HomeMy WebLinkAbout2015-01-12 15-048 ORDERCOUNCIL ACTION
Item No. 15-048
Date: January 12, 2015
Item/Subject: ORDER, Authorizing Execution of Agreement with Caleb Development
Corporation — Bradford Commons
Responsible Department: Legal
Commentary: This Order will authorize the City Manager to execute an Agreement for
Payment in Lieu of Taxes with Caleb Development Corporation (Bradford Commons).
The City of Bangor and Maine Affordable Housing Trust, Inc. are parties to an Agreement for a
payment in lieu of taxes (PILOT) dated December 10, 1992 for property located at 201 Husson
Avenue, Bangor, Maine known as Bradford Commons. Caleb Development Corporation, a non-
profit charitable and benevolent corporation duly organized under the laws of the State of
Massachusetts, has purchased the property at 201 Husson Avenue from Maine Affordable
Housing Trust, Inc. They have requested that the City agree to continue the PILOT currently in
place with Maine Affordable Housing Trust, Inc.
Maine law, specifically 36 M.R.S.A. §652 (1) (A) provides that in order to be tax exempt the
property must be a benevolent and charitable institution incorporated in the State of Maine.
However, there is the potential question of the enforceability of 36 M.R.S.A. §652 (1) (A) in light
of the case of Camps Newfound/Owatonna, Inc. v. Town of Harrison, Maine, 520 U.S. 564
(1997) in which the 36 M.R.S.A. §652 (1) (A) (1) was found by the United States Supreme Court
to be unconstitutional.
The purpose and intent of the 1992 PILOT agreement between the City of Bangor and Maine
Affordable Housing Trust, Inc. that a benevolent and charitable institution providing at least
50% of the dwelling units at Bradford Commons to persons or families of very low income will
continue to be met with the transfer of ownership to Caleb Development Corporation.
Additionally, all other terms and conditions will apply. This item was reviewed and
recommended for approval at the December 16, 2014.
Manager's Comments:
Associated Information:
Budget Approval:
Legal Approval:
Introduced for
Passage
First Reading
Referral
Department Head
Page _of_
City Manager
nce Director
So
15-048
JANUARY 12, 2015
ter.
Assigned to Councilor Faircloth.
CI~l-Y OF BANGOR
4TH fE r
(TITLE.) ORDER, Authorizing Execution of Agreement with Caleb Development Corporation
— Bradford Commons
WHEREAS, the City of Bangor and Maine Affordable Housing Trust, Inc. are parties to
an Agreement for a payment in lieu of taxes (PILOT) dated December 10, 1992 for property
located at 201 Husson Avenue, Bangor, Maine known as Bradford Commons; and
WHEREAS, Caleb Development Corporation has purchased the property at 201 Husson
Avenue from Maine Affordable Housing Trust, Inc.; and
WHEREAS, Caleb Development Corporation is a non-profit charitable and benevolent
corporation duly organized under the laws of the State of Massachusetts; and
WHEREAS, Caleb Development Corporation has requested that the City agree to
continue the PILOT currently in place with Maine Affordable Housing Trust, Inc.; and
WHEREAS, Maine law, specifically 36 M.R.S.A. §652 (1) (A) provides that in order to be
tax exempt the property must be a benevolent and charitable institution incorporated in the
State of Maine; and
WHEREAS, there is the potential question of the enforceability of 36 M.R.S.A. §652 (1)
(A) in light of the case of Camps NewfoundlOwatonna, Inc. v. Tower oafHanison, Maine, 520
U.S. 564 (1997) in which the 36 M.R.S.A. §652 (1) (A) (1) was found by the united states
Supreme Court to be unconstitutional; and
WHEREAS, the purpose and intent of the 1992 PILOT agreement between the City of
Bangor and Maine Affordable Housing Trust, Inc. that a benevolent and charitable institution
providing at least 50% of the dwelling units at Bradford Commons to persons or families of very
low income will continue to be met with the transfer of ownership to Caleb Development
Corporation; and
WHEREAS, the parties have determined that it is in their best interest to continue the
1992 PILOT agreement for 201 Husson Avenue as currently exists between Maine Affordable
Housing Trust, Inc, and the City of Bangor by replacing it with a new agreement with the same
terms and conditions.
