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HomeMy WebLinkAbout1998-05-27 98-229 RESOLVECOUNCIL ACTION Date: May 29 1998 Item No. 98-229 ItemlSubject: Designating Hammond Street Courtyard Municipal Developnrent District and Tax Increment Financing District and Adopting a Development Program for me District Responsible Department: Commonly & Economic Development Commentary: See adacMd Memo. A PUBLIC HEARING HAS BEEN ADVERTISED AND MUST BE HELD BEFORE PASSAGE. Dep nenr HeaZ Manager's Commenls:���L 0. e' -lyup r�'£^/iQI•N(G�yrp GMJ�u�nu.u� �PUBILC �f -. J• /2w; PAy�"^'^2°I"'C QarFC.0 �aY�On9O' �1G 16e�9MaX 40 .r'f`.'IN-^6`�-Yn a� City Manager Associated laureation: po,,yt ewA(� Budget Approval: Finance Director Legal Approval: Coy Solicitor Introduced For Passage _ First Reading Page-1-01-7— ageLofLReferred Referred Assigned to Councilor Aube Hay 27, 1998 CITY OF BANGOR Designating Hammond Street Courtyard Municipal Development mtte.) �Resslbe...... ............. ..... .... .... ... _... _......... _... .... _... _............... _.... _..... _............ .... Distrix and Tax Increment Financing District and Adopting a Develop raw Program for the District By the Cay Counted of tle City of Bomar: MMLVED, WHEREAS, the City of Bangor is autborizod pursuant an Chapter 207 of Title 30-A of Ne Maine Revised Semmes, as amended, to designate specified areas within the City as a Municipal Development District and Tax h eremem Financing Dlsnictand to adopt a Development Program for such District; and WHEREAS, for a another of years the former Bangor Furniture property has been "cam and available for the purpose of redevelopment; and WHEREAS, the City of Bangor approved and adopted the, Community Development Downtown Reviunization Program by passage of Council Order 82-239 on October 13, 1982; and WHEREAS, this Plan identified the continuing blighted conditions within the Downtown Area; and WHEREAS, this Plan recognized the need for higher levels of utilization of upper story space through renovation for medium rent office uses, residential use and other innovative activities; and WHEREAS, the Plan recognized the City's commitment to assist private sector investment in downtown by making available to private investors financial assistance through available loan or grant programs; and WHEREAS, Hammond Sneer Courtyard, L.P. plans m undertake a major redevelopment project and convert the Burger Fu nimre building and adjacent progeny into b units of affordable housing, commercial and retail space; and WHEREAS, there is a need to provide affordable housing for the citneens of Bangor and the surrounding region; to improve and broaden the tax base of the City of Bangor; and to improve the general economy of the City of Bangor, the surrounding region and the Same of Maine; and IN CITY COUNCIL May 29, 1998 Public Hearing Opened - No Public Comment - Motion to Continue at the Next Regularly Scheduled Meering of the City Council IN CITY COUNCIL June 0, 1998 Public Nearing opened No public cpope ere heard Public Hearing Closed Councilor Coleman abstained from discussion and vote Motion for passaga�made and seconded Passed CD 98-229 R E S O L V E Municipal no H andDevelopment C isfo d Tax Increment Financing district andAdopt- ing Ine a Development Program for the niacrlcc WHEREAS, the Hammond Street Courtyard, L.P. Project will provide affordable Musing opportarmas to the thenen of Bangor and the surrounding region; improve ars! broaden the tax base in the City of Bangor, improve the economy of the City of Bangor and the State of Maine; and provide for the renovation of vacam and blighted downmwn building space; and WHEREAS, there is a need to encourage redevelopment of the Downtown Area tlsough the establishment of a Municipal Development District and Tax Increment Financing District in accordance with the provisions of Chapter 207 of Tide 30-A; and WHEREAS, the City has contemporaneously herewith held a public hearing on the question of establishing the District in accordance with the requirements of 30-A M.R.S.A. $5253, upon at least ten (10) days prior notice published in a newspaper of general circulation within the City; and WHEREAS, the City desires to designate the Harramnd Street Courtyeard Municipal Development District and Tax Increment Financing District, and adopt a Development Program for such District; and WHEREAS, it is expected that approval will be sought and obtained from de Maine Depamnent of Bcomrnk anal Community Development, approving the designation of the District and approving the adoption of Ne Development Program for the District; NOW, THEREFORE, BE IT HEREBY ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT: eedon 1 The City hereby finds and determines Nat (a) Mleast 15%, by area, ofthe real property wiNinthe District, as hereinafter designated, is blighted and in need of rehabilitation, redevelopment and conservation work as defired in 30-A M.R.S.A. §5253; and do The used area of the District does not extend 2% of the tool acreage of the City and the land area of all development districts within the City (including the District) does rot exceed 5% of the round acreage of the City; rust (c) The aggregate value of equalized taxable property of the District plus the aggregate value of equalized taxable property of all existing lax increment Bouncing districts as of April 1, 1998 does not exceed 5% of the total value of equalized taxable property within the City as of April 1, 1998; mod (d) The aggregate value of indebtedness fusnced by the pretests from has increment bouncing districts within Penobscot County, including the proposed District, does not exceed $50 million; and 98-229 (e) The City expects that the Development Program will be completed within five years of the designation of the District by the Department of Economic and Community Development; and (f) The designation of the District and pursuit of the Development Program will generate substantial economic benefits for the City, State and its residents, including the provision of affordable housing, employment oppormmtres, broadened and improved tax base, and elimination of blighting conditions; and (g) The designation of the District and pursuit of the Development Program will he in the public interest. $¢T}jon2 Paramour in Chapter 2B7 of Title 30-A of the Maine Revised Seamus, as amended, the City hereby designates the Hammond Street Courtyard Municipal Development District and Tax Increment Financing District designated and described as more particularly set forth m the "CITY OF BANGOR, MAINE, HAMMOND STREET COURTYARD MUMCIPAI, DEVELOPMENT DISTRICT AND TAX MCREMENT FINANCING DISTRICT DEVELOPMENT PROGRAM" presented to the City Council in the form attached hereto, and such Development Program is hereby incorporated by reference into this Resolve as the Development Program for the District. Section 3. Pursumu to this provision of 30-A M.R.S.A.