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HomeMy WebLinkAbout1999-12-13 00-51 ORDERCOUNCIL ACTION Date: December 13 1999 Item No. 010u,$1_ Item/eubject: Authorizing Amendment to Option Agreement for Purchase and Development of Development Parcel Between Boyd and Newbury Streets - Realty Resources Chartered Responsible Department: Community & Economic Development Boyd Sm at Housing Aboahues, LP has been formed by Realty Resources to consumer a 32 unit, multi -family, affoNable housing pr ject on a City owned parcel of land located between Boyd Street and Newbury Streeq just below St. John's Catholic Church. The Project is located in a City Council designated Community Development project area, the Hancock -York Neighborhood Development Prgmi The project will have 16 two-bedroom units and 16 thee -bedroom units for mat 0 low-income families, and a community center. The project will be fully taxable, generating an estimated $28,800 in annual new tax revenues to the City. Thecwtoftheprojsctisatimatedtobe$2,775,386. The Developer will invest$1,775,386 in equity, $400,000 in private Bouncing, and $400,030 in Maine State Housing Authority defamed loan funds. Due 0 the high cost of building concoction, limited amomn of rents that can be charged residents, and the cost of the mmaunity building and services provided, the developer has applied for$200,000 in financial assistance from the City. This amendment would provide a $0,000 lines to Boyd Street Housing Associates fiom the proceeds from the sale of theproperty. The amendment would also provide a mum of a portion ofnew Mal estate taxes paid lathe City of Bangor each year on the projxt in an amount sufficient to amonze a loan of $140,0000 the developer fiom a Private lender, at a rate notto exceed 95%end for a period not to exceed 15 years. The amendment would also assign all rights of Realty Resources Chartered under the Option to Boyd Street Housing Assail iatess,,�LP. aceminent NEa Manager's constants: [t{ (t Jn C+4DMbmmu�sea.Valas, (i City Manager Associated Information L),rhaal Budget ` Approval: Finance Director CITY Solicitor Introduced For XPassage 0 First Reading 0 Referral Pageyof 1 Awipied to Centaur eohmau Beceober 13, 1999 - CITY OF BANGOR (TUTEE.) Orber,_ANpnzing A,mv, mmtto Opauu Agreementfgr Purchase and ....... DevelopmentofDevelopment Parcel Between Boyd and Newbury Strdts Realty Resowces Chartered BY eM City Gouwait offAe thh of Wnpor: OWER10 , TWT WHEREAS, the City entered rate an Option Agrcanent for Purchase and Development oflkvOopment Parcel Between Boyd and Newbury Surdas with Realty Resources Chartered dated February 25, 1999 approved by passage of Council Order 99-101 on February 22,1999; and WHEREAS, an amendment to the Option was approved by passage of Conrail Order 99-29lextendhrg its term or February 28, 2000; and WHEREAS, the Opfion provides for are development of a 32 unit, could - hardly, affordable housing project on a City owned parcel of land located between Boyd Street and Newbury Street, below St. John's Catholic Church; and WfIEREAS, Realty Resources Chartered has formed a limited partnership, Boyd Street Housing Associates, LP, to carry, out the development, and WHEREAS, Boyd Street Housing Associates, LP has requested Randal assistance front the City to curry out the project; NOW, THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT the City Manager is hereby authorized to execute an amendment to the Option Agreemenu for Purchase Bud Development of Development Parcel Between Boyd and Newbury Streets with Realty Resources Chartered dated February 25,1999, providing for a $60,000 ken tc Boyd Street Housing Associates from the proceeds from the sale of the property, a return of a portion of new real estate taxes paid to the City of Bangor each year on the project in an amount sufficienuo amortize a loan of $140,000 to the developer from a private Border, at arate not to exceed 9.5% and for a period not to exceed 15 years, assigning all rights of Realty Resources Charlaed under the Option on Boyd Street Housing Associates, LP, and other amerMments substantially as attached hereto, and in a fatal form as approved by the City Solicitor or Assistant City Solicitor. IP CITY CDmm December 13.-1999 Notiam for Pessege Mde and Becooded Passu 0031 ORDER Title, Authorizing Amendment to Option Agreement for A¢[base and Development f Developeemt Parcel Betveea Bold and Neeb'eiy 5Cceeie - %'aYCy 1e"souice'i Chartered ...................................... -0 i Councilmen AMENDMENT TO THE OPTION AGREEMENT FOR PURCHASE AND DEVELOPMENT OF DEVELOPMENT PARCEL BETWEEN BOYD AND NEWBURY STREETS BY AND BETWEEN THE CITY OF BANGOR AND REALTY RESOURCES CHARTERED Agreement made this_ day of December 1999. WITNESSETH WHEREAS, the City of Bangor and Realty Resources Chartered entered into m Option Agreement for Purchase and Development of Development Parcel Between Boyd and Newbury Streets dated Febmary 25,1999 (heremade "Option); and WHEREAS, Realty Resources Chartered, referred to in the Option as "Developer", has formed a new developmem entity, Boyd Street Housing Associates, LP, b proceed with the "Development" m refined b in the Option; and WHEREAS, the Developer desires to construct a 32 unit, mulfi-family, affordable housing project that will have 16 two bedroom units and 16 three bedroom units, on a City owned parcel of land located between Boyd Street and Newbury Street, below St. John's Carbolic Church; and WHEREAS, the estimated cost of acquisition of property, building construction, installation of equipment and furnishings, design fees, legal fees, insmmnce, financing and other costs associated with the development (herehiafte"Project") is estimated to be $2,775,386; and WHEREAS, Developer will invest not less then $1,9'15,386 in equity, will secure not less than $400,000 in private financing, and will secure $400,000 in Maine Sta a Housing Authority deferred loan funds for the Project; and WHEREAS, Developer will construct a community building thaz will be used by residents for social and occuyatioml activities; and WHEREAS, the Project includes the acquisition of computers to be placed in the community building for residents to use that will be networked and connected to the internet, the model is HUD's Neighborhood Networks Program; and WE[EREAS, completion of the Project will create a significant public benefit by Providing affordable housing opportunities, removal of blighting conditions in the Hancock -York Neighborhood Development Project area, and will significantly humming lire nor base of the City; and Page 1 of 4 WHEREAS, the high Post ofbuilding construction, limited rents that can be charged residents, the community building and providing opportunities order the model of HUD's Neighborhood Networks Program requires financial assistance from the City; and WHEREAS, the Project is located in a City Council designated Community Development project men, the Hancock -York Neighborhood Development Project; NOW THEREFORE, IN CONSIDERATION of the mutual promises and covenants contained in this Amendment, the City and Developer agree as follows: I. The City agrees to an assignment by Realty Resources Chartered of all rights of Realty Resources Chartered as "Developer" under the Option, and as amended hereby, m Boyd Street Housing Associates, LP as "Developer" 2. Subject to the provisions of the Option and this Amendmem, the Developer agrees to contract a 32 unit, multi -family housing project that will have 16 two bedroom units and 16 three bedroom wits, with tents affordable to tenants meeting low to moderate income guidelines established by the U. S. Department of Housing and Urban Development, and to construct a community building, all in accordance with the site plan for development of the Project approved by the Bangor Planning Board on October 21, 1999, a copy of which in on file in the City of Bangor Planning Office. 3. Developer agrees to invest not less than $1,775,386 in equity, secure not less than $400,000 in private loan financing, secure $400,000 in deferred Maine State Housing Authority loan funds for the Project, and will invest approximately $2,]]5,386 for all costs associated with the Project, including not less than $1,900,000 in actual balding construction, fivnishings and site development costs. 4. Developer agrees he Provide evidence, not later than February 1, 2000 satisfactory to City Solicitor of City, of binding construction contract, or oonhacts, Providing for site work and building construction was for the Project of not less than $1,900,000, 5. City agrees on transfer title of im development parcel described above to Developer for a purchase price of $60,000 and to provide the Developer a loan in the amount of not more than $60,000 for the purpose of providing a Portion of the permanent fmancing of the Project. 