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HomeMy WebLinkAbout2005-11-16 Business and Economic Development Committee Minutes • BUSINESS AND ECONOMIC DEVELOPMENT COMMITTEE November 16, 2005, MINUTES 1. Proposed Bangor City Council Letter in Support of Greater Bangor Convention &Visitors Bureau and the Bangor Region Chamber of Commerce This issue had previously been discussed during the budget process and at the September 14, 2005 BED Committee meeting. The purpose of the letter, originally proposed by Councilor Gratwick, is to attempt to gain the interest of some of the national firms that have local operations in Bangor. It requests these businesses be supportive of the City's business attraction efforts provided by the Chamber and the BCVB. The letter would be forwarded to a list provided by BCVB. Changes were suggested by Councilor Farrington to change paragraph four's first sentence to "Please become involved with our community . . .. " and paragraph seven's second sentence by taking out "only." A more appropriate closing than "Emphatically"was also suggested. It was also suggested the Council Chair sign the letter. • With the changes suggested, the letter would be as follows: Dear Bangor Business Owner/Manager: The City of Bangor has changed significantly in the last ten years. As the major service center for northern and eastern Maine, Bangor attracts large numbers of both regional residents and tourists. Bangor annually services well in excess of the 5 million visitors to the Mall. These visitors come from throughout the six counties in eastern, coastal, and northern Maine, Canada, and other out-of-state locations. Due to this high volume of trafFic, many companies headquartered out of Maine have found Bangor an attractive location for branch operations. Thus our community is a high growth area with a broad array of services. However, an often-unrecognized downside of this growth is many of these out-of-state owned companies do not support local community organizations that are critical to our local economic development and quality of life. In many states, economic development organizations are supported by dedicated tax revenues—state, county and/or local -- that are used to market localities for tourism, conferences, conventions, and new business attraction. Since this funding structure is not present in Maine, financial � support from businesses for marketing and economic development is critical to our continued success. � Please become involved with our community by supporting those organizations that are dedicated to bringing tourists and visitors to Bangor and our region. While visitors are here, they spend money in our shops, restaurants, and lodging facilities and businesses like yours. If treated right, they will come back again and again. Bangor has a population of about 33,000. A survey of just fifteen local hotels indicates that these properties handle well in excess of 700,000 annual overnight visitors, or more than twenty times our local population. The business that we attract makes a BIG difference to our economy and to your bottom line. Without a consistent and ongoing marketing efFort, our region will quickly lose market share. When Colorado stopped marketing in the mid 90's, it found out just how quickly you can move from a high level of marketplace recognition to almost total lack of recognition. Colorado is still struggling to regain the ground that they lost almost overnight, and the risks to communities like Bangor are no different! We need your support and investment in our efforts to sustain our current level of business AND to generate new future business. This can be accomplished through your support of the Greater Bangor Convention and • Visitors Bureau and the Bangor Region Chamber of Commerce. Our success depends on mutual support! If the City of Bangor can do anything to support your efForts to impress the importance of such support on your corporate leadership, please do not hesitate to call on us. For more information on either the Convention and Visitors Bureau or the Chamber of Commerce, we have included contact information below. Sincerely Yours, John H. Cashwell III Chair, Bangor City Council Convention and Visitors Bureau: contact information and web site address here. Chamber of Commerce: contact information and web site address here. � • 2. Amendment to the Bangor Pine Tree Zone The Committee recommended approval of an amendment to the Bangor Pine Tree Zone to include the parcel on tax map R18 Lot 11A. Kataddin Precision Components, LLC is leasing a 3,600 sq. ft. building on the parcel for the operation of newly formed manufacturing company. The company "will manufacture leadwires for use in lighting and electronic applications. The business will also manufacture tooling to be used for its own weld machines and that will also be sold to OSRAM Sylvania's Monterrey, Mexico leadwire facility. It addition, KPC will provide support services (quality inspection, consulting and machine rebuild) to this same facility. KPC expects to employ 12 people in the first year. 3. Lease Agreement with Penquis Community Actiorr Program, Inc. for Lease of 120 Cleveland Street The Committee approved a lease agreement with Penquis CAP to lease a building at 120 Cleveland St., Bangor for operation of a daycare center and related administrative functions. Penquis CAP has leased the building at 120 Cleveland St. from the University of Maine System for a number of years. Ownership of the building will transfer to the City of Bangor as a part of the properly exchange between • the City of Bangor and the University of Maine System concerning 6 Central St. for the Chancellor's office. This short-term agreement will cover the period until June 30, 2006. During this period a longer-term agreement will be negotiated. 4. Penquis Community Action Program Request for City Commitment of Community Development Loan Funds in Support of Proposed Affordable Housing Project—Griffin Road See below item# 5 5. Realty Resources Request for City Commitment of Community Development Loan Funds in Support of Proposed Affordable Housing Project—Ohio At the suggestion of temporary Chair Councilor Farrington the committee agreed to combine items 4 and 5, letting each developer present the details of their project and the requested financing. The Committee would then ask questions of the developers and then go in to an Executive Session to discuss the City's financial options. . Penquis C.A.P. went first with Stephen Mooers, Director of Housing Services for Penquis C.A.P. Inc., and CEO of North Side Family Housing Associates L.P. • Mr. Mooers expiained that the 5 acre Griffin Road parcel they wish to develop into 28 units of affordable housing is nearly across the street from their recent 16 unit development, adjacent to Griffin Park Family Housing (50 units of Public Housing). The project would be financed primarily through cash equity raised through the Low-Income Housing Tax Credit Program (LIHTC) in a statewide biannual competition with the Maine State Housing Authority (MSHA). The applications for the current funding round are due on December 2. Penquis C.A.P.,.Inc. has extensive experience in developing these types of projects throughout central Maine. They have developed 106 units. Mr. Mooers stated that if their application were approved North Side Family Housing Associates would secure all of the necessary funding ($5,345,000) to build the project. Initially they were requesting CDBG funds for acquisition of the properry, but they were recently approved for $400,000 from the Region 3 Homeless Council. The inclusion of those funds will require that 6 of the 28 units be set-aside for homeless families. A collaborative agreement between local service providers will be in place to provide supportive services directly to the families in these 6 units. The proposed development will also include a community center building with a part time resident services coordinator. Under the LIHTC Program the rents are restricted to affordable levels for a period of 90 years. The low rents do not generate sufficient revenue to � cover operating costs and generate a positive cash flow. If the City were to return approximately 45% of the real estate taxes or $24,500 per year to the owner for 15 years, the project would be able to meet it's operating expenses. T.J. Marizial, Housing Programs Manager pointed out that the parcel is currently assessed at $69,000 and pays around $1,400 in annual taxes. If the tax return on this project is approved, the property will still generate an additional (approximate) $25,000 per year in real estate taxes. Mr. Mooers stated that this project has already received conditional site plan approval from the Bangor Planning Board with the exception of some minor storm water design changes. Next, Suzanne Roy, Senior Development Officer for Realty Resources Chartered presented a proposal for 32 units of afFordable housing on a 9.5 acre parcel at 791 Ohio Street, across the street from St. Mary's church. This project will also submit an application to the MSHA under the LIHTC Program on December 2. The funding mechanisms are very similar for each project although the Realty Resources project does not include any homeless funding. Ms. Roy explained that this is virtually the same project that they previously proposed for the City owned parcel on Essex Street (former Naval Reserve Center). The original Essex St. housing proposal was awarded to Realty Resources under a competitive RFP process. Their original proposal was initially well received by the Business and Economic Development � Committee, but was denied a zone change by the Planning Board and that � decision was upheld by the City Council. This project has not received any site pian review or approval from the Planning Board. Ms. Roy explained that in their case the project has a gap in development costs and they are requesting the City provide CDBG funding to cover the cost of acquisition of the land. Their operating proforma indicates sufficient revenue to operate the proposed development. Councilor Stone asked for a brief explanation of the Low Income Housing Tax Credit Program and how it provides the equity capital for these types of projects. Mr. Tom Lewis, President of Community Development Services and a consultant t to Penquis C.A.P. provided a step by step explanation of the program. Councilor Allen had some concerns about the traffic on Ohio Street and how additional residential development could exacerbate the problem in the already congested area. Ms. Roy stated that a full traffic study would be performed if the project funding is approved and that Realty Resources would work with the City in designing any requirements to minimize traffic issues. Councilor Farrington was concerned that even though the Penquis C.A.P. proposal would generate an additional $25,000 in taxes per year over what � that parcel currently generates, it is still a reduction in taxes. Councilor Gratwick supported and encouraged approval of both projects because of the increasing demand for affordable housing in the City. Councilor Stone moved that the Committee go in to an Executive Session to discuss the financing options for each project. When the Committee returned to Public Session, Councilor Stone moved that the City support the request from Penquis C.A.P., and Northside housing Associates for a return of$24,500 per year in real estate taxes, but turn down the request from Realty Resources for $263,000 in CDBG funding for their proposal. The motion was seconded by Councilor D'Errico (?) and approved by unanimous vote. The recommendation will be referred to the full Council on November 28, 2005. •