HomeMy WebLinkAbout2003-02-10 03-79 ORDERItem No. may
Date: February 10, 2003
Item/Subject: ORDER, Authorizing the Execution of a Development Agreement wish Shaw
House Development, Inc
Responsible Department: Legal
Cammeftary:
On June 24, 2002, by Council Order #02-263, the Council authorized giving site mntml of the Bangor
Waterworks to Shaw House for the purpose of its application for Low Income Housing Tax Credits. On
November 25, 2002, by Council Resolve #03-22, the Council agreed to enter into an agreement with the
Shaw House to provide financial assistance not to exceed 17% OF the total project cost up to a maximum
of $1,000,000 for the redevelopment of the Bangor Watervmrics.
Shaw House Development, Inc. has been approved for Lav Income Housing Tax Credits and has other
financing in place in addition to the City's commitment so that it is prepared W proceed with the project
This Order authorizes the execution of a Development Agreement _
/ - Del+Artment Head
Manager's Comments:
oflNwy�' rl l ,f �/
q;(* City Manager
Associated Information: Development Agreement
Finance Director
CIN SoIitl[m
Introduced far
Passage
_First Reading Page 1 of l
Referral
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AssignMbComcibr Ne ey Peh[„ary 10. 2003
CITY OF BANGOR
(TITLE.) ORDER, Authorising the Execution of a Development Agreement with
Shaw House Development, Inc.
sythe CSty Lound/rYthe Oty ofae"ga:
ORDERED,
WHEREAS,
the City of Bangor Is the owner of the Bangor Waterworks
located on State Street on the Penobscot River In Bangor; and
WHEREAS,
the Bangor Waterworks has been designated a historic landmark
by the Bangor City Council under the provisions of the City of
Bangor Histonc Preservation Ordinance; and
WHEREAS,
the City of Bangor, since ceasing use of the facility for elecbical
power generation, has unsuccessfully sought private development
and reuse of the property; and
WHEREAS,
the Bangor Waterworks buildings are in a deteriorated and
blighted condition and at risk of being in need of demolition
and thereby lost to the citizens or the City of Bangor as a
historic resource; and
WHEREAS,
Shaw House Development, Inc. proposes to rehab and redevelop
the Bangor Waterworks into 35 units of low and moderate income
housing; and _
WHEREAS,
there is a need in the City of Bangor for such housing; and
WHEREAS,
the Shaw House Development, Inc. proposal will eliminate the
blight of the Bangor Waterworks and end the deterioration of
the buildings; and
WHEREAS,
the Shaw House Development, Inc. proposal will save the City
the cost of trying to maintain the Bangor Waterworks buildings
or the cost of demolishing the buildings; and
03-79
WHEREAS, the Shaw House Development, Inc. project will be taxable, thereby
generating property taxes for the City of Bangor,
NOW, THEREFORE, by the City Council of the City of Bangor, be it
ORDERED,
THAT the City Manager is hereby authorized and directed, on behalf of the City of
Bangor, to execute a Development Agreement with Shaw House Development, Inc. in
substantially the same form as attached hereto.
I CITT wmcm
February 10. 2003
Motion Haat and secovAed D n.4sdy..
for PassageC
councilor Mnhmav abstained
Eromdiseusaiou and vote 0 R D R R
due to previaasly e,tabliabed
conflict
Pasud �CrITLEJ Authorising the Execution of a
�� Development Agreeu£th Shaw mouse
Development . Ione..
Assigned to CrmnclhM
03-79
DEVELOPMENT AGREEMENT
This Agreement is made and entered into az ofAm 2003 by and between the
City of Bangan(hereinafter"City") a municipal corpor located in Bangor, County of
Penobscot, Store OfMainq and Shaw House Devetopmeat, Inc. having aplace ofbusiness in
Bangor, County of Penobscot, State of hfaine(hereinafler"Develmas"). -
WITNESSETH
WHEREAS, the Developer is desirous of developing the so-called Bangor Waterworks
into 35 units of affordable housing for low income persons and administrative offices; and
WHEREAS, the estimated cost of acquisition of the Bangor Waterworks rehabilitation of
the brldmgs, ioundlation of equipment and fmmshings, construction of a public crossing, design
fees, legal fees, insurance, foaming and other costs associated with the development (haranguer
"Project") is estimated to be. $6,085,934; sed
WHEREAS, Developer will secure rot tens than $5,085,934 in private fimnrag and
Nutty for the Project; and
WHEREAS, completion of the Pmjem will create a significant public benefit by
Providing affordable Musing opportunities, removal of blighting conditions, and significantly
enhance the tax base of the City; and
WHEREAS, the high cast of the development requires financial assistance from use City
to ensure the public benefit completing the Project; and
WHERBAS, the City currently holds Legal title m the Bangor Waterworks.
NOW THEREFORE, IN CONSIDERATION of the normal promises and covenants
contained in His Agreement, the City and Developer agree as follows:
1. Subject to the provisions of this Agreement, Developer agrees to develop the
Bangor Waterworks into 35 arts of affordable housing for low income persons
meeting low income guidelines established by the U. S. Department of Housing
and Urban Development, and administrative offices.
