Industrial Development Agency

Mount Vernon Industrial Development Agency City Hall – 1 Roosevelt Square Mount Vernon, New York 10550 (914) 665-2300 Shawyn Patterson-Howard Darren M Morton, Ed.D., CPRP, CMFO Mayor/ Chairman Treasurer Meeting September 12, 2024 10:00 AM AGENDA ROLL CALL APPROVAL OF MINUTES August 8, 2024 August 16, 2024 August 29, 2024 FINANCIAL REPORT Financial Statements Discussion Regarding Past Due PILOTs BUSINESS DEVELOPMENT REPORT RESOLUTIONS Resolution 9/2024-1 Authorizing Payment of Invoices NEW BUSINESS Expense Reimbursement Agreement – Penrose Development OTHER QWest Project Discussion Report of Agency Counsel ADJOURNMENT Next Meeting – October 10, 2024  Minutes of the City of Mount Vernon Industrial Development August 8, 2024 A meeting of the Board of Directors (“Board”) of the City of Mount Vernon Industrial Development Agency (“Agency”) was held on Thursday, August 8, 2024 in the Mayor’s Conference Room, City Hall, 1 Roosevelt Square, Mount Vernon, New York 10550 and via video conference. Present: Hon. Shawyn Patterson-Howard Darren Morton EdD (via remote meeting) Brian Johnson, Esq. Stephanie Vanderpool Chris McDonough (School Board Representative) Excused: None Absent: None Also Present: Robin Mack, Director of Business Development Darius Chafizadeh, Esq., Harris Beach PLLC Julie Marshall, Harris Beach PLLC (via remote meeting) The meeting was called to order at 10:08 AM by Chair Patterson-Howard. A quorum of members was present. Approval of Minutes Minutes of the June 13, 2024 meeting were reviewed. Motion by B. Johnson, seconded by S. Vanderpool, the minutes were approved. Financial Report J. Marshall reviewed the financial report including the IDA Administrative Fee income and PILOT payments. The board discussed past due PILOT payments. Both 130 East Third, Inc d/b/a Dominican Magic and Regent Hospitality Linen Services, LLC are in arrears. Demand letters were sent in June to the respective businesses and to date there has been no response. Business Development Report R. Mack reported on the Mt. Vernon First Small Business Grants which supports and attracts new businesses in the downtown area. The application deadline was June 24, 2024 and 30 applications were received. Award announcement will take place on September 10, 2024. Resolution Resolution 8/2024-1 Authorizing Payment of Invoices Motion by B. Johnson, seconded by S. Vanderpool, the resolution was unanimously adopted. Resolution 8/2024-2 Adopting Remote Meeting Policy Motion by B. Johnson, seconded by S. Vanderpool, the resolution was unanimously adopted. New Business Chair Patterson discussed the recent partial building collapse at the IDA owned property located at 217/225 South Fourth Avenue, occupied by National Gear and Piston. The City of Mt. Vernon Buildings Department and Department of Public Works have inspected the property. The street has been closed to pedestrian and vehicular traffic. Report of Agency Counsel No report Old Business Vice-Chair Morion stated that discussion with the Qwest Project are still ongoing. An updated proposed will be forward to board members. Storrs Associates will be asked to update the Cost Benefit Analysis for board review. A motion was made by B. Johnson, seconded by S. Vanderpool to temporarily adjourn the meeting and reconvene at 4:30 PM to review cost estimates received related to the partial demolition of the building located at 217 Fourth Avenue. The motion was unanimously adopted at 11:33 AM. The meeting was re-opened at 4:47 PM with all board members and counsel in attendance. Hediye Mamak, First Deputy Commissioner of City of Mt. Vernon Building Department was also in attendance and reviewed proposals received for structural engineering services and demolition services. 3 contractors were contacted to provide proposals with only 2 responses received by the 12 noon deadline. Motion by B. Johnson, seconded by S. Vanderpool authorizing the Board Chairperson to procure structural engineering and demolition services in an amount not to exceed $150,000 for emergency demolition of the building located at 217/225 South Fourth Avenue. The motion was unanimously adopted. Motion by B. Johnson, seconded by S. Vanderpool to adjourn the meeting at 5:18 PM. The motion was unanimously adopted. Respectfully submitted by Julie Marshall  Minutes of the City of Mount Vernon Industrial Development SPECIAL MEETING August 16, 2024 A Special Meeting of the Board of Directors (“Board”) of the City of Mount Vernon Industrial Development Agency (“Agency”) was held on Friday, August 16, 2024 in the Mayor’s Conference Room, City Hall, 1 Roosevelt Square, Mount Vernon, New York 10550 and via video conference. Present: Darren Morton EdD Brian Johnson, Esq. Stephanie Vanderpool