City of Syracuse Industrial Development Agency 333 West Washington St, Suite 130 Syracuse, NY 13202 Tel (315) 473 3275 Fax (315) 435 3669 Minutes Board of Directors Meeting Tuesday December 16, 2014, 8:30 A.M. Common Council Chambers 316 City Hall 233 East Washington St. Syracuse, NY 13202 Board Members Present: William Ryan, Pamela Hunter, Steven Thompson, Catherine Richardson, Esq. Donald Schoenwald, Esq. Staff Present: Ben Walsh, Judith DeLaney, Debra Ramsey Burns, John Vavonese, Thomas Babilon, Esq., Susan Katzoff, Esq. Others Present: Aggie Lane, Barry Lentz, Rob Connolly, Emily Bishop, David Prowak, Edward Riley, Richard Engel, Esq. Media Present: Rick Moriarty I. Call Meeting to Order Mr. Ryan called the meeting to order at 8:35 a.m. II. Roll Call Mr. Ryan acknowledged all Board Members were present. III. Proof of Notice Mr. Ryan noted notice of the meeting had been timely and properly provided. IV. Minutes Mr. Ryan asked for a motion to approve the minutes from the November 18, 2014 Board of Directors Meeting. Ms. Richardson made the motion. Mr. Schoenwald seconded the motion. ALL BOARD MEMBERS PRESENT UNANIMOUSLY APPROVED THE MINUTES FROM THE NOVEMBER 18, 2014 BOARD OF DIRECTORS MEETING. V. New Business Broadband Study Mr. Walsh advised the Board the City of Syracuse was proposing to undertake a broadband feasibility study and would be looking to the Agency to provide financial support. He then introduced David
Prowak, Director of Information Systems for the City of Syracuse, who was present to discuss the proposed study. Mr. Prowak said that in June of this year Mayor Miner approached MetroNet, the local non profit formed in the 1990 s to advance telecommunications infrastructure in Central New York, regarding the viability of bringing a high speed broadband network to the City. He said MetroNet completed a study on this issue in 2012 which needed to be updated to answer key feasibility questions including how to design, finance, build and operate such a network. Mr. Prowak noted the Mayor created a working group of representatives from education, business and the community to work on this issue and the first step will be to complete the study. Mr. Prowak said proposals had been solicited from three different firms with expertise in the field and he expected responses by Christmas. Proposals will be reviewed by an ad hoc committee, and once one is selected, the City will make a formal request to the Agency to underwrite the cost. Herald Commons, LLC Mr. Walsh, advising the Board the Agency had received an application for financial assistance from the owner of the Company, said he was requesting the Board approve a resolution authorizing a Public Hearing on the Project. He briefly reviewed the Project noting the owners intend to acquire and convert the vacant Krell Building, once home to the Syracuse Herald Journal, to a mixed use development at a cost of approximately $5,000,000. Mr. Walsh then introduced the developer of the building, Thomas Hornstein, and asked him to speak to the Board. Mr. Hornstein told the Board his Company intended to convert the building into 8,000 sq. ft. of office and 8,000 sq. ft. retail space on the first floor and 27 apartments on the upper floors. He noted the building had a 129 car parking lot and said his Company would be pursuing historic tax credits for the Project. Ms. Hunter asked about a traffic study for the Project. Mr. Hornstein responded one had been completed and would be reviewed by the City of Syracuse as part of the zoning and permit approval process. There being no further discussion, Mr. Ryan asked for a motion to authorize a Public Hearing. Ms. Hunter made the motion. Mr. Thompson seconded the motion. ALL BOARD MEMBERS UNANIMOUSLY APPROVED A RESOLUTION DETERMINING THAT THE ACQUISITION, RECONSTRUCTION, RENOVATION