Loading...
HomeMy WebLinkAbout1995-11-27 96-41 ORDERCOMCIL ACTION Datez 11-27-95 Item Nm 96-41 Item/Subject: Order, Authorizing the City Manager to Execute a Tentative Developer and Option Agreement with the Northern Conservatory of Music for a Portion of the Former Freese's Building Responsible Department: City Manager For almost a year now, we have been working with the Northern Conservatory of Music to help them in their plans to develop a Maine School for the Arte in a portion of the Freese's building. The City Council has already approved tentative developer statue for the Northern Conservatory In general outline terms subject to final ratification once a full agreement has been developed. The process of developing the actual agreement has been complicated by the City's efforts to clear the title to the Freese's building. At this time, we have completed a draft of the Tentative Developer and Option Agreement and provided to it the Northern Conservatory of Music. I will be meeting with representatives of the Northern Conservatory on Wednesday to review this draft. Aa a result of this meeting, theta may be some changes to it. Nevertheless, I have placed the Item on the agenda for Ecnday should we he in a position to go forward with it. Daryl Modes of the Northern Conservatory has indicated his desire that this process ,eve forward swiftly and this will allow us to proceed should we be prepared to do so. The summary of the terms and conditions of the proposed Tentative Developer and Option Agreement is attached to this agenda item. A full copy of the draft, subject as noted to changes in our discussions with Northern Conservatory, will be included in your packet for your review prior to Monday's meeting. Q Manager's Comments: aear� ve.nV dN UWn. Associated Information: Order, Summary of Agreement Legal Approval !'STY SOLSCZ'M Introduced For Passage First Reeding - page of Ref _ Referral 96-41 A®ip�edb CoonNor Baldacci November 27, 1995 CITY OF BANGOR (PTU.) Mrb¢X .Luthorisiny the. City paaaggr. to.. Execute. a Tentative Developer and option Agreement with the Northern Conservatory of Music for a portion Of the Former Freese•s. Building By the City Council of the Oily OfBMNXW-* ORDERED, THAT The City Manager is hereby authorized to execute a Tentative Developer and Option Agreement with the Northern Conservatory of Music for the purchase of a portion of the former Freese building to be used to establish the Maine School for the Arte. IIxx CITY COUNCIL, 96-61 '. ;Ndvenropr 34. 19M Tabledy Consider O R D E R Next Meeting _ - - `Title. Authoei'zing the City HanaSer to Wt. ci.! Execute a Tentative Developer and CITY CLERK Option Agreementwiththe Northern ... of Mddfd'f6i'd ybvifdv 'af'twe ye'rmeF' IN CITY COUNCIL brasse's Building December 11, 1995'. Tabled .............................. ....... 40 biq/N t0 CITY CLERK .... •••••••••••.• IN. CITY COUNCIL - Councilman December Y), 1995 Passed Amended Agreement o Pile in the City Clerk's Office _ CITY CLERK } 96-41 NORTHERN CONSERVATORY I. TENTATIVE DEVELOPER PERIOD 1. Tentative Developer Status Granted until March 31, 1996 with City option to exumd for three additional months at Conservatory request. 2. Conservatory, by March 31, 1996, will provide: a. fundraising plan b, business plan c. identification of barriers S contingencies to project d, engineering analysis 3. Clty will: a. undertake good faith effort to clear title b. cooperate with Realty Resources on their redevelopment plan a secure, protect and insure the premises 4. Proceeds of Really Resources Sale a. 66% to Conservatory for expenses related to redevelopment and improvement of premises b. 34% to CRY for expense related to acquisition and maintenance of the building 5. Mutual Option to Proceed City and Conservatory have mutual option to proceed with "maker of property and project based on results of structural analysis, construction =at estimates, and feasibility of project as shown by fundraising and business plan. a. If we proceed: 1. Conservatory shall donate $100,000 to capital campaign and place the first $165,000 in donations into an escrow account available to the CITY to offset acquisition costs 96-41 2. ' City shall provide the remaining balance of its proceeds form Realty Resources (at time Option is exercised) b. If we dont proceed: 1. Conservatory shall return to CITY Realty Resources proceeds and other funds in the minimum amount of $100,000. II. OPTION PERIOD 1. Term of Option Option runs to June 30, 1997 with City option to extend for additional 12 months. 2. Purchase Price of Premises $1.00 at time of closing. 3. Cost of Improvements Agreement will establish a minimum developer investment to be negotiated. 4. Exercise of Option Conservatory shall notify the CITY 30 days before the expiration of the Option period of their desire to exercise option. CONDITIONS PRECEDENT TO CONVEYANCE 1. Conservatory shall submit preliminary and final plans in accordance with a schedule to be negotiated. City must approve plans and amendments to them. 2. Conservatory must provide evidence of financial ability. 3. Conservatory must, at a minimum, repair facade and roof and make such other repairs and improvements so as to spend an amount equal to Conservatory/s proceeds from Realty Resources plus $20,000. 96-41 CONDITIONS SUBSEOUENTTO CONVEYANCE 1. In Lieu of Tax Agreement A minimum of 2% of the receipts from tax exempt activities are to be placed in a scholarship fund for Bangor residents. 