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HomeMy WebLinkAbout1988-03-28 88-171 ORDERCOUNCIL ACTION 88-171 Item/Subjects Authorizing Execution of Option Agreement with Eaton, Peabody, Bradford and Veague, P.A. - Parcel B-13 Responbile Department: Planning and Community Development Last September, Eaton, Peabody, Bradford s Veague, P.A., submitted a preliminary development proposal for a former 60.,000 sq. ft. Urban Renewal parcel designated as Parcel B-13. Parcel B-13 is located on Exchange Street adjacent to Henduskeag Plaza, Merrill Center, and Washington Street. The firm at that time proposed a 3- phase commercial development. The initial phase would consist of two separate 40,000 sq. ft. 4 -story office buildings located at opposite ends of the Exchange Street side of the parcel. One of the buildings would have been occupied by the law firm as developer / owner and the other by a bank. The second phase, to take place at an unspecified future date, would involve a 30,000 sq. ft, connection of the two buildings along Exchange Street and the third phase would extend the initial buildings back to the Henduskeag Plaza adding approximately 15,000 sq. ft. to each original building. Based on the law firm's proposal, the City Council designated Eaton, Peabody, Bradford s Veague, P.A. as tentative developers of Parcel 8-13 by passage of Council Order 87-381 (extended by Council Orders 88-75 and 88-117) which expires March 31, 1988. (See attached pages Manager's Coamentsn: 9Up1 DIe I1 p 'W Wl:c. �NxaO e Ca[y Manager t Associated inEormation:� Finance Director Legal Approval: okC City Solicitor Item No. Page of 88-171 $9-17/ AMENDED COPY /9 M�,Pdd Introduced by Councilor C,_ r CITY OF BANGOR (TITLE.) V11ri1Er Eked^ xeatatme. Developer statas for Urban Reaewal __.. By City CounaU of City of Bangor. ORDERED, THAT the tentative developer status granted Eaton, Peabody, Bradford and Veague, P.A. for Urban Renewal Parcel B-13 is hereby extended to April 26, 1988. Introduced by Councilor Shubert, March 28, 1988 :..r CITY OF BANGOR (TITLE.) (OrberAuth r ing exe ution of _Option Agreement with __Ea 9op�, Peabodyr_ a ad €qsd„a,nd Vea gue� P.A. Parcel B-13 BY W City CauncU otw aty dBanuer. OEDEEED, THAT the City Manager is hereby authorized and directed, o behalf of the City of Bangor, to execute an Option Agreement, a copy of which is n file in the Office of the City Clerk, with Eaton, Peabody,Bradford and Veague, P.A. for the purchase and redevelopment of former Urban Renewal Parcel B-13. In City Council March 28X88 mended by substiution and Passed City C1¢tk 80 RI PER Title, Extending Tentative Developer ............................... Statue for Urban Renewal Parcel B-13 ...................................... Introduce and H . n . . Councilman 8B HM24 P476 CUH F Cliy CIER, H The City staff and principles of Eaton, Peabody, Bradford 6 VOague, P.A. have been negotiating the terms of an option to pur- chase the 60,000 sq. ft. parcel. The original proposal has changed n that a bank will no longer be a major tenant of a separate 40,000 sq. ft. building and the construction of this second 40,000 sq, ft. building is no longer proposed in the initial phase of the project. The developer is now proposing to construct, own and occupy the majority of the space in a 60,000 sq. Et. office building to be constructed in the first phase of the long-range plan that still envisions the original potential of 140,000 sq. ft. The proposed 60000 sq. Et. 4 -story building would be located on the Merrill Center end of the parcel. A major concern of the law fl rm in going ahead with the project has been thee ailability of parking. In addition to the proposed 60,000 sq. ft. office building, the site will accommodate from 85 to 1D0 surface parking spaces. City ordinances presently require a parking space for each 300 sq. ft. of office space or total of 200 parking spaces to support the proposed 60,000 sq. ft. building. The Planning Board has the authority to waive this pro- vision in the Ordinance in the downtown Commercial 4 Zone and has routinely done so in the past to accommodate new development which could not provide its o -site parking. However, the developer is concerned with the availability of parking as well a meeting Ordinance requirements, even though they may be waived, The initial request of the developer was for the City to apply for an Urban Development Action Grant which would be used to deck over the existing City -owned parking lot adjacent to the Key Bank building on Exchange Street thereby creating an additional 100 parking spaces in the a A subsequent request of the developer s for the City to sell the existing parking area in the Kenduskeag Plaza between the development site and Kenduskeag Stream which involves approximately 83 surface parking spaces. The staff's position has been that adequate parking will be made available to support the development in the 500 space parking deck the City will construct. Although the parking structure would be located across Kenduskeag Stream from the proposed development, it would be connected by the overhead pedestrian walkway which the City has informally indicated a willingness to cover. The availability of the spaces in the parking garage has not satisfied the developer. We have attempted, but haven't been totally successful, to convince the Developer that the spaces located in the proposed parking garage would be as convenient as spaces located across Exchange Street in the lot adjacent to Key Bank. The staff and developer have been attempting to structure an Urban Development Action Grant application based on the developer's proposed $6 plus million development. One scenario involves the City applying to the U.S. Department of Housing and Urban Development for an Urban Development Action Grant which the City would lend to the developer to finance the developer's purchase of the off-site parking spaces from the City which are located i Kenduskeag Plaza adjacent to the alto. The City would use the payment of the Urban Development Action Grant loan to finance the replacement of the spaces sold to the