Troy Local Development Corporation

TROY LOCAL DEVELOPMENT CORPORATION Board of Director Meeting Minutes March 20, 2015 8:30 a.m. BOARD MEMBERS PRESENT: Kevin O’Bryan, Bill Dunne, Dep. Mayor Pete Ryan, Andy Ross and Hon. Ken Zalewski ABSENT: ALSO IN ATTENDANCE: Ken Crowe, Selena Skiba, Justin Miller, Sharon Martin, Kevin Mullen, Andrew Piotrowski, Joe Mazzariello, Paul Goetz, Laban Coblentz, Mike Morris, Adam Sanzone and Denee Zeigler Minutes The Chairman called the meeting to order at 8:30 a.m I. Minutes The board reviewed the minutes from the February 13, 2015 board meetings. Dep. Mayor Pete Ryan noted that spelling of his name was incorrect in last month’s minutes. Hon. Ken Zalewski made a motion to approve the minutes with corrections noted above. Andy Ross seconded the motion, motion carried. II. Other Business Bill Dunne noted that on April 28th at the Arts Center, The Temple University students will be here to present their final projects and the board is invited to attend that event. III. Draft Audit report by SaxBST The chairman introduced Paul Goetz of SaxBST to the board. Mr. Goetz advised he will go over the draft copy of the audit report for the Troy LDC. He noted that this is a draft report and will become finalized after the board reviews and approves it. The second thing needed to complete is a representation letter. The representation letter says that the entity was forthright in disclosing all of the requested information. Mr. Goetz noted that all of the reports are due to the ABO by March 31st. 1  Mr. Goetz noted that on the first two pages of the audit report it shows that the financial statements have received an unmodified opinion, the highest form of assurance an auditor can give. Page three of the report is the statement of net position, the balance sheet of the LDC as of 12/31/14 versus 12/31/13. Mr. Goetz noted the cash balance, assets and loans receivable. He advised that there are two places where the loans receivable are stated; the current portion the principal of what is expected to be received in 2015 and the other is the long term portion which is the amount expected to be received beyond 2016 through maturity. Mr. Goetz noted a couple of significant liabilities; the grants payable section shows the grants approved in 2014 and waiting to be paid in 2015 and the deposits held which is for the sale of 444 River Street. Mr. Goetz noted that the deposit for that property was received two years ago, but just went into the bank this year. He added the property will be closing soon. Mr. Miller advised that it went non- refundable at the end of last year. Mr. Goetz also noted the loans payable section, which is also separated by current and long term. The Chairman asked for clarification about the item listed as ‘deferred grant revenue shown as a liability’. Joe Mazzariello noted that it is revenue that is not earned until the grant requirements are fulfilled. Mr. Miller asked if that was the BEDI funds. Mr. Goetz advised yes. Mr. Goetz went over page 4, the statements of revenues, expenses and changes in net position. Mr. Goetz reviewed the operating revenue and operating expenses. The economic development grants section includes the money used to support the Troy Community Land Bank and the façade grants. Mr. Goetz noted the decrease in net position from last year. Mr. Goetz advised the board of the footnotes listed on page 9 under loans receivable. He advised that five new loans were issued during 2014 with various terms and maturities and noted that there is always risk of no payment. Mr. Goetz advised that they report the there is an allowance listed for doubtful loans. Note 4, Property held for development and resale carries over to page 10. This note indicates the cost of any of the work done at the King Fuels site. Mr. Goetz advised note 5 breaks down the BEDI loan and expected maturities. Mr. Mazzariello asked if there should be a note indicating that one of the notes to the City were to be paid off. Mr. Miller advised that it was approved last year, but not paid yet. Mr. Goetz advised that they would include it in the year that it is paid off. The Chairman asked if this is the copy that is posted to the website and sent to the ABO. Mr. Goetz advised yes. Dep. Mayor Pete Ryan made a motion to approve the DRAFT audit report as presented by SaxBST. Andy Ross seconded the motion, motion carried. IV. Rare From Brewing additional funding Mr. Dunne introduced Kevin Mullen, one of the owners of Rare Form Brewing, to the board. Mr. Dunne advised that they received funding from us in the past and are back to ask for additional funding in order to purchase equipment. Mr. Dunne advised the current loan request was $22,500 and has been modified to $20,000. Andy Ross asked if the term of the loan would be for 3 years and if we were combining the two loans. Justin Miller 2  explained that the term is 5 years and a new loan agreement will be drawn up with new securities. Mr. Mullen advised that a 5 year term would be ideal. The funds would be used to purchase additional equipment in order to increase