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HomeMy WebLinkAbout1983-10-12 83-342 ORDER83-342 Introduced by Councilor Soucy, October 12, 1983 "CITY OF BANGOR ��pp , (TITLE.) MrAiBrg------- -Adopttna the.. Bangor.Economic.,Incentive. Revolving.. By the City Cauro(t of OW of Bangor.' ORDERE% THAT WHEREAS, Title I of the Rousing and Community Develop- ment Act of 1974, as amended, (42 U.S.C. §6 5301 .atseq.) provides Chat the primary objective of the. Act is the development of viable urban communities through the .provision of decent housing, a suitable living environment, and expanded a onomio opportunities, principally for persons of low and moderate income;. and WHEREAS, said Act further provides that Federal. assistance under Title I thereof shall be for the support of community develop- ment activities which are directed towards certain objectives, one of which is the alleviation of physicaland economic distress through the stimulation of private investment and community revitalization in areas with a stagnatingor declining tax -base; -and WHEREAS, certain economic development activitiesare eligible for assistance from Ccmmunity`Development Block Grant foods provided to municipalities pursuant £� said Act:. and WHEREAS, the City of .Bangor CDBG. application for. FY. 1982 funds included provisionsrelative,to the fundingof economicdevelopment activities; and WHEREAS, the City Council at the City -sof Bangor hereby deter- mines that the goals of said Act `and the CiIF s economic development program would best be served by the establishment of a revolving, loan fund to provide assistance for eligible economic development activities ` as set forth in the Act and its implementing regulations; - NOW, THEREFORE, BE. IT ORDERED. BY THE CITY. COUNCIL OF. THE CITY OF BANGOR THAT the Bangor Economic. Incentive Revolving Loan Program:,.a copy of which is on -file in the'.of€ice of the City Clerk, -is hereby adopted and approved. 83-342 In City Council October 1211983 0 R 0 E R Passed as emended ' (9mended laousent on File) Title, Adopting the:Hansor Ecanemic Incentive p That Part VI Sec. 6.1 be amended .. & Cli:. _ by adding the following thereto: y "'" " Revolving LL)aa Program _ f. First priority for MP assistance o ............................... = _ shall be given to Uses commonly found in i.. Industrial Parks. Introduced and iled b d ity C1 k ...<..r+�n .. . .... COWCl unci a J . n THE BANGOR ECONOMIC INCENTIVE REVOLVING LOAN PROGRAM (BRLP) PART I GOALS e2- 3 v� 1. To create and retain jobs, principally for low -and moderate -income persons, leverage private investment, alleviate physical and economic distress, and expand e bar s through the use of Community Development Block Grant Entitlement fundsfor the acquisition of real property for economic development purposes; for the acquisition, construction, reconstruction, rehab- ilitation and installation of public facilities, site improvements, and utilities; for the acquisition, con- struction, reconstruction, rehabilitation and installa- tion of commercial or industrial buildings and structures and other commercial or industrial real property improve- ments; and to provide assistance to private, for-profit entities, when the assistance is necessary to carry out an economic development project. PART II ESTABLISHMENT OF BRLP FUND 2.1 A BRLP Fund is hereby established in the amount unt of $150,000.00 from the City of Bangor's FY 1982 CDBG Entitlement funds. Said funds shall be used for economic development activities eligible for assistance under this Program and Title I of the Housing and Community Development Act of 1974, as may be amended. Provided, however, that such activities conform to the requirements of this Program and all applicable federal, state, and local statutes, regulations, and/or ordinances, as may be amended. 2.2 All repayments of principal and interest relative to loans issued under this Program shall be credited to the SELF Fund and shall be available for eligible economic .development activities under this Program - and Title I of the Housing and Community Development Act of 1974, as may be amended. PART III ADMINISTRATION OF PROGRAM 3.1 A Loan Review Committee is hereby established for the purpose ofevaluating all requests for assistance under this Program. Said Committee shall consist of five members, two of whom shall be the City Manager and Finance Director of the City of Bangor. The remaining three members shall be from the banking and business community and shall be appointed annually by the City. Council, Each member shall serve until a successor has been appointed The Committee shall have the following responsibilities; a. Establishment of application requirements and procedures. b. Review of applications