WESTERN NEW YORK POWER PROCEEDS ALLOCATION BOARD

 

MINUTES

 

September 10, 2013 – 3:30 P.M.

Empire State Development Corporation

95 Perry Street

Buffalo, New York 14203

 

 

Table of Contents

 

 

            Subject                                                                                                Page No.                     Exhibit

 

Opening Remarks                                                                         2    

 

1.                  Adoption of the Proposed Meeting Agenda                                  2

 

2.                  Adoption of May 13, 2013 Meeting Minutes                                2

 

3.                  Adoption of June 26, 2013 Meeting Minutes

 

4.                  Adoption of  WNYPPAB Policies

 

a.       Standards of Conduct

b.      Conflict of Interest Policy

c.       Lobbying Contacts Policy

 

5.                  Fund Balance Update                                                                   3                            

 

6.                  Round Three - Award of Fund Benefits                                       3                        5-A, 5-B, 5-C, 5-D, 5-E, 5-F, 5-G, 5-H, 5-I, 5-J, 5-K, 5-L    

                                                                                                                                     

7.                  Next Meeting and Adjournment                                                    9

 

 


Minutes of the Meeting of the Western New York Power Proceeds Allocation Board held via video conference in Buffalo, New York.

 

Board Members Present:

Anthony J. Colucci III (Chairman)

Deanna Alterio Brennen

Brenda Williams McDuffie

Henry F. Wojtaszek

 

Board Members Excused:

Dennis W. Elsenbeck

 

NYPA Staff Present:

Karen Delince              Corporate Secretary (via video in White Plains)

Vincent Esposito          Special Counsel (via video in White Plains)

Deborah Hopke                       Principal Attorney I (via video in White Plains)

Melinda Li                   Senior Attorney II (via video in White Plains)

            Michael Huvane          Vice President Marketing – Business & Municipal Marketing

            John Giumarra                                     Account Executive, Business Marketing & Economic Development (via video in White Plains)

                        Chris Vitale                  Account Executive, Business Marketing & Economic Development  

 

 

ESDC Staff Present:

Richard Ball                 Project Manager

Sam Hoyt                     Regional President

Christina Orsi               Western New York Regional Director

 

Guest:

Scott Fein                     Counsel from Whitman, Osterman & Hannah

Howard A. Zemsky     Western New York Regional Council Co-Chair

 

 


 

Opening Remarks

 

            Chairman Colucci welcomed members of the Board, the staff of Empire State Development Corporation (“ESDC”), and the staff of the New York Power Authority (“NYPA”).  He stated that this meeting of the Board had been duly noticed as required by the Open Meetings law.

 

1.                  Adoption of Agenda

 

The agenda for the September 10, 2013 meeting was unanimously adopted.

 

2.                  Adoption of May 13, 2013 Meeting Minutes

 

Chairman Colucci said that the May 13, 2013 proposed meeting minutes had been held over to give members a chance to submit revisions. An amendment was made and appears on page 4 of the minutes. He asked whether there are any further amendments. 

 

Upon motion made by member Brennen  and seconded by member McDuffie, the May 13, 2013 meeting minutes were unanimously adopted.

 

3.                   Adoption of  June 26, 2013 Meeting Minutes

 

Upon motion made by member McDuffie and seconded by member Wojtaszek, the June 26,  2013 meeting minutes were unanimously adopted.

 

4.                  Adoption of Standards of Conduct, Conflict of Interest Policy and Lobbying Policy

 

Scott Fein, Esq. of Whitman, Osterman & Hannah presented the policies for the Board’s consideration.

 

Mr. Fein said that advisory committees are subject to the Open Meetings Law as well as the Public Officers Law. The Public Officers Law requires unpaid members of advisory committees to recuse themselves when they are involved with activities that may cause a conflict with the discharge of their duties. Mr. Fein reviewed the Conflict of Interest Policy.

 

In response to a question from member Wojtaszek, Mr. Fein said that in order to preserve the integrity of the process, when a conflict exists, members should refrain from reviewing the materials in question, participating in the discussion, and, if possible, step out of the room during consideration of the matter. In terms of the words used in recusal, there is no need to go into detail about the conflict. It is sufficient to say that there exists a personal or professional relationship, which causes the member to recuse himself.

 

Upon motion made by member Wojtaszek and seconded by member Brennen, the following Conflict of Interest Policy was adopted:

 

The Western New York Power Proceeds Allocation Board Conflict of Interest Policy

 

The Western New York Power Proceeds Allocation Board (“WNYPPAB”) is responsible for making recommendations to the New York Power Authority (NYPA) for the allocation of fund benefits under the Western New York Power Proceeds Allocation Act.  The members of WNYPPAB serve on a volunteer basis, without salary or compensation.  This policy sets forth the procedure for disclosing and addressing conflicts of interest that may arise when WNYPPAB members have significant involvement (in whatever capacity) with organizations that seek recommendations of fund benefits (“Applying Organization”).

 

A.     WNYPPAB member is involved with (including in a representative capacity) an Applying Organization that does not qualify as a Not for Profit

 

1.      Applying Organization Protocol

a.      The member must not participate in the preparation of the Fund Benefit application; and

b.      The member must recuse himself/herself from any discussion or vote on the Fund Benefit application; and

c.       The minutes of the Applying Organization must record the conflict of interest and recusal from discussion and vote.

