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
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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.