for assistance under this Program. c. Determination of whether or not an application for assistance 'constitutes an eligible economic development activity under this Program and all applicable federal, state, and local statutes, regulations, and/or ordinances, as may be amended. Said determination shall be i writing, shall state the basis therefor,.and shall be supported by adequate documentation to justify the same, all of which shall be maintained in the project file for each application. d. Determination of whether or not the proposed assistance to private, for-profit entities, is necessary or appro- priate to carry out an economic development project. Said determination shall be in writing, shall state the basis therefor, and shall be supported by adequate documentation to justify the same, all of which shall be maintained in the project file for each application. e. Approval of such applications as the Committee deter- s to be in accordance with the provision of this Program, subject to such terms andconditions, including but not limited to type of loan, interest rate, term of loan, and collateral required, as the Committee deems necessary and appropriate to adequately protect the City's investment in the proposed activity. The Committee or the Director of Economic Development are hereby authorized, on behalf of and in the name of the City of Bangor, to contract for such services as may be deemed necessary Th for the proper evaluation of an application. e costof said services may be paid from the BRLP Fund. Any such contract shall be procured pursuant to and shall be i compliance with all federal regulations applicable to the same. The Director of Economic Development shall also coordinate and arrange for meetings of the Committee, prepare agendas foreetings, and provide such other services as may be required by the Committee. The Director of Economic Development and the Director of Planning and Community Development shall attend the meetings of the Loan Review Committee, and shall provide information and recommendations to the Committee on each application.' 3.2 The City of Bangor Department of Economic Development, through its Director, shall be responsible for the administration of the Program, including its marketing and management, the screening of applicants, the conduct of initial interviews withloan candidates, consultation with the Director of Planning and Community Development to determine if projects are in conformance with the City's programs of economic and community development and are eligible activities under this Program and all applicable federal, state and local 'statutes, regulations, and ordinances, as may be amended, preparation of applications and related documents, and presentation of -2- eligible project applications to the Loan Review Committee for further loan processing and consideration. In the event that a loan is granted hereunder,. the Director of Economic Development, in consultation with the Director of Planning and Community Development, shallmonitor the project to ensure that the same is incompliance with all require- ments of the Programand the federal, state and local laws, statutes, or ordinances governing the Program. The Depart- ment of Economic Development shall also be responsible for the servicing of all Program loans', including the collection of payments and the crediting of the same to the BEEP Fund. The Department shall keep and maintain records for each loan under this Program and for all income and expenditures in regards to the HELP Fund. 3.3 The Administration of this Program by the City of Bangor shall be in conformance with all federal, state,and local laws, statutes, regulations, ordinances, etc. governing the same. PART IV ELIGIBILITY CRITERIA 4.1 General A BRLP Loan may be made with respect to an eligible project located within the City limits of the City of Bangor. Pro- jects must be in compliance with all applicable federal, state and local statutes, regulations and ordinances, in- cluding those imposed by the federal granting agency, the U.S. Department of Housing & Urban Development. Projects most be consistent with the City's program of economic devel- opment. Projects most provide a measurable impactinteras of the jobs created and retained principally for low -and moderate -income persons. On the average, Loans pursuant to this Program must leversg private investment at a minimum ratio of Three Dollars ($3.00) in private funds to each One Dollar ($1.00) provided through the Bangor Revolving Loan Pool. The Loan Review Committee shall render a written justification for any loan in which the private investment does not satisfy said 3:1 ratio. 