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HomeMy WebLinkAbout1988-09-26 88-407 ORDERt,ouncin}nr Dale "y^2i l88 orr ` Item No. - 88-407 nem/8 blecPAuthorizang Execution of Option Agreement with Gridley Street Associates - Parcels H-2 and H-3 Responsible Department: Community Development Commentary: 34e mmnuLLty cevelopnent Committee met can Moday, September 19, 1988 and recommended approval of the enclosed Council. Order. 'this has been quite a long project xequiring extensive'negotiatices and preparation work by the - Developer end City staff. All of the pieces appear to be in place at this time and the details of the Option Agreement appear to be in place and acceptable to all coxernen parties. As of the date of this Memorandum two outstanding issues include the earnest of the morthly option fee and the performance and materials bad requirements. City staff is recrinamanding that the monthly option fee remain as stated in: the version of the Option Agreement Mich is"before you. this amountis calculated in aobrdance with Council Order y88-172 and is the equivalent of cane-half of 18 of the pertbase estimated price for -the pit ,parcels. Rhe •to he a m would' like the block on be lowered, but this; does not appear to addressed a ease[ stumblh s block in our oper at the . .lbs bed infirm Onto be i,Ulislcysr d: staff and the Develops[.,"at but Council meeting. may Onto again, this does-nM appear fo he major issue .but discussion mag be'regardin and t Inds o ar[hMile for gun Counciwill a"pilicy,dedisim regarding in Ug Mat kinds of assurances arc] guarantees will be Yegmitral of developers in Ne:futmue.- L �p' pepertmf Hevd Manager Comments: If�W.aW+ga4 �aetV4�. `iu�O t �qt YY, lir.ns I.Wur.vMq mW A. s mordam°P u. Ciy Mem wa .455O<Iat[E Information:Q Bu d9et Approval: alf, ' F1'm u0i: ee renal Approval: A..CiOrSulleim: I n—broduced For LJ Passage First Reading - Page_ of 0 Referral 88-40] AmipMto Councilor Shubert, September 26, 1988 CITY OF BANGOR (TITLE.) Mrbtry.....AutbPLlzing...F sgdtlm of option..A rsemsnt with. crraley ,. street Associates -- Parcels H-2 and H-3 By the City Coamptt of Me City ofRanpor. ORDERED, THAT the city Manager is hereby authorized and directed, on behalf of the City of Bangor, to execute an Optim Agreement, a copy of whicb is on file in the Office of the City Clerk, with Gridley Street Associates for the purchase and redevelopment of property known as Urban Penewal Parcels H-2 aM H-3. 88-407 ORDER Title, - A�tliorizing `EaxuSiov: & ia-.:A reemnt with gridley street associates Parcels H-2 H-3 Passed council 9eptcmber.2 1988 PaPascal ...................................... M � AuipmJ W w� Ci y Clerk �Q�md b/ Comcilman. Date October 6, 1998 TO: Edward A. Barrett, City Manager FR h Matthew B. Nichols, Asst City Solicitor BE; Option Agreement for Parcels H -d 6 H-3 Please initial the change on page 6 of bath of these originals. The change is required due to a typographical error which occurred during one of our many revisions to the Agreement. The msing word "amount" wag discovered by Andy Hamilton and during the phone conversation with Andy, I advised him to have his client insert the change and initial it (see "gg" on page 6 for George Gillis). Afteryou have initialed the change, please forward one original to the City Clerk's office for their records, and forward the other original to the Community Development office. M.B.N. to Enclosures cc: Rodney G. McKay, Director of Planning S Community Development I1 K „✓ OPTION AGREEMENT FOR PURCHASE OF URBAN RENEWAL PARCEL H-2 6 H-3 THIS AGREEMENT is made this iwj day of n4iw , 1988, by and between the CITY OF BANGOR, a municipal corporation located in the County of Penobscot, State of Maine (hereinafter "CITY"), and Gridley Street Associates, a Maine General Partnership, having a place of business in Bangor, County of Penobscot, State of Maine (hereinafter "DEVELOPER" which term shall also include any wholly owned subsidiary corporation orany corporation, partnership, limited partnership or trust where the shares, partnership interests or legal or beneficial interests are held by the shareholders of DEVELOPER). WITNESSETH: WHEREAS, the CITY has received the DEVELOPER'S proposal for the development of the real property known as Renduskeag Stream Urban Renewal Disposition Parcel R-2 a H-3, located on Boyd Street in Bangor (hereinafter "the Premises"), being approximately 90,533 square feet, and being more particularly identified on Exhibit A attached hereto and incorporated herein by reference; and WHEREAS, in accordance with its Development. Plan, the CITY has determined that the private development of the Premises in accordance with the provisions of this Option Agreement and the Development Plan would best serve the interests of the citizens of the CITY; and WHEREAS, the CITY has determined that the DEVELOPER'S proposal will serve the interests of the citizens of Bangor; NOW, THEREFORE, in consideration of the option fee paid to the CITY by the DEVELOPER in accordance .with Section A.Z. below and of the mutual conditions and covenants contained herein, the parties agree as follows: Section A. GRANT OF OPTION 1. Grant of Option. The CITY grants and the DEVELOPER accepts an exclusive option to purchase the Premises for development of not less than 32 dwelling units containing not less than 64,000 square feet of floor area at a m direct construction cost (fees foe architects, engineering andrsurveVs plus sit¢ work, building labor and materials, and tenant improvements) of not less than Ona Million Eight Hundred Thousand Dollars ($1,800,000) in accordance with the terms and conditions of this Option Agreement. The purchase price of the Premises shall be $88,503.00, to be paid to the CITY in cash or by Certified or Bank Check at the time of closing on the sale of the Premises, less any amounts paid by the DEVELOPER to the CITY pursuant to this Option Agreement. 