HomeMy WebLinkAbout1998-06-08 98-253 RESOLVEMO CIL ACTION
Date: Susie S. 1996
xtns No. 98-253
Item/Subject: Approving Commmaity Development ResidmYnl Rehabilitation
Loan -
Hammond Street Coorlyard, L.P.
Responsible Department: Community 6 Economic Development
Co®¢¢Cary:
This Council Order would approve a Community Development
Residential Rehabilitation Loan
to Hammond Street Courtyard L.P. in the amount of $150,000.
Hammond Street Courtyard,
L.P., with Robert and Suzanne Kelly and Richard cattelle
as General Partners, intend to
rehabilitate the four buildings at 84-120 Hammond Street
into a Pat of retail, office and
residential space at an estimated cost of $1.7 million.
Proposed Sources of financing
Limited Partner Investment . . . . . . . . . . .
. . . . . . . . . $350,000
Dent Financing . . . . .
. . . . . . . . . . $1,000,000
City of Bangor Tax Increment Financing . . .
. . . . . . . . . . $200,000
City of Bangor Community Development Loan . . . .
. . . . . . . . $114..0.0.0
Total . . . . . . . . . . . . . . . .
. . . . . . . . . 4,700,000
v
Dep lent He
wanager's consents: C+-ia KA &
art
City Manager
Associated Information "
Budget Approval:
Finance DIYPCCOY
Legal
Approval:
�ryj('—II ^^
V/• W —
Ci[y SO3iCi tOr
Introduced For 0 Passage 0 First Reeding 0 Referral
Pagoyof 19_
Assigned to Councilor Aube June 8, 1998
i CITY OF BANGOR
Approving Community Development Residential
(TITLE.) �EDDIUEa......._......_....................._...._..._.._.........................................._...._..._......_
Rehabilitation Loan - Hammond Street Courtyard L.P.
By the City Coukit of the My ofBansnr:
RESOLVED. WHEREAS, the Community and Economic Development Committee of the
City Council of the City of Bangor has reviewed the application of
Hammond Street Courtyard, L.P. for a Community Development
Residential Rehabilitation Loan in the amount of One HuMred Fifty
Thousand Dollars ($150,000.00) for the rehabilitation of the property
owned by the applicants located at 84-120 Hammond Street and
WHEREAS, the City and Hammond Street Courtyard, L.P. entered into a
Development Agreement dated March 13, 1998 related W 84120
Hammond Street; and
WHEREAS, it has been determined that the applicant meets all of the
eligibility requirements of the Residential Rehabilitation Loan Program as it
applies to investor owned property;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City
of Bangor that the application by Hammond Street Courtyard, L.P. for a
Community Development Residential Rehabilitation Loan in the amount of
One Hundred Fifty Thousand Dollars ($150,000.00) is hereby approved.
The terms for this loan shall be at 6.25% interest for 20 years.
BE IT FURTHER RESOLVED, THAT the Director of Community and
Economic Development is hereby audwrized in issue a loan commitment
letter to Hammond Streit Counym, L.P., substantially under the terms of
that attached hereto, and in a form approved by the City Solicitor or
Assistant City Solicitor.
IN CITY COUNCIL
June 8. 1998
Councilor Rahman abstained from 98-253
discussion and vote y
Motion for Passage fl E 5 0 L V E
made and seconded
Passed
idential CnmmuMty 0 v Loan - ftr
idential CouRebrtyard
L.P.ion Loan -Hammond
Street Courtyard L.
CLERK
98-253
ciry o
MAINE P n ^^M°.ETAaar
oaaot
CEPAXRAFM d CO WNRY ECCNCMIC DMWPMEM 24rrem
w -i2
FAx2eM454"t
Tune_, 1998
Robert and Susame Kelly
Richard S. Curate
Hammond Street Courtyard, L.P.
c/o K.C. Development, Inc.
73 Pine Street
Burger, Maine 04401
Dear Bob, Sumane and Dick
L CITY COMMUNITY DEVELOPMENT LOAN
Pursuant m the application of Hammond Street Courtyard, L.P., a Maine Limited
Partnership, (hereinafter referred to as the "BORROWER") for partial financing of the
attluisition, improvement and mhabilitation oftheproperty locatM a M,104-108, and 120
Hammond Street, Bmigor, Maine (bereinafta refemdto as the "Project') the City of Bangor
(hereinafter referted to as the "CITY") agrees to loan Hammond Street Courtyard, L.P.
through its Community Development Residential Rehabilitation Loan Program a sum not
to exceed One Hundred Fifty Thousand Dollars ($150,000) (hereinafter referred to as the
"Loan") subject to the following terms and conditions:
t. BORROWER: Hammered Street Courtyard, L.P.