§5254, the City hereby adopts the assumed ed of Bre percentage of Assessed Value to be retained by the City as set forth in Tables 2-A and 2-8 of the Development Program for purposes; of said Section 5254. If at any time during the area of the District the captured assessed valor increases by reason of revaluation, the maximum amount of retained captured assessed value shall increase in proportion in the increase in assessed value attribumble to sueb revaluation, it being be event of the City that the Moaned tax increment from the captured assessed value shall remain a a level in least equivalent in Ne dollar values specified in the Development Program over the life of the District. Section 4 The City Manager be, met bereby is, authorized, empowered and directed to submit the proposed dcsignmon of the District and the proposed Development Program for the District to the Stam of Maim Department of Fcmwmic and Community Development ("DECD") for review and approval pursuant to be requirements of 30-A M.R.S.A. §§5253 (1)(F) and 5254-A G-A)(D). Secdon 5. The foregoing designation of the District and the adoption of the Development Program for tet District shall automatically become final and shall take bill force and effect upon receipt by the City of approval of due designation of the District and adoption of the Development Program by the Department of Economic and Community Development, without requirement of harbor action by the City of Roger. 98-229 Section 6. The City Manager be, aM hereby is authorized and empowered, at his discretion, from time to time, to make such revisions to the Development Program for the District as the City Manager dams reasonably necessary or convenient in order to meditate the process for review and approval of the District by the Department of Ecomenk and Community Development, or for my other reason, so long as such revisions are me inconsistent with these resolutions or the basic stricture and intent of the Development Program 98-229 MEMORANDUM May 20, 1998 TO: Honomble Chair and Members of the City Council FR: Rad McKay, Director ofCommuniiy & Ec comic Developmetn RE: Dowamwa Building Rehabilitation Project -Hammond Stect Courtyard Hammond Street Courtyard, L.P. is a Maine limited partnership formed to redevelop the former Bangor Furniture property on Hammond Street. The General Pertners are Robert Kelly, Suanne Kelly, Richard S. Catelle, Richard S. Cattelle, Inc., House Revivers, Inc. and Kelly Realty Management. To raise private equity, the Partnership has raised $350,000 from the sale of 14 partnerships at S25,000 each. The Partnership intends 0 take advantage of firs, Federal historic preservation tax incentives program, providing for a tax credit Nual to 20 1, of the amount spent in the certified rehabilitation of a certified historic structure, which could be passed on to the limited Farmers. This plan has worked well in the rehabilitation of the two properties immediately up Hmnmond Street from the Bangor Furniture property, where the only assistance provided by lire City was Community Development loans. The Geurel Partners are nauseating the City consider providing $200,000 in tax increment financing for the project, in addition to $150,000 in Community Development loan funds. The Project consists of few buildings located between 84 and 120 Hammond Street mmling approximately 30,000 square feet of mumble space. The plan is to renovate the property into a mix of Mail, office and residential space involving three w few retail tenants, seven or eight orrice tenants and up to six apartments in the project. The upper three Floors of the building at 104-108 Hammond Street will accommodate 6 apartments. All of the interior space of the building at 84 Hammond Street and the meet level at 104108 Hammond Street will be confngwed and finished meet the needs of commercial tenets as they identify them. It is anticipated that the meet level spaces will be retail use and the upper from will be office stores. Proposed Source of Funds: Limited Partnership Investment ........................................ $ 350,000 City of Bangor Community Development Low ............................. 150,000 City of Bangor Tax Increment Financing .................................. 200,000 Bank Financing..................................................... 1.040.440 Taal $1,700,000 Use of Fonds: Partnership & Syndication ............................................. $12,650 Purchase Price ...................................................... 387,000 Design & Financing ................................................... 56,500 Construction ................. 1,106,404 Contingency........................................................ 132,446 Tocol ....................................................... 1,700,000 98-229 City Council Hammond Sheet Courtyard May 20, 1998 Page 2 The property is presently assessed for $366,800. The City Assessor las estimatN the property's value, after rerovation, will be $1,387,000, providing a cox assessment increment of $1,000,000. With an must average tax rate increase of 1%W an average value increase of 2%, the project could he expected m provide $679,992 in new real mate taxes, with a net present value of $332,728 at a ]% investment cote. The $200,000 requested tax increment financing would aptesent approximately 60% of the net present value of the projected new real estate property taxes over 20 years. This investment would be similar to the City's $280,000 TIF investmem in the Realty Resources Frxeses Project(the completed bousing component). This project can he considered for TIF financing in that it is a redevelopment project that apparently will not happen without some assistance of this type.