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HomeMy WebLinkAbout2005-10-19 Business and Economic Development Committee Minutes Special Business and Economic Development Committee � October 19, 2005 Minutes Councilor Attendance: Tremble, Allen, Stone, Hawes, D'Errico, Farrington Staff Attendance: Barrett, McKay, Bolduc Others: Ames, Russell 1. Lease Agreement with L&S Enterprises at 39 Florida Avenue Bolduc said that L8cS Enterprises wishes to lease an individual office at 39 Florida Avenue to use the space for office machine sales and repair as well as administrative functions. Similar conditions would apply to L&S as to other tenants in the building. The rate is $174/month including utilities. A motion was made and seconded to approve the lease agreement as outlined by staff. On another note, Bolduc stated the Committee previously approved a lease renewal with the FAA at a prior meeting. Because the Council had a prior approval, it needs to be again approved by the Council. This item will appear on the upcoming Council Agenda. � 2. Executive Session: Negotiations of Disposition of Property - Economic Development - Waterfront— 1 M.R.S.A. §405 (6) (C) Prior to going into executive session, Brian Ames addressed the committee introducing Tom Russell, Attorney for the developer. Based on ongoing conversations and negotiations in support of an extensive of the developer's agreement, Ames had asked for an opportunity to speak to the committee. Ames and Russell had reviewed and found the terms of the agreement ofFered by the City to be agreeable. Ames asked for the Committee's support for the request for an extension of the developer's agreement. It basically is a continuation of the developer's effort of years of work and several hundred thousand dollars worth of investment on top of stafF's individual time and the potential of the developer for construction jobs, ongoing taxes. Ames said it is a viable project. There is no risk to the City; the developer guarantees safeguards, bonds, etc. The extension would allow the developer to complete its work. It has been a very complicated project. � It is difficult to sell a unit when no unit is on site. McKay said that staff has proposed an item on the upcoming Council agenda to approve an extension of the new option agreement. McKay asked Russell to review proposed changes by Penview, which have been previously discussed with Russell, McKay and Heitmann. Russell said that Heitmann drafted the original agreement. Basically the agreement would extend the option to February 15, 2006 and, during that time period, � Penview would have to submit revised plans for the City's review and approval. • The plans have changed since the.original submittal. If Planning Board and Council approvals are in place by February 15, the option would be extended to May 15, 2006 to provide Penview the opportunity to obtain financing, construction contracts, title, etc. Penview would have until May 4�" to exercise the option and then close within thirty days. Construction would have to start by July 1, 2006 and completed by September 30, 2007. Responding to Allen, Ames said this is a 28 unit development that the developer received approval for several months ago. Russell said at one point there had been plans for 32 units but it was dropped to 28. Stone asked for timelines for the period between now and February 15th. Russell referred to page 6-16, subsection C which outlines the timetable and benchmarks. McKay indicated an item would be prepared for the upcoming Council agenda authorizing the exchange between the property owners that would provide the additional piece of property. The additional piece is required for the project to move forward. Farrington spoke of the concern that the City wants the project to move forward quickly but wants to limit its risk. He wanted to be sure there is a safeguard to insure the City's risk. He doesn't want to risk City property beyond a certain point. Responding to Farrington, Russell said the current agreement does not call for a model on the site. He did state that in the future the developer might ask for that option. The City Solicitor added language to the agreement dealing with bonds and guarantees to protect the City's interests. Barrett said that Allen and Farrington's concerns are alike; i.e. the City has been concerned that the developer could not get their condominium documents filed to actually obtain committed sales until � having control of the land. The City's concern was that if it provided control of the land to the developer and the project was not completed there would be encumbrances on the land if it came back to the City. Russell said that paragraph 13 addresses the concern. Russell said the developer taking ownership is not part of the current proposal. The developer will not be taking title or control of the land during the option period. Stone thought the title transfer had already taken place. Barrett said he just wanted to be certain as it has been an issue in the past. McKay said this agreement is very similar to the previous agreement. Before exercising their options to purchase the property for development, the developer has to provide evidence of financing, construction contract, etc. Russell said it has changed a bit. Before exercising the option, all those required approvals will be needed by February 15. The requirement that the developer provide evidence of financing and of a construction contract prior to exercising the option has been changed to �prior to closing.'— Tremble thanked the developers and stafF for their hard work on the project. A motion was made and seconded to go into executive session. McKay said that the City Solicitor needs to be involved in items 2 and 3. Due to a phone call, he was not available. Tremble suggested starting with item 4. A motion was made and seconded to go into executive session for item 4. � 3. Executive Session: Negotiations of Disposition of Property - Economic • Development - Bangor Waterworks— 1 M.R.S.A. §405 (6) (C) No Committee action was taken 4. Executive Session: Negotiations - Economic Development— Development Agreement for Proposed Affordable Housing Project— 1 M.R.S.A. §405 (6) (C) No Committee action was taken � � .