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HomeMy WebLinkAbout2010-07-12 10-254 ORDERCOUNCIL ACTION Item No. 0 4 1 Date: July 12, 2010 Item/Subject: ORDER, Authorizing an Amendment to the Indenture of Lease with Bank of America at 1176 Union Street Responsible Department: Community and Economic Development Commentary: Bank of America has proposed a revision to their lease of land at 1176 Union St., Lot 2 in the BIA Commercial / Industrial Park due to cost cutting measures they are implementing in response to recent economic conditions. They are evaluating their "distribution strategy for Maine" to determine whether to maintain the Union St. branch. The City of Bangor has leased 0.76 acres at 1176 Union St. since 1969. The term will expire on June 30, 2011. Bank of America has two (2), five (5) year option periods to extend the lease, in 2011 and 2016. The current rate is six hundred dollars ($600.00) monthly. If an extension is exercised, the lease states that the rate would be adjusted to 9% of the "fair market value". Bank of America pays $9,032 in property taxes based on a 2009 assessment of $474,100. The proposed terms and conditions are: the term would be extended to June 30, 2016; Bank of America would have the option to terminate the lease on 6/30/14 providing a six (6) month notice; five (5) option periods of five (5) years each beginning in 2016; the rate would remain at $600 monthly during 2011-12; the rate would then increase by 2% during each of the next four (4) years; if any extension is exercised the rate would be increased by the change in the Consumer Price Index (CPI) during the previous five (5) years with a floor of 1% and a ceiling of 5% for any one year; and Bank of America would not be obligated to operate continuously or to operate during certain hours. Department Head Manager's Comments: This has been reviewed and is recommended for approval by the Business and Eco is Development Committee. �1.1 *� City Manager Associated Information: Order Budget Approval: Legal Approval: Introduced for x Passage First Reading Referral k-61 1-1 - I - - " FirQnce Director ZV1--)(7 City Solicitor Page _ of to 54 Assigned to Councilor — Weston July 12, 2010 CITY OF BANGOR (TITLE.) ORDER, Authorizing an Amendment to the Indenture of Lease with Bank of America at 1176 Union Street WHEREAS, by Indenture of Lease, dated November 26, 1969, the City of Bangor and Fleet National Bank as successor in interest to the Merrill Trust Company, agreed to the lease by the Lessor of, what is now known as Lot 2 in the BIA Commercial / Industrial Park subdivision; and WHEREAS, by Indenture of Lease, dated March 29, 2002, the City of Bangor and Fleet National Bank termanated said prior lease and entered into an agreement for Lot 2 in the BIA Commercial / Industrial Park subdivision; and WHEREAS, Bank of America, as successor in interest to Fleet National Bank, wishes to amend said agreement: BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT The Interim City Manager is hereby authorized, on behalf of the City of Bangor, to execute an amendment to the Indenture of Lease with Bank of America, as successor to Fleet National Bank, for the land at 1176 Union Street, Lot 2 in the BIA Commercial / Industrial Park in a form approved by the City Solicitor or Assistant City Solicitor and containing the following terms and conditions: 1) The term would be extended to June 30, 2016, an additional five (5) years. 2) Bank of America would have the option to terminate the lease on 6/30/14 providing a six (6) month notice. 3) There will be five (5) option periods of five (5) years each beginning in 2016. 4) The lease rate during 2011-12 will be $600 monthly. 5) The rate will increase by 2% during each of the next four (4) years beginning 2012. 6) If any extension is exercised, the rate would be increased by the change in the Consumer Price Index (CPI) during the previous five (5) years with a floor of 1% and a ceiling of 5% for any one year. 7) Bank of America would not be obligated to operate continuously or to operate during certain hours. IN CITY COUNCIL July 12, 2010 Motion Made and Seconded for Passage Motion Doubted Vote: 6-3 Councilors Voting Yes: Bronson, Gratwcik, Hawes, Nealley, Palmer, Wheeler Councilors Voting No: Blanchette, Stone, Weston Passed (TITLE,) Authorizin an Amendment to _The indenture of Lease with Bank of America at 1176 Union Street Assigned to Conneflo l.,/ 7k