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HomeMy WebLinkAbout2008-06-18 Business and Economic Development Committee Minutes i '� BUSINESS AND ECONOMIC DEVELOPMENT COMMITTEE ' June 18, 2008 � Minutes Councilors: Palmer, Blanchette, D'Errico, Farrington � Staff: Barrett, McKay, Bolduc 1. Purchase of Lot 13B in the BanAir Industrial Park by Kurt Thomas ' Bolduc explained that Mr. Thomas is the owner of Bangor Motor Sports, who wishes to purchase Lot 13B, and he has made an offer of$20,000. He currently occupies the adjacent lot. He intends to use the lot for storage and eventually will construct a storage building on the lot. His business originally employed 4 and now employs 15. ' � The Board of Directors of the BanAir Corporation has recommended approval of the sale. A motion was made and seconded to approve staff recommendation. The motion carried. ' � 2. Executive Session - Economic Development— Disposition of Property— Lot 13B, BanAir Industrial Park— M.R.S.A. § 405(6)(C) � This item was not necessary due to action taken on Item #1. 3. Amendment of Lease Agreement with Hannaford Bros. Co., 208 Maine Avenue � Hannaford Bros. Co. has leased this building since 1983 and has decided to downsize. The lease ends on June 30, 2008. Staff recommended that the lease be extended to July 30, 2008 in order for Hannaford and the City to complete the lease arrangements � for 39 Florida Avenue, which appears as the next agenda item. A motion was made and seconded to approve staff recommendation. The motion carried. 4. Lease Agreement with Hannaford Bros. Co., 39 Florida Avenue � Bolduc indicated that the City and Hannaford have negotiated for its training and regional center at 39 Florida Avenue. They will lease 8 offices af the 12 in the buifding. � The remaining four are currently occupied. The lease wilf be for five years with two extension options of three years each. The fixed rate for the first two years is $1,860/month with a rent adjustment in 2010. Also in 2010, the City has the authority , to adjust the rent based on any increases in cost of utilities. The City supplies the utilities for this building, Responding to Blanchette, Bolduc said that heating oil consumption should not increase greatly as the City has been heating the entire � building. She asked if 8angor Gas is in the area. Bolduc said there are lines near the properly, and Barrett said staff would check into it. A motion was made and seconded to approve staff recommendation. The motion carried. � 5. Executive Session— Economic Devefopment— Disposition of Property— 39 Florida Avenue— M.R.S.A. § 405(6)(C) ' This item was not necessary due to the outcome of Item 4. 6. Maine Marine Manufacturing — Purchase Option Agreement and Agreement for � Lease & Development of Land at Turtle Head in Hampden McKay noted that in January there was news media coverage about Hodgdon Yachts manufacturing vessels for the Navy. The Navy has purchased the prototype vessel and � . ' � � Hodgdon was looking for a site to manufacture the vessels. Their preference is City of Bangor land focated in Hampden. The City purchased it in the 1920's as a source of � gravef. In January 2008, the Council designated Hodgdon as tentative develaper of the site untii June 30, 2008 for them to work out an agreement. Staff is asking the Committee to consider the outline of a development and lease agreement with Maine � Marine Manufacturing, which will be the part af Hodgdon Yachts that will be the actual developer of the vessels. Approval by the Committee would be recommended to the full Council for a final action. The proposal is to lease the site for up to 20 years with an 1 option to purchase at the current market value, $65,500. In the earlier version snet the Committee, the lease rate would have been 6% of the purchase price per year but that amount is not correct but should be an amount equal to what it would cost to amortize � a foan of$650,500 at 6% over twenty. years adjusted every five years to the prime rate plus 1%. Under the current proposal, the fease rate would be $4,660/month for the first five years. In subsequent years, the rate will be adjusted annually to the prime rate � plus 1%. Hodgdon is proposing two phases: a 220,000 sq. ft. building to be used for the manufacturer of up ta four 80ft. advance composite vessels per year; and the second phase is their projected construction which will begin in April 2009 and complete in 2010. If they receive orders, they will buitd a second building of approximately . 54,000 sq. ft. They anticipate a minimum of 30 employees during phase one in the first year and �eaking out at 150. The agreement would provide a lease to them for the 20 � year period.with an option to purchase when they have built the first phase and employ at least 30 employees. The City is essentially owner financing the purchase but keeping the title until the business is up and running. Hodgdon needs to have secured all ' necessary permits for the development and secured financing before exercising the option to purchase. The City, before executing the agreement, would have an ultimate location for dumping snow removed from downtown streets, sidewalks and parking � areas. Responding to Blanchette, McKay provided details as to the exact location of the site. � Blanchette noted that the road is owned by Hampden and asked if there are any plans to widen the road or straighten out the curve. Sarrett said the City has spoken with the Town Manager about the project but not about the development details. He thinks it ' would arise during the site development phase. Barrett said he will follow up with the Town Manager of Hampden. The project will have to meet the State's new Stormwater Management Regulations. Blanchette talked about toxic waste materials. � Farrington asked if an alternate location for snow removal has been found. Barrett said it will be discussed under Item 8. If the Navy were to withdraw, he asked if there � should be a clause to cover such action. McKay said that the City will lease the property unti! the development begins and Hodgdon wifl not start that process until they have contracts for vessels and have their financing in place. , A motion was made and seconded to approval staff recommendation. It will be referred to the full Council at its next meeting. � 7. Executive Session — Economic Development— Dispasition of Property— M.R.S.A. § 405(6)(C) This item was not necessary due to the outcome of Item 6. � � � � 8. E�cecutive Session— Economic Development— Negotiations for Acquisition of Property— M.R.S.A. § 405(6)(C) 1 A motion was made and seconded to move into executive session. No Committee action was taken following theexecutive session. � ' , � .� ' , � � , � � ' � r �