BROOME COUNTY INDUSTRIAL DEVELOPMENT AGENCY BOARD MEETING 185 Court Street Binghamton, New York 13901 Friday, February 13, 2015, 12:00 pm SYNOPSIS OF MEETING PRESENT: J. Baumgartner, J. Bernardo, J. Davis, W. Howard, T. Kane, R. Nielsen Jr., J. Smith and J. Stevens ABSENT: J. Rounds GUESTS: Debbie Preston, Broome County Executive Jerry Marinich, Broome County Legislature Aaron Martin, Broome County Legislature Mark Whalen, Broome County Legislature Emmanuel Priest, Office of Senator Libous John Bertoni, Mayor of Village of Endicott Monarco DiFrancesco, American Horizons Group, LLC Anthony Paniccia, Delta Engineers, Architects & Land Surveyors Michael Keenan, Good Shepherd Village James Franz, Hinman, Howard & Kattell Robert Aikens, IYOE Local 158 Chris Bushnell, Laborers Local 785 Scott Colton, Carpenters 277 Dan Richardson, Roofers Local 203 Tom Spicer, Electricians 325 Tom Augostini, Town of Union John Solak, Broome County Resident Jon Harris, Press & Sun Bulletin Jeff Platsky, Press & Sun Bulletin STAFF: K. McLaughlin, S. Duncan, T. Gray, C. Campon, Z. Pehel, N. Schwartz COUNSEL: J. Meagher PRESIDING: T. Kane Mr. Kane called the meeting to order at 12:00 p.m. ITEM #1. APPROVE MINUTES FOR THE JANUARY 9, BOARD MEETING: Mr. Kane requested approval of the minutes for the January 9, 2015 Board Meeting MOTION: To approve the January 9, 2015 Board Meeting minutes. On a MOTION by Mr. Davis, seconded by Mr. Howard, the MOTION CARRIED UNANMIOUSLY. ITEM #2. PUBLIC COMMENT: Mr. John Solak said he attended the BCIDA Governance Committee on Wednesday and he enjoyed the presentation from American Horizons Group. He reminded the Board February 13, 2015 Page 2 that if anyone is a member of Visions Federal Credit Union, they are an owner of the credit union and since that institution is providing financing for the proposed American Horizons Project, any Visions members should abstain from voting. At the Governance Committee meeting, Mr. Monarco DiFrancesco, from American Horizons Group, said the project is 90% ADA compliant. Mr. Solak said that in accordance with Title IX, it should be 100%. He said the proposed project would take $16,000 of existing rents out of the tax revenue by granting it a PILOT. Mr. Solak recommended granting the PILOT in phases. He reminded the Board that banks have foreclosure power, and he asked how a foreclosure would affect a PILOT. Mr. Tom Spicer, Electricians 325, said most of the jobs that would be created by the American Horizons project would be in constructing the prefabricated units in Pennsylvania. Mayor John Bertoni, Village of Endicott, said the last group to attempt to develop this tract of land in Endicott was only able to build one unit before the project went astray and was left unfinished. When Mr. DiFransesco, a local real estate developer, came with his local architect and local lawyer to see Mr. Bertoni, the neighbors in that area were frustrated with previous attempts to develop there. The developers have since addressed their frustrations and the neighbors actually look forward to the project now. Mr. Bertoni said this tract of land is the last developable land in Endicott and the Village Board was very thorough in vetting the project. They have a sincere belief in it. Mr. Chris Bushnell, Laborers Local 785, said the project is a nice idea, but he wishes it would be built locally instead of with prefab units built out of state. He said the project gives local workers no opportunity for work. For that reason he is opposed. Mr. Mark Whalen, Broome County Legislature, said his concerns are not with this particular project but with the Agency’s lack of a PILOT policy. Mr. Whalen said the previous IDA Executive Director’s policy was that the IDA has PILOTS available and if projects qualify, they are granted. Mr. Whalen believes there should be a stricter policy based on an economic impact study. Mr. McLaughlin said the Agency would be open to considering a more detailed policy. He encouraged the Board to discuss having a plan for residential projects (student housing, nursing, etc.). Mr. Scott Colton, Carpenters 277, emphasized that the majority of the jobs that would be created by this project will be in constructing the prefab units out of state. Mr. Dan Richardson, Roofers Local 203, stated that with the construction taking place outside of the state, the supplies will also most likely be purchased out of town/state. Mr. Tom Augostini said the previous developer of that tract in Endicott should not have