2. Subdivision/Assignment No subdivision of the property may be made without City consent. No assignment or transferwithout approval of the City. 3. Reversion of Title to the City Title will revert B: a. Conservatory defaults on its obligations b. Texas a assessments are not paid c. Bankruptcy 4. Disposition upon Reversion H property reverts, CITY shall use its best effort to resell the premises. Proceeds shall be applied: a. to reimburse the City for costs and expenses b. to reimburse the Conservatory for purchase price and cash invested in improvements less any gains or income withdrawn or made by it. The CIN shall retain any balance remaining after such reimbursements. TENTATIVE DEVELOPER AND OPTION AGREEMENT FOR PURCHASE OF A PORTION OF THE BUFFER FREESE'S BUILDING THIS AGRBEMBNT is made this day of , 1995, by and between the CITY OF BANGOR, a municipal corporation located in the County of Penobscot, State of Maine (hereinafter "CITY'), and NORTHERN CONSERVATORY OF MUSIC (hereinafter "DEVELOPER"), a nonprofit corporation, having a principal place of business in Bangor, County of Penobscot, State of Maine. W I T N E S E T R: WHEREAS, the CITY has received the DEVELOPER'S proposal for the redevelopment of a portion of the real property known as the former Freese's building, located at 74-96 Main Street in Bangor (hereinafter "The Premises"); and NNEREAS, the CITY has determined that the private development of the Premises in accordance with the provisions of this Agreement would best serve the interests of the citizens of the CITY; and WNBAEAS, the CITY has determined that the DEVELOPER's proposal will serve the interests of the citizens of Bangor; NOW, TBSREFORB, in consideration of the mutual conditions and covenants contained herein, the parties agree as follows: I. TENTATIVE DEVELOPER STATUS I. The CITY grants and the DEVELOPER accepts exclusive tentative developer status to the Premises for development he MaineS h 1 £ h Arts/Maine Hjub School for the Arts of a high school fee tile �o fcr the period from the date of this agreement until March 31, 1996. 2. jrqmigf_. 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 `Paxcel Due" and "Parcel Two" in the deed from Bangor Maine Associates to Charles Fitzgerald, dated June 3, 1985 and recorded in Book 3669, Page 1, Penobscot Registry Of Deeds, being the front or westerly two-thirds, more or less, of said "Freese's building', being the remainder of the building not included in the conceptual plan entitled "Conceptual Floor Layout - Typical Upper Floor/Freese's 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 W. A full legal description Of the Premises shall be supplied by the City in accordance with the City's title obligations under Paragraph II.A.I of this Agreement. 3, Extension of Developer Status. The City Council may extend this Agreement, upon DEVELOPER'S written request, for a period not to exceed three (3) months it the contemplated sale of the rear third of the "Freese's building' to Realty Resources Chartered does not close prior to January 1, 1996. 4. ReanonsIbil4ties of . During the period in which the DEVELOPER has been granted tentative developer status, as outlined in paragraphs 1.1 and 1.3 above, the DEVELOPER shall, no later than March 31, 1996, submit to the CITY the following: a. a fundraising plan detailing how DEVELOPER will raise funds for its redevelopment of the Premises including DEVELOPER's overall fundraising strategy and the general sources from which funds will be sought. b. a business plan for the Maine School for the A=S/Maine Rich Cchool for the Arts ccnavrvctmr�af =aI but not limited to, a marketing plan, estimate of student enrollment, tuition rates, revenue sources, staff and other operating coats and expenses, an overall operating proforma. c. identification of all barriers, contingencies and other considerations which DEVELOPER knows or anticipates may hinder or interfere with the completion of the development of the Premises. d. an engineering analysis of the Premises undertaken by a firm acceptable to the CITY which shall determine the suitability of the Premises for DEVELOPER'S contemplated use, the presence of any structural defects which must be addressed in order to stabilize the Premises or which pose significant barriers to its redevelopment, a_s,rvev of the condition of Premises roofincluding plans estimates for immediate roof repairs. anda preliminary cost estimate for returning the major structural elements of the building to useable condition based on CITY's existing construction codes. It is understood that deve]Wer will be working in pbase5 and the sea n e detailed cost eta chase of e 3 E, 'bRi f =. During the period in which the CITY has granted DEOELORER tentative developer status, the CITY will: a. undertake a good faith effort to clear the title of the premises from any encumbrances which would restrict the CITY's ability to transfer the building to new ownership. b. to cooperate to the extent possible, as determined by 4 the City Council of the City of Bangor, with Realty Resources, Limited, to support their proposed reuse of a portion of the "Freese's building" for housing purposes. C. undertake the necessary short-term steps to secure, protect, and insure the premises as solely determined by CITY. LL._ to work with the DEVELOPER towards the completion of rshi ent fort £ the n ch: the Maine Rich School for the Artsa.. to negotiate in gooda to provide for inareas and egress to 2=emises m the Pickering $cuare a by means of a common easement th Developer godeigtands that any costs associatedwith t construction shall be -be the responsibility e aid t s_Res u at o£ D=YpS4legt is eT d I Imr:ft mtrHaftam Mutant of at least $±681,eee. 4 CITY shall retain thirty —four percent —f34%) $85992 of the proceeds which shall be available to CITY to defray any necessary expenses associated with the acquisition of