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Committee advances draft revisions to density-district priority loan program, discusses expanding eligibility and loan terms
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Summary
The IURA committee advanced a draft revising the density-district priority business loan program to emphasize categories over specific business lists, discussed expanding the eligible area to include Southworks and higher per-loan caps (up to $250,000), and asked staff to circulate the draft to stakeholders including the DIA.
The IURA Economic Development Committee voted April 14 to advance a draft revision of the density-district priority business loan program for stakeholder review after staff presented changes that remove a long list of specific business types and instead focus on categories. Nels, who presented the draft, said the changes are intended to give the agency flexibility to identify projects that provide greater community benefit and to incorporate retail-study recommendations for arts and entertainment and destination food and beverage businesses.
Committee members discussed whether the program must strictly follow existing density-district boundaries and whether to extend eligibility down to Southworks and adjacent blocks along South Cayuga. Nels said the draft has previously piggybacked on the city’s density district map but stressed the need to verify whether an expanded area lies within the urban renewal plan before formal changes.
The draft also contemplates higher loan caps and a different risk posture than the citywide revolving loan fund: staff explained the citywide program typically caps loans at $150,000 for businesses and $100,000 for retail, while the density-priority program could provide loans up to $250,000 per project if that level of funding is available and generally fund up to 60% of project costs. A committee member asked about interest-rate expectations: “Am I correct that the the rate is 75% of prime?” the member asked. Nels replied, “In this program, we actually don't designate a absolute rate, but our practice has been the interest rate has been 75% of prime as a starting point,” and added the agency can negotiate based on benefit and risk.
Concern was raised about whether agency lending at below-market rates might crowd out private lenders; staff said the agency’s underwriting and a requirement that the agency generally fund no more than about 60% of project cost are designed to limit displacement of commercial lending and that the program is intended to accept more risk when it yields greater community benefit. The committee asked staff to check urban renewal plan boundaries, to bring the draft to the Downtown Ithaca Alliance (DIA) for input, and to correct typos noted in track changes.
The chair moved to advance a substantively similar version of the draft for circulation; the motion was seconded, put to a vote and carried unanimously. Staff will circulate the draft to stakeholders and report back after receiving input.
