MINUTES OF A REGULAR RA MEETING

Minutes of a Regular Meeting

of the Board of the

Redevelopment Authority of the County of Lancaster

April 27, 2010

Immediately Following The 4:30 P.M. Meeting of the

Lancaster County Housing Authority

202 North Prince Street, Suite 400

Lancaster, PA 17603

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The members of the Board of the Redevelopment Authority of the County of Lancaster met Tuesday, April 27, 2010. The Board meeting was held at the office of the Redevelopment Authority of the County of Lancaster, 202 North Prince Street, Suite 400.

Members of the Board in attendance were: Cindy Stewart, Miriam Fletcher, Ed Fisher and James Shultz. |
Staff members present were: Matthew T. Sternberg, Executive Director; David M. Brazina, Deputy Executive Director; Aimee Tyson, Community Development Director; and Marian Joyce, Secretary.

Also present: Lyle Hosler, Economic Development Company; Cynthia Fuhrer, Housing Development Corporation; John Meeder and Ed Gordon, Historic East Side Suites; Penn Ketchum, Penn Cinema Management Company.

Ms. Stewart called the meeting to order at 4:39 p.m.

Public Comment – None

Minutes of the February 23, 2010 meeting and the special meeting on April 6, 2010 were approved. The motion was made by Ms. Fletcher, second by Mr. Fisher and unanimously accepted.

The Treasurer’s Reports for February and March 2010 were approved on a motion Mr. Shultz, second by Mr. Fisher and unanimously accepted.

Correspondence or Communications – None

Report of the Executive Director is attached hereto, and made a part hereof. Mr. Sternberg drew the Board’s attention to the Quarterly Report on Budget Expenditures. Mr. Brazina answered Board questions noting that the large expense under Equipment Purchase was for a new copier.

Mr. Sternberg updated the Board on a meeting held with the Dauphin County Industrial Development Authority and their attorney to investigate the viability of financing the rehab of a number of housing projects via a multi-family bond approach combined with 4% tax credits, by learning from their experience. Also, Authority staff together with Mike Carper of the Housing Development Corporation (HDC) met with the developer of a project in Wilmington Delaware and got additional feedback.

The goal is to take 15-20 year-old housing projects that are in need of rehab, group them together under one financing mechanism and have them all rehabilitated at once. The consensus was that it would be very complex but fundamentally doable – and HDC is interested in pursuing the idea further. The end result is to preserve these older projects as low income properties so they remain affordable rentals rather than going to market-value or deteriorating into slum situations. Mr. Sternberg and Mr. Brazina answered Mr. Shultz’ questions about HOME and Block Grant funding – and also addressed how the debt-holders get paid, restructuring of existing loans, rollovers, and PHFA involvement in both the model-projects and potential Authority projects.

Ms. Stewart suggested a future Board Education Session on this topic. Mr. Sternberg concurred, stating that as soon as the Authority finished educating staff and dissecting other projects elsewhere to see how they were done, then it would be possible to do a Saturday Board Session.

Committee Reports – None

Old Business:

1) The Board withdrew Resolution #4 from January 26, 2010 related to CAP lead-based paint inspections for the Homeless Prevention Program to be replaced later in the meeting with Resolution #20 revising the inspection payment schedule. The motion to accept was made by Mr. Shultz, second by Mr. Fisher and unanimously carried.

New Business:

1) The Board granted approval for issuance of a Tax-exempt Revenue Note of up to $2,550,000 to Hess Capital LP for the Historic East Side Suites, to finance a portion of (1) the acquisition of real estate located at 141-159 East King Street, Lancaster, (ii) its renovation into 17 apartment units and approximately 8,000 square feet of commercial space; and (iii) certain costs of issuance connected with the Project. The motion to accept was made by Mr. Shultz, second by Mr. Fisher and unanimously carried.

Mr. John Meeder of Historic East Side Suites introduced his colleague Ed Gordon, and then reviewed the project (now composed of 6-7 vacant storefronts and office space, located one block east of the square) and its significance for downtown. The bond, he stated, was just one important element of funding – other sources being EDC and City loans, syndication proceeds from the sale of tax credits to Fulton Bank, and equity and personal commitments from partners.

Mr. Shultz spoke briefly on behalf of the Board in favor of the project, noting that the Authority has a limited role, relying on EDC for underwriting and expertise. He also complimented Mr. Meeder on putting the financing together for this longtime project under difficult economic circumstances. He stated that the Finance Committee briefing had been well-organized and questions were answered to his satisfaction.

