HomeMy WebLinkAbout2000-05-22 00-201 ORDERItem No. 00-201
Date: Nay 22, 2000
Item/Subject: ORDER Authorizing Development Agreement—Fonder Prudential
Building 24 idarlow Street
Responsible Department: Community and Economic Development
Commentary: The City requested proposals for redevelopmern ofthe former Permanent building at 24 Hazlaw
Street andbypasoge of Comcil Order 99-142 ore Apnl 12,1999 selected Medical Care Developmmm as tentative
developer from the We proposals submitled. Council OMer 99-270 passed an July 26, 1999 authonud a
development agreement with Medical Cee Development and The Sooner Company. The Seemed Company is no
longer involved as a developer. The Development Agreement provides for the rcnovadon of the building into
trading and social center to provide space a train Medical Care Development's and other orgameation's staff, and
to provide a meding place for mental health and mantel connotation consumers a socialize. Under the previously
approved agreement eleven (11) summands would have ban created on the street and upper levels for low-income
persons with menial health or mental reWdatlw disabilftho. Stuff would be on site twenty-four hours a day to help
residents live successfully on iMir own. Contractor bids on rehabilitating the building resulted in higher cosh man
expected. To reduce costs, Medical Care Development now proposes to create 8 insead of 11 epamnmts
me nitanng this nonan led development agreement, replacing rhe perviously approved agreemen4 which was never
emcuted The prosect's canonical cost is over $700,000. Commimneuts have been received from the Home Len
Bank ofl aeon for a $190,000 loan and a $165,000 good, and 6om the Maine State Housing Authority and the
Mune Depemnent of Marra] Health fora $225,000 gond, with $140,000 proposed a he loaned by the City through
in Community Development Program. The Deperonmt of Merrill Health Menml Remeation and Substance Abuse
Servlces(DMHMRSAS) will provide operating subsidies. /J/J/ n�
Department Hand
Manager's Comments: Cf is rwrcQ
OtY Manager
Budget Approval:
v ei
Finance Dire:tor
Legal Approval:
CI licitor
Ineocetl Por
Passage
_ Meat Reading Page _ of
Refer
Assigned to Councilor Pa r nay 22, 2000
�A4
'q CITY OF BANGOR
(TITLE.) Order? Authorizing Development Agreement— Former Paramount
Building, 24 Harlow Street
6yfba 6ty cbn lofts cay WJ%Rga:
ORDERED?
TMT
WHEREAS, the City requested proposals for the purchase and redevelopment of the former
Paramount Building at 24 Harlow Street; and
WHEREAS, Medical Care Development and The Szanton Company were designated tentative
developer of the property by passage of Council Order 99-142 on April 12, 1999; and
WHERAS, a Development Agreement with Medical Care Development and The Szamon
Company was approved by passage of Council Order 99-270 on duly 26, 1999; and
WHEREAS, the Development Agreement approved by passage of Council Order 99-270 was
never executed by the parties; and
WHEREAS, due m the high cast of redeveloping No long vacant property said Development
Agreement requires changes reducing the number of residential units to be developed from t to
8 and extending dates frr starring and completing construction;
NOW, THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF
BANGOR THAT, the City Manager is hereby authorized to mature a Development Agreement
with Medical Care Development for redevelopment of the former Paramount Building at 24
Harlow Street, substantially as attached hereto, and in a Mal form as approved by the City
Solicitor or Assistant City Solicitor; and
BE IT FURTHER ORDERED THAT the Development Agreement approved by passage of
Council Order 99-270 is no longer valid; and
BE IT FARTHER ORDERED THAT the authodzavon contained in Council Order 99-270 for
the Community and Economic Development Committee of the City Council to approve a
Community Development Property Rehabilitation Loan in support of the project in an amount
not to exceed One Hundred Forty Thousand Dollars ($140,000) remains in affect.
IF CITY WMCiL
" 22. 2000
PmaeA (n/
00-201
ORDER
TW Auth riziug Development Agreemeut
Former Pax w=t Building. 26 Maela
Street
Andg11ld W
B� CoundW
0511 712 000 3:13 PM
DEVELOPMENT AGREEMENT
00-201
Tins Agreement is wade and entered into as of Wb -1999 May 18, 2000 by and
between the City of Bangor (hereinafter "City'), a municipal corporation located in Bangor,
County of Penobscot, State of Mame, and Medical Care Development with a place of business in
Augusm, Countyof Penobscot, State ofM ine'
(hereinatier "DeveloPa").
WITNESSETH
WHEREAS, the Developer is desirous of renovating 24 Harlow Street into a
haaviinglsocial center to train Medical care Developments and other organization's staff and
provide a meeting place for mental health and mental retardation consumers to socialize; and
eleven(14) eight (8) apartments for low income people with mental health or menial retardation
disabilities, with staff on site twenty-four hours a day to help residents live successfully on their
own; and
WHEREAS, the estimated cost of acquisition of 24 Harlow SneeS property,
rehabilitation of the building, installation of equipment and furnishings, design fees, legal bass,
insurance, financing and other costs associated with the development (hereinafter "Project") is
estimated to be $435699 $740,000;and
WHEREAS, Developer will secure not less than $590,000 in private financing and equity
for the Project and
WHEREAS, completion of the Pmject will create a significant public benefit by
Providing affordable housing opportunities, removal of blighting conditions in the dowmown
Bangor area, and significantly enhancing the tax base of the City; and
WHEREAS, the high cost of building rehabilitation minims financial assistance from the
City to ensure the public benefit of location of the Project in the downtown; and
WHEREAS, the City currently holds legal title to the 24 Harlow Street property by virme
of matured tax lien;
NOW THEREFORE, W CONSIDERATION of the mutual promises and covenants
contained in Ibis Agreavevt, the City and Developer agree as follows:
Page 1 of 5
1. Subject to the provisions of this Agrcemerd, Developer agrees to rehabilitate 24
Harlow Street into a meeting place for mental health and mental retardation
consumers to socialite, and Neves -(11) eight (8) apartments affordable to currents
with mcmd health or meatal retardation disabilities meeting law to moderate
income guidelines established by the U. & Department of Housing and Urban
Development, and to provide staffon site twenty-four hours a day to help
residents live successfully on their own.
