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Home My WebLink About1995-12-27 96-68 ORDERCOUNCIL ACTION Date: Dec 27 1995 Item No. 96--68_ Item/Subject Authorizing Execution of Development Agreement with Freese Building Associates - Pickering Square Municipal Development District Responsible Departmentt Community and Economic Development Commentary: The Council is aware of the negotiations with Realty Resources Chartered for the development of 34 apartments in the former Presses building within the Pickering Square Municipal Development District. The proposed Agreement, which will be reviewed by the Community and Economic Development Committee at its meeting on December 20, 1995, reflects the sults of those negotiations. If executed, this Agreement will provide the assurances needed by both parties to go forward with the project. The development entity will be Freese Building Associates, a Maine limited partnership, with Joseph M. Cloutier as General Partner. OL. ✓ Budget Approval: - Finance Director Legal Approval: City Solicit Int o ced For Passage First Reading Peg e of Referral - ca -form City zc L9 Manager Associated I¢formation:Q - Budget Approval: - Finance Director Legal Approval: City Solicit Int o ced For Passage First Reading Peg e of Referral - ca -form E Aeupmdio Com Sallivan December 21, 1995 CITY OF BANGOR (TMIE) (WWC "'prizing Execution f Development Agreement With �'-- FYeese Building Associates - Pickering Square Municipal Development District BY dw City Cmou of Mw City ofBnsow. ORDERED. TEAT the City Manager is hereby authorized, on behalf of the City of Bangor, to execute a Development Agreement, a copy of which is on file in the Office of the City Clerk, with Freese Building Associates for the development of 34 units of affordable housing i the former Branson Building located within the Pickering Square Municipal Development District designated by passage of City Council Resolve 96-53 on December 11, 1995. Iy CITY COUNCIL December 27, 1995 96-68 Passed - Ageement(Awended per - O R D E R .Nemo on file in the C1ty'Clerk's Office '.Title, Authorizing Execution Of ._Development Agre went with Preece CITY CLBRY Building Associates - Pickering $quaie Munictpzl �Geveiopment District - - .....�....'y.,..../..................... l ^A (.G A®�igpe/pd�to�� Y'.............. Councilman /9 renr(au� MEMORANDUM December 27, 1995 TO: City Council FR: Rod McKay RE: Amendment t Developer Agreement Freese Building Associmes Council Order 96-68 The Community and Economic Development Committee has reviewed the proposed Agreement between the City and Freese Building Associates, the entity established by Joe Cloutier of Ranks Resources for development ofthe 34 apartments in the Pickering Square Block portion of the Freeses building. The Committee voted to recommend approval with an amendment to Section 4 t limit reimbursement to the Developer for construction of an easement / passageway requested by Daryl Rhodes. The passageway "old be than the portion of the building being developed by the Freese Building Associates to the portion being developed by the Northern Conservatory of Music. The intent of the passageway is to provide access to Pickering Square from the Main Sued side of the building. Section4,aspresentlyproposed(below), providesformehnbmemmtto Freese Building Associates for the actual cost of constructing the passageway. The reimbursement would be made by the Northern Conservatory of Music, or whatever entity develops the remainder of the building. The cost of the passageway bas not yet estimated, but toe Cloutier has said he would feel comfortable with a reimbursement limit ofS15,000. Section 4 should be amended as follows (deletions am nhaM, additions are underlined 4. Developer agrees to provide tee City, an easement which will permit direct mal reasonable access through the Developer's property from Merchants Plain to the Main Sweet side of the fo rner Freeses building. Should the City or another party develop the remainder of the building, they agree to reimburse Developer for reasonable costs for the constmttion of such easement'es[i�ma(Cd iti WD said rcinduarsemem not to augsud S 15 00B C: City Manager City Clerk GS H>sd:3 AGREEMENT Draft of December 19, 1995 This Agreement is made and eNered into as of , 1995 by and between the City of Bangor (hereinafter "City"), a municipal corporation located in Bangor, County of Penobscot, State of Maine, and Freese Building Associates (Isereinufter'Developer"), a Maine lintite i partnership, with a place of business in Rockport, County of Lincoln, State of Maine. WITNESSETH WHEREAS, the Developer is desirous of constructing an approximate 34 unit, 48,000 square foot affordable housing project in the Pickering Square Municipal Development District (hereinafter `District") designated by We City by passage of City Council Resolve 96-53 on December 11, 1995, a copy of which is on file in the office of rhe City Clark, City Hall, 73 Harlow Street, Bangor, Maine; and WHEREAS, the estimated war of the acquisition of property, the building, rehabilitation, installation of equipment and furnishings, design fees, legal fees, insurance, financing mal other costs associated with the developmem (hereinafter "Project") is in excess of 2.6 Million Dollars ($2,400,000); and WHEREAS, Developer will secure over $1.9 million in private aod state foods for the Project; and WHEREAS, completion of the Project will create a significant public benefit by providing affordable housing opportunities, removal of blighting wrMitions in the Pickering Square area aod downtown Bangor area, ab significantly enhancing the tux base of the City; aro WHEREAS, the high cost of building rehabilitation requires financial assistance from Me City to ensure the public benefit of location of the Project in the District; aod WHEREAS, the City innings to use tax increment revenues created by captured assessed value in Ne District for the purposes of providing up to From Hurored Thousand Dollars ($400,000) to assist in the Mounting of the building rehabilitation. NOW, THEREPORE, IN CONSIDERATION of Me mutual promises and cove ran s concurred in this Agreement, the City and Developer agree as follows: 1. Subject to the provisions of this Agreement, the Developer agrees to rehabilitate a portion of the former Foaga; Building man a 34 unit affordable housing project. E 2. Developer agrees m invest not less than $1.9 million in funds secured privately or from the Maine Some Housing Authority in dee activity indicated in 1 above (hereinafter "Developer Investment'). 