMENTAL QUALITY REVIEW ACT WHEREAS, by Title 1 of Article 18-A of the General Municipal Law of the State of New York, as amended (the GML ), and Chapter 535 of the Laws of 1971 of the State of New York (hereinafter collectively called the Act ), the TOMPKINS COUNTY INDUSTRIAL DEVELOPMENT AGENCY (hereinafter called the Agency ) was created with the authority and power to own, lease and sell property for the purpose of, among other things, acquiring, constructing and equipping civic, industrial, manufacturing and commercial facilities as authorized by the Act; and WHEREAS, DELAWARE RIVER SOLAR, LLC (and after the Lease Assignment (as such term is defined in the hereinafter defined Initial Inducement Resolution), NY Enfield I, LLC (each hereinafter called the Company during their respective periods of interest)) desires to acquire, construct and equip upon real property leased by the Company on 236 Podunk Road in the Town of Enfield, Tompkins County, New York (currently designated as part of Town of Enfield tax parcel number 1-3-10.2) (the Land ) a 2-megawatt community solar array to be used to generate electricity that will allow residential and commercial subscribers to receive renewable energy that will offset traditional power sources for the equivalent of 400-450 homes and businesses (hereinafter called the Project ); and WHEREAS, pursuant to Section 859-a of the GML, at 10:00 a.m. on May 10, 2017 at the Enfield Community Building, located in the Town of Enfield at 182 Enfield Main Road, Enfield, New York, the Agency held a public hearing with respect to the Project and the proposed financial assistance (the Financial Assistance ) being contemplated by the Agency whereat interested parties were provided a reasonable opportunity, both orally and in writing, to present their views; and WHEREAS, pursuant to the New York State Environmental Quality Review Act, Article 8 of the Environmental Conservation Law and its implementing regulations adopted pursuant to at 6
6 N.Y.C.R.R. Part 617, as amended (collectively referred to as SEQRA ), the Agency constitutes a State Agency and it must therefore satisfy the applicable requirements set forth in SEQRA, as necessary, prior to making a final determination whether to undertake the Project; and WHEREAS, the Town of Enfield Planning Board (the Planning Board ), conducted an uncoordinated review (as such quoted term is defined under SEQRA) of the Project pursuant to SEQRA, which resulted in the issuance of a negative declaration by the Planning Board dated March 1, 2017 (the Negative Declaration ); and WHEREAS, on May 11, 2017 the Agency adopted an inducement resolution (the Initial Inducement Resolution ) whereby the Agency, among other things, (i) consented to and affirmed the status of the Planning Board as Lead Agency within the meaning of, and for all purposes of complying with SEQRA, (ii) determined that the proceedings undertaken by the Planning Board as Lead Agency under SEQRA with respect to the Project satisfies the requirements of SEQRA, (iii) ratified and confirmed said proceedings and (iv) determined that all of the provisions of SEQRA that are required to be complied with as a condition precedent to the approval of the Financial Assistance contemplated by the Agency with respect to the Project and the participation by the Agency in undertaking the Project had been satisfied, among other things; and WHEREAS, because the Planning Board conducted an uncoordinated review (as such quoted term is defined under SEQRA) of the Project pursuant to SEQRA, the Agency must conduct an uncoordinated review (as such quoted term is defined under SEQRA) of the Project and adopt independent findings pursuant to SEQRA; and WHEREAS, the Agency wishes to supplement the Initial Inducement Resolution in order to include its uncoordinated review (as such quoted term is defined under SEQRA) of the Project pursuant to SEQRA and to adopt its independent findings pursuant to SEQRA. NOW, THEREFORE, BE IT RESOLVED BY THE MEMBERS OF THE TOMPKINS COUNTY INDUSTRIAL DEVELOPMENT AGENCY AS FOLLOWS: Section 1. The Project involves an Unlisted Action (as such quoted term is defined under SEQRA). The Planning Board has issued a Negative Declaration with respect to the Project. The review is uncoordinated (as such quoted term is defined under SEQRA). The Agency, acting as an Involved Agency, having undertaken a thorough and comprehensive review of the Negative Declaration, Parts 2 and 3 of the Full Environmental Assessment Form, prepared by the Planning Board and dated March 1, 2017, and the materials presented by the Company, including, but not limited to, the Full Environmental Assessment Form, prepared by the Company and dated January 19, 2017 and related documents delivered by the Company to the Agency, as well as other representations made by the Company to the Agency in connection with the Project, (i) determines that the Project is an unlisted action (as such quoted term is defined under SEQRA), (ii) finds that the Project will result in no major impacts and, therefore, will not have a significant effect on the environment (as such quoted term is defined under SEQRA) and thus determines that no environmental impact statement (as such quoted term is defined under SEQRA) need be prepared for this Unlisted Action and (iii) further determines that that all of the provisions of SEQRA that are required to be complied with as a condition precedent to the Error! Unknown document property name.error! Unknown document property name.error! Unknown document property name. 2 7