Excused: Hon. Shawyn Patterson-Howard Absent: None Also Present: Robin Mack, Director of Business Development Hediye Mamak, Deputy Commissioner of City of Mt. Vernon Building Department Darius Chafizadeh, Esq., Harris Beach PLLC (via remote meeting) Julie Marshall, Harris Beach PLLC (via remote meeting) The Special Meeting was called to order at 11:53 AM by Vice-Chair Morton. A quorum of members was present. R. Mack stated that the Special Meeting was duly noticed. Board members were provided with the cost estimates received from 2 contractors related to the structural engineering analysis and emergency demolition of the building located at 217 South Fourth Avenue. The board previously authorized the IDA Chair to enter into an agreement in an amount not to exceed $150,000 for such services. Cost estimates received exceeded the authorized amount. Members further discussed the scope of work and responses received. It is possible that asbestos may be present on site, necessitating asbestos removal services. H. Mamak stated that due to the structural integrity of the building, 3rd party asbestos testing cannot be conducted. Therefore, building demolition will be completed as if asbestos is present. A motion was made by B. Johnson, seconded by S. Vanderpool to enter into Executive Session at 12:34 PM to discuss a potential contract. A motion was made by B. Johnson, seconded by S. Vanderpool to return to regular session at 12:49 PM. No action was taken during the Executive Session. The board determined that additional information is needed from the City Building Department to enable the IDA to award a contract to the most responsible bidder. A follow-up meeting will be scheduled as soon as possible to make a determination. Motion by B. Johnson, seconded by S. Vanderpool to adjourn the meeting at 12:51 PM. The motion was unanimously adopted. Respectfully submitted by Julie Marshall  Minutes of the City of Mount Vernon Industrial Development SPECIAL MEETING August 29, 2024 A Special Meeting of the Board of Directors (“Board”) of the City of Mount Vernon Industrial Development Agency (“Agency”) was held on Thursday, August 29, 2024 in the Mayor’s Conference Room, City Hall, 1 Roosevelt Square, Mount Vernon, New York 10550 and via video conference. Present: Hon. Shawyn Patterson-Howard (via remote meeting) Brian Johnson, Esq. Darren Morton EdD Stephanie Vanderpool Excused: None Absent: Chris McDonough Also Present: Robin Mack, Director of Business Development Hediye Mamak, Deputy Commissioner of City of Mt. Vernon Building Department Darius Chafizadeh, Esq., Harris Beach PLLC (via remote meeting) Julie Marshall, Harris Beach PLLC (via remote meeting) The meeting was called to order by Chair Patterson-Howard at 9:57 AM. Board members were provided with the cost estimates received from 2 contractors related to demolition of the building located at 217 South Fourth Avenue. Members reviewed the scope of work outlined in each contractor response. FDL Management Corporation estimate of $278,350 Capital Industries (f/k/a Queen City) estimate of $248,000 H. Mamak and the City of Mt. Vernon Buildings Department have reviewed the estimates and the scope of work. Both firms are capable of handling the scope of work. The work will include licenses asbestos removal and air quality monitoring and testing. The City will also test the air quality at an additional cost of approximately $10,000. The property is owned by the IDA therefore all expenses incurred are the responsibility of the IDA. Motion by B. Johnson to accept the bid of Capital Industries in the amount of $248,000 and enter into an agreement for the demolition of the building located at 217 S. 4th Avenue, Mt. Vernon, seconded by S. Vanderpool. Motion unanimously adopted. Funds will be transferred at the time of payment approval. Chair Patterson-Howard noted that Stop-n-Shop is moving out of the City of Mt. Vernon and will sublease the space to Food Bazaar. Food Bazaar will now have two locations in the City. The City will continue to engage with Stop-n-Shop. On a motion by B. Johnson, seconded by S. Vanderpool, the meeting was adjourned at 10:15 AM. Respectfully submitted by Julie Marshall  Mount Vernon Industrial Development Agency Quarter 1 Quarter 2 July August Financial Statements: 08/31/24 2024 2024 2024 2024 Income Statement Revenue PILOT 929,782 568,183 133,383 - Fees, Rent and Lease 49,221 44,413 108,023 52,240 PILOT Escrow 970 Interest 1,435 1,447 491 491 Total Income 981,409 614,042 241,897 52,731 Expenses Salaries and Benefits 25,106 28,568 8,369 8,369 Overhead Events PILOT Remittance - 856,883 Total Expenses 25,106 885,450 8,369 8,369 Net Earnings or (Loss) 956,302 $ (271,408) $ 233,528 $ 44,362 Balance Sheet Chase Escrow accounts 