the Freese's building and maintenance of the Premises during the Period for which tentative developer status has been granted to DEVELOPER. The CITY shall maintain separate accounts detailing any expenditures of these funds which shall be available to DEVELOPER at DEVELOPER'S request. should d b a shell b-.2rovg=ionately re=gszA- giaht of Entry. During the tentative developer period, the DEVELOPER shall have the right, on reasonable notice to and consent by. the CITY'S Code EnforcementOfficer, to enter upon the premise with persons and necessary equipment for the preparation n of surveys, structural analysis, feasibility studies, and construction. plans. In addition, during this period, the DEVELOPER shall have the right to enter upon the Premises with persons and necessary equipment to erect and maintain temporary 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 s said signage is in compliance with the CITY'S sign and historic preservation ordinances. 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, unless such personal injury or property damage is caused by the negligent acts or omissions of the CITY, its agents, employees, or invitees. For this purpose, DEVELOPER hereby expressly waives any and all immunity it may have under Maine's Workers Compensation Act in regard to such claims made or asserted against the CITY by DEVELOPER's agents, servants or employees. Prior to any entry hereunder, the DEVELOPER shall first obtain liability insurance for this purpose in coverage amounts satisfactory to CITY with the CITY as an additional named insured, and shall provide the CITY with written evidence thereof. •�Uh,dL c_pp'qn_lc, d. Subject to the ability of the CITY to clear title to the premises and the completion by DEVELOPER of the responsibilities outlined in paragraph I.4 above, and at the expiration of the tentative developer period and any extension thereto and in no instance later than June 30, 1996, the CITY and DEVELOPER will each individually have the option to proceed, in accordance with the OPTION section of this Agreement, with the transfer of the Premises to DEVELOPER for the purpose of establishing the h School for the w :ah School fox the Arte Maine-9�. The parties shall individually reach their decision based upon the results of the structural analysis of the building, construction cost estimates, and their analysis of the feasibility of the project and the DEVELOPER's fundraising and business plans. In order to proceed, both parties must agree. Should a decision be made to proceed, the DEVRLOPER shall donate $100,000,or assets of eaual value as start up capital £r3 the capital campaign for the Maine Schaal for the Arts h School £ h In addition, DEVELOPER agrees to place the first $165,000 in capital campaign donations into an escrow account to be available for use by the CITY to offset any costs incurred by CITY in the acquisition of the premises through eminent domain proceedings. DEVELOPER shall provide evidence of such donation and escrow account in a form acceptable to CITY's Solicitor_ It is understood that any q, Lt1gn-N2t_ta-Proceed. Should either party to this Agreement determine not to proceed, with the development oroi.ect as outlined above any proceeds unobligated proceeds held by DEVELOPER from the sale of a portion of the Premises to Realty Resources, Chartered as outlined in paragraph I.6 above -shall be returned to the CITY within ten (10)_days of the decision not to proceed. .The DEVELOPER further agrees to provide such other funds as may be necessary to insure that 6 CITY is 5-- -hg minimum amount of One Hundred Thousand Dollars ($100,000). II. OPTION A. GRANT OF OPTION 1.t of notion. In the event that both CITY and DEVELOPER agree to proceed with the redevelopment project as outlined in paragraph I.8 above, the CITY grants and the DEVELOPER accepts an exclusive option to purchase the Premises for development of heMaine SCbool for the Arts1gaing High Schgol for a vcho�r a minimum DEVELOPER cost, which may include surveys, demolition, site work, building improvements, interior fix up, purchase and installation of fixed equipment, architectural fees, engineering fees, legal fees, financing fees and preopening expenses of not less than Two Million Dollars ($2nn0 000). Said development shall be in accordance with the terms and conditions set forth below. The effective date of this Option shall be the date on which both parties to this Agreement have agreed to proceed. 2, Purchase Price of Premises. The purchase price of the Premises shall be $1.00, said amount to be paid to the CITY in cash or by check at the time of closing on the sale of the Premises. 3, Term of notions. This Option shall r effect from the date a mutual decision is made to proceed inn accordance with paragraph I.8 above until June 30, 1997. q, ExtenciOn Of OVtiOn. The CITY Council may extend this Option, upon the DEVELOPER's written request, for un to two additional one-year periods upon a finding by the City Council that DEVELOPER has complied with all terms and conditions of this Agreement and is making reasonable progress toward the redevelopment of the Premises and the establishment of the Maine School for the s/Maine 4 t e st Dagxs Prior to the expiration of the oriainal of onextension d si ed suc h i shall notmben unreasonably Nithheschool ld. f c - I Rxercise 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 DEVELOPER's Option or any extension thereof. Provided, that no notice of DEVELOPER's intent to exercise the option granted here shall be effective .so as to require the CITY to deliver title to the Premises to the DEVELOPER unless the DEVELOPER has firstfelly complied 7 with all conditions precedent to the CITY's conveyance of the Premises to the DEVELOPER as set out in Section II.E of this Agreement, below. E. giant of Enta. 