AND EQUIPPING OF A COMMERCIAL FACILITY AT THE REQUEST OF THE COMPANY CONSTITUTES A PROJECT; DESCRIBING THE FINANCIAL ASSISTANCE IN CONNECTION THEREWITH; AND AUTHORIZING A PUBLIC HEARING. Sutherland Global Services, Inc. Mr. Walsh, noting resolutions approving this Project had been held at the November Board meeting pending questions about the Company s operation, said he and Ms. Hunter subsequently toured the facility and had a productive meeting with company representatives. Ms. Hunter said she believed there were misconceptions about what services the Company provided to their clients and the quality of jobs available and noted she found the Company to be impressive and an untold story in the community. There being no further discussion, Ms. Katzoff advised the first resolution for the Board s consideration was an inducement resolution. She advised the Board the Company is seeking a benefit from the Agency in the form of an exemption from sales and use tax. She said the exemption benefit would not exceed
$146,688.00 and noted by the completion of the Project the Company will have created an additional 250 jobs. Mr. Ryan then asked for a motion to approve an inducement resolution for the Project. Ms. Richardson made the motion. Ms. Hunter seconded the motion. ALL BOARD MEMBERS PRESENT UNANIMOUSLY APPROVED A RESOLUTION UNDERTAKING THE ACQUISITION, RENOVATION AND EQUIPPING OF A COMMERCIAL FACILITY; APPOINTING THE COMPANY AS AGENT OF THE AGENCY FOR THE PURPOSE OF THE ACQUISITION, RECONSTRUCTION, RENOVATION AND EQUIPPING OF THE PROJECT; AND AUTHORIZING THE EXECUTION AND DELIVERY OF AN AGREEMENT BETWEEN THE AGENCY AND THE COMPANY. Ms. Katzoff then advised the Board the next resolution to be approved was a final resolution for the authorizing the execution and delivery of documents for the project. There being no discussion, Mr. Ryan asked for a motion to approve the resolution. Ms. Hunter made the motion. Mr. Thompson seconded the motion. ALL BOARD MEMBERS PRESENT UNANIMOUSLY APPROVED A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF CERTAIN DOCUMENTS BY THE AGENCY IN CONNECTION WITH A CERTAIN PROJECT UNDERTAKEN AT THE REQUEST OF THE COMPANY. Syracuse University Ms. Katzoff advised the Board they were being asked to approve a resolution authorizing a modification of bond documents in connection with a substitute Letter of Credit at the request of the University. She noted the bonds were issued in 2005 and the documents allow the substitution of a Letter of Credit. Ms. Richardson asked who would be responsible for the attorney fees associated with the transaction. Ms. Katzoff responded the University would incur the cost. There being no further discussion, Mr. Ryan asked for a motion to approve the resolution. Mr. Schoenwald made the motion. Ms. Hunter seconded the motion. ALL BOARD MEMBERS PRESENT UNANIMOUSLY APPROVED A RESOLUTION AUTHORIZING THE MODIFICATION AND EXECUTION OF CERTAIN DOCUMENTS RELATED TO A SUBSTITUTE LETTER OF CREDIT SECURING THE ISSUER'S $80,000,000 AGGREGATE PRINCIPAL AMOUNT OF CIVIC FACILITY VARIABLE RATE REVENUE BONDS (SYRACUSE UNIVERSITY PROJECT), SERIES 2005. Destiny USA Holdings, LLC Ms. Katzoff advised the Board they were being asked to approve a resolution authorizing an extension of the Sales Tax Appointment for the Project until December 31, 2015. Ms. Richardson asked what the amount of the exemption from sales tax would be. Ms. Katzoff responded it would not exceed $640,000.00. Ms. Richardson asked Robert Connolly, a representative of the owner who was present, how much of the property was leased. Mr. Connolly responded approximately 90% was currently leased and the Company anticipated an additional 5% would be leased in 2015. Ms. Katzoff advised the request today approximates an additional 5% being built out.