849,641 849,802 849,857 849,912 Money Mkt Account 812,363 812,868 813,040 813,213 (1) Pilot Account 2,041,758 1,881,966 2,015,877 2,015,877 Operating Account 118,934 80,911 131,610 166,502 PILOTS Receivable 103,178 69,708 255,896 255,896 Total Assets $ 3,925,874 $ 3,695,256 $ 4,066,281 $ 4,101,400 Liabilities Accounts Payable (Other) 7,993 6,146 9,838 9,544 Accounts Payable (PILOT) 2,041,758 1,881,966 2,015,877 2,015,877 Total Liabilities $ 2,049,751 $ 1,888,112 $ 2,025,716 $ 2,025,421 Cash Flow Statement Operating Cash Flow Net Earnings 956,302 (271,408) 233,528 44,362 Cash From Operations 956,302 (271,408) 233,528 44,362 Net Increase (decrease) in Cash 919,197 (197,815) 184,610 219,502 Opening cash balance 1,241,495 2,160,692 1,962,877 1,962,877 Closing cash balance $ 2,160,692 $ 1,962,877 $ 2,147,488 $ 2,182,379 Notes: (1) Market value per Tri-Party Collateral agreement with MVIDA, Webster Natl Bank & BNY Mellon is $576,308.88 thru 8/16/24.  Mount Vernon IDA - Status of 2024 Administrative Fees Updated 08/31/2024 Project Name Applicant Name Project Address Mailing Address 2024 Amount 2024 STATUS 130 Modern, LLC 130 Modern LLC 130 Mount Vernon Avenue 438 Fifth Avenue, Suite 100 6,523.87 Recd 6/28/24 203 Gramatan Avenue Atlantic Development Group, LLC 203 Gramatan Avenue 155 6th Avenue #3 6,244.31 Recd 8/20/24 Ace Natural Ace Natural 249-257 East Sandford Blvd 6,523.87 Recd 07/11/24 American Christmas, LLC American Christmas LLC 30 Warren Place 6,523.87 Recd 07/08/24 Dominican Magic Luciano Brothers LLC 458 South 10th Street 151 Ludlow Street 6,523.87 Not paid Enclave at Fleetwood Project Enclave Equities LLC 525-645 North MacQuesten 2 Pkwy Manhattanville Road, Suite 403 6,149.37 Recd. 01/05/24 Enclave on 5th Residential LLC Enclave on 5th Residential LLC 15 South Fifth Avenue 2 Manhattanville Road, Suite 403 5,000.00 Recd. 07/02/24 Grace Terrace LLC Grace Terrace Corp./ 125-129 South Fifth Avenue 700 White Plains Road 5,000.00 Recd. 01/09/24 Grace Plaza Grace Plaza LLC 153-163 South 5th Avenue 700 White Plains Road 5,000.00 Recd. 07/02/24 Grace Towers Project Grace Towers II LLC 20-28 East Third Street 700 White Plains Road 5,000.00 Recd. 01/03/24 Regent Hospitality Linen Services LLC Regent Hospitality Linen Services LLC 130 South Columbus Avenue86-02 104th St. 6,333.85 Not paid Target Corp./ Heritage North GDC Properties LLC and Target East Sanford Boulevard 245 Saw Mill River Road 5,000.00 Recd. 01/05/24 Oakwood Gardens Preservation LLC Oakwood Gardens Preservation LLC 630 East Lincoln Avenue 641 Lexington Avenue, 15th Floor 6,523.88 Recd 07/08/24 22 South West Street c/o MacQuesten Development 22 South West Street 438 Fifth Avenue, Suite 100 6,523.87 Recd 6/28/24 Macedonia Towers/ Community Housing Macedonia Towers 150 South Fifth Ave 700 White Plains Road 5,000.00 Recd. 07/02/24 Kings Court Kings Court 117 South Second Ave 5,000.00 Recd. 07/02/24 Heritage South Heritage South 550 East Sandford Blvd 100 Summit Lake Drive, Ste 235, 5,000.00 Recd. 01/05/24 Zion Court Zion Court 116 West First Street 5,000.00 Recd. 6/18/24 Sanford Terrace 470 South Fifth Avenue Corp 470 South Fifth Avenue CorpPO Box 204 6,428.91 Recd. 01/02/24 TOTAL $ 109,299.64 -$24,102.03 -22%  MVIDA SUMMARY_ 2024 PILOT PAYMENTS & OPEN BALANCES Project ESCROW PAYMENTS DUE PAYMENTS REC'D OPEN Updated 08/31/24 Balances January July January July BALANCES First Half 2023 Second Half 2024 First Half 2023 Second Half 2024 PAYMENT STATUS 22 South West Street 30,000 84,594.07 84,594.07 (84,594.07) (84,594.07) - Paid 06/17/2024 203 Gramatan Ave/ Blue Rio, LLC Project 9,200 47,463.58 47,463.58 (47,463.58) 47,463.58 Updated invoice for Second Half 2024 Pilot sent 8/30/24. Blue Rio/ Duck Soup 20,976.92 20,976.92 (20,976.92) (20,976.92) - Paid 07/31/24 130 Modern LLC/Macquesten - RESIDENTIAL 69,660 37,701.11 37,701.11 (37,701.11) (37,701.11) - Paid 01/16/2024 130 Modern LLC/Macquesten - COMMERCIAL 541.22 541.22 (541.22) (541.22) - Paid 01/16/2024 Ace Natural, Inc./Exit 8 Hutch LLC Natural Food 60,777.44 60,777.44 (60,777.44) (60,777.44) - Paid 07/22/24 Dominican Magic 20,000 28,080.00 28,080.00 56,160.00 Updated invoice for past due 2023 and 2024 Pilots. Enclave at Fleetwood Parcel A 63,864.50 63,864.50 (63,864.50) (63,864.50) - Paid 6/12/24 Enclave at Fleetwood Parcel B 41,689.00 41,689.00 (41,689.00) (41,689.00) - Paid 6/12/24 Enclave on 5th Housing Development Fund Company, Inc. 52,400 43,542.89 (43,542.89) - Annual Pilot paid 6/17/24 and Enclave on 5th Residential, LLC Grace Plaza LLC 17,376 59,732.45 (59,732.45) - Paid 04/25/24 Grace Terrace LLC 53,600 33,469.53 33,469.53 (33,469.53) (33,469.53) - Paid 6/13/24 Grace Towers Housing II LLC 49,680 128,401.00 (128,401.00) - Paid 4/30/24 Heritage House North (aka Mount Vernon