HomeMy WebLinkAbout1996-07-22 96-322 RESOLVECOUNCIL ACTION
Date: July »_ 3996 seem No. 96-322
Item/Subje=t: Authorizing Amendment of Development Agreement with Freese
Building Associates
Responsible Depaztme¢t Community and Economic Development
Commentary:
As financing commitments are being issued by the Maine State Housing Authority (MSHA) for the framer
Treese's building housing pfejecn, the developer (Really Resources/ Freese Building Associates) is requesting slightly
different financing commitments from &a Cay of Hang«. The City had previously agreed to provide $400,000 in TIF
(rix increment financing) and $188,OW in Community Development loans fora Intal of$588,000. The Developer
now s requesting $280,000 in TIF funds and $295,000 in loan funds for a total of $555,000. The financing now
proposed is more advantageous to the City The City loan would be sauced by a first mortgage.
The Developer has also requested the City, as the eligible applicant, apply to MSM for $152,506 in
Municipal InframucPore and Land Acquisition ProFmms grant funds. As proposed by the Developer, approximately
$100,000 ofthe Ponds would be used kr the purchase of Pickering Square Garage parking pertains and paymentof
City permit fees, and the balance of$52,506 used for building improvements.
I Developerpmo estopmchasepa&,bgp mim forthe Pickering Square Pinking(Iagemadvance for
a 15 year period at a proposal up how price of approximately $88,000. Using the current Wall Stred Journal
diamunt our of5Yy a nen present valueofapprommately $88,00would pu aWdm25 spaces for 15 years ata discount
of25%(the City'scurrentmmis$38/month/pe:mitlessa IW/adiscountforthepurchaseoflOormoapermits). The
spaces are available and the arrangement is favorable to the City.
Sources of financing for the project are now proposed as follows:
Equity investment ................ ................................. ...$1,649,610
MSHA loao to Developer ................................................$ 4WW0
City of Bangor TIF .................. ................. ............. ....$ 280,000
City of Bangor loan ....................................................$ 295,000
MSHA Municipal Infrastructure grant to City/ City to Developer ................ S t5lbi
T4TBL.........................................................$2.959,116
rx rtmerrt
bh nager' a cosmonauts;
City Manager
Associated Information:
Budget Approval:
Legal Approval:
City Solicitor
Introau=ea Per Passage lJ First Reading ❑ Referral
Page_ef
ce-fent,
Assigned to Councilor 331dacci July 22, 1996 96-322
CITY OF BANGOR
(TITLE.) P0011Ipy....... Authorizing Amendment of Development Agreement with
........... _
Freese
By the Gly Coatwil of its City ofBnnpor.-
BBSDLVBD.
WHEREAS, the City of Bangor and Freese Building Associates executed an
Agreement dmcd January 9,1996 for the development of 34 wits of affordable housing in
a portion of the former Freese4 Building; and
WHEREAS, the patties wish to amend their Agreement to revise portions relating
to project f acing end the project schedule, and to include provisions relating to the
Developer's purchase of parking:
NOW THEREFORE, BY THE CITY COUNCIL OF THE CITY OF BANGOR, BE
IT RESOLVED THAT the City Manager is hereby authonzed to execute an amendment to
the Agreement by and between the City of Bangor and Freese Building Associates dated
Jams 9,1996 by executing a substituted version of sold Agreement in the form attached.
NOTE: Deletions to the original Agreement are setale ou , additions are underlined.
ID CITY COUNCIL 96-322
July 22, 1996 H E S 0 L Y E
Peened
Authorizing Amendment of Development !
CITY CLERK Agreement with PCeene building
Associated
a��u' Nn lin I
w'u V
96-322
C1e1 Rgd5IVUd
This Agreement is made add entered into as of January 9. 199fi by and between the City of
Bangor (hetcir after "City"), a municipal corporation located in Bangor, County of Penobscot,
State of Maim, and Freese Building Associates (hereinafter "Developer"), a Maine limited
partnership, with a place of business in Rockport, County of Lincoln, Stade of Maim.