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 necessary equipment for the preparation of surveys, feasibility studies and construction plans. In addition, during this period, the DEVELOPER shall have the right to enter upon the Premises with persons and necessary equipment to erect and maintain temporary signage of 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 0 long as said signage is in compliance with the CITY's sign and historic preservation ordinances. 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, unless such personal injury or property damage is caused by the negligent acts or omissions of the CITY, its agents, employees, or invitees. For this purpose, DEVELOPER hereby expressly waives any and all immunity it may have under Maine's Workers Compensation Act in regard to such claims made or asserted against the CITY by DEVELOPER's agents, servants or employees. Prior to any entry hereunder, the DEVELOPER shall first obtain liability insurance for this purpose in coverage Duns satisfactory to CITY with the CITY as aadditional named insured, and shall provide the CITY with Written evidence thereof. All such structural repairs and environmental hazard abatement work shall be done in a manner that causes the least possible disturbance to the Promises. The DEVELOPER covenants and agrees that any work done Pursuant to DEVELOPER's entry under this paragraph shall be done in a workmanlike manner and that the DEVELOPER shall repair any damage to the Premises resulting from the exercise of these rights. V, oVd of Conveyance o£ Title. Within thirty (30) days, or such other time as the parties may agree, of the CITY's receipt of the DEVELOPER's notice under Section II.A.] above, the CITY shall convey good and marketable title to the Premises, free and clear of all liens and encumbrances, except easements for existing roads and utilities of record, to the DEVELOPER by Municipal Quitclaim Deed, subject however to the conditions, restrictions, and covenants contained in Sections II.E and II.0 below. Within one hundred twenty days (120) of the effective date of this. Agreement, or such ether time as the parties may agree, the CITY will furnish to the DEVELOPER evidence of its title in the form of an abstract of title prepared in accordance with the Maine Title Standards, or a title insurance 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 an amount not less than Two hundred and fifty thousand ($250,000) plus the DEVELOPER'S estimated casts of the improvements contemplated by this Agreement. If the CITY is unable to tender marketable title after reasonable efforts to do so, 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. The parties mutually acknowledge that the CITY derives its title to the Premises from the statutory foreclosure of municipal tax liens for City of Bangor fiscal year 1993, said foreclosure having occurred by operation of law on or about December S, 1994. For purposes of satisfying the CITY's title obligations under this paragraph, it shall be a sufficient showing of title if a title search title insurance policy shows fee simple title in the prior owner of record, Charles Fitzgerald, as of December ], 1994, subject to all mortgages of record as of that date, and if a court of competent jurisdiction shall have entered its final decree in favor of the CITY and against Charles Fitzgerald and all mortgage holders of record, confirming the validity of the CITY's tax foreclosure. Within thirty (30) days of the date of this Cption Agreement, or such other time as the parties may agree, the CITY shall also provide a legal description of the Premises by metes and bounds, as provided in paragraph II.A.2 above. 9,Effect of nRVELOPER'Sf Title. DEVELOPER's acceptance of the CITY's Municipal Quitclaim Deed conveying title to the Premises, tendered in accordance with Section II.A.I above, shall relieve the CITY of any and all further obligation to supply evidence of title or to take ether 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 II.A.4 and II.A.S above. Provided, however, that City shall cooperate with DEVELOPER to cure any title defects discovered subsequent to the conveyance. 9, i d 1 Upon transfer of title to DEVBIAPEA, CITY shall provide To DEVELOPER the remaining balance, if any, of the proceeds retained by CITY from the sale of a portion of the 'Freese's building" to Realty Resources, Limited. The use of these proceeds by DEVELOPER shall bs limited in accordance with the requirements of paragraph I.6 above including the record keeping requirements as outlined therein. B. CONDITIONS PRECEDENT TO THE CITY'S CONVEYANCE OF THE PREMISES TO THE DEVELOPER Before the CITY's conveyance of the Premises, the DEVELOPER shall complete the following: 1. 5 b in s of Plans. The DEVELOPER shall submit preliminary and final plans for ate for Phase 1 of the redevelopment of the Premises for review and approval by the CITY. Phase 1 shall 1 d at a minim exterior redesign and interior t f h fi d d fl £ h 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 i accordance with the provisions of paragraph 2 of this Section, below: 2, Approval of Plans. No constructionor renovation will be allowed without the prior submission and approval of preliminary plans, final plans, and specifications as to Phase 1 f h xoiect. All plans will be submitted to the City Mandger, 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 recommendations 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 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. Prellainary Plane - The intent of the Preliminary Plans shallbeto 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 scale of one (1) inch equals twenty (20) feet wherever practical. The site plan shall otherwise conform to the requirements of Article 17, Section 9 of the CITY's Land Development Code. (2) E1 1 - The scale of the floor plan shall be left to the discretion of the architect. This plan shall show general room layouts and use, including entrances 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 cress -section or elevation of the building shall be provided, either in the form of an artist's rendering of the building or a cross-section of the building. 