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HomeMy WebLinkAbout2003-02-18 Business and Economic Development Committee Minutes ' . ,. ' BUSINESS AND ECONOMIC DEV/ELOPMENT COMMI'iTEE TUESDAY, February 18, 2003 � Meeting Minutes ' Councilors Attending: John Rohman, Gerry Palmer, Frank Farrington, David ' Nealley, Michael Crowley, Dan Tremble Staff Attending: Ed Barrett, Jonathan Daniels, Rebecca Hupp, Mike Dyer, � Steve Bolduc, Rod McKay, Norm Heitmann Others Attending: Susan Westley, Sherrie Haller ' The meeting convened at 5:00 p.m. ' 1. Presentation by Susan Wesley, Ph.D. regarding development of the ' MESA Center in downtown Bangor. Dr. Wesley said that MESA stands for Music Experience for Sensory Awareness. ' She said that as a cultural organization The MESA Center can be an opportunity for growth and development in the arts, particularly in music. Significant � experiences with sensory awareness can address a variety of opportunities for people in the Bangor area and Downeast Maine. She said that as a former teacher and finance director for the school department, she was on the ground ' floor years ago to pull the arts together for the school and the community. She tied the purpose of the Center to the City's Mission Statement. She said that ' there are a lot of opportunities for school musicians to be involved in the community, and specifically with a program she has at Acadia Hospital. ' She said that she is looking forward to finding space in downtown. Rohman asked her to speak specifically to what she would like from the Council. Wesley ' asked if this sounded like something the City would be interested in. Rohman said that this sounds a little tike the Center for Cultural Exchange in Portland, which is not based on the same things, however it is based on an ethnic � outreach. Crowley said that this Council and the last several Councils have made very ' deliberate steps to bring stronger focus of the arts in the downtown, by ' , ' � encouraging private sector investment as well as trying to find the best way to ' leverage public dollars in a limited capacity. Crowley said that we have a very delicate balance, the cultural presence is growing, however he said that he was not sure of the depth of appreciation or understanding that the majority of ' citizens might have for the arts. He said Wesley's project sounds like the next level of sophistication, and that this may not be the right time for it, although we are approaching that time. We are allocated tax dollars to invest in the � downtown area, and we certainly have been known to be risk takers, and it has been successful up until this point. ' Nealley said he was not sure if this idea was that far down the road. The City will be looking more and more for private sector funding, and moving away from ' City funding for the arts in downtown. Palmer said that this could be an economic goal, not just a cultural goal. The ' arts add so much to a community. It takes many forms and our willingness to use tax dollars to theme this out is not the best way to go. He said that as we add more to the downtown, we are going to bring thousands of people into the ' area and to have these kinds of attractions is going to be win win for the area. Rohman said that this should be a private sector proposal rather than a city led t one. This should involve a lot of collaboration from a lot of other groups to have some momentum. , Crowley said that collaboration is going to be the strength to bring your plan to reality. The creative industries in the City will play a very significant part in our ' economic development in the years ahead. Daniels said that there is a possibility of creating an international cultural � spotlight for Bangor. This is the next step in the creative process and it is very exciting to see this idea come forth. ' Wesley said that she gave herself to the end of 2004 to get her idea going. She said that she is very interested in the Dakin Building, and has been talking with Charlie Fitzgerald. She said that collaboration is essential and she thanked the ' Committee for their comments and encouragement. 2. Bangor International Airport—Telford Aviation Lease. � Hupp said that the Airport had received authorization from the Business and Economic Development Committee to negotiate and enter into an agreement ' with Telford Aviation. There are a couple of different areas associated with Telford's operation. They have their facility in Hangar One, additions to the 600 i 1 . ' � Area, and the aircraft-parking ramp in the 600 Area. She noted that she had provided a memo outlining the details of the agreement. She said that one of ' the outstanding issues was the construction agreement. When this was originally discussed the idea was that Telford would construct the hangar and the Airport would buy it and then lease it to them. In reality, it makes more sense to , buy the building directly from the contractor. It allows us to have better control over the final project and eliminate $10,000 in sales tax. Palmer wanted to clarify the discrepancy of $10,000 in sales tax versus the � $20,000 listed in the memo. Hupp said that the sales tax would be closer to $20,000. ' Crowley moved that we accept the terms for the lease agreement as outlined by the memo. The motion was seconded. The item was approved. Crowley moved ' that we accept the recommendation for construction agreement as modified and presented. The motion was seconded. This was approved by the Committee. ' 3. BanAir Corporation Report A. -Extension of Lease Agreement with PBB USA, Inc. ' Bolduc said that PBB USA, Inc. wishes to extend its lease with the City for another two years. 