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Home My WebLink About1994-03-16 94-135 ORDERCOUNCIL ACTION Date: March 16, 1994 Item No. 94-135 Item/Subject: Authorizing city Manager to Execute Agreements for 26 Front Street with Sea Dog Brewing Co. Responsible Department: Community and Economic Development Commentary: Passage of this Council Order would authorize the City Manager to execute three agreements with Sea Dog Brewing Co. relating to City property commonly known as the "viner Building" located at 26 Front Street: 1. The OPTION AGREEMENT TO LEASE PROPERTY AT 26 PROW STREET would grant the Sea Dog Brewing Co. the right to enter a lease agreement (the "INDENTURE OF LEASE") until November 1, 1994 and requires Sea Dog to obtain the necessary City approvals and provide evidence of financing before it can exercise this right. 2. The INDENTURE OF LEASE contains the following major provisions: a. Sea Dog Brewing Co. is granted the right to lease the entire premises for a 10 -year term. Sea Dog is required to make the property improvements necessary to establish and operate restaurant and brew pub by May 31, 1995 (Sea Dog proposes t0 begin improvements this June and complete for opening this fall). ,�/(Continued next page) D/eR opar-tl �c Hedy Manager's Comments: 9 U,:W JfTYage- Associated Information: lee Finance Director Lagal Approval: / recommend/ YV r aAp®rose �. Tlw o�Qf;0A It leage as 6 en od�ldcf a{ � �® O4oq ga w;n5 Co. 5 / -7� f: Sd 'lMa'f U�+'`( VM r dd "M nef he boUnof jv a />e+s4 a^/'/ city Solidi Introduced For AAMiAS 1} fA ggaGe- I Passage _ First Reading Page 1 of 2 Referral ca -form COUNCIL ACTION (Continued from Page 1) 96-135 b. If the Sea Dog Brewing Co. does not establish the proposed micro brewery within the first five years of the term, the leased area would be reduced to approximately 8,400 square feet of the southwesterly (down river) end of the first floor of the building (approximately two thirds of upper level), and approximately 240 square feet of area in the lower level. C. The lease rate would be $16,800 for first five years. The base rent would increase to $19,495 at the beginning of year six, increasing at a rate of 3% per annum until the end of the to -year term. Additional rent estimated to be $19,208 would be due beginning in year six constituting loan payments pursuant to City financing of part of the building improvements (see Item e). d. All plans and specifications require City approval before commencement of improvements. . a. The City would finance up to $200,000 in building improvements through its Community Development program. Beginning in year six of the term, Sea Dog will begin repayment based on a 20 -year term at 6k interest. f. Sea Dog Brewing Co, would have an option to purchase the property during the ten-year term after June 1, 1994 in accordance with the terms of the REAL ESTATE OPTION AGREEMENT. g. All improvements to the property that upon removal would cause damage to the building would become part of the real estate belonging to the City until and unless the purchase takes place. 3. The REAL ESTATE OPTION AGREEMENT grants the Sea Dog Brewing Co. the right to purchase the property from June 1, 1994 (when the Lease requires the improvements to be completed) to the end of the ten- year term of the Lease. The purchase price would be $200,000 plus the outstanding balance due on City financed improvements. The City Manager would also be authorized to make minor revisions to the agreements, in a form approved by the City Solicitor, provided the agreements in their final form contain the substantive terms contained in the Council Order. Page? of 2 94-135 M6pmd to Councilor Baldecci March 16, 1994 CITY OF BANGOR (TITLE.) @ri12r, Authorizing the City Manager to Execute Agreements for 26 Front Street with Sea Dog Brewing Co. Ey We City COaaeH of de 04 of Ramer. ORDEREDe THAT WEEREAS, the City of Bangor is the o of land and buildings commonly known as the "Viner Building" e located at 26 Front Street 1R the Front Street Riverfront Revitalization project; and WHEREAS, the City has received a proposal for the redevelopment of said property from the Sea Dog Brewing Co.; and WHEREAS; the City has determined the proposal will serve the interests of the citizens of Bangor through improvements to the property and the creation of new employment opportunities; NOW THEREFORE, BE IT ORDERED, THAT the City Manager i hereby authorized, on behalf of the City of Bangor, to execute a Option Agreement with Sea Dog Brewing Co. to lease property at 26 Front Street, a copy of said Option Agreement being on file in the office of the City Clerk: and BE IT FURTHER ORDERED, THAT the City Manager is authorized to execute a related Indenture of Lease and a Real Estate Option Agreement for 26 Front Street with Sea Dog Brewing Co., copies of which are on file in the office of the City Clerk, and to make minor revisions to said Indenture of Lease and Real Estate Option Agreement, in a form approved by the City Solicitor, provided the agreements in their final form contain the following substantive terms: Term: Ten Years. Improvements Required: Sea Dog Brewing Co. makes the property improvements necessary to establish, open and operate a restaurant and brew pub by May 31, 1995. Promises: Building and 32,946 square feet of land area. In the event Sea Dog Brewing Co. does not establish the proposed micro brewery within the first five years of the term, the leased area be reduced to approximately 8,400 square feet of 94-135 the southwesterly (down river) end of the first floor of the building, and approximately 240 square feet of area in the lower level. Use: Restaurant and brew pub. Lease Rate: $16,800 for first five years. Base rent increasing to $19,475 at the beginning of year six, increasing at a rate of 3& per annum until the and of the 10 -year term. Additional rent based on amortization of City financed improvements at an interest rate of 6& with a 20 year term beginning in year six of the term of the lease. Improvements: City approval of all plans and specifications required before commencement of improvements. All improvements to the property that upon removal would cause damage to the building become part of the real estate belonging to the City until and unless purchase takes place. City Financed Improvements: City agrees to finance up to $200,000 in building improvements through its Community Development program. option to Purchase: Sea Dog Brewing Co. be granted an option to purchase the property during the ten-year term of Lease. Purchase price established as $200,000 plus any outstanding balance on City financed improvements. Maintenance: Lessee responsibility. Insurance: Lessee responsibility to provide comprehensive liability and property damage insurance, as well as fire and other casualty insurance. Utilities: Lessee responsibility ec adogca.rym IN CITY COUNCIL March 16, 1994 Passed TT C AR 94-135 ORDER Title, Auth9riafng the City Manager to Statute Agreements for 26 Front Street With ...................................... Sea Dog greving-Company. j Councilmen