production and keep up with demands. Mr. Ross asked if he is comfortable that the sales will cover the additional loan. Pete Ryan asked if this will help them to double their capacity. He explained that they sell out of what they are making before it is even in the kegs. Mr. Ross asked spoke of his previous business plan that included sales to surrounding areas. Mr. Muller advised they are in all of the top beer bars in Albany and are in a few bars in Saratoga. He advised that he has received requests from other businesses, but is unable to meet the demand currently. Ken Zalewski asked how long they have been open. Mr. Mullen advised they are coming up on their one year anniversary. Mr. Ryan asked if the market is close to being saturated. Mr. Mullen advised that the craft beer market has reached about 10% of the actual beer market. He advised that a lot of the breweries are focusing on smaller towns and it actually works well to have other breweries close by for people to try. People like to come to a town that has more than one to visit. Laban Coblentz added that one of the new services at The Center of Gravity is a sales and distribution service for foreign export. They select medium production companies and market their product to foreign niche markets. The first vertical they selected is American Craft beers. He noted that it used to be that the Americans bought European beers, but now may Europeans are demanded American Craft beer. Mr. Zalewski asked where the current loan stands. Andy Piotrowski advised the board they are current. The Chairman asked if there were any other questions or items to discuss. Hon. Ken Zalewski made a motion to approve the $20,000 loan to Rare Form Brewing Company. Dep. Mayor Pete Ryan seconded the motion, motion carried. V. Clark House LLC Mr. Dunne advised that he is waiting for some of the requested information to come in regarding the Clark House LLC and it can be discussed at the next meeting. VI. Old Business Justin Miller advised the board they anticipate a closing for 444 River Street by March 31st. Mr. Miller recalled that in January we approved an amendment to the sale contract where they were going to purchase by March and finance a portion of that with the LDC. They requested that the first 18 months of that be interest free. Mr. Dunne added that he has had some conversations with The Vecino Group regarding their financing. He advised that they are ready to proceed but will need assistance to create an application to NYS for tax credits. They are asking us for no interest and payments due for 18 months. The Chairman noted that we will get the $350,000 up front for the building and there would be a transfer of title which would make them responsible to maintain the building. We would get the remaining balance once financing is in place. Andy Ross advised that there seems to be a good deal for the LDC because we will get the full purchase price for the building and another payment down the road as well as having them pay the taxes and maintain the building. Mr. Miller added that if for some reason the project does not happen within the two years, the building 3  will revert back to the LDC. Mr. Dunne advised that they have money invested in the building. Ken Zalewski advised that we have been maintaining the building and asked if they have invested other funds into the building. The Chairman advised yes. Mr. Ross advised architect and engineer costs. The Chairman asked if there were any other questions from the board. Ken Zalewski asked about the timeframe of the project. Mr. Miller advised that there will be no interest or payments for 18 months and 30 months for project to be completed. He added that the timing follows the NYS tax credit application process. Pete Ryan noted the progress of the Hudson Art House and how quickly that moved along once financing was in place. (See attached LDA) Dep. Mayor Pete Ryan made a motion to approve the amended LDA for 444 River Street. Andy Ross seconded the motion, motion carried. VII. Freelot Mr. Miller reminded the board that at the last meeting authorization was given to negotiate a lease surrender agreement from Freelot, a tenant on the King Fuels site. He advised that he has a signed agreement and he is looking for a motion to execute the lease surrender agreement and authorize lease surrender payments. Mr. Miller advised the costs, for the most part, are for relocation fees. By closing out their lease two years early, National Grid will be able undertake their remediation and the tenant will not be disturbed during the process. Ken Zalewski asked for a recap of the process. Mr. Miller spoke about the background of the Freelot lease over the past few years. He advised that this will waive off some of the rents due and a series of payments that will assist them in relocating their equipment. They will be out by June 1st of this year. Mr. Ross asked if we know where they are moving to, will it be in Rensselaer County. Mr. Ryan asked if we will be checking the site before we pay them. Mr. Miller advised that NYS DEC may be able to