2. Developer agrees t invest tort less than$590,000 in funds secured from sources
other den the City of Bangor.
3. Developer agrees to provide evidence, not Iffier than Sol 39,1mmJuly
2000 satisfactory to City Solicitor of City, of binding concoction convect, or
contracts, providing site work and building construction costs for the Project
of not less thear M9;00&5$ 89160.
4. City agrees to provide the Developer a Coen d of$140,000forthe
purpose of developing the Project. The source of such loan shell be the City's
Community Development Block Grant Program, or other sources, and the City's
commitment shall be contingent upon the Developer applying for and conforming
to CDBG program requirements and conditions to be contained m the City's loan
commitment letter dated May 18 2000.
5. Developer agreesthffi development of me Project shall be in accordance with all
applicable Federal, State, and City laws, ordinances and building codes.
6. Developer agrees the scope of the work slmall conform in all material respects to
the plans approved by the City of Bangor.
a; to gfin� no- l, pmdAd by the City as previdAd Am in 1 abovw.
& Developer hereby acknowledges than the City, in agreeing t provide financial
assistance to Developer for the Project, relied m material part uponthe assured
completion of the Project and the Developer agrees to use its best effects t
substantially complete the Project no later thanlea, 099 December 1. 200
9. Upon the City's receipt of evidence of financing as
provided in patagmpbs 3. and S. above, the City shop release its title to the 24
Harlow Street Property to the Developer at the loan closing.
Page 2 of 5
10. Developer agrees then it shall keep and maintain books, records and other
documents relating directly to dee Project and agrees that any duly authorized
representative of the City shall, at all reasonable those, have access to and the
right to inspect, copy, audit and examine all such books, records add other
documents of Developer until completion of the Project upon prior written notice.
Developer shall ensure that similar provisions are included in all contracts or
subcontracts entered into in connection with this Project.
Il. Developer agrees that any duly authorized representative of the City shall, at all
reasonable times, have access to any portion of the Project until its completion
and aPermanent Certificate of Occupancy for the Project has been issued by the
City.
12. The DEVELOPER amees that property taxes on the property improved with loan
proceeds shall always be paid for the life of the loan regardless of the tax status of
the DEVELOPER. Payment of such imres may be aceomplhhed as a 100%
payment in lieu of taxes. As pan of the loan agreement, the DEVELOPER agrees
for itself, and every successor in interest to the property, or any pan thereof, that
the property shall be subject to all axes and assessments as may be imposed by
any govemmmml authority upon the afore described premises and any build rbp,
structures, or improvements which may he or may become located thereon. It is
the intent of the CITY and DEVELOPER, and DEVELOPER will agree to waive,
for itself W any successors in interest, all right or privilege of exemption from
municipal taxation of the property improved with the lona proceeds and that the
City of Bangor, in its capacity as a taxing authority, may assess all taxes and
areassments as would otherwise be applicable to the property including buildings,
strucm es or improvertats which are or may become located thermn, as if such
exemption did not exist. DEVELOPER fiuther agrees, fir itself and my
successors in interest, to pay said assessments on or before the date upon which
the same become due and payable. Provided, however, that CITY agrees that
DEVELOPER, or it successors in interest, shall have the right to contest the
amount of such teres or assessments in the manner prescribed by law.
13. 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, retort receipt requested, as follows:
If to City: Edward A. Barnett, City Manager
City of Bangor
73 Flarlow Street
Beengor, Maine 04401
Ifto Developer: John A LaCaase, President
Medical Care Development
Page 3 of 5
I I Parkwood Drive
Augusta, MAW 04330
Bwa o , Maine 04401
4x4te
45 A?wlang' 94M
PeAlami, Alain, 04-10;
Or such other person and/or address as may be identified in voiding by the parties.
14. Except as provided in this Agreement, until substantial completion of the Project,
Developer shall not assign its rights under this Agreement without the prior
w uen consent of City, which Wasern shall not be unreasonably vddiheld,
delayed or conditioned. The City's obligations hereunder are contingent upon the
Developers compliance with the terms smaller conditions set font in this
Agreement.
15. The Developer represents and agrees that its purchase of 24 Harlow Street w be
used for the purpose of development of the Project and not for speculation m land
holdings. This representation shall terminate and be of no fuller force and effect
upon substantial completion of the PmjM by the Developer.
16. It is intended by the parties that this Agreement shall operate as contact under
seal, in accordance with 14 MRSA Sec.951.
WITNESS WHEREOF this Agreement has been executed, sealed and delivered in
duplicate onmaciparls as of the day and year first above writtm.
Medical Care Development
By
John A. LaCaase, Its President
Ely
Page 4 of 5
CFFY OF BANGOR
PAward A. Barrett
Its City Mannar
e%ncm ATATUMOWm Wne.= 0317zaoo
Page 5 of 5