 

2.      WNYPPAB Protocol

a.      The member must recuse himself/herself from any discussion or vote on WNYPPAB board; and

b.      WNYPPAB minutes must record the conflict of interest and recusal from WNYPPAB discussion and vote.

 

B.     WNYPPAB member is compensated by a Not-for-Profit Applying Organization

 

1.      Follow the same procedures outlined in Section A, above.

 

C.     WNYPPAB member is involved (including in a representative capacity) with  a Not-for-Profit Applying Organization and is not compensated

 

1.      Applying Organization Protocol

a.      The member must not participate in the preparation of the fund benefit application; and

b.      The member must recuse himself/herself from any discussion or vote on the fund benefit application; and

c.       The minutes of the Applying Organization must record the conflict of interest and  recusal from discussion and vote.

 

2.      WNYPPAB Protocol

a.      The member may vote on the fund benefit application under consideration before WNYPPAB after complying with the Applying Organization protocol;  and

b.      The WNYPPAB minutes must record the nature of the member’s involvement in the Applying Organization and the fact that the member recused himself/herself from the preparation, discussion and vote of the fund benefit application before that organization; and

c.       If WNYPPAB makes its recommendation to the NYPA Board, it must provide a  summary of the circumstances attending the vote including the member’s involvement in the Applying Organization and his or her recusal from any discussion and vote before such organization.

 

 

 

 

Mr. Fein presented the Lobbying Contact Policy.  He said that the General Finance Law has been condensed into a short policy. He recommended that members contacted about an application that will be considered by the Board, should inform the person that under the law, they are not permitted to speak to them and provide her with the name of the lobbying contact person, who is designated to speak on behalf of the organization on such matters.  In addition, the law requires that the contact must be noted and filed.

 

Upon motion made by member McDuffie and seconded by member Brennen, the following Lobbying Contact Policy was adopted:

 

Western New York Power Proceeds Allocation Board Lobbying Contact Policy

 

Scope

In order to maintain the integrity of the process of reviewing and recommending fund benefits applications to the New York Power Authority (“NYPA”) and the Western New York Power Proceeds Allocation Board’s (“WNYPPAB”) commitment to transparency and accountability of its decisions, this policy imposes contact restrictions on the process and institutes a centralized recording system.

 

Implementation

This policy shall be adhered to by all NYPA and Empire State Development Corporation (“ESDC”) employees, officers and trustees and members of WNYPPAB.

 

Definitions

Definitions.  As used in this policy:

                   (a) The term  "lobbyist"  shall  mean  any  person  or  organization retained,  employed  or  designated by any client to influence ESDC, WNYPPAB, or NYPA decision making.

   (b)The term “contact” shall mean any oral, written or electronic communication with relevant entities under circumstances where a reasonable person would infer that the communication was intended to influence a decision regarding the allocation of funds derived from the sale of low cost energy.

  

Management Controls

ESDC and NYPA employees, officers and trustees and members of WNYPPAB who are contacted by a lobbyist regarding the application for fund benefits shall:

1. Direct the lobbyist to the designated person, who shall be the New York Power Authority Corporate Secretary; and

2. Make a contemporaneous record of such contact containing the day and time of the contact, the identity of the lobbyist and a general summary of the substance of the contact. (See Contact Form); and

3. Forward a completed Contact form to the NYPA Corporate Secretary for recordkeeping at Secretarys.office@nypa.gov.

 

 

Conflicts of Interest

           

            Before proceeding with the agenda, Chairman Colucci stated that some members had indicated the existence of conflicts of interest with certain of the companies being considered.  These conflicts prevent them from participating in, and voting on, item #5 (Round Three Applications). Chairman Colucci noted for the record the following conflicts of interest: member WojtaszekYancy’s Fancy and OSC Manufacturing and member Brennen – Greater Lockport Development Corp.

 

 

5.      Fund Balance Update

 

Mr. Michael Huvane submitted the following report:

 

The Western New York Economic Development Fund is created and administered by the Authority. It is funded with the aggregate excess of revenues  (“net earnings”) received by NYPA from the sale of Expansion and Replacement Power produced at the Niagara Power Project that was sold in the wholesale energy market over what revenues would have been received has such Power been sold on a firm basis to an eligible Expansion or Replacement Power customer.

As of August 31 there is $17,842,204 available to allocate as Fund Benefits. The Fund balance at the previous meeting was $23,210,204. A deposit of $1,600,000 was made after the meeting and awards of $6,968,000 were made.

A total award recommendation of $5,721,412 is before the Board today.  

At present, there is 45MW of unallocated power and 49 MW of allocated by unused power. The Authority is expected to make the next quarterly deposit to the fund in October.  

Under the law, a minimum of 15% of the funds must be awarded to “energy-related projects, programs and services.”  Staff is keeping a separate accounting of these projects. The current minimum amount of the Fund dedicated to energy- related projects is $3,721,531. The total awards made for energy-related projects to date is 1% or $300,000 and the currently available fund to be awarded for energy-related projects is $3,421,531.