North) 73,141.93 77,530.45 (73,141.93) (77,530.45) - Paid 06/28/24 Heritage House South (aka Mount Vernon South) 135,685.08 140,745.84 (135,685.08) (140,745.86) (0.02) Paid 01/05/24 Oakwood Gardens 20,000 39,166.02 39,166.02 (39,166.02) (39,166.02) - Paid 6/13/24 Warren Place LLC & American Christmas, Inc. 37,500.00 37,500.00 (37,500.00) (37,500.00) - Paid 7/08/24 Regent Hospitality Linen Services 27,750 16,567.48 16,567.48 33,134.96 Updated invoice for past due 2024 Pilots sent 09/06/24. Target 175,091.54 181,622.08 (175,091.54) (87,545.77) 94,076.31 Fourth Quarter Pilot expected Oct 2024. Zion Court Apartments LP - RESIDENTIAL 29,000 16,731.30 16,731.30 (16,731.30) (16,731.30) (0.00) Paid 6/18/2024 Zion Court Apartments LP - COMMERCIAL 865.95 865.95 (865.95) (865.95) (0.00) Paid 1/31/2024 Sandford Terrace LLC - NEW PROPOSAL 32,773 16,378.50 16,378.50 (16,378.50) (16,378.50) - Paid 07/02/24 Kings Court 57,123 20,646.57 (20,646.57) - Paid 1/10/24 Macedonia Towers 63,578.32 (63,578.32) - Paid 1/10/24 American Christmas 6,519 1 North Fulton 20,000 A-Val 54,608 WP East Acquisitions LLC 20,000 Petrillo Apartments 20,000 - - Hartley Park Towers 20,000 Hawkins, Delafield & Woods 50,223 Sandford Terrace TOTAL 849,912 $ 1,246,186.39 $ 946,264.99 $ (1,201,538.92) $ (760,077.64) $ 230,834.82  Resolution 9/2024-1 Date: September 12, 2024 At a scheduled meeting of the City of Mount Vernon Industrial Development Agency (the “Agency”) duly convened by the Chair of the Agency and held on September 12, 2024 at 10:00 AM in the Mayor’s Conference Room, 1 Roosevelt Square, Mount Vernon, NY 10550, the following members of the Agency were: Present: Absent: Excused: After the meeting had been duly called to order, the Chair announced that among the purposes of the meeting was to consider and take action on certain matters pertaining to the payment of invoices presented to the Agency for payment. The following resolution was duly moved and seconded, discussed and adopted with the following members voting: Voting Aye Voting Nay  Resolution 9/2024-1 RESOLUTION OF THE CITY OF MOUNT VERNON INDUSTRIAL DEVELOPMENT AGENCY APPROVING AND AUTHORIZING THE PAYMENT OF INVOICES PRESENTED TO THE AGENCY FOR PAYMENT WHEREAS, by Title I of Article 18-A of the General Municipal Law of the State of New York, as amended, and Chapter 786 of the Laws of 1976 of the State of New York, as the same may be amended from time to time (collectively, the “Act”), the CITY OF MOUNT VERNON INDUSTRIAL DEVELOPMENT AGENCY (the “Agency”), was created with the authority and power among other things, to assist with the acquisition of certain industrial development projects as authorized by the Act; and WHEREAS, the Act authorizes the Agency (1) to promote the economic welfare, recreational opportunities and prosperity of the inhabitants of the City of Mount Vernon (the “City”), and (2) to promote, attract, encourage and develop recreation and economically sound commerce and industry through governmental action for the purpose of preventing unemployment and economic deterioration; and WHEREAS, the Agency has been presented with certain bills, statements and/or invoices for payment for services and/or goods provided to or for the benefit of the Agency as follows (collectively, “Invoices”): (i) City of Mount Vernon Board of Water Supply, $1,445.66 for September, 2024 Healthcare Premium; and (ii) Harris Beach PLLC, $6,148.00 for July and August, 2024 Legal Services invoice; and (iii) Day Stokosa Engineering P.C., $1,950.00 for Structural Engineering Services; and WHEREAS, the Treasurer has reviewed the Invoices and made such inquiry with respect thereto as has determined the Invoices to be necessary and appropriate; and WHEREAS, the Treasurer has advised the Agency at the meeting at which these resolutions are presented for adoption of the identity, nature and amount of each such Invoice; and WHEREAS, the Treasurer has recommended and approved payment of the Invoices; and NOW, THEREFORE, BE IT RESOLVED by the Agency (a majority of the members thereof affirmatively concurring) as follows: Section 1. The Agency hereby approves and authorizes the payment of the Invoices. Section 2. The Treasurer for the Agency is hereby authorized and directed to immediately pay the Invoices. -2-  Resolution 9/2024-1 This resolution shall take effect immediately. [Remainder of Page Intentionally Left Blank.] -3-  Resolution 9/2024-1 CERTIFICATION S T AT E OF N E W YORK ) SS.: COUNT Y O F WE ST CHES TE R) I, the undersigned, Secretary of the City of Mount Vernon Industrial Development Agency (the “Agency”) DO HEREBY CERTIFY: That I have compared the annexed extract of minutes of the meeting of the Agency including the resolution contained therein, held on September 12, 2024, with the original thereof on file in the office of the Agency, 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 related to the subject matters therein referred to. I FURTHER CERTIFY, that all members of said 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. I FURTHER CERTIFY, that there was a quorum of the members of the Agency present throughout said meeting. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of said Agency this ____ day of ________, 2024. ________________________ Brian G. Johnson, Secretary -4-  EXPENSE REIMBURSEMENT AGREEMENT (this “Agreement”), made as of the ____ day of August, 2024, by and between The Mount Vernon Industrial Development Agency (“IDA”), a public benefit corporation of the State of New York, having an office at City of Mount Vernon Office Building, 1 Roosevelt Square, Mount Vernon, New York 10550 and the City of Mount Vernon (the “City”) on the one hand and Pennrose NY Developer LLC (the “Developer”), a New York limited liability company having an office at c/o Pennrose, 230 Wyoming Avenue, Kingston, PA 18704 on the other hand. WITNESSETH: WHEREAS, IDA and/or the City (together with the IDA the “Government Entities” or “Government Entity”) own certain property known as Parcel IDs 169.22- 3109-8; 169.22-3109-29; 169.22-3109-30; 169.22-3109-31; 169.22-3109-32; 169.22-3109-33; 169.22-3109-34 and 169.22-3109-35 on the Tax Map of the City of Mount Vernon (the “Property”); WHEREAS, the Government Entities are considering engaging in a transaction (the “Transaction”)to ground lease the Property (the “Property Interests”); to the Developer or its affiliates in connection with construction of a mixed-use project consisting of a 7- story, approximately 188-unit affordable multi-family rental housing facility with 32 studio, 102 one-bedroom, 36 two-bedroom rental units and 18 three-bedroom apartments, all of which will be affordable to low income residents, with one fully subgrade parking level consisting of approximately 100 parking stalls, approximately 10,000 square feet of light industrial space, approximately 5,000 square feet of workforce development space, approximately 6,000 square feet of retail space and approximately 1,500 of community facility space (the “Project”); WHEREAS, the Developer indirectly controls properties that are adjacent to the Property on which will be combined with the Property to form the development site for the Project; WHEREAS, the Government Entities are considering conditionally designating the Developer as the purchaser of the Property Interests; WHEREAS, the Government Entities are unwilling to enter into any further discussions or negotiations with the Developer unless the Developer agrees to pay for or reimburse the Government Entities and any affiliates, subsidiaries, consultants and lawyers of the Government Entities who may act or perform services for or on behalf of the Government Entities, as applicable, in connection with the Transaction for such Government Entities’ costs and expenses incurred in connection with a prospective transaction, subject to the limitations provided for herein; and WHEREAS, the Developer has agreed to pay for or reimburse the Government Entities for the costs and expenses incurred by the Government Entities relating to the Transaction pursuant to and in accordance with the terms and conditions set forth herein.  NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, IDA and the Developer hereby agree as follows: 1. Developer Reimbursement Obligation. (a) The Developer agrees to pay or reimburse the Government Entities for all of the following costs and expenses incurred by the Government Entities from and after January 1, 2024 (the “Effective Date”) in connection with or related or attributable to the Transaction and/or the Project (collectively, the “Reimbursable Costs”) up to a maximum amount of Fifteen Thousand Dollars ($15,000) until the execution and delivery of the Binding Agreement (as defined below) and thereafter, unless otherwise agreed to by the parties, there shall be no cap and the Developer’s reimbursement obligations shall be governed by Section 2 hereof. (i) fees and disbursements of outside counsel, engineers, appraisers, land use consultants, architects, economic consultants, environmental consultants and engineers conducting or reviewing due diligence and financial and real estate advisors retained, engaged or hired by any Government Entity for services rendered after the Effective Date in connection with, related to or attributable to the Transaction or the Project, including without limitation, in connection with the preparation and negotiation of any term sheet or development agreement for the sale of the Property Interests sought by the Developer in connection with the Project, and the proposed form thereof; (ii) other costs and expenses payable or reimbursable by the Developer to the Government Entities pursuant to any documents or agreements hereafter entered into after the Effective Date with respect to the Transaction or the Project and identified in such documents as being payable from the Expense Funds (defined below). 