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 unding grades. Materials to be used for exterior treatment shall be indicated. b. Final Plans and c if' t' - After approval of the preliminary plans, the DEVELOPER shall then proceed with the preparation of final plans and specifications. Said plans and specifications shall show sufficient details necessary to insure 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 logs or material guarantees. 1. C. Timetable for Approval of Prellminarv/Final Plans No DEVELOPER shall submit to the CITY's City Manager, in care of the CITY's Director of Community and Economic Development, for approval of preliminary plans as specified in Section II.B.2. above. if the DEVELOPER proposes revisions, or if the City Manager or the Director of Community and Economic Development deem revisions to the preliminary plans necessary or appropriate, the revisions shall be submitted to the Community and Economic Development Committee for its approval not later than September Be,, 1996 July 1. 1998. The DEVELOPER is hereby advised that any time the DEVELOPER proposes revisions to plans previously I1 approved or submitted, the proposed revisions should be submitted as soon as possible to the City Manager, in care of the Director of Community and Economic Development, for review and approval before the DEVELOPER proceeds with the preparation of final plans and specifications. Concurrently with submission of preliminary plans, and no later than �9% dune 1. 1998. 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 steps necessary to obtain local review and approval of site plan, subdivision and historic preSe rvation applications no later than - July 1, 1998 No later than Hwambe= ±5,i9'96,Su1y 15 1998 the DEVELOPER shall meet with the City Council Cammunity and Economic Development Committee and submit for its approval final plans and related drawings, specifications, and documents n the form specified in Section II.B.2 above. If the City Council Community and Economic Development Committee deems revisions to the final plane to be necessary o appropriate, the plans must he so revised and submitted to the City Council Community and Economic Development Committee for its approval no later than Anoust 15 1998 3. amendment to Final Plans. 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 II.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. q,i Ysa�dulS as to Phase 1.Concurrently with the submission of the final plans, the DEVELOPER shall submit an anticipated construction progress schedule as to Phase 1 to the City Council. The progress schedule shall provide for the 12. _ commencement of construction within three (3) months after closing but in no event later than No 15, 199 a done 30, }99T and shall provide for completion of construction no later than June 30. 1999 ^BOeembOx 3t, 1997, 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, ��egalremt. DEVELOPER shall obtain, and shall provide satisfactory evidence thereof to the CITY, every permit, license, and governmental approval necessary for commencement and completion of the development described in Section II.A.1 above. Except in accordance with Section II.A.S above,o term r deadline specified in this Agreement shall be extened by reason of DEVELOPER'S failure to obtain or of an approving authority to issue any required permit in a timely manner. 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 finenci'no Financial Ability. 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, o other sources showino VEL_Us financial ability to s ort proposed development cost as required in Section II.A.luand detailed in the plans referred to and approved under Sections II.E.1 and II.B.2 above. The DEVELOPER or D£VELOPER's general contractor shall post 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 um equal to the total estimated cost of the total proposed development, to secure performance of the obligations set forth in Sections II.B.1, I1.8.2.1 II.B.3 and II.B.4 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 II.C.12 below. 7,i C_4.ect. 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 development in accordance with the provisions of Sections II.B.1, II.B.2, II.B.3 and II.B.4 above. nom, The DMWPER aarees to provide for and ubl e premises from ftin Street n to the c easement to be d b t Resources u h the x one-third of the so-called • ldin The of this easeMent s toallow tor access through the to ub Main t 14 ant shallavailable to WrIng h a ebl.eaa i nosiness h C. IT T E F THE PAE THE DEVELOPER Except as otherwise specified herein, the following express conditions, covenants, and restrictions shall be expressly incorporated into the CITY's Deed to the DEVELOPER, and shall run with the land: 1 Deed covenants, It isintended and agreed, and the Deed shall o expressly provider that the express conditions, covenants, and restrictions provided in Section II.0 hereof shall be covenants "running with the land" and that they shall be binding, to the