2. AMOUNT: Not w exceed$150,000
3. MTEREST RATE: 6.25% fixed rate
4. TERM: 240 months
5. PREPAYMENT PENALTY: None
6. LATE CHARGE: 5% of payment if 15 days We
7. COMMITMENT FEE: None
Page 1 of 17
98-253
S. REPAYMENT:
Monthly installments including principal and
interestof$1,096.39 for2A0months.
9. COLLATERAL:
Personal guarantees in favor of CITY from Robert
Kelly, Sumane Kelly, Richard S. Cattelle, Richard
S. Cattails, Inc., House Revivers Inc., Kelly Realty
Management, K.C. Development, Inc., and
Hammond Street Courtyard, L.P., to repay the loan,
and not less than a second mortgage on the land and
buildings located at 84, 104-108, and 120
Hammond Street, Bangor, Maine subordinate only
to afirst mortgage securing a loan made by Bangor
Savings Bank or other lender in an amount not to
exceed $1,000,000.
10. LOAN CLOSING:
Lon closing shall take place prior to July 31, 1998
but not earlier than July 16, 1998, unless otherwise
agreed to in writing by the CITY.
11. CDBG REQUIREMENTS:
BORROWER's conformance to Community
Development Block Cram Program requirements.
12. ADDITIONAL TERMS:
Completion of a satisfactory appraisal with a
conclusion ofPmject value of at least $1,200,000.
BORROWBR(s)noinject equity equal no$350,000,
plus any cast over runs, reserves or contingencies.
Subject to Bangor Savings Bank or other lender
cormnhtment for Project financing in an amount of
not less than $1,000,000.
Subject to approval by the Bangor City Council and
Scare of Maine providing for Tax Increment
Financing in support of the Project in an amount of
not less than $200,000.
Subject to BORROWER meeting all loan
conditions of Bangor Savings Back or other lender.
Page 2 of 17
11.
98-253
Subject w passage of a Resolve by the City Council of the City of Bangor Designating
Hammond Street Coortyard Municipal Development District and Tax Increment Financing
District and Adopting a Development Program for the District; approval of the designation
by the State of Maine Commissioner of Economic and Community Development, and
pursuant to an application of Hammond Street Courtyard, L.P. for partial financing of the
Project, in addition to the above loan commitment in Section I above, the CITY agrees to
reimburse Hammond Street Courtyard, L.P. a sum not to exceed Two Hundred Thousand
Dollars ($200,000.00) (hereinafter referred to as the 'Reimbursement', through the
issuance of City of Bangor taxable general obligation bonds, or other City of Bangor
borrowing, to assist BORROWER in financing of the Project subject to the following tams
and conditions:
1. AMOUNT:
Twelve Percent (12%) of BORROWER's cost of
the Pmject including acquisition, construction,
construction, improvement, renovation,
permitting, legal and orb" costs directly related to
the Pxject exclusive of developer's furs, not to
exceed a total of$200,000.
2. COMMITMENT FEE:
None
3. REPAYMENT:
None due so long as Ibe increase in annual real
estate and personal property taxes paid CITY by the
Project exceed $27,296 each year for a Period of
not less than20 yeas fianthe loan closing referred
to in Section I above. In the event the inarease in
annual real were and personal property was paid
. CITY by the Project are less than $27,296 in any
yearover rhe 20 yearperiod, BORROWER shall be
obligated to pay CITY as repayment rhe difference
between $27,296 and the amount paid in that year.
4. COLLATERAL:
None
5, CLOSING:
Closing sball lake place prior m July 31, 1998 hot
not earlier than July 16, 1998, at the same time and
place as the closing on CRY loan referred to in
Section I above, unless otherwise agreed to in
writing by the CITY.
Page 3 of 17
98-253
6. PROJECT COST: BORROWER's cost of the Project including
acquisition, construction, reconstruction,
improvement, renovation, permitting, legal and
other costs directly related to the Project =[naive
of developer's fen shall have reached a WW of not
Ins than $1] million.
7. DISBURSEMENT: Pm rata reimbursement (12%) as Project costs are
incurred and paid.
