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HomeMy WebLinkAbout2011-07-20 Business and Economic Development Committee Minutes BUSINESS & ECONOMIC DEVELOPMENT COMMITTEE Wed., July 20, 2011, 5 pm City Hall Council Chambers Minutes Councilors: Chair Weston, Blanchette, Bronson, Durgin, Longo, Nealley Staff: Conlow, Heitmann, McKay, Wallace, Bolduc, Pereira, Wellington Others: Carol Epstein, Epstein Properties and Epstein Commercial Real Estate; Joe Haskins, Bangor resident Chair Weston changed the order of the items to be discussed by taking the agenda out of order; Item 6 – Executive Session, to become Item 1; Item 4 is new to the agenda. Councilor Durgin made a motion to move into Executive Session – Economic Development – Disposition of Waterfront Property – 1 M.R.S.A. § 405 (6) ( C ); seconded by Councilor Longo. 1. Executive Session – Economic Development – Disposition of Waterfront Property – 1 M.R.S.A. § 405 (6) ( C ) 2. Action on above item. No action was taken by the Committee. 3. Reviewing Proposed Guidelines for Community Development Downtown Façade Program Rod McKay presented this item to the Committee and then turned it over to Shirar Patterson to further review. The proposed façade program had previously been presented to the BED Committee in March of 2011; in the past the City’s downtown façade improvement had been a loan program, staff is now recommending that it be a grant program that requires a minimum 50% cash match from the property owner. The activities that would be eligible would include painting, window or door repairs/replacements, signage, awnings, storefront restorations and other activities. (full guidelines were provided to the committee in advance of this meeting for their review.) One of the major objectives is to make the downtown look nicer and also bring facilities up to code. Staff is proposing that the $100,000 that had already been approved for facade improvements under the federal Community Development program be used for this grant program. These guidelines meet federal requirements and local requirements of the CDBG program/funds. Staff is requesting the Committee recommend to the full City Council approval of the program guidelines as well as that the Committee make a determination between option A and option B under Section VIII, item number two, of the guidelines that deals with the application review and approval, either by the Business and Economic Development Committee, or by the Director of Community & Economic Development, Manager or Finance Director. Discussion among the Committee members. Councilor Durgin is in favor of the application review committee review and score process be done by the City Manager, Director of Economic and Community Development and/or the City Finance Director (Option 1). Shirar added that in the past when loan awards had been done it was up to $30,000 with at least a 50% matching requirement; but the piece in these current guidelines with respect to awarding of the funds on completion of the project is standard as with the use of CDBG funds it is required to make sure that the work is meeting construction/materials guidelines. As staff goes through the approval process documentation will be required to show that the applicant has the 50% funding required and if full funding is not readily available, staff could issue a commitment letter that they could submit to their bank to secure 100% funding until satisfactory project completion when Community Development could release City matching funds to the owner. If the owner has the funds readily available staff would place it in an escrow account with the city and pay the contractors throughout the project. Shirar further stated that there will be eligibility for small projects up to $2,500 such as signs; the applicant is not required to apply for the maximum amount of $15,000. Councilor Nealley made a motion to move staff recommendation to approve the 2011 Downtown Façade Improvement Grant Program using Option A to approve and award the grants as presented. Seconded by Councilor Longo. Unanimous committee vote. 4. 63 Sixth Street Rod McKay stated that the BED Committee had previously authorized him to apply for a zone change for the property that the City owns under the Neighborhood Stabilization Program (NSP) at 63 Sixth Street. The property is a 3,300 sq. ft. building that at one time had 3 apartments but that was not legal. Staff is seeking a recommendation from the Planning Board to the City Council to rezone this property from URD-1 to URD-2 which will allow 4 units to be built into the building. The Planning Board considered this at their meeting on July 19 and unanimously recommended against it. Rod related to the neighbors attending the July 19 Planning Board meeting that he would be requesting the BED Committee’s authorization on July 20 to withdraw the request, but the City Council has to act on the Order first. Rod’s recommendation is that staff withdraw the request and that the City Council at its meeting on July 25 take action to indefinitely postpone this request and Rod will come back to the committee for authorization to reapply for URD-2 status contract zone limiting the number of apts. in the building to two (this was the suggestion by Planning Board members at their July 19 meeting). Rod asked committee for authorization to notify the abutters of 63 Sixth Street that City staff has recommended that the Order be indefinitely postponed and that the BED Committee, if it votes to recommend indefinite postponement, that it’s likely going to be indefinitely postponed. Chair Weston stated that as a point of suggestion he wouldn’t communicate that it’s most likely to be turned down at the Council meeting and it is an open agenda item so public comments would be welcome. He added that he would encourage staff to communicate with those from the public who have reached out but would not draw any conclusions on that communication. 