approval of the Financial Assistance contemplated by the Issuer with respect to the Project have been satisfied. The Agency s determination constitutes a negative declaration (as such quoted term is defined under SEQRA) and the Agency hereby ratifies the Negative Declaration issued by the Planning Board. Section 2. Unless amended by the terms hereof, the Agency ratifies, confirms, reaffirms, restates and incorporated herein by reference as if set forth herein in their entirety, the findings made in the Initial Inducement Resolution and hereby reapproves the Project and the Financial Assistance. Section 3. The officers, employees and agents of the Agency are hereby authorized and directed for and in the name and on behalf of the Agency to do all acts and things required and to execute and deliver all such certificates, instruments and documents, to pay all such fees, charges and expenses and to do all such further acts and things as may be necessary or, in the opinion of the officer, employee or agent acting, desirable and proper to effect the purposes of the foregoing resolutions and to cause compliance by the Agency with all of the terms, covenants and provisions of the documents executed for and on behalf of the Agency. Section 4. All actions heretofore undertaken by the Agency and the Company as agent of the Agency are ratified and approved and the Agency and the Company, as agent of the Agency, are hereby authorized to continue to undertake the Project. Section 5. These Resolutions shall take effect immediately. The question of the adoption of the foregoing Resolutions was duly put to a vote on roll call, which resulted as follows: Yea Nay Abstain Absent James P. Dennis [ ] [ ] [ ] [ ] Martha Robertson [ ] [ ] [ ] [ ] Svante L. Myrick [ ] [ ] [ ] [ ] Will Burbank [ ] [ ] [ ] [ ] Grace Chiang [ ] [ ] [ ] [ ] Jennifer Tavares [ ] [ ] [ ] [ ] Richard T. John [ ] [ ] [ ] [ ] The Resolutions were thereupon duly adopted. Error! Unknown document property name.error! Unknown document property name.error! Unknown document property name. 3 8
STATE OF NEW YORK ) COUNTY OF TOMPKINS ) SS: I, the undersigned Assistant Secretary of the Tompkins County Industrial Development Agency, DO HEREBY CERTIFY: That I have compared the annexed extract of minutes of the meeting of the Tompkins County Industrial Development Agency (the Agency ), including the resolution contained therein, held on June 8, 2017, with the original thereof on file in my office, and that the same is a true and correct copy of the proceedings of the Agency and of such resolution set forth therein and of the whole of said original insofar as the same relates to the subject matters therein referred to. I FURTHER CERTIFY, that all members of the Agency had due notice of said meeting, that the meeting was in all respects duly held and that, pursuant to Article 7 of the Public Officers Law (Open Meetings Law), said meeting was open to the general public, and that public notice of the time and place of said meeting was duly given in accordance with Article 7. I FURTHER CERTIFY, that there was a quorum of the members of the Agency present throughout said meeting. I FURTHER CERTIFY, that as of the date hereof, the attached resolution is in full force and effect and has not been amended, repealed or modified. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the Agency this day of June, 2017. Svante L. Myrick, Secretary Error! Unknown document property name.error! Unknown document property name.error! Unknown document property name. 4 9
Memorandum To: Tompkins County Industrial Development Agency From: Heather McDaniel Date: June 1, 2017 Re: Harold s Square Determination of Financial Need The City of Ithaca Community Investment Incentive Tax Abatement Program (CIITAP) allows an applicant to request an enhanced property tax abatement that begins at 100% in year one and decreases in equal increments over ten (10) years if the applicant can demonstrate financial need as determined by a review by IDA administrative staff of the project pro forma and demonstration of an annual return on investment less than 20% in each of the first five years. The applicant for the Harold s Square project, has requested the enhanced abatement and provided me with the construction budget and assumptions, a ten-year operating pro forma, the assumptions used to develop the pro forma including rent rolls, and a calculation of a leveraged return on investment. I reviewed the documentation, requested some clarifications and additional information, I have determined that: 1. The developer s financial projections are reasonable. 