6. City agrees to return a portion of annual real estate taxes paid on the project for up toe15-yearperod. Theamountofrml esm[e [axes returned in anyyear shall not exceed 100%ofreal estate faces paid, and shall not exceed the amount necessary Page 2 0£ 4 to amortize a loan amount of $140,000, at an interest rate not to exceed 9.50/o, for a term not to exceed 15 years, with not less than semiamual payments, and lunger provided no portion of real estate takes paid the City by the project will be retuned after Mach 31, 2016. 7. Developer agrees that development of the Project shall be in accordance with all applicable Federal, State, and City laws, ordinances and building codes. 9. Develop r agrees the scope of the work shell conform in all material respects to plans approved by the City of Bangor under Section B of the Option. 9. Developer agrees to provide evidence by February, 1, 2000, satisfactoryto City Solicitor of City, of legally binding private lender financing commitments of $540,000 fm financing of the Psojeet- 10. Developer agrees to provide evidence by February 1, 2000 satisfactory to City Solicitor of City, of legally binding limited partner's capital investment and general partner's capital investment of not less than $1,775,000, said investment to support the financing of the Project. 11. Developer agrees b provide evidence by February 1, 2000, satisfacmryto City Solicitor of City, of legally hinting Maine State Housing Awlimity defered financing commitments of $400,000 for financing of the Project 12. Developer hereby acknowledges that the City, in agreeing to provide financial assistance to Developer for the Project, relied in material part upon the assured completion of the Project ant the Developer agrees ur use its best Plane to substantially complete the Project no later thea March 1, 2001. 13. Developer agrees that it shall keep and maintain books, records and other documents relating directly to the Project and agrees that any duly authorized representative of the City shall, at all reasonable times, have access to and the right to inspect, copy, audit and examine all such books, records and other documents of Developer until completion of the Project upon prior written notice. Developer shall aware that similar provisions are included in all contracts or subcontracts entered into in connection with this Project. 14. Developer agrees that any duly autbortred representative of the City shall, at all reasonable lives, have access to my portion of the Project until its completion and apermaeat Occupancy Permit for the Project has been issued by the City. 15. Any notice which either party desmes or is required to give to the other in connection with the Option, as amended, shall be in writing and shall be sent postage prepaid, certified mail, mum receipt requested, as follows: Page 3 of 4 If to City: Edward A. Barrett, City Manager City of Bangor 73 Harlow Street Brogan, Maine 04401 Ifto Developer: Boyd Street Housing Associates, LP do Realty Resources Chartered 247 Commercial Street Rockport, Maine 04856 Or such other person and/or address as may be identified in writing by the parties. 16. Except as provided in the Option as amended hereby, until substantial completion of the Project, Developer shall not assign its rights order the Option without the prior written consent of City, which consent shall not be unreasonably withheld, delayed or conditioned. The City's obligations hereunder are contingent upon the Developers compliance with the terms aM/or conditions set forth in the Option as hereby amended. 17. It is intended by the parries that the Option, as hereby amended, shell operate as contract order seal, in accordance with 14 MRSA Sec.751. 18. To the extent that this Amendment is inconsistent with the Option, the parties agree to be bound by the terms and conditions of Us Amendment. WITNESS WHEREOF this Amendment bas been executed, sealed and delivered in duplicate counterparts as of the day and year first above written. Boyd Street Housing Associates, LP By JMC PaMers LLC, General Poorest By Joseph M. Cloutier Its Managing Member CRY OF BANGOR By Edward A. Barrett Its City Manager LNq nsxvwecvnmm�ryoaaopmm�enibeewne,eevCSMEVAO.rI.M Page 4 of 4