Mr. Sternberg summarized the Authority’s role as conduit issuer – to ensure the proper process is being followed. If approved at this meeting, it would trigger the draft bond documents by Barley Snyder. These documents then go to Authority counsel, John Espenshade, for review on our behalf. Only then can the documents be finalized. He also answered clarification questions from Ms. Stewart. (A copy of said Resolution [Apr 10 #15] is attached hereto, and made a part hereof).

NOW, THEREFORE, BE IT RESOLVED by the Board of the Redevelopment Authority, of the County of Lancaster in lawful session duly assembled, as follows:

1. This Authority hereby authorizes the issuance and sale of the Note for the purpose of assisting in the financing of the Project as described above.

2. The terms and conditions of the Note (including, without limiting the generality of the foregoing, the interest rates, interest payment dates, maturity dates and redemption provisions thereof) and the form of the Note shall be as approved by the Company and Note Counsel and shall be acceptable to the officers of this Authority who execute and deliver the Note, its execution and delivery thereof to constitute conclusive evidence of such approval.

3. This Authority shall enter into a Loan Agreement with HESS Capital, LP and the Bank (the “Agreement”), such Agreement to be substantially on such terms and conditions as may be acceptable to counsel to the Authority. Pursuant to the Agreement, the Authority (i) will loan the proceeds of the Note to HESS Capital, LP and HESS Capital, LP will agree, among other things, to make certain loan repayments in amounts and at times equal to the principal of, premium, if any, and interest on the Note and (ii) shall assign all of its right, title and interest (except for its right to indemnification and payment of its fees and expenses) in and to the Agreement and the Note and the loan payments to be paid by HESS Capital, LP thereunder to the Bank.

4. Notwithstanding any other provision of this Resolution, the Note, when issued, shall not be deemed an obligation of the County of Lancaster, the Commonwealth of Pennsylvania or any other political subdivision thereof, and shall be payable solely from payments made by or on behalf of the Company. No recourse shall be had for the payment of the principal or the redemption price of or the interest on the Note or for any other claim based on the Note or the tax exemption thereof, against the Authority or any successor body, against any officer, board member or employee of the Authority, past, present or future, or against any other monies, accounts, rights or other assets the Authority may possess.

5. It is hereby confirmed that a TEFRA hearing for this project was duly posted and conducted by the Board of County Commissioners on
April 21, 2010.

6. The Chairman, Vice Chairman, Secretary or Assistant Secretary or any other officer of this Authority are authorized, empowered and directed to execute and deliver such other documents, certificates and instruments and to do such other acts or things as may be necessary, proper or desirable to affect the financing of the Project and the other transactions contemplated by this Resolution, including, without limiting the generality of the foregoing, (i) to execute the Agreement, and (ii) to do such acts and things and to execute such other certificates, documents and instruments as may be necessary to comply with requirements of Sections 103 and 141 through 150 of the Code.

7. The Authority hereby approves the appointment of Barley Snyder LLC of Lancaster, Pennsylvania as Note Counsel in connection with the Project and the issuance of the Note.

8. The costs, fees and expenses of Note Counsel, Authority counsel and all other costs and expenses incurred by or on behalf of the Authority in connection with the Project shall be the sole responsibility of the Company.

9. The Chairman, Vice Chairman, Secretary or Assistant Secretary or any other officer of the Authority are authorized and directed to proceed promptly with the undertakings herein contemplated. Such officers are authorized, empowered and directed to do any and all acts and things to execute and deliver any and all documents, agreements, instruments, security documents or certificates that may be necessary, proper or desirable, to affect the transactions contemplated by this Resolution, including, but not limited to, the execution and delivery of such documents, instruments, certificates, agreements, financing statements, letters, etc., as may be reasonably requested by Note Counsel and as may be approved by counsel for the Authority. The execution and delivery by the Chairman, Vice Chairman, Secretary or Assistant Secretary or any other officer of the Authority, of any and all such documents, instruments or certificates that may be necessary, proper or desirable to affect the transactions contemplated by this Resolution shall constitute conclusive evidence of approval of any such document, instrument or certificate, as applicable, by the Authority.

10. The Chairman or Vice Chairman are each authorized to execute and cause to be filed the Form 8038 and any other letters, elections, statements, certificates, documents or instruments that may be necessary in the opinion of Note Counsel and counsel to the Authority to secure and maintain the tax exempt status of the Authority Note as required by the Code and the regulations promulgated thereunder. The execution and delivery, by any officer of the Authority, of the Form 8038 and any and all such other letters, elections, statements, certificates, documents or instruments shall constitute conclusive evidence of approval of any and all such other letters, elections, statements, certificates, documents or instruments by the Authority.

