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Home My WebLink About2007-02-21 Business and Economic Development Committee Minutes � � BUSINESS AND ECONOMIC DEVELOPMENT COMMITT'EE ' February 21, 2007 �` Minutes , Councilor Attendance: Farrington, D Errico, Gratwick, Greene, Stone, Palmer � Staff Attendance: McKay, Bolduc, Barrett 1. Proposed Improvements to 120 Venture Way � Palmer disclosed that he is a member of the Penquis CAP Board and asked if it was a conflict. Gratwick made a motion that Palmer does have a conflict. Barrett said there is a follow up executive session to this item and should be considered in terms of the ,� proposed conflict. Farrington agreed. The motion was seconded to include Item 1 and the following Executive Session, Item 3. Farrington and Barrett discussed the conflict of interest guidelines. � Bolduc said he is seekin a roval to s end u to 350 000 in CDBG funds for the 9 pP P P � � proposed improvements. The building is leased from the City by Penquis and is used as �, a daycare center. Representatives from Penquis CAP attended. Bolduc provided photos - of the building, which was built by the military in the 50's and has undergone very little improvements. Proposed renovations are roof replacement, insulation addition, replace � oil burner and heat distribution system, reconfigure the floor plan to allow for greater � utilization, asbestos removal; handicap accessible restrooms, replace electrical wiring, and security. Carpenter Associates estimates $600,000 for the proposed renovations. There is currently $100,000 in the Economic Development Fund budget for repairs targeted for the roof. These funds will be recovered through revenues received from rentals and sales from other City properties. Barrett said the fund is used to house � properly which the City is trying to redevelop. Penquis has applied for and has received a $150,000 facilities grant and are willing to invest other funds into the improvements. Staff recommends that the remaining $350,000 CDBG funds be approved to complete � the necessary funding. Penquis will increase their lease payments so that the $350,000 � +:'�' will be repaid to the City over a twenty-year period. The renovations would allow Penquis to double their current number of children served as well as to increase the age � limit. The number of employees would increase up to 12-15. The majority of families served by the daycare are low income. Responding to Gratwick, McKay said the building's value would increase to approximately $600,000 with the proposed � renovations. The current value is in the $400,000 range. McKay said this is an opportunity for the City to match funds, which Penquis CAP is willing to invest in City property. New construction would cost$100/sq. foot.The improvements are at $60/sq. �� ft. Responding to Stone, McKay said the building is worth saving for a commercial venture. The business model for the Maine Business Enterprise Park has always included a daycare in the park as an amenity to employees in the area of the airport. � Stone asked if Penquis'daycare and the Leonards'daycare would be in competition. McKay said that one is a not for profit and the other a profit and each organizations � � serves a different clientele. Jean Bridges from Penquis CAP said that Parkside Daycare has made it known at public events that they will not be dealing with childcare subsidies. Up to 80% of Penquis CAP's families are low to moderate income and qualify for subsidies. She spoke about the services provided by the daycare including costs, ,�� etc. Stone asked if the Leonards'had been notified of the competition. McKay said that � Penquis has been in business for 22 years. Barrett said if the City wasn't going to continue leasing it would have to invest in it, which he did not recommend, and it is also � in a location which is not clearly visible from a high traffic location. The City would then probably recommend demolition but does not feel it would be a good business choice due to the costs involved. By investing CDBG funds into the renovations, the Economic Development Fund will receive a higher retum on its investment. The payback is � roughly a 4-5 year payback in this instance. Greene spoke about the high cost of the improvements and who would be p�rforming them. Barrett said these are estimates, and the City will go out to bid for the services. Greene said that Penquis'lease � payments would be increasing considerably. Bridges said the steep increase has been calculated into their budget and it is more than doable. Responding to Farrington, McKay said there is $1.3M available through the end of June in the CDBG account. A � motion was made and seconded to authorize stafF to go out to bid for the project. The bids will come back to the Committee to recommend final action to the Council. The Committee will be reviewing the final lease agreement with Penquis CAP. � 2. Proposal Presentation —Waterfront Residential Condominiums McKay introduced Campbell, an area contractor, and Amy McLellan with Dawson Real � Estate who are representing a housing developer. The developer is requesting tentative developer status for a City owned lot on the corner of Railroad and Summer Street. McKay said that tentative developer status is normally for a 90-day period in which time � the developer firms up its proposal in terms of the planned use and investment: Staff and developer will negotiate a development agreement during that time period for the Council's consideration. Following the 90-day period, if the Committee is satisfied with a � viable project, a development agreement will be entered into with the Council's approval. It requires the developer to present to the Committee preliminary plans and � prepare final plans both for the Committee's approval to the full Council. During that � time, the developer also is required to obtain necessary permitting. Campbell and McLellan presented their background experience. He spoke of John Sites, � CEO of Somerset Development Company of Maryland, and outlined some of his projects. 