HomeMy WebLinkAbout1992-04-13 92-210 ORDERCOUNCIL ACTION
Item No. 99-210
Date April 13, 1992-
Item/Subject: First Amendment to Option Agreement for Purchase
of Bangor waterworks Facilities
Responsible Department: Community & Economic Development
This item was discussed at length by the Municipal Operations
Committee on March 17, 1992.
As the Council is aware, the City executed an Option Agreement
with Bangor waterworks Associates in Merch 1991, for redevelopment
of the Bangor waterworks facility into a 37 -unit vacation timeshare
project. The original Option Agreement obligated the City to
petition mBOT to establish a public crossing of the Maine Central
Railroad line adjacent to the project site, and further provided
that the option period and construction schedule proposed by the
developer would be reasonably extended if construction or marketing
of the project was held up as a result of delays in the City o
State permittingprocess. The Agreement also tied the City's
obligation to convey the property, and to take other steps, to the
developer's pre -sale of aertain number of timeshare units, in
lieu of regular financings
(continued on next page)
Manager's Comments:
Department Bead
- City Manager
Associated Information: Order, First Amendment
Budget Approval:
Finance Director
Legal Approval: Councilor Baldacci should abstain on this item due
to his family relationship with one of the developer's principals.
ALA
City Solicitor
Introduced For
Passage
First Reading
Referral Page 1 of 8
92-210
A%*M to CaweJoe Soucy April 13, 1992
CITY OF BANGOR
(D First Amendment to the Option 11 Agreement for
Purchase of Bangor Waterworks Facilities
....... ...._..._._ ............... .......... ......... -_.__.
BYW CUY CmW of CftofDemise.
OHDBBSD,
THAT the City Manager is hereby authorised to execute a
FirstAmendment to the Option Agreement for Purchase of Bangor
Waterworks Facilities by and between the City of Bangor and
.Bangor Waterworks Associates dated March 6, 1991, a copy of
which First Amendment is on file in the Office of the City
Clerk.
92-210
In City Connell aptil 13,1992 1 P O R D E R
Passed
Title,
J
,FY? Firs[ Amendment to the Option Agreement
try Clar i�.......................................
for purchase of Bangor Waterworks Facilities
gU.
R Awigned to
C
6 •��Cvwncilman
92-210
FIRST AMENDMENT
TO THE
OPTION AGREEMENT FOR PURCHASE OF
BANGOR WATERWORKS FACILITIES
Thin Amendment to the Option Agreement of March 6, 1991 is made
this day of 1992, by and between the CITY OF
BANGOR, a municipal corporation located in the County of Penobscot,
State of Maine (hereinafter "CITY"), and Bangor Waterworks
Associates, a Maine Corporation having a place of business in Bangor,
County of Penobscot, State of Maine (hereinafter "DEVELOPER").
WITNESSETH:
WHEREAS, the CITY and the DEVELOPER have executed an Option
Agreement for the Purchase of. the Premises for development In
accordance with. the "Bangor Waterworks Proposal" submitted to the
CITY by Bangor Waterworks Associates dated September 21, 1990 and the
terms and conditions of the Option Agreement dated March 6, 1991; and
WHEREAS, delays in obtaining necessary approvals from the State
of Maine for establishment of a public railroad crossing and for
redevelopment of the facility have made it necessary to revise the
DEVELOPER'S project schedule and financing arrangements as
contemplated by the parties' original Option Agreement;
NOW, THEREFORE, the CITY and the DEVELOPER, hereby mutually agree
that the parties' said Option Agreement dated September 21, 1990 is
hereby amended as follows:
Section A. (GRANT OF OPTION), Subsection 9., Paragraph 1 of the
Option Agreement provides that the Option Agreement shall remain in
effect until June 30, 1992. This date shall be amended to June 30,
1993.
Section B. (CONDITIONS PRECEDENT TO THE CITY'S CONVEYANCE OF THE
PREMISES TO THE DEVELOPER), Subsection 2.c., Paragraph.3 of the
Option Agreement provides that no later than May 15, 1992, the
DEVELOPER shall meet with the City CouncilCommunityand Economic
Development Committee and submit for its approval final plans and
related drawings, specifications, and documents in the form specified
in Section B.2. above. If the City Council Community and Economic
Development Committee deems revisions to the final plans to be
necessary or appropriate, the plans must be so revised and submitted
to the City Council Community and Economic Development Committee for
its approval no later than June 15, 1992. These dates shall be
amended to May 15. 1993 for the submittal of final plans and June
15. 1993 for any revisions required for these plana.
