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HomeMy WebLinkAbout2016-05-23 16-226 ORDERCOUNCIL ACTION Item No. 16-226 Date: May 23, 2016 Item/Subject: ORDER, Authorizing Execution of Documents by and Between the City of Bangor and Bangor Savings Bank for Amendment to Development Agreement for Lot 3 in the Maine Business Enterprise Park, Termination of Leases, and Purchase of Property —19 Maine Avenue and 203 Maine Avenue Responsible Department: Legal Commentary: This Order will authorize the City Manager to execute any and all documents necessary to convey currently leased properties to Bangor Savings Bank. The City of Bangor currently has 4 separate leases with Bangor Savings Bank pertaining to property located at 19 Maine Avenue, 203 Maine Avenue, and a 30' portion of a vacant parcel. In 2013 the City and Bangor Savings Bank entered into an Agreement for the eventual acquisition of these leased parcels and development and acquisition of Lot 3, all contingent upon certain conditions, principally Bangor Savings Bank's increase in taxable real property. At this time, Bangor Savings Bank has not met all the conditions set forth in 2013, however they would like to move forward with the following transaction: • First, Bangor Savings Bank would like to expand its building and operations located at 203 Maine Avenue, however they will only do so contingent on the purchase of the leased parcel from the City before construction. • Second, to enable the expansion at 203 Maine Avenue, Bangor Savings Bank will require additional land. This is achieved by narrowing of portions of the Texas Avenue and Corporate Drive right of ways. The City Engineer has confirmed that narrowing the rights-of-way will not negatively affect the roads. • Third, Bangor Savings Bank would like to purchase 19 Maine Ave. • Fourth, Bangor Savings would like to acquire a 30 foot long portion of Lot 3 that abuts their existing Hammond Street Branch Office. In addition to property taxes on the existing facilities, Bangor Savings Bank currently pays on monthly leases to the City. In an effort to keep the City whole as a result of this transaction, and pursuant to City policy, Bangor Savings Bank has agreed to expand the current facility and pay taxes on property valued at a minimum of $2.5 million in additional assessed value, which will offset the lost lease revenue. Should they not create $2.5 million in real taxable value, Bangor Savings Bank agrees to pay the difference, until such time as they reach the real assessed value of $2.5 million in excess of current valuations. It should be noted that Bangor Savings Bank will also pay the appraised value for each property to be acquired. If approved, this order will authorize the City Manager to execute any and all documents necessary to convey the above described properties to Bangor Savings Bank; preserve easements for existing utilities; and amend the current Lease Agreements, Option, and Development between the parties for 19 Maine Avenue, 203 Maine Avenue, and Lot 3 in the Maine Business Enterprise Park ;and to retain the right of Bangor Savings Bank to exercise the option to purchase Lot 3; and to terminate the existing leases; and to provide for Bangor Savings Bank to pay to the City that amount that would be payable for taxable value of real property of $2.5 million in addition to property taxes paid until such time as they increase the taxable value of real property by $2.5 million. This item was reviewed by the BED Committee and Council in executive session. Manager's Comments: Associated Information: Budget Approval: Legal Approval: Introduced for Passage First Reading Referral Department Head rA aL4-�k - finance Director ity olicitor Page _of_ 16-226 MAY 23, 2016 Sy the City Council of the City of Bangor. ORDERED, That Catherine M. Conlow, City Manager, is hereby authorized, on behalf of the City of Bangor to execute documents necessary to convey to Bangor Savings Bank the property currently leased at 19 Maine Avenue and, provided that the width of Corporate Drive and Texas Avenue right of ways are reduced to convey the land that was formerly part of the right of ways; and to convey the property currently leased at 203 Maine Avenue; and to convey a portion of Lot 3 in the Maine Business Enterprise Park currently leased by Bangor Savings Bank; and to execute documents necessary to preserve easement for utilities existing on the properties to be conveyed; and to amend the current Agreement for Lease Amendments, Option, and Development between the parties for 19 Maine Avenue, 203 Maine Avenue and Lot 3 in the Maine Business Park to retain the right of Bangor Savings Bank to exercise the option to purchase Lot 3; and to terminate the existing leases; and to provide for Bangor Savings Bank to pay to the City that amount that would be payable for taxable value of real property of $2.5 million in addition to property taxes paid until such time as they increase the taxable value of real property by $2.5 million. Said documents shall be in a final form as approved by the City Solicitor or Assistant City Solicitor. 16-226 MAY 23, 2016 Assigned to Councilor Sprague of CITY OF BANGOR (TITLE.) ORDER, Authorizing Execution of Documents by and Between the City of Bangor and Bangor Savings Bank for Amendment to Development Agreement for Lot 3 in the Maine Business Enterprise Park, Termination of Leases, and Purchase of Property —19 Maine Avenue and 203 Maine Avenue WHEREAS, the City of Bangor leases property in the Maine Business Enterprise Park to Bangor Savings Bank at 19 Maine Avenue, 203 Maine Avenue, and a portion of Lot 3 in the Maine Business Enterprise Park; and WHEREAS, the City of Bangor is the owner of a vacant lot, known as Lot 3, in the Maine Business Enterprise Park and has an Option and Agreement with Bangor Savings Bank for its purchase and development by Bangor Savings Bank; and WHEREAS, Bangor Savings Bank desires to add to its building at 203 Maine Avenue and purchase the parcel from the City before construction; and WHEREAS, to enable the expansion intended by Bangor Savings Bank at 203 Maine Avenue additional land is required which will be available upon the narrowing of portions of the Texas Avenue and Corporate Drive right of ways; and WHEREAS, at the same time as the purchase of the parcel at 203 Maine Avenue, Bangor Savings Bank desires to purchase the parcel at 19 Maine Avenue (Lot 1 in the Maine Business Enterprise Park), and a portion of Lot 3 in the Maine Business Enterprise Park currently leased by Bangor Savings Bank; and WHEREAS, the current agreement provides for a sale after an increase in taxable value of real property created by Bangor Savings Bank; and WHEREAS, Bangor Savings Bank has not increased taxable value of its real property but will begin to do so with the expansion at 203 Maine Avenue and has agreed to pay to the City that amount that would be payable for taxable value of real property of $2.5 million in addition to property taxes paid until such time as they increase the taxable value of real property by $2.5 million; and WHEREAS, purchase of the parcels of land Will necessitate an amendment to the current Agreement for Lease Amendments, Option, and Development between the parties for 19 Maine Avenue, 203 Maine Avenue and Lot 3 in the Maine Business Park, and an increase taxable value; and WHEREAS, it is in the best interest of the City of Bangor to amend the Agreement with Bangor Savings Bank and to sell property currently leased by Bangor Savings Bank. IN CITY COUNCIL MAY 23, 2016 MOTION MADE AND SECONDED FOR PASSAGE PASSED CITY CLERiK-