fullest extent permitted by law and equity, for the benefit and in 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 II.C.10, shall be construed so as to limit the DEVELOPER's liability to the CITY for the DEVELOPER's breach of any of its obligations under this Option Agreement and the Deed. 2,i 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 itssuccessors and assigns, that the Premises and any improvements which mayabe or may become located thereon shall be used, constructed, developed, occupied and maintained in accordance with the laws, ordinances, o regulations of the State of Maine and the City of Bangor, as the same 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, orepair o replacement of all existing sewer lines on the Premises which are depicted on the survey to be furnished by CITY to DEVELOPER under Section II.A.9 above. 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.'-d' im' ti 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 DEVELOPER, and its successors and assigns, shall not discriminate upon the basis of race, color, creed, national origin, age, sex, physical or mental handicap or on any other basis prohibited by law now or in the future, in the sale, lease, or rental, or use or occupancy of the Premises or any improvements thereon. This covenant shall runin perpetuity. This covenant against discrimination be binding for the benefit and in favor of, and enforceable by the CITY and the United States of America against the DEVELOPER and very successor in interest to the Premises or any part thereof. y, prpuerty Taxes/In Lieu of Tax Par�eem_ent. The DEVELOPER agrees for itself, and every successor cinterest to the Premises, or any part thereof, and Deed shallcontain express covenants on the part of the DEVELOPER for itself, and its successors and assigns, that in the event the Premises or any portion thereof Shall be transferred to or operated by a tax-exempt entity such that the Premises of any portion thereof shall no longer be subject to such real estate or personal property taxes as may be otherwise imposed by the CITY in its governmental capacity upon the Premises or any portion thereof, the DEVELOPER or such successor in interest shall enter into an in -lieu of tax agreement with the CITY. Such agreement shall require the DEVELOPER orsuch successor in interest, to establish a scholarship fund to be used to defray the costs and expenses of deserving City of Bangor residents who wish to attend the Maine School for the Arts/Maine Miah School For the arts. On ann annual basis, a minimum of 2% of the gross receipts derived from any tax-exempt activity taking place within the Premises shall be provided to the City of Bangor to be held in treat for this purpose. Said receipts shall be paid to the CITY no later than sixty (60) days after the close of the fiscal year of the tax exempt entity(ies) DEVELOPER shall cooperate with CITY in establishing the appropriate trust documents and the procedures governing the disbursement of these funds. Should the Maine School for the Artslxaine High School for h "rtR cease to function or transfer all or any portion of the Premises for any reason, the in -lieu of tax payments shall on account of any tax exempt use of the Premises be made in cash to the CITY's General Fund. In such event, the amount of such in -lieu of tax payments shall equal fifty percent (508) of the amount that would otherwise be assessed as property taxes on the Premises or exempt portion thereof, including all Improvements thereto and personal property located thereon, were the Premises and such improvements and personal property fully taxable; minus any amount paid by the tax exempt organization to the City of Bangor on account of the Premises as a service lea under 36 MRSA 651(a)(1) or other provision of law, as now in force or hereafter amended. 5, a bdiv' q i on 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 part of the DEVELOPER for itself, and itssuccessors 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 condminim pursuant to the Maine Condominium Act (33 M.R.S.A. Sec. 1601-101 at seq.). b. Leases of portions of the Premises. c. Construction of separate buildings or structures on the Premises. d. Sale of conveyance of all or a portion of the Premises to corporation to be organized, under the n "Maine School for the Arts/Maine Rich School for the Arts', for the purpose of operating high school for the arts and arts conservatory as contemplated by this Agreement. 6, Luind Spa u1 triction. 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 II.A.1 above, and not for speculation in land holdings. This covenant shall terminate upon the CITY's issuance of the Certificate of Completion under Section II.C.12 below. I. IT A vol 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 entering into this Option Agreement and is. 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 the purpose of obtaining financing necessary to enable the DEVELOPER or any approved successor in interest to perform the obligations under Section II.B hereof, the DEVELOPER has not made or created and, until the CITY issues the Certificate of Completion under Section II.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, or with respect to, this Option Agreement, the Premises, or any part thereof, or interest therein, nor shall any contract or agreement to do any of the ease 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 II.B hereof; b. Any proposed transferee, by instrument in writing satisfactory to the CITY and in a form recordable in the Penobscot Registry of Deeds, shall for itself and its successors and assigns, and expressly for the benefit 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 restrictions to which the DEVELOPER is subject under Section II.0 hereof) and c. The consideration payable for the transfer by the transferee or on its behalf shall not exceed an 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 II.