2. The developer s assumptions are reasonable. 3. The developer s Return on Investment is less than 20% in each of the first five years. It is my recommendation that the applicant has demonstrated financial need as outlined in the CIITAP guidelines and is eligible for the enhanced abatement. Following is a brief review of my analysis: Development Costs I received and reviewed a copy of the development costs. The constructions costs are projected at $170 and $200 per square foot for the retail and resident portions, respectively. These costs are in line with other residential and retail development in the downtown core. The acquisition cost includes carried costs by David Lubin since he first purchased the buildings for the project. The acquisition cost is reasonable compared to recent acquisitions downtown. Soft costs include architectural and engineering, legal, closing costs and other miscellaneous soft costs. The construction contingency is 5% which is standard in the industry. A developer fee is included as part of the capitalized project costs to preserve cash flow in the first few years after construction and meet bank requirements for the debt coverage ratio. Operating Pro forma I received and reviewed a ten-year operating pro forma and related material detailing the assumptions used to develop the pro forma. The residential rental rates are slightly above current market rate TCAD 401 E. State Street / E. MLK Jr. St., Suite 402B Ithaca, New York 14850 (607) 273-0005 10
Tompkins County Area Development apartments including Gateway Commons and the Carey Building. The projected stabilized rental vacancy rate is similar to other downtown projects developers are assuming very little vacancy in the tight downtown market. The retail vacancy rate is initially over 25% which is reasonable considering current retail vacancies on The Commons and the length of time the developer has been trying to pre-lease the space. The expenses include an accurate estimate of real estate taxes paid if the 10 year abatement is approved. A management fee of 4% is fairly standard. Return on Investment The applicant provided a leveraged return on investment analysis that I reviewed and determined to be reasonable. I also calculated a standard return on equity calculation (net operating income minus projected debt service divided by equity invested. The net operating income was determined to be reasonable based on the analysis of the operating pro forma. The debt service assumptions are reasonable based on my discussions with the applicant and recent discussion/knowledge about commercial real estate financing. In all cases, the return on investment is below the 20% annually required by the CIITAP application to demonstrate financial need. Return on Investment Return On: Year 1 Year 2 Year 3 Year 4 Year 5 $ Leveraged -1.5% 6.3% 7.8% 9.4% 11.1% Equity Invested -1.5% 6.3% 7.4% 8.2% 8.9% 2 11
June 1, 2017 Heather D. McDaniel, CEcD, AICP, EDFP Vice President, Director of Economic Development Services Tompkins County Area Development (TCAD) 401 E. State St., Suite 402B, Ithaca, New York 14850 Re: Energy Efficiency at Harold s Square Dear Ms. McDaniel, At the recent Public Hearing on May 30 th 2017, questions were asked about Harold s Square s energy efficiency measures. It is clear that reducing buildings carbon footprints and their demand for fossil fuels is an important value to the people and businesses of Tompkins County, and it is one that we share as well. We would like to take an opportunity to provide additional information about the Project s designed energy strategy which was not including in our IDA application. The heating and cooling system is a water source Heat Pump loop. This system will have individual heat pump units for each space which will allow for individual temperature control for the various spaces. These high efficiency heat pumps are electrically powered and utilize a common water loop to share and exchange heat between the units and zones within the building. For example, when the center core spaces and other spaces are in cooling mode (those on the South that will incur a large solar heat gain), the heat pumps will be adding heat to the loop, allowing the perimeter spaces and other spaces that need heat to extract heat from the loop at the same time. This balancing of natural/solar heat gain within the building is an excellent way of utilizing available energy and reducing demand for fossil fuel generated heat or cooling sources. With the heat pumps connected to each tenant s electric meter, this provides inherent energy conservation as compared to the landlord paying for the climate control. Residents tend to increase their own conservation efforts when they are responsible for their utility costs. They are more inclined to keep operable windows closed and to limit room temperature set points from above normal comfort levels when they are paying for the heat individually. 12