 

6.      Round Three – Award of Fund Benefits   

Ms. Christina Orsi, ESDC’s Western New York Regional Director, submitted the following report and resolution for consideration and adoption:

 

SUMMARY

           

The Western New York Power Proceeds Allocation Board (“Allocation Board” or “Board”) is requested to recommend to the Board of Trustees of the Power Authority of the State of New York (“NYPA” or “Authority”) that awards of Fund Benefits be made to the eight applicants found in Exhibit “A”, Exhibit “B”, Exhibit “C”, Exhibit “D”, Exhibit “E”, Exhibit “F”, Exhibit “G”, Exhibit “H” in the amounts indicated in each Exhibit.

 

The Board is also requested to find and determine that: (1) the applications listed in Exhibit “I” will not receive a recommendation for an award of Fund Benefits based upon the application of the relevant program criteria to such applications; (2) the applications listed on Exhibit “J” propose projects that are not eligible projects for Fund Benefits for the reasons described below; and (3) the application listed in Exhibit “K” proposes a project that is not an eligible project and, in any event, such project will not receive an award of Fund Benefits for the reasons described below.

 

The Board is also requested to defer the applications listed in Exhibit “L” for consideration at a later time.

           

BACKGROUND

 

1.      Western New York Power Proceeds Allocation Act

On March 30, 2012, Governor Cuomo signed into law the Western New York Power Proceeds Allocation Act (the “Act”).  The Act provides for the creation, by the Authority, of the Western New York Economic Development Fund (“Fund”).  The Fund consists of the aggregate excess of revenues received by the Authority from the sale of Expansion Power (“EP”) and Replacement Power (“RP”) produced at NYPA’s Niagara Power Project that was sold in the wholesale energy market over what revenues would have been received had such energy been sold on a firm basis to an eligible EP or RP customer under the applicable tariff or contract.

 

            Under the Act, an “eligible applicant” is a private business, including a not-for-profit corporation.  “Eligible projects” is defined to mean “economic development projects by eligible applicants that are physically located within the state of New York within a thirty mile radius of the Niagara power project located in Lewiston, New York that will support the growth of business in the state and thereby lead to the creation or maintenance of jobs and tax revenues for the state and local governments.”  Eligible projects include, for example, capital investments in buildings, equipment, and associated infrastructure owned by an eligible applicant for fund benefits; transportation projects under state or federally approved plans; the acquisition of land needed for infrastructure; research and development where the results of such research and development will directly benefit New York state; support for tourism and marketing and advertising efforts for western New York state tourism and business; and energy-related projects.

 

Eligible projects do not include public interest advertising or advocacy; lobbying; the support or opposition of any candidate for public office; the support or opposition to any public issue; legal fees related to litigation of any kind; expenses related to administrative proceedings before state or local agencies; or retail businesses as defined by the board, including without limitation, sports venues, gaming and gambling or entertainment-related establishments, residential properties, or places of overnight accommodation.

 

Fund Benefits are payable to successful eligible applicants for eligible projects in the form of grants. It is anticipated that Fund Benefits will be disbursed by NYPA as reimbursement for expenses incurred by the Eligible Applicant.   

 

At least 15% percent of Fund Benefits must be dedicated to eligible projects which are “energy-related projects, programs and services,” which is “energy efficiency projects and services, clean energy technology projects and services, and high performance and sustainable building programs and services, and the construction, installation and/or operation of facilities or equipment done in connection with any such projects, programs or services.”

 

Allocations of Fund Benefits may only be made on the basis of moneys that have been deposited in the Fund. No award may encumber funds that have not been deposited in the Fund.

 

2.      Western New York Power Proceeds Allocation Board

 

Under the Act, the Allocation Board is charged with soliciting applications for Fund Benefits, reviewing applications, making eligibility determinations, evaluating the merits of applications for Fund Benefits, and making recommendations to NYPA on Fund Benefit awards.  The Allocation Board uses the criteria applicable to EP, RP and PP allocations, and for revitalization of industry, provided for in Public Authorities Law § 1005. Additionally, the Board is authorized to consider the extent to which an award of Fund Benefits is consistent with the strategies and priorities of the Regional Economic Development Council having responsibility for the region in which an eligible project is proposed. 

 

At its meeting on March 4, 2013, the Board, in accordance with the Act, adopted by-laws, operating procedures, guidelines related to the application, and a form of application.  A copy of the relevant criteria (collectively, “Program Criteria”), adapted from this Board’s “Procedures for the Review of Applications for Fund Benefits,” is attached as Exhibit “L”.

 

 

The Board also defined “retail business” to mean “a business that is primarily used in making retail sales of goods or services to customers who personally visit such facilities to obtain goods or services”.

 

Finally, the Board designated the Western New York Regional Director, Empire State Development Corporation to act on its behalf for administrative matters and to provide staff services (“Staff”).  Among other things, Staff was authorized to perform analyses of applications seeking Fund Benefits and to make recommendations to the Board on the applications. 

