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HomeMy WebLinkAbout2008-06-23 08-237 ORDERItem No, 08 237 Bate: June 23, 2008 Item/Subject: ORDER, Authorbing Lease and Purchase Option Agreement -Maine Marine Manufacturing, LLC Responsible papers. nt: Communtty B Economic Development Commentary: On January 28'", the CityCoundl designated Hodgdon Marine, LLC tentauve developerof City propertyin Hampden adjacent to the Hampden Marna. The 16.62 acres of land owned! by the City is known as Steam's Mt. The development would be substantial In terms of employment and value. Hoogdon is affillated with Maine Marine Manufacturing LLC, Hodpdon Yachts Inc., and the University of Maine and developer the HMO pmtotype vessel delivered m the United States Special Operations Cornmand early this year. Maine Marne Manufacturing, LLC would use the site or a shipyard for the manufacture of advanced composite vessels suitable for military and coastal patrol applications. This Order would authorize Maine Marine Manufacturing, LLC, the corporate entity which will build and operate the facility, to lease the property from the City for up to 20 years with an option to purchase R for Its current market value of $650,500. During any lease period, a portion of the lease payments will be applied to reduce the purchase price. Maine Marne Manufacturing envisions two buildings on the site. The Phase 122,000 square foot building would be for the manufacture of up to four 80 foot advanced composite vessels a year, anticipated within 2 years of breaking ground. The Phase If building would be a 59,000 square foot building for the manufacture of 150 foot vessels. The sequence and the timing could change depending on orders for the vessels. Maine Marine anticipates completing final design, planning, and Hampden approvals by June 30, 2009, with site Improvements and construction beginning in 2009. They anticipate a minimum of 30 people would be employed. Employment for Phase I would peak at 150 employees. Depamnent Head Manager's Comments: _s Associated Information: Budget Approval: Finance Dlredgr Legal Approval Passage _ First Reading Page _ of _ Referral 08 237 Assigned to Councilor Palmer T®e 23, 2008 tet. CITY OF BANGOR (MILE.) ORDER, Authorizing Lease and Purchase Option Agreement — Maine Marine Manufacturing, LLC WHEREAS, on January 28", the City Council designated Hodgdon Manne, LLC tentative developer of 16.62 acres of City property in Hampden; and WHEREAS, Hodgdon Marine, LLC is affiliated with Maine Marine Manufacturing LLC, Hodgdon yachts Inc., and the University of Maine, which developed the MAKO prototype vessel delivered to the United States Special Operations Command earlier this year; and WHEREAS, Maine Marine Manufacturing, LLC, the corporate entity which will build the facility and lease the property, will develop and use the site as a shipyard for the manufacture of advanced composite vessels suitable for military and coastal pabol applications; and WHEREAS, Maine Marine Manufawtring, LLC anticipates completing final design, planning, and Hampden approvals by June 30, 2009, with commencement of site improvements and building construction beginning In 2009; and WHEREAS, Maine Marine envisions two buildings on the site, with Phase I consisting of a 22,000 square feet building for the manufacturing of up M four 80 foot advanced composite vessels a year within 2 years of breaking ground; Phase 11 would consist of a 54,000 square foot building for the manufacture of 150 feet vessels, with the sequence and timing dependent an orders for the vessels; and WHEREAS, Maine Manne would create a substantial number of quality employment opportunities and anticipates a minimum of 30 employees in the first year of Phase I production, increasing to 150 employees at peak production; NOW, THEREFORE, BE IT ORDERED "THE CM COUNCIL OF THE CITY OF BANGOR THAT On or before lune 30, 2009 and subsequent to securing a suitable alternative Sate for depositing snow removed from City meets and parking areas, the Oty Manager is authorized to execute an Agreement for Lease and Development of Land at Turtle Head in Hampden and a Purchase Option Agreement with Maine Marine Manufacturing, LLC under the following terms and conditions and in a form approve by the City Solicitor or Assistant City Solicitor: IN CITY CONMCIL Jove 23. 2008 foMade end Seconded for FYP aeg4 Pae CITT CL F 08 23] 0NDNM gffLEJ"t a in¢ Leese and Purcpe^_e. optic AArem t — wive Narine -Mmmtact=in&. LLC MsipW b Coendloe 08 237 By June 30, 2009, Maine Marine Manufacturing, LLC will enter a lease agreement with • the City of Bangor for the City's 16 acre Stearn's Pit/turbe Head site in Hampden for the purpose of establishing a shipyar i for the manufacture of advanced composite vessels; The lease shall have a term of twenty years with the monthly lease rare for the first five years of the lease equal to the amount necessary to amortize a $650,500 loan at 6% interest over 20 years which is $4,660.3B a month for the first five years of the lease; thereafter the lease rate shall be adjusted every five years on the anniversary data of the lease to equal the amount necessary to amortize a $650,500 loan over 20 years at the prime rate plus 1%, utilizing the prime rate as published in the Wall Street Journal; • During the tame of the lease, Maine Marine shall have the right to purchase the property with the purchase price calculated as follows: $650,500 less an amount equal W that portion of the lease payments received! by the City that would be consideretl principal payments as if the purchase price of the property were financed at 6% over 20 years, with the interest rate adjusted every five years as stipulated! above; • Before Maine Marine Manufacturing, LLC may exercise its option W purchase, it shall: 1. have severed any necessary State of Maim and Town of Hampden approvals for construction of the project; and 2. have seared financing for and invested not less than $4 million in site work, design, engineering, building construction, and tooling of a not less than 22,000 square foot shipbuilding building capable of Producing four 80 That boats a year, vnffi constrr.¢dan beginning by June 30, 2009 and substantially completed In 2010; and 3. employ not less than 30 employees with full competitive compensation packages; • if a market develops for the construction of 150 foot advanced composite vessels, Maine Marine will use As best efforts to construct the vessels at the Hampden site; • The City shall have the right to continue using the Hampden Steam's Pit site to deposit snow removed from the downtown area and other public areas in Bangor until March 30, 2009 or until the data one lease is signed, whichever is later, with snow W be deposited in areas that would not interfere with Maine Marine's development of the site.