11. The Authority makes no, and will make no, representation regarding the tax exempt status of the Authority Note as, if, and when issued.

12. This resolution shall be effective immediately.

13. This Authority approves, ratifies and confirms all action heretofore taken by officers and any other persons in the name or on behalf of this Authority in connection with the undertakings herein contemplated.

14. In the event any provision, section, sentence, clause or part of this Resolution shall be held to be invalid, such invalidity shall not affect or impair any remaining provision, section, sentence, clause or part of this Resolution, it being the intent of this Authority that such remainder shall be and shall remain in full force and effect. All previous resolutions of the Authority are hereby repealed to the extent they are inconsistent with the provisions hereof.

2) The Board granted approval for issuance of a Tax-exempt Revenue Note of up to $4,550,000 to Penn Cinema Management Company LLC and Byler Management Company LLC to finance a portion of (i) the construction of a new 20,000-square-foot complex at 541 Airport Road, Lititz, PA 17543 to be used for two restaurants and an IMAX movie theater, (ii) new equipment for the operation of the IMAX theater; and (iii) certain costs of issuance connected with the Project. The motion to accept was made by Mr. Shultz, second by Mr. Fisher and unanimously carried.

Mr. Lyle Hosler of the Economic Development Company provided some background on the process the County Commissioners had asked of EDC, and then introduced Penn Ketchum of Penn Cinema Management Company to describe the IMAX project. Mr. Ketchum stated that they were locally owned and not part of any national chain. He described dramatic growth from the originally-built cinema to present demand for an IMAX product from both regular and tourist customers. Mr. Sternberg reiterated that, as with the first resolution, this project has been approved by the Commissioners.

Mr. Ketchum answered Board questions about the attached restaurants, economic impact to the Lititz area, reasons why a City location is not being considered, construction date, projected jobs and employment, tickets for low income kids etc.

Mr. Hosler summarized that these first two resolutions exemplified the two types of projects EDC expected to apply, 1) for John Meeder – it was the extra incentive to get a project over the hump; and 2) for Penn Ketchum – it was the carrot in a down economy to get construction going now rather than waiting till later. (A copy of said Resolution [Apr 10 #16] is attached hereto, and made a part hereof).

NOW, THEREFORE, BE IT RESOLVED by the Board of the Redevelopment Authority, of the County of Lancaster in lawful session duly assembled, as follows:

1. This Authority hereby authorizes the issuance and sale of the Note for the purpose of assisting in the financing of the Project as described above.|

3. This Authority shall enter into a Loan Agreement with the Company and the Bank (the “Agreement”), such Agreement to be substantially on such terms and conditions as may be acceptable to counsel to the Authority. Pursuant to the Agreement, the Authority (i) will loan the proceeds of the Note to the Company and the Company will agree, among other things, to make certain loan repayments in amounts and at times equal to the principal of, premium, if any, and interest on the Note and (ii) shall assign all of its right, title and interest (except for its right to indemnification and payment of its fees and expenses) in and to the Agreement and the Note and the loan payments to be paid by the Company thereunder to the Bank.

5. It is hereby confirmed that a TEFRA hearing for this project was duly posted and conducted by the Board of County Commissioners on April 21, 2010.

7. The Authority hereby approves the appointment of Barley Snyder LLC of Lancaster, Pennsylvania as Note Counsel in connection with the Project and the issuance of the Note.

11. The Authority makes no, and will make no, representation regarding the tax exempt status of the Note as, if, and when issued.

12. This resolution shall be effective immediately.

13. This Authority approves, ratifies and confirms all action heretofore taken by officers and any other persons in the name or on behalf of this Authority in connection with the undertakings herein contemplated.

3) The Board authorized a Reservation of Funds letter reserving HOME Investment Partnerships Program funds and/or Community Development Block Grant funds for the South Square Apartments Project. The motion to accept was made by Mr. Shultz, second by Mr. Fisher and unanimously carried. Mr. Sternberg stated that this was the first project under the HOME Consortium mixing City and County funding. The City allocated $100,000 as their portion and the County $350,000. Combining the funds will streamline reporting and tracking. He then introduced Cindy Fuhrer of HDC to describe the project, located one block south of Penn square. (A copy of said Resolution [Apr 10 #17] is attached hereto, and made a part hereof).

NOW, THEREFORE, BE IT RESOLVED by the Board of the Redevelopment Authority of the County of Lancaster to authorize issuance of a Reservation of Funds letter reserving HOME Investment Partnerships Program funds and/or Community Development Block Grant funds in an amount not to exceed FOUR HUNDRED FIFTY THOUSAND AND 00/100 ($450,000.00) DOLLARS for the South Square Apartments Project.

4) The Board authorized a Sub-recipient Agreement with the City of Lancaster for the use of HOME Investment Partnerships Program funds. The motion to accept was made by Mr. Shultz, second by Ms. Fletcher and unanimously carried. Mr. Sternberg explained that this was a formality to enable the Program to be administered by the Authority on behalf of the City. Programs included under the agreement are: Home Repair Program, Spanish American Civic Association CHDO, South Ann Concerned Neighbors CHDO, and SACA Homeowner Choice Program. Staff answered Ms. Stewart’s question on the process. (A copy of said Resolution [Apr 10 #18] is attached hereto, and made a part hereof).

NOW, THEREFORE, BE IT RESOLVED by the Board of the Redevelopment Authority of the County of Lancaster to authorize the Executive Director of the Redevelopment Authority of the County of Lancaster to execute a Sub-Recipient Agreement with the City of Lancaster for the use of FOUR HUNDRED NINETY-FIVE THOUSAND ($495,000.00) DOLLARS in Fiscal Year 2010 HOME Investment Partnerships Program Funds within the City of Lancaster in accordance with Exhibit A, attached hereto.

5) The Board approved a contract amendment with Lancaster Housing Opportunity Partnership (LHOP) for the operation of the Community Homebuyer Loan Program. The motion to accept was made by Mr. Shultz, second by Ms. Fletcher and unanimously carried. Ms. Tyson explained that costs for the program and its educational component had been rising for a number of years but the fee had not increased to reflect this. (A copy of said Resolution [Apr 10 #19] is attached hereto, and made a part hereof).

NOW, THEREFORE, BE IT RESOLVED by the Board of the Redevelopment Authority of the County of Lancaster to approve the execution of a Contract Amendment with the Lancaster Housing Opportunity Partnership to amend the performance fee.

6) The Board approved a contract amendment with the Community Action Program for the operation of the Homeless Prevention Program. The motion to accept was made by Mr. Shultz, second by Ms. Fletcher and unanimously carried. Ms. Tyson explained that CAP had asked for an amendment to the unit cost on realizing that the amount originally requested was insufficient, and the Authority believes it to be a fair request. (A copy of said Resolution [Apr 10 #20] is attached hereto, and made a part hereof).

NOW, THEREFORE, BE IT RESOLVED by the Board of the Redevelopment Authority of the County of Lancaster to approve the Contract Amendment with Community Action Program of Lancaster County to amend the Scope of Services and the reimbursement rate for the unit cost for lead based paint visual assessments.

7) The Board approved a contract with Tabor Community Services for the operation of the Transitional Living Center using Emergency Shelter Grant System Interim Plan Funds. The motion to accept was made by Mr. Shultz, second by Mr. Fisher and unanimously carried. Ms. Tyson stated that the contract originally ended in December 2009 but there was a lag-time in the caseload switchover from Crispus Attucks to TLC. Ms. Tyson answered
Ms. Stewart’s questions on a possible long-term commitment. (A copy of said Resolution [Apr 10 #21] is attached hereto, and made a part hereof).

NOW, THEREFORE, BE IT RESOLVED by the Board of the Redevelopment Authority of the County of Lancaster to approve a Contract amendment with Tabor Community Services for the Transitional Living Center, increasing the length of time of performance for this Contract to June 30, 2010.

8) The Board approved a contract amendment with United Veterans Beacon House for the use of Emergency Shelter Grant Funds. The motion to accept was made by Mr. Shultz, second by Ms. Fletcher and unanimously carried. Mr. Sternberg said that this was just a technical correction.
(A copy of said Resolution [Apr 10 #22] is attached hereto, and made a part hereof).

NOW, THEREFORE, BE IT RESOLVED by the Board of the Redevelopment Authority of the County of Lancaster to approve a Contract amendment with United Veterans Beacon House, correcting the reference to the grant amount for this Contract to SIX THOUSAND, TWO HUNDRED AND 00/100 ($6,200.00) DOLLARS.

Other Business:

Ms. Stewart announced that the next meeting of the Board of the Redevelopment Authority of the County of Lancaster is expected to be held Tuesday, May 25, 2010 at the offices of the Lancaster County Housing and Redevelopment Authorities, 202 North Prince Street, Suite 400, immediately following the 4:30 p.m. meeting of the Lancaster County Housing Authority.

The meeting was adjourned at 5:29 p.m.

Marian C. Joyce, Secretary