4 Sites has an interest in the Bangor waterfront. McLellan talked about the importance of the site and stressed that they are also looking at three other sites within Maine. She is confident about the developer, about her numbers for the project and about Bangor. � Sites has 35 years of experience with a substantial residential development background. His company has over 100 employees, and he is financially qualified and responsible. He � is currently involved in 8 projects - seven in Maryland and one in Vassalboro. Sites would like to kick off this project at the same time that Penn does with their new site. They propose between 28-40 condo units, very upscale look to the building, warm and � � residential. The age group is the 55 plus. Her studies show that this age group likes �' cities with rich history such as Bangor. She provided written material to the Committee for its review. She and Campbell presented a power point presentation. Marketing is a � strong portion of the project. She spoke of virtual tours as part of their marketing. Responding to Stone, McLellan said their target market is 55 plus but there is also the echo boomers. Gratwick confirmed that 2/3rds of the occupants are not from the �, Bangor market. He spoke of the importance of local workers. He applauded the proposed architectural style. McLellan discussed four key aspects that most �. � � `� . � municipalities have been concerned about: 1)the financial feasibility; 2) market share; 3) quality of work; 4)time line. McLellan said she was hired to do the legwork to find a site and she needs to know the decision within 90 days in order to beat the frost next � fall. She is in hopes to have everything in place in 90 days. Campbell said the optimistic view is to break ground immediately after the Folk Festival. Responding to Stone, McKay said that if the Committee and Council support the idea, within 90 days � the market feasibility study would be completed to demonstrate the market. It would be considered by the Council on or before May 30"'. Prior to that meeting, the developer would make a presentation of their proposal to the BED Committee, which will '� in turn make a recommendation to the Council. If all goes well, then a development agreement is the next step and is typica{ly six months in duration. Palmer applauded _ the proposed concept. Farrington and Campbell talked about timeframes involved with � the project, if approved by Council. Palmer talked about the need for continuing communication between the parties. � 3. Executive Session - Economic Development- Lease Negotiations- 120 Venture Way ` - 1 M.R.S.A. § 405(6)(C) McKay indicated that there was no need for an executive session on this item as the Committee has previously approved staff to go out for bid, as discussed in Itenr 1. The Committee unanimously concurred. � Farrington indicated that Councilor Allen joined the Committee. "� Farrington also recognized Brian Ames. Ames spoke about his previous meetings with the Committee regarding waterfront development. He has been actively pursuing the investment portion of the project. He is close to bringing an investor to the table and � hopes to bring a specific proposal for continuance of the project and at that time you might have a choice to continue with Ames or to try a new approach with Sites. Ames said there are options for the City. Responding to Farrington, Ames said he has been � expecting a call for the last several days regarding an investment commitment. 4. Committee Action on Above Item � 5. Executive Session - Economic Development- Negotiations for Disposition of � Waterfront Property- 1 M.R.S.A. § 405(6)(C) � A motion was made and seconded to go into executive session. ^ 6. Committee Action on Above Item � No Committee action was taken on the above irtem. �� 7. Executive Session - Economic Development- Negotiations for Conservation Easement - 116 Main Street- 1 M.R.S.A. § 405(6)(C) -� � A motion was made and seconded to go into executive session. �� _ _ �— 8. Committee Action on Above Item �� The Committee directed the stafF to notify the owner that the City would not be pursuing a conservation easement on the 116 Main Street property. � 9. Executive Session — Economic Development— Negotiations for Disposition of Maine Business Enterprise Park Lot - 1 M.R.S.A. § 405(6)(C) �, A motion was made and seconded to go executive session. 9. Committee Action on Above Item � No Committee action was taken on the above ite. � � `� �— � �. �, � � � � �- �. �- �