2. Term and Price of Option. This Option Agreement shall remain in effect from the date hereof until April 1, 1989. The non- refundable option fee for this period is $425.00 per month, which shall be pale to the CITY in cash or by Certified or Bank Check on or before the first business day of each month this Option Agreement is in effect beginning October 1, 1988. The City Council may extend this Option Agreement, upon the DEVELOPER'S written request stating the reasons therefor, for a period not to exceed an additional six (6) months. The fee for an extension, which shall be payable in full, before or at the time the extension is executed, shall be $ 425.00 per month. All option fees paid to the CITY under this Agreement shall be applied towards the purchase price upon the conveyance of the Premises to the DEVELOPER; provided, however, that the option fees shall be -forfeited to the CITY if the DEVELOPER does not purchase the Premises in accordance with the terms and conditions of this Agree- ment. 3. Exercise of Option. To exercise its right to purchase the Premises, the DEVELOPER shall so notify the CITY in writing before the expiration of this Option Agreement and any extension thereof. 4. fore lance and Evidence of Title. Within 30 days, orsuch other time as Heparties may agree upon, o the CITY'S receipt of the DEVELOPER'S notice under Section A.3. above, the CITY shall c vey the Premises, including the areas formerly known as Frazier Street, Gridley Street, and Church Lane included therein, conveying good and clear marketable title, free and clear of all liens and encumbrances, except easements for existing sewer lines as shown on Exhibit •A•, or as such sewer lines may be relocated by the DEVELOPER, to the Premises to the DEVELOPER by Municipal Quitclaim Deed, subject however to the conditions, restrictions, and covenants contained in Sections E. and C. below. Within 30 days of the date of this Option Agreement, o such other time as the parties may agree, the CITY will furnish to the DEVELOPER evidence of its title in the form of an abstract of title prepared in accordance with the Maine Title Standards, or a title insurance co mmitment issued by a title insurance company, licensed to do businessin the State of Maine, that it will issue a title insurance policy insuring marketable title. If the CITY is unable to tender marketable title after using such reasonable efforts, the CITY shall refund to the DEVELOPER the fees paid under this Option Agreement, if the DEVELOPER so requests, or the DEVELOPER may choose to accept the CITY'S Municipal Quitclaim Deed, in which case the DEVELOPER shall assume any risks associated with the title. The status of title disclosed by such abstracts or title insurance binder must meet the approval of the DEVELOPER'S attorneys; such approval shall not be unreasonably withheld. In no event shall the CITY'S obligations to tender marketable title, and to use reasonable efforts to determine the source of title, extend beyond the term of this Option and any duly executed extension thereof as set forth in Section A.2. above. 5. Right of Entry. During the option period the DEVELOPER shall have the right, on reasonable notice to and consent by the City Engineer, to enter upon the Premises with persons and machines for the preparation of feasibility studies and construction plans. Such entry shall be at DEVELOPER'S sole risk and expense, and the DEVELOPER covenants and agrees to indemnify, defend, and hold the CITY harmless from any claims for personal injury or property damage suffered by reason of entry upon the Premises by DEVELOPER, its agents or employ- ees, or anyone acting on the DEVELOPER'S behalf. Prior to any entry hereunder, the DEVELOPER shall first obtain liability insurance or other acceptable coverage for liability for this purpose in such amount(s) of coverage satisfactory to CITY with the CITY as a additional named insured, and shall provide the CITY with written evidence thereof. All work shall be done in a manner us that causes the least possible disturbance t0 the Premises, and the DEVELOPER covenants and agrees that the exercise of its rights under this paragraph shall be done in a workmanlike manner and that DEVELOPER shall repair any damage to the Premises resulting from the exercise of these rights. 6. Site Improvements. The City hereby agrees to remove all dead and/or diseased trees from the Premises prior to conveyance of the Premise to DEVELOPER. Section B. CONDITIONS PRECEDENT TO THE CITY'S CONVEYANCE OF THE PREMISES TO THE DEVELOPER Before the CITY'S conveyance of the Premises the DEVELOPER shall complete the following: 1. Submission of Plans. The development and use of the Premises as incorporated the DEVELOPER'S final plan shall be i substantial conformance with the scope of development described i Section A.1. above and the DEVELOPER'S presentation to the CITY o Jud, 1988, and plana entitled "Pros poed 32 Apt. Units", prepared by Webster/Bald win/Rohm an/Dav/Csarnreck L, P.A., dated July 19, 1988, copies of which plans are on file in the office of the Department of Planning and Community . Development, City Hall, 73 Harlow Street, Bangor, Maine. Any development and use of the Premises shall comply with the Codes and Ordinances of the City of Bangor. All terms used in this paragraph shall be -defined in accordance with the provisions of the Zoning Ordinance of the City of Bangor and any applicable amendments thereto or replacements thereof. Plans shall conform to and be submitted in accordance with the pro- visions of subsection 2. below. 