15-048
JANUARY l2, 2015
By tfre aty Counoif of the City of Bangor:
ORDERED, THAT Catherine M. Conlow, City Manager, is hereby authorized on behalf
of the City of Bangor to execute an Agreement for Payment in Lieu of Taxes with Caleb
Development Corporation for property located at 201 Husson Avenue Known as Bradford
Commons. Said Agreement shall be in substantially the same form as attached hereto and in a
final form as approved by the City Solicitor.
IN CITY COUNCIL
JANUARY 12, 2015
PASSED
ITY CL
15-048
JANUARY 12, 2015
AGREEMENT FOR PAYMENT IN LIEU OF TAXES
This Agreement is made and entered into this day of , 2015, by and between
the City of Bangor (hereinafter "City"), a municipal corporation organized and existing under the
laws of the State of Maine, and having its principal offices located at 73 Harlow Street, Bangor,
Maine, and Caleb Development Corporation, a Massachusetts non-profit, having a place of
business at 491 Humphrey Street, Swampscott, Massachusetts.
WITNESSETH:
WHEREAS, the City of Bangor and Maine Affordable Housing Trust, Inc. are parties an
Agreement for a payment in lieu of taxes (PILOT) dated December 10, 1992 for property located
at 201 Husson Avenue, Bangor, Maine known as Bradford Commons (the "Property"); and
WHEREAS, Caleb Development Corporation has purchased the property at 201 Husson
Avenue from Maine Affordable Housing Trust, Inc. and
WHEREAS, Caleb Development Corporation is a non-profit charitable and benevolent
corporation duly organized under the laws of the State of Massachusetts; and
WHEREAS, Caleb Development Corporation has requested that the City agree to
continue the PILOT currently in place with Maine Affordable Housing Trust, Inc.; and
WHEREAS, Maine law, specifically 36 M.R.S.A. §652 (1) (A) provides that in order to
be tax exempt the property must be a benevolent and charitable institution incorporated in the
State of Maine; and
WHEREAS, there is the potential question of the enforceability of 36 M.R.S.A. §652 (1)
(A) in light of the case of Camps Newfound/Owatonna, Inc. v. Town of Harrison, Maine, 520
U.S. 564 (1997) in which the 36 M.R.S.A. §652 (1) (A) (1) was found by the United States
Supreme Court to be unconstitutional; and
WHEREAS, the purpose and intent of the 1992 PILOT agreement between the City of
Bangor and Maine Affordable Housing Trust, Inc. that a benevolent and charitable institution
providing at least 50% of the dwelling units at Bradford Commons to persons or families of very
low income will continue to be met with the transfer of ownership to Caleb Development
Corporation; and
WHEREAS, the parties have determined that it in their best interest to continue the 1992
PILOT agreement for 201 Husson Avenue as currently exists between Maine Affordable
Housing Trust, Inc. and the City of Bangor by replacing it with a new agreement with the same
terms and conditions.
15-048
JANUARY 12, 2015
NOW, THEREFORE, IN CONSIDERATION of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. The City and Caleb Development Corporation agree that the Bradford Commons
property shall be deemed exempt from taxation under 36 M.R.S.A. § 652(1) (A) for so long as
the same is owned by Caleb Development Corporation, or a successor in interest who also
qualifies as a nonprofit, charitable and benevolent institution incorporated by the State of Maine,
and is used to provide at least 50% of the dwelling units therein to persons or families of very
low income, as that term is defined by the United States Department of Housing and Urban
Development. The City and Caleb Development Corporation agree that Caleb Corporation shall
make the March 1, 2015 payment as provided in the December 10, 1992 agreement between the
City of Bangor and Maine Affordable Housing, Inc. and that said exempt status shall continue
provided that Caleb Development Corporation, or a duly qualified successor, is the owner of
record as of the date of this agreement, and shall continue in full force and effect until such time
as the property is not owned by a nonprofit, charitable and benevolent institution incorporated by
the State of Maine, is not used to provide at least 50% of the dwelling units therein to persons or
families of very low income, or is rendered non-exempt by a change in the applicable statutory
provisions under 36 M.R.S.A. § 652.
