In addition to serving as a Legislator for Chemung County’s 7th District, I am the secretary of the Chemung County Industrial Development Agency. In order to clarify and explain the state of affairs at Elmira’s First Arena, we offered this statement today.
A copy of the lease referenced in the statement and the specific requests for reimbursement are embedded at the end of our statement.
The purpose of this communication is to update the community about the status of the Chemung County Industrial Development Agency’s lease of Elmira’s First Arena to CAN-USA, a company owned and operated by Chemung County resident Robbie Nichols.
The Chemung County Industrial Development Agency (CCIDA) owns Elmira’s First Arena.
On July 15, 2018, CCIDA entered into a one-year lease with CAN-USA. The lease allows CAN-USA to renew its lease twice for additional one-year terms so long as it is not in breach of the lease’s terms.
Under the lease, CAN-USA is obligated to pay $125.00 per month, property taxes, and all expenses related to routine repair and maintenance of the building and outdoor premises.
The lease required CCIDA to pay the first $103,000 of First Arena utility bills issued to CAN-USA, after which CAN-USA assumed responsibility for them. CCIDA honored its agreement to pay the first $103,000 of utility bills. Responsibility for these bills has since shifted to CAN-USA.
The lease also requires CCIDA to reimburse CAN-USA up to $200,000 for repairs it makes to the First Arena’s ice plant along with capital improvements completed within the first year of the lease. All claims for reimbursement must be made in accordance with a process set forth in the lease that calls for at least two estimates and prior approval of CCIDA, and must meet the definition of capital improvements, i.e. a permanent structural change or the restoration of some aspect of a property that will either enhance the property’s overall value, prolongs its useful life, or adapt it to new uses.
Last week CAN-USA sent a letter to CCIDA indicating it wishes to exercise its right to renew the lease from July of 2019 through July of 2020 if CCIDA reimburses CAN-USA over $122,000 for what CAN-USA claims it paid toward ice plant repairs and capital improvements.
The status of repayment from CCIDA
CCIDA, like all Industrial Development Agencies in New York, is a public entity subject to yearly audits. As such, CCIDA has a fiduciary duty to taxpayers to make sure any remittance of payment to CAN-USA is lawful and appropriate.
In May of 2019 CAN-USA presented CCIDA Board members with requests for reimbursement for ice plant repairs and what it characterized as capital improvements.
Upon receipt, CCIDA Board members internally analyzed the requests and has consulted with legal counsel to determine whether (1) these expenditures were made in accordance with the lease; and (2) they represent capital expenditures or routine maintenance and repair for which CAN-USA is responsible.
CAN-USA has made several public statements suggesting CCIDA is withholding repayment without justification. To the contrary, CCIDA has an absolute duty to taxpayers to make every dollar we spend is done appropriately. The expenditures CAN-USA has asked us to make raise many important questions that we must answer before any money can be paid. Specifically, many of the requests appear to be related to routine repair and maintenance, something CAN-USA is required to pay.
The future of the First Arena is very important to CCIDA and the community. We are working very hard to make sure this valuable asset is protected while also honoring our duty to the taxpayers to be watchdogs for their money.
CCIDA will provide updates to the public as this situation continues to develop.