2. Approval of Plans. No construction or renovation will be allowed without the prior submission and approval of preliminary plans, final plans, and specifications. All plans will be submitted to the city Manager or staff designated by the City Manager. All plane and revisions to plans shall be reviewed by City staff desig- nated by the City Manager after which the City Manager shall submit the plans along with his recommendations to the City Council. Said plana shall be reviewed and approved by the City Council. No plans shall be approved unless said plans have been prepared by a duly registered architect or a duly registered professional engineer, as each is defined by Title 32 of the Maine Revised Statutes Annotated, unless otherwise accepted by the City. The following submissions shall be required: a. Preliminary Plan - The intent of the Preliminary Plan shall be to outline the general scope of development or redevelopment, and to convey to the City Council sufficient information to determine the character of the work to be performed. The Preliminary Plan shall contain: (1) Site Plan - The site plan shall be drawn to a scale of one (1) inch equals twenty (20) feet .wherever practical. The plan should include: (a) Property lines and dimensions. (b) Adjacent features, such as abutting streets, buildings or properties. (C) existing and proposed paved areas, including the type of pavement an principal dimensions. (d) The on-site parking layout, and traffic flow, if any. (e) Planting aaincluding general sive and variety of trees and shrubs. (f) All existing and proposed utilities, both above and below ground, including ser- vice connections and drainage facilities. (g) Principal elevations, grades, or con- tours, on-tours, both existing and proposed. (h) existing and new building outlines, including overlaps such as canopies or basement extensions. (2) Floor Plan - The scale of the floor plan shall he left to the discretion of the architect. This plan shall show general room layouts and including entrances and exits. Dimensions may be approximate and the overall floor area for each floor shall be indicated. The elevation of each floor shall be indicated. (3) Elevations - A suitable cross-section or elevation of the building shall be provided, either in the form of an artist's rendering of the building or a cross-section of the building. Where site grade plays an important part in the layout of multi-level structures, the City shall reserve the right to request cut -away elevations showing the relationship of floors to surrounding grades. Materials to be used for exterior treatment shall be indicated. b. Final Plans and Specification -After approval of the pralimv na[y plan, the developer shall then proceed with the preparation of final plans and specifications. Said plans and specifications shall Show sufficient details necessary to insure proper construction. All dimensions and elevations shall be accurate and all materials to be used in the structural or architectural treatment of the facility shall be outlined in complete detail. If, in the opinion of the City, there is a doubt regarding the structural adequacy of any facility, the developer shall provide all required back-up data, including structural computations, boring logs or material guarantees. C. No later than December 1, 1988, the DEVELOPER shall set with the CityTity Councvl and submit for its approval preliminary plans as specified in Section B.2. above. If the City Council deems revisions to the preliminary plans to be necessary or appropriate, the plana must be so revised and submitted to the City Council for its approval no later than Jan. 1, 1989. No later than March1, 1989, the DEVELOPER shall meet with the City Council 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 deems revisions to the final plans to be necessary or appropriate, the plans must be so revised and submitted to the City Council for its approval no later than April 1, 1989. 3. Amendment to Final Plans. If the DEVELOPER desires to make any substantial alterations in the final plans after their approval by the City Council, the DEVELOPER shall submit the proposed change in writing to the City Council for its approval. If the final plans, as modified by the proposed change, still conform to the requirements of Section R.I. hereof, the City Council shall not unreasonably withhold approval of the proposed change. The City Council shall either approve or disapprove the proposed change within ten (10) days after its submission and notify the DEVELOPER of its decision. 4. ConstruCtionProd rose Schedule. Concuree nt ly with the submission of the final plans, the DET E_YtR shall submit a construc- tion -progress schedule to the City Council for its approval. The progress schedule shall provide for the commencement of construction within six (6) months after closing and completion of construction within twenty-four (24) months from the commencement of construction, r such later date as the City Council may approve. Nothing herein shall be construed to extend, limit, or otherwise affect the time limits prescribed in any building permit or Planning Board approval. 