The following directors and alternates were present, constituting a quorum:

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "The following directors and alternates were present, constituting a quorum:"

Transcription

1 MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS OF NEW YORK CITY INDUSTRIAL DEVELOPMENT AGENCY HELD AT THE 110 WILLIAM STREET OFFICES OF NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION OCTOBER 11, 2016 The following directors and alternates were present, constituting a quorum: Maria Torres-Springer, Chairman Al De Leon Barry Dinerstein, alternate for Carl Weisbrod, Chair of the City Planning Commission of The City of New York Kevin Doyle Brian Cook, alternate for Scott M. Stringer, Comptroller of The City of New York James McSpiritt, alternate for Zachary W. Carter, Esq., Corporation Counsel of The City of New York Robert Santos Peter Wertheim, alternate for Alicia Glen, Deputy Mayor for Housing and Economic Development of The City of New York The following directors were not present: Marlene Cintron Andrea Feirstein Anthony Ferreri Also present were (1) members of New York City Economic Development Corporation ( NYCEDC ) staff and interns, (2) Sara Kim from Hawkins Delafield & Wood LLP, (3) Scott Singer from Nixon Peabody LLP, (4) Steve Adnopoz from Pearlman & Miranda, LLC, (5) Patricia Mollica from Winston Strawn LLP, (6) John Ravalli from the City s Department of Finance, and (7) other members of the public. Maria Torres-Springer, Chairman of the New York City Industrial Development Agency (the Agency or NYCIDA ), convened the meeting of the Board of Directors of NYCIDA at 9:00 a.m., at which point a quorum was present. LDCMT

2 1. Adoption of the Minutes of the September 20, 2016 Board of Directors Meeting Ms. Torres-Springer asked if there were any comments or questions relating to the minutes of the September 20, 2016 Board of Directors meeting. There being no comments or questions, a motion to approve such minutes was made, seconded and unanimously approved. 2. Financial Statements for August 31, 2016 (Unaudited) Christine Robinson, Senior Accountant of NYCEDC, presented the Agency s Financial Statements for the two month period ending August 31, 2016 (Unaudited). Ms. Robinson stated that for the month of August, the Agency recognized revenues in the amount of $181,000, which came from project finance fees from one closing. Ms. Butler stated that the Agency recognized revenues derived from compliance, application, post-closing, recapture and termination fees in the amount of $343,000 for the month-to-date. Ms. Butler stated that the Agency recognized $570,000 in operating expenses, largely consisting of the monthly management fees for the two months ended August 31, Jughandle Realty, LLC Lily Berticevich, a Project Manager of NYCEDC, presented for review and adoption a preliminary inducement resolution for the benefit of Jughandle Realty, LLC. Ms. Berticevich described the project and its benefits, as reflected in Exhibit A. On behalf of the Finance Committee, Mr. Dinerstein recommended approval of this preliminary inducement. In response to a question from Mr. Dinerstein, Ms. Berticevich stated that the project site is currently vacant and owned by the City. There being no further comments or questions, a motion to approve the preliminary inducement resolution attached hereto as Exhibit B for the benefit of Jughandle Realty, LLC was made, seconded and unanimously approved. LDCMT