4.2 - Project Eligibility To qualify for a BRLP Loan, the project to be assisted must be located within the City of Bangor, must create and/or retain jobs principally for. low- and moderate -income persons, or most comply with such criteria as may be established by the Department of Housing and Urban Develop- ment for satisfaction of the requirements tbat.activities benefit low- and moderate -income persons:A low- and moderate -income person is defined as those persons whose income does not axceed 80% of the median family income of the Bangor, Maine Standard Metropolitan Statistical Area SMSA) as defined in the most recent publication by the. U.B. Department of Housing and Urban Development establishing incoe limits in the Bangor, Maine Standard Metropolitan Statistical Area (SMSA) for lower-income housing assistance under Section 8 of the U.S. Housing Act of 1937. 4.3 Applicant Eligibility To qualify for a loan under this Program, an applicant must: 3 a. Provide suitable proof of ownership, or for lessees, permission from the owner and suitale proof of a leasehold interest, for properties to be improved or of businesses to be assisted.. b. Provide suitable evidence of ability to repay the loan under the Program. PART V LIMITATIONS OF BANGOR REVOLVING LOAN FUND LOAN 3.1 General BRLP funds may be used only for those activities which will generate and/or retain jobs principally for law- to moderate -income persons based an a minimum rate of one job retained and/or created per $5,000. of loans made with funds under this Program. BRLP funds may be used only to finance those activities eligible under Title I of the Housing and Community Development Act of 1974 and Department of Housing and Urban Development Regulations under 24 CFR Part 570, as may be amended, and those activities contained in the City of Bangor's Final Statement of Community Development Objectives submitted to and approved by the U.S. Department of Housing and Urban Development. 3.2 Maximum Loan Under Bangor Revolving Loan Funds The maximum loan shall not exceed, on the average, Five Thousand Dollars ($5,000) for each job generated and/or retained. PART VI GENERAL TERMS AND CONDITIONS 6.1 General The BRLP is intended to be a flexible financingtool that can be used in a variety of creative and innovative ways to meet the development goals of the city. The following minimum standards shall be applied to projects considered for assistance under this Program: a.. All projects must be located within. the City limits of Bangor. - b. Projects must be in compliance with all applicable federal, state and local statutes, regulations and ordinances, including those imposed by the U.S. Department of Housing and Urban Development. Projects =at be consistent with the City's program of economic development. d.. There must be a measurable impact in terms of jobs. created and/or retained, to be determined on a case - by -ease basis. On the average, one job must be created and/or retained for each $5,000 in funds loaned. e. BRLP assistance may be used to. (i) finance the acquisition, construction, reconstruction, rehabilitation and/or installation of public facilities, site 'improvements, or utilities; (ii) finance the acquisition, construction, reconstruction, rehabilitation, expansion and/or installation of commercial or industrial buildings and structures and other commercial or industrial real property, equipment and improvements; (iii) finance the acquisition, construction, reconstruction, rehabilitation, expansion, repair, or installation of equipment or fixtures if the same are to Be a part of the real estate upon which they are located; (iv) provide working capital or operational funds; or (v) such other assistance to private, £or -profit entities as may be deemed necessary o appropriate to carry out an economic develop- ment project. 6.2 Applications for DELP Funds Parties interested in receiving assistance under this Program shall contact the Director of Economic Develop- ment and shall provide such data as the Loan Review Committee deems necessary .for a proper evaluation of the request. 6.3 Loan Cancellation Provisions The City shall have the right to cancel an approved loan if, after an established period of time from the date of execution of the note, the borrower has failed or refuses to commence funded activities, or, if after commencing work, a period of unjustified inactivity occurs. The Loan Review Committee shall have the authority to establish said time periods for each Project. Specific loan cancellation or acceleration provisions shall be contained in the promissory note. The borrower shall have all rights of cancellation provided by law. - 6.4 Project Loan Note Prior to the disbursement of any BRLP Funds, the applicant shall execute a promissory note (and mortgage or other collateral instrument, if required) for the full amount of the loan made under the Program. From this point on, the applicant will be known as the "Borrower." Me note/mortgage shall provide for pay- -5- meat of the loan according to an amortization repayment schedule established by the Loan Review Committee. The loan documents shall establish the time and place for delivery of payments, The amount, the maturity date, and shall provide for any loan security or additional stipulations as may be required by the Committee. 