Additionally, the ventilation system will include Rooftop units that have integral Heat Recovery wheels that extract the heat from the exhaust air stream and preheat the incoming fresh air during the heating season. Our design team has also redesigned the building s envelope with high efficiency panels that offer an increased R-value over the original curtain wall design. Finally, although not yet designed, we are working with a solar provider to design a structure for rooftop solar which is planned to provide power for the common area lighting throughout the tower. Harold s Square, LLC By: Name: David L. Carswell Title: AVP, Development 13
INDUCEMENT RESOLUTION: Harold s Holding, LLC 123-139 East State Street, City of Ithaca A regular meeting of the Tompkins County Industrial Development Agency was convened on June 8, 2017 at 4:00 p.m. The following resolution was duly offered and seconded, to wit: Resolution authorizing the Tompkins County Industrial Development Agency to (i) take a leasehold interest in real property to be acquired by Harold s Holding, LLC consisting of approximately 0.40 acre of land located at 123-127, 133, 135, and 137-139 East State Street in the City of Ithaca, Tompkins County, New York (currently designated as tax parcel numbers 70.-5-5, -7, -8, and-9), and improvements to be constructed thereon; (ii) appoint Harold s Holding, LLC as its agent to acquire, construct and equip thereon (including the demolition of three buildings and the renovation of the historic Sage Block building) an approximately 180,000-square-foot mixed-use building of five stories (approximately sixty feet tall) fronting on the Ithaca Commons and twelve stories (approximately 140 feet tall) set back, containing approximately 16,241 square feet of ground-floor retail/restaurant space; approximately 33,833 square feet of commercial office space; approximately 80,678 square feet of residential housing comprising forty studio apartments, thirty-one one-bedroom apartments, and thirtyseven two-bedroom apartments; and approximately 11,293 square feet of personal storage space; (iii) negotiate and execute a lease agreement, leaseback agreement and related payment-in-lieu-of-tax agreement; (iv) provide financial assistance to Harold s Holding, LLC in the form of (a) a sales tax exemption for purchases and rentals related to the acquisition, construction and equipping of the project, (b) a partial real property tax abatement through the PILOT Agreement, and (c) a mortgage tax exemption for the financing related to the project; and (v) execute related documents. WHEREAS, by Title 1 of Article 18-A of the General Municipal Law of the State of New York, as amended, and 895-b of the General Municipal Law of the State of New York, as amended (hereinafter collectively called the Act ), TOMPKINS COUNTY INDUSTRIAL DEVELOPMENT AGENCY (hereinafter called the Agency ) was created with the authority and power to own, lease and sell property for the purpose of, among other things, acquiring, constructing and equipping civic, industrial, manufacturing and commercial facilities as authorized by the Act; and IDA \ HaroldsHolding 123-139EState induce.res - Page 1-14
WHEREAS, Harold s Holding, LLC (hereinafter called the Company ), for itself or on behalf of an entity to be formed, desires to acquire, construct and equip (including the demolition of three buildings and the renovation of the historic Sage Block building) upon approximately 0.40 acre of land located at 123-127, 133, 135, and 137-139 East State Street in the City of Ithaca, Tompkins County, New York (currently designated as tax parcel numbers 70.-5-5, -7, 8, and -9) (the Land ) an approximately 180,000-square-foot mixed-use building of five stories (approximately sixty feet tall) fronting on the Ithaca Commons and twelve stories (approximately 140 feet tall) set back, containing approximately 16,241 square feet of ground-floor retail/restaurant space; approximately 33,833 square feet of commercial office space; approximately 80,678 square feet of residential housing comprising forty studio apartments, thirty-one one-bedroom apartments, and thirty-seven two-bedroom apartments; and approximately 11,293 square feet of personal storage space (hereinafter called the Project ); and WHEREAS, pursuant to Article 18-A of the General Municipal Law, the Agency desires to adopt a resolution describing the Project and the financial assistance that the Agency is contemplating with respect to the Project; and WHEREAS, it is contemplated that the Agency will (i) designate the Company as its agent for the purpose of acquiring, constructing, and equipping the Project, (ii) negotiate and enter into a lease agreement (the Lease ), leaseback agreement (the Leaseback Agreement ) and payment-in-lieu-of-tax agreement (the PILOT Agreement ) with the Company containing the abatement schedule set forth