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, to the extent that it is in excess of the amount so authorized, belong and forthwith be paid to the CITY. All covenants contained in this Section II.C.J shall terminate upon the CITY's issuance of the Certificate of Completion under Section II.C.12 below and upon completion of five full years of operation of the Mair School for the Arta/Maine High School for the 8, to Commletionof improvements. a. Prior to the completion of the improvements as certified by the CITY, neither the DEVELOPER nor any successor in interest to the Premises o any part thereoshall engage n any financing or any other transaction creating any mortgage or any other encumbrance or lien upon the Premises, whether by express agreement or operation of law, or permit any encumbrance of lien to be made on or attached to the Premises, except for the purpose of obtaining funds necessary fox making improvements provided herein. 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 Premises, whether by voluntary act of the DEVELOPER or otherwise. b. 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 in lieu thereof, shall not be obligated by the provisions of this Option Agreement to construct or complete the improvements or to guarantee such construction or completion. No covenant o any other provision in 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 any uses, or to construct any improvements thereon, other than those uses or improvements provided or authorized in this Option Agreement. All covenants contained in this Section II.C.8 shall terminate upon the CITY'e issuance of the Certificate of Completion under Section II.C.12 below and upon completion of five full years of operation of the Maine School for the Arts/Maine Hiah School for the Acts. g, Notice of befaultg1 . a. Whenever the CITY shall deliver or make any notice or demand to the DEVELOPER with respect to any breach or default by the DEVELOPER in its obligations or covenants under this option Agreement, the CITY shall at the same time deliver to each holder of record of any mortgage authorised 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 undertake or continue the construction or completion of the improvements beyond the extent necessary to conserve or protect improvements or construction already made without first having expressly assumed i writing the obligations to the CITY to complete, in the matter provided in this option Agreement, the improvements on 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 provided in Section II.C.12 of this Agreement. Such certification shall, if so requested by such holder, provide that any remedy of the CITY's with respect to reverting of title to the Premises because of failure of the DEVELOPER to cure any default with respect to the construction of the improvements on other parts of parcels of the Premises, or because of any other default in or breach of this Agreement by the DEVELOPER, shall not apply to the part or parcel of the Premises to which such certification relates. b. I£ after the DEVELOPER's default under this Agreement, the holder of any mortgage on the Premises or part thereof does not exercise 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 optionofpaying 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 vested in such 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 MI action in lieu thereof less all appropriate credits, including those resulting from collection and 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 amount 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. C. In the event of the DEVELOPER's default in its obligations under any mortgage or other instrument creating an encumbrance upon the Premises or part thereof prior to 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° in reference to a mortgage shall be deemed to include any insurer or guarantor of any obligation or condition secured by such mortgage, including but not limited to the Federal Housing Commissioner, the Administrator of veterans Affairs, and any successor in office of either such official. All covenants contained in this II.C.9 shall terminate upon the CITY's issuance of the Certificate of Completion under Section II.C.12 below. 10. t or sio Prior to Completion. In the event that prior to the CITY's issuance of the Certificate of Completion under Section C.12. below: - a. The DEVELOPER, or its successor in interest or assign, shall default in or violate its obligations with respect to the construction of the improvements (including the nature and the dates for thebeginningand completion thereof), or shall abandon or substantially suspend construction work, and any such default, violation, abandonment, or suspension is not cured, ended, o remedied within three (3) months (or six (6) months, if 21 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 its successor in interest or assign, 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 II.0 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 or provision made, satisfactory to the CITY, for such payment, removal, r discharge, within thirty (30) days after the CITY's written demand to do so; or c. The DEVELOPER, or its successor ninterest or assign, shall make any assignment for the benefit of creditors, or a receiver or similar officer shall be appointed to take charge of all or any substantial part of the DEVELOPER's property, and such assignment or appointment is not dismissed or released within thirty (30) days of the date the assignment or appointment is made; or d. There i , in violation of Section II.0 hereof, any transfer of the Premises or any part thereof, or any change in ownership of the DEVELOPER, except as expressly permitted in Section II.C.] 