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HomeMy WebLinkAbout2018-01-22 18-091 Order 01/22/201818-091 01/22/2018 18-091 Community & Economic Development Order R41-038 Title, Order Authorizing Execution of an Amendment to a Property Tax Development Agreement With Penquis C.A.P., Inc. dated August 3, 2017. This order would authorize the execution of an amendment to a Property Tax Development Agreement with Penquis C.A.P. Inc. dated August 3, 2017 to extend the for-profit ownership portion with a 70% property tax reimbursement to a term of 30 years instead of the current 15 years. On August 3, 2017, the City entered into a development agreement with Penquis for a housing development project on Map-Lot (R41-038) on Grandview Ave. This development agreement included provisions regarding property taxes, as required by the City’s disposition policy and requested by Penquis. Penquis has requested an amendment to that agreement. The original agreement allowed a for-profit entity owing the property to be reimbursed by the City of 70% of the real estate taxes generated by the property for 15 years to support annual operating expenses and keep rents affordable. After the expiration of the 15 years of for-profit ownership, a non-profit entity (Penquis or a subsidiary) would then take ownership, at which time they would pay a payment in lieu of taxes (PILOT) of 30%, consistent with the City's requirement in the disposition policy. Should the property be converted to market rate housing, the property would become fully taxable. Penquis believes this amendment would improve the overall score of their application for tax credits, presenting a better chance for project approval. Business & Economic Development Committee 01/16/2018 Recommend for passage 40 Consent 01/22/201818-091 CITY OF BANGOR ORDER 01/22/2018 18-091 Davitt Authorizing Execution of an Amendment to a Property Tax Development Agreement With Penquis C.A.P., Inc. dated August 3, 2017. WHEREAS, a Development Agreement with Penquis CAP, Inc. was executed on August 3, 2017; and WHEREAS, that Development Agreement included provisions of regarding property taxes through a Credit Enhancement Agreement in which 70% of taxes will be reimbursed for the first 15 years while the property is under for-profit ownership to support annual operating expenses and help keep rents affordable. After expiration of the 15 years of for-profit ownership, a non-profit entity will take ownership and will pay a payment in lieu of taxes (PILOT) of 30%. Should the property be converted to market rate housing, the property would become fully taxable; and WHEREAS, Penquis CAP, Inc. has requested to extend the for-profit ownership with a 70% property tax reimbursement for a term of 30 years. They feel this amendment would improve the overall score of their application for tax credits, presenting a better chance for project approval. Be it Ordered by the City Council of the City of Bangor that, Catherine M. Conlow, City Manager, is hereby authorized on behalf of the City of Bangor, to execute an amendment to the Property Tax Development Agreement between the City of Bangor and Penquis C.A.P., Inc. dated August 3, 2017 to increase the term of the first phase of the tax agreement, which identifies a 70% reimbursement for the first 15 years, to a 30 year term. Said amendment shall be in a form as approved by the City Solicitor. IN CITY COUNCIL JANUARY 22, 2018 CO 18-091 MOTION MADE AND SECONDED FOR PASSAGE PASSED CITY CLERK