8. OTHER TERMS: The City intends to fund its reimbursement to the
BORROWER with a twenty (20) year general
obligation bond issue or with funds borrowed or
Provided from other sources. The City, in its
municipal government capacity, will retain W to the
full amount of the in increment generated by the
Project by designating any "captured assessed
value", as defined he 30-A MRSA § 5254, for a
period not to exceed twenty (20) yeas, for the
repayment of the financing obtained of up to a
maximum of Two Hundred Thousand Dollars
($200,000), to the extent such revenues ere
available. The BORROWER agrees for itself and
for its successors and assigns the, should the tax
increment generated "e Projectbe insufficierrtin
any year to make any scheduled payments for the
financing obtained, due in fuuue state or federal
legislative action Nat results in reductions in local
real came or personal property, tax revenue, the City
of Burger, in its municipal government capacity,
may impose special assessmevm pursuant to 30-A
MRSA § 5255 in an amount necessary to fiend the
additional amount necessary to make the payments
concerned. The BORROWER, for itself and its
successors, hereby agrees to execute any necessary
written consent to such special assessments. The
BORROWER shall pay to the City the amount of
any such special assessments thirty (30) days before
the bond payment by the City is due.
Page 4 of 17
98-253
IIL CONDITIONS
The CITY Corcwanity Developmem Loan and Reimbursement shall be contingent upon
compliance with the following conditions:
I. BORROWER shall provide CITY documentation to verify BORROWER'S legal
capacity and authority to borrow funds applied for and to encumber the property as
security for repayment of the loan.
2. BORROWER shall provide CITY a policy of mortgage title insurance in due amount
of the loam inswing the lien of the mortgage subject only m those exceptions to title
as are approved by the CITY.
3. BORROWER shall invest not less then One Million Seven Hundred Thousand
Dollars ($1,700,000) for costa involved is the acquisition, improvement and
rehabilitation of the property located at 84, 100.108, and 120 Hammond Street,
Bangor, Maine.
4. BORROWER shall invest not less than Three Hundred Fifty Thousand Dollms
($350,000) cash equity in the project. This amount shall include an equity
investment of not less (ban One Hundred Fifty Tbowared Dollars ($150,000) by
Bangor Furniture Company or its principals.
5. BORROWER shall secure a legally binding comarnment from the Bangor Savings
Bmtk, or other private lender or source satisfactory m CITY, in an amour[ of not less
ahao One Million Donuts ($1,000,000), provided however, Us =a= may be
reduced by flue amount of malt equity invested by doe BORROWER in excess of the
Three Hundred Fifty Thousand Dollars ($350,000) equity investment required in
Section ID, Pan 4 above
6. BORROWER agrees that development of the Project shall be in accordance with all
applicable Federal, State, and City law& ordinances, and building codes.
7. BORROWER agrees the scope of Project work shall conform in all material respects
to the plans approved by the CITY. Building plans and detailed cost estimates shall
be subntiond by BORRDWERm CITY for approval by CITY prior to loan closing.
9. BORROWER hereby aeknowledges that CITY, in agreeing to provide financial
assistance to Project, relied in material part upon the assured completion of the
project and the BORROWERagrees to use its best efforts to substantially complete
the Project no later Nan March 31, 1999.
Page 5 of 17
98-253
9. BORROWER shall agree that any aad all cost overmns in excess ofthe contingency
Provided for in the proposal and application will result in a fuller cash injection by
Hammond Street Courtyard, L.P. or its General Partners sufficiem to pay the excess
costs necessary or incurred.
111. BORROWER shall request and receive any necessary approvals from the Maine
Mamie Preservmion Commission
11. My prior mortgage or deed of trust to which the CITYS mortgage is to be
subordinate 0 must be approved by the ClWasm all ofits terns and conditions and
as to the principal amowt outstanding thereon.
12. BORROWER will maintain hazard aadliability insurance with financially sound and
reparable insurers in such amounts and such coverage as shall be satisfactory to the
CITY. The BORROWER shall maintain fire and extended coverage insurance, and
such other insurance as the CITY deems necessary or appropriate, in an amount
sufficient 0 cover the total of all indebtedness secured. Such insurance shall name
the City of Bangor as a loss payee. Such heard, fee and extended coverage
insurance shall expressly apply to the property located at 84, 104-108 and 120
Hammond Street, Burger, Maine during the examuction phase of BORROWERS
renovation project, and shall cover the fail replacement cost of the property plus all
renovations and imRovemevts, including the value of renovations and improvements
in progress.
13. The BORROWER shall comply with all terms and conditions of Bangor Savings
Bank or other leader.
