Industrial Development Agency, Regular Meeting

1. 0:06All right. Good afternoon everyone. We're going to begin with our two committee meet before moving into the full board meeting. So it is 2:03 p.m. call to order the IDA audit committee agenda. Um we have a brief agenda here. Uh the first is election of the audit committee chair and for those uh just for awareness the members are myself, Ron Bogle and Vicki Dascaludi. Uh can I get a nomination for audit committee chair?
2. 0:45Uh Ron, I'll second that nomination. All those in favor say I. I. Congratulations, Ron, wherever you are.
3. 0:56[laughter]
4. 0:58All right. Ron did not to buy us in advance that he would be here today.
5. 1:00Yes. Yes, he did. Yes. Uh the next item on the agenda are uh approval of the minutes for April 6, [snorts] 2026 for the audit committee agenda. Um two of us here, we had an opportunity to look at the minutes.
6. 1:18Excellent. Um, there are no questions or comments or uh edits. May I get a motion to approve the minutes of April 6?
7. 1:28All second. There we go. All in favor say I.
8. 1:33All right. The next item on the agenda is the news that RBT has been acquired by UHY. Um, John, is there anything we should know about that besides just the awareness for
9. 1:42Yeah, just awareness for now and then we'll figure out going forward if that practically means anything for the audits that we need to reconsider or so we'll talk to them and let her go by the timing and all that stuff too. So,
10. 1:59excellent. Thank you. Uh, the last item on the agenda is public comments. We'll start with people in the room. Any comments? Hearing none. Anyone online? All right. Seeing none.
11. 2:20Can you go?
12. 2:22All right. Excellent. Um, be weird if AI ask us a question. Um, all right. Uh, may I get a motion to end our audit committee agenda meeting? Yes.
13. 2:35I will second. Yes. All in favor? I. All right. We have adjourned the audit committee meeting. I will turn it over for the finance committee.
14. 2:48Um finance. Thank you. Um you have in front of you the balance sheet for uh the IDA through the end of last month. Uh we can see that we have uh about 330,000 in cash in Bank and Green County. Uh another 15,000 that we're holding for escrow and then we now have uh 535 uh in CDs uh for the six month and the 12th month.
15. 3:29Uh both have matured, both have been rolled over. So uh you'll note that those numbers are not even 175. The difference is that the that's the interest that was accured during a period of time after we recorded as revenue at the end of the year but as receivable because we can't actually take it as cash until the matured. So the 12-month one just matured. We voted on that last meeting to roll it over.
16. 3:54six month one we rolled over a little late so we've lost a little interest for about a month or two but that's rolled over as well and the next one uh I have written down somewhere dated by so we'll make sure we get in front of the board uh on a timely enough basis to make sure we roll it over without any uh interruptions unless the board decides it wants to do something else. Uh does anybody have any questions on it?
17. 4:29Really the only other thing that's outstanding is the elum the accounts payable and you'll be seeing those bills later on in the meeting. Uh we have not uh received actually that's not true. I received today one pilot payment uh so that's not been recorded yet. So next month you'll have uh you'll see what's due to uh the city, the county, and the school district uh depending on the number of escro payments we get in as well as uh request for approval to pay those out. So that should happen next month.
18. 5:01And that's basically it on the income statement. Any questions on that in the finance page?
19. 5:08Okay. And then if you look at the next page, page eight, I guess, uh it's income statement for the P&L. Uh so we made about uh $9,500 in interest, which is a significant increase versus we were making in prior years. So we talked to Vancouver County and they were kind enough to increase the interest rate for us. So that's been uh like 10 times the normal amount of interest which is great obviously. Uh least income uh the pilot income obviously uh comes in and out so that doesn't count as long-term income and then the regular expenses. Any questions on that?
20. 5:52Okay. Uh then if we go to page nine, these are the current bills. Um as a reminder, uh the first two are still being held, still awaiting escrow from 61 Union Street. Um and then the August September bills are new since we didn't have our meeting last month. So that's just for general services and for uh enforcement on 620 union.
21. 6:14Uh, I would just like to confirm with Chris Shaw that uh all the expenses that are associated with the enforcement against 620 should be paid out of their escrow. Is that correct or no? Muted.