in Exhibit A, (iii) take a leasehold interest in the land and the improvements and personal property constituting the Project (once the Leaseback Agreement and PILOT Agreement have been negotiated), and (iv) provide financial assistance to the Company in the form of (a) a sales and use tax exemption for purchases and rentals related to the acquisition, construction and equipping of the Project, (b) a partial real property tax abatement through the PILOT Agreement, and (c) a mortgage tax exemption for the financing related to the Project; and WHEREAS, pursuant to General Municipal Law Section 859-a, at 5:30 p.m. on May 30, 2017 at the Ithaca Town Hall, located in the City of Ithaca at 215 North Tioga Street, Ithaca, New York, the Agency held a public hearing with respect to the Project and the proposed financial assistance being contemplated by the Agency (the Public Hearing ) whereat interested parties were provided a reasonable opportunity, both orally and in writing, to present their views. A copy of the minutes of said Public Hearing is attached hereto as Exhibit B; and WHEREAS, the City of Ithaca Planning and Development Board on June 25, 2013 and August 23, 2016 issued negative declarations (the SEQR Proceedings ) under Article 8 of the Environmental Conservation Law and Regulations adopted pursuant thereto by the Department of Environmental Conservation of the State (collectively, SEQR ) with respect to the Project; and NOW, THEREFORE, BE IT RESOLVED BY THE MEMBERS OF THE TOMPKINS COUNTY INDUSTRIAL DEVELOPMENT AGENCY AS FOLLOWS: Section 1. The Company has presented an application in a form acceptable to the Agency. Based upon the representations made by the Company to the Agency in the Company s application, the Agency hereby finds and determines that: a. By virtue of the Act, the Agency has been vested with all powers necessary and convenient to carry out and effectuate the purposes and provisions of the Act and to exercise all powers granted to it under the Act; and IDA \ HaroldsHolding 123-139EState induce.res - Page 2-15
b. It is desirable and in the public interest for the Agency to appoint the Company as its agent for purposes of acquiring, constructing and equipping the Project; and c. The Agency has the authority to take the actions contemplated herein under the Act; and d. The action to be taken by the Agency will induce the Company to develop the Project, thereby increasing employment opportunities in Tompkins County and otherwise furthering the purposes of the Agency as set forth in the Act; and e. The Project will not result in the removal of a civic, commercial, industrial, or manufacturing plant of the Company or any other proposed occupant of the Project from one area of the State of New York (the State ) to another area of the State or result in the abandonment of one or more plants or facilities of the Company or any other proposed occupant of the Project located within the State, and the Agency hereby finds that, based on the Company s application, to the extent occupants are relocating from one plant or facility to another, the Project is reasonably necessary to discourage the Project occupants from removing such other plant or facility to a location outside the State and/or is reasonably necessary to preserve the competitive position of the Project occupants in their respective industries; and f. The Project meets the requirements of the Agency s Community Investment Incentive Tax Abatement Program. The project was approved by the City of Ithaca CIITAP Review Committee on October 29, 2013 and will increase density in the City of Ithaca downtown density district. g. The Project involves a Type I action as defined in Article 8 of the Environmental Conservation Law and Regulations adopted pursuant thereto by the Department of Environmental Conservation of the State (collectively, SEQR ). Section 2. Based upon a review of the Company s application and the SEQR Proceedings submitted to the Agency, the Agency hereby: a. Consents to and affirms the status of the City of Ithaca Planning and Development Board (the Planning Board ) as Lead Agency within the meaning of, and for all purposes of complying with, SEQR; b. Determines that the proceedings undertaken by the Planning Board as Lead Agency under SEQR with respect to the acquisition, construction and equipping of the Project satisfy the requirements of SEQR, and ratifies and confirms such proceedings by the Planning Board as Lead Agency; c. Determines that all of the provisions of SEQR that are required to be complied with as a condition precedent to the approval of the financial assistance contemplated by the Agency with respect to the Project and the participation by the Agency in undertaking the Project have been satisfied. Section 3. Based upon the representations and warranties made by the Company in its application for financial assistance, the Agency hereby authorizes and approves the Company, as its agent, to make purchases of goods and services relating to the Project and that would otherwise be IDA \ HaroldsHolding 123-139EState induce.res - Page 3-16