14. The BORROWER shall, prior to loan closing, provide the CITY with a copy of an
eavromme rtal compliance analysis on the property located at 84, 104.108, and 120
Hammond Street, Bangor, Maine.
15. The BORROWER, Contactor and Subcontractors shall comply with all
specifications for improvements to 84, IM -108 add 120 Hammond Street, Bangor,
Mame which are subject m approval by CITY.
16. The BORROWER shall execute and deliver to the CITY such loan documents as the
CITY deems necessary or appropriate to evidence the loan hereunder and 10 provide
adequate securityCortico same The form and substance ofsuch documents shall be
satisfactory to CITY'S counsel.
Page 6 of 17
98-253
17. Upon any sale or transfer of the mortgaged premises, the CITY Community
Development loan shall become due and payable, as of the dare of said sale or
transfer, in full, together with at accred interest thereon.
18. In the event CITY lona funds are needed prior to July Ib, 1998, receipt by the
BORROWER of a bridge loan from Bangor Savings Bank or other lender in an
amount not to exceed $200,000 to be used only for partial financing for
improvemeatsto 84, Voklo8 and 120 Hammond Street, Bungoq Maine and for no
other purpose. The BORROWER agrees that fee $150,000 reimbursement mount
5orn CITY will only be used to pay off the Bangor Savings Bunk, or other lender,
bridge loan at time of loan closing. City loan is contingent on Bangor Savings
Bank's, or other lender's, agreement not to release bridge loan funds to
BORROWER without written consent of CITY, which said not mvessonably be
withheld.
19. BORROWER agrees that all equipment and materials are to be installed in
accordance with manufacnues recommendations and in accordance with nationally
recognlzed, and City of Bangorbuildingcodes. The BORROWER father agrees to
Danish the CITY with appropriate documentation of all expenditures for the above
listed improvements. Nothing in the above statement shell be construed to suggest
that expenditures by the BORROWER for the work specified at a cost in excess of
$200,000 eballvuaease the amount of the CITY reimbursement.
20. The BORROWER agrees that property notes on the property improved with loan
proceeds shall always be paid for the life of the loan regardless of the tax status of
the BORROWER. Payment of such nixes may be accomplished as a 100%paymen[
inlimoftaxes. As part of the loan agreement, the BORROWER agrees for itself,
and every successorin interest w the property, or any part thereof, fim thepmperty
shallbembjeotmelltaxesa msmsmmtsnmaybeimposedbyanygover mtaI
authority upon the afore described premises and any buildings, structures, or
improvemeer4 which umy be or may become Iocekd thereon. It is the intent ofthe
CITY and BORROWER, and BORROWER will agree to waive, for itself and my
successors in interest, all right or privilege of exemption from municipal taxation of
the property improved with the loan proceeds and fiat the City of Bangor, in its
capacity as a nixing authority, Wray assess all taxes and assessments w would
otherwise be applicable to the property including buildings, structures or
improvements which are or may become located thereon, as if such exemption did
not exist BORROWER further agrees, for itselfa l any successors in interest, as
pay said assessments on or before the date upon which the same became due and
payable. Provided, however, that CITY agmes that BORROWER, or its suoressom
in interest, shell have ted right to contest the amount of such taxa or assessments in
the manner prescribed by law.
Page 7 of 17
98-253
21. The BORROWER, Contractor and Subconractors agree to abide by all terms and
conditions of Federal Regulations governing the use of Community Development
Block Grant funds, including but not limited to:
Fair Human
BORROWER, Contractor and Subcontractors will comply with Tide VI of
the Civil Right's Act of 1964 (Public law 88-352,42 U.S.C. 20Nd et seq.)
which provides that no person in the United States shall on the grounds of
Pont, creed, or national origin be exclude from participation im be
denied the benefits of, or be subjected to discrimination under any program
or activity receiving federal financial assistance. BORROWER, Contractor
and Subcontractors shall comply with the Fair Housing Act (Public Law 90-
28, 42 U.S.C. 3601-20) which prohibits my person from discriminating in
the sale, lease, nomad or occupancy of housing, the finencing of housing, or
the provision of brokerage services, including otherwise making available or
denying a dwelling to any person, because of race, color, religiom sex,
national origin, handicap or installed status. The BORROWER will
affirmatively further Fair Housing by agreeing to not discriminate, or deny
occupancy on the basis of race, religion, gender, color, physical or mound
disability, familial status, or national origin in the sale, management lease,
rental, or occupancy, of the enfue rehabiEtated property. This includes, but
is not limited to compliance with Tide VI of the Civil Righty Act of 1964,42
U.S.C. 20004, as amended; the Fair Housing Act 42 U.S.C. §3601-20 as
amended; the Americans With Disabilities Act (ADA) of 1990, 42 U.S.C.