5. Discussion regarding City owned property leased or available for lease Chair Weston stated that this item is to review the City’s policy on whether or not they want to be landlords, to be in the situation they are in, do we want to have a policy about selling versus leasing, and as the City prepares to go forward on some of the advancements that have been made through the budget season we have just come out of they have software and some efficiency upgrades that took place in both GIS and point of service and add to that the current construction of a new internet presence and you start to build momentum towards collectively communicating more thoroughly what we have for not only policies but for properties and the policies behind those properties. There seems to be a desire again to visit what our policies are, what our available property ownership versus lease versus owned is and how does this council view the need for keeping or adjusting the policy that staff goes by. He then asked that Rod McKay give a brief overview of the city’s position as both the landlord and a landowner and the organizations that are involved in the activity. Rod proceeded to review the City’s current policy guidelines for City owned property leased or available for lease in their various business and industrial parks. The current guidelines were adopted by the City Council in 2001. He added that since it has been 10 years, it is appropriate to review them again. He also reviewed the development policy for the waterfront whether the City should be leasing or selling those lots, particularly along Front Street, it may be in the City’s best interest to lease rather than to sell. The lots further back from the water potentially there would be less need to lease and the City may be willing to sell those. This process will take more than one meeting – he handed out copies of the guidelines to the committee adding that this is a starting point for them and will discuss at a future committee meeting. Chair Weston asked that Rod also inform the committee as to who is managing City-owned properties. Rod related that after the closure of Dow Air Force Base in 1968 the City formed a corporation called the BanAir Corporation that would market and manage the properties adjacent to the airport deeded to the City that were part of the former Dow Air Force Base. The deed had a restriction that many of the properties could not be sold, that any revenue from the lease or sale of the properties that could be sold had to go towards the operation of the airport. The BanAir Corporation’s role was to market and manage those properties in the area of the airport except for aeronautical properties involved in the operation of the Airport. Non-aeronautical property not part of the airport operations are managed by the Dept. of Community & Economic Development staff under contract to BanAir. BanAir funds Steve Bolduc’s position in the Economic Dev. office for managing the properties. In 1996 the City Solicitor’s office determined that the deed restrictions that the federal government imposed on the property formerly owned by the City, Godfrey Field, and deeded by the City to the United States for military purposes, should not have been subject to the deed restrictions when deeded by the U.S. back to the City when the U.S. no longer needed it for military purposes. Attorneys for the U.S. concurred and the deed restrictions were removed from the land that was formerly Godfrey Field. The deed restrictions remained on additional land acquired and improved to expand Dow Air Force Base over the years of its operation. The City then established an Economic Development Fund and the revenue from the property where deed restrictions were removed now goes to the Economic Development Fund instead of the Airport Fund. The Economic Development Fund which is used to operate and manage City properties involved in economic development. Over time, depending on decisions that were made at the time, the revenues are either collected by the Airport or by BanAir. The Council just renewed the contract with BanAir for another two years to provide time to review BanAir’s future role. BanAir originally reviewed all of the leases, and all of the development proposals and the sales of land in the Airport vicinity and made recommendations to the City Council. The Business and Economic Development Committee is now deeply involved in the process. This has made for a dual process to review leases and development proposals for recommendation to the City Council. BanAir has representation from 4 City Councilors, and the City’s airport director; and the others are private citizens of Bangor that provide the Council advice and recommendations on what should happen to the property. This all needs review. Chair Weston added that this will be an ongoing topic for the BED Committee to have and that the goal is try to eliminate confusion to get to the point of direction and recommend to the City Council any changes seen necessary on both owning/leasing and arrangements with parties. Councilor Nealley asked that other important data to have would be the amount of land and buildings that’s in our total inventory; what the average occupancy rates have been in the buildings; to what extent and how much has the land been marketed, and what has been our average sales rate. Chair Weston inquired of Rod if this information would be available for a future meeting; Rod replied that it is available. Chair Weston added that the intent of this conversation was not to go line by line of the policy that the City has but get to a point where we either have consensus there is something that could be changed or a conversation that could be had or to leave it alone. Councilor Durgin stated that he feels the areas to be looked at are what is the marketing plan, how we are doing this and what are our goals. Chair Weston inquired for future conversation if the City is duly qualified to be in the business from a commercial / landlord point of view. City Manager Conlow added that the purpose of this review/conversation is to make sure we have the right guidelines; that we’re doing what the Council wants from a policy perspective. Councilor Blanchette suggested that the City needs to also look at their policy on required landscaping for new development – it needs to be more accommodating for business. Chair Weston concluded that with the previous items expressed by committee that perhaps Rod McKay could come back at the next meeting with some briefings. Carol Epstein spoke to the Committee on the City’s policy with regard to the land around the airport. She stated that she will encourage other local developers to come speak at future meetings on this subject. Carol