2. Developer agrees to invest not less thav$5,085,934 to man secured from sources
other than the City of Human.
3. Developer agrees to provideevidnce, not later them August 1, 2003 samumry
In City Solicitor of City, of abindmg rumination contract or contracts, providing
for site work and building construction costs for the Project of not Ins man
$4,620,000.
Page 1 0£ 4
03-79
4. City agrees to provide the Developer ahem rot to exceed seventeen percent
(17%) of the mtal project cost up to aguidance of $1,000,000 for the purpose of
developing the Project The source of such loan shall be the Citys Community
Development Block Gram program, or other sources, and the City's comma nent
shall be contingent upon the Developer applying for and coammting in CDBG
program requirements and conditions to be contained in the City's Iran
commihnmt.
S. Developer ageesthat development ofthe Project stall be in accordance with all
applicable Federal, Sante, end City laws, ordinmces and bwldiog codes.
6. Developer agrees the stripe ofine work shall conform in all material respects to
the plans approved by the City of Bangor.
7. Developer agrees in provide evidence by August 1, 2003, satisfactory to City
Salience of City, of legally binding private leader financing commitments and
equity investment of art less than $5,085,954 in funds for financing of the Project
exclusive of financing c be provided by the City as provided for in 4 above.
S. Developer hereby acknowledges mat the City, in agreeing to provide fmmcial
assistance to Developer for the Project, relied in amended pan upon the azsured
completion of the Project and the Developer agrees to use its best efforts to
substantially complete the Project no bete Oran December 31, 2004.
9. Upon the Citys receipt of evidence of connotation products and pumping as
provided in paragraphs 3 and 7, above, the City shall carver title to the Danger
Wmerworks to the Developer with all environmmlah remediation completed
10. Developer agrees me it shall keep and maintain books, records and other
documents relating directly to the Froject and curves that any duly authorized
representative of the City Omll, at sU miserable tires, have ==a to and the
right to inspect, copy, audit and examwe all such books, records and other
documents of Developer until completion of the Project upon prior vrtitten notice.
Developer shah ensure that similar provisions me included in all cmmacm of
subcontinent entered into in correction with this Project
11. Developer agrees that my duty authorized representative of the City shall, m aE
reasonable times, have access to any portion of the Project until its completion
and a permanent Certificate of Derogatory for the Project has been issued by the
City.
12. The DEVELOPER agrees met property taxes on the Property improved with loan
proceeds sball always be paid for the Ef of the loan regardless of the tax status of
the DEVELOPER. Payment of such tines may be accomplished as a100%
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paymwtiv taco oftaxce. Aspartofthelounagreemwt,the DEVELOPERa m
foritself, and every successor n ancient to the Property, or aaypart thereof, than
the PropertymO be subjectto all taxes and assesamwta u may be impws by
any gover mwnd authoriry upon the aforelesc rbed premises and any buildings,
structures, or improvements which may be or may become located thereon. It is
the intent of the C= and DEVELOPER, and DEVELOPER will agree to waive,
for itself and any successors in interest, all right or privilege of exemption from
municipal taxation of the property improved with his loan proceeds and than the
City of Burger, m its capacity as a Ming malwrity, may assess all taxes aad
assessments as would otherwise be applicable N the Property including buildings,
structures or improvements which are or may become located therwn, as if such
exemptim did not exist. DEVELOPER former agrees, fm itself and my
successors is interest, to pay said assessments on or before the d re upon which
the same become due and payable. Provided, however, than CIN agrees than
DEVELOPER, or its successors in interest, shall have the right n contest the
amount of such taxes or assessments in the manner prescribed by law.
13. Any notice which either party devices or is required to give to the other in
connection with this Agreement shall be in writing and shall be sent postage
prepaid, certified mail, region receipt requested, as follows:
If to City: Edward A. Barrett, City Manager
City of Bangor
73 Harlow Sheet
Bangor, Maine 04401
If to Developer. Douglas Bouchard, CEO
Shaw House Development, hon.
136 Union Street
Bator, Maine 04401
On such other person and/or address as may be identified in writing by the parties.
14. Except as provided in this Agreement, until substantial completion of the Project,
Developer shall not sssigo its rights under this Agreement without the prior
written wmart of City, which consent shall not be unreasonably withheld,
delayed or conditioned. The Citys obligations hereander are contingent upon the
Developer's compliance with the users and/or conditions set forth in this
Agreement.
15. The Developer represents and aposs that its purchase of the Bangor Waterworks
will be used for the purpose ofdwelopment of the Project and not for speculation
inlandholdings.Thisrepresentnionsballcermmareandbeafnofuriherforty
and effect upon substantial completion of the Project by the Developer.
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03-79
16. It is intended by dor parries that this Ageennent scall operate as cMUPot order
seal, is accordance with 14 MRSA Sec.751.
WITNESS WHEREOF this Agceauvt has beau executed, sealed and delivered m
duplicate oaunterpats as of the day and year first above written.
Shaw House Development, bac.
/ By 4
/
ICE Bouchmd
ts CFA
MY OYl
ny �6 / \bs City Manager
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