§12101, as amended; Section 504 of the Rehabilitation Act 29 U.S.C. 794,
HLT) regulations 24 CFR Part 8, as amended; and The Maine Human Rights
Act (M61RA) 5 I SA §4581. A violation of Us condition will be
considered a breach of the terms of We Promissory Note, and as such will
result in acceleration of the Nate.
b. Non-discrimination
A BORROWER shall abide by Executive Order 11063, w amended by
Executive Order 12259, and HUD's implementing regulations contained in
24 CFR Part 107, dealing with the prevention of discriminating because of
roe, color, religion (creed), sex or national origin in the sale, leasing, rental
or other disposition of residential property and relined facilities, or in the use
and occupancy thereof if provided in whole or in part by aid from the
Federal Govemmerd.
C. Embihidon of D'scrimmatian
A BORROWER must abide by Section 109 of the Housing and Community
Development Act of 1974, as amended, (42 U.S.C., Sec. 5309), dealing with
Page 8 of 17
98-253
the prohibition of discrimination on the grounds; office, color, national origin
or sex under my program or activity funded in whole or m pan with funds
under the Act, and HUD's implementing regulations remained in 24 CFR,
Sec. 570.602a.
d. Non -Disco inafnn on the Basis of Ane or Disability
Section 109 of the Housing and Community Development Act of 1974, as
amended, prohibits discrimination on the basis of age under the Age
Discrimination Act of 19M (42 U.S.C. 6101 at seq.) or whir respect to an
otherwise qualified handicapped person as provided in Section 504 of the
Rehabilitation Act of 1973 (29 U.S.C. 794). HUD regulations implementing
the Age Discrimination Act are contained in 24 CFR Part 146 and the
regulations implementing Section 504 are contained in 24 CFR Part 8.
C. Federal Lekm Standard
All Inheres and mechanics employed by contactors or subcontractors on the
construction work financed shall be paid wages at rotes not less than those
prevailing on similar construction in the locality as determined by the
Secretary of Labor in accordance with Ne Davis -Bacon Ad, as amended (40
U.S.C. 276a -276a-5) and the Connect Work Homs and Wary Standards; Act
(40 U.S.C. 327 et seq.) as supplemented by Department of Labor regulations.
f. Flood Hazard Insuran
If the property to be unproved is located in a designated flood bound area,
the applicant is required to carry flood plain insurance and abide by the
regulations ofthe Flood Disaster Protection Am of 1973 (42 U.S.C. 4106)
and the National Plana Insurance Program in accordance with 44 CFR Parts
5949.
g, nssisturce
A BORROWER most abide by the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970 (42 U.S.C., Sections W1 4655)
and HUD's implementing regulations contained in 24 CFR Pon 42, and 24
CFR Sec. 570.606 which deal with the acquisition of real property for a
Community Development activity and the displacement of any family,
individual, business, von -profit organization, or from that results from such
acquisition.
h. Employment and Contracting Orwrouniti s
The BORROWER, Contractor and Subconnamors must abide by Executive
Order 11246, as amended by Execufive Order 12086, and as supplemented
in Department of Labor regulations (41 CFR Part 60) providing that no
Page 9 of 17
98-253
person shall be discriminated against on the basis of race, color, religion, sen,
or national origin in all phases of employment during the performance of
federally assisted construction contrams. As specified in Executive Order
I IN6 and the implementing regulations, contractors and subcontractors on
federally assisted construction contracts shall take affirmative action to
ensure fair treatment in employment or recruitment advertising, upgrading,
demotion or transfer, layoff or renunciation. rates of pay, or other forms of
compensation and selection for training and apprenticeship.
S. Militia i"
The BORROWER, Contractor and Subcontractors most comply with the
Provisions of Section 3 of the Housing and Community Development Act of
1968 (12 U.S.C. 1701u) which requires to the greatest extent feasible
opportunities for training and employment be given in low and moderate
income persons residing within the local area in which the Pronto is Insured
(the City of Bangor and the Bangor Metopolhm Statistical Area), and that
manages for work be awarded to eligible business concems which are located
in, or owned in substantial your, by persons residing in the same area.
j. IPaa Based Paint
BORROWER, Contactor and Subcontractors shall comply with the Lead -
Based Paint Poisoning Prevention Act (42 U.S.C., Sections 4831(b) and
4822) which prohibits the use of lead-based paint in residential structures
constructed or rehabilitated with Federal assistance and to eliminate as far as
practicable the hazards due to the preserve of paint which may contain lead
and to which children under seven years of age may be exposed in existing
housing which is rehabilitated with Community Development assistance.
