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Home My WebLink About1992-11-09 93-12 ORDERI M810d to Councilor Soucy November 9, 1992 CITY OF BANGOR (TITLE.) (DrbU, - °-ect.iay .11 at staff- to 1. ssm�te E E1» wly.len xrncn E� Co�tim for the Davelcpm a'd Cyaea of a Gwoline Service Statim on Mvra Avem.= By City Co ofWCityofBa.- OEDEEED, . THAT -City staff is harety anWri eM dirstad, on 3e3ulf of tha City of Bangor, to negoFlMu eulusivaly with forth Star Inteti>atimal &e Copoint for the developu a operation of a gsailure service arabin on Maita Ave�me in the Bangs IrRamatiaial Aixp= Capl . 1n City Council November 9, 1992 vote to indefinitely postpone failed z yea ].n voting Yea Soucy, Sullivan voting No Blanchette, Bragg, Cohen, Frankel, Goal, Shubert Stone First Amendment Failed vote 3 yes 6 -No ' voting Yes- Storyf'Sullivan 'at : ` NS"Blanchette. Bragg Cohen. Frankel, Saxl. Shubert Stone First Amendment reads as follows Upon the condintion that North Star International engeigy Corp. agree to reinburee the city of Bangor orte half of the City's reasonable cost of securing outside appraisals and othe outside professional services necessary to determine arnable rental of the property tobe Second Amendment Passed ' 93-12 O ROER Titles Directing City staff to Negotiate Exclusively with North Star International Energy Corporation f6:'46e uedefopmenc edd'66d;iefon' f e gasoline Service Station on Maine Avenue ............... 4...................... M Fg to Cfcilman Second amendment reads as follows Be it further Ordered that appropriate City Staff under take the necessary steps to obtain professional opinions regarding the I_ value of the lease and appropriate lease rates and conditions, that said professional opinions become the basis for lease negotiations with North Star International Corporation Contain separate provision to recover the City's direct expenses for obtaining the necessary professional opinion Order Passed as Amended City gUark To: Members of the City Council From: Stephen A. Bolduc, Economic Development Officer Date: November 11, 1992 Subject, Location of a Gasoline Service Station on Maine Avenue Issue The agreement with North Star International energy Corporation to operate a gasoline service station at 75 Maine Avenue in the Bangor International Airport Complex expired on March 31, 1991. Since that time, North Star International Energy Corporation, at mutual consent, has continued to operate the facility an month-to-month basis. During that period, Staff has discussed the appropriateness and possible location of a gasoline service station operating within the new Maine Business Enterprise Park (MBEP) development. Background North Star International Energy Corporation has leased the City's gasoline service station facility since 1981. A five year lease was awarded to North Star International Energy Corporation in 1981 as the result of a bidding process. The lease was renewed n 1986 and ran through 1991. North Star International Energy Corporation has continued to operate the gasoline service station since 1991, at mutual consent, on a month-to-month Maim. As the owner of the facility, the City of Bangor must remove the underground gasoline storage tanks located on the property. The preliminary schedule calls for underground tanks to be removed during the Spring and Summer of 1993. In 1991 North Star International Energy Corporation expressed interest in a long term lease for the property and indicated that Peter D'Erico, the former Airport Manager, had told them they would have the "first shot" at a long term lease. Since then, Bob Liegelaar, Airport Manager, and Ken Gibb, Director of the Dept. of Community and Economic Development, and I have had the opportunity to discuss the continuance and location of a retail gasoline station in the area of the Maine Business Enterprise Park. We carefully considered how a retail gasoline station would fit within both the future development plane of the Airport's aeronautical mission and the development of the Maine Business Enterprise Park. We reached the following conclusions and communicated them to North Star International Energy Corporation: 9}12 1. It is desirable and appropriate to have a retail gasoline station within the airport complex, especially from a financial return standpoint. 2. The retail gasoline station must be designed, constructed, And operated in a manner consistent with the objectives of the Maine Business Enterprise Park (e.g. building design, landscaping). 3. The lease rate for the parcel should reflect current market conditions for such a facility. 4. The lease term must be of sufficient length to allow amortizationof the operator's investment. 5. The existing location of the retail gasoline station conflicts with the most appropriate development plan for the Maine Business Enterprise Park. 6. There are several locations along Mine Ave. that would be appropriate for the retail gasoline station, but the overall, most appropriate location is Lot #18, or a portion thereof, on the westerly side of Maine Avenue, approximately across the street from the existing station. 7. The exclusivity of the agreement to operate a retail gasoline station demands that the selection of an operator be done through the City's bidding procedures. North Star international Energy Corporation strongly disagrees with our recoameMatfon to select an operator through the City's bidding procedures arguing that, 1. Preference should be given to existing businesses. 2. Preference should be given to small businesses. 3. Other buildings and property are leased within the Airport Complex without going through the City's bidding procedures. 4. Going to bid and possibly losing the facility would put North Star International Energy Corporation out of business because the operation on Naive Avenue comprises 508 of its business. The lease rate for the property is a mini®M_ payment of $1,875.00. If over 125,000 gallons are pumped in any month, the rate is $.015 per gallon. North Star International Energy Corporation's last payment in excess of the minimum lease payment was in 1987. in 1991 North Star International Energy Corporation fell into arrears $13,150. In October, 1991, they agreed to a repayment schedule that included its regular monthly payment plus $1,000 to reduce the past due amount. Payments made during the past year R3-12 have reduced the past due amount to $275. North Star International energy Corporation is current in their regular monthly payments with the next payment due November 10. R -I Staff has concluded that it is appropriate for a gasoline service station to operate within the Maine Business Enterprise Park, but that It should be relocated from its current location. The most appropriate location is a portion of Lot i18, a .89 acre lot on the westerly aide of Maine Avenue, approximately across from the current facility. This lot is currently within an Industry and Service district which would need to be changed to an Urban Service zone. Staff felt that a gasoline service station could be developed on that site that would: 1. Be consistent with the objectives, design and construction standards of the SEEP. 2. Utilise a lot that 1s not suitable for park development. 3. Continue to provide service to customers of the existing facility. 9. Provide a steady, long-term income Stream to the Airport. The following lease terms and conditions are suggested: Term: Twenty years. Rate: Eased upon bids offered. Premises: 20,000 sq. ft. +- of Lot %18. Insurance: Provide comprehensive public and property damage liability insurance to limits of $300,000 per each occurrence. Staff continues to recommend that proposals be solicited through a competitive process for the following reasons: 1. An RPP process is consistent with the City's purchasing Policies and similar to the process being used for terminal, retail, and car rental concessions. 2. The exclusivity of the proposed Site, the long term nature of the lease, and the potential revenues involved dictated that a mopetitive process be utilized. Staff believes that this can only be accomplished by seeking multiple proposals. wckweae.m (11,,m)