After some further discussion, Mr. Ryan asked for a motion to approve the resolution. Ms. Hunter made the motion. Mr. Thompson seconded the motion. ALL BOARD MEMBERS PRESENT UNANIMOUSLY APPROVE A RESOLUTION APPROVING AN EXTENSION OF THE SALES TAX APPOINTMENT AGENT STATUS OF DESTINY USA HOLDINGS, LLC UNTIL DECEMBER 31, 2015. Syracuse Community Hotel Restoration Company 1, LLC Ms. Katzoff advised the Board they were being asked to approve a resolution authorizing an extension of the Agency Agreement and Temporary Sales Tax Appointment until March 31, 2015. She said current documents for the Project are due to expire December 31 and asked Edward Riley, the owner of the Company, to provide an update to the Board. Mr. Riley said a Phase 1 stabilization had been completed and that a hotel operator, Crescent Hotels and Resorts, has been selected. He also noted proposals had been received from three hotel chains for a hotel flag and a decision was imminent. He advised M&T Bank would be lead bank for financing and a meeting had been scheduled with a consortium of several other local banks to participate in the financing. He said he hoped to have a commitment for funding by the end of January with major construction to commence in March. After some further discussion Mr. Ryan asked for a motion to approve the resolution. Ms. Richardson made the motion, Mr. Schoenwald seconded the motion. ALL BOARD MEMBERS PRESENT UNANIMOUSLY APPROVED A RESOLUTION APPROVING AN EXTENSION THE AMENDED AGENCY AGREEMENT BETWEEN THE AGENCY AND THE COMPANY UNTIL MARCH 31, 2015; APPROVING AN EXTENSION OF THE SALES TAX APPOINTMENT AGENT STATUS OF THE COMPANY UNTIL MARCH 31, 2015; AND DELIVERY OF CERTAIN DOCUMENTS IN CONNECTION THEREWITH. Strathmore Huntley Group, LLC Ms. Katzoff advised the Board they were being asked to approve a waiver of a potential conflict of interest relative to the Project. She noted the Project was induced by the Agency in 2013 and was anticipated to close in the first quarter of 2015. She said recently an owner of the Company, Brenda Colella had joined Hiscock & Barclay. Ms. Katzoff also advised the Board she would request a waiver from the Company. There being no discussion, Mr. Ryan asked for a motion to approve the waiver. Ms. Richardson made the motion. Mr. Schoenwald seconded the motion. ALL BOARD MEMBERS PRESENT UNANIMOUSLY APPROVED A WAIVER OF A POTENTIAL CONFLICT OF INTEREST IN THIS MATTER. Agency Properties Mr. Babilon advised the Board they were being asked to approve resolutions authorizing the disposition of property at 298 West Jefferson St., 495 Plum Street, 324 Maltbie Street Rear, 501 Plum Street Rear, and 520 Plum Street, owned by the Agency to the City of Syracuse for less than fair market value. He noted the Board approved transfer of the properties to the City in August 2014 for $1.00 each.