Implementing regulations are in 24 CFR Pan 35, Subparts A, B and C.
k. Environmental Pollcv
A BORROWER must abide by 42 U.S.C., Sm. 5304 (f), 42 U.S.C., Sec.
4321 at seq. (National Environmental Policy AM of 1969), and HUD's
implementing regulations contained in 24 CFR Pan 58, dealing with
compliance with carom morroun ual standards and procedural
requirements.
1. Insatiable Contactors
The BORROWER must abide by 24 CFR, Sec. 570.609 and 24 PER Pat 24,
dealing with the prohibition on the use of debarred, suspended, or ineligible
contactors or subcontractors. BORROWER most not award my warned for
rehabilitation work to he paid for in whole or in pan with the proceeds of the
lora, to my contractor, who, ar the time is ineligible under the provisions of
Page 10 of 17
98-253
any applicable regWations issued by the Secretary of Labor to receive an
award of such contract
M. Interest of Certain Officials
The BORROWER shall not permit my member of or Delegate in the
CmD ess ofthe United States, and non -Resident Commissioner, to share in
my proceeds of the loan, or to my benefit to arise from the same.
M Interest of , c n Aen me
ofLocal Body at QdhePublic
Official
In accordance with 24 CFR Part 85.36 and OMB Circular A-110, no member,
officer, or employee of the CITY'S Department of Community and Economic
Development or its agents or assigns, no municipal officers of the CITY, and
no other member of my board or commission, elected or appointed official
of Bangor or employee of the City of Bangor who exercises my decision-
making functions or responsibilities respecting this project in the Community
Development Program shall have my duect or indirect financing or
pecuniary interest as tbw term is defined by 30 M.R.S.A., Section 2250 et
seq. in the proceeds of the loan, in any contract or subcontract, or the
proceeds thereof for work to be performed in connection with the proceeds
of the luau, either themselves or those with whom they have fmdly or
business fies, during their tenure or for one year thereafter.
o. Bonux Comm ax'an rrc Fa
A BORROWER cannot pay my bonus, commission, or fee for the purpose
of obtaining the City of Bmgofs approval of the loan application, or my
other approval of concunence required by the City of Bangor or its designee
to complete the activity finenied in whole or in pair with the Low.
p. Transfer of the Pmcerty.
Not sell, lease (N the case where the BORROWER is also a lessee), or
transfer the property without repaying the entire her, unless prior written
consent of the CITY is sought and received. For the purpose of this
subsection, this word "uoasfer" shall include, but not be limited to,
acquisition of title by inheritance and the wood "sell" shall include, but not
be limited to, the execution ofa land sales contract or similardocument.
q. Subsordinifinin of Usan to Liens Affirchhur After the Dave of
The CITY in its sole discretion may choose to subordinate the loan to a
mortgage entered into after the date of the loan, upon request of the
mortgagor. No such subordination shall be agreed to Wass the rehabilitation
loan remains W a least as high priority as when the loan was made. Further,
Page 11 of 17
98-253
ivy new mortgage to watch the rehabilitation loan is subordinated most be
used only for improvements to the property. Further, the applicant requesting
the subordination shall pay all costs incurred by the CITY in scrimping the
subordination, including the value of the time spent by CITY staff.
T. Other Rmryremmts
A BORROWER must abide by such other laws, statutes, regulations,
ordinances, administrative rules, etc. as may be, or may become, applicable
to the particular projects assisted under the Community Development Block
Gant Program. In order to he eligible for resistance ander this Program, the
BORROWER must agree to abide by all of the applicable Fedeal
Regulations, and any amendments thereto, or replacements thereof,
governing the use of CDBG funds.
