HomeMy WebLinkAbout1995-05-22 95-239 ORDER_ COUNCIL ACTION
Date: May 22 1995
Item No. 95-239
Item/Subject: AUTHORIZING E%ECUTION OF OPTION AGREEMENT WITH
REALTY RESOURCES CHARTER® - FORMER PREBSE'S BUILDING
Responsible Department: Community and Economic Development
Commentary:
The Option Agreement, as drafted, requires a purchase price of $250,000;
development of 34 units of housing in the easterly 1/3 of the building at a
cost of not less than $1.9 Million for acquisition, surveys, demolition, site
work, building improvements, environmental remediation, interior fit up,
purchase and installation of equipment, appraisal fees, architectural fees,
engineering fees, legal fees,unting fees, financing fees, permit fees
and preopening expenses; an Option period ending 12/31/95 with provision to
extend for an additional 6 months; an option fee of $1,000 and $100 per month
for any extension; application of the Option fee at Developer's option to
building stabilization or repairs; submission of preliminary plans for City
approval by 8/31/95 and final plans by 11/15/95; construction start within 3
months of conveyance of title but not later than 6/30/96 ynd coq$( ction
completion by 12/31/96. y ///�
partment Head
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Associated Information:
Finance Director
Legal Approval: W/ / kwp/iy Gllan
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Ltroduced For
X Passage
_ First Reading Page 1 ofL
_ Referral
co-fxee
95-239
Aedpmdto Coundoe Popper May 22, 1995
CITY OF BANGOR
(TITLE.) (Orberp.... ......AOTHORIEING BEBCUTION OF OPTION AGREEMENT WITH
RBALPY RESOURCES CHARTERED - FORNER FREESE'S BUILDING
By as city ca"aw Of do city ofBanown,
ORDERED¢
THAT the City Manager is hereby authorized, on behalf of the
City of Bangor, to execute an Option Agreement, a copy of which i
on file in the Office of the City Clerk, with Realty Resources
Chartered for the purchase and redevelopment of a portion of the
former-Freese's Building", located at 79-96 Main Street.
IN CITY COUNCIL 95-239
May 222, 1995 O R D E R
e
Title, Authorizing Execution of Option Agreement
CITY ERI( with Realty Resources Chattered - Former Freese's
Building
.............�...... �........................
�
Asigmed to
95-239
OPTION AGREEMENT FOR PURCHASE OF
A PORTION OF FORMER FREEZE'S BUILDING
TABLE OF CONTENTS
Draft of Mav 15. 1995
Section A. GRANT OF OPTION . . . . .
. . . . . Page 1
of
23
1. .rant of Option . . . . . . .
. . . . . Page 1
of
23
2. Premises . . .
. . . . . Page 2
of
23
3. N rchase Price of Premises . .
. . . . . Page 2
of
23
4. Term and Price of Option . .
. . Page 2
of
23
S. Extension of Ootid . . . . .
. . . . . Page 2
of
23
6. Application of option Fees . .
. . . . . Page 3
of
23
7. Exercise of Option . . . . . .
. . . . . Page 3
of
23
8. Right of Entry . . .
. . . . Page 3
of
23
9. Evidence and Conveyance of Title
Page 4
of
23
30. Effect of DEVELOPER'sAccentance
of Title
. . Page 9
of
Page 5 of 23
Section B
CQDD1T1fSeS
ME PREMISES To THE DEVELOPER .
. . Page 5
of
23
1.
Submission of Plans . . . . . . . . .
. . Page 5
of
23
2.
Annroval of Plans . . . . . . .
. Page 5
of
23
3.
Amandment to Final Plane . . .
. Page 8
of
23
4.
Construction Progreae Schedule . . .
. . Page 8
of
23
5.
Permit Requirement . . . . . . . .
. Page 8
of
23
6.
Evidence ofFinancing . . . . . . .
. . Page 9
of
23
7.
construction contract . . . . . . . .
. . Page 9
of
23
Section C.
CONDITIONS EUBSEOI�NT TO JHS-Clj��
1 PRRMTSFS TD THR nV17VWPER .
. . Page 9
of
23
1.
Deed Covenants . . . . . . . . .
. . Page 10
of
23
2.
Raa Reatri.('t io . . . . . . . . .
. . Page 10
of
23
3.
Anti -discrimination
Page 10
of
23
4.
Property Taxes . . . . . . .
. . Page 11
of
23
S.
Subdivision Reatrirtion . . . . .
. . Page 11
of
23
6.
Land Speculation Reetrictiov . .
. . Page 12
of
23
7.
Q111'a Appromal of Transfer Prior to completion.
..
. Page 12
of
23
a.
Mortgages iriol to Completion of Porrovempnea
Page 14 of 23
9. Notice of Default to Mortgagee
. . . Page
15
of
23
10. Title Reversion Prior to Completion
. . Page
18
of
23
11. _i Snaitinn LWQn Reversion . .
. . . . . Page
20
of
23
12. Certificate of Completion. . .
. . . . . Page
21
of
23
13. geverability . . . . . . . . .
. . . . . Page
21
of
23
14. Ijotire . . . . . .
Page
21
of
23
15. Memorandum of option
. . . Page
22
of
23
95-239
OPTION AGREEMENT FOR PURCHASE OF
A PORTION OF FORMER FREEZE'S BUILDING
THIS AGREEMENT is made this _ day of 1995, by
Red between the CITY OF BANGOR, a municipal corporation located in
the County of Penobscot, State of Maine (hereinafter "CITY'), and
REALTY RESOURCES CHARTERED (hereinafter "DEVELOPER"), a Maine
corporation whose President1Joseph M. Cloutier, having
principal place of business in Rockport, County of Lincoln, State
of Maine.
