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HomeMy WebLinkAbout2001-08-13 01-327 ORDERCOUNCIL Item No 01-327 Date: August 13, 2001 Item/Subject: Eetablisbmg Guidelines for Leasing and Disposition of Property in City of Bangor Business and Industrial Parks Responsible Department: Community and Economic Development Passage of this Order would adopt a written policy regarding the leasing or sale of development sites In the BIA Commercial / Industrial park, Maine Business Enterprise Park anti BarWir Industrial Park The Policy will provide guidance to City staff in dealing wish prospective developers. Remaining development saes in the BanNr Industrial Park will remain available for sale. The policy retains the City's preference for leasing of development apes in the BIA Commercial / Industrial Park and Maine Business Enterprise Park. It also provides guidelines for staff and Dry Council to consider sale of development sites in these parks when sale of a development site is necessary for the City ro achieve Its development objectives. For sale of development sites, the proposed development must demonstrate that it will create sgniftcant new tax value and expansion of the City's employment base by creating quality new job opportunities in employment sectors considered a priority by the City. Priority would be given m projects drat would expand employment in the research and development and technology sectors of the economy. The Policy has been reviewetl by the Business and Economic Development Committee, which recommends passage. Department Head City Manager Asaodated Information: DA-Aai i P„P.LJ Budget Approval: �T— Finance Director Legal Approval: City Solicitor Intrndu®d for 1 Passage _ First Reading Page 1 of I Referral 01-322 AeaignW to Councilor ae3daeci 9ugast 13. 2003 CITY OF BANGOR (=E.)Order, Establishing Guidelines for Leasing and Dispositon of Property in City ofBangor Busmess and Industrial Parka By in Qv �IofMe[RrofBangor. ORDERED, WHEREAS, it is the intent ofthe City Council to adopt an updated w Uen policy regarding the leasing and disposition ofproperty in City of Bangor business and industrial parks to enable stay to consistently and responsibly deal with prospective development and fledble enough to address individual circumstances; NOW, THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR. THAT the City of Borrow, Maine Guidelines For Leasing And Disposition Of Property In City Of Bangor Business And Industrial Pads August 2001, a copy ofwhicbs attached hereto, is hereby adopted. r I9 CIL Aagaet 13.3. 2 2001 Notion EWJe S Seconded for Passage Passed B1 "cmx 01-32] ORDER 7R1e6 establishing Guidelines for Leasing and Disposition of Property in City of Bangai Bnsioess and Industrial Parks ASSIWmd to 01-32) GUIDELINES FOR LEASING TY IN The intent of these guidelines is to estabbsh a disposition policy Flexible enough to address individual circumstances and to enable Staff to consistently and responsively deal wiW prospective development A. To develop airport land resources in a maturer consistent with the Bangor International Airport Maser Plan and Land Development Strategy on Non - Aeronautical areas adjacent te BIA. B. To generate revenues supporting the City's Economic Development Enterprise Fund and Bangor International Airport's revenue base. C. To expand line economic base of the City of Bangor and ounce quality job opportunities for its citizens. D. To enhance the tax base of the City of Bangor. E. To provide afull menu of development sites in accoramodete a full range of commercial and industrial opporturdtiw. F. To offer competitively priced development sites that genually, reflect the local market and do not undercut the private sorter real estate marn- I :\II\ 1 :Y1\. The City has overall economic development goals which may be different than a private real estate developer and may influence land lease and disposition negotiations. Tb nsfore, the following guidelines shall apply: A. The baseline for land negotiations shall be the established fah market value of the laud and; W. B. Any Iowa or purchase coat writedown or incentives should follow the establishment of the fat market "Inc. The decision to offer incentives" old be based on factors such as: (1) The number and quality, ofnewjobs to be created, (2) A prospective project's role in implementing the City's development strategy, and (3) Tax base enhancement. Therefore, a lease or purchase write-down or offering other development Incentives is likely not appropriate for an existing operation moving to a business or industrial park wbereas such incentives may be critical in the job mating expansion of local industry or the attraction of a new business to the Bangor area. Two major issues arising in land lease negotiations are lease length and lease rate. The following will describe policy guidelines. A. Lease Lmeth The general guidelines for land lease length shall be a shaight 40 -year lease term. It should be recognized that a shorter time flame may be appropriate for smaller projects said that more than 40 years may be necessary on larger scale projects. B. T+A°�Rates (1) Ivitial Lease Rate The mmual lease rate guideline is amended and reduced from the current 10%ofthe fair market value of the land to S.IN/o of the fair market value of the laud. Therefore, annual rent for a parcel with a current value of $100,000 would be $8,000 per year. Pair market value would be established through an appraisal or moth" method ofdemornining the value of the property within the comext of the local real estate market. (2) Lease Rate Increases: Fora typical 40 -year lease, the initial lease raze shall be established by the previously described 8.0% of value formula. The 8.0% formula would also be applied in years 20 and 30. Between years l and 20, 20 and 30, and 30 and 40, the lease into should be adjusted every 5 years in order to reflect changing laud values. This economic adjushmeat could be made by using a variety of methods mediating: 01-327 V. 01-327 (a) Prenegoeated normal increases. (b) Adjesvnents based on the Consumer Price Index or other