5. Permit Requirement. DEVELOPER shall obtain, and shall provide satisfactory evidence thereof to the CITY, every permit, license, and governmental approval necessary for commencement and completion of the development including, but not limited to, Bangor Planning Board approval if required. 6. Evidence of %arcing. The DEVELOPER shall provide the CITY with written, legally bind r ng commitments, in a form satisfactory to the City Solicitor, from acceptable lending institutions or govern- mental agencies for both interim construction financing and long -teem financing of the total proposed development as it is detailed in the plans referred to and approved under Sections B.1. and B.2. above. J. Construction Contract. The DEVELOPER shall provide the CITY with a certificate executed by the DEVELOPER and its general contractor, if any, for construction of the total development certi- fying to the existence of such a contract for development i accor- dance with the provisions of Section B.1., B.2., B.3. and B.14. above. S. Performance Bond. The DEVELOPER or the DEVELOPER'S general contractor shall post with the lending institutions or governmental agencies referenced in Section 6 above both a performance bond and a labor and materials payment bond issued by corporate surety licensed todo business in the State of Maine, each in a penial sum equal to the total estimated cost of the total proposed development, to secure performance of the obligations set -forth in Sections B.1, B.2, B.3 and B.4 above. The DEVELOPER Or the DEVELOPER'S general contractor shall submit to the CITY a copy of said bonds and written evidence of payment of the required premiums.. The bonds must remain ineffect until the CITY'S issuance of the Certificate of Completion under Section C.12. below. In Lieu of the above referred to labor and materials payment bond, the DEVELOPER may, at its option, obtain an irrevocable letter of credit from the lending institution referred to in paragraph 6 above in an amount equal to one hundred twenty percent (120%) of the total construction cost set forth in Section A.1 above less construction advances as such advances are tendered; said letter shall name the CITY as beneficiary thereof andall by its express terms and conditions require that all of said,°, sed to complete the �f improvements as set forth in said Section A.1. If the DEVELOPER acts as its own contractor and does not retain a general contractor, the CITYshall not require the DEVELOPER t0 post a performance bond. Section C. CONDITIONS SUBSEQUENT TO THE CITY'S CONVEYANCE OF THE PREMISES TO THE DEVELOPER Except as otherwise specified herein, the following express conditions, covenants, and restrictions shall be expressly incorpo- rated into the CITY'S Deed to the DEVELOPER, and shall run with the land: 1. Deed Covenants. It is intended and agreed, and the Used shall so expressly provide, that the express conditions, Covenants, and restrictions provided in Section C. hereof shall be covenants "running with the land" and that they shall be binding, to the fullest extent permitted by law and equity, for the benefit and in favor of, and enforceable by, the CITY and any successor in interest to the Premises or any part thereof for the time periods specifically pre- scribed herein for each. None of the provisions and remedies below, including the Reversion specified in Section C.10., shall be construed so as to limit the DEVELOPER'S liability to the CITY for the DEVEL- OPER'S breach of any of its obligations under this Option Agreement and the Deed. 2. Use Restriction. The DEVELOPER agrees for itself, and every successorssor vinterest to the Premises, or any part thereof, and the Deed shall contain express covenants on the part of the DEVELOPER for itself, and its successors andassigns, that the Premises and any improvements which may be or may become located thereon shall be used, constructed, developed, occupied and maintained in accordance with the laws, ordinances, or regulations of the State of Maine and the City of Bangor, as the same may now or hereafter be in effect. In the event that both the State and the City have law(s) governing the same sub- ject matter, DEVELOPER agrees that the Premises and any improvements which may be or may become located thereon shall be governed by the most restrictive of these law(s). The Developer further agrees that any structure, or the occupancy thereof, constructed on the Premises shall not unreasonably interfere in any way with the operation, main- tenance m-tenance , repair or replacement of all existing sewer lines on the Premises. In addition to other requirements herein, the Developer shall not construct any structure on the Premises without receiving prior written certification by the City Engineer that said structure shall not unreasonably interfere with said sewer. 3. Anti -discrimination. The DEVELOPER agrees for itself, and every a essor in rote rest Co the Premises, o any part thereof, and the Deed shall contain express covenants on the part of the DEVELOPER for itself, and its successors and a signs, that the DEVELOPER, and its successors and assigns, shall not discriminate upon the basis of race, color, creed, national origin, sex, or physical handicap in the sale, lease, or rental, or use cupancy of the Premises or any improvements thereon. This covenant shall r n perpetuity. This covenant against discrimination shall be binding for the benefit and n favor of, and enforceable by, the CITY and the United States of America against the DEVELOPER and every successor in interest to the Premises or any part thereof. 