1 There was a motion and a second to extend the lease. The committee approved extending the lease. Councilor Palmer was absent during the vote. ' B. -Development by USABFIT, LLC d/b/a Union Street Athletics. Bolduc next discussed that USABFIT d b a Union Street Athletics wishes to ' / / expand its building at 366 Griffin Road. This will be going before the Planning � Board, however there are some items in the lease that require Committee action regarding some development standards that were set forth in the lease in addition to those of the Planning Board. In review the site plan that has been ' filed with the City, staff has concluded that all except four of the items have been met. StafF recommends that the Committee certify that the proposed improvements comply with the"Site Plan Standards" referenced in the lease with � three conditions outlined in his memo to the Committee, and that they approve the change of use of the premises from "automobile sales, rental and service"to an "enclosed recreation center." � Barrett explained that the City did take a look at the intensity of development in that area. The value of the building falls in the lower end of properties in the , � ' � � area, however this does not affect the lease arrangement. He said the property � as it exists now is a relatively small building for the acreage involved. Sherri Haller, owner of Union Street Athletics, said that she has been in operation � for 6 �/z years. She said that they have been very successful, have catered to and nurtured newcomers to exercise. She said that they are proposing to add 5,000-sq. ft. on the back end of the building, and move equipment into that area. Internally, they want to expand office space and locker rooms. Crowley asked if we would we see exterior treatment. Bolduc asked if Ms. Haller ,� was prepared to speak on this issue. Haller said that she was not prepared to present anything, however she would go through and try to answer the questions. The exterior would be metal as is the existing building, and the same �- color. The second issue, equipment on the roof, which there is not currently any, and no plans to do so. The third issue, rights of way, she said that they will � continue to maintain the lawns. Rohman said that it would be nice to see what the addition to the building would look like, however since it does not change the look of the front of the building he was not too concerned. Haller said that she ,� has a drawing of the proposed addition, but did not bring it because she thought the Planning Board would be more likely to want to review it. Rohman said that the Planning Board does not look at the exterior of the building, they look at the � footprint and the site plan issues. It falls on this committee to look at elevations. Nealley said that he has been a member of the gym for quite some time. He is � very familiar with the building and has no problem with the addition. He questioned the lease term with the new addition. Bolduc said that we amended � the lease in 2001, which allows Union Street Athletics to take advantage of their option to extend the lease through 2026. Nealley moved for staff recommendation. Crowley seconded the motion. � Palmer said that he is concerned about the recommendation that the Committee approves the exterior, and the roof equipment, and we have heard that there isn't any but it is in the recommendation. Bolduc said that at the time the memo �� was written he did not have specific information regarding the roof. Rohman said that it would be nice to see elevations since that is what we are being asked � to approve. Haller said that she would be willing to leave and bring the elevations back to the Committee. � Palmer moved to table this item until later in the evening when the Committee could review the elevation plan. The motion was seconded. � ' � � � -Extension of Agreement between BanAir Corporation and the City of Bangor, Airport Department. � This item was tabled. 4. Extension of tentative developer status for Chad Walton for �_ development of commercial rental space — Maine Business Enterprise Park, lots 15 and 16. '� Daniels noted that the Committee members had a copy of an order, ExtendFng Designation of Chad Walton as Tentative Developer of Commercial Rental Space �, — Maine Business Enterprise Park, Lots 15 and 16. McKay said that we have not yet received a proposal from Chad Walton, who has asked for more time. McKay � said that as we do not have any other interested parties for this property, we have no problem extending the tentative developer status. During this period they still have to present a more specific plan. �. The Committee approved the request. 