6.5 Interest. Rate All loans made under the Program shall carry a fixed rate of interest for the full term of the note. The interest rate for any loan made under this Program shall be established by the Loan Review Committee. Provided, however, that in no event shall the interest rate be less than 3% per year. 6.6 Term of Loan The maximum term of a loan under the Program for the acquisition, construction, reconstruction, rehabilitation, expansion and installation of commercial or industrial buildings and structures and commercial or industrial real property improvements shall generally not exceed the term of the primary mortgage. The terms of all loans under the Program shall be established by the Loan Review Committee, which shall give due consideration to The nature of the loan and the collateral securing the same. 6.7 Loan Security A loan made under the Program for less than $5,000 need not be secured by collateral. Loans of $5,000 or more shall be secured by sufficient collateral, preferably. mortgage on the improved premises. The cost of pre- paration and registration of the 'security instrument(s) shall be borne by the borrower and shall be paid at the time of the loan closing, or included in the loan amount. The Loan Review Committee shall determine the necessary collateral for each loan. 6.8 Work Schedule Borrower must agree to follow the recommended work schedule established by the Loan Review Committee, and to complete the work in a manner satisfactory to the Committee. 6.9 Municipal Codes and Ordinances Borrower must agree to follow the procedures and conditions of all established and applicable municipal ordinances in undertaking the funded activity. The borrower must also comply with all federal and state requirements which are applicable to the project. -6- 6.10 Prepayment of Note A borrower may repay any or all outstanding principal to the City of Bangor at anytime and without penalty. 6.11 Transfer of Improved Property ownership of a property improved with funds under the Program cannot be transferred unless loan repayment arrangements are approved by the City of Bangor. 6.12 Insurance A borrower shall be required to maintain hazard insurance on any property used to secure the loan in an amount sufficient to cover the aggregate indebtedness aacured by said property. Said insurance shall name the City of Bangor as an insured mortgagee. Borrower shall pro- vide certificate of insurance evidencing compliance with this requirement. 6.13 Records Me borrower must agree to keep and maintain such records as may be required by the City of Bangor and/or HUD and to allow the City of Bangor or HUD, or their representatives, access to the same. 6.14 Inspection Borrower must agree to permit reasonable. inspection during normal business hours by the City of Bangor and/or HUD, or their representatives, of all activites assisted under this Program, and all contract agree- ments, materials, equipment, payrolls, and conditions of work pertaining to said activities. 6.15 Disbursement of BRLP Funds BRLP Funds shall be disbursed to or on behalf of the borrower in accordance with such terms and conditions as may be established by the Loan Review Committee. Any drawdown of CDBG funds shall be in accordance with federal regulations governing the same. 6.16 Points of Aereement with Respect to Federal Regulations Any assistance under this Program shall be subject to all the terms and conditions of Federal Regulations, and any amendments thereto or replacement thereof, governing the use of Community Development Block Grant funds, including but not limited to: -7- a. Title VI of the Civil Rights Act of 1964 (Public Law 88-352; 42 U.S.C. § 2000det seq.), which pro- vides that no person in the United States shall on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance, and HUD's implementing regulations contained in 24 CFR Part 1. b. Title VIII of the Civil Rights Act of 1968 (Public Law 90-284; 42 U.S.C. § 3601 at seq.), popularly known as the Fair Housing Act, which prohibits any person from discriminating in the sale o ental of housing, the financing of housingsor the provision of brokerage services, including in any way making unavailable or denying a dwelling to any person, because of