HomeMy WebLinkAbout2006-10-23 06-361 ORDERItem No, 06 361
Date: October 23 2006
Item/Subject: Order, AuMorizing a Development Agreement and Tax Revenue and
Enhancement Agreement with Northside Family Housing
Associates L.P.
Responsible DBWrtmem: Community and Economic Development
28 unit affordable housing project an Griffin Road immediately adjacent to the Airport Mall.
Specifically, they are seeking the reimbursement of 50%af the real estate taxes generated by the
project or $24,500 per year, whichever is less, for a period! of 15 years beginning with the April I,
20M assessment NoMside Family Housing Associates L.P. is a for-profit entity created by Penquls
C.A.P., Inc. to secure equity financing From the Low Income Housing Tax Credit Program through
the Maine State Housing Authority. They will construct 22 two-bedroom and 6 three-bedroom units,
including a community center. Six athe units will be reserved for homeless families. The units will
be targeted to families earning up to 0% of the area median Income ($32,600 Por a family of 4).
Rends will range from $550 to $725 Including heatand hotwaler. The low -rent affordability period
forthese types of projects is 90 years. The current HUD published! Fair Market Rents forthese units
are $704 to $895. Actual rents In the Bangor renal market right now are significantly, higher for
apartments ofthis quality. Penquis C.A.P.,Inc. through their affiliatetl limited partnerships has an
roaxeIentmick record of developing new affordable housing in Bangor, Veazie, BeHast, Corinna, and
Searsport. The parcel proposetl for development is currently taxed at $1,460 per year.
On November 28, 2005, by Council Omer 06.026 the Council approved such a Development
Agreement It was to expire June 30, 2006. Because of delay in MSHA issuing the Low Income
Housing Tax Credits, the Ory and NoMside Family Housing did not enter into an Agreement.
That problem has been resolved, and they are now ready to proceed with construction expected
to start this November.
This Omer will authorize the execution of a Development Agreement and the necessary Tax
Revverlue and Credit Enhancement Agreement required for the tax reimbursement ^
I
Department Head
MaWger's Comments: Recommend approval. The details of this agreement are
Identical
toMakers previously approvedbyMeCouncil. /rA)
3tj.T.AlLL�&H-t-44 City
Manager
Budget Approval: //
T Finance Directar
Legal Approval'
Oar Solicitor
Intrpduced for
-fX� Passage
_ First Reading Page _ M_
Referral
09 Hit
a\YY Asugoei io Comrinr Allen October 23, 2006
CITY OF BANGOR
(MLE.) Order, Order, Authorizing a Development Agreement and Tax Revenue
and Enhancement Agreement with Northside Family Housing
Associates L.P.
WHEREAS, North Side Family Housing Associates L.P., a limited Partnership entity affiliated
Wit Penquis CAP., Inc., has pmpased to develop 2B units of affordable housing
on the Griffin Road; and
WHEREAS, the City Council of the City of Bangor acknowodges that Me need for affordable
family housing units in Bangor is crucial; and
WHEREAS, Northside Family Housing Associates L.P. has applied to the Maine State Housing
Authority for low-income housing W credits and other available programs o
provide the majority of the $5.535 million In debt and equity funding needed for the
proposed development arta has been informed that May will re xave the W credits;
and
WHEREAS, the projected openrUng costs of the proposed project, which Include property fazes,
exceed the amount projected to be available from affordable rants; and
WHEREAS, Northside Family Housing Associates Is requesting reimbursement by the City of
50% of the real estate Wes generated by the project or $29,500, whichever is
less, for a period of 15 years beginning with Me April 1, 2008 assessmentto assist
in supporting annual operating expenses thereby keeping rents affordable; and
WHEREAS, On November 28, 2005, by Council Order 06-026 the Council authorized
execution of a Development Agreement with Nor side Family lousing Assoduates
LP for this assistance, said Development Agreement M expire June 30, 2005, and,
because of delay by MSM in issuing the Low Income Housing Tax Credits, one
Development Agreement was not executed; and
WHEREAS, MIN has now notified Northside Family Housing Associates LP that they will
receive Me W cretlRs; and
WHEREAS, reimbursement of real estate Was is done through a Tax Revenue and Cred'd
Enhancement Agreement;
NOW, THEREFORE, BE IT ORDERED BY THE QTY COUNCIL OF THE CITY OF BANGOR THAT
the City Manager is hereby authorized M enter Into a Development Agreement and a Tax
Revenue and Credit Enhancement Agreement with Northside Family Housing Associates LP. in
forms substantially the same as attached hereto and in final farm as approved by the City
Solicitor or Assistant City Solicitor.
IN cin COMM
October 23, 2006
Motion Made avd Seconded
for Passage
Councilor Palmer star" that
he serves on Peuquis Cap.
and Questioned whether he
should recuse henself from
this vote
Motion Made and Seconaea
that Councilor Palmer has an
Conflict
Vote: s-2
Councilors voting yea: Cashwell.
D'Etrico. Farrington. Greene E
Stone
Councilors voting no: Allen.
DratyM1ck
Pawh d
ClR MEEK
A 06-361
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(TITLEdAuthotitina a Develoomat 9aeasout
and Tu Revenue a" M hmceoent Agreenent
with Forthalde Favily Housing Asaaociates
L.P.
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