4. Property Taxes. The DEVELOPER agrees for itself, and every successor in interest to the Premises, or any part thereof, and the Deed shall contain express covenants on the part of the DEVELOPER for itself, and its successors and assigns, that the Premises shall be subject to all taxes andassessments as may be imposed by any govern- mental authority upon the Premises and any buildings, structures, or improvements which may be or may become located thereon. It is the intent of the parties hereto, and DEVELOPER hereby agrees that it does hereby waive, for itself and any successors in interest, all right o privilegeof exemption from municipal taxation of the Premises and any buildings, structures, or improvements which may be or may became located thereon, as may be available by reason of DEVELOPER'S o such successors' legal status, or for any other reason whatsoever, and that the City of Bangor, in its capacity as a taxing authority, may assess all taxes as would otherwise be applicable to the Premises, buildings, structures or improvements which may be or may become located thereon, as if such exemption did not exist. DEVELOPER further agrees, for itself and any successors in interest, to pay any assessments on or before the date upon which they become due and payable. The CITY agrees that DEVELOPER, or its successors in interest, shall have the right to contest the amount of such taxes or assessments in the manner prescribed by law. 5. Subdivision Restriction. The DEVELOPER agrees for itself, and every successor in—interest the Premises, or any part thereof, and the Deed shall contain express covenants on the part of the DEVEL- OPER for itself, and its successors and assigns, that the Premises shall not be subdivided without the CITY'S express written consent. For the purpose of this paragraph, or any restriction or,covenant of the Quitclaim Deed, any of the following shall not be Seemed to constitute a subdivision: a. Development of the project as condominium pursuant to the Maine Condominium Act (33M.R.S.A. Sec. 1601- 101 at seg.); b. Leases of portions of the development; or c. Construction of separate buildings or structures on the Premises. 6. Land Speculation Restriction. The DEVELOPER represents and agrees that its purr hase of the Premises and its other undertakings pursuant to this Option Agreement are and will be used for the purpose of development of the Premises in accordance with Section B.1., B.2., 6 B.3 above, and not for speculation in land holdings. This covenant shall terminate upon the CITY'S issuance of the Certificate of Completion under Section C.12. below. 7. CITY'S Approval of T[anefe[ P[io[ to Completion. The DEVELOPER recognises that the qualifications and identity of the DEVELOPER, and its principals or any successors in interest, are Of n particular concern to the CITY.The DEVELOPER further recognizes that it is because of rsuch qualifications and identity that the CITY i entering into this Option Agreement and is willing to accept and rely n the obligations of the DEVELOPER for the faithful performance of all undertakings and covenants to be performed by the DEVELOPER. Therefore, the DEVELOPER represents and agrees for itself, its succes- sors and assigns, that, except only by way of security for the purpose of obtaining financing necessary to enable the DEVELOPER or any approved successor in interest to perform the obligations under Section B hereof, the DEVELOPER has not made or created and, until the CITY issues the Certificate of Completion under Section C.12. below, will not make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, lease, trust, power, or transfer in any other mode or form, of, or with respect to, this Option Agree- ment, the Premises, or any part thereof, or interest therein, nor shall any contract or agreement to do any of the same be entered into without the CITY'S prior written approval. The CITY shall be entitled to require as conditions to any such approval that: a. Any proposed transferee shall have the qualifications and financial responsibility, determined by the CITY by written evidence submitted to it, to be necessary and adequate tofulfillthe obligations undertaken under Section B. hereof; In. Any proposed transferee, by instrument in writing satisfactory to the CITY and in a form recordable i the Penobscot Registry of Deeds, shall for itself and its successors and assigns, and expressly for the benefit of the CITY, have expressly assumed all of the obligations of the DEVELOPER under this Option Agreement and agreed to be subject to all of the conditions and restrictions. to which the DEVELOPER is subject under Section C. hereof; and C. The consideration payable for the transfer by the transferee or on its behalf shall not exceed an mount representing the actual cost to the DEVELOPER of the Premises and the improvements, if any, there- tofore made thereon by it; the intent of this pro- vision being to preclude assignment of the agreement, or transfer of the Premises, for profit prior to the CITY'S issuance of the Certificate of Completion under Section C.12., and to provide that if any such assignment on transfer is made the CITY shall be entitled to increase the purchase price to the DEVEL- OPER by the amount that the consideration payable for the assignment or transfer is in excess of the amount that may be authorized pursuant to this subparagraph c. and such consideration shall, to the extent that it is in excess of theamount s authorized, belong and forthwith be paid tthe CITY. 10 The foregoing provisions of this Section C.I. notwithstand- ing, the DEVELOPER may assign this Option Agreement and all rights and duties herein, subject to the terms and conditions hereof, to a devel- opment entity hereafter organized and qualified by DEVELOPER under the laws of the State of Maine; provided, however, that DEVELOPER shall retain an active involvement in the entity and the entity shall n a writing satisfactory to the CITY, the obligation to complete, in the manner provided for in this Option Agreement, the contemplated improvements on the Premises. furthermore, the entity must submit evidence satisfactory to the CITY that it has the quali- fications and financial responsibility necessary to perform such obligation. All covenants contained in this Section C.I. shall termi- nate upon the CITY'S issuance of the Certificate of Completion under Section C.12. below. 