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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 96-322 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 96-322 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 96-322 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