BOARD OF DIRECTORS MEETING
County of Chautauqua Industrial Development Agency
CCIDA
201 W Third Street, Jamestown, NY
February 27, 2018
10:00 a.m.
Mike Metzger Chairman
Hans Auer Treasurer
Kim Peterson Secretary
Kelly Farrell DuBois Member
Cory Duckworth Member
Brad Walters Member
Mark Odell Member
Also in attendance:
Rich Dixon CCIDA CFO
DGreg Peterson Counsel
Matt Mazgaj Counsel
Michelle Turner VP of Marketing
Carol Rasmussen CCIDA Staff
Kristine Morabito CCIDA Staff
Sue Casel CCIDA Staff
Scott Fairbrother Krog Group
Daniel Brennan Nixon Peabody LLP
Jon Penna Nixon Peabody LLP
Oliver Haynes Housing Prevention Inc.
James Carmichael Housing Prevention Inc.
Ron Vaughn Salsarons MTC Foods
Katrina Fuller Post-Journal
Jason Sample WRFA Radio
Absent Board Member(s): Dennis Rak
Meeting was called to order by Mike Metzger, Chairman, at 10:05 a.m.
Mike Metzger
I will now call the County of Chautauqua Industrial Development Agency (CCIDA) Board of Director’s meeting to order. We are meeting at CCIDA, 201 W Third Street, Jamestown, NY. Today is February 27, 2018, (10:05 a.m.)
I will now have roll call.
Kim Peterson – Here, Kelly Farrell DuBois – here, Hans Auer – Here, Cory Duckworth – Here, Brad Walters – Here, Mark Odell – Here, and Mike Metzger is here.
Let the record show we have seven members in attendance. We do have a quorum.
I will entertain a motion to accept the January 23, 2018, minutes that were sent to you in advance.
Mark Odell
So moved.
Kim Peterson
Second.
Mike Metzger
Any discussion? Hearing none – All in favor indicate by saying Aye.
Ayes all around. The motion is carried unanimously.
Next on the Agenda is a Deviation Hearing for the 320 Roberts Road Freezer, LLC, project.
Matt Mazgaj
The General Municipal Law Section 874 requires that the IDA have a Uniform Tax Exemption Policy. If there is a request for financial assistance that deviates from the policy, the IDA must notify the potentially effected taxing jurisdictions about the deviation and provide an opportunity to comment.
Today, we have an application from 320 Roberts Road Freezer LLC that made a PILOT request that deviates from the UTEP policy. Notices related to the deviation were sent out to the potentially effected taxing jurisdiction on February 9th by mail. At this point, any representatives of the potentially effected taxing jurisdictions can comment on the proposed deviation identified in the letter.
If there are no representatives of the potentially effected taxing jurisdictions present, we can call the deviation hearing to a close.
Mike Metzger
Let’s move on to new business. Kim Peterson, the first Resolution, please.
Kim Peterson
Resolution 02-27-18-01
Resolution of the County of Chautauqua Industrial Development Agency Pursuant to the State Environmental Quality Review Act Concerning the Determination of Significance in Connection with regards to the 320 Roberts Road Freezer, LLC, Project.
Kelly Farrell DuBois
Second.
Kristine Morabito
This is a project that we have been working on for a couple of years now. We have a wonderful partnership with the Krog Group. Fieldbrook Foods needs more warehouse space, as close as possible to the food processing facility located in the City of Dunkirk. At the same time, we have been working to redevelop the Roberts Road site. The two companies have been working together – the Krog Group would develop the Roberts Road parcel into a cold storage warehouse that would service Fieldbrook Foods, possibly expand it down the road. This is a great project for the County itself, and a great project for Fieldbrook Foods.
Scott Fairbrother
I am CFO for the Krog Group. I am here today on behalf of the 320 Roberts Road Freezer. This was a joint venture between Peter Krog, from the Krog Group, and Sonwil Distribution Principal, Peter Wilson.
A brief history of working on this site was given going back a significant period of time. We’ve been persistent in trying to get this site redeveloped. With that, with the knowledge that we have with this site, we’re very familiar with it and we think that our relationship with Fieldbrook Foods, going forward, is a good use to restore this property to the tax rolls.
Discussed the project, and handed out a concept site plan.
In closing, I would just like to say, we are very excited about finally bringing this project forward. It’s important to note that we really can’t do it without the IDA’s assistance given the environmental challenges with the remediation of the building, the asbestos abatement, the demolition associated with the existing building, and the fact that new freezer buildings are expensive to put up. In this case, the new facility is a necessity for Field Brook for them to be able to remain competitive in this environment. They are on a growth track, and down the road, given this strategic initiative will allow them to expand their business, which is outside of what we are looking at today.
In our opinion, the project provides us with an opportunity to work in conjunction with your organization, the County, and others to bring what is a site that has significant environmental challenges, has been off the tax role for an excess of 10-years, it’s been fallow, it’s an eyesore, back to a productive building that we think benefits the community, Fieldbrook, and others.
Mike Metzger
Kristine, if you could, please capsulate the next three Resolutions that we are going to be voting on.
Kristine Morabito
You have three resolutions before you related to this project. The SEQR Resolution that Matt will describe to you; the Deviation Resolution; and the Final Authorizing Resolution for the Tax Lease request.
The applicant is requesting a PILOT on the Real Property Taxes, and a Deviation to that, Sales Tax Abatement, and also Mortgage Recording Tax Abatement. We did hold the Public Hearing on February 6th; there were four members of the public in attendance. They were all from the City of Dunkirk. Three of them spoke in favor of the project. You were all sent the minutes from that meeting.
Matt Mazgaj
The SEQRA for this project was a coordinated review in which the CCIDA acted as lead agency. Thirty day notices were provided and that process was completed. Ultimately, it was determined that it was a Type I Action, but there was a Negative Declaration issued – meaning that there was no adverse environmental impact. They are going to be remediating a previous industrial property and replacing it with an industrial project.
This Deviation is on a 20-year PILOT with fixed numbers that escalate over time with the total payment to municipalities of over $2M over the course of the PILOT. Passing this resolution authorizes the CCIDA to deviate from the UTEP policy; and allow for the property taxes to be paid as negotiated between the company and the CCIDA.
The Authorizing Resolution allows for the CCIDA to proceed with the transaction documents of a lease/lease back, which will allow for the Sales Tax/Mortgage Recording Tax/Property Tax Abatement to proceed.
Mike Metzger
Is there any further discussion. Hearing none, I will take a rollcall vote.
Kim Peterson – Aye, Kelly Farrell DuBois – Aye, Hans Auer – Aye, Cory Duckworth – Aye, Brad Walters – Aye, Mark Odell – Aye, and Mike Metzger – Aye.
Let the record show the resolution passed with seven votes in the affirmative. The resolution is passed.
Brad, please read the next resolution.
Brad Walters
Resolution 02-27-18-02
Resolution Authorizing a Deviation from the Uniform Tax Exemption Policy of the County of Chautauqua Industrial Development Agency with Respect to the 320 Roberts Road Freezer, LLC, Project.
Hans Auer
Second
Mike Metzger
If there is no further discussion, I will take a roll call vote.
Kim Peterson – Aye, Kelly Farrell DuBois – Aye, Hans Auer – Aye, Cory Duckworth – Aye, Brad Walters – Aye, Mark Odell – Aye, and Mike Metzger – Aye.
Let the record show the resolution passed with seven votes in the affirmative. The resolution is passed.
Hans, if you’d read C please.
Hans Auer
Resolution 02-27-18-03
Resolution Taking Official Action Toward and Approving the Straight Lease Documents for a Certain Project for 320 Roberts Road Freezer, LLC, Project.
Kelly Farrell DuBois
Second.
Mike Metzger
Any further discussion? I will have a roll call vote.
Kim Peterson – Aye, Kelly Farrell DuBois – Aye, Hans Auer – Aye, Cory Duckworth – Aye, Brad Walters – Aye, Mark Odell – Aye, and Mike Metzger – Aye.
Let the record show the resolution passed with seven votes in the affirmative. The resolution is passed.
Kelly, please read resolution D, please.
Kelly Farrell DuBois
Resolution 02-27-18-04
Resolution Taking Preliminary Action Toward the Acquisition and Straight Leasing of a Certain Project for Housing Preservation Inc. and Authorizing the Execution and Delivery of a Preliminary Agreement with the Applicant with Respect to Such Transaction.
Cory Duckworth
Second
Mike Metzger
Discussion please.
Carol Rasmussen
The application is from Housing Preservation Inc. It is an application for a PILOT. They are buying six properties – four in Jamestown, one in the Town of Ellicott, and one in Falconer. There is a total of 200 Units – they are low income, disabled, and elderly apartments. This will be a deviation; because, they are asking for a 29 year PILOT. They are tax exempt; however, they are making voluntary payments to the City of Jamestown. This Deviation PILOT besides being 29-years – they will not only continue making payments to the City of Jamestown, they will be making payments to the Village, the Town, and the School Districts.
This resolution is a Preliminary Resolution that will allow us to go ahead do the Public Hearing.
Jon Penna
I am with Nixon Peabody, and I’m here with James Carmichael – he’s with Housing Preservation Inc. who is under contract to purchase six HUD 202 projects from affiliates of Lutheran Housing Services, and one from Methodist Homes. HUD 202 projects, as previously stated, are housing designed for low income, elderly, and disabled individuals. That is what Housing Preservation does – their name speaks to their mission.
As Carol stated, the existing projects are all exempt from taxes, but the Lutherans do make a payment directly to the City. Over the past three years, that payment has been approximately $15,000 annually. We are proposing to more than double that payment.
The project will not only consist of the acquisition and stabilization of occupancy.
James Carmichael
Our company, Housing Preservation, is a 501C3 and has twenty different assets all over the United States. We buy, acquire, and operate apartments for senior citizens – people over the age of 62 – and allowing them to live independently. We own and operate our buildings for the long term. Our residents are 62 and older and living under 60% of the average area medium income. This housing is in demand because there is not enough units to serve the overall amount of baby boomers that are hard-working Americans. The average SS check in the US is about $1,290/month for the average American. The average SS check of those living in the Lutheran buildings is about $900/month. Without the housing, they wouldn’t be able to live in an apartment. They would be paying substantially more from their SS check, or they would be living with family member.
We reached out to the Lutherans; as you know, they are a very good organization. They genuinely care about their mission, and what they do, and they execute it very, very well. I will tell you about how good of a neighbor they actually are – they have decided, after 30 some years, that it’s in their best interest for their organization to refocus their efforts. They’ve got multiple different business models, and they’ve decided it makes sense for them to focus on doing fewer things. They explored the disposition of these particular communities. They went out and did their research, and we were introduced to them.
As we went through the process, we realized that the buildings were exempt. We are qualified for PILOTS and tax exemptions, all around the US. We reached out to our primary counsel, Nixon Peabody, and started to do our research. At that point, we realized that we qualified for 100% tax exemption. As we were going through their records, we recognized that Lutherans had been making a voluntary payment to the City. We were very much confused by this. After a few conference calls, it was noted that the Lutherans – under a very loose agreement – had been making voluntary payments to the City of about $12,000 to $15,000 a year, based on something that was in essence written on the back of a napkin. That made me a little concerned as a developer.
This showed us that the Lutherans wanted to be a good neighbor.
We reached out to Rich Dixon – who was a breath of fresh air. We could have been tax exempt, but we wanted to be a good neighbor. Along with Rich, we discussed similar projects; and how we could structure a transaction that would benefit the overall town, multiple taxing jurisdictions, benefit the project, and be done seamlessly. Everyone had a good feeling about the overall transaction – and I feel like that is what we have done and proposed here. We want to pay our share of taxes. We can’t pay the entire amount because of how the projects are structured, and how our financing is set up with the Department of Housing and Urban Development. The money that the Lutherans invested into the community is worth about $2.5 M as additional debt going back to 2011. Rich made this process a good one. Hopefully, we will continue to be a good neighbor and continue to pay our voluntary, now legal payment, under a contractual agreement. Where the City will continue to receive what they were receiving before, the school district and the County will also get equal payments, and it will escalate over time as I’m able to occupy the buildings.
Mike Metzger
Any more discussion? I will have a roll call vote.
Kim Peterson – Abstain, Kelly Farrell DuBois – Aye, Hans Auer – Aye, Cory Duckworth – Aye, Brad Walters – Aye, Mark Odell – Aye, and Mike Metzger – Aye.
Let the record show the resolution passed with six votes in the affirmative, and one abstention. The resolution is passed.
Cory, please read resolution E, please.
Cory Duckworth
Resolution 02-27-18-05
Resolution of the County of Chautauqua Industrial Development Agency Pursuant to the State Environmental Quality Review Act Concerning the Determination of Significance in Connection with the 2071 Stoneman Project.
Mark Odell
Second
Kristine Morabito
The next two resolutions are related to the acquisition of the property located at 2071 Stoneman Circle, in Lakewood; otherwise known as the Stoneman Spec building, which houses Southerntier Distillery and Classic Brass. Alan Steinberg, the owner of 2071 Stoneman LLC, is proposing to acquire the property from the CCIDA.
The two resolutions before you are the SEQRA Resolution, and the Final Authorizing Resolution related to the PILOT request.
Matt Mazgaj
The CCIDA currently owns the property – members of the CCIDA had previously voted to sell the property. This is financial assistance to ramping the property taxes on the property for Alan coming in as the new landlord. The only request related to financial is the PILOT so that will be in accordance to the UTEP policy – ramping up over 10-years.
The SEQRA is an unlisted action – Negative Declaration, basically related to the purchase of the property replacing the IDA as the landlord.
Kristine Morabito
I will mention that a Public Hearing was held on February 7th. You should have all received the transcript of the Public Hearing. There was one attendee, and there were no comments.
Mike Metzger
Any more discussion? I will have a roll call vote.