8. MOTt9aces Prior t0 Completion of Improvements. a. Prior to the completion of the improvements as cer- tified by the CITY, neither the DEVELOPER norany successor in interest to the Premises or any part thereof shall engage in any financing or any other transaction creating any mortgage or any other encumbrance or lien upon the Premises, whether by express agreement oroperation of law, or permit any encumbrance or lien to be made o attached to the Premises, except for the purpose r of obtaining funds necessary for making the improvements provided herein plus the purchase price of the Premises paid by the DEVELOPER to the CITY. The DEVELOPER shall notify the CITY in advance of any mortgage financing it proposes to enter into with respect to the Premises, and of any encumbrance or lien that has been created on or attached to the Premises, whether by voluntary act of the DEVELOPER or otherwise. b. The holder of any mortgage authorized by this Option Agreement, including any such holder who obtains title to the Premises or any part thereof as a result of foreclosure proceedings or action in lieu thereof, shall not be obligated by the provisions of this Option Agreement to construct or complete the improvements or to guarantee such construction o completion. No covenant or any other provision in any deed shall be construed so to obligate any such holder. However, neither such holder nor its suc- cessors or assigns shall be authorized to devote the Premises or any part thereof to any uses, or to con- struct any improvements thereon, other than those uses or improvements provided or authorised in this Option Agreement. 11 All covenants contained in this Section C.B. shall termi- nate upon the CITY'S issuance of the Certificate of Completion under Section C.12. below. 9. Notice of Default to Mortgagee. a. Whenever the CITY shall deliver or make any notice o demand to the DEVELOPER with respect to any breach or default by the DEVELOPER in its obligations or cove- nants under this option Agreement, the CITY shall at the same time deliver to each holder of record of any mortgage authorized by this agreement a copy of such notice or demand. Each such holder shall, insofar as the rights of the CITY are concerned, have the right at its option to cure such breach or default and to add the cost thereof to the mortgage debt and the lien of its mortgage. However, if the breach or default is with respect to construction of the improvements, such holder may not undertake ocon- tinue the construction or completion of the improve- ments beyond the extent necessary to conserve or protect improvements or construction already made without first having expressly assumed in writing the obligations to the CITY to Complete, in the manner provided in this Option Agreement, the improvements n the Premises or the part thereof to which the lien r title of such holder relates, and having submitted evidence satisfactory to the CITY that it has the qualifications and financial responsibility necessary to perform such obligation. Any such holder who shall properly complete the improvements relating to the Premises or applicable part thereof shall be entitled, upon written request made to the CITY, to a certification by the CITY to such effect in provided in Section C.12. of this Option Agreements Such certification shall, if so requested by such holder, provide that any remedy of the CITY'S with respect to revesting of title to the Premises because of failure of the DEVELOPER to cure any default with respect to the construction of the improvements on other parts of parcels of the Premises, or because of any other default in or breach of this Option Agree- ment by the DEVELOPER, shall not apply to the part or parcel of the Premises to which such certification relates. F b. If after the DEVELOPER'S default under this Option Agreement, the holder of any mortgage on the Premises or part thereof does not exercise the option to con- struct orcomplete the improvements relating to the Premises or part thereof covered by its mortgage or to which it has obtained title within 60 days after the holder has been notified of the default or under- takes completion of the improvements but does not complete construction within the period as agreed upon by the CITY and such holder, the CITY shall have the option of paying to the holder the amount of the mortgage debt and securing an assignment of such debt and of the mortgage.If ownership of the Premises or part thereof has vested i such holder by way of foreclosure or action in lieu thereof, the CITY shall be entitled, at its option, to a conveyance to it of the Premises or part thereof upon payment to.such holder of an amount equal to the sum of the mortgage debt at the time of foreclosure or action in lieu thereof less all appropriate credits, including those resulting from collection and application of rentals received during foreclosure proceedings; all