WITNESSETH
WHEREAS, the Developer u desirous of constructing an approximate 34 unit, 48,000
square foot affordable housing project in fie Pickering Square Municipal Development District
(here^Ao.' "District-) designated by rhe City by passage of City Council Resolve 90-53 on
December 11, 1995, a -copy of which is on file in the office of the City Clerk, City Hall, 93
Harlow Street, Bangor, Make; and
WHEREAS, the estimated cost of the acquisition of property, the building, rehabilitation,
installation of equipment and furnishings, design fees, legal foes, insurance, financing and other
costs associated with the development (hereinafter "Project-) is in excess of 2 4 Million Dollars
($2,4W,"); and
WHEREAS, Developer will secure over $1.9 million in private and sure funds for the
Project; and
WHEREAS, completion of the Project will create a significant public benefit by providing
affordable housing opportunities, removal of blighting conditions in the Pickering Square area
and downtown Bangor area, and significantly enhancing the tax base of the City; add
WHEREAS, rhe high cost of building rehabilitation requires financial assistance from the
City to ensure the public benefit of location of the Project in the District; sal
WHEREAS, the City hounds to use tax increment revenues created by captured assessed
value in the District for the purposes of providing up to Faer Dollar
($409,009) Two HuMred Eighty Thousand Dallas (5280 0001 to assist in the financing of the
budding rehabilitation.
NOW, THEREFORE, IN CONSIDERATION of the moral promises and covenants
corvairwd in d ids Agreement, the City am Developu agree as follows:
I. Subject to the provisions of this Agreement, the Developer agrees to rehabilitate a
portion of the former Freese's Building into a 34 unit affordable housing project.
96-322
2. Developer agree to invest mt less than $1.9 million in funds secured privately or
from the Maine State Housing Authority in the activity indicated in t above
(hereinafter "Developer Investment").
3. Developer agrees m provide evidence, not later than ;am 39, 1996 August 30
122L satisfactory m City Solicitor of City, of a binding construction contract, or
cowscts, providing for site work and Wilding cons ruaiou costs in the District of
not less than $1,500,000.
4. Developer agrees to provide to the City, an easement which will pemit direct and
reasonable access through the Developer's property from Merchants Plaza to the
Main Street side of the former Freese's building. Sbould the City or another party
develop Ne remainder of the building, they agree to reimburse Developer for
reasonable casts for the construction of such easement, said reimbrsement not to
exceed $15,000.
5. City agrees to reimburse Developer
$280.WO to assist Developer in the
,Cro ncing of the Project. Such payment shall W made upon the Developer
submitting evidence that Developer's costs (including construction, design, land
acquisition, permaing, legal and other costs directly related to the project.
exclusive of Developer's fees) have reached a total of $1,50,000.
6. City agrees to provide the Developer a loan in the amount of approximately
%88,000$275.0 The A source of
such loan shall W the City's Community Development Block Grant Program and
Ne City's commitment shall W cordmgent upon the Developer conforming to the
CDBG program requirements.
7. Developer agrees that development of the Project shall be in accordance with all
applicable Federal, Sam, and City laws, ordinances, and building codes.
8. Developer agrees the scope of the work shall conform in all material respects to
the plans approved by the City of Bangor.
9. Developer agrees to provide evidence by "mbasalt 15, i990 Ak rn 15, 1996,
satisfactory to City Solicitor of City, of legally binding financing commitment of
not less than $1.9 million in funds for financing of the Projm exclusive of
financing m be provided by the City as provided for in 5 and 6 above.
10. Developer Wreby acknowledges that the City, in agreeing to provide financial
assismrae to Developer for the Project, relied in material part upon the assured
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completion of the Project and the Developer agrees to use its best efforts to
substantially complete the Project no later Nan"aelt 1, 1997 30. 1927.
I1. Developer agrees that it shall keep and maintain books, records and other
documents relating directly to the receipt and disbursement of the City funds
provided horenndet and agrees Nat any duly authorized representative of the City
shall, at all reasonable tines, have access to and the right an inspect, copy, audit,
and examine all such books, records and other documents of Developer coal
completion of the Project upon prior written notice. Developer shall ensure that
similar provisions are included in an contracts or subcompacts entered into in
connection with Ws Project.
12. Developer agrees that any duly authorized representative of the City dull, at all
reasonable times, have access to any portion of the Project until its completion and
a permanent Occupancy Permit for the Project has been issued by the City.
13. Any notice which either party desires or is required to give to Ne other in
connection with this Agreement shall be nt writing aM shall be sem postage
Prepaid, certified mail, return receipt requested, as follows:
If to City: Edward A. Barrett, City Manager
City Hall
73 Harlow Street
Bangor, Mame 04401
If to Developer: Freese Building Associates
247 Commercial Street
Box 515-5
Rockport, Maine 04856
Attention: Joseph M. Cloutier
Or to such other person and/or address as may be identified in writing by the
parties.
14. Except as provided in this Agreement, until substantial completion of the Project,
Developer shag pmt assign its rights under this Agreement without ted prior written
consent of City, which consent shall not be unreasonably withhold, delayed or
conditioned. The City's obligations hereunder are contingent upon the
Developer's compliance with the terms and/or conditions set forth in Ws
Agreement.
3
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15. The City i uends to hard its reimborsemen[ to the Developer as provided in
paragraph 5 above with a twenty (20) year general obligation bond issue or wit
funds bomowed or provided from other sources. The City, in its municipal
government capacity, will retain up to the full mount of the tax increment
generated by the Project by designating any "captured assessed value, as deemed
in 30-A MRSA § 5254, for a period rat to exceed twenty (20) years, for the
repayment of bonds issue the finarenig obmirrd of up m a maximum of Fear
Hasatit ed Thansant! Dollars ($ 409,990:99l Two H rshrul Eighty Thousand Dollars
fS280.000), to the extent such revenues are available. The Developer agrees for
itself and for its successors aM assigns dust, should the rax increment generated by
the Project be insufficient in any year to make any scheduled payments for the
bends fnanc'ng obm'rcd, due to future state or federal legislative action that
results in reductions in load real estate or personal property tac revemre, the City
of Bangor, in its municipal govetmrent capacity, may impose special assessments
pursuant to 30-A MRSA § 5255 in an amount rwcessary m fund the additional
amount r e=ssary to make the bend payments concerned. The Developer, for
itself and its successors, hereby agrees to execute any necessary, written consent to
such special assessments. The Developer shall pay to the City be amount of any
such special assessments thirty (30) days before the bond payment by the City is
due.
16. The Developer represents and agrees that ns purchase of the former Freese's
building will be used for the purpose of developrmem of the, Project and not for
speculation in land holdings. This representation shall terminate and be of no
further force and effect upon substantial completion of the Project by the
Developer.
17. It is intended by the parties that osis Agreement shag operate as a contract under
seal, M accordance with 14 MRSA §751.
Cir, agrees to make I'
cation to the Maine State Housing Author W under the
i al bahastrahme and Land Acaucsition Promans for fundingin the
opinoximbe amount of One
152506 and un ation to
Developer under substantially the s= � = they an" hc ded to City by the
Maine Sam Homing Authority. The so the afundsprovidedmDevelpher by
purchaseCim will be far the ofmunicial kin i
ofpermitaud 1psk"phes and buldinn'm mentt
dQ Civ agrees to provide Develolsar puldne penotits
Square Ranking discount
4.201 ter usamt. per month. Ifa one brae Imp sumfull Vayrneat
ofaCerfificateofOccuttallcy for the
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IN WITNESS WHEREOF duffs Agreement has been executed, sealed and delivered in
duplicate wwterparts as of the day wd year first above written.
FREESE BUILDING ASSOCIATES
By
Witness JosephA Cloutier
General Partner
By
witness
CITY OF BANGOR
Edward A. Barnett
Its City lvlanager