2. In addition to the aforementioned March 1, 2015 payment, Caleb Development
Corporation agrees to pay to the City an annual payment in lieu of taxes and in lieu of a service
charge under 36 M.R.S.A. § 652 (1) (L) equal to one-half of the real estate taxes which would
have been assessed against the property if it was not exempt from taxation. Caleb Development
Corporation agrees to pay said amount in two installments, the first installment for one-half of
said amount to be paid on or before September 1St and the second installment for the remaining
amount to be paid on or before March 1St of each City of Bangor fiscal year.
3. At the same time that the City sends out its annual tax bills, the City agrees to provide
Caleb Development Corporation with a bill for said annual payment in lieu of taxes, which bill
shall contain the itemized amount of the land value and building values, the tax rate for the
applicable year, and a calculation of the amount due under the terms of this Agreement. The
City agree that the land and building values shall be determined in accordance with the standard
practices utilized to value and assess comparable apartment complexes in the City of Bangor.
4. If Caleb Development Corporation disagrees with the values utilized by the City, the
parties agree that Caleb Development Corporation shall have the right to petition the Assessor
for a review of those values in accordance with the practices, procedures, and principles
applicable to tax abatement requests. If Caleb Development Corporation and Assessor are
unable to agree on the values to be utilized for the payment in lieu of taxes within 60 days from
Caleb Development Corporation's filing of a petition with the Assessor, the parties agree that the
matter may be appealed by Caleb Development Corporation to the City's Board of Assessment
Review for a determination of the appropriate values in the same manner as other valuation
appeals made pursuant to 36 M.R.S.A. § 843 (1). If Caleb Development Corporation disagrees
15-048
JANUARY 12, 2015
with the decision of the Board or if the Board fails to make a decision within 60 days from the
date of the filing of an appeal by Caleb Development Corporation, the parties agree that Caleb
Development Corporation may initiate and pursue an action in the Maine courts for a
determination of the appropriate values in accordance with the same legal principles utilized by
the courts in tax valuation appeals. Said action must be initiated by Caleb Development
Corporation within 30 days from the earliest of: (1) the date of receipt by Caleb Development
Corporation of the Board's decision or (2) 60 days from the date of filing of an appeal with the
Board by Caleb Development Corporation, unless the deadline is extended by the mutual consent
of the City and Caleb Development Corporation. Any refund due Caleb Development
Corporation because of a reduction in value, plus interest thereon at the rate established by the
City for delinquent taxes for the fiscal year in question, shall be paid by the City to Caleb
Development Corporation within 30 days from the date on which the determination of value
becomes final.
5. By April I" of each year of this Agreement Caleb Development Corporation shall
provide to the City documentation that it is in compliance with the terms and conditions of this
Agreement.
6. This Agreement is entered into based on Maine law in effect as of the date hereof. In
the event that Maine law concerning tax exemption is changed subsequent to the date of
execution of this Agreement, the City reserve the right to pursue whatever taxation alternatives
may become available. In that event, Caleb Development Corporation shall not be obligated to
make the payments called for under this Agreement.
IN WITNESS WHEREOF, the parties have executed duplicate counterparts of this
Agreement as of the date first above written.
CITY OF BANGOR
Witness By: Catherine M. Conlow
Its: City Manager
Witness
CALEB DEVELOPMENT CORPORATION
By:
Its: