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Home My WebLink About1992-08-05 Community and Economic Development Committee Minutes • � , COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE Wednesday, August 5, 1992 @5:30 PM � • MINUTES MEMBERS PRESENT: Chairman W. Tom Sawyer Councilor Pat Blanchette Councilor Marshall Frankel Councilor pon Soucy OTHERS PRESENT: Rod McICay T.J. Martzial Elizabeth Whitehouse Roger Griffith, Director of The Together Place. AGENDA ITEM #1 - PUBLIC HEARING - Proposed Amendment to 1992 Community Development Block Grant Final Statement of Community Development Objectives and Projected Use of Funds. The Public Hearing was opened. Community Development Director Rodney McKay explained that the City proposed to amend its 1992 Community Development Block Grant Final Statement of Community Development Objectives and Projected Use of Funds to allocate an additional e�enditure of $90,000 of Community Development funds for handicap access improvements at the Police Station. The amendment would expand the scope and location of the Handicap Access • Activities to include the expenditure of $90,000 to build an elevator and access ramp at the City Police Station which presently does not meet handicap access requirements. The $90,000 needed would be made available by reducing the City-Wide CDBG Residential Property Rehabilitation Loans component of the Final Statement from $515,431 to $425,431. McRay explained that the expenditure was now proposed due to the award of $319,000 in Maine Jobs Creation Bond funds making possible needed Police Station improvements totaling $505,000. The $90,000 in Community Development funds would be a part of the $186,000 local match needed and the expenditure would made the building and services accessible. Members of the Committee and Mrs. Whitehouse spoke in favor of the proposed amendment. The Public Hearing was closed and the Committee voted unanimously to recommend approval by the City Council. AGENDA ITEM #2 - Authorization for City Manager to execute revised Submerged Land Lease with State of Maine Department of Conservation for docks on Bangor Waterfront. � • • - 2 Community Development Director Rod McRay explained that uses on • or over submerged lands require a lease or easement from the Bureau of Public Lands, a requirement which applies to all docks on the Bangor waterfront. The revision proposed to the Submerged Land Lease reflects the City's acquisition of the docks formerly owned by Bangor Dock Facilities, Inc. The Submerged Land Use fee formerly charged for the commercial operation of the facility by Bangor pock Facilities, Inc. will not be charged by the Bureau of Public Lands to the City as long as the revenues received by the City from the operation of the docks are used for the operation and maintenance of the City's waterfront facilities. AGENDA ITEM #3 - The Committee approved a Community Development Business Development Loan in the amount not to exceed $7,000 for facade improvements at 30 Central Street. AGENDA ITEM #4 - The Committee considered a Community Development Property Rehabilitation Loan application for the rehabilitation of 5 apartments located at 9 and 16 Center Street Ave. by the Friends of Together Place, Inc. and voted to refer the application to the full City Council. The information in the attached Memorandum from T.J. Martzial, Housing Resources Coordinator, was reviewed by the Committee. Concerns expressed by Committee members were that the Center Street Ave. area was too confined and overcrowded, the size of the • lots involved were too small, parking was limited, the City's loan security would be a third mortgage on the property, and the concern about the availability of continued rent subsidies from the Bureau of Mental Health needed to make the project successful. Councilor Blanchette moved and the Committee voted to have the application referred to the full City Council for consideration. AGENDA ITEM #5 - The Committee approved a Community Development Property Rehabilitation Loan in the amount of $8,659 for improvements to a single family home located at 74 Webster Ave. � • s - �o�� • O: C & ED COMMITTEE FROM: T.J. Martzial, Housing Resources Coordinator DATE: August 5, 1992 RE: 9 & 16 Center St. Ave. "With the projected downsizing of Maine's two state-run mental institutions and the proposed shifting of resources to the community, the urgent need for a wide range of community housing for the