subject to New York State and local sales and use tax in an amount up to $17,500,000.00, which result in New York State and local sales and use tax exemption benefits ( sales and use tax exemption benefits ) not to exceed $1,400,000.00. The Agency agrees to consider any requests by the Company for increase to the amount of sales and use tax exemption benefits authorized by the Agency upon being provided with appropriate documentation detailing the additional purchases of property or services. Section 4. Section 5. Section 6. Pursuant to Section 875(3) of the New York General Municipal Law, the Agency may recover or recapture from the Company, its agents, consultants, subcontractors, or any other party authorized to make purchases for the benefit of the Project, any sales and use tax exemption benefits taken or purported to be taken by the Company, its agents, consultants, subcontractors, or any other party authorized to make purchases for the benefit of the Project, if it is determined that: (i) the Company, its agents, consultants, subcontractors, or any other party authorized to make purchases for the benefit of the Project, is not entitled to the sales and use tax exemption benefits; (ii) the sales and use tax exemption benefits are in excess of the amounts authorized to be taken by the Company, its agents, consultants, subcontractors, or any other party authorized to make purchases for the benefit of the Project; (iii) the sales and use tax exemption benefits are for property or services not authorized by the Agency as part of the Project; or (iv) the sales and use tax exemption benefits are taken in cases where the Company, its agents, consultants, subcontractors, or any other party authorized to make purchases for the benefit of the Project, fails to comply with a material term or condition to use property or services in the manner approved by the Agency in connection with the Project. As a condition precedent of receiving sales and use tax exemption benefits, the Company, its agents, consultants, subcontractors, or any other party authorized to make purchases for the benefit of the Project, must (i) cooperate with the Agency in its efforts to recover or recapture any sales and use tax exemption benefits, and (ii) promptly pay over any such amounts to the Agency that the Agency demands. Subject to the Company executing the Agency Project Agreement attached hereto as Exhibit C, the Agency hereby authorizes the Company to proceed with the acquisition, construction and equipping of the Project and hereby appoints the Company as the true and lawful agent of the Agency: (i) to acquire, construct and equip the Project; (ii) to make, execute, acknowledge and deliver any contracts, orders, receipts, writings and instructions, as the stated agent for the Agency with the authority to delegate such agency, in whole or in part, to agents, subagents, contractors and subcontractors of such agents and subagents and to such other parties as the Company chooses; and (iii) in general, to do all things which may be requisite or proper for completing the Project, all with the same powers and the same validity that the Agency could do if acting on its own behalf; provided, however, that the Agent Agreement shall expire on June 30, 2019 (unless extended for good cause by the Administrative Director of the Agency) if the Leaseback Agreement and PILOT Agreement contemplated have not been executed and delivered. The Chairperson, Vice Chairperson, and/or the Administrative Director of the Agency are hereby authorized, on behalf of the Agency, to negotiate and execute (a) the Lease Agreement whereby the Company conveys a leasehold interest in the Project to the Agency, (b) the related Leaseback Agreement leasing the Project back to the Company, and (c) the PILOT Agreement; provided (i) the rental payments under the Leaseback Agreement include payment of all costs incurred by the Agency arising out of or related to the Project and indemnification IDA \ HaroldsHolding 123-139EState induce.res - Page 4-17
of the Agency by the Company for actions taken by the Company and/or claims arising out of or related to the Project; and (ii) the terms of the PILOT Agreement are consistent with the Agency s Uniform Tax Exemption Policy or the procedures for deviation have been complied with. Section 7. Section 8. Section 9. The Chair, Vice Chair and/or Administrative Director of the Agency are hereby authorized, on behalf of the Agency, to execute and deliver any mortgage, assignment of leases and rents, security agreement, UCC-1 Financing Statements and all documents, in a form acceptable to the Agency s counsel, reasonably contemplated by these resolutions or required by any lender identified by the Company (the Lender ) up to a maximum principal amount of $34,000,000.00 to finance demolition, building construction, materials, equipment, and other personal