HomeMy WebLinkAbout2003-07-28 03-246 ORDERCOUNCIL ACTION
Item N0. 03-246
Date: July 28. 2003
Dem/Subject ORDER - Authorizing City Manager to Execute a Sixth Addendum t0 Lease -
General Electric Company
Responsible Department: Legal
This amendment is to adjust the rent amounts due the City from General Electric to conform
with refinancing of the can which financed GE's building expansions in the BIA Commercial /
Industrial Park. The expansions were financed by Fleet National Bank through a loan to the
Bangor Target Area Development Corporation for which General Electric Company is the
Guarantor. The City's lease agreements with GE and GE's loan guarantee provide security for
Target's loan from Fleet. The rental payments paid by GE to the City include a base lease
amount, which the City retains, and an additional lease amount sufficient be pay the debt
service on the Target loan from Fleet. The City assigns the additional lease payments it
receives from GE to Target. Target then uses the lease payment revenue to make loan
payments due to Fleet. This arrangement to finance new buildings and expansions to the City's
buildings used by GE works for all and keeps the debt off the City's books and avoids any risk to
the City.
The Council passed a similar Order June 9, 2003 with the expectation of a June 2003 loan
dosing which did not take place. The can dosing is presently scheduled for July 31, 2003.
Due to the uncertainty of the exact closing date, the present Order for the Council's
consideration refers only to a "2003" Promissory Note and Loan Agreement (the earlier order
referred be a "June 2003" Promissory Note and Loan Agreement). Staff recommends approval.
Department Head
Manager's Comments:
Recommend! approval of this minor technical adju4ment � Id (/•.�[`�//
City Manager
Associated Information
Approval:
Introduced for Consent
X Passage
First Reading Page _ of
_ Referral
03-246
Assigced to Councilor sohnan July 28, 2003
o CITY OF BANGOR
(TITLE.) Order, Authorizing the City Manger to Ekecute a Sixth Addendum to Leaser
Assignment and Subordination Agreement and Consent to
Conditional Assignment of Leases and Rents -- General Electric
Company
eythe tky Couno/Ofine Oty, OfBango:
THAT, the City Manager is authorized, on behalf of the City ofBamgn, to execute s
Sixth Addendum to Lease with General Elwoic Company to revise the rental amounts presently
due under Article III (B)(1) and III (E)(2) of the 1993 Amended and Restated Indenmte of Lease,
as previously amended and revised, to conform to the debt service schedule for the 2003
Promissory Note and Loan Agreement between Bangor Target Are Development Corpomtioa
and Fleet National Behr. The City Manager is further authorized to execute an Assigmnent and
Subordination Agreement by aM between the City of Bangor, Bangor Area Development
Corporation and Fleet National Bank and a Consent to Conditional Assignment of Leave and
Rentals between Target Are Development Corporation and Fleet National Bank.
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July 28. 2003
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Geu¢vl electric Company
Assgnedto Councilor 6Rmhh ..p