race, color, religion, sex, or national origin. c. Executive Order 11063, as amended by Executive Order 12259, and HUD's implementing regulations contained in 24 CFR Part 107, dealing with the prevention of discrimination because of race, color, religion (creed), sex, or national origin in the sale, leasing, rental, or other disposition of residential property and related Facilities, o n the use and occupancy thereof, if provided i whole or in part by aid from the Federal Government. d. Section 109 of the Housing and Community Development Act of 1974, as amended, (42 U.S.C. § 5309), dealing with the prohibition of discrimination on the ground of race, color, national origin x under any program Or activity funded in whole or in part with funds under the Act, and HUD's implementing regulations contained in 24 CFR § 570.601 (to be replaced by § 570.602 under new regulations scheduled to go into - effect on November 1, 1983; 'See 48 Fed. Reg. 43,569). e. 42 U.S.C. § 5310 and HUD's implementing regulations contained in 24 CFR § 570.605 (to be replaced by § 570.603 under new regulations scheduled to go into effect on November 1,.1983; See 48 Fed. Reg. 43,570), which require that all laborers and mechanics employed by contractor or subcontractors on construction work Financed in whole or in part with assistance received under the Housing and Community Development Act of 1974 shall be paid wages at rates not less than those prevailing o similar construction in the locality. -See Davis - Bacon Act, as amended, (40 U.S.C. §§ 27Tiaa-276a-5) and the Contract Work Hours and Safety Act (40 U.S.C. §§ 327 at seq.). f. 42 U.S.C. § 5304(£), 42 U.S.C.S. §§ 4321 at seq. (National Environmental Policy Act of 1969), and HUD's implementing regulations contained in 24 CPR Part 58, dealing withcompliance with certain environmental standards and procedural requirements. g. Flood Disaster Protection Act of 1973-(42 U.S.C. §§ 4001 at seq.) and HUD's implementing regulations contained in 24 CFR § 570.509 (to be replaced by § 570.605 under new regulations scheduled to go into effect on November 1, 1983; 'See 48 Fed. Reg. 43,570). h. Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 9§ 4601 at seq.) and HUD's implementing regulations contained n 24 CFR Part 42, and 24 CFR § 570.602 (to be replaced by § 570.606 under new regulations scheduled to go into effect on November 1, 1983; See 48 Fed. Reg. 43,570), which deal with the acqulsTtion of real property for a community development activity and the displacement of any family, individual, business, nonprofit organization, or farm that results from such .acquisition. r. Executive Order 11246 and the regulations issued pursuant thereto (41 CFR Chapter 60)andSection 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. § 1701u), dealing with nondiscrimination in employment, the provision of opportunities for training and employment to lower income persons, and the award of contracts to eligible business concerns which are located in, or owned in substantial part by persons residing in,the same metropolitan area as the project. j. Lead -Based Paint Poisoning Prevention Act (42 U.S.C. §§ 4831 at seq.) and the regulations issued pursuant thereto (24 CFR Part 35), dealing with the prohibi- tion on the use of lead-based paint and the elimina- tion, as far as practicable, of hazards associated with existing lead-based paint in .housing units.' k. 24 CFR § 570.614 (to be replaced by § 570.609 under new regulations scheduled to go into effect on November 1, 1983; See 48. Fed Reg. 43,571) and 24 CFR Part 24, dealing with the prohibition on the use of debarred, suspended, or ineligible contractors or subrecipients. i. 24 CFR § 570.611 (to become effective on 'November 1, 1983; See 48 Fed. Reg. 43,571) and any other relevant—statute, law,. or regulation dealing with conflicts of interest. M M. 24 CFR S 570.610 (to become effective on November 1, 1983: See 48 Fed. Reg. 43,5]1) and the require- ments of [fie OMB Circulars referred to therein, dealing with uniform administrative requirements and cost principles. n. Such other laws, statutes, regulations, ordinances, administrative rules, etc. as may be, or may become, applicable to the particular project assisted under this Program. In order to be eligible for assistance under this Program, the borrower must agree to abide by all of the applicable Federal Regulations, and any amendments thereto, or replacements thereof, governing the use of CDBG funds. slim C.O. 83-342 Amending the Bangor economic Incentive Revolving Loan Program (BRLP) document on file in the Clerk's office: THAT Part VI, Sec. 6.1 be amended by adding the following thereto: I. First priority for BRCP assistance shall be given to uses commonly found in industrial parks.