22. P M ofAgreemmt The BORROWER shall also agree to abide by Ne following
terms and conditions:
a Use ofPrmceM�
Use the loan proceeds only to pay for costs of services and materials
necessary, to carry out the rehabilitation work.
b. Completion of Work
Assure that the rehabilitation work shall be carried out promptly and
effictemly through written wrmnct(s) approved by Community Ilevelopmw
and to with the prior concu¢ence of the CITY.
c. Interaction
Permit inspection by the CITY or its designee of the property, the
rehabilitation work, and all contracts, materials, equipment, payrolls, and
conditions of employment pertaining to the work.
d. Records
Keep and maintain books, records and other documents relating directly to
the receipt and disbursement of CITY funds provided hereunder and agrees
that any duly ordained representative of CITY shall, at all reasonable times,
have access to said the right to inspect, copy, audit and examine all such
books, records and other doomnems of the BORROWER, until completion
of Project, upon prior written notice. BORROWER shall ensure that similar
provisions are included in all contracts and subcontracts entered into in
connection with Project.
Page 12 of 17
98-253
e. Reservation of the Security
Maintain the property in conformance with the minimum standards of the
BOCA Property Maintenance Code and permit the CITY or its designee to
inspect the property during the term of the loan.
f
Empire
In the event a dispute exists between the BORROWER end the Contractor
with respect to the rehabilitation work, Community Development will take
appropriate action in accordance with the provisions of the construction
contract to assure that all parties are satisfied before payment to the
contractor.
Relabilitarinn Loan Sonnlemented by Other Funds
If a rehabilitation loan is m be supplemented by foods to be provided by the
BORROWER from a source other than through a commitment from a
recognized lending institution, those supplemental funds shall be deposited
in a rehabilitation escrow account maintained by the CITY at the same time
the rehabilitation loan check is deposited. Supplemental funds provided by
mems of commitment from a recognized lending institution may either be
deposited in the rehabilimtion eworw account, or applied by property owner
for direct payment of the rehabilitation work. If the supplemental funds are
to be deposited in the rehabilitation escrow account, the deposit most be
made prior an any payment by the CITY to the Contractor. If the
supplemental funds are not to be deposited in the rehabilitation escrow
conn[, then sock funds shall be applied in fail by the property owner before
my disbursement may be made from the rehabilitation escrow account for
rehabilitation work.
23. Contraction for Rehabilitation Works Companies work shallbe undertaken only
through carmen wnM1act between the Contractor and the BORROWER approved by
CITY Community Development.
s. Form of Connect
The construction contract will consist of a single document signed by the
Connector and accepted by the BORROWER, only following approval of the
rehabililumn loan. It shall contain a Bid or Proposal by the Contractor and
the agreements, as well as the specifications for the work to be performed.
It. thawed Conditions
The contract will contain provisions of general conditions to include:
Page 13 of 17
98-259
(1) Finnish evidence of comprehensive public liability insurance
coverage protecting the inviter for not less than 100,000 in the event
of bodily injury including death, and 51,000,000 to the event of
property lounge raising out of me work performed by the contractor,
mid, evidence of insurance or other coverage required by local law
govcome workmen's compensation.
(2) Obtain and pay for all permits and licenses necessary for the
completion and execution ofthe work and labor to be performed_
(3) perform all work in conformance with applicable local and state
codes and requirements whether or not covered by the specifications
and drawings for the work.
(4) Abide by Federal nod local regulations penetrtng to equal
employ metal by incorporating in at I contracts the acquired language
of Executive Order 11246, as amended. if the contract is for a
structure that will cerium 8 or more dwelling units after
rehabilitation, the Contractorovllk and will require his subcontractors
W, abide by the Davis -Badu Act (40 U.S.C, 276a though 296a-5, as
amended), the Contact Work Hams and Safety Standards Act (40
U.S.C. 327-333), and all regulations issued under these Acts, mid
with other applicable ledeml laws had regulations pertaining to labor
standards including Forms HUD -4010, federal Labor Standards
Provisions, 24 CFR 136 (Section 3 Requirements of the Housing and
Urban Development Act of 1968 as amended, 12U.S.C, 1701ir) and
the affirmative action obligations set farh m 41 CFR 60.4.3 (a).
(5) Keep the premises clean and orderly during the course of the work
mid remove all debris wthe completion riche work. Materialsand
equipment that have been removed and replaced as your of the work
shall belong to the Contractor.
(6) Not assign the contract without written consent of the tomer and
Community Development.
(7) Guarantee the work performed for a minimum period of one(1)yew
From the date of lied acceptance of all the work required by the
content. markwnnme. furnish me owner with all mars f rowers' and
suppliers written guarantees and warranties covering materials and
equipment famished under time contract.
Page 14 of 17
98-253
(R) Permit the CITY, or its designee to examine and inspect the
rehabilitation work.
(9) A provision that final payment on the contract commit will be made
only aftef final inspection and acceptance of all the work to he
performed by me Contractor. and the Contractor has famished the
rommer satisfactory releases of liens or claims for liens by the
contractor. subcontractors. laborers, and material suppliers.
