HomeMy WebLinkAbout1998-09-28 98-396 ORDERCOUNCIL ACTIOB
Dubai g%pfemher 29 1998
IteM 90. 98-Ier.
Item/subject: Authorizing Community Development hone to Ft«sNlNalo Street Housing Aspedues, LF
Responsible Department: Commsmity k Economic Development
Com aotary:
This loan will finance $212,136 for the acquisition and conversion of the top
three floors of the Main Street side of the former Freesen Department Store
building into 39 affordable dwelling units with ans isted living component. The
Total estimated coat of the project is $3,902,100of which $3,089,964 will be
vested by Freese/Main Street Housing Associates, $600,000 loaned by the Maine
State Housing Authority, and the r ning $212,136 loaned by the City of Bangor
through its Community Development Residential Loan Program. The loan will be
repaid through the new property tax revenues generated by the project.
Construction will begin prior to the end of this calendar year and will be
completed in 10 to 12 months. The terms of the loan are included in the Council
Order.
ce� cmevc Nei
Manager's C0®ante:
City Manager
Associated Information
Budget Approval,
Finan Ca DSYPCTOr
Legal Approval:
Introduced For ❑ passage D First Reading ❑ Referral
Fage�of--I—
M
Amigved to Comega Palmer September 28, 1998
CITY OF BANGOR
(TITLEJ (®Cbff .Auto rag Commpprty Daedopmtntcopnroerw..tan....
Street Housing Astactate, LP
By thio My Owned oral MY OfAlawsm.-
II I
THAT WHEREAS, Realty Resources Chartered of Rockport, Maine proposes to form a
partnership known as FrceseM fir Street Housing Associates, LP for the purpose of
converting floors 4, 5 add 6ofine Main Sound section (tire "Main Street Block') of the
homer Freeses building at 9496 Main Street into thirty-nine apartments of affordable
housing with an assisted living component; and
WHEREAS, the project will involve an investment ofapproxlmately $3,902,100 of
which $3,089,964 will W invested as equity by Freese%lain Street Hoaxing Associates
LP, $600,000 loaned by the Maine Stere Housing Authority seemed by a fust mortgage
on Boors 4, 5, and 6, and $212,136 is requested an be provided by the City of Bangor;
and
WHEREAS, the project meets the leading guidelines ofme City of Bangor Community
Development Residential Rehabilitation Loan Frogmen as the dwelling units created
will be renkd a affordable renes to pothers meeting me U. S. Dominator of Housing
and Urban Development definition of low and moderate income persons; and
WHEREAS, rehabilitation of the former Freeses building bas been a long term
objective of the City:
NOW, THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY
OF BANGOR THAT, the Director of Community and Economic Development is
hereby authorized to provide a loan to Fr A mstreet Housing Associates, LP for
the purpose of converting arms 4, 5 and 6 of the Main Soret section (tab"Main Street
Block") ofme former Presses building m 74-96 Main Street into mUty-nim apartments
of affordable housing under the following terms and conditions and other terms and
conditions as may be required by the U.S. Department of Housing and Urban
Development or by the Director of Community and Economic Development for the
administration ofine loan:
1. BORROWER: Freese/Main Street Housing Associates, LP
2. AMOUNT: Not mexceed$212,136
3. INTEREST RATE: 8.0% fined rete
4. TERM: 240monms
5. PREPAYMENT PENALTY: None
6. LATE CHARGE: 5% of payment if 15 days late
IN CITY COUNCIL
September 28, 1998
Motion for Passage Made and Seconded
Passed
ITY LEM
98-396
ORDER
Title, Authorizing Commonalty Development
Loan to Freese/Mein Street Housing
Associates. LP
......................................
............................i.�.�........
{eeQu.(6. h'r A
Aerigned to
.P ...............
Councilman
98-396
7. COMMITMENT FEE: None
S. REPAYMENT: Principal and interest shall be Payable intwantyl20) annual
Installments oFEi2hteen Thousand Fow Hundred Ninety-Fow and 98/100
Dollart!$19496991 each, with the first such installment being due one year
fro a loanclosmg. 'Ihe last such insudimentbeivg due twenty years from the
date ofloan closing (tire "Maturity Date"). Iffor anyreasonam paid priorm
the Maturity Data, the balance of Principe] then remaining unpaid, together
with accrued unpaid interest shall be paid in full on the Maturity Date.
The BORROWER may defer repayment of the annual payment amount
otherwise due for any year in which the BORROWER has failed to generate
gross rental income from its ma dentid boards of a least $186,287. In such
event, BORROWER may defer its amend Note repayment in whole or part,
as it shall see fit. In any such you, should BORROWER'S gross rental
income from residential reasons fall between $186,287 and $201,698,
BORROWER nay defer a portion of its annual repayment otherwise due
mrderthis Note in so amount not to exceed the difference between $201,698
and the am mutofgmssrental income actually gen umadby the BORROWER
from its residential tenants.
All repayment amounts deferred by the BORROWER shall be added to ant
shall become part of the principal due. In any year following the deferral of
any around repayment in whole or past, and for so long as such deferred
srwantremeins unpaid, BORROWER shall be regdcedto increase its annual
repaymetuto the same extent the gross rental income, Ices vacancies, actually
generated from residential tenants for the year concerned exceeds $201,698,
as necessary In repay principal and interest on such deferred amount.
For each year after the initial year of the loan, the figures for gross rental
income less vacawies stated above, entitling BORROWER If defer all or a
portion of its sound repayment m the CITY, shall be increased by a factor of
one and one-half percent (1.5%).
9. REPAYMENT CREDIT: BORROWER will receive a credit against the
require repayment in subsection 8 above equal to the amount oftax increment
revenues ge temred by the PROJECT, W to 100of of the annual repayment
araoum due.
10.PREPAYMENT: BORROWERmayrepaypW alloftheloanaanytime
without penalty.
11. COLLATERAL: The loan shall be secured by a second mortgage on the
PROPERTY subordinate only to a fun mortgage securing a loan made by the
Maine Stam Housing Authority or other louder in an amount rent to exceed
$600,000 without written approval of the City.
12. LOAN CLOSING Loan closing shag take place priorto December 31,1999
unless otherwise agreed In in writing by the CITY.