been trusted, but Mr. DiFrancesco is someone to trust. He said Mr. DiFransesco has the integrity and financial resources to get the job done. Mr. Marinich said he feels it’s a great project, but local contractors aren’t being given the opportunity to work. He encouraged the Board to review the local labor policy and table to decision until next month. MOTION: No motion necessary. ITEM #6. EXECUTIVE DIRECTOR’S REPORT: Mr. McLaughlin said he, Mr. Gray and Ms. Campon attended the NYSEDC conference last month that focused on comptroller compliance. While in Albany on that trip, February 13, 2015 Page 3 Mr. McLaughlin was also able to attend the Governor’s State of the State address. Regarding the internal financial statement, Mr. Nielsen asked about the new investment account. Mr. McLaughlin said the money is being invested in the most aggressive accounts as allowed by State and Federal regulations, varying between short and long term. Mr. Nielsen requested that interest rates be provided for the investment account going forward. MOTION: No motion necessary. ITEM #7. LOAN FUNDS AVAILABILITY AS OF DECEMBER 31, 2014: Mr. Gray presented the Loan Funds Availability report to the Board. The balances available to lend are $164,788.34 (STEED) and $114,163.75 (BDF). MOTION: No motion necessary. ITEM #8. COMMUNICATIONS STRATEGY UPDATE: Ms. Duncan said she will put together a quarterly update on the communications strategy going forward. She has been working with Mr. Davis and Mr. Stevens based on the strategic plan. Ms. Duncan plans to have the new printed collateral available for the full board by next month, before the IDA’s annual breakfast. She is currently reviewing where the marketing budget is being spent and future options to maximize return on investment. Ms. Duncan introduced the two new interns working with the Agency: Nate Schwartz and Zach Pehel. MOTION: No motion necessary. ITEM #9. RESOLUTION TO EXTEND SALES TAX EXEMPT STATUS FOR SHEEDY ROAD LLC/JUNEBERRY ROAD LLC: Mr. Meagher stated that because construction is ongoing for the skilled nursing facility in Johnson City, the company has requested an extension on their sales tax exempt status. He recommends extending their status for one year. Mr. Nielsen said he would be voting no as he wasn’t on the Board when the project was initially approved, but he would have opposed it then. MOTION: Resolution to extend sales tax exempt status for Sheedy Road/Junberry Road. On a MOTION by Mr. Stevens, seconded by Mr. Davis, the MOTION CARRIED. Mr. Baumgartner and Mr. Smith abstained as they were not on the Board when the initial project was approved. Mr. Nielsen opposed. ITEM #10. RESOLUTION AUTHORIZING THE FINAL INDUCEMENT FOR THE AMERICAN HORIZONS, LLC SALE LEASEBACK TRANSACTION TO FACILITATE THE FINANCING OF THE CONSTRUCTION AND EQUIPPING OF A 56-UNIT, SINGLE LEVEL, 55 AND OLDER, RESIDENTIAL RENTAL COMMUNITY LOCATED AT EAST FRANKLIN STREET, VILLAGE OF ENDICOTT, BROOME COUNTY, NEW YORK, ENTERING INTO A PILOT AGREEMENT DEVIATING FROM THE AGENCY’S UNIFORM TAX EXEMPTION POLICY AND GRANTING A SALES AND MORTGAGE TAX EXEMPTIONS CONSISTENT WITH THE AGENCY’S POLICIES: Mr. McLaughlin said the developers presented at the Governance Committee meeting on Wednesday and will present again today. Mr. DiFransesco said he was born and raised locally and grew up half a block from the site that he intends to develop. When the site went up for sale it had been vacant for years with only February 13, 2015 Page 4 one house ever built on it. The land was scarred and the vegetation had been removed. Mr. DiFransesco said he listened to the concerns of the neighbors and incorporated those concerns into his plans. He said when developing senior housing, it’s important to develop the community and curb blight. Mr. DiFransesco said he appreciates what the contractors are saying with regard to the opportunity to work. He considered stick build, but it would add 25% more to the cost of building and another construction season. In regards to Mr. Solak’s comment during public comment about the ADA compliance, Mr. DiFransesco said 90% compliant is adequate because this is 55-plus residences rather than a nursing facility or hospital. Mr. DiFransesco explained the necessity of a PILOT agreement because he said the potential rent income is less than the taxes alone before maintenance and insurance costs are factored in. He said the project is not feasible without the help of the IDA. Mr. DiFransesco said the project is important to