2. Expense Fund. (a) Deposits. Within five (5) business days following the execution of this Agreement, the Developer shall deposit the amount of Fifteen Thousand Dollars ($15,000.00) with IDA for the benefit of the Government Entities, as an initial deposit into an expense fund (such funds, together with any funds hereafter deposited by the Developer with IDA in replenishment thereof, collectively, the “Expense Funds”) to be withdrawn and used by IDA to pay for or reimburse the IDA Parties for Reimbursable Costs. (b) Replenishment. After Developer and IDA enter into a binding agreement conditionally designating the Developer as the purchaser of the Property Interest (the “Binding Agreement”), at any time that the amount of Expense Funds then being held by IDA is less than Ten Thousand Dollars ($10,000.00) (as the same may be increased from time to time as hereinafter provided, the “Threshold Deposit Amount”), IDA may give notice to the Developer specifying the amount then in such fund and the Developer, not later than ten (10) business days after its receipt of such notice, shall deposit with IDA an amount that when added to the amount set forth in the notice from IDA as being the remaining balance of Expense Funds on account shall equal or exceed the Threshold Deposit Amount. In determining whether the Expense Funds then being held by IDA is less than the Threshold Deposit Amount or the amount required for replenishing the same, IDA may (but shall not be obligated to) take into consideration Reimbursable Costs which have been incurred by the Government Entities and are the subject of pending unpaid invoices or for which the Government Entities are contractually committed pursuant to purchase orders or other third-party contracts with respect to the Transaction of the Project. The Developer acknowledges that the Government Entities may cease any further work or activity in relation to the Transaction or the Project until such time as the Developer delivers to IDA the replenishment funds required by this Paragraph 2(b) and that, notwithstanding anything to the contrary contained herein or any other agreement between the Developer and/or any of its affiliates, on the one hand, any of the Government Entities, on the other hand, any such suspension shall not extend the time frame for performance by the Developer or any of the Developer’s affiliates. The foregoing replenishment obligation shall continue until the termination of this Agreement as provided in Paragraph 4 below. Notwithstanding anything to the contrary, in no event shall Developer be obligated to replenish Expense Funds pursuant to this provisions prior to the execution of a Binding Agreement. (c) Payments to IDA. The initial deposit of Expense Funds in accordance with Paragraph 2(a), any replenishment of Expense Funds in accordance with Paragraph 2(b), and any other payment required to be made to the IDA hereunder shall be made by wire transfer of immediately available funds pursuant to IDA’s wiring instructions set forth on Exhibit A. 3. Withdrawal; Payment; Notice. (a) From time to time as Reimbursable Costs are incurred by any Government Entities, IDA shall have the right to draw against the amounts held as Expense Funds for the payment or reimbursement of such Reimbursable Costs. (b) On approximately the twentieth (20th) day of July, October, January and April, IDA shall provide to the Developer a report setting forth the Reimbursable Costs that were paid or reimbursed from the Expense Funds during the previous three-month period. Such report shall itemize such Reimbursable Costs, provide supporting documentation, (including copies of the invoices from third parties) and contain such other information as shall be reasonably requested by the Developer (for the avoidance of doubt, invoices from outside counsel shall include a breakdown of time but shall not be required to include entries/descriptions). The Developer shall have thirty (30) days after receipt of each such report to notify IDA of its objection to any of the items identified on such report. If the Developer does not so object during such period, all of such payments and/or reimbursements shall be deemed approved by the Developer. If within thirty (30) days after receipt of a report, the Developer notifies IDA of an objection to any of the items identified therein, IDA and the