5. Discussion on draft request for qualifications for the private � management of Bangor Auditorium and Civic Center/Eastern Maine Arena and Convention Center (materials to be provided under separate � cover). Daniels presented a draft request for qualifications for the private management � of Bangor Auditorium and Civic Center/Eastern Maine Arena and Convention Center. The first page is an historical overview of Bangor and a brief overview of the proposal. He noted that we still need to look at financing, design and � construction for some time in 2006 and 2007. The objective of the request for qualifications outlines the information that we � are looking for; structure of the organization, including but not limited to ownership structure, professional experience, and overview of the facilities in � New England that the company currently manages. Other objectives include, providing an overview of the company's capacity to operate entertainment and convention complexes, including but not limited to entertainment experience, � convention/conference experience and fair management. Daniels discussed that we want to know the company's experience and approach to advertising sales. . The company would need to provide an overview of their financial capability. � We want to know the company's food and beverage qualifications and how it might approach upgrading such operations at the current facility and at the Bangor State Fair. � � � 1 � � We want to know what the organization's philosophy is regarding current � employees of the City at Bass Park. What has been the company's practice in ] the past when assuming control of a facility previously manage by either a governmental unit or another private firm? Daniels said that we also want the � company to outline the general benefit package provided to their employees. We want to make sure that the fine employees we have in place right now have the right tools for the future. We want the company to outline their proposed �, financial arrangements between the organization and the owner of the managed complex. It is very important to bring someone on board who understands the installation of a building program, pre-opening services, design, planning and � procurement and advertising consulting services. Daniels noted that we have several different naming rights components including �� the ice sheet, arena, convention center, and basketball court. Daniels said that the draft includes a date of March 26, 2003 as the proposal � deadline. Although this date is negotiable, he recommends a minimum of 30 days to allow time for this to get put into the appropriate trade magazines, and � meet editorial deadlines. Rohman asked how we cover the issue of the attraction of groups/conventions, �� and the success a company might have had regarding this area. Barrett said that this is covered under request for qualifications, #2 — Convention/Conference experience. Rohman said that this covers operating, and Barrett suggested � adding a line that talks about marketing the facility. Farrington wanted to know if there were a group of prospects for this type of � service. He also wanted to know how much are we committed to going to a private group. Barrett said that we are under no commitment, this is an opportunity to see if there is any interest. Then we need to decide if there are � any groups that we are interested in pursuing further and entering into negotiations. Daniels said that there are some groups that specialize in this activity. There are international groups and regional groups, and we may want � to issue a target list of companies that we may want to��go after." Dyer said that there are at least 5 or 6 national companies, and there are ways to get the � word out. Crowley said that while this Council is taking bold steps in looking for alternative � management opportunities for Bass Park, and looking at ways to find dedicated revenue to help build a new arena or replacement, this is the one piece that appeared to be missing. He said that he was hopeful that Council would endorse � this concept. It will help bring forward interest in Bangor, and help to make Bangor a destination. When we talk about the possibility of a new arena, we ■ I � . � have a responsibility of educating the public. We are not talking about building a new auditorium; we are building a new facility, which will function very � I difFerently. It will be become more than a complement to the economy of this region. He said that a March deadline is fine. Palmer said that he thought that this has a lot of inerit. He hoped that we would � theme out carefully what we expect in terms of transition of current stafF. He said that if there is an existing company that does this on an international or -� nafional scale, there is some economies of scale in terms of purchasing and ownership potential. HOK's consulting fees have been worth every penny in terms of what this end product was. He said that he was supportive of this RFQ ;� process. Rohman welcomed Councilor Tremble to the meeting. �� 5 Barrett said that what we are asking for is qualifications, and more general than � the detailed aspects that Palmer was looking for. The details would come later in the negotiation process. Nealley said that to some extent companies are only going to invest so much up � front for the long term potential being first in on a brand new facility. The current facility has only so many events that can be promoted. He discussed '� subsidies in attracting potential companies. He said that marketing and promotional aspects are the most important things a national company could offer. He said he was concerned about the March 26t" date, because how � quickly do we think a big company is going to prioritize our RFQ and respond to it. T � remble asked