There being no discussion Mr. Ryan asked for a motion to individually, the first being 298 West Jefferson St. Mr. Schoenwald made the motion. Mr. Thompson seconded the motion. ALL BOARD MEMBERS PRESENT UNANIMOUSLY APPROVED A RESOLUTION AUTHORIZING THE DISPOSAL OF 298 WEST JEFFERSON STREET FOR LESS THAN MARKET VALUE. Mr. Ryan asked for a motion to approve resolution authorizing the disposition of property at 495 Plum St. Ms. Richardson made the motion. Mr. Schoenwald seconded the motion. ALL BOARD MEMBERS PRESENT UNANIMOUSLY APPROVED A RESOLUTION AUTHORIZING THE DISPOSITION OF THE PROPERTY. Mr. Ryan asked for a motion to approve resolution authorizing the disposition of property at 324 Maltbie, part of the creek walk. Mr. Schoenwald made the motion. Ms. Hunter seconded the motion. ALL BOARD MEMBERS PRESENT UNANIMOUSLY APPROVED A RESOLUTION AUTHORIZING THE DISPOSAL OF 324 MALTBIE STREET FOR LESS THAN FAIR MARKET VALUE. Mr. Ryan asked for a motion to approve a resolution authorizing the disposition of property at 501 Plum St, also part of the creek walk. Ms. Richardson made the motion. Mr. Schoenwald seconded the motion. ALL BOARD MEMBERS PRESENT UNANIMOUSLY APPROVED A RESOLUTION AUTHORIZING THE DISPOSAL OF 501 PLUM STREET FOR LESS THAN FAIR MARKET VALUE. Mr. Ryan then asked for a motion to approve resolution authorizing the disposition of property at 520 Plum St, parking lot adjacent to the creek walk. Mr. Schoenwald made the motion. Mr. Thompson seconded the motion. ALL BOARD MEMBERS PRESENT UNANIMOUSLY APPROVED A RESOLUTION AUTHORIZING THE DISPOSAL OF 520 PLUM STREET FOR LESS THAN FAIR MARKET VALUE. Directors & Officers Liability Insurance Mr. Walsh advised the Board they were being asked to approve a resolution accepting a proposal to provide Directors and Officers Liability insurance coverage for 2015. Noting there had been a prior discussion on this topic, staff had solicited proposals and after meeting with a representative of Haylor Freyor & Coon Insurance determined coverage provided by the Darwin Insurance Co. best suited the Agency s requirements. After a brief discussion Mr. Ryan asked for a motion to approve the proposal. Ms. Richardson made the motion. Mr. Schoenwald seconded the motion. ALL BOARD MEMBERS PRESENT UNANIMOUSLY APPROVED A RESOLUTION ACCEPTING A PROPOSAL BY THE DARWIN INSURANCE COMPANY TO PROVIDE DIRECTORS AND OFFICERS LIABILITY INSURANCE COVERAGE FOR 2015. Annual Board of Directors Evaluation Mr. Walsh advised the Board, a copy of the annual Board of Directors evaluation was included in the Agenda packet and needed to be completed by December 31, 2014 and returned to Ms. Richardson. Board of Directors Meeting Schedule for 2015 Mr. Walsh distributed the Board of Directors meeting schedule for 2015.
Local Labor Policy Mr. Walsh advised staff had undertaken a review of the Agency s Local Labor and City of Syracuse & MWBE Preference policies in an effort to make both more reflective of the Agency s intent. Regarding the Local Labor Policy, staff was recommending removal of the language requiring the use of local suppliers. He said while the Agency wanted to encourage the use of local suppliers, in some instances the requirement became onerous for Companies who had contractual obligations to make use of certain vendors. He also noted that in most cases Projects will use local suppliers as they are typically the most cost effective option. Regarding the City of Syracuse & MWBE Preference Policy, which was simply being formalized from language already contained in the Agency s application, Ms. Hunter asked how the Agency would give consideration to the Project s efforts in this regard. Mr. Walsh stated the Agency will take into consideration policy compliance, which will be monitored through the quarterly contract status reports, when considering requests for benefit extensions and/or additional Agency involvement in projects. Mr. Thompson suggested the Preference Policy could be made clearer as it relates to hiring residents of the City of Syracuse, which Mr. Walsh agreed to try to do. Mr. Ryan asked if the City Auditor could play a role in assisting the Agency in enforcing its policies. Mr. Walsh noted that while the City Auditor does not have any official jurisdiction over the Agency, he was open to exploring the idea further if the board so desired. VI. Adjournment There being no further business to discuss, Mr. Ryan asked for a motion to adjourn the meeting. Ms. Hunter made a motion. Mr. Schoenwald seconded the motion. ALL BOARD MEMBERS PRESENT UNANIMOUSLY APPROVED TO ADJOURN THE MEETING AT 9:45 A.M.