expenses with respect to the foreclosure; the net expenses, exclusive of general overhead, inred by such holder in and a a direct result of the subsequent management of the Premises; the cost of any improve- ments mprovements made by such holder; and an amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such amounts become part of the mortgage debt and such debt had continued in existence until such acquisition by the CITY. C. In the event of the DEVELOPER'S default in its obligations under any mortgage orother instrument creating a encumbrance upon the Premises or part thereof prior to completion of improvements, the CITY may at its option cure such default or breach. In such case the CITY shall be entitled, in addition to and without limitation upon any other remedy to which it shall be entitled by this Option Agreement, oper- ation of law, or otherwise, to reimbursement from the DEVELOPER or successor in interest of all coats and n expenses incurred by the CITY in curing such default or breach, and to a lien upon the Premises or part thereof to which the mortgage, encumbrance, or lien relates, to secure such reimbursement. d. For the purposes of this and other Paragraphs of this Option Agreement, the term 'holder' in reference to a mortgage shall be deemed to include any insurer o guarantor of any obligation or condition secured by such mortgage, including but not limited to the Federal Housing Commissioner, the Administrator of Veterans Affairs, and any successor in office of either such official. 13 All covenants contained in this Paragraph 9 shall terminate upon the CITY'S issuance of the Certificate of Completion under Section C.12. below. 10. Title Reversion Prior to Completion. In the event that prior to the CITY'S issuance of the Certificate of Completion under Section C.12. below: a. The DEVELOPER, or its successor in interest or sign, shall default in or violate its obligations with respect to the construction of the improvements (including the nature and the dates for the beginning and completion thereof), or shall abandon or sub- stantially suspend construction work, and any such default, violation, abandonment, or suspension is not cured, ended, or remedied within three (3) months (or six (6) months, if the default is with respect to the date for completion of the improvements) after written demand by the CITY to do a or b. The DEVELOPER, or its s interest or assign, shall fail to parealestatetaxes or ants on the Premises o any part thereof when due, shall place thereon any encumbrance or lien unauthorized by Section C. hereof, shall suffer any levy or attachment to be made, or any material - men's or mechanics' lien, or any other unauthorized cumbrance or lien to attach, and such taxes o assessments shall not have been paid, or the one=- branceor lien removed or discharged or provision made, satisfactory to the CITY, for such payment, removal, or discharge, within thirty (30) days after the CITY'S written demand to do sop or C. The DEVELOPER, or its successor In interest or sign, shall make any asaignment for the benefit of r creditors, o receivero similar officer shall be appointed to take charge of all or any substantial part of the DEVELOPER'S property, and Such assignment or appointment isnot dismissed o released within thirty (30) days of the date the assignment or appointment is made; or d. There is, inviolation of Section C. hereof, any transfer of the Premises or any part thereof, or any change in ownership of the DEVELOPER, except as expressly permitted in Section C.7. above, and such violation shall not be cured within thirty (30) days after written demand by the CITY to the DEVELOPER: 14 then the CITY shall have the right to re-enter and take possession of the Premises and to terminate and revert in the CITY the entire estate conveyed by the Deed to the DEVELOPER as if no Deed had ever been given; it being the intent of this provision, together with other provisions of Section C. hereof, that the conveyance of the Premises to the DEVELOPER shall be made upon, and that the Deed shall Contain, condition subsequent to the effect that in the event of any default, failure, violation, c other action or inaction by the DEVELOPER specified in subparagraphs a., b., C. and d. of Section C.10. hereof, and failure on the part of the DEVELOPER to remedy, end, or abrogate such default, failure, violation, or other action or inaction, within the period and in the manner stated in such subparagraphs, the CITY at its option may declare a termination in favor of the CITY of the title, and of all the rights and interests inand to the Premises, and that such title and all rights and interests of the DEVELOPER, and any assigns or successors in interest to and in the Premises shall revert to the CITY; provided, however, that such condition subsequent and revesting of title in the CITY shall always be subject to and limited by, and shall not defeat, render invalid or limit in any way; (1) the lien of any mortgage authorized by Section C. hereof, and (2) any rights or interests provided in Section C. for the protection of the holders of such mortgages. The CITY shall have the right to institute such actions or proceedings as it may deem desirable for effectuating the purposes of this Section C.10. including also the right to execute and record or file among the public land records in the office in which the Deed is recorded a written declaration of the termination of all the right, title and interest of the DEVELOPER, its successors in interest and signs, in the Premises and the revesting of title in the CITY; provided, however, that any delay by the CITY in instituting or pros- ecuting any such actions or proceedings or otherwise asserting its rights under Section C. hereof shall not operate as a waiver of such rights or to deprive it of or limit such rights in any way. The express conditions, covenants, and restrictions con- tained in this Section C.10. shall terminate upon the CITY'S issuance of the Certificate of Completion under Section C.12. below. 