City shall review the Developer’s objection(s) in good faith and (i) if IDA and/or the City agrees with all of the Developer’s objections, IDA shall cause the amount of such improper withdrawal to be credited back into the Expense Funds held on account, (ii) if IDA and/or the City disagrees with the Developer’s objections in full, IDA and/or the City shall send the Developer notice that the Developer’s objection is not accepted, or (iii) if IDA and/or the City agrees with some of the Developer’s objections and disagrees with some of the Developer’s objections, IDA and/or the City shall proceed as set forth in clause (i) above with respect to those disputed items that IDA and/or the City determines need to be corrected and shall proceed as set forth in clause (ii) above with respect to those disputed items that IDA and/or the City determines need no correction. IDA’s good faith determinations as to Reimbursable Costs shall be final and binding, absent manifest error. 4. Term. If at any time the negotiations between the Developer and the Government Entities are terminated without definitive agreements for the Transaction, either party may send a notice of termination and this Agreement shall terminate ten (10) business days after receipt of such notice; provided, however, that the Developer shall continue to be obligated for the payment or reimbursement of all Reimbursable Costs incurred prior to the date of termination including those that are the subject of pending unpaid invoices or for which the Government Entities are contractually committed. Within one hundred eighty (180) days of termination of this Agreement, the Government Entities shall deliver to the Developer a report setting forth the Reimbursable Costs that were paid or reimbursed from the Expense Funds from the date the last such report was issued to the Developer and the terms and provisions of Paragraph 3(b) shall apply in connection with such report notwithstanding the termination of this Agreement. The Government Entities shall return any remaining balance of Expense Funds then held by IDA (after applying the same to any then remaining unpaid Reimbursable Costs incurred prior to the termination of this Agreement including those that are the subject of pending unpaid invoices or for which the Government Entities are contractually committed) to the Developer along with the delivery of such final report. The obligations of the Developer under this Paragraph 4 to pay or reimburse all Reimbursable Costs incurred prior to the date of termination and the obligations of the Government Entities under this Paragraph 4 to return the remaining balance of Expenses Funds shall survive the termination of this Agreement. 5. Entire Agreement. This Agreement contains all the promises, agreements, conditions, understandings, inducements, warranties and representations between the Government Entities s and the Developer relative to the payment or reimbursement for Reimbursable Costs incurred by the Government Entities following the Effective Date in connection with or related or attributable to the Transaction or the Project, and there are no other promises, agreements, conditions, understandings, inducements, warranties, or representations, oral or written, expressed or implied, between them. Nothing in this Agreement gives rise to any obligation to commence, continue or conclude any discussions or negotiations with the Developer relating to the Transaction or thew Project. 6. Waiver, Modification. Etc. No covenant, agreement, term or condition of this Agreement to be performed or complied with by any party shall be changed, modified, altered, waived or terminated except by a written instrument of change, modification, alteration, waiver or termination executed by the other party. No default hereunder by an the IDA, the City or the Developer shall be waived except by written instrument executed by the other party. No waiver of any default shall constitute a waiver of any other default, and no waiver of any default shall affect or alter this Agreement, but each and every covenant, agreement, term and condition of this Agreement shall continue in full force and effect with respect to any other then-existing or subsequent default thereof. 