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Section B. (CONDITIONS PRECEDENT TO TBE CITY'S CONVEYANCE OF THE
PREMISES TO TBE DEVELOPER), Subsection 4., Paragraph 1 of the Option
Agreement provides that the progress Schedule shall provide for the
commencement of construction of the DEVELOPER'S project as described
in the DEVELOPER'S Proposal dated September 21, 1990 (Exhibit "B"),
within three (3) months after closing but in no event later than June
30, 1992. This date shall be amended to July 30. 1993 .
Section B. (CONDITIONS PRECEDENT TO THE CITY'S CONVEYANCE OF THE
PREMISES TO THE DEVELOPER), Subsection 6. SM11 be deleted in its
entirety and replaced with the following Subsection 6.
6. Prosect Financing. It is contemplated by the DEVELOPER End
understood by the CITY that construction of the DEV@LOPER's project
will requireconstruction financing by a commercial lender or private
investors. in order to assure the availability of funds necessary to
complete construction of those aspects of the project of special
interest to the CITY, and to assure the availability of tax increment
revenue necessary to retire any obligation incurred by the CITY in
accordance with "Attachment C" paragraph 4, the CITY and the
DEVELOPER expressly agree to the following additional terms and
conditions:
a. It the DEVELOPER shall not have obtained necessary
construction financing or commitments in a minimum
amount of $200,000.00 by June 30, 1993, the DEVELOPER
may, at its option, elect to cancel this Option
Agreement. In such event, the CITY shall release to
the DEVELOPER any letter of credit Or Other security
for construction of on-site improvements furnished in
accordance with Section B.]. below, but shall have no
liability to refund to the DEVELOPER the cost of any
improvements actually constructed, which shall become
the property of the CITY. The CITY shall also retain
the DEVELOPER'S option fee paid in accordance with
Section A.4. above.
b. Upon exercise of its option in accordance with Section
A.]. of this Agreement, DEVELOPER shall provide
satisfactory evidence of project financing sufficient
to assure construction ofallimprovements required to
be made under Section S,O. below, and shall provide a
performance bond or other financial guarantee, in a
form acceptable to the CITY'S City Solicitor, as
provided in Sections B.]. and B.B. below.
C. If the DEVELOPER engages in pre -marketing activities,
all such activities shall fully comply with all
applicable disclosure and other requirements under the
Maine Condominium Act, 33 MRSA 51601-101 at seg_,
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including purchase -money escrow requirements under 33
MRSA 51604-109, and with Title 33 MRSA 5591 at seq. ,
relating to time-shares. DEVELOPER Shall provide the
CITY with evidence of its compliance with disclosure
and other requirements under the cited statutes.
d. No unit or interest in a unit shall be finally conveyed
to any individual for consideration prior to the date
on which the CITY .conveys title to the Premises to the
DEVELOPER, or prior to the date on which the DEVELOPER
received CITY subdivision approval under Section 5.5.
of this Option Agreement. Execution of a purchase and
sale or similar agreement with an individual timeshare
purchaser shall not be deemed a final conveyance under
this subparagraph.
WHEREAS, in accordance with 'Attachment C" dated March 6, 1991,
additional terms were
negotiated between the parties, Section 4 of
id "Attachment C shall be deleted in its entirety d
with the following Section 4.
4. CITY to Create Develooment District and Construct Public
Improvements
The CITY agrees that upon DEVELOPER'S compliance with the
requirements of Section S. of this Agreement, the CITY shall
designate the Premises as part of a municipal development district to
be created in accordance with 30-A MRSA g§ 5251-5260, and shall
designate any "captured assessed value", as defined in 30-A MRSA
§5254, for a period not toexceed ten (10) Years, up to a maximum of
Three Hundred Fifty Thousand Dollars ($350,000.00), as retained for
the purpose of financing proposed public improvements as set forth in
DEVELOPER'S proposal dated September 21, 1990. Said $350,000.00
shall be in addition to the $100,000.00 purchase proceeds to be
applied to structural repairs as designed in Paragraph 1. of this
Attachment. The public improvements to be financed In this manner
shall include the following,
a. Construction of a public crossing to provide access to
the site, the amount retained for this Purpose not to
exceed One Hundred Fifty Thousand Dollars ($150,000.00)
(portion of "Phase I" Public Improvements).
b. Construction of any turning lanes on State Street
determined by the CITY to be necessary as a result of
DEVELOPER'S project, the amount retained for this
Purpose not to exceed Twenty Five Thousand Dollars
($25,000.00) (portion of "Phase I" Public Improve-
ments).