if it is possible to break away the fair if a potential company was not interested in it. Daniels said that if necessary we could split contracts as we � did in our marketing quest. Crowley said that we all want a new facility and he is hopeful that we get national and local interest, and encouraged everyone to allow this process to � unfold. ' The Committee approved sending out for RFQ. Nealley suggested ivin more � 9 9 time for companies to respond. Barrett said in terms of time, 30 days is enough time for companies to respond, because we are only asking them to tell us about � � their company. � � � i i Continuation of item 3B. � The Committee voted to discuss the Union Street Athletics issue. Haller presented their proposal to continue with the same exterior siding and metal, same color, with nothing to be mounted on the roof. Palmer suggested a little � more landscaping. The Committee certified that the proposed improvements to the site and building layout and design did comply with the"Site Plan Standards" referenced in the lease with the following conditions: � 1. A note will be added to the site plan indicating that the street rights of way abutting the premises will be mowed by the Lessee. � 2. The site plan is approved.by the Planning Board in substantially the same form as originally submitted. 3. The committee approved the exterior treatment of the building and � acknowledged that there would not be any equipment mounted on the roof of the building. � The Committee also approved the revision in the use of the premises from "automobile sales, rental and service"to an "enclosed recreation center." � 6. Discussion on the utilization of Tax Increment Financing. Barrett said that this was on the agenda at the request of Councilor Tremble. � The concern is that cities may use tax increment financing competitively in order to attract businesses and jobs. Some cities use this to attract businesses away from other cities and do not create new jobs for the labor market. Barrett said '� that there are a couple of communities that have a problem with doing this. One option is to clarify the law as to what TIF allows. The original intent was to try � to make it possible for Maine to compete in the country or for individual labor markets within the state to attract expansion from other labor markets. Another possibility is to propose some form of regional tax base sharing. A percentage of � any new construction would go into a regional pot with a percentage going back to each community. A community that the new company located in would keep 70% of the tax revenue, 20% would go to a regional fund, and maybe 10% � dedicated to economic development funding. This is a quantum leap in terms of how communities look at this. He said that the current situation is self- defeating. � Crowley said that there are Bangor businesses that are being courted over the city line, with incentives that are representing an irresponsible use of programs. '� Crowley said that he would be interested in what prompted Councilor Tremble to bring this to the agenda. � � � l Trembie said that he agrees with Barrett. He said that a lot of our businesses � have been courted from neighboring towns. We have used TIFs for job creation, and we have not gone to neighboring towns. What prompted this discussion was the article in the paper a few days ago, was an expansion in a business park � in Brewer. When this first started it was going to be put together by Eastern Maine Healthcare. Under that proposal, it was going to be 80% tax exempt. It was consolidating office space, and it would have been nice if that had happened � in Bangor. Now Cianbro Corp. is the developer and they do not have tax exempt status, and they have asked the City of Brewer for a TIF. The City of Brewer is - planning to put together a package where they are offering a TIF on the � difference between the tax revenue that they would have received from the hospital and what they are getting on the private operation. The DECD, Department of Economic and City Development, still has to sign off on the TIF, �, and Tremble said that we should ask them to oppose it. The City of Brewer is just taking people who are paying taxes in Bangor and moving them across the � river. He would also like to see some action taken with BRDA. Nealley said that TIF opportunities usually go to larger corporations that can � afford the taxes anyway. He discussed a business situation in Guilford, Maine, where a small business owner could not afFord to move to another location, and then see a bigger corporation come in and receive a TIF. He said it should be a � greater goal for communities to maintain existing businesses. Part of the way in retaining what you have is to offer something that you can legally offer, however regarding the ethical part it is not right to not take care of those businesses who � have paid taxes in the community. , Barrett said that we have to be careful not to put on TIF, all of these business � competitiveness issues. The notion of a TIF is that it is supposed to be for economic development. It should not be used for retail, however it should be to create new jobs, or to maintain existing jobs. Barrett suggested an executive � session to discuss options, and to discuss it at BRDA's meeting. The Committee agreed to schedule an executive session for further discussion. � � � � � �