3

4 LDCMT Exhibit A

5 INDUSTRIAL INCENTIVE PROGRAM PROPOSAL BARTLETT DAIRY, INC. MEETING OF OCTOBER 11, 2016 Project Summary Jughandle Realty, LLC, a New York limited liability company ( Jughandle ), and Bartlett Dairy, Inc. (the Company ), a New York corporation that stores and distributes dairy and other food products, seek financial assistance in connection with the: (a) acquisition of an approximately 209,088 square foot parcel of land located at Brookville Boulevard, Jamaica, New York 11422, and (b) construction, furnishing, and equipping of an approximately 56,000 square foot industrial building (the Facility and, (a) and (b) collectively, the Project ). The Facility will be owned by Jughandle and operated by the Company and used for the warehousing, distribution, manufacturing, and processing of food products. The total cost of the Project is approximately $24,065,000. Based on a review of the Project, Agency staff has concluded that the Project is likely to be completed within three years of the closing date. Current Location st St, Ste 609 Queens, New York Project Location Brookville Boulevard Queens, New York Actions Requested Preliminary Inducement Resolution for an Industrial Incentive Program transaction. Anticipated Closing June 2018 Impact Summary To be determined Employment Jobs at Application: 197 Jobs to be Created at Project Location (Year 3): 34 Total Jobs (full-time equivalents) 231 Projected Average Hourly Wage (excluding principals) $ Estimated City Tax Revenues Impact of Operations (NPV 25 years at 6.25%) $52,707,419 One-Time Impact of Renovation 1,132,103 Total impact $53,839,522 Estimated Cost of Benefits Requested: New York City Building Tax Exemption (NPV, 25 years) $9,365,086 Land Tax Abatement (NPV, 25 years) $4,855,661 MRT Benefit $304,551 Sales Tax Exemption $630,689 Agency Financing Fee -$178,062 Total Cost to NYC Net of Financing Fee $14,977,925 Estimated Cost of Benefits Requested: New York State MRT Benefit $220,214 Sales Tax Exemption $613,169 Total Cost to NYS $833,383 Overall Total Cost to NYC and NYS $15,811,308 Lily Berticevich, SIG Winston & Strawn LLP Astrid Andre, LGL Project Number

6 Bartlett Dairy, Inc. Costs of Benefits Per Job 1 Estimated Total Cost of Benefits per Job $80,260 Estimated City Tax Revenue per Job $273,297 Comparison of Agency and As-of-Right Benefits Available As-of-Right Benefits (ICAP) $4,727,078 Agency Benefits In Excess of As-of-Right Benefits $11,084,230 Sources and Uses Sources Total Amount Percent of Total Financing Commercial Loans $ 18,741,600 78% Company Equity 5,323,400 22% Total $ 24,065, % Uses Total Amount Percent of Total Costs Land and Building Acquisition $ 4,255,000 17% Construction Hard Costs 14,279,000 59% Construction Soft Costs 873,000 4% Furnishings and Equipment 4,020,000 17% Capitalized Interest 407,625 2% Closing costs 230,375 1% Total 24,065, % Fees Paid at Closing Agency Fee $ 178,062 Project Counsel Hourly On-Going Fees (NPV, 25 Years) Annual Agency Fee 1,250 16,755 Total 179,312 16,755 Total Fees $ 196,067 Financing and Benefits Summary It is anticipated that the Company will use a combination of commercial loans and Company funds to finance the acquisition and construction of the Facility. The total Project cost is anticipated to be $24,065,000. The financial assistance proposed to be conferred by the Agency will consist of payments in lieu of City real property taxes, mortgage recording tax deferral, and exemption from City and State sales and use tax. The Company is anticipated to return to the Agency for inducement and authorization by November, Because this is an operating company, the number of jobs at application was used in the following calculations. 2

