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HomeMy WebLinkAbout2002-02-04 02-95 ORDERItem Na, 02-95 Date: February 4, 2002 (Special Meeting) Item/Subject: ORDER - Authorizing City Manager to Execute a Fifth Addendum to Lease --General Electric Company Responsible Department: Legal Commenbry: General Electric's new building and expansions of the City's buildings adjacent to the Airport are financed by Bangor Target Area Development Corporation through a loan agreement between Target and Fleet Bank for which General Electric Company is the Guarantor. The City's lease agreements with GE and GE's loan guamnme 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 harms, and an additional lease amount sufficient m pay the debt service on the Target loan from Fleet. The loan funds are used to finance improvements, expansions aM a new building, all owned by the City. The City than assigns the additional lease payments it receives from GE m Target, which uses the lease payment revenue to make loan payments due to Flee. This arrangement to finance the 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 my risk to the City. The purpose of "a Fifth Addendum to the City's lease agreement with GE is to adjust the rental payments under the Lease to cover debt service associated with financing the expansion ofGeneml Electric Company's Bangorfacilifica A special meeting is required for Council approval ofthe amendment to accommodate an intended February 7,2002 loan closing convening construction flouncing for the GE expansion project to permanent financing. , /may j j Depanmggt Head Managees Comments: Associated Information: Budget Approval: City Manager Finance Director _ Passage _ First Reading Page _ of Referral 02-95 SO95PTTOTE GOVT AS Albert .'• Assigned b Councilor February 4. 2002 '.,j CITY OF BANGOR (TITLE.) order, Authorizing the City Manger to Execute a Fifth Addendum to Lease -- General Electric Company 6y the 6ty fouxD ofthe O'fy OfRa gm THAT, the City Manager is sudomwc, on behalf of the City of Ungar, m exewm a Fiflh Addendum to Leese with (ienaml Electric Company to mix the v nod mounts presently due under ArticleID (B) (I) and N (E) (2) of the 1991 Arum ed and Eestated htdenme of Uwe, as itmiouaty amended and revised, b confomt to tM debt service schedule [or dee February ], 2002 Promissory Am and Loan Agreement bemen Eangof Tale Atp Development Commdon and Flmt Sank of Maine. Assigned to Councilor February 6, 2002 CITY OF BANGOR (TITLE.) ORDER, Authorizing the City Manager to Execute a Fifth Addendum W Lease -- General Electric Company ay rite ary c iaunai orure cr4'W Brnya: ORDERED, THAT the City Manager is authorized, on behalf of the City of Bangor, to execute a FM Addendum to Lease with General Electric Company, a copy of which is attached hereto. IE CITY COUNCIL February 6, 2002 Notion Made and Succeeded # 02-95 for Passage Motion Made and Recorded ORDER to Armand by substitution Notion unite and seconded to Pass As Amended by (TITLE,) Authorizing i[y Naoage[ [o Substitution Erecate a Fifth rCX Leas! Adde Passed As Amended by General Electric Company Substitution i' � ( C CLE6E Assigned to Councilor 02-95 This FIFTH ADDENDUM TO LEASE executed in duplicate as of_J 2002, by and between: CITY OF BANGOR, abody politic and corporate, organized and existing undo and by virtue of the Iaws of the State of Maine, being located in the County of Penobscot, State of Maine (hereinafter sometimes refinedm as "Bevgor'� GENERAL ELECTRIC COMPANY, a corporation organized and existing under and by virtue of the laws of the State of New York, having aplace of business m One River Road, County of Schenectady, City of Schenectady, Scale of New Yak (hereinafter sometimes referred to as'Generel Electric") WITNESSETH: WHEREAS, Bangor and General Electric are parties to an "Amended and Restated Interstate of Lease" dated June 30,1993 affecting land and buildings at Bangor International Airport C BIA"); and WHEREAS, said Leese was ameaded by a "Fust Amendment to Amended and Restated Indenture of Lease" dated August 30,1994 to incorporate additional provisions affecting building no. 273 at BIA, and by a"Second Amendment be Annealed end Resmte Indenture of Lease" dated June 23, 1995; and WHEREAS, the "Fust Amendment to Amended and Restated Indenture of Leese" and "Second Amendment to Amended and Restated hnenture of Leese" referenced above contain provisions securing repayment of an $11,000,000 Ion from Fleet National Bank, formerly Fleet Bank of Maine to Bangor Target Area Development Coryornhon for the benefit of General Electric Company through assigmnent of "additional rental" due from General Electric to the City of Bangor under Article III (E) (2) of the parties' Lease, as amended; and WHEREAS, by their "Second Addendum n Lease" dated May 17, 1996, the parties seared repayment of an additional loan of up to $600,000 from Fleet National Bank, formerly Fleet Bank of Maine to Bangor Target Area Developnrnt Corporation for the benefit of General Electric Company, as evidenced by a Loan Agreement and Promissory Now between Fleet National Bank, formerly Fleet Banc of Maine and Bangor Target Area Development Cospomfion dated on or about May 17, 1996, by maturing the amount of "additional rental" to be paid by General Electric on the City of Bangor under Article DI (E) (2) of