Kim Peterson – Aye, Kelly Farrell DuBois – Aye, Hans Auer – Aye, Cory Duckworth – Aye, Brad Walters – Aye, Mark Odell – Aye, and Mike Metzger – Aye.
Let the record show the resolution passed with seven votes in the affirmative. The resolution is passed.
Mark, please read resolution F, please.
Mark Odell
Resolution 02-27-18-06
Resolution Taking Official Action Toward and Approving the Straight Lease Documents for a Certain Project 2071 Stoneman.
Kim Peterson
Second
Mike Metzger
Any more discussion? I will have a roll call vote.
Kim Peterson – Aye, Kelly Farrell DuBois – Aye, Hans Auer – Aye, Cory Duckworth – Aye, Brad Walters – Aye, Mark Odell – Aye, and Mike Metzger – Aye.
Let the record show the resolution passed with seven votes in the affirmative. The resolution is passed.
Kim, please read resolution G, please.
Kim Peterson
Resolution 02-27-18-07
Amendment to Resolution 11-28-17-08 Authorizing an AL Tech Revolving Loan Fund loan for AgriAmerica Fruit Products, LLC.
Cory Duckworth
Second
Mike Metzger
Discussion please.
Kristine Morabito
The next two resolutions relate to AgriAmerica Fruit Products. At the November Board meeting where two resolutions were passed approving financing towards this project. This is the acquisition and revitalization of the Cott fruit processing facility in Fredonia. Eric Huddy and Rich Jozwiak were there to present this project. At the time of the last presentation, the base financing was not in place yet. Over the course of the last few months they have been working with prospective lenders. They have identified Steuben Trust Company as the lender of choice. Steuben Trust offered them more money than they had conservatively anticipated. Steuben Trust is requiring less equity injection.
AgriAmerica has come back to the Board to see if the subordination request could be increased for the amount that Steuben Trust is willing to finance. The only change that was necessary in the Resolution was the dollar amount.
Mike Metzger
Any more discussion? I will have a roll call vote.
Kim Peterson – Aye, Kelly Farrell DuBois – Aye, Hans Auer – Aye, Cory Duckworth – Aye, Brad Walters – Aye, Mark Odell – Aye, and Mike Metzger – Abstain.
Let the record show the resolution passed with six votes in the affirmative, and one abstention. The resolution is passed.
Brad, please read resolution H, please.
Brad Walters
Resolution 02-27-18-08
Amendment to Resolution 11-28-17-09 Authorizing a Chautauqua Revolving Loan Fund loan for AgriAmerica Fruit Products, LLC.
Hans Auer
Second
Mike Metzger
Any more discussion? I will have a roll call vote.
Kim Peterson – Aye, Kelly Farrell DuBois – Aye, Hans Auer – Aye, Cory Duckworth – Aye, Brad Walters – Aye, Mark Odell – Aye, and Mike Metzger – Abstain.
Let the record show the resolution passed with six votes in the affirmative, and one abstention. The resolution is passed.
Rich, the Treasurer’s Report, please.
Rich Dixon
There is no report. There was an Audit Committee meeting on February 5. The Auditors have completed their review and will present the Audit at the March meeting. The next Audit Committee meeting is scheduled for March19.
Mike Metzger
I would now like to move for a motion to go in to executive session to discuss the financial and credit history of certain companies, the potential acquisition and lease of real property by the Agency, and/or personnel matters.
Hans Auer
So moved.
Mark Odell
Second
Mike Metzger
All in favor.
Board Members
Ayes all around.
__________________________________________________________________________________________
Executive Session Begins at 11:09 a.m.
__________________________________________________________________________________________
Executive Sessions Ends at 11:20 a.m.
__________________________________________________________________________________________
Mike Metzger
We are now in open session.
Kim, please read resolution I that was discussed in Executive Session.
Kim Peterson
Resolution 02-27-18-09
Resolution Number 02-27-18-09 – Authorizing a Contract for Mark R. Geise as Chief Executive Officer of County of Chautauqua Industrial Development Agency.
Hans Auer
Second
Mike Metzger
Any more discussion? I will have a roll call vote.
Kim Peterson – Aye, Kelly Farrell DuBois – Aye, Hans Auer – Aye, Cory Duckworth – Aye, Brad Walters – Aye, Mark Odell – Aye, and Mike Metzger – Aye.
Let the record show the resolution passed with seven votes in the affirmative. The resolution is passed.
Mike Metzger
If there is no further business, may I have a motion to adjourn?
Mark Odell
So moved.
Brad Walters
Second.
Ayes all around.
Mike Metzger
Meeting adjourned at 11:23 a.m.
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(Assistant) Secretary (Vice) Chairman
