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HomeMy WebLinkAbout2025-01-13 25-048 OrderCITY COUNCIL ACTION Council Meeting Date: Item No: Responsible Dept: Requested Action: Summary Committee Action Meeting Date: For: Against: City Manager City Solicitor Finance Director Map/Lot: Introduced for: Order Committee: Action: Staff Comments & Approvals Date: Item No: Assigned to Councilor: 25-048 JANUARY 13, 2025 OPTION AGREEMENT THIS OPTION AGREEMENT (the "Agreement") made and entered into as of the day of January 2025, by and between the CITY OF BANGOR, a Maine body corporate and politic with a place of business and mailing address of 73 Harlow Street, Bangor, Maine 04401 (the "Grantor") and DEVELOPERS COLLABORATIVE PREDEVELOPMENT LLC, a Maine limited liability company with a place of business in Portland, Maine, and a mailing address of 631 Stevens Avenue, Suite 203, Portland, Maine 04103 (the "Grantee"). WITNESSETH: WHEREAS, pursuant to a competitive process, Grantee has been selected to develop a Grantor-owned property on Grandview Avenue shown on City of Bangor's Tax Assessor's map as Map R41, Lot 023-A as housing according to a statement of qualifications dated September 25, 2024, for the development of mixed residential housing targeting persons and families with incomes at 80-120% of area median income for the Bangor Housing and Urban Development Metro Financial Management Regulation Area(HMFA), Maine (the "Proposed Development"), identified as Proposal No. P25-09, issued August 28, 2024 (the "City RFQ"); and WHEREAS, this Agreement is intended to provide Grantee with an exclusive and irrevocable option to acquire such property (the "Option"); NOW THEREFORE, in consideration for One Dollar ($1.00) (the "Option Consideration"), the receipt of which is hereby acknowledged by Grantor, Grantor and Grantee hereby agree as follows: l. Grant of O�tion. Grantor hereby grants to Grantee, its successors and assigns, the exclusive and irrevocable option to acquire land located on Grandview Avenue, shown on the Bangor Tax Assessor's maps as Map R41, Lot 023-A, containing 10.5 acres, more or less, and being a portion of the property described in a deed to the Grantor recorded in the Penobscot County Registry of Deeds in Book 964, Page 70,together with all appurtenant rights and easements (collectively the "Property"). 2. Ex�iration. This Option shall expire on April 30, 2025, at 11:59 EST, unless exercised by that date and time. 3. Notice of Exercise; Failure to Exercise. This Option may be exercised only by Grantee giving written notice of election to exercise to Grantor by first class mail, postage prepaid, registered or certified, return receipt requested, addressed to Grantor at the address set forth at the beginning of this Agreement, or to such other address as Grantor may designate to Grantee in writing. Said notice shall be deemed to have been duly given if postmarked prior to the expiration date and time specified herein. Except as otherwise provided in this Agreement, in the event that Grantee fails to exercise the option granted in this Agreement within the time specified in Section 2 above, the Option Consideration shall be retained by Grantor, and thereafter neither Grantor nor Grantee shall have any further rights or claims against the other. 4. Exercise. In the event that Grantee exercises the Option granted in this Agreement to purchase the Property as provided herein, the following shall be applicable: a. Grantor and Grantee shall negotiate and enter into a Development Agreement which may include a phased development, staggered closings, and a requirement that a development plan and a financial model consistent with the development plan be developed. b. Grantor's allocation of$2,000,000.00 of American Rescue Plan Act(ARPA) funds shall be utilized for the development of infrastructure at the Property, with the understanding that Grantee may apply for additional funding through Tax Increment Financing (TIF)programs and other state and federal programs. c. While Grantee's response to the City RFQ contemplates a total of 94 units within the Proposed Development, Grantor acknowledges that the total number of units is dependent upon site constraints and the availability of sufficient financing. d. Subject to any adjustments and prorations hereinafter described, the total purchase price for the Property shall be One Dollar ($1.00), which is the Option Consideration and which has been paid in full. e. At each closing under this Agreement, Grantor shall execute and deliver a Municipal Quitclaim Deed conveying Grantor's interest in the Property to Grantee. £ Each closing under this