W I T N E S S E T H'
WHEREAS, the CITY has received the DEVELOPER's proposal for
the development of a portion of the real property known as the
former FREEZE'S building, located at 74-96 Main Street in Bangor
(hereinafter "the Premises'); and
WHEREAS, the CITY has determined that the private development
of the Premises in sordance with the provisions of this Option
Agreement would bestserve the interests of the citizens of the
CITY; and
WHEREAS, the CITY has determined that the DEVELOPER's proposal
will serve the interests of the citizens of Bangor;
NOW, THEREFORE, in consideration of the option fee paid to the
CITY by the DEVELOPER in accordance with Section A.4. below and of
the mutual conditions and covenants contained herein, the parties
agree as follows;
132SEEPTIMTKOTWOF MW
1. era ni na Oot io The CITY grants and the DEVELOPER
accepts an exclusive option to purchase the Premises for
development of 34 units of housing (hereinafter sometimes referred
to as "the DEVELOPMELT"), at a minimum direct DEVELOPER cost, which
Page 1 of 23
95-239
may include acquisition cost of the Premises, surveys, demolition,
site work, building improvements, environmental remediation,
interior fit up, purchase and installation of equipment, appraisal
fees, architectural fees, engineering fees, legal fees, accounting
fees, financing fees, permit fees and preopening expenses of not
less than One Million Nine Hundred Thousand Dollars
($1,900,000.00). Said DEVELOPMENT shall be ina ccordance with the
terms and conditions of this Option Agreement.
2. Promises. The Premises made subject of this Option
consists of a portion of the ^Freese's Building", so called,
located at 74-96 Main Street, Bangor, Penobscot County, Maine, and
further described as -Parcel One" and "Parcel Two" in the deed from
Bangor Maine Associates t0 Charles Fitzgerald dated June 3, 1985
and recorded in Book 3669, Page 1, Penobscot Registry of Deeds,
being the rear or easterly one - third, more or less, of said
"Freese's Building- as depicted in the conceptual plan entitled
Conceptual Floor Layout - Typical Upper Floor / Freese Building
Renovations / Realty Resources Chartered prepared by Curtis Walter
Stewart Architects of Portland, Maine dated 10/12/94, a copy of
which is attached hereto as Attachment "A". A full Legal
description of said Premises shall be supplied by the CITY in
accordance with the CITY's title obligations under paragraph 9 of
this Section.
3,M1Price of Premiaea. The purchase priceof the
Premises shall be $250,000, said amount to be paid to theCITY i
cash or by check at the time of closing on the sale of the
Premises, less any amounts paid by the DEVELOPER to the CITY
pursuant to this Option Agreement.
4. Term and Price of Option. This Option Agree ent shall
remain in effect from the date hereof until December 30, 1995. The
non-refundable option fee for this period is One Thousand Dollars
($1,000.00).
5. Extension of Option. The City Council shall extend this
Option Agreement, upon the DEVELOPER's written request stating the
reasons therefor, for a period not to exceed an additional six (6)
months, if the Developer is pursuing the development in good faith.
The fee for an extension, which shall be payable in full, before o
at the time the extension is executed, shall be One Hundred Dollars
($100.00) per month.
Page 2 of 23
95-239
6. Application of Option Fees. Insideration Of
DEVELOPER'S purchase and redevelopment of the Premises, in
accordance with this Option Agreement and the DEVELOPERRIs proposal,
the CITY expressly agrees that the option fee specified in this
Agreement be returned to the DEVELOPER to be applied toward
necessary stabilization and repairs to the existing buildings and
site. CITY shall return to the DEVELOPER the option fee paid to
the CITY upon the CITY's issuance of the Certificate of Completion
under Section C.12, below; provided, however, that the option fee
shall be forfeited to the CITY if the DEveLOPER does not purchase
the Premises in accordance with the terms and conditions of this
Agreement.
9. Exercise of Option. To exercise its right to purchase
the Premises, the DEVELOPER shall so notify the CITY in writing
thirty (30) days before the expiration of this Option Agreement and
any extension hereof. Provided, that no notice of DEVELOPER's
intent to exercise the option granted herein shall be effective s
as to require the CITY to deliver title to the Premises to the
DEVELOPER unless the DEVELOPER has first fully complied with all
"conditions precedent to the CITY's conveyance of the Premises to
the DEVELOPER" as set out in Sectlon,B. of this Agreement, below.
a. Richt of Entry. During the option period the DEVELOPER
shall have the right, on reasonable notice to and consent by the
CITY's City Engineer, to enter upon the Premises with persons and
machines for the preparation of surveys, feasibility studies and
construction plans. This right of entry shall include the right to
enter into the Premises for the purpose of making structural
repairs to the Premises and abatement of environmental hazards. In
addition, during the option period the DEVELOPER shall have the
right to enter upon the Premises with persons and machines to erect
and maintain signage on the Premises, provided, however, that the
location, size
and content of any such sign shall be subject to the
approval of the CITY's City Manager and so long as
said signage i
n compliance with the CITY's sign ordinance. Such entry shall be
at the DEVELOPER'S sole risk and expense, and the DEVELOPER
covenants and agrees to indemnify, defend, and hold the CITY
harmless from any claims for personal injury or property damage
suffered by reason of entry upon the Premises by the DEVELOPER, its
agents or employees, or anyone acting on the DEVELOPER's behalf.