11. Disposition Upon Reversion. Upon the revesting in the CITY Of title to the Premises o any part thereof as provided in Section C.10., the CITY shall in accordance with State law use its best efforts to resell the Premises or part thereof, subject to any exist- ing mortgage liens, a and in such manner as the CITY shall find feasible and consistent soon the objectives of developing the Premises for retail or professional office use, to a qualified and responsible party or parties, as determined by the CITY, who will assume the obligation of making or completing the improvements or such other improvements in their stead as shall be satisfactory to the CITY. is be applied: Upon the resale of the Premises, the proceeds thereof shall a. First, to reimburse the CITY for: all costs and expenses incurred by the CITY including but not limited to salaries of personnel in connection with the recapture, management, and resale of the Premises r part thereof (but less any income derived by the CITY from the Premises or part thereof); all taxes, assessments, water, sewer and other utility charges with respect to the Premises or part thereof; any payments made or necessary to be made to discharge any encumbrances or liens existing on the Premises or part thereof at the time of revesting of title thereto in the CITY or to discharge or prevent from attaching or being made any subsequent encumbrances r liens due to obligations, defaults, or acts of the DEVELOPER, its successors or assigns; any expendi- tures made or obligations incurred with respect to i the making o completion ofthe .improvements or any part thereof on the Premises or part thereof; and any amounts otherwise owing to the CITY by the DEVELOPER and its successor Or assign; and b. Second, to reimburse the DEVELOPER, its successor or assign, up to the amount equal to: (1) the sum of the purchase price paid by it for the Premises or part thereof and the cash actually invested by it in making any of the improvements on the Premises or part thereof; less (2) any gains or income withdrawn or made by it. The CITY shall retain as its property any balance remaining after such reimbursement. The express conditions, covenants, and restrictions con- tained in this Section C.11. shall terminate upon the CITY'S issuance of the Certificate of Completion under Section C. 12. below. 12. Certificate of Completion. Promptly after completion of the improvements accordance with the provisions or this option Agreement, the CITY will furnish the DEVELOPER with an appropriate instrument so certifying, which instrument shall not be unreasonably withheld. Such certification shall be in such form as will enable it to be recorded in the Penobscot Registry of Deeds. The CITY'S issuance of the Certificate of Completion will constitute con-clusive proof of the satisfaction and termination of the express conditions, c ants, and restrictions contained in Sections C.6., CA., C.B., C.9. ,C.10., and C.11. above. 16 If the CITY shall refuse or fail to provide such certifi- cation, the CITY shall, within thirty (30) days after written request by the DEVELOPER, provide the DEVELOPER with s written statement indicating in adequate detail in what respects the DEVELOPER has failed to complete the improvements in accordance with the provisions of this Option Agreement and what measures will be necessary to obtain such certification. 13. Severability. If any provision of this Option Agreement is determined to be invalid or unenforceable under law, it shall not affect the validity or enforcement of the remaining obligations or portions hereof. 14. Notice. Any notice under this Option Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, and a. in the case of the DEVELOPER, i addressed to or delivered personally to the DEVELOPER, at Gridley Street Associates c/o George Gillis, P.O. Box 479, Brewer, Maine 04412. b. in the case of the CITY, is addressed to or delivered personally to the CITY, c/o City Manager, City Hall, 73 Harlow Street, Bangor, Maine 04401, r to such other persons or addresses as the parties may designate in writing to the other. IN WITNESS WHEREOF, the parties hereto have set their hands the day and year first written above. CITY OF BANGOR By %�////�,q�® ELward A. Barrett Its City Manager GRIDLEY STREET ASSOCIATES BY.ay/O� STATE OF MAINE Penobscot. as. MFI:IB 17 Then personally appeared the above-named Edward A. Barrett, n 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. Before me, O Printed Name: yf4ry LS.N 6.4e �i N e Attorney at Law STATE OF MAINE Penobscot, as. oe'*lb3 '1988 Then personally appeared the above-named t Ift Y/lY/1a his capacity as Ayp�g@j g./M6fiaiA, of Gridley Street seoc�iM and n acknowledged the foee g instrument to be his free act and deed in such capacity and the free act and deed of Gridley Street Associates. Before me, a�N�a &&o Printed Name: rarq c� � woranr. eems Notary Pub Attorney at Law NOTE THIS DISPOSITION PLAN IS BASED ON PLISGA & DAY LAND SURVEYORS SURVEY PLAN DATED AUGUST I, 1988 v SCALE: Int = 401 0 20 40' 80 120' 160 20Q 09 EXHIBIT A PLAN for H2 8i H3 SEPTEMBER 28, 1988 DEPARTMENT OF PLANNING & COMMUNITY DEVELOPMENT