C. Cost of removing Power line, as provided in Paragraph
2. of this Attachment (portion of "Phase I- Public
Improvements).
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d. Improvements to the public areas of the Premises to be
retained by the CITY, in an amount not to exceed One
Hundred Seventy -Five Thousand Dollars ($175,000.00),
("Phase II" Public Improvements). Said improvements to
include renovation or repair of the upper gatehouse,
construction of two bridges in the forebay area,
construction of an island connection between the two
bridges, and completion of a pedestrian walkway in the
retained area,
all a shown on plans submitted with the
DEVELOPER'SBangor Waterworks Proposal dated September
21, 1990 ("Exhibit B" attached to this Agreement).
The CITY'S obligation to construct the above -listed public
Improvements and to create a tax increment financing district under
this Paragraph shall be void and of no force until such time as the
DEVELOPER has provided satisfactory evidence of construction
financing and posted a performance bond or other security as provided
in Sections B.6., B.7. and B.B. above.
Concurrently with DEVELOPER'S actual construction of the
improvements required under Section B.6. above, the CITY shall
construct or cause to be constructed the public improvements listed
in subparagraphs a. - c. above ("Phase I" Public Improvements).
Concurrently with the DEVELOPER'S interior renovations and actual
construction of no fewer than 12 individual units of the planned 37
nit project, and the pre -sale of no less than 550 individual
ownership units (timeshare "weeks') by the DEVELOPER, the CITY shall
construct or cause to be constructed the public improvements listed
in subparagraph d. above ("Phase II" Public Improvements). The CITY
may, in its sole discretion, require the DEVELOPER to complete
construction of all or part of the above listed public improvements,
including public improvements to areas to be retained by the CITY.
In that event, all direct costs of such public =Provements
constructed by the DEVELOPER shall be refunded by the CITY to the
DEVELOPER within ninety (90) days following completion of the public
Improvements. From such sums, the CITY may withhold a total of not
more than ten percent (108) for a period of not more than one (1)
year, as surety for satisfactory completion of the improvements and
correction of any defects therein.
IN WITNESS WHEREOF, the parties hereto have set their bonds and
seals this _ day of , 1992.
CITY OF BANGOR
BY
Edward A. Barrett
City Manager
92-210
BANGOR WATERWORKS ASSOCIATES
BY
Witness Robert E. Baldacci, Jr.
STATE OF MAINE
Penobscot, as.
1992
Then personally appeared the above-named Edward A. Barrett, in
his capacity as the City Manager of the City of Bangor, and
acknowledged the foregoing instrument to be his free act and deed in
such capacity and the free act and deed of the City of Bangor.
Penobscot, as.
Before me,
Printed Name: Erik M. Stumpfel
Attorney at Law
STATE OF MAINE
1992
Then personally appeared the above-named Robert E. Baldacci Jr.,
in his capacity as President of Bangor Waterworks Associates and
acknowledged the foregoing instrument to be his free act and deed in
such capacity and the free act and dead of the Partnership .
Before me,
Printed Name: Erik M. Stumpfel
Attorney at Law
92-210
Since March 1991, several things have happened to affect the
Agreement. First, the City petitioned MOOT and was successful in
obtaining a public crossing of the Maine Central line at the
waterworks site. However, due to the vigorous opposition of Maine
Central and delays at the State level, we did not get a final
decree until February 19, 1992. Second, the project developer has
had more success recently in obtaining regular construction
financing, and now feels that it will net need to rely on pre -sale
of timeshare weeks as a financing mechanism.
The attached Council Order and "First Amendment- to the Option
Agreement responds to these delays and recent developments. The
Order and Amendment would extend the original option period for one
year, with the option now to expire on June 30, 1993. Option fees
of $500/month would be paid for the extension period. The
developer's
construction schedule dates would be extended for a one
Fear period, and would also be adjusted slightly. Finally, Section
B.6 of the original Agreement would be amended to require proof of
--- -construction financing, in lieu of pre -sale of timeshare units, to
trigger the City's obligations to convey the property and to
establish a development district to fund project -related public
improvements required under the original Agreement.
The City's Community and Economic Development staff and the
Municipal Operations Committee have both recommended approval of
the proposed amendments.