Agreement shall take place not later than ten (10) days after the completion of the City Work, whether as a whole or as to individual phases (the "Closing Date"), at 10:00 AM, local time, or at such other time and place as Grantor and Grantee shall mutually agree upon in writing. Each closing shall take place at City Hall in Bangor, Maine. At each closing hereunder, Grantor shall execute a Municipal Quitclaim Deed conveying Grantor's interest in the Property and such other documents and instruments as Grantee shall reasonably request and that are customary in commercial real estate transactions in Maine. g. Grantee shall pay the cost to record the deed or deeds and any financing documents executed by Grantee. Grantee shall pay its share of the Maine real estate transfer tax due at each closing, Grantor being exempt. 5. Ins�ection. At all times during the term of this Agreement, upon reasonable prior notice, Grantee and any prospective lender or investor of Grantee's shall have the right to enter the Property and perform, at Grantee's expense, any and all inspections, tests, surveys or other due diligence inquiries with respect to the Property as Grantee deems necessary or appropriate. Grantee agrees to return the Property as nearly as possible to its original condition after any of such tests and inspections. In the event Grantee is not satisfied for any reason by the results of such due diligence inspections, Grantee shall have the option of terminating this Agreement by written notice to Grantor. Without limiting the generality of the foregoing, this Agreement and 2 Grantee's purchase of the Property are subject to a determination by Maine State Housing Authority or other agency with jurisdiction as to the desirability of the Property for Grantee's intended use as a result of the completion of the environmental review process required by the United States Department of Housing and Urban Development, and if such determination is unsatisfactory, Grantee may terminate this Agreement and receive a refund of the Option Consideration. 7. Default; Remedies. In the event Grantor defaults under this Agreement, and such default is not cured within thirty (30) days of written notice of such default, Grantee shall have all remedies at law and in equity, including, without limitation the right to seek specific performance. In the event Grantee defaults under this Agreement, and such default is not cured within thirty (30) days of written notice of such default, Grantor shall have all remedies at law and in equity. 8. Notices. Except as provided in Section 3 above, all notices, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the parry to whom notice is to be given, or on the first business day after mailing if mailed to the party to whom notice is to be given by first class mail, postage prepaid, registered or certified, return receipt requested, addressed to the recipient at the addresses set forth at the beginning of this Agreement. Either parry may change its address for purposes of this Section by giving the other party notice of the new address in the manner described herein. 9. Miscellaneous. Time is of the essence hereo£ This Agreement constitutes the entire agreement between Grantor and Grantee as to the Property, there are no agreements or understandings between the parties with respect to the Property except as set forth herein, and all prior agreements and understandings concerning the Property are superseded by this Agreement. This Option Agreement will inure to the benefit of and bind the respective successors and assigns of Grantor and Grantee. If any provision of this Agreement is determined to be invalid or unenforceable, it shall not affect the validity or enforcement of the remaining provisions hereo£ This Agreement shall be governed by and construed in accordance with the laws of Maine. 3 IN WITNESS WHEREOF, Grantor and Grantee have executed this Option Agreement as of the date first above written. WITNESS: CITY OF BANGOR, Grantor By: Deborah Laurie, City Manager [signatures continue on next pageJ 4 IN WITNESS WHEREOF, Grantor and Grantee have executed this Option Agreement as of the date first above written. WITNESS: DEVELOPERS COLLABORATIVE PREDEVELOPMENT LLC, Grantee By: Kevin R. Bunker, its Manager C:\OneDrive\Documents\CT\DC Predevelopment LLC(20981)\Grandview Ave(375)\Option Agreement_Grandview 1_7_25_CT edits.docx 5 IN CITY COUNCIL JANUARY 13, 2025 CO 25-048 Motion made and seconded for Passage Vote: 7—0 Councilors Voting Yes: Beck, Fish, Fournier, Hawes, Mallar, Pelletier Councilors Voting No: None Passed �����:,w�,��° '" .�� ��°,„�,��"���,°��*°.������ �� CITY CLERK