indices. (c) Adjustments based on the performance of the project such as operating income. (d) Changes in market value of the leased land. A. BanAir Industrial Park The City shall continue its policy of offering development sites for sale or lease in the Ba Industrial Park. B. BIA Commercial / Industrial Park The City shall continue its preference w lease development sites in the BIA Commercial / Industrial Park. Consideration for sale of lots in the BIA Commercial / Industrial Park will be considered only when the development proposed conforms to the City's long range development strategy to attract mw quality job opportunities to the area and only in those instances when its ability to do so would be impeded by only offering a specific development site for lease. In considering a request for sale of a development site, where title restrictions prohibiting the sale of land do not apply, the City Council will consider sale of the development site based on the following factors: (t) The project must create significant new rax value and an expansion of the area's employment base; (2) Job retention which will result through assisting in the expansion of an established business in the City of Bangor; (3) The creation of long-term, permanent employment opportunities; (P) Number, type and quality of raw jobs to be created; (5) Priority will be given to projects that will expand employment in the manufacturing sector of the economy; (6) Consideration of projects involving the general service sector, such as but not limited to medical or professional offices, shall take into accoart the mutant availability of such services within the community and the current level of competition. Where such competitive services currently exist, sale of a development site should be limited to projects meeting the above criteria. The City's policy is or not favorably consider sale of development sites for We to businesses in the BIA Commercial / Industrial Park in direct competition with other existing businesses, especially retail operations. It is the City's policy to offer development sites for 01-327 sale in the Park only when necessary for location of new businesses that help diversify the local monomy by offering services or producing products not presently provided or produced by other area employers. C. Maine Business BMerpriw Park The City shall continue its preference to lease development sites in the Maine Business Enterprise Park. Development sites in the MBEP located west of Maine Avenue will be available on a lease only basis. The City Council will consider sale of development sites in the MBEP cost of Maine Avenue only when requested by the developer of specific development proposal, based on the following factors: (1) TheProject must create significant new tax value and an expansion of the area's employment base; (2) Job retention which will result through assisting in the expansion of an established business in the City of Bangor, (3) The creation of long -tern, permanent employment opportunities; (4) Number, type and quality of new jobs in be created; (5) Priority will be given to Projects that will expand employment in the research and developnreat and technology sectors of the economy; (6) Considemtioa of projects involving the general service sector, such as but not limited to medical or Professional offices, shall rake into account the current availability of such services within the community and the current level of competition. Where such competitive services currently exist, sale of a development site should be limited to projects meeting the above criteria. The City's policy is to not favorably consider sale of development sites for sale to businesses in the Maine Business Emerprise Park in direct competition with other existing businesses, especially retail operations. It is the City's policy to offer development sites for sale in the Park only when necessary for location of new businesses that help diversify the local economy by offering services or producing products not presently provided orproducM by other area employers. D. Sale of Developed Sites Currently (.eased From City (1) No Business Expansion Proposed: Where sale is not probibited by title restrictions avd on request by the losses, the City Council shall 01-322 consider on a wee by case basis, sale of developed than currently hood from the City. If sold, the compensation for sale will not be less than the fain market value of the land based on an appraisal or appraisals satisfactory to the City. Since development on the lots leased already exists, and an development incentive is necessary, the City shall consider the most advantageous financial benefit in the City when considering the option to sell or lease. The City Council shall consider on a case by was basis, sale of the developed site currently tuned based on the factors outlined in V.B. and V.C. above. (2) Business Expansion proposed: Where expansion of an existing business or creation of new business is propwed on a development site currently leased from the City, when requested by the developer / boxes, the City Council shall consider on a case by case basis, sale of the developed site annually leased for a specific development proposal, based on the factors outlined in V.S. and V.C. shove. V1. Flls LAUTHORITY The final authority to approve sale or lease of any City owned development site rests with the City Council. 