(10) A provision that the contract consists of the bid and proposal, the
agreement, me specifications incorporated therein by reference and
drawings incorporated therein by reference.
(11) Specifications and dravings covering the specify rehabilitation work
The specifications shall clearly establish the nature of the work to be
done, and lire materials and equipment to be installed Known
acceptable brands shall be identified by reference ro manufacturers
or dation specifications, and provision shall be made for
acceptance of equal substitraiom
24. Inspection ofRhb'I' Work
a. Inspections of construction work shall be pertbrrned by Communiry
Development in accordance with the Improsing:
(I) Prpyres pavm nrF. A compliance inspection of the rehabilitation
work shall remade before Chromatinic Development processes and
consents to a progress payment o be made by Bangor Savings Rank
mit other lender on a Contractus invoice
(a) payment for Satisfacory Wor If the inspection determines
that work completed is satisfactory, Community Development
will consent or a progress payment check payable to the
BORROWER and the intended payee.
(b) Ob - C ti A - . Ifthe work completed is not in
accordance with the construction contract for it progress
payment, Contractility Development shrill advise the
BORR DYER of any noncompliance in the construction
work or of Pat incorrect invoice submitted by the convector,
The BORROWER shall be requested to obtain appropriate
corrective action from the Contractor. No payment shall be
consorted to a construction contract until the Contractor has
satisfactorily completed the necessary corrective action.
Page 15 of 17
98-353
(c) F II Upon completion of the rehabilitation work
and receipt of the Contractor's invoice
containing his
certification of satisfactory completion of all the work in
accordance with the contract and hu eminently, Community
Development shall inspect the completed work When the
final inspection determines that the work is satistectorih
completed in accordance .nth the contract, Community
Development shall obtain from the Contractor a release of
liens, and a copy of each warranty due the BORROWER for
The work. After receipt of a release of liens, including
releases from all substrate motors mid suppliers and a copy of
each warranty, Community Development mill process and
Consent to Baal payment.
25. Rent Rem lat ry Ay comm - BORROWER agrees that, dining the term of the
Commutik Development loan, rents for a minimum of four (4} or 51 % of the
apartments to be rehabilitated at 84, 10¢108 and 120 Hammond Street, Bangor,
Maine, whichever number is greater, will not exceed Fair Market Rents for the
Section 8 Housing Assistance Payments program published periodically by the U.S.
Department of Housing and Urban Development.
CITY may terminale this commitment if, except as may be olherwisepmvided herein, the
loan, or any other fealmeof theean Transaction, hes been or its misrepresented by the BORROWER
in the loan application or otherwise_ or any adverse manage may occur to the property at 84. 104-108
and 120 Hammond Shen, Bangor, Maine, BORROWF.R. or any other person or entry wweeted
with the loan or collateral for from
All iustrmnents and documents required hereby or affecting the property at 84,104-108 and
120 Hammond Street. Bangor, Maine, secuntg the loan or relating to the capacity of the
BORROWER to make The loan and to execute the loan documents and such other documents.
Instrmnemc certilicates, opinions, assurances, consents, amid approvals as CITY may request and all
procedures connected therewith shall be subject to the approval, as to Accurate substance, of CITY.
CITY reseryes the Tight to withder" Us Commitnwn unless it is accepted in writing by
BORROWBR on or before July 31,1998. Such acceptance is To be made by BORROWER signing
and returning to the CITY the attached copy of this Commlunml
Page 16 of 17
98-253
This Commitment will expire at 4:30 P.M. Easuar Standard Time on Ioly 31, 1998, unless
CITY grants a written extension.
Sincerely,
Rodney G. McKay
Director
c: Riehmd Founder, Bangor Savings Bvik
The undersigned hereby accept tlds Commitment and agree to be bound by its terms and conditions.
The undersigned hereby acknowledge Nat the sole purpose for obtaining this credit is to obtain funds
to finance the acquisition of and improvements to 84, 104-108 and 120 Hammond Street, Bangm,
Maine and for no arbor propose.
Date Robes Kelly, General Pander
Hammond Street Courtyard, L.P.
A Maine Limited ParN¢rsbip
Date Surname Kelly, General Partner
Hammond Street Courtyard, L. P.
A Maine Limited Partnership
Data Richard S. Ca[alle, General Pander
Hammond Street Courtyard, L.P.
A Maine Limited Partnership
Page 17 of 17