Tompkins County Industrial Development Agency Industrial Application for Incentives Applicant Information Date: 5/6/2015

Transcription

1 Tompkins County Industrial Development Agency Industrial Application for Incentives Applicant Information Date: 5/6/2015 Name of Company/Applicant: Ithaca Downtown Associates, LLC Owner: Neil Patel Address: 337 Elmira Road City/State/ZIP: Ithaca, NY Primary Contact: Neil Patel Phone: Fax: Will a separate company hold title to/own the property in question that is separate from the operating company/applicant? If yes, please provide the name and contact information for that entity. Name: Address: City/State/Zip: Contact: Phone: Fax: Owner: TCIDA Industrial Application for Incentives Page 1

2 Describe the terms and conditions of the lease between the applicant and the owner of the property. Applicant Attorney: Barney, Grossman, Dubow, Marcus, Orkin & Tesi, LLP Address: 220 East Buffalo Street, Suite 402 City/State/ZIP: Ithaca, NY Primary Contact: Randall B. Marcus Phone: Fax: Applicant Accountant: Philip Mann Address: 6400 Sheridon Drive City/State/ZIP: Williamsville, NY Primary Contact: Philip Mann Phone: Fax: Applicant Engineer/Architect (if known): T.G. Miller, P.C. / spg3 architects Address: 203 North Aurora Street / 1524 Delancy St. City/State/ZIP: Ithaca, NY / Philadelphia, PA TCIDA Industrial Application for Incentives Page 2

3 Primary Contact: Andrew Sciarabba / Richard Gelber Phone: / ajs@tgmillerpc.com / gelber@spg3.com Fax: Applicant Contractor (if known): Address: City/State/ZIP: Primary Contact: Phone: Fax: Business History Year Company was Founded: 2013 NAICS Code: Type of Ownership (Corporation, LLC, Sole Proprietor) Product or Service: Hotel/hospitality Major Customers: Corporate travelers, leisure travelers, group, & local The IDA avoids offering incentives to businesses that will compete with or displace existing Tompkins County businesses. Major Suppliers: Sysco, Maines, Ithaca Glass, Casella Waste, Sysco Guest Supply Who are your major competitors in Tompkins County? HGI, Homewood Suites, Courtyard Has your business ever received incentives tied to job creation from local governments in New York State? Yes X No TCIDA Industrial Application for Incentives Page 3

4 If Yes, please describe. Were the goals met? Yes No If No, why were goals not met? After expansion: Annual Sales to customers in Tompkins County $ $4,750,909 Percent subject to sales tax 90% Annual purchases of operating items subject to local sales tax 75% Business profit history. Please supply in spreadsheet format five (5) years of Past History and Three (3) years future projections. Historical Projected Years Revenues $4,750,909 $4,976,282 $5,382,133 Profits $312,168 $405,231 $604,093 TCIDA Industrial Application for Incentives Page 4

5 Project Description Please give a brief narrative description of the project. This project, which will redevelop a surface parking lot in the heart of downtown Ithaca where the Strand Theater once stood, seeks to reinvigorate the public realm in this important part of our urban core. With 123 guestrooms, the new 7-story boutique hotel (80 ft tall, with 74,475 gsf) is designed to both relate to its dense context and be a vibrant addition to the downtown scene. The ground floor will include a café and bar, a retreat area, public restrooms, a garden patio, and approximately 2,000 sf of retail space. The second floor will accommodate a fitness room, board room, meeting room, roof terrace, and guest rooms. Floors 3-7 are dedicated to guestrooms. Exterior façade materials on the ground floor will be brick veneer, precast concrete, aluminum storefront, folding glass walls and a metal and backlit glass vehicular drop-off canopy. Other typical floors will use brick veneer, composite metal panel, fiber cement lap siding and punched aluminum warehouse style windows. canopy, a new boutique lifestyle hotel brand from Hilton, is centered on a neighborhood-driven theme of locality, culture, and comfort. canopy Ithaca is one of only 11 canopy hotels currently being planned throughout the U.S. and abroad, and is to be situated in the smallest city among its peers. Each canopy hotel will reflect its individual neighborhood character and setting by physically engaging with the public realm at the street and ground level, and by its use of local and regional products and art. There will be three outdoor spaces, two on the ground level, and one as a 2 nd floor roof terrace, as a gesture to create transparency and connection between the hotel s indoor and outdoor spaces. To create access and continuity in the urban realm, the project is also exploring the possibility of developing a thru-block sidewalk that would connect pedestrians to State Street and Seneca Way. The addition of this new and unique downtown building will substantially enrich the economic and cultural life of both its neighborhood and Ithaca s downtown, and it is expected that it will quickly become a major destination for residents and visitors alike. Location: E. MLK, Jr. / E. States Street, Ithaca, NY Property size (acres) both existing and proposed: acres (both) Building size (square feet) both existing and proposed: Existing- none; Proposed- 74,475 gsf Proposed project start and completion dates: Fall 2015-Fall 2016 What types of green building practices do you plan to use, if any? Please see attachment A Do you certify that the project will not result in the relocation of all or part of any business or jobs from within New York State to Tompkins County? X Yes No Will this project result in a regular increase in overnight visitors to your facility (e.g. for training programs)? X Yes No If Yes, number of visitors per year 40,000-45,000 Average duration of stay (days) 1.8 days TCIDA Industrial Application for Incentives Page 5

