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Home My WebLink About1994-02-14 94-92 ORDERCOUNCIL ACTION Item No. 94-92 Date 2-14-94 Item/Subject: ORDER: Ratifying City Manager's Execution of Consent to Assignment of Leasehold Interest - Bangor Development Associates Schoolhouse Project Responsible Department: Legal See Attached uepartment Head Manager's Comments: WmA asm,�%I .,� Associated information: C.O. 94-7, Letter dated January 28, 1994 from Edward A. Barrett to Donald E. Guild, Esq., Map of Parking spaces. Finance Director cIt( Q City Sol'c'tor Introduced For Consent�Agenda E Passage First Reading Referral Page A of 9 94-92 Amipmd to Counedoe Tyler February 14, 1994 CITY OF BANGOR ( ffm) Mrhrt_._...__Basifxing. City .Manager's _ Execution... of... consent.. to Assignment of Leasehold interest - Bangor Development Associates Schoolhouse Project By ohs City Council o(tFe IXry Kl7aWsr+ ORDERED, THAT the action of Edward A. Barrett, City Manager, in executing a consent, attached hereto, to Hanger Development Associates' assignment to Maine State Housing Authority of a leasehold interest in 30 parking spaces leased by the City to Hanger Development Associates for use by tenants of the Schoolhouse Project at 183 Harlow Street is ratified. IN CITY COUNCIL 94-93 February 14, 1994 Pe d (Cqurc4lor Baldacci Abstained) Title, Ra[iying City Manager's Execution of Consent to Assignment Of Leasebold-Interest- CI CLEAR Bangor 0evelopmen[ Aaeocie[ea 3[boolhoude Project. ....... ................... ........ Aaa.� A,apeMto .. CowciLnsn 94-92 The Council will recall that it has previously passed Council Order 94-7 regarding the refinancing of the Bangor Development Associates' (BDA) Schoolhouse Project located at 183 Harlow Street. A memorandum, dated January 3, 1994, from Asst. City Solicitor Bruce N. Shibles informed the Council that the closing on the refinancing took place on December 30, 1993. At that closing, BDA executed a Mortgage Modification Agreement, dated December 30, 1993, in which BDA assigned its leasehold interest in the long term Lease Agreement BDA has with the City to lease 30 parking spaces in the Abbott Square and Atler lots for use by,Schoolhouse tenants. Maine State Mousing Authority (MM) has asked the City to consent to this assignment pursuant to the Lease terms. MSHA believes the City consented toa similar BDA assignment back in 1984 or 1985. City staff can find no record of that consent and has asked MSHA to provide documentation of this consent. In any event, executing a consent is not against the City's interest with regard to the continued viability of the Schoolhouse Project. MSHA has agreed that the City's consent may be conditioned on maintaining the current mix of residential and commercial use. This means that if in the future the project, for example, Here to become entirely commercial in nature, the City would have the option of deciding at that time whether to continue with the same arrangements regarding parking or cancel the lease and require the owner/tenants to pay for parking at market rates. Your approval is recommended. Because Robert Baldacci is a partner of Bangor Schoolhouse Associates, which is the general partner of HER, and is one of the signatories to the Mortgage Modification Agreement, Councilor Baldacci should abstain from consideration of this issue. Amimed to Councilor Sullivan November e, 1993 _ CITY OF BANGOR (TITLE.) Ip1'DPT Authorization to War Acceleration Rights and to Y """'" Subordinate '"'-City Mo tg j"e"'"to'M Ihs__St9te""Housing Authority Mortgage - Bangor Development Associates, Schoolhouse Project By jA ,Cay Couuitt of tAo C:to of Bomar: ORDERED, THAT WHEREAS, loans made to fund the renovation and reuse of the former Bangor High School building located at 183 Harlow Street in Bangor are secured by a first mortgage on the property given by Bangor Development Associates to the Maine State Housing Authority; and WHEREAS, the City of Bangor holds a second mortgage on the property in Che amount of $160,000 given by Bangor Development Associates on December 4, 1985 to secure payment of funds due the City for improvements made to the Abbott Square parking lot located