property and related transactional costs (hereinafter, with the Leaseback Agreement and PILOT Agreement, collectively called the Agency Documents ); and, where appropriate, the Secretary or Assistant Secretary of the Agency is hereby authorized to affix the seal of the Agency to the Agency Documents and to attest the same, all with such changes, variations, omissions and insertions as the Chair, Vice Chair and/or Administrative Director of the Agency shall approve, the execution thereof by the Chair, Vice Chair and/or Administrative Director of the Agency to constitute conclusive evidence of such approval; provided in all events recourse against the Agency is limited to the Agency s interest in the Project. The officers, employees and agents of the Agency are hereby authorized and directed for and in the name and on behalf of the Agency to do all acts and things required and to execute and deliver all such certificates, instruments and documents, to pay all such fees, charges and expenses and to do all such further acts and things as may be necessary or, in the opinion of the officer, employee or agent acting, desirable and proper to effect the purposes of the foregoing resolutions and to cause compliance by the Agency with all of the terms, covenants and provisions of the documents executed for and on behalf of the Agency. These resolutions shall take effect immediately. The question of the adoption of the foregoing resolutions was duly put to a vote by roll call, which resulted as follows: Member names Yea Nea Abstain Absent James P. Dennis, Chairperson [ ] [ ] [ ] [ ] Martha Robertson, Vice Chairperson [ ] [ ] [ ] [ ] Svante L. Myrick, Secretary [ ] [ ] [ ] [ ] Will Burbank [ ] [ ] [ ] [ ] Grace Chiang [ ] [ ] [ ] [ ] Jennifer Tavares [ ] [ ] [ ] [ ] Richard T. John [ ] [ ] [ ] [ ] The resolutions were thereupon duly adopted. IDA \ HaroldsHolding 123-139EState induce.res - Page 5-18
I, Svante L. Myrick, as Secretary of the Tompkins County Industrial Development Agency, hereby certify that the above is a true and correct copy of a duly authorized resolution of the Tompkins County Industrial Development Agency. Dated: June, 2017 Svante L. Myrick - Page 6-19
EXHIBIT A Payment-in-Lieu-of-Tax ( PILOT ) Agreement abatement schedule As long as the Land and improvements thereon are leased to the Agency and, therefore, exempt from general real property taxation, the Company agrees to pay annually to such Taxing Jurisdictions, i.e., the City of Ithaca, the County of Tompkins, and the Ithaca City School District (or cause any mortgagee to release any escrow for payments hereunder annually to such Taxing Jurisdiction), as a payment in lieu of general real property taxes respecting such premises: (i) an amount equal to 100% of the real property taxes which would be due for said premises but for record ownership by the Agency (but without reference to, or utilization of, Section 485-b of the Real Property Tax Law of the State of New York) based on the lowest valuation as set by the Tompkins County Department of Assessment at the point in time when the existing rooms are taken out of use as part of the construction of the Project; and (ii) with respect to the portion of the assessed value of said premises attributable to the construction of the Project thereon, the following percentages of the general real property taxes which would be due in respect of the improvements to the premises (i.e., the assessed value of the improvements to the premises) but for its record ownership by the Agency (but without any reference to, or utilization of, Section 485-b of the Real Property Tax law of the State of New York), based on a then-current assessment of such improvements: TAXING JURISDICTIONS PAYMENT YEAR OF IN LIEU OF TAX FOR ASSESSED EXEMPTION VALUE OF IMPROVEMENTS 1 0% 2 10% 3 20% 4 30% 5 40% 6 50% 7 60% 8 70% 9 80% 10 90% 11 and thereafter 100% (no abatement; full taxes paid) (it being understood and agreed that from the date hereof until year 1 of exemption, the Company shall be obligated to pay or cause to be paid annually to the Taxing Jurisdictions normal real property taxes on the full assessed value of the total land portion and then-existing improvements on the conveyed premises). - Page 7-20
Tompkins County Industrial Development Agency Administration provided by TCAD MINUTES OF PUBLIC HEARINGS Harold s Square May 30, 2017, 5:30 PM Ithaca Town Hall, 215 N. Tioga Street, Ithaca NY IDA Members Present: Michael Stamm (Recording), Jim Dennis, Martha Robertson, Jennifer Tavares, Svante Myrick Mr. Stamm called the hearing to order at 5:30 pm. He introduced himself and gave an overview of the public hearing purpose, briefly described the project, and detailed the financial assistance contemplated by the agency. He highlighted that the purpose of the hearing is to afford the public an opportunity to make comments about Harold s Square s application for financial assistance from the TCIDA. It is not a question and answer session. The applicant gave a