7 Bartlett Dairy, Inc. Company Performance and Projections The Project will enhance the operations of the Company and enable it to expand. Their current facility does not provide for sufficient space for trucks to park and maneuver. The Project includes the construction of a warehouse facility and a manufacturing space for processing milk and other products. The Company has a large facility in New Jersey and would potentially move all of their operations from Queens if this Project were not completed. Inducement I. The Company requires additional space in order to meet demand and expand operations. II. The Company has asserted that without assistance from the NYCIDA, the project would not occur or would occur out of state. UTEP Considerations The Agency finds that the Project meets one or more considerations from Section I-B of the Agency s Uniform Tax Exemption Policy ( UTEP ), including the following: I. The Company has represented that acquiring a new facility is crucial to its business plan and long term growth II. III. strategy; The Company maintains that, through the Project, it will retain approximately 197 permanent private-sector jobs and create 11 new jobs over the next three years; Staff has concluded, based upon evidence and representations provided and made by the Company, that absent Agency assistance, the Company will be unable to withstand the extra carrying costs for the acquisition and renovation of the Facility. Therefore, the financial assistance that the Agency may provide is necessary to (i) induce the Company to permanently locate their facility in New York City, (ii) construct and fit out the Facility located in the Queens, and (iii) hire employees in New York City. Applicant Summary The Company was founded in 1963 as a home delivery and retail milk route operating in the borough of Queens. Since then, it has grown into a major food and dairy distributor with operations in New Jersey, Connecticut, and New York, with sales approaching $200 million annually. The customer base includes foodservice outlets and supermarkets as well as New York City schools, the Archdiocese of New York, industrial feeding operations such as ARAMARK, and snack outlets such as Barnes & Noble bookstores and Starbucks Coffee. Incorporated in 1990, the company is now managed and owned by founder Thomas Malone Sr. s four sons, Tom Jr., Michael, Kenny, and Donald. All of them have worked in the dairy industry for their entire lives, and grew up in East New York in Brooklyn, where their father began his business delivering glass milk bottles. Many of the original customers are still with the Company today. Tommy Malave, President Tommy began working for his dad after graduating from high school, delivering milk bottles to people s homes. Realizing that the home delivery aspect of the industry was dying, and because of his entrepreneurial nature, he applied for a wholesale milk license to deliver to grocery stores. Tommy then started his first grocery store delivery route and today is the President of the Company. Donald Malave, VP of Sales Donald, the youngest brother, was the second to join the family business. He previously worked for Rollin Dairy. Michael Malave, VP of Sales and Marketing Michael joined the Company after working as a sales manager with Highview Dairy. He and Michael form the strong leadership team for Bartlett s aggressive sales effort. Kenny Malave, VP of Transportation Kenny Malave joined the family business after retiring from the Marine Corps, working at American Farms, and then driving trucks for Dairytest. He was hiredto handle the Logistics Division and today serves as VP of Transportation. 3

8 Bartlett Dairy, Inc. Employee Benefits The Company provides health insurance to all employees and contributes to a retirement plan. Sixty-nine existing employees who work as truck drivers are members of the International Brotherhood of Teamsters Local 553. Recapture Pursuant to UTEP, all benefits subject to recapture for a 10-year period. Due Diligence The Agency conducted a background investigation of the Company and its principals and found no derogatory information. Compliance Check: Living Wage: Paid Sick Leave: Affordable Care Act: Bank Account: Bank Check: Supplier Checks: Customer Checks: Unions: Vendex Check: Attorney: Accountant: Not applicable Exempt Compliant Compliant JP Morgan Chase Relationships are reported to be satisfactory. Relationships are reported to be satisfactory. Relationships are reported to be satisfactory Relationships are reported to be satisfactory. Pending Joseph N. Paykin Paykin Krieg & Adams, LLP 2500 Westchester Ave, Ste 107 Purchase, NY Greg Wank Anchin, Block & Anchin LLP 1375 Broadway New York, NY Community Board: Queens, CB #13 4

9 LDCMT Exhibit B

10 RESOLUTION GRANTING PRELIMINARY APPROVAL IN CONNECTION WITH THE FINANCING OF A WAREHOUSING, DISTRIBUTION AND MANUFACTURING FACILITY BY BARTLETT DAIRY, INC. AS A STRAIGHT-LEASE TRANSACTION WHEREAS, New York City Industrial Development Agency (the Agency ) is authorized under the laws of the State of New York (the State ), and, in particular, the New York State Industrial Development Agency Act, constituting Title 1 of Article 18-A of the General Municipal Law, Chapter 24 of the Consolidated Laws of New York, as amended, and Chapter 1082 of the 1974 Laws of New York, as amended (collectively, the Act ), to promote, develop, encourage and assist in the acquiring, constructing, reconstructing, improving, maintaining, equipping and furnishing of industrial, manufacturing, warehousing, commercial and research facilities and thereby advance the job opportunities, general prosperity and economic welfare of the people of the State of New York and to improve their prosperity and standard of living; and WHEREAS, Bartlett Dairy, Inc. (the Applicant ) has informed officials of the Agency about, and has expressed the desire to enter into negotiations with officials of the Agency in connection with the renovation and equipping of a commercial (the Facility ), consisting of the acquisition of an approximately 209,088 square foot parcel of land located at Brookville Boulevard, Jamaica, New York and the construction, furnishing and equipping of an approximately 56,000 square foot facility thereon, all for the use by the Applicant in the warehousing, distributing and manufacturing of milk and other food products (the Project ); and WHEREAS, the Applicant has submitted a Project Application (the Application ) to the Agency to initiate the accomplishment of the above; and WHEREAS, the Application sets forth certain information with respect to the Applicant and the Project, including the following: that the Applicant is currently located in in The City of New York (the City ); that the Applicant s current facility in Jamaica, New York does not provide sufficient space for the Applicant to expand its business; that the Applicant currently employs approximately 197 full time equivalent employees within the City; that the Applicant expects to employ approximately 231 additional full time equivalent employees within the three years following the completion of the Project; and that, therefore, Agency financial assistance is necessary to encourage the Applicant to proceed with the Project; and WHEREAS, the Applicant is obtaining and compiling all information necessary to allow the Agency to comply with the provisions of the State Environmental Quality Review Act ( SEQRA ), being Article 8 of the New York State Environmental Conservation Law and the implementing regulations related thereto; NOW, THEREFORE, NEW YORK CITY INDUSTRIAL DEVELOPMENT AGENCY HEREBY RESOLVES AS FOLLOWS: Section 1. The proposed Project would, if approved by the Agency, promote and be authorized by, and in furtherance of the policy of the State as set forth in the Act. Section 2. The officers of the Agency and other appropriate officials of the Agency and its agents and employees are hereby authorized and directed to take whatever steps may be necessary to implement the provisions of this preliminary resolution. NY:

11 Section 3. Nothing herein shall be construed as committing the Agency to undertake or approve the Project. The contemplated lease of and leaseback by the Agency of the Facility and the other transactions contemplated hereunder by the Agency in connection with the Project will be subject to the completion of all requirements related to SEQRA and adoption by the Agency of an authorizing resolution. No final determination may be taken by the Agency with respect to the proposed Project until the Agency has complied with the requirements of SEQRA. The actions taken under this preliminary resolution shall be limited to environmental, soils, engineering, economic, feasibility and other studies, surveys, subsurface investigations and preliminary planning and budgetary processes necessary to formulate the proposed Action as that term is defined under SEQRA. Section 4. Any expenses incurred by the Agency with respect to the proposed Project shall be paid by the Applicant. By acceptance hereof, the Applicant agrees to pay such expenses and further agrees to indemnify the Agency, its members, directors, employees and agents and hold the Agency and such persons harmless against claims for losses, damage or injury or any expenses or damages incurred as a result of action taken by or on behalf of the Agency in good faith with respect to the proposed Project and the financing thereof. Section 5. This preliminary resolution is subject to the approval of a private investigative report with respect to the Applicant. The provisions of this preliminary resolution shall continue to be effective until one year from the date hereof whereupon the Agency may, at its option, terminate the effectiveness of this preliminary resolution (except with respect to the matters contained in Section 4 hereof) unless prior to the expiration of such year the Agency shall by subsequent resolution extend the effective period of this preliminary resolution. Section 6. This preliminary resolution shall take effect immediately. Adopted: October 11, 2016 Accepted:, 2016 BARTLETT DAIRY, INC. By: Name: Title: NY: