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Home My WebLink About2000-08-28 00-330 ORDERItem No. 00-330 Date: August28,2000 Item/Subject Authorizing Development Agreement—John Kamer -47-53 Park Street Responsible Department Community and Economic Development Commentary: This Order would approve a development agreement with John lames providing partial City financing of Me renovation of 47-53 Park Street. The sidewalk level of the building would be commercial space and seven apartments would be created on the upper two levels of the building. As proposed, $167,000 would be loaned from Me City's Community_ Development program to partially finance this $314,000 downtown project. Repayment of $27,000 of the $167,000 of the loan amount would be deferred and repaid from new tax revenues generated by the project over the first five years. As a result of Me renovation, the assessed value of the property is expected to increase from $59,200 to $287,700, a 385% increase. Department Head Manager's Commends: Community and Economic Development will have a recommendation for Mon ay. G. City Manager Associated Information: Order, agreement Finance Director Legal Approval: City Solicitor �L Passage First Reading Page _ of_ Referral Aasignadw Goanulw varamis Auy�st 28, 2000 cw: CITY OF BANGOR (TfTLE.)Order, Authorizing Development Agreement-3ohn Karnea-47-53 Park Street BY th OTy Council oftl a aw offir. DRneR6p, TBAT WHEREAS, John T. Kamer 1T( has purchased 47-53 Park Sheet and desires to renovate the building into a mix of mmmercial space and seven residential units; and WHEREAS, this building in the Downtown Development District has been vacant and urxlerublized; and WHEREAS, completion of the Project will create a significant public benefit by providing agwdable housing opportunides, removal of blighting condlin s in the downtown Bangor area, and significantly enhancing the tax base of the UN: and WHEREAS, the assessed value of the property is projected W Increase by 38M as a result of the building renovation; and WHEREAS, Ne high cost of building rehabilitation b cunent code requirements requires financial assistance from the City in order for the project to be financially feasible; and WHEREAS, the proposed Community Development ban amount exceeds $100,000; and WHEREAS, the proposed development agreement has been reviewed by Me Oemmuntty and Economic Development Committee of the City Council; NOW, THEREFORE, BY THE QTY COUNQL OF THE CITY OF BANGOR, BE R ORDERED THAT the City Manager is hereby authorized W execute a development agreement with John T. Kames BI providing for the renovation of 47-53 Park Street, by providing a Community Development loan not to exceed $167,000, under terms and congticrs substantially as attached hereto, and In a final form approved by the City Solicitor or Assistant City Solidtor. IH CITY CWNCIL Angus[ 28, 2000 00-330 Motion for Passage X e add secaaded ORDER Passed TdQ Authorfaiug 0evelopmeat Agr'eemeuc - John Farmes - 67-53 Park Street �I ChPAR DEVELOPMENT AGREEMENT This Agreement is made and entered into as of August _, 2000 by and between the City of Bangor (hereinafter "City"), a municipal corporation located m Burger, County of Penobscot, State of Maine, and John T. Kames m (hereinafter' Developer'). WDNESSETH WPiQ S, the Developer is desirous oftenovating 47-53 Pack Street into a mix of commercial and residential space; and WEIEREAS, the estimated cost of acquisition of property, rehabilitation of the building, installation of equipment and fumishings, design fees, legal fees, insurance, financing and other costs associated with the development (hereinafte'Prolecf9 is estimated to be $318,500; and WHEREAS, Developer will secure not less than $154,000 yr private financing and equity for the Project; and WHEREAS, completion of the Project will create a significant public bmefit by providing affordable housing oppottuniies, removal of blighting conditions is the downtowm Bangor area, and significantly enhancing the tae base of the City, and WHEREAS, the high cost of building rehabilitation requires financial assistaure form the City to ensure the public benefit of location of the Project in the downtown; NOW THEREFORE, IN CONSIDERATION of the mutual promises and covenants contoured in this Agreement, the City and Developer agree as follows: 1. Subject to the provisions of Us Agreement, the Developer agrees to rehabilitate 47-53 Park Street into a mix of commercial and residential Two involving not less them sever residential apartments, not less than four of which shall be affordable to tenants meeting low to moderate income guidelines established by - the U.S. Department of Housing and Urban Development. 2. Developer agrees b invest not less than $154,000 in funds savored privately, of whicb not less than $56,000 shall be equity investment. 3. Developer agrees to provide evidence of a binding constmction command, or contracts, providing for site work and building construction costs for the Project of not less than $300,000. - 4. City agrees m provide the Developer a loan in the amount not to exceed$167,000 f lheparposeofdevelopingthe Project Ofthe$167,000lounamount, $140,000 shall he loaned at 60/, innocent for aperied not to exceed 30 years. Repayment of $27,000 of the $167,000 low amount shall be defined for a period not to exceed 5 years. The source of the loan shall he the Cihes Community Development Block Giant Program, and the Citys commitment shall be contingent upon the Developer conforming to CDBG program requirements and conditions to be contained in the City's loan commitanent. 5. City agrees to apply an annual mount act to exceed 100% of real estate tax trareareat revenue received from the Project towards repayment of the $27,000 deferred loan mutual referred to in 4. above, for aperiod not to exceed five years, provided however, Nat the total amount so applied to reduction of the deferred loan anmwt shall not exceed a total amount of$27,000. Tax increm®t revenues are new tax revenues paid to the City by developer on the real estate at 47-53 Park Street over and above annual real estate taxes due on the property at 47-53 park Street based on its assessed value as of April 1, 2000. The five year period shall begin from the date a promissory note and mortgage are executed by the developer seeming the City's loan. 6. Developer agrees that development of the Project shall be in accordance with all applicable Federal, State, and City laws, ordinances and building codes. 7. Developer agrees the scope of the work shall conform in all material respects to the plans approved by she City of Burger, 8. Developer agrees to provide evidence by October 31, 2000, satisfactory to City Solicitor of City, of legally binding private leader financing communicants and equity investment of not less Nen $154,000 in fund for financing of she Pmj set exclusive of firuncing to be provided by the City as provided for in 4 above. 9. Developer hereby acknowledges that the City, in agreeing in provide financial assistance to Developer for the Project, relied in material part upon the assured completion of the Project mW the Developer agrees to use its best efforts to substantially complete the P jcer no later Nan April 30,2001. 10. Developer agrees that it shall kap and maintain books, records and other documents relating directly to the Project and agrees that any duly authorized representative of the City shall, at all reasonable times, have access to and the right to inspect, copy, audit and examine all such books, reeords and other documents of Developer until completion of the Project upon prior written notice. Developer shall ensure Nat similar provisions we included in all contracts or subcontracts entered into in connection with this Projat. It. Developer agrees that any duly authorized representative of the City shall, at all reasonable times, have ¢sass to any portion of the Project until its completion and a perms Bent Occupancy Permit for the Project has been issued by the City. 12. Any notice which either party denims or is requird 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: Edward A. Barrett, City Marmger City of Bangor 73lfarlow Street Bangor, Maine 04401 If to Develops: IoM T. Karnes, M 9 Brhmner Street Brewer, Maine 04412 Or such other person and/or address as maybe identified in writing by the parties. 13. Except as provided in this AgrewenS unfil substantial completion of the Project, Develops shall net assign its rights under this Agreement without the prim written consent of City, which consent shall not be unreasonably withheld, delayed or crnnditiond. The City's obligations hereunder are contingent upon the Developer's compliance with the terms and/or conditions set forth in this Agreement. 14. It is intended by the parties that this Agreement shall operate as contact under seal, in accoNance with 14 MRSA See.751. WITNESS WHEREOF this Agreement has been executed, sealed and delivered in duplicate counterparts as of the day and you fiat above written. IoM T. Karnes, III By John T. Kemea M CITY OF BANGOR By Edward A. Barrett Its City Manager