HomeMy WebLinkAbout2004-12-27 05-46 ORDERItem No. 05-46
Date: December 27.2004
Item/Subject: Authorization to Enter into a Development Agreement with Gail M. and
Martin A. Hipsky for the Rehabilitation and Reuse of a-56 Main Street
Responsible Department: Community and Economic Development
Commentary: Gail & Martin Hipsky have applled for a Community Development Residential
Rehabilitation Loan to provide financing to rehabilitate the upper 3 Floors of Q-56 Main Sol the farmer
Standard Shoe building, into 12 residential units. The Business & Economic Development Committee has
reviewed the application favorably and has referred the application to the full Council for approval. The
COBS Residential Rehabilitation Loan Program requires that a minimum of 51%, or ] of the new housing
units be affordable and occupied by persons who meet HUD guidelines as "Io nnk cerate income", with
rents controlled at the HUD approved Fair Market Rem for a period of four years. Total acquisition,
renovation and related cost are estimated to be $1,038,613. Proposed financing includes $122,500 in
cash equity from the developers, and Bangor Savings Bank financing of $235,875 for the acquisition and
$121,425 for the renovation. City assistance to the project would be a Community Development loan of
$458,813 at 3% Interest for 30 years and a secand loan of $100,000 at 3%wM payment deferred for 20
years at which time all wool principal and Interest would be due. It Is also proposed the City agree
to apply annually 50% of new real estate taxes paid by the pmjeot to the Community Development loan
payment due the M. The amount of City assistance proposed does not exceed the amount of City
assistance needed to make the projectfinancially viable. The Community Development Residential
Rehabilitation Loan Program, In collaboration with developers and private financing, has a successful
track record of rehabilitation of several vacant downtown properties including the Hammond Street
Courtyard, the Cyrus Clark House, the Thomas Hatch Black, the Paramount, the Freese Building, and the
One Hundred Associates building. Rehabilitation of this property providing an additional 12 residential
unit, and restoration of the buildings fa5ade, will represent another significant and positive step toward a
revitalized downtown. This Order would authorize the City Manager to enter Into a Development
Agreement with the owner seRing forth the terms and conditions of the City's assistance.
Department Head
Manager's Comments: nnr�f" 10
Legal Approval:
City Manager
Finance Director
City Solicitor
Introduced for
_ Passage
_ First Reading Page _ of
Referral
05-66
Anigro3b Councilor stone December 27. 2006
17
CITY OF BANGOR
(TITLE.) Order, Authodubw to Enter into a Development Agreement With Gail M. and
Martin A. Hipsky for the Rehabilitation and Reuse of 48-56 Main Street
WHEREAS, R has been the policy of the City Coundl to encourage the redevelopment of the
upper floors of downtown buildings through the Community Development
Residential Rehabilitation Loan Program to contribute to the economic viability of
the downtown; and
WHEREAS, Gall M. and Martin A. Hipsky have purchased and have proposed to develop 12
residential units in the upper floors of 98-55 Main Street; and
WHEREAS, there is a need for additional affordable housing; and
WHEREAS, Gail M. and Martin A. Hipsky have seared the necessary private financing and
have provided equity, which, in addition to the City assistance requested, will
enable the pro)ect to go forward; and
WHEREAS, it is projected the project will provide nee real estate tax revenue to the City
estimated to be in excess of $11,000 annually;
NOWr THEREFORE, BE IT ORDERED BY THE CITY COUNCH. OF THE CITY OF BANGOR
THAT the City Manager is hereby authorized to enter Iran a Development Agreement wish Gall
M. and Martin A. Hip" with terms requiring the development of not leu than 12 new dwelling
units at 40-56 Main Street with no fewer than J units affordable, at a construction and relate
cost of not leu than $761,000; the City to provide a Community Development Residential
Rehabilitation Loan in an amount not exceeding $458,813 a 3% interest amortized! over 30
years; the City to provide a second Community Development Residential Rehabilitation
Dearred Payment Loan in the amount of $100,000 at 3% annual interest wish payments
deferred 20 years at which time all outstanding principal and interest would be due; the Cty to
apply annually 50% of nen, incremental real estate taxes received from the property to the
Community Development ban payments for a period of 20 years; and contingent on the
Hips" securing private financing and providing equity investment adequate to provide the
needed financing for the project; and other such additional terms and conditions as may be
required by U.S. Department of Housing and Urban Development Community Development
regulations, the City Solicitor or Assistant CIN Solicitor, or the Director of Community and
Economic Development, in a form approved by the City Solicitor or Assistant City Sulldtnr.
IP'Cl2[ COUNCIL
Dece er 27. 2006
Motion Mede and seconded
for Passage
Passed
CI
CLBBH
�umi C tui11
DEPOS4
f Y 115-6fi
(IfPLE,)Authotization to Enter into a
Development Agreement with Gail M and
Martin A. Minsky for Aehgahilitatfan and
Reuse of 68-56 Maine Street
Aodgaed to Coenedor