HomeMy WebLinkAbout2013-07-22 13-254 ORDERCOUNCIL ACTION
Item No.1 -254
Date: July 22, 2013
Item/Subject: ORDER, Authorizing the Execution of Documents for the Purchase of the Federal
Government's Remaining Interest in Parks Woods
Responsible Department: Health and Community Services
Commentary:
This Order would authorize the City to begin the process to purchase the U.S. Department of Health and
Human Services' remaining interest in Park Woods. The City of Bangor currently owns 60 apartment units in
Bangor commonly referred to as Park Woods. Under the terms of the deed by which the City acquired these
apartments from the United States Government in 1994, the City must meet certain obligations and conditions
for a period of 30 years, including the use of certain of these apartments -for transitional housing.
Under the terms of the deed from the federal government, the City may abrogate the conditions of the deed by
paying an amount equal to the fair market value of the property, less 1/360th of the value of the property for
every month the City has had the property. If that abrogation were to take place today, the City would be
required to pay approximately $1.36 million for the property, assuming a value of $3.6 million.
While Park Woods has provided valuable services to the City throughout the years, it has become clear that the
current model of transitional housing in place is unsustainable. In general, the transitional housing program
loses money each year; moreover, the City does not have the staff to operate this transitional housing in such a
way as to fully realize the benefits of such a program. City expenditures for Park Woods have included a
$195,000 Community Development loan for capital improvements and $400,000 from the General Fund to
cover operating expenses. This item will initiate the process but does not commit the City at this time to any
payment to the US Department of Health and Human Services. This item was reviewed by the Council in
Executive Session on June 24, 2013.
Manager's Comments:
Associated Information:
Budget Approval:
Legal Approval:
Introduced for
X Passage
First Reading
Referral
Department Head -
EVAN'S
"I _ — MUM
M�wkmWrvlsr ;i
Finance Director
Solicitor
13-254
JULY 221, 2013
Assigned to Councilor Sprague
i� SiOF BAHT
CITY OF BANGOR
4 D.FE r"
ORDER, Authorizing the Execution of Documents for the Purchase of the Federal
Government's Remaining Interest in Parks Woods
WHEREAS, the City of Bangor wishes to purchase the U.S. Department of Health and Human
Services' remaining interest in the apartment complex commonly referred to as Park
Woods;
WHEREAS, under the terms of the deed from the federal government, the City may abrogate
the conditions of the deed by paying an amount equal to the fair market value of the
property, less 1/360"' of the value of the property for every month the City has had the
property;
WHEREAS, based on a recent appraisal of the property, the value of the property is $3.6
million, and the cost for the City to abrogate the deed conditions and clear title to the
property would be no more than $1.36 million;
WHEREAS, Bangor Housing Development Corporation proposes to purchase this property from
the City and use it to provide affordable housing in a way that does not impose a
financial obligation on the City;
BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR, THAT
The City Manager is hereby authorized to sign all documents and act in all related capacities
necessary to abrogate and purchase the U.S. Department of Health and Human Services'
remaining interest in the housing complex known as Park Woods. Said documents shall be in
final form as approved by the City Solicitor or Assistant City Solicitor.
IN CITY COUNCIL
July 22, 2013
Motion made and seconded for Passage
Passed
CITYCLERK