expressed that if the City wants to encourage development and encourage the development of the tax base, land leases in that area are probably not going to do it. If a business leases property rather than owning it, it creates certain disincentives because it is better to own. Generally, in a commercial market you see land leases only in really high demand areas such as a mall – high traffic retail locations. If a person is to build an office building, whether they’re a developer or user, they want to own the land. If the City’s goal is to create tax base you have to structure deals so they fit in the market place so that somebody will come in and do what you want done. Carol added that she would propose that land leases will not accomplish that. She added that the City has an issue of fairness here in that they lease to some people and sell to others. The lessees do not feel good when across the street you sell again and again and they’re sitting there and they do not get to buy. The lessee’s costs are higher, their operating costs are higher year in and year out. If you amortize their land costs on a sale over 20 years or a sale versus a sale for 30 years, the lessee is paying more year in and year out. They have to be competitive in the market place and so they start out with strikes against them. Some of the City’s policies are completely out of touch with the market which is why there have been buildings built around the City but they’re not building them there (airport area ?) She encourages the City to go back and look at what the City’s goal is here – just trying to create some small income stream for the airport or are we trying to develop tax base for the City or some combination of the two. The City also needs to stay in touch with the market and ask the question what will the market bear, what’s the reality of the market place; and lastly you have to be fair to people who are out there and who have done it and paid the taxes over the years. This is a very sore topic and there is no topic that has fostered harder feelings between some of those in the business community and the City then this over the years. She concluded that she hopes the City looks at this and take all of these things into consideration; she thanked the Committee for letting her speak. Chair Weston thanked Carol Epstein for speaking to the committee and encouraged her to come back as these conversations proceed in the future. Councilor Bronson stated that he would like to see a complete list of city-owned property compiled in order to see what all is owned – the BanAir list is a start. Rod replied that a list of city-owned property can be made available. Councilor Durgin stated that in going forward we need to redefine what the purposes are of the land and buildings at the airport which are not necessarily related to airport management or use. It’s time to redefine what the property is, what its importance is to the City and how we should market it. Chair Weston concluded by stating that Rod McKay has a list that he’ll bring back to the next BED meeting and we will continue this conversation. 6. Discussion regarding abandoned or foreclosed property in Bangor Chair Weston introduced this item to the committee stating that there are considerable public conversations in regard to visibly abandoned property and visible property that have questionable code issues. In order to bring focus and additional information to the Council it is necessary to have public conversations such as this. It is important to know what the process is on such properties and what is the responsibility of the City in such matters. This will also be an ongoing conversation in the future. City Manager Conlow gave some background on how this issue has come to be brought to the committee today. With the assistance of Code Enforcement and Tax Assessors offices they have gone through, along with the assistance of Community Development also, to identify potential abandoned / foreclosed properties in the City of Bangor. There are approximately 100 plus properties. This has resulted in the questions of what are the City’s rights with these properties with respect to Code, what our actions can be and what we can and cannot do. Dan Wellington, Code Enforcement Director, gave background on the housing crisis in Bangor and where it is thought to be going. Since 2008 to present time, the Code Enforcement office has received notification of 132 foreclosures. Recently there have been about 118 properties identified as vacant and not being maintained; many of these cannot be matched up with foreclosure documents, inquiries they have received at the Code office, public notices or in doing very cursory title checks at the Registry of Deeds. He added that his concerns are that when a property is not maintained, we cannot find a responsible party to maintain it, then it leaves the property susceptible to vandalism. He added it may be a couple of years before the housing market in Bangor returns to a healthier state. City Solicitor Norm Heitmann also spoke with respect to the foreclosure situation stating that foreclosure does not give the lender any title to the property, it doesn’t give them any interest in the property, it is the first step in collecting on a promissory note. To do this, the lender will have the property sold at auction – if everything was fast tracked the lender may have an auction in about 6 months after it was started; the reality is it takes 9-18 months. Property being subject to foreclosure isn’t of any use to the City other than in theory there may be a light at the end of the tunnel when the foreclosure is completed by way of an auction and sale of the property. In terms of a property being abandoned with or without a foreclosure process pending, that’s not a code violation (not living in your home) for whatever time frame. The code violation comes if you’re not taking care of your home and that depends on the extent you’re not taking care of it. Councilor Blanchette added that situations for example where the home is vacant and not being taken care of and the grass is 24” high, needs to be looked at as a safety issue not only to that property but to the neighborhood where it exists. Bangor resident Joe Haskins of Blue Hill W., spoke to the committee with respect to the exterior condition of adjacent vacant