7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of law principles other than Section 5-1401 of the New York General Obligations Law. 8. Notices. Whenever it is provided in this Agreement that a notice, demand, request, consent, approval or other communication shall or may be given to or served upon either of the parties by the other, such notice, demand, request, consent, approval or other communication shall be in writing, shall be given either by first class mail, postage prepaid, hand delivery or overnight courier service addressed to the parties at their addresses first set forth above. Notices so addressed shall be deemed properly given (a) when personally delivered in the case of hand delivery when receipt is rejected, (b) one (1) business day after deposit or pickup by nationally recognized overnight courier service, or(c) in the case of delivery by first class mail, three (3) business days after the same is duly deposited in the United States mail. Either party may, by written notice to the other, change the address to which notices to such party shall thereafter be given. 9. No Personal Liability. Notwithstanding anything appearing to the contrary in this Agreement, no direct or indirect partner, member or shareholder of a party (or any officer, director, agent, member, manager, personal representative, trustee or employee of any such direct or indirect partner, member or shareholder) shall be personally liable for the performance of such party’s obligations under this Agreement. 10. No Third-Party Beneficiary. Except for any subsidiaries or affiliates of the Government Entities, whether or not direct parties to this Agreement (which subsidiaries and affiliates the parties hereby agree are intended to be third party beneficiaries of this Agreement), no persons other than the Government Entities and the Developer will have the right to benefit from or enforce this Agreement. 11. Counterparts. This Agreement may be executed with counterpart signature pages or in several counterparts, at different places and times, all of which taken together shall constitute one and the same instrument, which shall be deemed dated as of the day and year first above written, and fully executed upon receipt by each of the parties hereto of an executed counterpart. A Party who cannot deliver an executed wet ink original, may instead deliver a true copy of it as a PDF file attached to an email (“Authentic Duplicate”). Upon receipt of such electronically transmitted Authentic Duplicate, it will have the same validity and binding effect as the wet ink original until the wet ink original is received. A party who delivers an Authentic Duplicate electronically shall as soon as practicable deliver the wet ink original; provided, however, that failure to do so will not affect the Authentic Duplicate’s validity and binding effect. 12. Jurisdiction and Venue. Each of the parties irrevocably (a) agrees that any suit, action or other legal proceeding arising out of or relating to this Agreement, must be brought in a state court sitting in Westchester County, State of New York which courts shall have the exclusive jurisdiction over any such suit, action or proceeding commenced by any of the parties relating to this Agreement, (b) consents to the jurisdiction of each such court in any such suit, action or proceeding and (c) waives any objection which it may have to the laying of venue of any such suit, action or proceeding in any of such courts and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. In furtherance of such agreement, each party agrees upon the request of any other party to discontinue (or agree to the discontinuance of) any such suit, action or proceeding brought in any other jurisdiction. 13. Waiver of Trial by Jury; Counterclaims. Each of the parties hereby waives all rights to trial by jury in any action or proceeding brought by such party against the other party on any matters whatsoever arising out of or in any way relating to this Agreement. Each of the parties hereto agrees not to claim any set-off or offset or interpose any counterclaim of whatever nature or description, except compulsory counterclaims, in any such proceeding or action. 14. Headings. All headings and titles in this Agreement are for purposes of identification and convenience only and shall not affect any construction or interpretation of this Agreement. 15. Prior to entering into a Binding Agreement, Developer’s liability under this Agreement shall not exceed Fifteen Thousand Dollars ($15,000) in the aggregate. [SIGNATURES APPEAR ON THE FOLLOWING PAGE]  IN WITNESS WHEREOF, IDA and the Developer have executed this Agreement as of the date first above written. The Mount Vernon Industrial Development Agency By__________________________________________________ Name: Title: The City of Mount Vernon By__________________________________________________ Name: Title: Pennrose NY Developer LLC By____________________________________________ Name: Title:  EXHIBIT A – IDA WIRE INSTRUCTIONS Beneficiary Name: The Mount Vernon Industrial Development Agency Bank Name: [_______________] Routing Number (ABA): [_____________] Account Name: IDA Operating Account Beneficiary Account Number: [_____________] Attention: [_____________]