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HomeMy WebLinkAbout2019-03-25 19-126 Order 03/25/201919-126 03/25/2019 19-126 Community & Economic Development Order 041-196 Title, Order Authorizing Execution of a Development Agreement and Credit Enhancement Agreement with Cressey, Butler & Cohen, LLC, for Property at 29 Franklin Street This order will authorize the execution of a Development Agreement and Credit Enhancement Agreement with Cressey, Butler & Cohen, LLC for property located at 29 Franklin Street. 29 Franklin Street is a former non-profit office building that is being renovated for a mixed use development consisting of commercial space on the first floor and residential units on the upper floors. The developer proposes to invest $1.625 million of private funding and equity to develop the project leading to a substantially increased assessed valuation. It is anticipated that the project will be completed by March 15, 2020. The level of investment required for rehabilitation of the property is not economically feasible without assistance from the City. This assistance can be provided through an agreement with the developer to return 75% of the increase in real estate taxes paid on the increase in value created by the improvements to the property for a period of seven (7) years. If approved, this order will authorize the City to enter into Agreements with Cressey, Butler & Cohen, LLC, under the following terms: The developer will invest $1.625 million of private funding and equity in the development project; the City will return to the developer 75% of the real estate taxes paid on the increased valuation of property located at 29 Franklin Street as a result of the investment in the property for a period of seven (7) years; the developer will substantially complete the project by March 15, 2020; the project shall be for commercial use on the street level and residential use on the upper floors; and such other terms and conditions as appropriate. Business & Economic Development Committee 03/05/2019 Recommend for passage 40 New Business 03/25/201919-126 CITY OF BANGOR ORDER 03/25/2019 19-126 Davitt Authorizing Execution of a Development Agreement and Credit Enhancement Agreement with Cressey, Butler & Cohen, LLC, for Property at 29 Franklin Street WHEREAS, the City of Bangor supports new investment and the creation of additional commercial and residential space in its downtown area; and WHEREAS, 29 Franklin Street has been acquired by Cressey, Butler & Cohen, LLC with plans to renovate the property for commercial space on the street level and residential use on the upper levels; and WHEREAS, 29 Franklin Street is currently tax exempt, underutilized, long vacant, and the developer's renovation of the property will result in substantial increase of the property taxes on the building and land; and WHEREAS, the investment required for rehabilitation of the property is not economically feasible without assistance; and WHEREAS, the assistance necessary can be provided through entering a credit enhancement agreement with Cressey, Butler & Cohen, LLC, to provide the return of 75% of real estate taxes paid on the increase in value created by the improvements to the property for a period of seven (7) years: BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT: The City Manager is hereby authorized to enter into Agreements with Cressey, Butler & Cohen, LLC, which will include the following terms: a return to Cressey, Butler & Cohen, LLC 75% of the real estate taxes paid on the increase in the value of property located at 29 Franklin Street as a result of the development of the property for a period of seven (7) years; $1.625 million of private funding and equity in the development project; project to be completed by March 31, 2020; the project shall be for commercial and residential uses; and such other terms and conditions as appropriate and the Agreements shall be in a final form approved by the City Solicitor or Assistant City Solicitor. IN CITY COUNCIL MARCH 25, 2019 CO 19-126 MOTION MADE AND SECONDED FOR PASSAGE PASSED >';7:1/JL-/? >44(2e- --) CIT CLERK