homes (that are apparently in foreclosure) such as unmowed lawns. He is concerned with the possibility that these adjacent properties may invite squatters or other unethical things that may occur to/at these properties as well as the safety aspect and how that could impact his family and home and the neighborhood. He is also trying to sell his home and these properties are a definite blight. He suggested that initially if the city could mow the lawn he would be willing to continue keeping it mowed thereafter. Councilor Longo inquired if there are any regulations on the city books with respect to this type of situation due the safety issues it raises. City Solicitor Heitmann replied that he does not think so but that he would be willing to meet with Code Enforcement Officer Dan Wellington to further look over the city’s maintenance code to see what there is. Chair Weston expressed that this has been a good conversation and that there are some questions the committee can revisit and any decision that committee makes on action or to Councilor Blanchette’s point of view, policy should be done from a global point of view and certainly not from a single home point of view, but there were very good points and concerns raised tonight and hope to revisit this at the next BED Committee meeting to see if there’s something the City can start to do on this. 7. Discussion regarding Code inspections and enforcement Chair Weston stated that this item is a continuation of a previous conversation on whether or Not there is an inventory and is there a process by which homes that aren’t abandoned or foreclosed that do run down from a code point of view, how often and what is the protocol for taking action on those particular properties. Rod McKay gave the history of how the City used to handle these situations and how they are handled at the current point in time. At one time the Community Development office had 2 housing inspectors and the Code Enforcement office had 2 housing inspectors. The Community Development inspectors worked in targeted neighborhoods and systemically inspected all of the properties in the neighborhood, Community Development offered low interest financing to the homeowners and property owners to improve their properties; and Community Development funds were used to improve public infrastructure such as the streets, sidewalks, parks, esplanades and street lighting. In the past 20 years, staffing has been reduced to 1 housing inspector and that person’s time is largely taken up by complaints and inspections requested for federal rent subsidy programs. The housing inspector responds to requests and complaints and beyond that there is no systematic inspections of properties in Bangor at the present time. Dan Wellington further stated that our housing program is complaint driven; those complaints come from 3 sources: tenants, landlords and from police and fire depts. Code Enforcement’s single inspector also handles residential remodels when the building inspector is on vacation. Councilor Nealley inquired if it’s possible to look at what the cost is on an interim basis or is the certification different from something that comes out of the Code office versus what quickly could be brought up to speed with a regular housing inspector as it would pertain to the identified 118 properties that Dan suggested earlier in the meeting that are either foreclosures or abandoned. Dan replied that a discussion at a future date about augmenting on a temporary basis may be appropriate. Currently, in the Code office their health inspector has also been handling more of the quality of life issues in Bangor such as abandoned vehicles, potentially abandoned properties and lack of maintenance. Chair Weston inquired what happens when someone submits a complaint to the Code Enforcement office – does it get added to a list or is it a priority. Dan replied that he reviews the complaints to determine if it’s a life threatening situation based on the information he has and if it is, it is given to the appropriate Code Enforcement staff person asking that they look into the complaint as soon as possible. 8. Discussion regarding Downtown Zoning Rod McKay had suggested at an earlier meeting that the City look at the area between Third Street and Main Street from Union Street down to Buck Street as a potential Community Development project area. Community Development would target this area for intensive treatment over a 2-3 year period whereby the properties would be inspected, do some Code Enforcement, provide Community Development financing for property rehabilitation, look at the infrastructure needs in the neighborhood and the zoning to come up with a plan that the BED Committee could consider for adoption by the City Council to improve this entire area understanding that things are changing in this area particularly with the waterfront, the Main Street corridor between Bass Park and the downtown area and the issues we have on First, Second and Third Streets. Staff proposes to have this plan prepared later this fall to discuss with the committee – unless committee would like staff to move forward quicker than that. He also reviewed the targeted neighborhoods that Community Development had undertaken in previous years since the Community Development Program first originated in 1974. Councilor Blanchette asked Rod if he could put together a list (for the newer members of the BED Committee) of neighborhoods that Community Development has targeted and have done extensive rehabilitation through their program. Councilor Longo inquired if an existing multi-family could be changed into a single family – is this possible through the Community Development program. Rod replied that the goal and the requirement is that the property be brought up to health and safety codes. So if it would be required to reduce the number of apartment units within a building that could be done. We generally do not fund expansion of additional units but we do the improvements necessary to the existing units to bring it into Code compliance. Chair Weston added that with the additional focus on the waterfront he knows there has been conversation on long-term use of what type of property and uses are allowed in that area. Perhaps committee and staff can revisit this issue in October with a progress report. Meeting adjourned.