22. 6:38There we go. Yep. I was just looking for my button. Um, so, uh, I think, uh, you should track it separately. Uh but um it is uh an item that the um company is obligated to pay.
23. 6:52So well, when you say track separately, do you mean separately versus the uh $49.50 that they still owe from 2024 or do you mean track separately in terms of Okay.
24. 7:08Yeah. So because um in we just we just set up a separate account so that you could track what was litigation and what was um general [clears throat] you know uh management of the of the project and and dealing with uh you know interaction. Um but all of the expenses are payable under the lease agreement and and the board should be I guess realize that even though it says it's payable from escrow the escrow is currently negative.
25. 7:32Correct. Correct.
26. 7:38Okay. So, that means the IDA is paying for it and we'll need to seek reimbursement from the owner.
27. 7:48Okay.
28. 7:49Y uh does anybody have any questions on the bills? If not, can I get a section to uh pay the bills?
29. 8:05Okay. Uh can I also get a motion and a second to forward the uh financial documents to the full board for approval?
30. 8:14Make second. Okay. Thank you.
31. 8:18Um see what you'll see bank reconciliations if you would not mind sir an initial that's your pleasure doesn't have to be represented and uh and that is it in terms of content for the finance meeting uh first within building or within the room. Does anybody have any questions or comments?
32. 8:55Does anybody online have any questions or comments with that? Can I have a motion and a second to adjourn? We'll make motion.
33. 9:04I'll second. All in favor? I. Very good.
34. 9:11All right. Okay. Uh, call to order the September meeting of the City of Hudson Industrial Development Agency. Um, first item on our agenda is approval of the minutes of August 3rd, 2026. Has everyone had an opportunity to review the minutes? Anybody have any questions, comments, feedback?
35. 9:41Thank you again for great minutes. May I get a motion to approve the minutes? Motion. Can I get a second?
36. 9:49I'll second. Excellent. All those in favor say I. I.
37. 9:54Minutes are approved there. I'll turn it over to you for the finance committee report.
38. 10:02Okay. Um, do I need to go over it again since everyone is already in the room?
39. 10:09Excellent. All right. Um, can you u may I get a motion to approve the treasurer's report?
40. 10:25A second. A second. All in favor say I. I. Next up for approval are the bills.
41. 10:35May I get a motion to approve the bills? I make a motion. Excellent. A second.
42. 10:43A second.
43. 10:44All those in favor say I. I. The bills have been approved. And then last, uh, the bank reconciliations. And get a motion to approve the bank reconciliations. Motion. And a second. I'll second.
44. 11:01Great. All those in favor say I. I.
45. 11:05Reconciliations have been approved. Um the next two items on the agenda are in regards to the audit. Ron Bogle has been elected the new committee chair and uh RBT has acquired or RBT has been acquired by uh um more for awareness right now. Uh more to come in future months. RBT has been our auditor for past.
46. 11:30Uh we're going to make a brief tweak to the agenda. We're going to um put administrative director's report um first before we get to 620 union.
47. 11:40Very good. All right.
48. 11:41Thank you very much. The uh updates are pretty um slim this month. Uh we've been mainly focused on 620 Union. So 76 North 7th Street, no updates. We recorded last meeting back their uh their um occupancy. They've hired a new marketing director. So I think that's a positive development.
49. 11:59Uh, Bachbook Hotel, no updates. Upper War and Crescent, no updates. JLE Penrose, no updates. Uh, 601 Union Street, the mansions, I had an intro call with the project lead, Attakus, on Wednesday. Other than that, I have no updates.
50. 12:18Seemingly fine. 620 Union Street. We'll get to that in a minute. Um, that'll deal with separately as a uh separate standalone um item. Um, and then Providence Hall, Skyler Court, no updates.
51. 12:25Um, one pipeline update. The St. Charles Hotel. The St. Charles Hotel is under uh purchase sale agreement um by Arena Capital who already own some property in Hudson. Um they came in um and introduced themselves and we've talked to them two or three times, maybe a bit more. They're working on an application for benefits.
52. 12:49Um we our anticipation is that we should receive that in time for the October board meeting. But when we set the agenda out in advance, we'll confirm that in the agenda. Uh so they're likely to uh put in an application for benefits. Other than that, that's the administrative report.
53. 13:08When is um the next report due from the pocketbook factory?
54. 13:12Pocket book factory, which you mean just party?
55. 13:16Yeah. the end of the year I think would be the next time that we have to send it out at the end of the year for the Paris report. I think they I can't remember once a year.
56. 13:26It's once a year they already by March but probably reporting. Okay. You mean reporting on the terms of the Y great. Okay.
57. 13:38[clears throat]
58. 13:38And we can flag that one at the next meeting if you want to. Yeah, that's it. Anybody have any questions?
59. 13:48Sure. Yeah, I have a quick question on the St. Charles. Um, are they thinking about I mean do you have insights into like what they're planning to do with it or it just so yeah as far as as far as I'm aware it's it's uh yeah it's probably what I would call the renovation of the building but you know I think until they actually take action on it sounds like they don't want to fundamentally change the structure of the building and it's just going to be a renovation and based on the original uh the uh I don't know Mike do you have any other details else you want to add to? Mike has had several conversations with the arena capital already.
60. 14:24I think they want to renovate the propel. I think they realize uh it's in a certain price point. It'll obviously uh no doubt go up a bit. They want to serve the same.
61. 14:34Yes, they emphasize that it's not going to be a luxury and certainly will fill out the square. Uh they have two other buildings including firehouse that they have under contract and uh with the work that uh be ultimately done in public square. Uh it will be great to have it as a modern day approved hotel.
62. 14:57Is it your sense that the sale is going to be dependent on whether or not they receive benefits?
63. 15:02Think so. Because otherwise they have to meet the forecast for us.
64. 15:08So that we find that developers are coming in uh at the county level as well. Uh and in the past I think developers were right ready to go when they passed IDA approvals because uh they had their financing in place and their stack arranged. Uh but what we're seeing now is people are coming in to get approvals and it will raise an issue that John will bring up later about how long are approvals uh in place before they expire because of projects that are not able to go forward and they get their IDA in place so they think so they're sure they have the ability to do the project.
65. 15:44So it's it's becoming an issue around the state point where yeah we have often uh closed the week after IDA approvals were issued looked at uh SEC7 or even some of the other projects at least within two or three months.
66. 16:05Yeah. So it would seem the money's tighter right now.
67. 16:10The uh and what Mike alluded to um and we'll probably talk about that more in uh sometime on the agenda in the fall is just tightening up our processes. Um there's a couple of areas where there's maybe too much what I would call linger time. Um, so figuring out how to minimize labor time because letting air time for us equals generally risking.
68. 16:30You said they own the firehouse next to them.
69. 16:32They have under contract with other property. Yes.
70. 16:36Okay. So, they're not operating business.
71. 16:39They've got other properties in Hudson, but not part of this deal. They own. So, for example, most I think it's most recently they bought from the hospital, Dr. Alman's old offices up at the top of Warren Street. So that was a building for example they bought they buy commercial and mixed commercial they bought a wire portfolio uh from uh Judge Howard on the bench properties which means in the newspaper Dutch I'm sorry you know the uh creative the building that's a couple doors down from the hotel as you go towards the Hudson roastery it's called like creative collective or they own that building for example that's another so they're they're actually I I think probably one of the uh most unknown uh good landlords in the town. So no, it looks like they're serious on investing. So yeah. So thanks. Very good.
72. 17:36On to 620 Union Street.
73. 17:37Yes. See who we have there. So 620 Union Street. What I'm going to propose and Chris feel free to interrupt me as uh if needed. Um, what I'm going to propose is that we vote on that you vote on a resolution and advise you to vote on the resolution to terminate our agreement and our benefits with the principal and the project. Um, that will enable us to continue to unwind the deal.
74. 18:04Did somebody did you want to say something, Chris?
75. 18:06Nope. Just just waiting for you. Sorry, my getting ready.
76. 18:10Sure. Sure. So, uh, and I'll let Chris as soon as I'm done, Chris will talk through the resolution and answer any questions that you have. We have a copy of it written as your handouts. Um but the uh the idea here is separate from what we did last time was the recapture. So we authorized um the IDA uh to recapture benefits um that being expressly the $25,000 mortgage tax exemption.
77. 18:31Today is about the partnership or the the legal relationship that exists between the two. So we will terminate so that we can return the property um and it can be uh properly uh sold or however they're going to uh whatever process it's going to take healed. Um and then I would suggest after we vote on this resolution that Joe um Mr. Chairman you make a uh a motion to go into executive session so we can talk about potential. So Chris, I'll turn it over to you.
78. 19:08Sure. So, um, at the at the prior meeting, uh, we had a resolution to, uh, initiate a process to, um, uh, declare default and initiate a process to consider recapture. They're sort of two different things because, um, the the termination of the agreement um is based on compliance with conditions that are in the agreements. The recapture um is a decision that would have to be made about benefits they already received.
79. 19:38And under the agreements, the consideration of recapture is under the IDA's own adopted uh project benefits um uh policy. So, uh, before taking action on the resolution, I just want to turn to that policy and just briefly go over, um, and have the IDA go over and consider those, um, factors, um, you know, with with, um, John and Michael's help as to the actual financial um, issues. But so um the the primary uh both of the resolutions address the primary uh deficiency is in this case you know failure to pro progress with the project. Um the project was due to be uh completed in 2024. As you know they haven't even started the project.
80. 20:33They haven't even pulled building permits. Um so that is that that is the primary factor that is driving the the decision-making by the IDA. Um I think that uh the so the the considerations in the policy are um if there are significant deficiencies in achievement of the economic benefits well in this case it's not that they you know didn't make enough money on the project didn't build all the units they said they were going to build they didn't build anything right so um and the [clears throat] question is is there justification satisfactory to the agency to explain those deficiencies um so that is something that the IDA has to consider on a case-byase basis.
81. 21:11It's not automatic as to recapture. So, one of the things that we have we have written the resolution today to address solely the termination. In other words, the com the the turning back of the project to the owner um and so that they will no longer be able to take advantage of financial assistance with respect to the project. So going forward, if they proceed with the project, uh they would not be able to take advantage of sales tax, additional mortgage tax, uh exemption, and they wouldn't be able to take advantage of a pilot going forward.
82. 21:49So um the recapture is about going backwards. The the termination is really about going forward. Um and the termination is really about determining that the project hasn't met its conditions and there isn't a satisfactory reason to for the IDA you know presented to the IDA that it that it feels comfortable with to um you know essentially forgive that failure.
83. 22:12Um the uh enforcement you know in a in a proper case you have lots of steps for enforcement. You could, you know, um you could uh um you know, change the pilot. You could, you know, you could do a lot of things, but you don't have a sort of essentially a revised project proposal in front of you. You know, if in a proper case, you could have a project owner come forward and say, "Well, I wasn't able to do this, but really I could do it if I did why. Can I amend this?" But that's not really what you have in front of you.
84. 22:52And and John and Mike, maybe you want to present some of the conversations that you had with the developer um over the last, you know, couple of years uh about what um what their ideas for moving forward were, if any.
85. 23:08Sure. Sure. The um you know what I what I'll do is uh give you a real short snapshot. Uh so preceding this year, Mike had several uh conversations um that I would say weren't productive in the sense that there was no outcome achieved. Um you know, the conversations were initiated by CEDC in order to discover whether what we thought was the case that there was no starting that the project had to started was in fact the case and it was in fact the case.
86. 23:31Um so Mike also drew his attention to the fact that there was a deadline you know um and those consequences of not meeting the deadline. Um fast forward to this year shortly after I started my first conversation with him was to let him know that it was uh was officially deficient that we were going to take action to uh so that the law or the rules here could recognize that the reality had already taken place and that was you missed the deadline by two years not a month or so.
87. 24:02So, uh, I had the conversation with him. Uh, he said that he was, uh, looking that he had lost a, um, equity partner, uh, that he needed to replace and that he had been trying to, um, and that took place in CO. So, that was three years before he and I had a conversation more than five years. Um, and then we've had two or three other very brief conversations since then, um, initiated by us to remind him of the process that we're following. um and also to extend him the courtesy um of uh coming to the meeting, coming to any of our meetings and presenting his case.
88. 24:40Uh he said that uh he could and then he said that he wasn't able to. Schedule didn't allow it today. Um so we may be talking to him again, but uh he's been given several opportunities um to appear. Um, so exactly what our next conversation will be like, I'm not sure, but I think it is now time to uh to terminate and we've tried and tried to uh to sort of spark up um something new to keep the project alive and to figure out if he had a plan, keep the project alive and he does not.
89. 25:11So, and John, I would just add that I think he told you that um he did he was still trying to find another partner and he was trying to essentially sell the project um uh to somebody who wanted to move the project forward and he wanted the IDA um to give him a further extension of the time for completion of the project.
90. 25:37Yes. He he that was the ask, right?
91. 25:41Yes. the uh but there was no substance uh you know that conversation like I said had basically taken its place four times over the past five years a couple times with life and then with myself but there was never any follow-up there was never any here's the number of partners I'm considering here's who they are here are the other alternatives if I can't find an equity partner here's lending partners so nothing substantive at all came from any of the conversations and he would have to reply anyway right pardon He would have to reapply for any benefits.
92. 26:13Yes. If he wants new benefits, if we proceed with the termination, he would have to he still owns the property. If some by some uh you know process he decid he does come up with more money and wants to keep the project going. It would just no longer be an idea project his own. And he'd have if he did want to pilot, he'd have to come back and apply if we terminate.
93. 26:31So that's the intention is we're not shutting the door in the sense that he can still proceed if he finds that partner but he'd have to come back to us and explain the situation and then reapply. I mean basically what we're doing is our responsibility in terms of this forward unfortunate situations is our responsibility to move things like this forward when they're in this non-compliant situation.
94. 26:55Exactly. This is all about compliance. Yep. Got it. Sorry.
95. 27:00So when this is terminated, the property goes out of the name of the IDA back into his entity's name and that's where this lawsuit from his capital lender comes in. Can we talk a little bit about what the implications of that are?
96. 27:14Yes, I I think we should wait to talk about that. Chris, correct me if I'm wrong, but I think we should go into executive session and talk about those details because it's pending litigation.
97. 27:23Right. I mean, I can just I what I can say address is what I can what I can say in public is that is that a lawsuit um has been initiated by his lender to foreclose. And so, you know, the implications of that we can talk about and should talk about in executive session from the IDA's perspective, but just from the perspective of it is a fact that the lender has initiated their petition.
98. 27:48and looking at the resolution and looking at the timeline that was in the minutes from last from the August meeting and two things come to my mind. First, it feels like we give an extension of what it's asked for. It's just more of the same in terms of a runaround. And second, we need to send a message to future applicants that yes, COVID was a a moment in time, but we're six years out and he's not had his equity an equity lender replacement in a number of years.
99. 28:16So, it's it's three-fold. It's what Dominic mentioned in terms of responsibility. It's I I don't see any I don't have any confidence in anything changing. And three, we need to put a line in the sand. the future applicants know that we're serious about the rules that we lay out. I think we've been more than um accommodated or circumstances.
100. 28:44Do we have any other applicants that they're in the same boat as that? Were they getting collecting a tax event from the city but nothing materializes with moving forward? We do not have any fun.
101. 28:59There's one project uh there's two projects that have been approved that are uh have not closed. uh the Hudson mansion was approved last December and the school which was passed a year ago and that's something that um you know they have Jonathan spoke with is the owner from Mansion and he's we also had a call with representatives Penrose who are waiting for the next round of application for tax credits for the school and they just submitted their application for that as well and assuring us that their option with the school district uh is is still in place.
102. 29:41So, but it is something you want to look at how how long is reasonable and perhaps they with the idea that they're allowed to ask for an extension. We only give them three years to uh leave the project for the time or they time they close up the finance.
103. 29:57Yeah. Especially in both of those cases, they got delayed because part of their stack involved grants or other income that they weren't approved for. And in many cases, it takes a whole another year before they can apply again and receive those. So at minimum, it's going to be a year in between define and possible. So three years is reasonable five. So these are two different time frames.
104. 30:25Um uh these are there's there's a set of time frames from when the IDA decides that uh the project merits financial assistance and allows the applicant to move forward with their project financing taking into account the IDA availability of funding. The IDA's made a commitment. It's essentially a commitment, but they haven't closed yet. So, we aren't in ownership or lease arrangements with the um applicant. Um they are still paying taxes on their project as they normally would.
105. 30:58They are still moving forward with their lender, but they can now tell their lender um the I, you know, my deal pencils out because the IDA is willing to give me this and this financial assistance, right? Um, and and what the IDA should consider is, you know, how long, generally speaking, do you want to leave a resolution out there for the typical application? And people can ask for a specific, you know, accommodation if they have a particular, you know, lender or time frame in mind that's going to take time, such as, you know, projects that involve state financing.
106. 31:24Um, and and you can make that decision about, you know, how long that period is until we close. Um and then um there's a there's a sort of a separate issue of what's the time period um that they need to complete a project once you have closed on a financing and you're in a lease agreement um with these uh um you know project developers. Um what's the time period?
107. 31:57And our uniform project agreement right now says it's three years that can be changed on a case-byase basis based on what a particular project is. um you know if a project had a particularly long period of time during which it needed to progress construction for example phased construction or whatever right you could establish a different time frame but the purpose of the uniform uh policy is to establish a a regular period that you expect people to complete within and so in that policy it was set at 3 years which is I think typical for IDAS uh but
108. 32:38again you can vary it is that helpful and and really the issue is if you change your policy going forward about what kind of pilots you're going to approve, then from a commitment perspective, you you don't want the commitment to go on forever because then if you change your policy, you know, the applicant should have to come back and justify why they're eligible for your assistance again. But for a period of time, they need to be able to tell their lenders, you know, I I I have this financial assistance and my deal works, right? Is that I hope that's helpful.
109. 33:11Thank you.
110. 33:15I think between Jonathan and Mike the good faith is out now. I think avoidance is ending and I think that's we can't move forward with anything. We'd have to just you know I mean move backwards is going to move forward right at this point because now I see this as he's just avoiding never. So we just got to forward on our end and hopefully it could motivate something on his end.
111. 33:30Um and uh but exactly Dominic I think uh you know as Chris said the u you can deviate from the three years but there needs to be a reason and you need to articulate why you would grant him extension and just I missed my deadline is not a reason for giving somebody a new deadline right or playing David Copperfield right you know I I you know I feel for anyone that's going to in a situation co but it gets to a point where you got to your pace and it there's lean your face, you know, what do we do for precedence, right? Because now if we let this continue, the next person is going to say, well, this this was let, you know, so I think we we're obligated at this point to move forward with our our responsibilities.
112. 34:26With that in mind, um I think the sense of the road here, uh I get a motion to introduce the resolution for a vote authorizing the determination of financial assistance with respect to the project at 620 unit.
113. 34:44Second, Vicki. Thank you. All those in favor say I.
114. 34:44I.
115. 34:50Could I I'm sorry, Mr. Chairman. Could I just ask for a roll call just for ready?
116. 34:50Of course. Yes. Joe Ferris.
117. 34:58Hi.
118. 34:58Absent. Heather Campbell.
119. 34:58Hi.
120. 34:58Vicky Tesli.
121. 34:58Hi.
122. 34:58Sher Tasuka.
123. 35:06Hi.
124. 35:06Dominic Moranti.
125. 35:06Hi.
126. 35:06Excellent. Thank you. Thank you, Chris.
127. 35:14And uh at this time to introduce a motion to go into executive session to discuss pending litigation.
128. 35:25I'll make a motion.
129. 35:27Maybe a second. Thanks. Uh Mr. Chair, we can Mr. Chair, we can say pending litigation specifically with respect to foreclosure action on 620.
130. 35:37Okay. Thank you. Yeah.
131. 35:43Yeah. We're gonna pause open up the mic again. All right, you're back.
132. 35:53Thank you, Steve.
133. 36:01All right. Um we have returned to a public hearing uh for executive session. Uh like to get a motion authorizing Ro House Shale to appear on behalf of the IDA to represent the IDA in its interest.
134. 36:24Excellent. [clears throat] Uh will this be a roll call vote, Chris?
135. 36:24Sure. Yep. All right.
136. 36:31Yeah.
137. 36:51Motion has passed.
138. 36:54Um the last item on our agenda is public comments with the room. Okay. Hearing none. Uh opening the floor up to those online.
139. 37:12Okay. Uh public comments. Um that may I get a motion to adjourn our September meeting.
140. 37:24Excellent. All in favor?
141. 37:24I meeting is adjourned. Thank you everyone.

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