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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.