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 r vest in the CITY the entire estate conveyed by the Deed to the DEVELOPER as if no Deed had 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 event of any default, failure, violation, or other action o action by the DEVELOPER specified in subparagraphs s inaction c. and d. of Section II.C.10 hereof, and failure on the part of the OEVEWPER to remedy, end, or abrogate such default, failure, violation, or other action or inaction, within the period and in the manner stated in such subparagraphs, the CITY at its option may declare a termination in favor of the CITY of the title, and of all the rights and interest in and to the Pxemises, and that such title and all rights and interest of the DEVELOPER, and any assigns or successors in interest to and In the Premises shall revert to the CITY; provided, however, that such condition subsequent and reverting 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 22 any mortgage authorized by Section II.0 hereof, and (2) any rights or interests provided in Section II.0 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 II.C.10 including also the right to execute and record or file among the public land records in the office in which the Deed is recorded a written declaration of the termination of all the right, title and interest of the DEVELOPER, its successors in interest and assigns, in the Premises and the reverting of title in the CITY; provided, however, that any delay by the CITY in instituting or prosecuting any such actions or proceedings or otherwise asserting its rights under Section II.0 hereof shall not operate as a waiver of such rights or to deprive it of or limit such rights in any way. The exoress conditions, covenants, and restrictions contained in this Section II.C.10 shall terminate upon the CITY's issuance of the Certificate of Completion under Section II.C.12 below. 11.Disnc$iticu Uren Beversion.Upon the reverting in the CITY of title to the Premises or any part thereof as provided in Section II.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, as soon and in such 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: a. First, to reimburse the CITY for: all costs and expenses u incrred by the CITY including but not limited to salaries of personnel in connection with the recapture, management, and resale of the Premises or part thereof (but less any income derived by the 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 reverting of title thereto in the CITY or to discharge or prevent from attaching or being made any sublta,eor acts acts or liens due to obligations,of DEVELOPER, its successors or assigns; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the 21 Premises or part thereof; and any amounts otherwise Owing to the CITY by the DEVELOPER 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 of the purchase price paid by it for the Premises or part thereof and the cash actually invested by it in making any of the Improvements On the Premises or part thereof; less (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 II.C.11 shall terminate upon the CITY's issuance of the Certificate of Completion under Section II.C.12 below. 12. Certificate of Comlation. 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 unreasonably withheld. Such certification shall be in such form as 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 II.C.6, II.C.4, II.C.S, II.C.9, II.C.10, and II.C.11 above. If the CITY shall refuse Or 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 t0 complete the improvements in accordance with the provisions of this Option Agreement and what measures will be necessary to obtain such certification. 13. Severabilitv. If any provision of this Option Agreement is determined to be invalid or unenforceable under law,itshall not affect the validity or enforcement of the remaining obligations or portions hereof. 14, Notice. 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 a. in the case of the DEVEWPER, is addressed to or delivered personally to the DEVELOPER, 96 Harlow Street, Suite 9, Bangor, ME 04401. 24 b. in the case of the CITY, is addressed to or delivered personally to the CITY, c/o City Manager, City Hall, 73 Harlow Street, Bangor, Maine 04401. or to such other persons or addresses as the parties may designate in writing to the other. 15. Magjud m of notion. Upon request of either, the parties agree to prepare and execute a Memorandum of Option in recordable form, which Memorandum may be recorded by either party in the Penobscot County Registry of needs. IN WITNESS WHEREOF, the parties hereto have set theirhandsthe day and year first written above. CITY OF BANGOR By Witness Edward A. Barrett Its City Manager NORTHERN CONSERVATORY OF MUSIC By witness Daryl Rhodes Its President STATE OF MAINE Penobscot, as. WRkNi Then personally appeared the above-named Edward A. Barrett, in his capacity as the City Manager of the City of Bangor, .and 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. Printed Beast Before me, Notary Pubiic Attorney at Law STATE OF MAINE 25 Penobscot, as. , 1995 Then personally appeared the above-named Daryl Rhodes, in his capacity as President of Northern Conservatory of Music 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 as, Printed Name: Notary Public Attorney at Law 26