inspect the site before we issue the final payment. Mr. Dunne added we will make sure we have staff monitor the site. (See attached Settlement Agreement) Bill Dunne made a motion to authorize the surrender, settlement and mutual release agreement with Freelot Steel Corp. and E-Lot Electronics Recycling Inc. Dep. Mayor Pete Ryan seconded the motion, motion carried. VIII. Financials Joe Mazzariello handed out a draft copy of the PARIS report to the board members. He advised they will be reviewed and sent over the NYS by March 31st. Mr. Mazzariello advised it is compromised of the Mission statement, accomplishments, budget and the official PARIS report. The Chairman wanted to make sure this report is complete and reviewed before it is submitted on March 31st. Mr. Mazzariello passed out a copy of the procurement report. Mr. Mazzariello reviewed the current financials of the LDC noting the current assets, $25,000 being held for a parking study, the restricted cash from the BEDI and restricted cash for $20,000 for a building deposit. He noted 4  accounts receivable, fixed assets and pre-paid expenses. The next section discusses was the liabilities section and accounts payable. Mr. Mazzariello advised that the deferred revenue is the unused BEDI funds which will be zero by the end of this year. He noted the detailed income and expense statement and the receivables. The Chairman asked if there were any questions. Bill Dunne made a motion to accept the financials as presented. Andy Ross seconded the motion, motion carried. IX. New Business Mr. Dunne advised that there are two items to discuss for new business. Union Station Clock - The first item is a piece of Troy’s history that has come up for auction which was sent to the board members for review. Mr. Dunne advised it is the clock that used to be at Troy’s Union Station. He advised that it is about to go up for auction in NYC through a company called Urban Archeology. Mr. Dunne advised he has reached out to them and the auction house to see if there was a way to acquire the piece. He advised that the estimated price is $60,000-$80,000 and has asked them if they would be interested in donating to the LDC as a tax write off. Mr. Dunne asked if there was any interest by the board to pursue. The Chairman commented that it seems like a wonderful opportunity for the preservation community to try and purchase the clock. It is not something that falls within the LDC’s mission statement. Mr. Dunne advised he has reached out to them, but unfortunately it will probably be auctioned off to another entity. The board agreed that it will be a shame to lose it, but it is outside our mission statement. Laban Coblentz, Center of Gravity – Mr. Coblentz wanted to give an update about The Center of Gravity and also thank the board for their initial loan and grant then support for Gloabal Citizen that helped get them to the next phase. He advised that the LDC has been a great partner and wanted to thank Bill Dunne and the rest of the board for being consistently involved in the process. Mr. Coblentz advised that we were awarded funding in 2013 and are currently going through the approval process. He added that they received a $250,000 National Grid grant and recently signed on a business for a naming opportunity. Mr. Coblentz wanted to address the question of imitation and whether or not it detracts from Troy. He advised that inquiries come in from surrounding areas in New York State and a few in North Carolina asking how to imitate this, but Troy will always be the flagship. There are many places that want to re- create this in their cities. Mr. Coblentz advised recently that someone from the National Institute of Technology visited recently and wanted to know how they could imitate this program on a national level. RPI also has us featured on their panel of a very prestigious conferences of the year, The Advanced Manufacturing Conference. We are seeing three main aspects of economic development happening; Main Street revitalization, support and training. The fourth aspect that we will continue to work on is retention of young professionals. Mr. Coblentz also noted that they are working on a space 5  called the Thinkubator, a kid’s maker space that will be imbedded there. He also noted that they are partnering with the Workforce Development Institute that works with the labor unions and business. They are working on a couple of major projects with them to help create training programs for higher level jobs. Mr. Ryan asked what the timeframe of the building will be. Mr. Coblentz advised that the completion date should be sometime towards the end of next month. He advised that there is some loan paperwork that they are also working to finalize. He will let us know the completion date and ribbon cutting ahead of time. X. Adjournment The Chairman thanked Mr. Coblentz for his update and asked if there was any other business to discuss. With no other items, the meeting was adjourned at 9:30 a.m. Bill Dunne made a motion to adjourn the meeting. Dep. Mayor Pete Ryan seconded the motion, motion carried. 6