HomeMy WebLinkAbout2010-04-26 10-159 ORDERCOUNCIL ACTION
Item No. I r
Date: April 26, 2010
Item/Subject: ORDER, Authorizing a Community Development Business Development
Loan to Webster Atlantic Corporation
Responsible Department: Community & Economic Development
Commentary:
The City uses a portion of its annual federal Community Development Block Grant (CDBG) to provide
funds for its Community Development Business Development Loan Program. The goals of the
Program are to create and retrain jobs, principally for low- and moderate- income persons, leverage
private investment, and alleviate physical and economic distress. Webster Atlantic Corporation,
publishers of Bangor Metro and Maine Ahead magazines, is seeking financing for working capital to
support its new publication, Maine Ahead magazine. The Eastern Maine Development Corporation has
agreed to loan Webster Atlantic Corporation $35,000 in working capital if the City will loan a like
amount through its CDBG Program. EMDC's proposal is for EMDC and the City each to finance a loan
of $35,000 to Webster Atlantic, for a total of $70,000, for 24 months, at 8.5% interest, with the first
payment due in three months, with EMDC and the City sharing a security collateral position behind
Bangor Savings Bank on Mark Wellman's home and Webster Atlantic's business assets, and with a
personal guarantee from Mark Wellman. The loan request is for working capital. The loan is eligible
for Community Development funding because of the job creation and retention involved. The City's
ability to make the loan with CDBG funds will be dependent on the applicant providing documentation
that persons meeting the criteria of low- and moderate- income persons will be employed.
Department Head
Manager's Comments:
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Associated Information:
Budget Approval:
Legal Approval:
Introduced for
Passage
First Reading
Referral
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Fin a Director
Page _ of _
ty Solicitor
Assigned to Councilor— Gratwick
CITY OF BANGOR
IPC 1 ,,1
April 26, 2010
(TITLE.) ORDER, Authorizing a Community Development Business Development Loan to
Webster Atlantic Corporation
WHEREAS, the City allocates a portion of its annual federal Community Development Block
Grant (CDBG) to provide funds for its Community Development Business
Development Loan Program; and
WHEREAS, the goals of the Program are to create and retain jobs, principally for low- and
moderate- income persons, leverage private investment, and alleviate physical
and economic distress; and
WHEREAS, Webster Atlantic Corporation, publishers of Bangor Metro and Maine>Ahead
magazines, is seeking $70,000 in financing to support its working capital needs
to continue the growth of its newest publication, Maine>Ahead magazine; and
WHEREAS, Eastern Maine Development Corporation (EMDC) has reviewed the loan
application and has agreed to loan Webster Atlantic $35,000, half of the
requested loan amount, provided the City also agrees to lend $35,000; and
WHEREAS, the loan is eligible for Community Development funding because of the job
creation and retention involved:
BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT
The application of Webster Atlantic Corporation for a Community Development Business
Development Loan in the amount of $35,000 is hereby approved with the following conditions:
Borrower: Webster Atlantic Corporation, One Cumberland Place, Bangor
Loan Amount: $35,000
Security Collateral. Personal Guarantee of Mark T. Wellman, second security interest
subordinate to Bangor Savings Bank shared with EMDC on all business
assets, second mortgage on Mr. Wellman's home at 28 Squirrel Lane in
Eddington, subordinate to a Bangor Savings Bank 1st mortgage, shared
with EMDC.
Purpose. To support working capital needs to continue the growth of Webster
Atlantic Corporation's new publication, Maine>Ahead magazine.
IN CITY COUNCIL
April 26, 2010
Motion Made and Seconded for Passage
Councilor Nealley had been determined
to have a confilict of interest and
left the room
Motion Doubted
Vote: 5-3
Councilors Vtoing Yes: Bronson,
Hawes, Palmer, Stone & Wheeler
Councilors Voting No: Blanchette,
Gra ck Weston
Pas d
ITY CLERK
(TITLE)) A";hnri zi ng a Community
Deuelnnmpnt Rncinpss Development Loan to
Assigned to Councilor.
P
L: 1 u v
Location: One Cumberland Place, Bangor, Maine
Employment: Webster Atlantic Corporation will not reduce current Bangor employment
levels through transfers to other locations, and will employ a minimum of
one person in Bangor that meets the US Department of Housing and
Urban Development's published definition of low- or moderate- income
persons.
Other Funds: An Eastern Maine Development Corporation loan of $35,000 is made to
Webster Atlantic, at 8.5% interest, with a two year amortization period,
with the first payment due three months from loan closing, with EMDC
and the City sharing security collateral
Term of Loan: Amortized over 24 months.
Interest Rate: 8.5%
Payments: Monthly, starting 3 months from loan closing
Payment Amount: $1,590.95 monthly, except for last payment adjustment.