Developer. Another potential use of UDAG loan repayments would be to finance the covering of the overhead pedestrian walkway. Since the City owns the parking, it may be difficult to convince the Department of Housing and Urban Development that it is absolutely necessary that the City be reimbursed for selling parking spacesto a developer that maintains it will not develop unless it receives those parking spaces. The initial reaction from HUD has been that since the City owns the spaces, it can make its own deal without the need for Urban Development Action Grant funds if it truly wants the development to occur. After reviewing the Developer's proposed schedule (see attached March 18th letter) it is apparent that the City will have at least three more opportunities (July 188, Nov. '89, March '88), if not more, to apply for a UDAG to assist this project. The project has not yet developed sufficient information and financial commitments to meet UDAG submission requirements. The Developer and staff have agreed to continue working on a UDAG application, but to not submit one prior to the next deadline of July 31, 1988. Aside from the Urban Development Action Grant application, it has also been the staff's position that the City should not convey to the developer the additional 83 parking spaces in the plaza. Due to the axisting shortage of parking spaces, which will particularly continue to exist on the east side of the Kenduskeag Stream after the parking structure is built on the west side of the stream, w feel it will be very difficult to remove those 83 spaces from the public parking supply and convey them for the exclusive use of a private developer. We have not sold any other developer off-site parking spaces. we have indicated that when, and if, development on the site increased to a level of 120,000 sq. ft. we would recommend transfer of the 83 plaza spaces and would recommend such terms i the option agreement. (We have leased The Schoolhouse project, a 60 -unit downtown residential reuse of a former high school building, 30 off-site parking spaces in a situation involving an Urban Development Action Grant whereby the City received UDAG funds to rebuild and expand the axisting Abbott Square parking lot to create the additional 30 leased to the developer.) The City could consider several alternative approaches in providing the requested assistance: 1. Waiver that portion of the Ordinance required parking which cannot be accommodated on the development site. This alternative, often thermsed by the Planning Board in the past, i ost economical in the short-term. However, n the long -teen it would add to the o rall e parking deficit which already is n sitating the construction of expensive structured parking. Neither would this alternative serve the actual parking needs of the tenants of the new development. 2. Construct a single parking deck over the existing surface lot between Hancock Street and Key Bank as initially requested by the developer. This alternative has considerable opportunity costs because it would compete with the primary parking structure on the west side of the stream and it would initially increase the cost of future development of a multi-level parking structure on this site. 3. Lease the developer parking spaces in the 500 - space parking structure to be c nstructed on the west side of the stream. This is the best alternative from the City's prospective as it provides an additional built-in demand for spaces n the already committed parking structure and does not reduce the inventory of public surface parking. This approach apparently will not satisfy the Developer. 4. Sell (or lease) the developer the 83 spaces in Kenduskeag Plaza located adjacent to the development site. Should the Council agree to such a sale, it should recognize the cost of replacing these spaces. At the time of this memo the Community Development staff has not been able to work out a agreement acceptable to both parties. It is recommended that the various options be considered by the Council Community Development Committee (a meeting is scheduled for 4 PM on Monday, March 28th) prior to the City Council taking action. If an agreement cannot be reached at the Community Development Committee meeting, or if the Option Agreement needs more refinement, it is recommended that the tentative developer status granted to the Developer be extended to the first Council meeting in April (April 11th) during which time it is hoped all issues can be resolved. EATON. PEABODY, BJw DFONO OR VEAGGE. I MERRILY CENTER. I RELEASE STREET 88-171 1 0 Box 1210 CARBON. MAINE "ITT GAMBIA FEET MARI IN 4 WILK 4207P BE III I I GEORGE I EATON [1092 1 "IT "'I'LL' 'HARVARD ILL.' MI 'All' ISIEDLE I WAGE, 'FINE 190 1 .111.11 'All' DEAR A 111A.6... A ANDESTA OFFICE THOMAS I "I" MAN THE I TICKET 0 CONNOR AUGUSTA MAIN' SEEM 'All" I'll 'All. A ITLEACT SOUTHWEST VINCE ORSAII I AIM" VALLSOM "I 'All LAW THOMAS I JOHNSTON THICARL 0, LINE. W'w' NE "HE March 18, 1988 DOVER MACHINE OFFICE IIIIATIALKI 'IRELAND 10,111L SRI 11.1111, DOVER III MITI Mr. Rod McKay community Development Director City of Bangor City Hall Bangor, Maine 04401 Dear Rod: I have reviewed the Firm's plans regarding the construction of an office building on lot B-13 in order to -establish a construction schedule as you requested. Considering our current lease constraints and other factors as well as the availability of our architect, the following i the current tentative schedule: Date Description 9/88 - 1/89 Preliminary design 2/89 - 6/89 Final design 7/89 Project bid 9/89 Contract award 9/89 - 5/90 Foundation construction 6/90 - 9/99 Structural construction 10/90 - 4/91 Mechanical 11/90 - 7/91 Interior finish 6/91 - 9/91 Landscaping, paving and final site work 9/91 project completion Because our financial and construction plans are incomplete and we have net decided upon an ownership structure, w are unable to extrapolate a precise lease rate. However, we can provide some rough figures at our meeting on March 22, 1988. Very truly yours, 'C�� Stanton L. McCowen Administrator SLAM/aaa DATE RECEIVED-III-�1 - TIME RECEIViD Ki 1 ETC C 0 .