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HomeMy WebLinkAbout2015-01-26 15-074 ORDERCOUNCIL ACTION Item No. 15-074 Date: January 26, 2015 Item/Subject: Order, Authorizing Execution of an Amended and Restated Development Agreement with Edward G. Ernst Manor Housing Associates Limited Partnership and Broadway Housing, Inc. Responsible Department: Legal Commentary: Council Order 13-191 authorized the execution of a Development Agreement, Tax Credit Enhancement Agreement and Agreement for a Payment in Lieu of Taxes with Broadway Housing, Inc., a non-profit organization that owns a senior housing project located at 686 Broadway in Bangor, known as Ernst Manor. The property is in need of repairs and upgrades estimated to cost more than $800,000 with construction. The project was expected to be completed in 2014 but there have been several delays beyond the control of the Developer. The project is now expected to begin this spring and be completed in the fall of 2016. If approved, the completion dates would be extended to the fall of 2016. All other provisions in the agreement including the the payment in lieu of taxes would remain in effect. This item was reviewed and recommended for approval by the Business and Economic Development Committee at its January 20, 2015 meeting. Manager's Comments: Associated Information: Budget Approval: Department Head eeabyb- La,� - City Manager Finance Director Legal Approval: City Solicitor Introduced for Passage First Reading Page _ of Referral Assigned to Councilor Baldacci CITY OF BANGOR I5-074 JANUARY 26, 2015 (TITLE.) ORDER, Authorizing Execution of an Amended and Restated Development Agreement with Edward G. Ernst Manor Housing Limited Partnership and Broadway Housing, Inc. WHEREAS, Broadway Housing, Inc., a non-profit, tax exempt corporation, is the owner of property located at 686 Broadway, Bangor, Maine, providing affordable housing for senior citizens; and WHEREAS, the property at 686 Broadway is in need of repairs and upgrades; and WHEREAS, the projected costs of the repairs and upgrades to 686 Broadway is in excess of $800,000; and WHEREAS, the construction for the repairs and upgrades will begin by June 30, 2015 and be completed by September 30, 2016; and WHEREAS, the projected operating costs of the proposed project, which include property taxes, exceed the amount projected to be available from affordable rents; and WHEREAS, Edward G. Ernst Manor Housing Associates Limited Partnership has been formed and will have title to 686 Broadway conveyed to it and will apply to the Maine State Housing Authority for low-income housing tax credits and other available programs to provide the majority of the funds necessary to address the capital needs of the property; and WHEREAS, in order to qualify for low-income housing tax credits, Edward G. Ernst Manor Housing Associates Limited Partnership is required to be a taxable entity and Broadway Housing, Inc. is, therefore, requesting reimbursement by the City of 70% of the real estate taxes generated by the property located at 686 Broadway for a period of 15 years beginning with the April 1, 2015 assessment to assist in supporting annual operating expenses thereby keeping rents affordable; and WHEREAS, after the expiration of 15 years the ownership of 686 Broadway will revert to Broadway Housing, Inc. a non-profit, tax exempt entity and Broadway Housing, Inc. agrees to enter into an agreement for a payment in lieu of taxes (PILOT); and WHEREAS, reimbursement of real estate taxes to Ernest G. Manor Housing Associates Limited Partnership shall be done through a Tax Revenue and Credit Enhancement Agreement; and WHEREAS, the parties entered into a Development Agreement dated September 13, 2013, which they now wish to amend and restate to reflect their agreement to change certain time frames in the original Development Agreement due to the longer than anticipated pre - development process. IN CITY COUNCIL JANUARY 26, 2015 PASSED A-) CITY CLERK 15-074 JANUARY 26, 2015 By 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 an Amended and Restated Development Agreement with Edward G. Ernst Manor Housing Associates Limited Partnership and / or Broadway Housing, Inc. and any other documents necessary to meet the terms and conditions of the Development Agreement Said document(s) shall provide for repairs and upgrades to the property located at 686 Broadway, construction to commence no later than June 30, 2015 and completion of construction no later than September 30, 2016; the use of property to continue in its current use as low income housing for seniors; reimbursement of 70% of the property taxes paid by Edward G. Ernst Manor Housing Associates Limited Partnership assessed after April 1, 2015; a payment of 30% of property taxes by Broadway Housing, Inc. upon conveyance of 686 Broadway from Edward G. Ernst Manor Housing Associates Limited Partnership to Broadway Housing, Inc. or Penquis Cap, and other terms and conditions as approved by the City Solicitor or Assistant City Solicitor. Said document(s) shall be in a final form as approved by the City Solicitor or Assistant City Solicitor.