For thispurpose, DEVELOPER hereby expressly waives any and all
immunity it may have under Maine's Workers Compensation Act in
Page 3 of 23
95-239
regard to such claims made or asserted by DEVELOPER's agents,
Servants or employees. Prior to any entry hereunder, the DEVELOPER
shall first obtain liability insurance for this purpose in such
amount (a) of coverage satisfactory to CITY with the CITY as a
additional named insured, and shall provide the CITY with written
evidence thereof. All work shall be done in amr that causes
the least possible disturbance to the Premises, and DEVELOPER
covenants and agrees that any work done pursuant to DEVELOPER's
entry under this paragraph shall be done in a workmanlike maner
and that the DEVELOPER shall repair any damage to the Premises
resulting from the exercise of these rights.
9. Em dente and_^_ s
-_ Within 30 days, or
such other time as the parties may agree upon, of the CITY's
receipt of the DEVELOPER's notice under Section A.7. above, the
CITY shall convey good and marketable title to the Premises, free
and clear of all liens and encumbrances, except easements of record
or required by the CITY, to the DEVELOPER by Municipal Quitclaim
Deed, subject however to the conditions, restrictions, and
therants contained in Sections E. and C. below. Within 30 days of
date of this Option Agreement, or such other time as the
parties may agree, the CITY will furnish to the DEVELOPER evidence
of its titlen n
the form of abstract of title prepared in
accordance withthe Maine TitleStandards, or a title insurance
s
commitment issued by a title insurance company licensed to do
business in the State of Maine, that it will issue a title
insurance policy insuring marketable title, free and clear of all
liens and encumbrances, except as set forth above. Said commitment
shall be in
aamount not lees than the purchase price of the
Premises plus the DE"LOPER'a estimated coats of the improvements
thereto contemplated by this Agreement. If the CITY is unable to
tender marketable title after reasonable efforts to do so, the CITY
shall refund to the DEVELOPER the fees paid under this Option
Agreement, if the DEVELOPER so requests, or the DEVELOPER may
choose to accept the CITY's Municipal Quitclaim Deed, in which case
the DEVELOPER shall assume
any risks associated with the title.
Within 30 days of the date of this Option Agreement, or such other
time as the parties may agree the City shall also provide a
boundary survey of the Premisesprepared by a duly registered land
surveyor or duly registered professional engineer, as each is
defined by Title 32 of the Maine Revised Statutes Annotated, which
survey shall also contain the easements excepted above.
Page 4 of 23
95-239
10. DEVELOPER'¢
acceptance of the CITY's Municipal Quitclaim Deed conveying title
to the Premises, tendered in accordance with Section A.9. above,
shall relieve the CITY of any and all further obligation to supply
evidence of title or to take other steps to perfect the title
delivered. In no event shall the CITY's obligations to tender
marketable title,and to use reasonable efforts to determine the
source of title, extend beyond the term of this Option and any duly
executed extension thereof as set forth in Sections A.4. and A.S.
above. Provided, however, that City shall cooperate with DEVELOPER
to cure any title defects discovered subsequent to the conveyance.
Section B. CONDITIONS PRECEDENT TO THE CITY -8 CONVEYANCE
THE PREMISES TO THE DEVELOPER
Before the CITY's conveyance of the Premises the DEVELOPER
shall complete the following:
1. Submission of Plana. The DEVELOPER shall submit
preliminary and final plans for use of the Premises for review and
approval by the CITY.
DEVELOPER's plans submitted in accordance with this paragraph
shall in all respects comply with all applicable Codes and
Ordinances of the City of Bangor, and in particular with the
requirements of the CITY's Land Development Code and Historic
Preservation Ordinance.
Plans shall additionally conform to and be submitted in
accordance with the provisions of paragraph 2 of this Section,
below.
2. Aon vei cr mane. No construction or renovation will be
allowed without the prior submission and approval of preliminary
plans, final plans, and specifications. All plans will be
submitted to the City Manager, c/o the Director of Community and
Economic Development. All plans and revisions to plans shall be
reviewed by City staff designated by the City Manager after which
the City Manager shall submit the plans along with his
recommenidations to the City Council Community and Economic
Development Committee. Said plans shall be reviewed and approved
by the City Council Community and Economic Development Committee.
No plans shall be approved unless said plans have been prepared by
Page 5 of 23
95-239
a duly registered architect, as defined by Title 32 of the Maine
Revised Statutes Annotated, unless otherwise accepted by the City.
The following submissions shall be required:
a. Pr 31minary c]_a_ - The intent of the Preliminary
Plans shall be to outline the general scope of
development or redevelopment, and to convey to the
CITY sufficient information to determine the
character of the work to be performed. The
Preliminary Plans shall contain:
(1) Site Plan - The site plan shall be drawn to a
tale of one (1) inch equals twenty (20) feet
wherever practical. The site plan shall
otherwiseonform to the requirements of
Article 1]C Section 4 of the CITY's Land
Development Code.
(2) Plooz elan - The scale of the floor plan shall
be left to the discretion of the architect.
This plan shall show general room layouts and
including entrances o and exits.
Dimensions may be approximate and the overall
floor area for each floor shall be indicated.
The elevation of each floor shall be
indicated.
(3) Elevations - A -suitable ose-Section or
elevation of the building shall be provided
either in the form of an artist's rendering of
the building or a erose -section of the
Wilding. Where site grade plays an important
Part in the layout of multilevel structures,
the CITY shall reserve the right to request
cutaway elevations Showing the relationship of
floors to surrounding grades. Materials to be
used for u exterior treatment shall be
indicated.
b. final Plans and Specifications - After approval of
the preliminary plans, the DEVELOPER shall then
proceed with the preparation of final plans and
specifications. Said plans and specifications
Page 6 of 23
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shall show sufficient details necessary to inure
Proper construction. All dimensions and elevations
shall be accurate and all materials to be used in
the structural or architectural treatment of the
facility shall be outlined in complete detail. if,
in the opinion of the CITY, there is a doubt
regarding the structural adequacy of any facility,
the DEVELOPER shall provide all required back-up
data, including structural computations, boring
loge or material guarantees.
Preliminary/FinalTimerah1p far Approval of
No later than_AU,mst 31 1994, the DEVELOPER shall
submit to the CITY Is City Manager, in care of the
CITY's Director of Community and Economic
Development, for approval of preliminary plans a
specified in Section B.S. above. If the DEVELOPER
proposes revisions, or if the City Manager or the
Director of Community and Economic Development
deems revisions to the preliminary plana necessary
or appropriate, the r shall be Submitted to
the Community and Economic a Development Committee
for its approval not later than Seetvmher 30 1995.
The DEVELOPER is hereby advised that any time the
DEVELOPER proposes revisions to plans previously
approved or submitted, the proposed
r
should be submitted as e s possible to theCity
Manager, in e of the Director of Community and
Economic Development, forwand approval
before the DEVELOPER proceeds with the preparation
of final plans and specifications.
Concurrently with submission of preliminary plans,
and no later than gap mnc_ nar_3n_tcog, the DEVELOPER
shall submit complete applications for all plan
approvals required by the City of Bangor (for site
plan and subdivision approval), the Maine Historic
Preservation Commission, and the City of Bangor
Historic Preservation Commission.The DEVELOPER
shall take all stepsssary to obtain local
view and approval of site plan, subdivision and
historic preservation applications no later than
October an. 399
Page 7 of 23
95-239
No later than November 15,1995, the DEVELOPER shall
meet with the City Council Community and Economic
Development Committee and submit for its approval
final plans and related drawings, specifications,
and documents in the form specified in Section B.2.
above. If the City Council Community and Economic
Development Committee deems revisions to the final
plans to be necessary or appropriate, the plans
must be so revised and submitted to the City
Council Community and Economic Development
Committee for its approval no later than December
1994.
3. Lmrndmrni to Final Plane. If the DEVELOPER desires to
make any substantial alterations in the final plans after their
approval by the City Council Community and Economic Development
Committee, the DEVELOPER Shall Submit the proposed change in
writing to the City Council Community and Economic Development
Committee for its approval. If the final plans, as modified by the
proposed change, still conform to the requirements of Section B.1.
hereof, the City Council Community and Economic Development
Committee shall not unreasonably withhold approval of the proposed
change. The City Council Community and Economic Development
Committee shall either approve or disapprove the proposed change
within ten (10) days after its submission and notify the DEVELOPER
of its decision. No final plan approval by the Community and
Economic Development Committee shall override any requirements for
City of Bangor Planning Board and Historic Preservation Commission
approval.
9.ln Prna Schedule. Concurrently with the
submission of the final plans, the DEVELOPER shall submit a
anticipated construction progress schedule to the City Council•
o
The progress schedule shall provide for the.encement of
construction within three (3) months after closingbuti no event
later than June 30, 1996 and shall provide for completion of
construction no later than December 31, 1996, provided that nothing
herein shall be construed to extend, limit, or otherwise affect the
time limits prescribed in any building permit or Planning Board
approval.
5. Permit Requirement. DEVELOPER shall obtain, and shall
provide satisfactory evidence thereof to the CITY, every permit,
Page 8 of 23
95-239
license, and governmental approval necessary for commencement and
completion of the development described in Section A.1. above.
Except in accordance with Section A.S. above, no term or deadline
specifiedrthis Agreement shall be extended by reason of
DEVELOPER's failure to obtain or of an approving authority to issue
any required permit in a timely turner. Provided, however, that
CITY agrees to act in good faith and to give due consideration to
a request by DEVELOPER for such an extension where the failure to
obtain such approval or permit is due to circumstances beyond the
control of DEVELOPER.
6. Evidence of Pinancina. The DEVELOPER shall provide the
CITY with written, legally binding commitments, in a form
satisfactory to the CITY's City Solicitor, from acceptable lending
institutions, governmental agencies, or other sources for both
interim construction financing and long-term financing of the
DEVELOPERa One Million Nine hundred Thousand Dollars ($1,900,000)
share of total proposed development coat as detailed in the plans
referred to and approved under Sections B.1. and B.2, above. The
DEVEWPER Or DEVEWPER's general contractor shall past with said
financing entity both a performance bond and a labor and materials
payment bond issued by a corporate surety licensed to do business
in the State of Maine, each in
a penal sum equal to the total
estimated cost of the total proposed development, to secure
performance of the obligations set forth in Sections 8.1, B.2.,
B.3. and 8.9 above. The DEVELOPER or the DEVELOPER's general
contractor shall submit to the CITY a copy of said bonds and
written evidence of payment of the required premiums. The bonds
must remain in effect until the CITY's issuance of the Certificate
of Completion under Section C.12. below.8
7. Construction Contract. The DEVELOPER shall provide the
CITY with a certificate executed by the DEVELOPER and its general
contractor, certifying the existence of a contract or contracts for
construction of the total developmentin ordance with the
provisions of Sections B.1., B.2., B.3. and Ba9e above.
Section C. C�ITIM SUBSEQUENT TO TEE CITY -S CONVEYANCE QF
THE PREMISES To TEE DEVELOPER
Except as otherwise specified herein, the following express
conditions, covenants, and restrictions shall be expressly
Page 9 of 23
95-239
incorporated into the CITY's Deed to the DEVELOPER, and shall run
with the land:
1. Deed Covenants, It is intended and agreed, and the Deed
shall so expressly provide, that the express conditions, covenants,
and restrictions provided in Section C. hereof shall be covenants
'running with the land° and that they shall be binding, the
fullest extent permitted by law and equity, for the benefit and i
favor of, and enforceable by, the CITY and any successor in
interest to the Premises or any part thereof for the time periods
specifically prescribed herein for each. None of the provisions
and remedies below, including the Reversion specified in Section
C.10., shall be construed so as to limit the DEVELOPER's liability
t0 the CITY for the DEVELOPER's breach of any of its obligations
under this Option Agreement and the Deed.
2. Use Restriction. The DEVELOPER agrees for itself, and
very successor in
interest to the Premises, or any part thereof,
and theDeed shall contain express covenants on the part of the
DEVELOPER for itself, and its successors
s and assigns, that the
Premises and any improvements which may be or may become located
thereon shall be used, constructed, developed, occupied and
maintained in accordance with the laws, ordinances, or regulations
of the State of Maine and the City of Bangor, as the am.may now
or hereafter be in effect. In the event that both the State and
the City have law(s) governing the same subject matter, DEVELOPER
agrees that the Premises and any improvements which may be or may
become located thereon shall be governed by the most restrictive of
these law(s). The DEVELOPER further agrees that any structure, or
the occupancy thereof, constructed on the Premises shall not
unreasonably interfere in any way with the operation, maintenance,
repair or replacement of all existing sewer lines on the Premises
which are depicted on the survey to be furnished by CITY to
DEVELOPER under Section A.9above. In addition to other
requirements herein, the DEVELOPER shall not construct any
structure on the Premises without receiving prior written
certification by the City Engineer that said structure shall not
unreasonably interfere with said sewer lines.
3. =i -discrimination. The DEVELOPER agrees for itself,
and every successor in interest to the Premises, or any part
thereof, and the Deed shall contain express covenants on the part
of the DEVELOPER for itself, and its successors and assigns, that
Page 10 of 23
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the DEVELOPER, and its successors and assigns, shall not
discriminate upon the basis of race, calor, creed, national origin,
xphysical o ental handicap o any other basis prohibited
bylaw now or in the future,rn the sale, lease, or rental, or use
or occupancy of the Premises o any improvements thereon. This
covenant shallrun res
perpetuity. This ant against
discrimination shall be binding for the benefit and rein favor of,
and enforceable by the CITY and the United States of America
against the DEVELOPER and every successor in interest to the
Premises or any part thereof.
9. Property Taxes. The DEVELOPER agrees for itself, and
every successor in interest to the Premises, or any part thereof,
and the Deed shall contain express covenants on the part of the
DEVELOPER for itself, and its successors
and assigns, that the
Premises shall be subject to all taxes and assessments asmay be
imposed by any governmental authority upon the Premises and any
buildings, structures, or improvements which may be or may become
located thereon. At the CITY's discretion, the deed tendered i
accordance with Section A.9. above may contain a provision
effecting a reverter of title to the Premises to the CITY, if any
breach of this covenant shall reuncured for a period of 90
days following written notice. It isthe intent of the parties
hereto, and DEVELOPER hereby agrees that it does hereby waive, for
itself and any successors in interest, all right or privilege of
exemption from u municipal taxation of the Premises and any
buildings, structures, or improvements which may be or may become
located thereon, as may he available by reason of DEVELOPER's o
such successors' legal status, or for any other r whatsoever,
s at the oCi taxon
and that the City of Bangor,i its capacity as a taxing authority,
may a asall taxes a would otherwise be applicable to the
premises, buildings, structures orimprovements which may be o may
become located thereon, as if eachremption did not exist.
DEVELOPER further agrees, for itself and any successors in
interest, to pay any assessments on or before the date upon which
they become due and payable. The CITY agrees that DEVELOPER, o
its successors interest, shall have the right to contest the
amount of such taxes or assessments in the manner prescribed by
law.
5. Subdivision Restriction. The DEVELOPER agrees for
itself, and every successor in interest to the Premises, or any
part thereof, and the Deed shall contain express covenants on the
Page 11 of 23
95-239
part of the DEVELOPER for itself, and its successors and assigns,
that the Premises shall not be subdivided without the CITY's
express written consent, which consent shall not be unreasonably
withheld. For the purpose of this paragraph, the following alone
shall not be deemed to constitute a subdivision:
a. Development of the project as a condominium
pursuant to the Maine Condominium Act (33 M.R.S.A.
Sec. 1601-101 at seq.).
b. Leases of portions of the development.
c. Construction of separate buildings or structures on
the Premises.
6. Land Soecnlatioa Restriction. The DEVELOPER represents
and agrees that its purchase of the Premises and its other
undertakings pursuant to this Option Agreement are and will be used
for the purpose of development of the Premises in accordance with
Section A.1. above, and not for speculation in land holdings. This
covenant shall terminate upon the CITY'ean ce of the
Certificate of Completion under Section C.12. below.
. The
DEVELOPER recognizes that the qualifications and identity of the
DEVELOPER, and its principals or any successors in interest, are of
particular concern to the CITY. The DEVELOPER further recognizes
that it is because of such qualifications and identity that the
CITY is
em
entering into this Option Agreement and r willing to
accept and rely on the obligations of the DEVELOPER for the
faithful performance of all undertakings and covenants to be
performed by the DEVELOPER.
Therefore, the DEVELOPER represents and agrees for
itself, its successors and assigns, that, except only by way of
security for thea
purpose of obtaining financing necessary to enable
the DEVELOPER or any approved successor in interest to perform .the
obligations under Section R. hereof, the DEVELOPER has not made o
created and, until the CITY issues the Certificate of Completion
under Section C.12. below, will not make or create, or suffer to be
made or created, any total or partial sale assignment, conveyance,
lease, trust, power, or transfer in any other mode or form, of, o
with respect to, this Option Agreement, the Premises, or any part
Page 12 of 23
95-239
thereof, or interest therein, nor shall any contract or agreement
to do any of the same be entered into without the CITY's prior
written approval. The foregoing provisions shall not apply to the
lease of the premises or the improvements to be constructed thereon
to prospective tenants, provided that said leases are made subject
to the provisions of this Agreement.
The CITY shall be entitled to require as conditions to
any such approval that:
a. Any proposed transferee shall have the
qualifications and financial responsibility,
determined by the CITY by written evidence
submitted to it, to be necessary and adequate to
fulfill the obligations undertaken under Section B.
hereof;
b. Any proposed transferee, by instrument in writing
satisfactory to the CITY and in a form recordable
in the Penobscot Registry OfDeeds, shall for
itself and itssuand signs, and
expressly for the benefit s
of the CITY, have
expressly assumed all of the obligations of the
DEVELOPER under this Option Agreement and agrees to
be subject to all of the conditions and
astrictions to which the DEVELOPER 1s subject
under Section C. hereof; and
C. The consideration payable for the transfer by the
transferee or on its behalf shall no[eXeed a
amount representing the actual cost to the
DEVELOPER of the Premises and the improvements, if
any, theretofore made thereon by it; the intent of
this provision being to preclude assignment of the
agreement, or transfer of the Premises, for profit
prior to the CITY's issuance of the Certificate of
Completion under section C.12., and to provide that
if any such assignment or transfer is made the CITY
shall be entitled to increase the purchase price to
the DEVELOPER by the amount that the consideration
payable for the assignment or transfer is in
excess
of the amount that may be authorized pursuant to
this subparagraph c. and such consideration shall,
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93-239
to the extent that it is in excess of the amount so
authorized, belong and forthwith be paid to the
CITY.
The foregoing provisions of this section C.Y. notwithstanding,
the DEVELOPER may assign this Option Agreement and all rights and
duties herein, subject to the terms and conditions hereof, t0 a
development entity hereafter organized and qualified by DEVELOPER
under the laws of the State of Maine; provided, however, that
DEVELOPER shall retain an active involvement in the entity and the
entity shall a in writing satisfactory to the CITY, the
obligation to complete nthe manner provided for in this Option
Agreement, the contemplated improvements on the Premises.
Furthermore, the entity must submit evidence satisfactory to the
CITY that it has the qualifications and financial responsibility
necessary to perform such obligation.
All covenants contained in this Section C.Y. shall terminate
upon the CITY's issuance of the Certificate of Completion under
Section C.12. below.
a. Prior to the completion of the improvements as
certified by the CITY, neither the DEVELOPER nor
any successor in interest to the Premises or any
part thereof shall engage in any financing o any
o
other transaction eatingany mortgage or any
other encumbrance lien upon the Premises,
whether by express agreement or operation of law,
or permit any encumbrance of lien to b, made on or
attached to the Premises, except for the purpose of
obtaining funds necessary for making improvements
provided herein plus the purchase price of the
Premises paid by the DEVELOPER to the CITY. The
DEVELOPER shall notify the CITY in advance of any
mortgage financing it proposes to enter into with
respect to the Premises, and of any encumbrance or
lien that has been created on or attached to the
Premixes, whether by voluntary act of the DEVELOPER
or otherwise.
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95-239
The holder of any mortgage authorized by this
Option Agreement, including any such holder who
obtains title to the Premises or any part thereof
as a result of foreclosure proceedings or action i
lieu thereof, shall not be obligated by the
provisions of this Option Agreement to construct or
complete the improvementso to guarantee such
construction or completion.NOeant any
other provision i any deed shall be construed so
to obligate any such holder. However, neither such
holder nor its successors or assigns shall be
authorized to devote the Premises or any part
thereof to anYto construct any
improvements thereon, esother than those uses or
improvements provided or authorized in this Option
Agreement.
All covenants contained in this Section C.B. shall
terminate upon the CITY's issuance of the Certificate of Completion
under Section C.12. below.
Whenever the CITY shall deliver or make any notice
r demand to the DEVELOPER with respect to any
breach or default by the DEVELOPERrits
obligations covenants under this Option
Agreement, the CITY shall at the same time deliver
to each holder of record of any mortgage authorized
by this agreement a copy of such notice or demand.
Each such holder shall, insofar as the rights of
the CITY are concerned, have the right at its
option to cure such breach or default and to add
the cost thereof to the mortgage debt and the lien
of its mortgage. However, if the breach or default
is with respect to construction of the improvements
such holder may not undertakeor [ontinue the
construction or completion of the improvements
beyond the extent necessary to conserve or protect
improvements or construction already made without
first having expressly medwriting the
obligations to the CITY to complete,
n the manner
provided in this Option Agreement, theimprovements
Page 15 of 23
95-239
n the Premises or the part thereof to which the
lien or title of such holder relates, and having
submitted evidence satisfactory to the CITY that it
has the qualifications and financial responsibility
necessary to perform such obligation. Any such
holder who shall properly complete the improvements
relating to the Premises or applicable part thereof
shall be entitled, upon written request made to the
CITY, to a certification by the CITY to such effect
in a manner providedSection C.12. of this
Option Agreement. Such certification shall, if s
requested by such holder, provide that any remedy
of the CITY's with respect to revesting of title to
the Premises because of failure of the DEVELOPER to
r any default with respect to the construction
ofthe improvements on other parts of parcels of
the Premises, or because of any other default in or
breach of this Option Agreement by the DEVELOPER,
shall not apply to the part or parcel of the
Premises to which such certification relates.
b. If after the DEVELOPER's default under this Option
Agreement, the holder of any mortgage on the
Premises or part thereof does notexercise
the
.option to construct or complete the improvements
relating to the Premises or part thereof covered by
its mortgage or to which it has obtained title
within 60 days after the holder has been notified
of the default or undertakes completion of the
improvements but does not complete construction
within the period as agreed upon by the CITY and
such holder, the CITY shall have the option of
paying to the holder the amount of the mortgage
debt and securing an assignment of such debt and of
the mortgage. If ownership of the Premises or part
thereof has estedsuch holder by way of
foreclosure or action in lieu thereof, the CITY
shall be entitled, at its option, to a conveyance
to it of the Premises or part thereof upon payment
to such holder of an amount equal to the sum of the
mortgage debt at the time of foreclosure or action
in lieu thereof less all appropriate credits,
including those resulting from collection and
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95-239
application of rentals received during foreclosure
proceedings; all expenses with respect to the
foreclosure; the net expenses, exclusive of general
overhead, incurred by such holder in and as a
direct result of the subsequent management of the
Premises; the cost of any improvements made by such
holder; and an
aunt equivalent to the interest
that would have accrued on the aggregate of such
amounts had all such amounts become part of the
mortgage debt and such debt had continued in
existence until such acquisition by the CITY.
In the event of the DEVELOPER's default in its
obligations under any mortgage or other instrument
eating an encumbrance upon the Premises or part
thereof priorto completion of improvements, the
CITY may at its option cure such default or breach.
In such case the CITY shall be entitled, in
addition to and without limitation upon any other
remedy to which it shall be entitled by this Option
Agreement, operation of law, or otherwise, to
reimbursement from the DEVELOPER or successor in
interest of all costs and expenses incurred by the
CITY in
curing such default or breach, and to a
lien upon the Premises or part thereof to which the
mortgage, encumbrance, or lien relates, to secure
such reimbursement_
d. For the purposes of this and other Paragraphs of
this Option Agreement, the term "holder
reference to am ortgage shall be deemed to include
any insurer or guarantor of any obligation or
condition secured by such mortgage, including but
not limitedto the Federal Housing Commissioner,
the Administrator of Veterans Affairs, and any
successor in office of either such official.
All covenants contained in this Paragraph 9. shall
terminate upon the CITY'S issuance of the Certificate of Completion
under Section C.12, below.
Page 17 of 23
95-239
10.
Title
Reversion Prior
to Cnm lep tion. In the event that
prior to
the
CITY's issuance
of the Certificate of Completion under
Section
C.12.
below:
The DEVELOPER, or its successor in interest o
sign, shall default in or violate its obligations
with respect to the construction of the
improvements (including the nature and the dates
for the beginning and completion thereof), or shall
abandon or substantially suspend co nstruction work,
and any such default, violation,abandonment, or
suspension is not cured, ended, o remedied within
three (3) months (or six (6) months, if the default
is with respect to the date for completion of the
improvements) after written demand by the CITY to
do so; or
b. The DEVELOPER, or itssuccessor in interest o
sign, shall fail to pay real estate taxes or
assessments on the Premises or any part thereof
when due, or shall place thereon any encumbrance or
lien unauthorized by Section C. hereof, or shall
suffer any levy or attachment to be made, or any
materialmen's or mechanic's lien, or any other
unauthorized encumbrance or lien to attach, and
such taxes or assessments shall not have been paid,
or the encumbrance or lien removed or discharged o
provision made, satisfactory to the CITY, for such
payment, removal, or discharge, within thirty 130)
days after the CITY's written demand to do so, or
C. The DEVELOPER, or its successor in interest or
assign, shall make any assignment for the benefit
of creditors, or a receiveror smilar officer
shall be appointed to take chargeof all orany
substantial part of the DEVELOPER's property, and
such assignment or appointment is not dismissed o
released within thirty (30) days of the date the
assignment or appointment i6 made; or
d. There is, nviolation of Section C. hereof, any
transfer of the Premises or any part thereof, o
any change in ownership of the DEVELOPER, except as
Page 18 of 23
95-239
expressly permitted in Section C.7. above, and such
violation shall not be cured within thirty (30)
days after written demand by the CITY to the
DEVELOPER;
then the CITY shall have the right to re-enter and take possession
of the Premises and to terminate and revest in the CITY the entire
estate conveyed by the Deed to the DEVELOPER as if no Deed bad ever
been given; it being the intent of this provision, together with
other provisions of Section C. hereof, that the conveyance of the
Premises to the DEVELOPER shall be made upon, and that the Deed
shall contain, a condition subsequent to the effect that in the
ant of any default, failure, violation, or other action or
action by the DEVELOPER specified in subparagraphs a., b., c
and d. of Section C.10. hereof, and failure on the part of the
DEVELOPER to remedy, end, or abrogate such default, failure,
violation, or other action or inaction, within the period and in
the manstated in such subparagraphs, the CITY at its option may
declare artermination in favor of the CITY of the title, and of all
the rights and interest in and to the Premises, and that such title
and all rights and interest of the DEVEIAPER, and any assigns o
successorsinterest to and in the Premises shall revert to the
CITY; provided, however, that such condition subsequent and
revesLing of title in the CITY shall always be subject to and
limited by, and shall not defeat, render invalid or limit in any
way; (1) the lien of any mortgage authorized by Section C. hereof,
and (2) any rights or interests provided in Section C. for the
protection of the holders of such mortgages.
The CITY shall have the right to institute such actions
or proceedings as it may deem desirable for effectuating the
purposes of this Section C.10. including also the right to execute
and record or file among the public land records in the office i
which the Deed is recorded a written declaration of the termination
of all the right,title and interest of the DEVELOPER, its
successorsr ;
interest and signs, in the Premises and the
revesting oftitle in the CITY;provided, however, that any delay
by the CITY in nstituting or prosecuting any such actions or
proceedings or otherwise asserting its rights under Section C.
hereof shall not operate a;waiver of such rights or to deprive
it of or limit such rights in any way.
Page 19 of 23
95-239
The express conditions,Vants, and restrictions
contained in this Section C.10. shall terminate upon the CITY's
issuance of the Certificate of Completion under Section 0.12.
below.
11. Disposition Upon Reversion. Upon the revesting in the
CITY of title to the Premises or any part thereof as provided i
Section C.10., the CITY shall in accordance with State law use its
best efforts to resell the Premises or part thereof, subject to any
existing mortgage liens,s soon and in uch manner as the CITY
shall find feasible and consistent with the objectives of
developing the Premises to a qualified and responsible party or
parties, as determined by the CITY, who will assume the obligation
of making or completing the improvements or such other improvements
in their stead as shall be satisfactory to the CITY.
Upon the resale of the Premises, the proceeds thereof
shall be applied:
First, to reimburse the CITY for: all costs and
expenses incurred by the CITY including but not
limited to salaries of personnel is connection with
the capture, management, andsale of the
Promiseer part thereof (but less anyincome
derived bythe CITY from the Premises or part
thereof); all taxes, assessments, water, sewer and
other utility charges with respect to the Premises
or part thereof; any payments made or necessary to
be made to discharge any encumbrances or liens
existing on the Premises or part thereof at the
time of revesting of title thereto in the CITY o
to discharge or prevent from attaching or being
made any subsequent encumbrances or liens due to
obligations, defaults or acts of the DEVELOPER,
its a signs; any expenditures made o
successors or as r
obligations red with respect to the making or
completion of the improvements or any part thereof
t
n the Premises or part thereof; and any amounts
otherwise owing to the CITY by the DEVEIAPER and
its successor or assign; and
b. Second, to reimburse the DEVELOPER, its successors
or assigns, up to the amount equal to: (1) the sum
Page 20 of 23
95-239
of the purchase price paid by it for the Premises
ir part thereof and the cash actually invested by
t in making any of the improvements on the
Premises or part thereof; leas (2) any gains or
income withdrawn or made by it.
The CITY shall retain as its property any balance
remaining after such reimbursement.
The express conditions, covenants, and restrictions
contained in this Section C.11. shall terminate upon the CITY's
issuance of the Certificate of Completion under Section C.12.
below.
12.Ceres fi cafe of rom lei_ t=on. Promptly after completion of
the improvements in accordance with the provisions of this Option
Agreement, the CITY will furnish the DEVELOPER with an appropriate
instrument so certifying, which instrument shall not be
unrsonably withheld. Such certification shall be in such form a
will enable it to be recorded in the Penobscot County Registry of
Deeds. The CITY's issuance of the Certificate of Completion will
constitute conclusive proof of the satisfaction and termination of
the express conditions, covenants, and restrictions contained in
Sections C.6., C.9., C.e., C.9., C.lo., and C.11. above.
If the CITY shall refuser fail to provide such
certification, the CITY shall, within thirty (30) days after
written request by the DEVELOPER, provide the DEVELOPER with a
written statement indicating in adequate detail in what respects
the DEVELOPER has failed to complete the improvements in accordance
with the provisions of this Option Agreement and what measures will
be necessary to obtain such certification.
13.e ..
ranilir. If any provision of this Option Agreement
is determinedto be invalid or unenforceable under law, it shall
not affect the validity or enforcement of the remaining obligations
r portions hereof.
14. Hoeice. Any notice under this Option Agreement by either
party to the other shall be sufficiently given or delivered if it
is dispatched by registered or certified mail, postage prepaid,
return receipt requested, or delivered personally, and
Page 21 of 23
95-239
a. in the case of the DEVELOPER, is addressed to or
delivered personally to the DEVELOPER, U.S. Route
kl, Box 515-5, Rockport, ME 04856.
b in thecase
of the CITY, addressed to
deliveredpersonally to the CITY, c/o City Manager,
City Hall, 73 Harlow Street, Bangor, Maine 09901.
or to such other persons or addresses as the parties may designate
in writing to the other.
15. Mem andum r,f tmtio Upon request of either, the
parties agree to prepare and execute a Memorandum of Option in
recordable e
form, which Memorandum may be recorded by either party
in the Penobscot County Registry of Deeds.
IN WITNESS WHEREOF, the parties hereto have set their hands
the day and year first written above.
Witness
CITY OF BANGOR
By
Edward A. Barrett
Its City Manager
REALTY RESOURCES CHARTERED
By
witness Joseph M. Cloutier
Its President
STATE OF MAINE
Penobscot, as.
1995
Then personally appeared the above-named Edward A. Barrett,
in his capacity as the City Manager of the City of Bangor, and
Page 22 of 23
95-239
acknowledged the foregoing instrument to be his free act and deed
in such capacity and the free act and deed of the City of Bangor.
Before me,
Printed Name:
Notary Public
Attorney at Law
STATE OF MAINE
Penobscot, ss.
1995
Then personally appeared the above-named Joseph M. Cloutier,
n his capacity as President of Realty Resources Chartered and
acknowledged the foregoing instrument to be his free act and deed
in such capacity and the free act and deed of the Corporation.
Before me,
Printed Name:
Notary Public
Attorney at Law
Page 23 of 23