opposite the 183 Harlow Street "Schoolhouse" Project; and. WHEREAS, the Maine State Housing Authority has foreclosed on the mortgage given by Bangor Development Associates for failure to pay sums owed under the Maine State Housing Authority mortgage when due; and- WHEREAS, a Workout Agreement between the Maine State Housing Authority and Bangor Development Associates has been proposed and Bangor Development Associates has requested the City of Bangor waive its rights of acceleration of payment due under the terms of the mortgage given by Bangor Development Associates and agree to subordinate the mortgage to additional financing proposed to be provided Bangor Development Associates by the Maine State Housing Authority, NOW THEREFORE, BY THE CITY COUNCIL OF THE CITY OF BANGOR BE IT ORDERED THAT the City Manager is hereby authorized, in r forms to be approved by the City Solicitor, to acquiesce to the request of Bangor Development Associates for the City to waive its rights of acceleration of paymentadue under the terms of the hssociatea dated mortgage given the City by goDevelopment December 4, 1985 and, 94-92 BE IT FURTHER ORDERED THAT the City Manager is hereby authorized, in a form or forma to be approved by the City -Solicitor, to subordinate the mortgage given the City by Bangor Development Associates dated December 4, 1985 to additional new financing provided to Bangor Development Associates by the Maine State Housing Authority secured by a first mortgage on the property located at 183 Harlow Street in the City of Bangor; and BE IT FURTHER ORDERED THAT the above authorization is and will not be effective until all real estate taxes, special assessments, and parking lease amounts due by Bangor Development Associates related to 183 Harlow Street are paid in full. ...,...,..n..a...wieuwws_v.,✓e.usu:.u.....:�.9/Ai02.., CUMBERLAND STREET C:> LEAS ®.wE;/ wo 5MPING STREET B-Z ve 8-2 94-92 K ENDUSKEAG STREAM PARKING AREA �,fi T = SI D z o j z z z r y z D N 0 i N A RLOW STREET r IT B B'� /� 94-92 SANGOR MAINE 04401 Y /'_-.M_(,��V MA73 PARLOW STREET INE .Y EXECUTIVE DEPARTMENT reg. 20DAMIN4,100 EdwaN A. Barren, Manger January 28, 1994 Donald E. Guild, Esq. Maine State Housing Authority 353 Water Street P.O. Box 2669 Augusta, ME 04338-2669 Re: Bangor Development Associates -Schoolhouse Project Dear Mr. Guild: As you have discussed with Bruce N. Shibles, Asst. City Solicitor, the City of Bangor can find no record of a formal Consent, pursuant to Article XI of a certain Lease Agreement, dated August 31, 1984, or Article XI of a certain Amendment to said Lease Agreement, dated July 30, 1987, to the Assignment to the Maine State Housing Authority (MSHA) conditional or otherwise, of Bangor Development Associates' (BDA) leasehold interest in the 30 parking spaces subject to said Lease Agreement. The City awaits receipt of documentation from MESA supporting your contention that such consent was given, either explicitly or implicitly, at the time of the original BDA financing of the Schoolhouse Project in 1984 or 1985. Notwithstanding this fact, the City of Bangor hereby consents to the assignment by BDA to HERB, as contained ina Mortgage Modification Agreement, dated December 30, 1993, of BDA's leasehold interest in the 30 parking spaces noted in said Lease Agreement. This consent, however, is conditioned upon MSHA, its successors or signs maintaining the current mix of residential and commercial use of the property. Should MSHA or asubsequent owner change the current mix of residential and commercial use, the City expressly reserves its right to determine whether to extend the Lease terms to said owner or MESA at that time or to exercise its other rights under the Lease Agreement, including termination.. This action on behalf of the City will be presented to the Bangor City Council for ratification at its meeting on February 14, 1994 at 7:30 p.m. It will be presented on the Consent Agenda. Donald E. Guild, Esq. January 28, 1994 Page 2 Thank you for your consideration. Since' Edward A. Barrett City Manager cc. Philip K. Clarke, Esq. Bangor Development Associates Bruce N. Shibles, Asst. City Solicitor Nod McKay, Community Development Director 94-92