him, as his first residential project, because he wants to give back to his community. He emphasized that almost 70% of construction will still remain after the prefab units. Mr. DiFransesco said neighbors attended the last Village meeting and expressed that they look forward to having this project in their neighborhood. Mr. DiFransesco said the project will bring in 110 55-plus age residents with income; not subsidized housing. Mr. Paniccia said Mr. DiFransesco has used all local labor and supplies in the past, and he plans to continue. He said Lackawanna County, where the prefab units are manufactured, is only 37 miles away, which meets the criteria of the Agency’s local labor policy. Mr. Nielsen said this decision is not about the honor of the developer or the difficulty of developing this site or the project’s worthiness, but the Board needs to decide if it should grant a $2 million subsidy to a project that will be constructed in another state. He said he opposes the project because the Agency’s labor policy says 90% of the project should be local, not just 70%. Mr. Davis asked if the Agency should develop a policy that will never allow the use of prefab units. Mr. Nielsen said yes, the Board should always be against manufactured housing from out of state. Mr. Davis asked if there is anyone in a 50 mile radius who manufactures modular units. Mr. Paniccia said the closest company is in Oneida, NY, about an hour and a half away. Mr. Davis asked if American Horizons already has a contract with Simplex, the Lackawanna County company. Mr. Paniccia said no. Mr. Stevens said Endicott needs to see something positive happen, and this is the opportunity. He said this is the first time since he’s been on the board- five yearsthat a developer is interested in Endicott. Mr. Bernardo said Mr. Nielsen’s point is well taken but the discussion about the local labor policy needs to take place in a future Governance Committee meeting. He said he doesn’t necessarily love granting PILOTs to residential projects, but this project is similar to others that the IDA has done. There is a huge demand for this type of housing in the community and a huge demand for development in Endicott, speaking as a resident of the Village. Multiple consultants have pointed out the area’s desperate need for housing for the aging population. Mr. Howard said he is concerned about foreclosure or sale of the project. He asked if the Board should table the decision until February 13, 2015 Page 5 next month. Mr. Davis said the Governance Committee has requested that the following conditions be included in the resolution, addressing Mr. Howard’s concerns: The development is to be exclusively used as a 55 and older residential rental community. The IDA Board reserves the right to rehear and discontinue, if necessary, the PILOT program in this project if the project fails to rent to persons 55 and older only; if there is a change in majority ownership of the project, or in the ownership of American Horizon Group, LLC; and/or if there is a substantive change in the build out schedule/construction completion schedule. Mr. Meagher said if it is proposed as an amendment to the resolution and the resolution is passed, the language will be included. Mr. DiFransesco agreed the project should come back before the Board if any of those conditions change, but he said if someone is to buy it and keep the business otherwise unchanged, it should not require further Board approval. Mr. Meagher added that if there is any change in use, the Agency can rescind the PILOT, per the standard PILOT language. Mr. Nielsen suggested the project go back to the Governance Committee and the Committee should provide an amended resolution to the Board before making a final decision. Mr. Howard moved to table the item until next month, Mr. Stevens seconded. Mr. Kane said the Governance Committee will meet, followed by a special Board meeting to address this before next month. He also stated that he received 101 letters from local labor union members with concerns about labor. MOTION: To table the item. On a MOTION by Mr. Howard, seconded by Mr. Stevens, the item was tabled. ITEM #11. ADJOURNMENT: Mr. Kane requested a motion for adjournment. MOTION: To adjourn the meeting. On a MOTION by Mr. Stevens, seconded by Mr. Bernardo, the MOTION CARRIED UNANIMOUSLY, and the meeting was adjourned at 1:22 p.m. The next meeting of the BCIDA Board of Directors will be decided by the Chairman after the Governance Committee meets.