brief overview of the project. Theresa Alt 206 Eddy Street, Ithaca NY The legal mission of the Industrial Development Agency is to create good jobs. We would not have this problem of working people who can t afford to live here if there weren t too many jobs at very low pay, too few that pay well. The Harold s Square project does not create permanent jobs. Of the construction jobs, only a measly 20% are promised at prevailing wages and for local labor. As for the Harold s Square project itself, the recession that once made it hard to get financing is now over. The prospect of years of construction on the Commons that might have deterred building in recent years is now over. This is now an attractive place to build. If Harold s Square were to walk away, another company would come. Consider the investment already made by the City in Commons infrastructure. This has been enough subsidy. No need for more. As for green considerations, yes, density of population is desirable. For that you need to have centrally located apartments at rents people can afford. You will not achieve density if you drive working people into the outlying counties. You will not cut fossil fuel use if they all have to drive to their jobs. If the IDA must abandon its mission to create jobs and instead give abatements for housing, it should do this ONLY for affordable housing. The bottom line is that tax abatements for Harold s Square are not justified. Marnie Kirchgessner 74 Westbury Hill Road, Ithaca NY 7 th generation in Tompkins County trying to survive in Tompkins County. My relationship to development is tenuous due to past experiences. I see this project as lining the pocket of the developer. Why does she pay taxes to subsidize the developers? Maybe I m anti capitalist, but I have always worked for a living. It is 401 E MLK Jr., Street, Suite 402B, Ithaca, New York 14850 phone: (607) 273-0005 fax: (607) 273-8964 21
Tompkins County Industrial Development Agency hard to survive here and this is difficult for those of modest incomes to understand. Public disclosure would help me understand this endless subsidy by the taxpayer. There is an enterprise zone on the Commons; does this apply to all vendors on the Commons? If you can t afford rent you can t afford to eat out at restaurants. Housing costs in Ithaca are too high and my subsidizing those costs do not make it better. Peter Wissoker 705 N. Tioga Street, Ithaca NY I am writing to ask that the Harold Square project not be given tax incentives of any kind for the following reasons: 1. We do not know the value of the tax breaks. The numbers we have are based on a $16 million dollar increase in the value of the property. Given that the existing properties were recently assessed at $1,675 millions dollars (see table below), that would mean that the total value of the new property would be roughly $17.7 million dollars. This strikes me as highly unlikely. If you use the assessor s model of what would it cost to build a similar building from scratch we have an easy answer: $42 million. That is far more than the current estimate. If we use a model based on the anticipated revenues of the building times the current cap rate then one would have to wonder what kind of lending institution would offer a loan based on these figures and, therefore, whether they are showing different figures to lenders than we are seeing. We don t know. The tax break could end up being for a good deal more than we expected if the valuation ends up being higher. Let s say the building is built and the valuation is $24 million instead of $16 million still just above half the cost of building the building then we are looking at a $5.2 million PILOT rather than $3.4 million in tax breaks. These kinds of decisions need to be based on more concrete figures than what we have at hand. State Street E. Valuation 2017 123-127 $650,000 133 $250,000 135 $375,000 137-139 $400,000 Total $1.675,000 2. The project is not self-sustaining, yet the developers have offered nothing by way of benefit to the public in exchange for its assistance. The developers admit on page 4 of their application that this is a challenging project whose financial viability depends on public investment. Their difficulties raising capital to this point shows that the developer has perhaps attempted too much. It shouldn t be the public s job to bail out what the market won t support unless it is going to have broad, positive public effects. Yet the developers have not promised to make any of the apartments affordable, nor have they offered to ensure that their building maintenance and management subcontractors will pay a living wage to their employees. These should be minimum standards for assisting this type of project. 3. It is time for the IDA to stop supporting market rate housing. That is not its core mission and a distortion of what the phrase community development means. 401 E MLK Jr., Street, Suite 402B, Ithaca, New York 14850 phone: (607) 273-0005 fax: (607) 273-8964 22