1 WERMWNTAMUSM77 **ojjju I Ki LOWdt: Is Understanding me rule private real estate professionals may have in attracting desirable new development to the City, the City will pay a commission to licensed real estate agents who reregister their clients with the City's Contributed of Community and Economic Development. A. All properties owned by the City of Bangor and managed by the Bm Air Corporation that are available for sale or lease will be eligible for representation by all licensed real estate agents on a non-exclusive basis. B. Commissions will only be paid to licensed real estate agents who have registered a client with the City of Bangor and the BanAn Corporation and whose registration agreement is valid at the time of closing or final execution of the lone. Acorn ssionwillnotbepaidifawgis"tionhas expired or S invalid for any other reason. preexisting clients of the City ofBurger =it the BanAir Corporation are not eligible for registration. C. An agent- client registration will be valid for six (6) months from the date ofexecufionoftheregistrationfonnbythe Ba kCorporation. The 01-32) agent- client registration can be extended or canceled upon receipt of written notification signed by the client. D. The City of Burger's and the Bawdir Corporation's obligation to pay a commission is conditioned upon the agent not receiving any compensation Form the client in cmmectim with the sale or lease of property owned by the City of Bangor and managed by the EaoAir Corporation. At agent representing and being compensated by the client will not need to register the client. E. The commission for sale transactions will be 5% of the selling price paid at the closing. F. For Iwo transactions, the commission will be bash upon the number of years in the initial teen of the lease, not including any options to extend the tam. The commission may be paid in full upon receipt of the first month's rent payment m on other negotiated terms approved by the City Council according m the following "Schedule of Commission Fares Paid to Real Estate Agents". 01-32) Val. The undersigned agent (hereinafter referred to as "Agent') certifies that he/she is a rest estate agent licensed in the Some of Maine and hereby registers with the BmNir Corporation and the City of Bangor (hereinafter refected to as BanAir/City) (hereinafter referred to as"Cliesn'). By signing this agreement, Agent and Client represent 0 Banu it/City that the Agent is the sole and exclusive agent dealing with are Client in connection with the sale or lease of property owned by the City of Bangor and managed by the parade Corporation. 1. Term: The term of this agreement is six(6)months. This term stall commence on the daft: of execution by BaMir/City and shall and at midnight on the same day of the sixth calendar month thereafter. The term can be extended by lire execution of another agreement. 2. Termination: This agreement can be nominated by the Again or Client by providing written notification of such connotation signed by the client to BaMir/City. 3. Commission: If during the term of this agreement a purchase and sale or lease agreement is executed by and between BanAir/City and dee Client for property owned by the City of Bangor and managed by the Bw Air Corporation, the Agent will be entitled to a real estate commission based on the embed `Schedule of Commission Rates paid to Real Estate Agents". Agent agrees that if any other agent asserts a claim to commission, or portion thereof, Agent and Client shag indemnify and hold BaMir/City harmless from and against any costs, expenses or liabilities (including atmmtys' fees) incurred by BanAn/City in contraction with each claim. 4. No Obligation to SeB or Lease: The registration of the Client in no way obligates BanAir/City m consider the Client or negotiate with the Client for any property owned by the City of Bangor and managed by the BaMir Corporation. 5. No Compensation from Client BaMir/City's obligation to pay a commission as provided above is conditioned upon the Agent and his/her's Designated Broker receiving no compensation man the Client or any affiliate of the Client in cormection with the sale or lease of property owned by the City of Bangor and managed by the BanAir Corporation. Agent and Client agreethin they will sign a incident statement to flus effect prim to payment of any commission by BaMir/City. 6. Sale or Lease Negotiations: Agent and Client acknowledge that the Agent is not authorized to commit Barkir/City to any We or lease terms or other obligations, and no written or oral statements or representations of Agent shall be binding upon BartAir/City.- Further, Bandit/City's only obligations to the Client shall be those contained in a 01-32] purchase and sale or lease agreement how= &a Client and BaMir/City, if one is executed, and any other writtrn or oral statement, whenever executed and whether by Agent or Barth/City, shall not be binding upon Barth/City. '/. Nonexclusivity: This agreement does not constitute an exclusive right to sell or lease or an exclusive agency contract and Agent is not authorized to exclusively advertise, promote or make[ property owned by the City ofEangor and managed by the Baton Corporation. Nothing herein shall be construed an preventing BurnAm lty from utilizing other agents or services (including multiple fisting services) in wrmection with the lease in sale of property owned by the City of Bangor and managed by the BanAir Corporation or from selling or leasing property owned by the City of Bangor and managed by the BasAir Corporation to other Clients, and except m specifically provided above, BaMir/City shall not be Gable for any commission to Agent hereunder. 8. Successor/Assigns: This agreement shall be binding on and shall inure to the benefit of the parties and their respective heirs, administrators, successors and assigns. Client's Signature / Date Address St Telephone number AGENT Agent's Signature/Date Agent's Real Estate License Number Real Estate Agency, Address, & Telephone number BANAIR CORPORATION/ CITY OF ]RANCOR BanAir Sigrm me /Date 01-327 IX. Schedule of Commission Hadca P'd M RealRt AgMIS A. gale transactions -5% of the selling price paid at the closing. R. Lease TranSnetinR- Commissions will be based upon the number of years in the initial term of the lease, not including any options to extend the term. A commission may be paid in full upon receipt ofthe first month's rent paymrn or on other negotiated terms approved by the City Council according to the following schedule: Five (50%) percent of the mmual lease payment for each of years 1 to 5, plus, Two and onaquarter (2.25%) percent of the annual From payment paid in year 1 for each of years b to 10, plus, One (1%) percent of the annual lease payment paid in year 1 for each of years 11 to 20.