3. Developer agrees to provide evidence, not later than June 30, 1996 satisfactory to City Solicimr of City, of a binding construction cmmact, or contracts, providing for site work and building construction costs in the District of not less than $1,500,000. d. Developer agrees m provide to the City, an casement which will permit direct and reasonable access through the Developer's property from Merchants Plaza to the Main Strett side of the former presses building. Should the City or another party develop the remainder of the building, they agree to reimburse Developer for reasonable costs for the construction of web easement estimated in be $10,000. 5. City agrees to reimbmse Developer $400,000 through the issuance of City of Bangor taxable general obligation bonds to assist Developer in the financing of the Project. Such payment shalt be made upon the Developer submihing evidence that Developer's costs (including rumination, design, land acquisition, permitting, legal and other costs directly related to Ne project exclusive of Developer's fees) have reached a total of $1,500,000. 6. City agrees to provide Bre Developer a loan in the amount of approximately $18800 for the purpose of developing the Project The source of such loan shall be Ne City's Community Development Block Gram program and the City's commitment shall be contingent upon the Developer conforming to the CDBG program requirements. 7. Developer agrees that development of the Project shall be in accordance with all applicable Federal, State, and City laws, ordinances, and building codes. 8. Developer agrees the scope of the work shall conform in all material respects to the plans approved by the City of Bangor. 9. Developer agrees to provide evidence by March 15, 1996, satisfactory to City Solicimr of City, of legally binding financing commitment of not less than $1.9 million in funds for financing of the Project exclusive of bouncing to be provided by the City as provided for in 5 and 6 above. 10. Developer hereby acknowledges that the City, in agreeing to provide fumcial assistance to Developer for the Project, relied in under let part upon the assured completion of da Project and the Developer agrees to use its best efforts to substantially complete the Project no later than March 1, 1997. 11. Developer agrees that it shall kap acrd maintain books, records and other documents relating directly to the receipt and disbursement of the City funds provided hereunder and agrees that any duly authorized representative of the City shall, at all rensomable times, have access in and the right to inspect, copy, audit, and examine all such books, records and other documents of Developer until completion of the Project upon prior written notice. Developer shall ensure that similar provisions are included in all contracts or subcontracts entered into yr connection with this Project. 12. Developer agrees that any duly authorized representative of the City shall, at all reasonable times, have access to any portion of the Project until its completion and a permanent Occupancy Permit for the Project has been issued by the City. 33. Any notice which either party desires or is required to give to the other is connection with this Agreement shall be in writing and shall be sent postage prepaid, certified mail, redun receipt requested, as follows: If m City: Edward A. Barrett, City Manager City Hall 73 Harlow Street Burger, Maine 04401 If to Developer, Freese Budding Associates 247 Commercial Street Box 515-5 Rockport, Maine 04856 Attention: Joseph M. Cloutier Or to such other person and/or address as may be identified in writing by the parties. 14. Except as provided in this Agreement, until substantial completion of the Project, Developer shall not assign its rights under this Agreement without the prior written consent of City, which concent shall not be unreasonably withheld, delayed or conditioned. The City's obligations hummader are contingent upon the Developers compliance with the terms and/or conditions set forth in this Agreement. M 15. The City intends m Coad its reimbursement to the Developer as provided in paragraph 5 above with a twenty (20) you general obligation bond issue. The City, in its municipal government capacity, will rmain up to the full amount of the lax int== generated by the project by designating any "captured assessed value", as defined or 30-A MRSA § 5254, for a period not to exceed twenty (20) years, for the: repayment of bonds issued of up to a maximum of Four Hundred Thousand Dollars ($400,0011.00), to the extent such revenues are available. The Developer agrees for itself and for its successors and assigns that, should the tax increment generated by the Project be imvtFlcient in any you to make any scheduled payments for the bonds, due to future state or federal legislative action But results in reductions in local real estate or personal property tax revenue, the City of Bangor, in its municipal government capacity, may impose special assessments pmsuam to 30.A MRSA § 5255 N an. mnount necessary to usual the additional amount necessary to make the bond paymerns concerrcd. The Developer, for itself and its successors, hereby agrees to execute any recessary written comment to such special assessments. The Developer shall pay to the City the amount of any such special assessmeras thirty (30) days before Bre bond payment by the City is due. 16. The Developer represents and agrees that its purchase of the former Freewes building will be used for the purpose of development of the Project and not for speculation in land holdings. This representation shall terminate and be of no further force and effect upon substantial completion of the Project by the Developer. 17. It is intended by the parties that this Agreement sha0 operate as a wntnct under seal, in accordance with 14 MRSA §751. M WITNESS WFIEREOF this Agreement has been executed, sealed and delivered in duplicate counterparts as of the day and year first above written. FREESE BDILDMG ASSOCIATES By Witness Joseph M. Cloutier General partner 96-68 CITY OF BA OOA By wlmess Edward A. Ba ft its City Maya eeFxsn 1219.fs