long term mentally ill is readily apparent. " This statement is from a letter to me by Roger Griffith, Director of The Tocrether Place, a licensed mental health facility offering social, recreational, and vocational services in Bangor. This sets the stage for a cooperative housing project proposed in Bangor which will be the first of it's kind in the state of Maine, and a model for The Bureau of Mental Health's future housing concerns. It involves a public and private partnership for affordable housing that is complex, but workable. There are several players, and you can't keep track without a score card which I will attempt to outline here. First, The Tocrether Place has formed an "asset management" corporation called "Friends Of Toctether Place" , (all of the entities in this plan are separate 501 3 (c) non- • profit corporations) . Friends of Together Place has purchased 5 units in two properties, 9 & 16 Center St. Ave. on a foreclosure for $40,000 , they are currently the owner- applicant. If the rehab loan is approved, we will be in first mortgage position at this time. Friends of Together Place has applied for and received a $30,000 grant from the Federal Home Loan Bank of Boston to reimburse them for the purchase of the property. This money will be released AFTER the rehab is completed (a key point here) , and will remain a grant at 0� interest as long as the properties remain affordable housing as currently designed. This grant will be administered by Bangor Savings Bank. Friends of Together Place has also received a commitment from The Bureau of Mental Health to fully subsidize the rents of the tenants, similiar to HUD's Section 8 program. The income stream is now guaranteed, and there is NO debt service on the first mortgage. Friends of Together Place has also received a commitment from Bangor Savings Bank for a $13,500 amortized loan to cover their soft costs incurred, and some of the rehab already completed at the properties. Another requirement for receiving these two loans is that the FHLB be in first position, and Bangor Savings Bank be in second position. THEREFORE, AFTER THE REHAB WORK IS COMPLETED, THE CITY MUST AGREE TO SUBORDINATE OUR REHAB LOAN TO THE $43,500 FROM • BANGOR SAVINGS BANK. � � ' . 2 . • Now, after the rehab is complete, Friends of Together Place, along with an $8,000 unsecured GR.ANT from the Maine State Realtors Association, forms a limited equity cooperative with the tenants called Toaether Place Housincr. Friends of Together Place then sells the buildings to Together Place Housing, but retains ownership of the land. This relationship will be governed by a Ground Lease. The Ground Lease, along with defining who is responsible for what, also provides several "safety net" provisions that will allow Friends of Together Place to directly monitor the finances of Together Place Housing, and intervene in case of emergency. The limited equity cooperative model, whereby each resident owns a share in a corporation made up of it's residents, provides long term affordability and consumer control and empowerment. This is the direction Federal and State housing policy is currently headed. Future public funded housing initiatives will maximize control and responsibility for the residents. ANOTHER PROVISION AT THIS POINT IS, THE CITY'S REHAR MORTGAGE MUST BE ASSUMABLE, (RATHER THAN A DUE ON SALE/ TRANSFER AS IS TYPICAL) . OUR CONCERNS AS A LENDER ARE COVERED IF THE FRIENDS OF TOGETHER PLACE AGREE TO SUBORDINATE THEIR INTEREST IN THE LAND TO THE CITY'S INTEREST IN CASE OF A DEFAULT. This key language will be placed in the mortgage executed with Friends Of Together Place. � The Players: The Lenders: In Order of final security position The Together Place Friends of Together Place 1. ) Federal Home Loan Bank Together Place Housing 2. ) Bangor Savings Bank 3. ) City of Bangor unsecured Grant: Maine State Realtor's Assoc. 1 . ) $ 30,000 2 . ) 13,500 3 . ) 27,977 $ 71,477 Assessed Value: $132,800 ' • • -� j � ___J � � ( � � � f � � ' - �� I� �'S� � ` � � �'� , � r� � �� -- ---__...__._.__� � � � I i � � � � ----� I I , -- x , � � � 110�6 � � Ij�4� r ~ _ �� ii � � � � i � �-• r 1� �/�./��]i f I -� �y i ' �I V � � ..� � � ( . � � � , Q � -� � i � i i � i � � � � � � � � I Q i i ��•� ' � - � , � N •_ �'— � � _� � � 1 � ! � i j , f � � � � , , i � 1 ` , � � ' � I ' 88. ' t � � � I �� sr L e -_ _ _ . - __ � . �-- io �� --L . , � ` I �. 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