the parties' Lease, as previously amended, and by an 02-95 assignment of the increased "additional rental" amount from the City of Bangor to Bangor Target Area Development Corporation; and WHEREAS, by their"Third Addendum to Lease" dated May, 20,1997, the parties revised General Electric's rental payment schedule with respect the $600,000 additional loan referred to in the "Second Addendum to Lease", and made provisions fine repayment of an additional $2 million loan from Fleet Nmional Bank, formerly Flee[ Bank of Mame to Target Area Development Corporation forme benefit of Geamal Electric Company; and WHEREAS, by their "Fourth Amendment to Lease^ dared July 31, 1998, the parties revised General Electric's rental payment schedule with respect In arefinancing of the remaining balance due on an previous bomowings by Bangor Targe[ Area Development Corporation from Fled National Bank, formerly Fleet Bank of Maine for the benefit of General Electric Company were consolidated into a single obligation, as evidenced by acerin loan commitment letter dated July 22, 1998; promissory Note dated July 31, 1998; and Loan Agreement also dated July 31,1998; and WHEREAS, on February 7, 2002 the remaining balance due on all previous borrowings by Bangor Target Area Development Corporation from Fleet National Bank, formerly Flat Bank of Maine for the benefit of General Electric Company were consolidated into a single obligation, as evidenced by a Promissory Now dated February 7, 2002 and Loan Agreamad dated February 7, 2001; and WHEREAS, the parties wish to revise the rental amomds presently due under Article ID (B) (1) and IB (E) (2) of the 1993 Amended and Reamed Indentme of Lease, as previously amended and revised, to conform to the debt service schedule for the February 9, 2002 Promissory Note and Loan Agreement between Bangor Target Area Development Corporation and Fled National Bank, formerly Plat Bank of Maine; IN CONSIDERATION ofthe Seeping recitals, the parties by this Fifth Addendum to Lease, hereby specify that the monthly amown required to be paid by General Electric to Bangor miler Article III (8) (I) and III (E) (2) of the parties' Amended and Restated hmdature of Lease dated June 30, 1993, as previously amended and revised, shall be adjusted to a most one time payment of $_ due on or before 2002, and subsequent monthly payments of $ with the first payment of said amount due on or before . 2002. The pares further agree that the monthly rental ammurt payable by Geveml Electric to Bangor under Article III (B) (1) and ID (E) (2) shall be automatically adjusnul whenever monthly amounts due for debt service under the February 7,20M Promissory Note and Loan Agreement are adjusted pursuant to the provisions thereof. Notwithstanding any provisions of this Lease or my agreement in connection with the test increment finmcing or otherwise with resped to the right of the Lessee to receive my credit or offset against renal or my other suras which may become due and payable by Lessee to the Lessor as provided in this Lease, as amended, by vire of 02-95 agreements for tax increment financing, or otherwise, the Lessee hereby agrees to pay as rent to the Lessor sufficient sums to pay all obligations due and awing by Bangor Area Target Development Corporation to Fleet National Bank, formerly Fled Bank of Maine evidenced by a note in the principal amount of , and any renewal or renewals thereof, which were borowon by Bangor Area Target Development Corporation to provide funds to construct improvements on the Premises lesson hereby, which rentals have been assigned by the Lessor to Bangor Area Target Development Coryore6on, as Assignee, to provide sufficient foods to pay said Ions or loans in full. Leiser agrees that in the event that Lessee, as Guarantor of obligations due and owing by Bangor Area Target Developmat Corporation to Fleet National Bards. formerly Fleet Bank of Maine under the Loan Agreement dated February 7, 2002, is required in pay my sum of said obligation due Fled National Bank, formerly Fleet Barak of Maine, Lessee may offset any rental amount due Lessor under the terms of this Lease for the express purpose of paying said obligation in Lessee's capacity as Command, upon the express instructions of Flat National Book. formerly Fled Bak of Maine. All other provisions of the parties' lease dated June 30,1993, as previously amended and revised, shall remain in full fora and effect. For memorandum purposed only, a schedule listing monthly rental amounts due or to be due from General Electric Company to the City of Bangor on and diet February 9, 2002 is Mtacbed to this "Fifth Addeadum to Lease". IN WITNESS WHREOF, the parties hetero have caused dris "Fifth Addendum to Lease" to be exetmted this data and year first written above. CITY OF BANGOR By Witness Edward A. Barren Its City Manger Approved as to form: Nomaa S. Heimrarm III City Solicitor City of Bangor GENERAL ELECTRIC COMPANY By Wimeis anko Br ine CII COUNCIL TOTHE MEMBERS OF THE CITY COUNCIL .lOUBArV 30. 2002 NMiCe is hereby given that a SPECILL MEETING of me City Council will be held in the Council Room, City Hall, Bangor, Maine on Pe6roerr 4, 2002 a[ 5:00 o1clock P.m. for the Purgose of consicenig: G cil Order 02-95 AOT90¢ G TBa MW Mg9AG¢& To MWEE A MM ADDMM To 1.8048 — GEeeBPL 8L cmc GO8PAN2. Ci f1 CITY COJNCI AIR