6 Occupancy List the name(s), nature of business of proposed tenant(s), and percentage of total square footage to be used for each tenant (Additional sheets may be attached if necessary). Ground Floor: 12,400 gsf Uses include: Reception/Lobby, Café/Bar, Public Toilets, Hotel back of house area 2,000 sf of retail space- tenant unknown Second Floor: 10,365 gsf Uses are: 13 guestrooms, Meeting room(s), Board Room, and Fitness Room Typical Floors 3-6: 10,365 gsf x4 = 41,460 gsf Uses are: 22 guestrooms per floor Floor 7: 10,250 gsf Uses are: 22 guestrooms Total GSF: 74,475 gsf / 123 guestrooms Building height: 7 stories / 80-0 (based on 17-0 ground floor, 10-4 floors 2-6, and 11-4 floor 7) Project Costs Amount % subject to sales tax Value of land to be acquired (if any): $3,800, N/A Value of building to be acquired (if any): none N/A Cost of new construction: $12,500, % Value of improvements to existing building: none % Value of equipment to be acquired: $4,000, % Other: $3,872, % TOTAL: $24,172, N/A For IDA to fill out Estimated reimbursement of soft costs based on project cost: Agency Fee: Agency Counsel Fee: Agency Bond Counsel Fee: TCIDA Industrial Application for Incentives Page 6

7 Financing Amount of anticipated financing from a lending institution $18,000, (Please note: the applicant must inform the TCIDA at the time of issuance of commitment letter if the financing will exceed the amount stated here.) Value of Incentives Property tax abatement Assumptions $15,000,000 Value of increase in assessment 4% Annual increase in assessment and tax rate New Taxes Paid $3,286,486 Taxes Abated $3,528,081 Year County City School Total County City School Total , , , , ,707 20,108 28,214 59,030 96, , , , ,271 41,825 58, ,781 89, , , , ,744 65,248 91, ,539 81, , , , ,178 90, , ,601 72, , , , , , , ,281 62, , , , , , , ,911 52,109 97, , , , , , ,838 40,645 76, , , , , , ,431 28,181 52,923 74, , , , , ,074 14,654 27,520 38,612 80,786 Total 596,140 1,119,541 1,570,805 3,286, ,964 1,201,840 1,686,278 3,528,081 Value of sales tax abatement: $980,928 Estimated length of sales tax abatement (years): 1 year Estimated value of abatement for facility construction including information on assumptions used in calculations: 60% of $12,500,000 construction costs x 8% sales tax = $600,000 Estimated value of abatement for furniture, fixtures and equipment including information on assumptions used in calculations: 90% of $4,000,000 equipment costs and 30% of $3,872,000 other projects costs x 8% sales tax = $380,928. Mortgage Recording tax abatement: $45,000 TCIDA Industrial Application for Incentives Page 7

8 Other government incentives or support include summary of program, name of contact person and terms and conditions of program: _ The project received a low interest loan from the IURA, approved on 3/26/15 (contact: Nels Bohn). The terms and conditions of this $1,375,000 loan is a 255-month term (20 years month construction period) at an interest rate of the City s cost of funds plus 20 basis points (note: 3.15% as of 3/5/15). Repayment will be made as interest-only payments for 15 months, then level monthly payments to fully amortize the loan over 240 months. No prepayment penalty for partial or full prepayment of the loan. In the event of a default after notice and a cure period, the interest rate will increase by 100 basis points until the default is remedied. Need for Incentives Are you asking for a schedule of incentives that deviates from the IDA s City of Ithaca Community Investment Incentive Tax Abatement Program (CIITAP) (as listed below)? Yes X No Standard Enhanced Year Abatement Year Abatement 1 90% 1 100% 2 77% 2 90% 3 64% 3 80% 4 51% 4 70% 5 39% 5 60% 6 26% 6 50% 7 13% 7 40% 8 30% 9 20% 10 10% If the applicant is requesting incentives that are greater than the IDA s CIITAP, please include a detailed description and justification for this request. The 10-year enhanced abatement offered under the CIITAP is being requested, which does not deviate from the CIITAP. Information has been submitted to TCAD staff to determine that the request meets with the CIITAP requirements that the project does not yield a return on investment greater than 20% in each of the first 5 years. TCIDA Industrial Application for Incentives Page 8