 

3.      Application Process

            The Allocations Board established a series of application due dates coupled with a schedule of dates through the end of 2013 on which dates the Board expected to meet to consider applications.  In addition, the application process was promoted through a media release and with assistance from state and local entities, including the Western New York and Finger Lakes Regional Economic Development Councils, the Empire State Development Corporation and other local and regional economic development organizations within the State.  A webpage was created that is hosted on WWW.NYPA.GOV/WNYPPAB with application instructions, a link to the approved application form and other program details including a contact phone number and email address staffed by the Western New York Empire State Development regional office.

 

As of July 2, 2013, the third application due date, the Board received 16 applications collectively seeking over $18 million in Fund Benefits. Staff analyzed the applications and is now making recommendations to the Allocation Board on all applications.

 

DISCUSSION AND RECOMMENDATIONS TO THE BOARD

                       

Staff has reviewed the applications received during the first solicitation round, and is making the following recommendations to the Board.

 

1.       Recommendations for Awards of Fund Benefits

 

            Based on a review of the applications and an application of relevant Program Criteria, Staff recommends that the Allocation Board recommend to NYPA Trustees that the eight applications listed on Exhibit “A”, Exhibit “B”, Exhibit “C” , Exhibit “D”, Exhibit “E”, Exhibit “F”, Exhibit “G”, and Exhibit “H” each receive an award of Fund Benefits in the amount indicated. Collectively, these applicants have indicated that the proposed projects would create or retain 457 jobs in Western New York.  The total amount to be expended on the projects proposed by these applications is expected to exceed $140M. 

 

            Staff has been advised that one or more of these applications may propose projects that must receive approvals and/or comply with other legal requirements, such as the State Environmental Quality Review Act, before they may proceed.  Staff recommends that any affirmative recommendation by the Board for any such project not be forwarded to the NYPA for action until after the Board receives appropriate notification that all such approvals and requirements have been satisfied, and that such recommendations be made subject to further consideration by Board in the event that such approvals and/or comply legal requirements are not satisfied.

 

 

2.      Recommendations for No Award

Based on a review of the applications and an application of relevant Program Criteria, Staff recommends that the Allocation Board determine that no recommendation for an award of Fund Benefits will be made to the NYPA Trustees for the applications listed in Exhibit “I”. 

 

3.      Ineligible Projects

 

Economic Development Law (“EDL”) § 189-a(5) defines “eligible projects” and further excludes certain categories of projects from such definition, including “retail businesses” as defined by the WNYPPAB and “residential properties.”  As noted above, the Board has defined “retail business” to mean “a business that is primarily used in making retail sales of goods or services to customers who personally visit such facilities to obtain goods or services”. 

 

Based on a review of the applications and the Board’s definition of “retail business,” Staff recommends that the Board find and determine that the applications listed in Exhibit “J” by St. John Fruitbelt CDC and Mount St. Mary’s Hospital and Health Center propose projects that are a retail business, and therefore are not eligible for proceeds funding. 

 

4.      Ineligible Projects and No Award Recommendation

 

Based on a review of the application of Lockport Main Street (“LMS”) listed on Exhibit “K”, additional information provided by LMS, and the language of the Act, Staff recommends that the Board find and determine that LMS’s application does not propose an “eligible project,” and, in any event, that no recommendation for an award of Fund Benefits will be made to the NYPA Trustees for this project. 

 

The Act defines “eligible projects” in relevant part as “economic development projects by eligible applicants…” and further provides that an eligible project “may include capital investments in buildings, equipment, and associated infrastructure (collectively, "infrastructure") owned by an eligible applicant for fund benefits.” EDL § 189-a(5) (emphasis added).

 

LMS’s funding request relates to restoration of the so-called “Flight of Five” historic locks and associated infrastructure (collectively, the “Locks”) which is owned by the Canal Corporation, a New York State entity.  The Locks project is a joint restoration effort being undertaken by the Canal Corporation and the City of Lockport.  Although LMS supports the Locks project, it does not own or have any property interest in the Locks, has no obligation to fund any portion of the Locks project, and has no obligation to pay for any costs (e.g., goods and services) associated with the Locks restoration project.  Indeed, it appears that were LMS to receive Fund proceeds, it would simply give the money to the Canal Corporation or the City – neither of which is an “eligible applicant” – to help defray the costs of their project.

 

 

5.       Recommendation for Future Consideration

 

The Board is also requested to defer the applications listed in Exhibit “L” for consideration at a later time.

 

PROJECT STATUS

 

Under the Act, a recommendation for Fund Benefits by the Allocation Board is a prerequisite to an award of Fund Benefits by NYPA. Upon a showing of good cause, NYPA has discretion to adopt the Allocation Board’s recommendation, or to award Fund Benefits in a different amount or on different terms than recommended by the Board.  In addition, the Authority is authorized to include in any contract providing for the implementation of an award (“Award Contract”) any terms and conditions that NYPA deems appropriate.

 

Given the preliminary stage of the eight projects identified on Exhibit “A”, Exhibit “B”, Exhibit “C”, Exhibit “D”, Exhibit “E”, Exhibit “F”, Exhibit “G”, Exhibit “H”, Staff is not in a position to recommend any specific terms and conditions to the Board that might be included in the Board’s recommendation for award.  It is anticipated that NYPA staff, in consultation with Staff, will negotiate final terms and conditions with successful applicants after the receipt of more detailed information concerning the projects. 

 

Recommendation

 

Based on the foregoing discussion and information, Staff recommends that the Allocation Board:

 

(1)   recommend to the NYPA Board of Trustees that each of the applicants listed in Exhibit “A”, Exhibit “B”, Exhibit “C”, Exhibit “D”, Exhibit “E”, Exhibit “F”, Exhibit “G”, Exhibit “H” receive an award of Fund Benefits in the amounts indicated;

(2)   find and determine that the applications listed in Exhibit “I” will not receive a recommendation for an award of Fund Benefits;

(3)   find and determine that the applications listed in Exhibit “J” each proposes a project that is not an eligible project;

(4)   find and determine that the application listed in Exhibit “K” proposes a project that is not an eligible project and, in any event, will not receive a recommendation for an award of Fund Benefits; and

(5)   find and determine that the applications listed in Exhibit “L” be deferred for consideration at a later time.

For the reasons stated, Staff recommends the adoption of the above-requested action by adoption of a resolution in the form of the attached draft resolution.

 

 

R E S O L U T I O N

            NOW THEREFORE BE IT RESOLVED, That the Western New York Power Proceeds Allocation Board (“Allocation Board”) hereby recommends that the Power Authority of the State of New York (“NYPA”) grant an award of Fund Benefits to the applicants listed in Exhibit “A”, Exhibit “B”, Exhibit “C”, Exhibit “D”, Exhibit “E”, Exhibit “F”, Exhibit “G”, Exhibit “H” in the amounts indicated therein, for the reasons set forth in the attached memorandum and the attachments thereto, provided that (i) applications which propose projects that must receive approvals and/or comply with other legal requirements, such as the State Environmental Quality Review Act, before they may proceed shall not be forwarded to NYPA until Staff, on behalf of the Board, receives appropriate notification that legal approvals and/or requirements which are necessary for the project to proceed have been satisfied, and (ii) such recommendations shall be subject to further Board review in the event that such approvals and/or legal requirements are not satisfied; and be it further

RESOLVED, That the Allocation Board hereby finds and determines that the applications listed in Exhibit “I” are not recommended for an award of Fund Benefits for the reasons set forth in the attached memorandum and the attachments thereto; and be it further

RESOLVED, That the Allocation Board hereby finds and determines that the applications listed in Exhibit “J” propose projects that are not eligible projects for the reasons set forth in the attached memorandum and the attachments thereto, and therefore are not eligible to receive Fund Benefits; and be it further

RESOLVED, That the Allocation Board hereby finds and determines that the application listed in Exhibit “K” proposes a project that is not an eligible project and, in any event, is not recommended for an award of Fund Benefits for the reasons set forth in the attached memorandum; and be it further

RESOLVED, That the Allocation Board hereby finds and determines that the applications listed in Exhibit “L” will be deferred for consideration at a later time; and be it further

            RESOLVED, That Staff is authorized on behalf of the Allocation Board to transmit the Board’s decision to NYPA, and to do any and all things and take any and all actions to effectuate the Board’s decision and the foregoing resolution.

 

 

a.      Recommendations for Awards of Fund Benefits

 

Ms. Orsi presented the allocation recommendations.

 

Field & Fork Network

 

Ms. Orsi said that staff recommends an award of $166,912. The agriculture related non- profit applicant has provided extensive evidence backing the economic impact of a Regional Food hub in Western New York and has also shown why Field &Fork is the most capable organization to lead the Region in taking the first step toward a Regional Food Hub. The study would take approximately forty weeks to complete.

 

The Western New York Regional Economic Development Council has made the WNY agricultural industry a priority in its strategic plan for the economic advancement of the WNY Region. This applicant has provided extensive evidence that taking the first and most fundamental step toward a Regional Food Hub in WNY will have an enormous impact on the Agricultural foot print of Western New York. This project also plays a big part in State and Regional Smart Growth goals which call for the preservation of farmland throughout the State and the Region. This project will lead to long term sustainability of the farms currently operating in the Region and will provide great benefits to Chautauqua, Cattaraugus, Allegany, Wyoming, Genesee and Orleans Counties along with the two Counties of central focus, Erie and Niagara.

 

Upon motion made by member Wojtaszek and seconded by member Brennen, the Board adopted the following resolution regarding Field & Fork Network:

That the Western New York Power Proceeds Allocation Board (“Allocation Board”) hereby recommends that the Power Authority of the State of New York (“NYPA”) grant an award of Fund Benefits to the applicants listed in Exhibit “A”, in the amounts indicated therein, for the reasons set forth in the attached memorandum and the attachments thereto, provided that (i) applications which propose projects that must receive approvals and/or comply with other legal requirements, such as the State Environmental Quality Review Act, before they may proceed shall not be forwarded to NYPA until Staff, on behalf of the Board, receives appropriate notification that legal approvals and/or requirements which are necessary for the project to proceed have been satisfied, and (ii) such recommendations shall be subject to further Board review in the event that such approvals and/or legal requirements are not satisfied.

 

Global Outreach Mission, Inc.

 

Ms. Orsi said that staff recommends Global Outreach Mission, Inc., a non-profit, receive an award of $154,500. The goal of this project is to provide workforce development and training for currently unemployed individuals. This program has already shown a propensity for success which is evidenced by the great deal of support the program has already received. Grant assistance will allow the applicant to triple the amount of students served per year by the program.  The class is currently being offered three (3) times a year to approximately 10 students per class (30 students per year).  Funding will allow the organization to offer an additional six (6) classes per year to an additional 60 students per year.  An award of Fund Benefits would allow two additional teachers to be hired for one year, and allow the organization to purchase hand tools, power tools and class room equipment.  This project has the potential to transform not only the neighborhoods of Niagara Falls but the workforce as well.

 

Upon motion made by member McDuffie and seconded by member Wojtaszek, the Board adopted the following resolution regarding Global Outreach Mission, Inc.:

That the Western New York Power Proceeds Allocation Board (“Allocation Board”) hereby recommends that the Power Authority of the State of New York (“NYPA”) grant an award of Fund Benefits to the applicants listed in Exhibit “B”, in the amounts indicated therein, for the reasons set forth in the attached memorandum and the attachments thereto, provided that (i) applications which propose projects that must receive approvals and/or comply with other legal requirements, such as the State Environmental Quality Review Act, before they may proceed shall not be forwarded to NYPA until Staff, on behalf of the Board, receives appropriate notification that legal approvals and/or requirements which are necessary for the project to proceed have been satisfied, and (ii) such recommendations shall be subject to further Board review in the event that such approvals and/or legal requirements are not satisfied.

 

 

Aquarium of Niagara

 

Ms. Orsi said that staff recommends an award of $1,750,000 to the Aquarium of Niagara. A $25 million investment is being made in the Niagara Falls State Park to create a world class destination. In its current state the applicant is able to maintain its average annual attendance of approx. 250,000 guests which already puts them in the top 5 destinations.  Presently, Niagara Falls sees 6.2 million domestic visitors who spend approximately $711 million dollars.  For the applicant to capitalize on the visitors who come to Niagara Falls by getting them to increase their stay in the region the applicant must execute Phase I of their Master Plan.  Phase I will create a new penguin exhibit for the Humboldt Penguins, the premier species located at the Aquarium.  

 

Upon motion made by member Wojtaszek and seconded by member Brennen, the Board adopted the following resolution regarding Aquarium of Niagara:

That the Western New York Power Proceeds Allocation Board (“Allocation Board”) hereby recommends that the Power Authority of the State of New York (“NYPA”) grant an award of Fund Benefits to the applicants listed in Exhibit “C”, in the amounts indicated therein, for the reasons set forth in the attached memorandum and the attachments thereto, provided that (i) applications which propose projects that must receive approvals and/or comply with other legal requirements, such as the State Environmental Quality Review Act, before they may proceed shall not be forwarded to NYPA until Staff, on behalf of the Board, receives appropriate notification that legal approvals and/or requirements which are necessary for the project to proceed have been satisfied, and (ii) such recommendations shall be subject to further Board review in the event that such approvals and/or legal requirements are not satisfied.

 

Michigan Street African American Heritage Corridor Commission, Inc.

 

Ms. Orsi said that staff recommends an award of $250,000 to Michigan Street African American Heritage Corridor Commission, Inc. to hire a project manager and staff to develop a detailed implementation plan and to raise funds to achieve improved programming that creates true tourist destinations in the Corridor.  As a condition of this award it is recommended that there be clear milestones set forth for the drawdown of grant funding. Some of those conditions should include:

 

Upon motion made by member McDuffie and seconded by member Wojtaszek, the Board adopted the following resolution regarding Michigan Street African American Heritage Corridor Commission, Inc.:

That the Western New York Power Proceeds Allocation Board (“Allocation Board”) hereby recommends that the Power Authority of the State of New York (“NYPA”) grant an award of Fund Benefits to the applicants listed in Exhibit “C”, in the amounts indicated therein, for the reasons set forth in the attached memorandum and the attachments thereto, provided that (i) applications which propose projects that must receive approvals and/or comply with other legal requirements, such as the State Environmental Quality Review Act, before they may proceed shall not be forwarded to NYPA until Staff, on behalf of the Board, receives appropriate notification that legal approvals and/or requirements which are necessary for the project to proceed have been satisfied, and (ii) such recommendations shall be subject to further Board review in the event that such approvals and/or legal requirements are not satisfied.

 

Niagara Label Company, Inc.

 

Ms. Orsi said that Niagara Label is applying to this Board for assistance in completing the $938,880.00 second phase of a two phase project totaling $1,564,720.00. Staff is recommending an award amount of $150,000.  This project proposes to increase production to meet demand, thereby increasing employment with the creation of 17 new jobs in the rural Village of Akron. The new jobs this project will create will pay employees an average of $50,000, which is well over the Regional average. This kind of job growth at the rates the company will pay is significant for a place like the Village of Akron.

 

Upon motion made by member McDuffie and seconded by member Brennen, the Board adopted the following resolution regarding Niagara Label Company, Inc.:

That the Western New York Power Proceeds Allocation Board (“Allocation Board”) hereby recommends that the Power Authority of the State of New York (“NYPA”) grant an award of Fund Benefits to the applicants listed in Exhibit “E”, in the amounts indicated therein, for the reasons set forth in the attached memorandum and the attachments thereto, provided that (i) applications which propose projects that must receive approvals and/or comply with other legal requirements, such as the State Environmental Quality Review Act, before they may proceed shall not be forwarded to NYPA until Staff, on behalf of the Board, receives appropriate notification that legal approvals and/or requirements which are necessary for the project to proceed have been satisfied, and (ii) such recommendations shall be subject to further Board review in the event that such approvals and/or legal requirements are not satisfied.

 

Yancey's Fancy, Inc./D&Y Cheeses, Inc.

 

Ms. Orsi daid that D&W Cheese/Yancey’s Fancy is a fast growing manufacturer of specialty and artisan cheeses. It has grown in Pembroke to where it now employs 108 people and is in need of substantially larger facilities. The company has several options including the purchase of an existing dairy operation in Wisconsin or to invest substantially in expanded facilities and capacity at its plant in Pembroke. Just two months ago ground broke on a new sewer line that will run down right by the plant and this is also allowing for the substantial new capacity in manufacturing this project will bring. Should a Pembroke site be chosen, YF would add 112,000 sf of production space, distribution, offices, and employee facilities to its existing 29,000 sf plant. The total investment of over $20 million would retain 65 and create 50 new jobs. Should YF choose the Wisconsin option, YF would maintain its artisan business but transfer the work for 65 existing jobs from Pembroke to Wisconsin. Ancillary to the project is the fact that YF will build a $2M reverse osmosis system for their whey waste. This is a very positive environmental investment as YF has been simply spreading their whey over a landfill with a DEC Monitor. This project takes this environmental cost and concern away. Staff recommends an award amount of $500,000.

 

Upon motion made by member McDuffie and seconded by member Brennen, the Board adopted the following resolution regarding Yancey’s Fancy, Inc, with member Wojtaszek abstaining:

That the Western New York Power Proceeds Allocation Board (“Allocation Board”) hereby recommends that the Power Authority of the State of New York (“NYPA”) grant an award of Fund Benefits to the applicants listed in Exhibit “F”, in the amounts indicated therein, for the reasons set forth in the attached memorandum and the attachments thereto, provided that (i) applications which propose projects that must receive approvals and/or comply with other legal requirements, such as the State Environmental Quality Review Act, before they may proceed shall not be forwarded to NYPA until Staff, on behalf of the Board, receives appropriate notification that legal approvals and/or requirements which are necessary for the project to proceed have been satisfied, and (ii) such recommendations shall be subject to further Board review in the event that such approvals and/or legal requirements are not satisfied.

 

Alita Holdings, Inc.

 

Ms. Orsi said that staff recommends an award in the amount of $2,000,000 for Alita USA Holdings, Inc. ("Alita"), which is a manufacturer of specialized pipes for use in the extraction of natural gas and oil.  The company plans to build a pipe mill that will be approximately 340,000 square feet, consisting of 16,000 square feet dedicated to a lab, storage and office area with the remaining 324,000 square feet being dedicated to manufacturing.  Most of the pipes will be used for domestic consumption.

 

Both New York State and Erie County have already made aggressive moves towards solidifying a commitment from Alita to do the project in WNY. In an effort to bring 172 new jobs to WNY at almost twice the average wage for the Region and $110 million in new investment, ESD has offered Alita $6.4 million in Excelsior Tax Benefits. The ECIDA has offered them $1,382,500 in sales tax exemptions, $4,949,342 in Property Tax Abatements over 10 years and $2 million in forgivable loans. NYPA is pursuing 4 megawatts of power allocations for Alita as well. After several months of working with this company on making this project happen in WNY, it is the sense of the participating Economic Development Agencies that this deal is close to being closed and with the help of the Power Proceeds fund this project can be brought to WNY.  

 

Upon motion made by member Brennen and seconded by member Wojtaszek, the Board adopted the following resolution regarding Alita Holdings, Inc.:

That the Western New York Power Proceeds Allocation Board (“Allocation Board”) hereby recommends that the Power Authority of the State of New York (“NYPA”) grant an award of Fund Benefits to the applicants listed in Exhibit “G”, in the amounts indicated therein, for the reasons set forth in the attached memorandum and the attachments thereto, provided that (i) applications which propose projects that must receive approvals and/or comply with other legal requirements, such as the State Environmental Quality Review Act, before they may proceed shall not be forwarded to NYPA until Staff, on behalf of the Board, receives appropriate notification that legal approvals and/or requirements which are necessary for the project to proceed have been satisfied, and (ii) such recommendations shall be subject to further Board review in the event that such approvals and/or legal requirements are not satisfied.

 

OSC Manufacturing & Equipment Services, Inc

 

Ms. Orsi said staff is recommending an award of up to $750,000 pending pursuit of other economic development assistance. This project offers the WNY Region a chance to be on the cutting edge of Clean Technology by participating in the manufacture of excavation machines with zero emissions. As State and Federal guidelines continue to demand lower emissions on construction sites the industry is searching for ways to reduce emissions with driving up costs in excess of their budgets. This applicant has provided evidence that the machine they will be manufacturing will have zero emission, equal power and much lower operating costs which quickly make up for the additional expense of purchasing this machine.  This applicant has demonstrated that this project will create advanced manufacturing jobs while improving the environmental outlook in the commercial construction industry.

 

Upon motion made by member Brennen and seconded by member McDuffie, the Board adopted the following resolution regarding OSC Manufacturing & Equipment Services, Inc. with member Wojtaszek abstaining:

That the Western New York Power Proceeds Allocation Board (“Allocation Board”) hereby recommends that the Power Authority of the State of New York (“NYPA”) grant an award of Fund Benefits to the applicants listed in Exhibit “H”, in the amounts indicated therein, for the reasons set forth in the attached memorandum and the attachments thereto, provided that (i) applications which propose projects that must receive approvals and/or comply with other legal requirements, such as the State Environmental Quality Review Act, before they may proceed shall not be forwarded to NYPA until Staff, on behalf of the Board, receives appropriate notification that legal approvals and/or requirements which are necessary for the project to proceed have been satisfied, and (ii) such recommendations shall be subject to further Board review in the event that such approvals and/or legal requirements are not satisfied.

 

 

b.      Recommendations for No Award

 

            Ms. Orsi said that staff recommends that no award allocations are made to Burgio Health Alliance, LLC. and Photolitec, LLC. Burgio Health Alliance, LLC is a very early stage start-up company. At the present time it is more appropriate for this company to pursue venture capital investment and/or State programs like Innovate New York which provides early stage investment in exchange for an equity stake in the company. Photolitec, LLC has requested $2.6M to complete Phase 1 trial and this is too large without enough private sector leverage/seed capital funding and although there has been some angel investment in the company, they have not secured a private seed capital from an existing VC.

 

            Upon motion made by member Wojtaszek and seconded by member Brennen, the Board adopted the following resolution regarding Burgio Health Alliance, LLC, and Photolitec, LLC:

That the Allocation Board hereby finds and determines that the applications listed in Exhibit “I” are not recommended for an award of Fund Benefits for the reasons set forth in the attached memorandum and the attachments thereto

 

 

c.       Ineligible Projects

 

Ms. Orsi said that after review, staff believes that the following applications are not eligible for award from the Western New York Economic Development Fund under the law: St. John Fruitbelt CDC and  Mount St. Mary’s Hospital & Health Center.  St. John Fruitbelt CDC and Mount St. Mary’s Hospital and Health Center are retail business and Economic Development Law, section 189-a(5) “retail business” is defined as a business that is primarily used in making retail sales of goods or services to customers who personally visit such facilities to obtain goods or services.  

 

Upon motion made by member Brennen and seconded by member McDuffie following resolution  regarding St. John Fruitbelt CDC and Mount St. Mary’s Hospital & Health Center was adopted:

That the Allocation Board hereby finds and determines that the applications listed in Exhibit “J” propose projects that are not eligible projects for the reasons set forth in the attached memorandum and the attachments thereto, and therefore are not eligible to receive Fund Benefits.

 

Ms. Orsi said that after further review, the applicant listed in Exhibit “K” was found to be ineligible. Lockport Main Street, Inc. project involved the changing locks. While the non-profit applied, the locks are owned by the state and government entities are deemed ineligible.

 

            Upon motion made by member McDuffie and seconded by member Wojtaszek, the following resolution  regarding St. John Fruitbelt CDC, Mount St. Mary’s Hospital & Health Center and Lockport Main Street, Inc. was adopted with the exception of member Brennen abstaining with respect to Greater Lockport Development Corp:

That the Allocation Board hereby finds and determines that the application listed in Exhibit “K” proposes a project that is not an eligible project and, in any event, is not recommended for an award of Fund Benefits for the reasons set forth in the attached memorandum.


d.      Recommendation for Future Consideration

 

Ms. Orsi said a more in depth analysis is necessary for the following projects, therefore, staff recommends they be deferred to a later time: ENTECCO, LLC, Buffalo Maritime Center, and Humble Pie Group, LLC.  

 

Upon motion made by member Brennen and seconded by member Wojtaszek, the following resolution regarding ENTECCO, LLC, Buffalo Maritime Center and Humble Pie Group, LLC was adopted:

That the Allocation Board hereby finds and determines that the applications listed in Exhibit “L” will be deferred for consideration at a later time.

That Staff is authorized on behalf of the Allocation Board to transmit the Board’s decision to NYPA, and to do any and all things and take any and all actions to effectuate the Board’s decision and the foregoing resolution.

 

 

7.   Motion to Conduct an Executive Session

 

A motion made by member Wojtaszek and seconded by member Brennen to hold an executive session in order to seek advice from counsel was adopted.

 

 

8.   Motion to Resume Meeting in Open Session

 

Upon motion made and seconded, the meeting resumed in Open Session.

 

Chairman Colucci stated that no actions were taken during the closed session.

 

 

9.   Next Meeting and Adjournment

 

            Chairman Colucci said the next meeting of the Board is scheduled for November 18, 2013 at 3:00 p.m. at the Empire State Development Corporation, Buffalo, New York.  A motion to adjourn the meeting, made by member Brennen and seconded by member Wojtaszek, was entertained by the Chairman and unanimously adopted.