HomeMy WebLinkAbout2005-01-10 05-61 ORDERItem No 09_61
Date: ]anuary10,3005
Item/Subject: Authorizing Development Agreement with Realty Resources Chartered/Essex Common
LLC and Related Actions— Redevelopment of Former Naval Reserve Property— Essex
Street
Responsible Department: Community and Economic Development
Commentary:
This will authorize a development agreement with Realty Resources for 32 new elevating units at the City's
Essex Street site. As you are aware, this project has been under discussion for some time and has been
reviewed on a variety of occasions by the Business and Economic Development Committee. Most
recently, a revised proposal was submitted that addressed a number of previous Committee considers
including density and traffic Flow.
The Oty's role in the projed will include a $263,000 Community Development loan at 0% interest with
payment defaced for 16 years at which time the full principal amount would be due. This loan will be
used to purchase the property from the Airport. The Airport will then loan these funds, through the City's
Economic Development Fund, to the circled with a 30 year 6.5% note. Finally, the City will apply a small
portion of the new taxes generated by the project ($3,031 per year for 30 years) toward the 6.5%
Interest loan. This level of City participation is required to make the project financially viable. Total
projected cost of the project is $4,633,00. Other project finandng will be in the form of tax credits,
Maine State Housing loans and subsidies, and developer equity.
The project as well as the Oty's financial participation in it, has been reviewed and is recommended by
the Business and Economic Development Committee.
Department Head
Manager's Comments �
Recommend approval _ Q/,1J�Ly6.
City Manager
Asaeciatei InformatOm Order
!lv(.a. =
France Director
Covj7 Cl Soliatur
Introduced for
X Passage
_First Reading
Page _of_
Referral
05-61
Assi@,W to Councilor Tremble January 10. 2005
CITY OF BANGOR
(MILE.) Order, Authorizing Development Agreement with Realty Resources Chartered/
Essex Common LLC anti Related Actions - Redevelopment of Farmer
Naval Reserve Property- Essex Street
By me City Cowxd a me ay aEangn:
ORDERED, THAT
WHEREAS, Realty Resources Chartered/Essex Common LLC submitted the only twoposal
received in response to the Citys Request for Proposals for redevelopment of the flamer Naval
Reserve Center property on Flux Street; and
WHEREAS, Realty Resources Chartered/Essex Common LLC has proposed the development of
a thirty-two (32) unit affordable housing project on the ste; and
WHEREAS, there is a need for additional affordable housing; and
WHEREAS, the apartments developed on the site will be leased to lowincane persons for a
minimum period of thirty years; and
WHEREAS, Realty Resources Chartered/Essex Common LLC has secured the necessary private
financing and equity, which, in addition to the City assistance requested, will enable me project
to go /onward; and
WHEREAS, the Business and Economic Development Committee has reAewed the proposal
and recommends the Council approve a Developmem Agreement with Realty Resources
Chartered/Essex Common LLC;
NOW, THEREFORE, BE BORDERED BY THE CITY COUNCR OF THE CRY OF SANGOR
THAT, the following actions are aumorbed:
1. The City Manager is hereby authorized to enter Into a Development Agreement
with Realty Resources Chartered/Essex Common LLC with terms requiring me
development of not less than 32 new dwelling units at the Essex Street site,
requiring that all 32 unite be rented to low-income persona and families for a
minimum period of 30 years, at a consbuctlan And THAW cwt of not lea than
$4,500,000, aM other such additional telcos and conditions as may be required
by U.S. Department of Housing and Uman Development Community
Development Block Grant Program regulatlaw, the City Solicitor or Assistant City
Solicl or the Director of Community and Economic Development, in a form
approved by the City Solicitor or Assistant city Solicitor.
IR C= MUMCM
.January 10. 2005
Paused
A True Go", Attest:
2. A Community Development Residential Rehabilitation Deferred Payment Juan to
Realty Resources Chartered/Essex Common LLC Is authorized in an amount net
exceeding $263,000 at 0% Interest with repayment deferred for 16 years at
which time all outstanding principal and Interest would be due, M be used Dy
Realty Resources Chartered/Essex Common LLC to purchase the site from the
City at fair market value with the sale proceeds going M Bangor International
Airport.
3, glre Airport Department Is "thornetl M loan the $263,000 received from the
sale of the Essex Street property M Me CWs Economic Development Fund at
6.5 % Interest, amortized over a perked of 30 years.
4. A Coy loan M Reeky Resources Chartered/Essex Gammon LLC from the City§
Erummnic Development Fund is auMorized, not to exceed $26 M, at 50A
Interest, amortized ever a period of 30 years, M Ee used for the partial funding
of the estimated development casts, lie Citys loams M Realty Resources
Chartered/Essex Common LLC contingent on Really Resources Chartered/Essex
Common LLC receiving Maine State Housing Authority (MSHA) Tax Credits,
MSHA RLP loan funds, MSHA subsidies and developer equity of not less than
$4,137,500 M finance Me development.
5. The Finance Director Is authorized M apply and allocate annually $3,031 from
new real estate taxes received from the Really Resources Chartered/Essex
Common LLC development M the Cltys Economic Development Fund for a
period of 30 years or until the altys loans M Realty Resources Chartered/Essex
Common LLC are paid in full, whichever occurs first.
6. The Agreenem may 6e assigned to a legal entity formed by Really Resources
Chartered/Essex Common LLC for Me purposes of the proposed development
provided that said entity has the same or better financial rapacity as Realty
Resources Chartered/Essex Common LLC and Includes the pindpals of Really
Resources Chartered/Essex Common LLC,
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