9 Employment Information (please note that during the course of the abatement you will be required to provide detailed employment information annually.) Please provide a description of the benefits that you offer to your employees. Lighthouse Hotels - A family owned/operated company Lighthouse Hotels is a family-owned development and management company that was established in 1986 with the purchase of one single hotel in Ithaca, NY. With a family-like corporate culture and emphasis on associate satisfaction, Lighthouse has become a pioneer in developing and managing hospitality assets. The company has acquired/developed/managed over a dozen assets throughout the northeast region while maintaining consistent growth in Upstate NY. Our focused vision, strong values, and aggressive long-range strategy have helped us develop reputable, wellbranded hotels throughout New York State. Currently we have seven Hilton and Marriott branded hotels throughout New York State with several developments in the pipeline. Our properties are multiple award winning hotels where product, quality, customer, and team member satisfaction are our main priorities. Lighthouse Hotels is an Equal Opportunity Employer. At Lighthouse Hotels we strive to maintain a drug-free workplace. Lighthouse Hotels enforces a zero tolerance of drugs, alcohol, harassment, or discrimination of any type in the workplace. We require all employees to pass a Criminal Background check and Drug testing prior to employment. We strive to maintain a safe and accident free workplace. Lighthouse Hotels offers superior benefits: Group Medical Insurance Group Supplemental Insurance (Accident, Life, Short & Long Term Disability, Cancer) Workers Compensation Paid Time Off (PTO) - to be used for Holiday / Sick / Vacation Incentive Bonus Plans Lighthouse Hotels salaries & wages are highly competitive in the local market. Please provide a description of internal training and advancement opportunities offered to your employees. Lighthouse Hotels utilizes both hands on, classroom, and webinar training programs and tools provided by the Hilton brand, accompanied by our companies orientations and training program for all new associates in each position. Though each position requires different training requirements and additional training throughout employment to stay abreast of technological and industry trends. We foster an open and ongoing training program as well as cross training of all of our team members to allow them to grow within the property. We post weekly open position flyers at all of our hotels and give preference to current employees if applying within our company. Lighthouse offers advancement and promotion from within and believes in the constant development of our team. TCIDA Industrial Application for Incentives Page 9

10 What percentages of your current positions do women occupy? 55% (existing hotels) What percentages of your current positions do minorities occupy? 60% (existing hotels) Are you willing to pay a livable wage as defined by the Alternatives Federal Credit Union (AFCU) of Ithaca, NY ( to all employees for the duration of the abatements? Yes X No As per our purchase agreement with IURA, we will create and maintain at least 33 full-time equivalent jobs for a minimum of 3 years, and have living wage positions that are created and maintained for a minimum of 16 fulltime employment positions paid at least a living wage as defined by AFCU (currently $12.62/hour including employer paid health insurance benefits) and as such living wage changes from time to time. Each employee in the housekeeping department shall also be paid at least 120% of the State minimum wage, as such minimum wage changes from time to time (NYS minimum wage is currently $8.75/hour). What percent of current workforce and management are in: Tompkins County? 15% In New York State? 100% Out of New York State? 0% Do you have a strategy for ensuring diversity in hiring? X Yes No If yes, please describe. Though we do not have a specific strategy in place at Lighthouse Hotels, we focus on diversity in hiring at all of our properties. We look at all applicants for the quality and uniqueness they can bring to our hotels, and value all applicants unique backgrounds. Currently, we work with various Refugee agencies in placement and training within our hotels. We also utilize various agencies and training programs to bring diversity to our properties. In Ithaca we are partnered with the Hospitality Education Training Program (HETP) in both assisting in classroom training and internships. HTEP is assisting citizens to gain hands-on learning in the hospitality industry, and is comprised of people of diverse ethnic backgrounds and many cultures. At our existing 6 properties, women hold 9 of our 12 senior management positions. Will you allow your building to be used as a polling facility? Yes X No TCIDA Industrial Application for Incentives Page 10

11 Permanent Occupations in Company Current Permanent Full-Time Jobs by Occupation Average Annual Salary Ranges/ Hourly Wage Number of Employees New Jobs Added in Year 1 Projection of New Permanent Full-Time Jobs New Jobs Added in Year 2 New Jobs Added in Year 3 Total New Jobs Management 41,000-80, Administrative $ $ Guest Services $13.00-$ Sales: $50,000- $60, Housekeeping $10.80-$ Maintenance F & B $12.00-$ $ $ Other (Describe): Total: TCIDA Industrial Application for Incentives Page 11

12 Please provide your Employment Plan Estimated percentage of new hires who would be unemployed at time of hire 50% Construction Labor Will you use contractors who: Have a certified apprenticeship program Yes X No Pay a prevailing wage Yes X No Use Local Labor Yes X No To the extent possible, it is our intent to use local labor. Environmental Review Environmental Assessment Form short or long Submitted to: Long Environmental Assessment Form submitted to the City of Ithaca Agency name: City of Ithaca Planning Board Agency address: 108 E. Green Street Ithaca, NY Date of submission: 9/16/14 Status of submission: Approved on 1/27/15 (please note: an environmental review must be completed before TCIDA can vote on proposed financial incentive. It is the applicant s responsibility to provide a copy of the determination of environmental impact by another agency to TCIDA.) Permits Describe other permits required and status of approval process. 1/27/15, complete, SEQRA Negative Declaration 2/24/15, complete, City of Ithaca Planning Board, Preliminary and Final Site Plan Approvals 3/26/15, complete, Ithaca Urban Renewal Agency, Urban Renewal Agency, Land Transfer Approvals 4/8/15, complete, Economic Development Committee of Common Council, Land Transfer Approvals 5/6/15, pending, Common Council, Land Transfer Approvals Other Do you have any thing else you would like to tell TCIDA regarding this project? TCIDA Industrial Application for Incentives Page 12

13 Beginning with their purchase of the Wonderland Motel on Route 13 in Ithaca in 1986, Lighthouse Hotels has been a family operated company for close to 30 years, and they are delighted to bring the new canopy Hotel to the Ithaca market. The canopy was announced in October 2014 as the new boutique brand of Hilton, and Ithaca is among the first group of 11 to be developed. Other canopy Hotels are currently being planned for Denver, Miami, Portland, Washington DC, and London, England, among others. Ithaca is by far the smallest city in this group, and one of the first to receive its approvals. The canopy brand is very much about celebrating the local. Each canopy is designed with flexibility to relate to the community in which it is developed, so that the final product its architecture, culture, and food, drink, and art reflects the qualities and character of its neighborhood and region. This approach not only creates a singular experience for the visitor, but also places it firmly in its community, both culturally and economically, and creates a host of direct and indirect benefits in excess of those usually expected of a new business of this type. The possibilities for collaboration and cooperation are boundless - from promoting/purchasing local wines & spirits, to the display of local art, to guest gifts of local products, and to the hotel collaborating with nearby fitness gurus bringing guests on prearranged jogs throughout our scenic downtown. The unconventional approach this hotel will take a typical hotel stay to another level of experience, convenience, and local engagement. The other benefits are those that clearly derive from a new visitor based operation in the heart of Ithaca s downtown; Room taxes; Other sales taxes (miscellaneous items i.e.. treat shop); Local business revenue and taxes (Purchasing goods, partnerships with businesses, etc.) and, Indirect benefits to Local businesses (revenue & taxes). Direct economic benefits of the project are a projected $3,286,486 in new property taxes paid over 10 years. Over 5 years, payroll from jobs created by the hotel is estimated to create an additional $2,225,510 in payroll generated in Tompkins County as a multiplier effect. This is generated using IMPLAN 2009 Multipliers, with the multiplier affect of on the Hotel s projected payroll. Direct spending of the hotel, such as when they purchase products, and the employees of those suppliers receive payment, will generate a portion of the additional $2,225,510. Another contributor will be employees spending their income on personal purchases and the workers at those companies are paid wages. Over the course of the first 5 years, this hotel is projected to create $2,115,070 in sales tax revenue. This figure includes all room revenues, food & beverage, parking, and miscellaneous revenues that are subject to local and state sales tax. The property is also projected to generate $1,212,794 in room occupancy taxes over 5 years. This is 5% of our given room revenues. Indirect benefits of the project are based on the multiplier effect of visitors the hotel will attract. The multiplier effect of the average spending per visiting person generated by the project is based on the Chimora study completed in 2009, which uses conservative estimates. Based on room nights, visitors who stay in hotels spend an average $99 on Food and Drink, $71 on Shopping, and $5 on Entertainment and Attractions, totaling an average of $175 of additional spending per person per night. With 8% sales tax, it is an additional $14 in sales tax per person per night. The proposed Hotel anticipates approximately 40,000-45,000 visitors per year with an average duration stay of 1.8 nights. As a conservative estimate, assuming 40,000 visitors stay for 1 night, the additional spending generated by these visitors would be $7,000,000 per year. The additional sales tax generated by these visitors would be $560,000 per year.! TCIDA Industrial Application for Incentives Page 13

14 Additional to the benefits already addressed in this application, we have already committed to provide the following: 44 FTE positions (a minimum of 33 FTE positions is required as per IURA agreement) 16 livable wage positions as defined by AFCU 120% of minimum wage for each employee in the house keeping department Participation in the Hospitality Education Training Program (HETP) Lighthouse Hotels has been working with the Hospitality Education Training Program with their Hampton Inn on Elmira Road, and have partnered with them to assist in additional training with the new hotel. Given the convenient location and the array of positions available, Lighthouse Hotels feels it will be a great opportunity for both the program and the hotels. TCIDA Industrial Application for Incentives Page 14

15 CERTIFICATION Neil Patel deposes that she/he is the Managing Member (Name of chief executive officer of company submitting application) (Title) of Ithaca Downtown Associates, LLC, the corporation named in the attached application; that (Company Name) he has read the foregoing application and knows the contents thereof; that the same is true to his knowledge. Deponent further says that the reason this verification is made by the deponent and not by (Company Name) Ithaca Downtown Associates, LLC is because the said company is a corporation. The grounds of deponent s belief relative to all matters in the said application which are not stated upon his own personal knowledge, are investigations which deponent has caused to be made concerning the subject matter of this application as well as information acquired by deponent in the course of his duties as an officer of and from the books and papers of said corporation. As an officer of said corporation (hereinafter referred to as the Applicant ), deponent acknowledges and agrees that applicant shall be and is responsible for all costs incurred by the nonprofit Tompkins County Industrial Development Agency (hereinafter referred to as the Agency ) acting in behalf of the attached application whether or not the application, the project it describes, the attendant negotiations and ultimately the necessary issue of bonds or transfer of title are ever carried to successful conclusion. If, for any reason whatsoever, the Applicant fails to conclude or consummate necessary negotiations or fails to act within a reasonable or specified period of time to take reasonable, proper, or requested action, or withdraws, abandons, cancels, or neglects the application or if the Agency or Applicant are unable to find buyers willing to purchase the total bond issue required or financing for the project, then upon presentation of invoice, the Applicant shall pay to the Agency, its agents, or assigns all actual costs involved in conduct of the application, up to that date and time, including but not limited to fees of bond counsel for the Agency and fees of general counsel for the Agency. Upon successful conclusion and sale of the required bond issue or transfer of title the Applicant shall pay to the Agency an administrative fee set by the Agency, not to exceed an amount equal to 1% of the total project cost. The cost incurred by the Agency and paid by the Applicant, including bond counsel, the Agency s general counsel s fees and the Agency s administrative fees, may be considered as a cost of the project and included as part of the resultant bond issue. Applicant hereby understands and agrees, in accordance with Section 875(3) of the New York General Municipal Law, that any New York State and local sales and use tax exemption claimed by Applicant and approved by the Agency in connection with the Project may be subject to recapture by the Agency under such terms and conditions as will be set forth in the Agent Agreement to be entered into by and between the Agency and the Applicant. The Applicant further represents and warrants that the information contained in this Application, including without limitation information regarding the amount of New York State and local sales and use tax exemption benefits, is true, accurate and complete. SIGNATURE PAGE FOLLOWS ON SEPARATE PAGE TCIDA Industrial Application for Incentives Page 15

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18 canopy Ithaca by Hilton Sustainability Statement March 31, 2015 In addition to compliance with the requirements of the 2012 Energy Conservation Construction Code of New York State with the 2014 Supplements, the design and operations of the canopy Ithaca will include the following sustainability measures: 1. Hotel Management and operations: Participation in the Hilton Worldwide sustainability measurement program known as lightstay which includes continuous operations improvement projects in energy monitoring and reduction; water usage reduction and waste management and diversion. 2. HVAC system engineering: a. Guest room HVAC by high efficiency vertical terminal air conditioning units with individual thermostatic controls linked to occupancy status. b. Building wide energy management system (BAS) providing digital control and monitoring of public and back of house space HVAC, guest rooms HVAC, lighting & power systems and the life safety systems. 3. Lighting & Electrical Engineering: a. Lamping for all hard wire fixtures with LED lamps. b. Occupancy sensor lighting control for all back of house areas. c. Timer & dimer control for public areas and exterior lighting.