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Home My WebLink About2003-10-27 03-338 ORDERItem No. na_aaa Date: Ocmber 2J. 2003 Item/Subject: ORDER, Authorizing Development Agreement with Merrill Merchants Bank -- 183-201 Main Street Responsible Department: Legal Merrill Merchants Har: desires to purchase and renovate 183 Main Soca, the farmer Penobscot Theater, into commercial / office space co amped to its adjacent facility at 201 Main Street. The estimated cost ofacquisifion ofproperty, rehabilitation ofthe budding, installation of equipment and Amdshinge, design fees, legal fives, insurance, financing and other costs associated with the development is estimated to w $1,250,000. 'Ihe development wi0 create a significant public, bmefit by removal of bligJrng conditions in the downtown Bangot area, preserving an historic structure, expanding employment opportandes, and significantly enhancing be fax base of the City. Because ofthe high cost of building rehabilitation, Merrill Members bas requened financial assistance From the City to ensure the public benefits of this downtown bistmic preservation redevelopment. This Order will authorize the execution of a development agreement that will provide A 100°/ TIF for the development for a period of twenty years. It will require that Merrill Merchants Banc invest at least $1,250,000 into the project and saemuctirly complete it by March 31, 2005, Department Head Manager's Comments: This property is wrrently tax exempt As a result, dre deferral of taxes will have no immediate hoped on the Ory's property taxes. At the same time, this project will preserve a historic structure, bring additional employees into our downtown, improve the appearance of one of the major entrances to our downtown, and eventually result In Increased property taxes at the end of the twenty-year parts. We have concluded that our participation is essential to insure that this project moves forward. I recommend your approval, as does Me Business and Economic Development Committee. /] , r' - m City Manager Associated Ddomtation: Budget Approval: Sze Finance Director City $olidmr _ Passage _ First Reading Page 1 of 2 Referral 03-338 ArsignW to Covncilw CBOnb84 October 27. 2003 Cw n� 4 CITY OF BANGOR (TITLE.) ORDER, Authorizing Development Agreement with Merrill - Merchants Bank— 183-201 Main Street By the Ory Council of the O'ty ofBangon ORDERED, WHEREAS, Merrill Merchants Bank desires to purchase and renovate the property at 183 Main Street into commercial and office space to be connected to its property at 201 Main Street; and WHEREAS, the estimated cost of property acquisition and rehabilitation, installation of equipment and furnishings, design fees, legal fees, Insurances, financing and other costs associated with the development is estimated to be $1,250,000; and WHEREAS, completion of the development will create significant public benefit by removal of blighting conditions in downtown Bangor, expanding employment opportunities and enhancing the tax base; and WHEREAS, the high cost of this development requires financial assistance from the City, 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 Merrill Merchants Bank to provide 100% tax increment financing for the project for a period of twenty years. The Agreement will provide that the development shall require an investment of at least $1,250,000 and be substantially completely by March 31, 2005. The agreement shall be in a frail form approved by the City Solicitor or Assistant City Solicitor. for Cn cilo�_ Aoimev Mstaived f-tw RiscSaof. avd Vole -1rpt5nR Mee and..A'eeondedfor SP9enBe .__ . Y d a p d3 -AAA -WR D.ER (TITLE rA4thntfzing n 1 V.ent.AAreemnt Itchpeal 1La�ts 8m[ _l&YzolMain Assigned to Councilor 03-338 DEVELOPMENT AGREEMENT This Agreement is made and entered into as ofNovmber OL_, 2004 by and between the City of Bangor (hereinafter "City"), a municipal corporation located in Burger, County of Penobscot, State of Maine, and Merrill Merchants Bank (hereinafter "Developer"). WITNESSETH WHERBAS, the Developer is desirous ofpurchming and renovating 183 Main Street into commercial / office space connected to its adjacent facility at 201 Main Street; and WIHiREAS, the estimated cost of acquisition of property, rehabilitation of the building, installation of equipment and furnishings, design fees, legal fees, insurance, financing and other costs associated with the development (hereinafter "Project") is estimated to be $1,250,000; and W REAS, Developer will secure not less tbn$1,250,000 in private financing and equity for the Project; and WHEREAS, completion of he Pmjmt will create a significant public benefit by, removal of blighting conditions in the downtown Bangor area, expanding employment opporNnities and significantly enhancing the tax base of the City; and WHEREAS, the bigb cost of building rehabilitation requires financial assistance Gum the City to ensure the public benefit of location of the Project in the downtown; NOW Tf[ERBFORE, W CONSIDERATION of the mutant premises and covenants contained in this Agreement, the City and Developer agree as follows: 1. Subject to the provisions of this Agreement, the Developer agrees to rehabilitate 183 Main Street into approximately 9,000 square feet of conductorial / office space. 2. Developer agreesto invest not less than$1,250,000 in hods secured privately, of which not less than $1,250,000 shall be equity inveshuent. 3. Developer agrees to provide evidence of a binding construction contract, or contacts, providing for site work and building construction costs for the Project of not less than $1,000,000. 4. Upon payment of real estate taxes by Developer on the real estate at 183 and 201 Main Street City agrees to return to the Developer 100% of the real estate tax increment on the increased taxable value from the Project at 183 Main Street and 201 Main Street. The period of return of the aforesaid real estate tax increment 8 338 will he for twenty (20) years beginning from the daze taxes are due the City based on the assessed value of 183 Main Street and 201 Main Street as of April 1, 2003. 5. Developer agrees that development of the Project shall be in accordance with all applicable Federal, State, and City laws, ordinances and building coda. 6. Developer agrees the scope of the work shall conform in all material respecrs to the plans approved by the City of Hangar. 7. Developer agrees to provide evidence by December 31, 2006, satisfactory to City Solicitor of City, of legally binding private leader financing commitments and equity investment of not las than 41,250,000 in funds for financing of the Project. City acknowledges that the financing maybe self-financing. 8. Developer hereby acknowledges that the City, in agreeing tp Provide financial assistance to Developer for the Project, relied in material part upon the named completion of the Project and the Developer ages to use its bat efforts to substantially complete the Project no later than September 30, 2005. 9. Developer agrees that it shall keep and maintain books, records and other documents relating directly to the Project and agrees that my duly auMorized representative of the City shall, az all reasonable times, have access to and the right to inspect, copy, audit and examine all such books, records and other documents of Developer until completion of the Project upon prior written notice. Developer shall ensure that similar Provisions arc included in all contracts or subcontracts entered into in connection with this Project. 10. Developer agrees that any duly authorized representative of the City shall, stall reasonable times, have access to any portion of the Project until its completion and a pemrment Occupancy Permit for the Project has been ismed by the City. Il. Any notice which either party desires 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, return receipt requested, as follows: If to City Uward A. Paten, City Manager City of Bangor 73 Harlow Street Hmgm, Maim 00601 Ifto Develops: Merrill Merchants Bank 201 Main Skeet Hanson, Maine 00401 M-338 Or such other pemov aM/or address as maybe identified in writing by thepanies. 12. Except as provided in [his Agreement, until substantial completion of the Project, Developer shall rot assign its rlgbts under this Agreement without the prior written consent of City, which consent shall not be unreasonably withheld, delayed or conditioned. The Citys obligations hereunderare contingent upon the Developers compliance with the terms andlor conditions set fortb in this Agreement. 13. It is intended by the parties that this Agreement shall opende as contract under seal, in accordance with Id MRSA SecJ5I. WITNESS WHEREOF this Agreement has been executed, sealed and delivered in duplicate counte trans ss of the day and year first above written. MER BANK C By William P. President //�� CfIYYOF BANGOOR�Q 4 16 —T¢j By /�LwuN�.Qger a6� Edward A. Barrett Its City Manager