HomeMy WebLinkAbout2000-10-11 00-387 ORDERItem No nn-asr
Date: October 11 2000
Item/Subfect: ORDER, Authorizing Etecution of Credit Enhancement Agreement
--- Boyd Street Housing Associates, LP
Responsible Department: Legal
The City Council approved a Development Agreement with Boyd Street Housing Associates, LP for the
construction of 32 residential units on a parcel of land between Boyd Street and Newbury Street The
agreement provides that the City will give a to rebate for up to 15 years to amortize a $140,000 loan, at
an Interest rate of up to 91/2%.
Manager's Comments:
Associated Information:
Department Head
City Manager
Rnanoe Director
Legal Approval:
Cty Solicitor
_Passage
Final: Reading Page of
Referral
00-387
_ Anignedw Councilor
CITY OF BANGOR
(MU.) ORDER, Authorizing Execution of Credit Enhancement Agreement
--- Boyd Street Housing Associates, LP
By Op Of y cmwxd of me cay o/ wngon
ORDERED,
THAT the City Manager is hereby authorized, on behalf of the qty of Bangor, to
executh a Credit Enhancement Agreement with Boyd Sheet Housing Associates, LP.
Said document shall be in a final form approved by the City Solicitors office In
substantially the form as attached hereto.
IP CIW COUNCIL
October ll, 2000
Motiao to Suspend the Rules to Consider
Council Order 800-387 Made and Seconded.
Rules Suspended
Motion far Passage Made and.
Seconded
Passed
TTY
RM
Title, Authorising ffiecution of Credit
Enhancement RSteecent - Boyd Street
Noosing Associates, LP
llsslgnad m
C ncllcr
PROM 'DRUMMNI W0009N
To
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AGREEMENT
II11S CREDIT ENHANCEMENT AGREEMENT dated as of October 11,
2000 between the City of Bangor, Maine (the'TOwn"), u municipal holy corporate anti
politic and a political subdivision of the Surto of Maine, and Boyd Street Housing
Associates, LP, a limited partnership duly organized and existing under the laws of the
Score of Maine, with a place ofbasiness in Rockport, Maine (the" Partnership').
WITNESSED] I'HAT
WIIBRBAS, the City has previously approved by Council Order the return to the
Partnership of real estate taxes paid on the Project in an amount sufficient to amortize a
$140,000 loan at an interut rote ofup to 9.5%over a norm of fifteen (15) years, mid
W1112REAS, Camden National Bank has agreed to make such a loan to the
partnership, secured in part by an Assignment of this Credit Enhancement Agroenum and
uvichurcu i by a I'imnissory Note of approximately even data containing the foregoing terms
and an intaeslrale of 9.5% (the "Camden National Bank Now"); and -
WHRRRAS, de City also shall agree in annually consider appropriating funds from
the City's general fund to provide financial assistance to the affordable family housing
Project being developed by the Partnership in the wont that the City is unable to remm the
properly tax revenues as described above to the partnership;
NOW, TI IBRRPORP., in consideration ofthe foregoing and in consideration of the
mutual premises and covenants set Ibrth hemin, the parties hereby agroc as follows;
ARTICLE
DEFINITIONS
Section LI. Definitions.
I'he Icons ciclined in this Article 1 shall, for all purposes of this Agreement, have die
meanings herein specified, unless the context clearly requires otherwise.
"Agreement" means this Credit linhancommrt Agreement between the City and the
partnership dated as at the dale set forth above.
" Partncmhip" has the meaning given such turn in the that paragraph hereto.
"Partnerehip Tax Revenues" means in eneh year that this Agreement is in effect the
amount actually paid by the partnership to the City on account of real estate taxa, but in no
evert a governor amount than that required to maks payments which would fully amortize a
FROM :eaLYl'eN0 tjGGVS H
I
207 905 9997
2000.18_ 9 Men.ea�
W-387
S140,0001ann at an interest cote of9.5%in semi-annual installments ovcra fifteen (15)year
torn.
Project"mcansihc land and improvcmcros owned by the partnership located at Boyd
Street, Bangor, Maine, constituting the Parmcnhip's affordable housing development.
"City" shall have the meaning given such term in the rovitals hereto.
"Tex Payment Dote" means the device which any PartnemhipT'ax Revenues are paid
by the Partnership to the City.
ARTICLE 11
PAYMENT REQUIREMENTS
Section2.1. Payments for Affordable Honstn¢_Development Pa3torm.
The City shall pay the Partnership Tax Revisions, at the Partnership's
direction, to Camden National Bank for application to die Camden National Bank Note
within ten (10) days of each Tax Payment Date. In the event that the City Is unable for
any reason, including without limitation lack of legal authority or enforceable obligation,
to me rn the Partnership Tax Revenues by paying them as provided above, then the City
shall consldm an appropriation of a like amount from the City's General Fund from tmc
to time throughout he term of this Agreement (provided, however, that in no event shall
the amounts so appropriated exceed die Partnership Tax Revenues and any appropriation
shall be subject to the City's regular appropriation process), and shall pay said amount b
Camden National Bank for the purposes described above.
ARTICLE Ill
PAYMENT OBLIGATIONS
Section 3.1. Fallure to Make Payment.
In the event the City should fail to, or be unable to, make any of the payments
required under the provisions of this Agrecmont, the filum or installment so unpaid shall
continue as s limited obligation of die City, under the toms and conditions hereinafter set
forth, until the amount unpaid shall have been fully paid. llic Partnership shall have the
right to initiate and maintain an action, to spool fcally mdorce the City's obligations
hereunder, including without limitation, die City's obligation to pay Partnership Tax
Revenues as described above..
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SMOm13.2. Mosmetafravabents.
The payments provided far in this Agmcmcnt shall be paid in immediately
available funds directly W the Partnership in the manner provided above.
Section 3.3. Limited Obl'vatian,
Tine City's obligations of payment hereunder shall be limited obligations of the
City, shall not constitute a general debt or a general obligation on the part of the City or a
general obligation or charge against or pledge of the faith and cmdit or taxing power of
the City and shall be payable solely from the partnership Tax Revenues received by the
City, and any earnings thereon pledged therefor under thisAgroemun. Thu Agreement
shall not directly or indirectly or contingently obligate the City W levy or hr pledge any
form oftxxation whatever therefor excepting the City's obligation to assess in good faith
property taxa upon the property.
Section 3.4. 91441 on of Partnership to Pay Real P v I •'1'
The Partnership shall pay all real estate taxa to the City when duo.
ARTICLE IV
DEFAULTS AND REMEDIES -
Section 4.1._XnId gQefault
Each of the following events shall censtlule and be miles of to in this Agreement as
an Event of Defaulb
a. Any failure bythe City to pay any amounts dues to Purinmship when the some
shall become due and payable;
b. Any failure by the City to make any payment W or for the account of the.
Partnership as and when due;
c Any failure by the City or the Partnership to observe and perform in all
materiel respects any respective covenant, condition, agreement or provision contained
herein on tine Part ofthe City or the Partnership respectively to be observed or performed
which failure is not cured within thirty (30) days following written notice draeof, and
d. If a deoree or order of a court or silently or supervisory authority having
Jurisdiction inthe promises shall appoint uonservamrorreceiver ar liquidator forum city,
or if any insolvency, readjustment of debt, marshaling of assets and liabilities or similar
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proceedings for the winding up or liquidufion Of 410 City's affairs shall have been entered
against the (.Sty or if the City shall have consented to the appointment of a conservator or
receiver or I i qu i datur in any such proceedings of or relating to the City or of or rcl ating to all
or substantially all of its property, including without limitation the filing of a voluntary
pefition in bankruptcy by the City or the failure by the City to have a politics in bankruptcy
dismissed within aperiod of 90 consecutive days following its filing or in the event an order
for release has been succeed under the Bankruptcy Code with respect to the City.
Section 4.2. Remedies on Default.
Whatever any Event of Default described in Section 4.1 hereof shall hove occurred
and be continuing, the nondefaulting parry may take any one or more of the following
remedial steps following any applicable cure period:
a. The nondefaulting party may take whatever action at law or at equity as may
appear necessary or desirable to collect the amount then due and thercaller to become due,
U) specifically onfomn the performance or observance of any obligations, agrccmonts, or
covenants ofthenondefaulfingpartyundcrthis Agreement and any documents, instruments,
and agreements contemplated hereby or to enforce any rights or mmcdics available
hemunder,and -
b. The partnership or the City shall also have the right to exercise any rights or
remedies available under the laws of the State of Maine.
Ali'fICLE V
EFFEC77VE DA'Z'E, TERM AND TERMINATION
Sectlo115.1. EffectillisPidCapliTeim.
TlsisAgreement shall become effective upon its execution and delivery by the parties
hereto and shall remain in full force from the date hereof and shall expire on the date on
which the City $hall have returned or paid to or account of the partnership a cumulative.
amount ofPannership Tax Revenues for a period offiftecn yeas in an amount sufficient to
amortize the Camden National Dank Note.
Section 5.2. Cancellation and Exelration of TBgl
At the termination or other expiration of this Agreement and following full payment
of all amounts due and owing to the partnership hereunder or prevision for payment thereof,
the City and the partnership shell as ch execute and dcliversuch documents and lake of co use
to betaken such actions as may be necessary to evidence the termination ofthis Agreement.
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ARTICLE Vi
ASSIGNMENT AND PLEDGE OF INTEREST
Section 6.1 'onsent t Pled A t r Grm t of Sex 'N DLL¢re
The City hereby acknowledges that the Partnership may pledge and assign its right,
title and interest M. to and under this Agreement as collateral for financing for the Project,
including without limimtion apledge or assignment to Camden National Dank to secure the
Carden National nank Note, Although no obligation is hereby imposed an the Partnership
to make such assignment or pledge. Recognizing this possibilily, the City does hereby
around and agree to thepledge and assignment ofall the Partnorship's right, tide and interest
in, m and under this Agreement and in, and to the payments to be made to Partnership
hereunder, to third parties as collateral or security formclebtedness orotherwise, on one or
more ocesslOm during the term hereof. The City agrees to execute and deliver any
assignmrnts,pledge agrcemenm,consents oothercmfl mationarcquiredbytheprospective
pledgee or assignee, including without limitation recognition of the pledgee or assignee as
the holder Of of tight, fide and interest herein and as the payee of amounts due and payable
hereunder and may and all such other documentation as shall confirm to such pledgee or
asaignee the position of such assignee in pledgee and the irrevocable and binding nature of
this Agreement and provide to the pledgee coassignee such rights and/mrcmedios as it may
deem necessary for the eamblishing, perfcetion and protection of its interest hotels.
Section 6.2. AABl@l@.SAI
The Partnership shall have the unrestricted right to transfer slid assign all or any
Portion of its rights in, to and under this Agreement, at any time, and from time to time, as
Partnership may, in its sole discretion, deem appropriate.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Si
In the event of the dissolution of the City or the Parmership, the covenants,
stipulations, Promises and ngmcments ad forth herein, by or on behalf of or for the benefit
of stmh party shall bind or inure to the benefit ofthe successors and assigns thereof from time
to time and any artily, officer, board, commission, agency or malrumenmlity to whom or to
Which any power or duty Of such party shall be transferred.
aaaa.ra-rt
SOCUM 72. kartlea in latere5j.
00-x7
EXCeptashocamOtherwisespecilicallyprovidcd,nothing in WisAgmenucatexpreased
or implied is intended or shall be construed to Confer upon any Plana, into or corporation
Other than the City and the Partnership any right remedy or claim under or by reason of this
Agmcment it being intended that this Agmemem shall he for the sole And cxclusivnbenefit
of the City and the Partnership; provided, howwer, that if the payment obligations of the
city TO the Partnership hereunder are held by a final and binding proceeding to be illegal or
invalid, this Agreement shall temdnate. In such event, all obligations of the pmtics shall
temtinate. And uo party shall have any further liability to the other hereunder.
Section 7.3. Severatiffty.
Except As otherwise provided herein, in arae any one or mora ofthe provisions ofthis
Agreement shall, fm any reason, be held to be illegal or invalid, such illegality M invalidity
shall notaffect any Other provision of this Agmement And this Agreement shall be constmed
and enforced as if such illegal o invalid provision had not been contained herein.
Seefion7.4. No ersanal Liability of Off' I fn City.
No covenant, stipulation, obligation m agreement ofthc City contained heroin shall
be deemed to be a covenant, stipulation or obligation of any pmsent or forum elected or
appointed circle], officer, agent, servant or employs of the City in his or ho individual
capacity and ncidtcr the members of the City Council of Ute City, nor Any official, officer,
employee or agent of the City shall be liable personally with respect to this Agreement or be
subject to any personal liability or accountability by reason hemof
section 7.5. ('alawparts.
'Mils Agmement may be streamed In any number of counterparts, en rh of which, what
so executed and delivered, shall be on original, but such countarpartsshall together Constitute
but one and die same Agmemcnt.
Section 7.6. -ravers' o L
The laws of Ute State OfMainesltall govern the construction and enforcement fthis
Agreement in all mspects.
Section 7.7. Notle
All notices, certificates, requests, requisitions o Otho communications by the City
m'the partnetslup pursuant to this Agreement shall be in writing and shall be sufficiently
Fin
:pRlgplm Lppp N
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given and shall dccmed given whmrmailod by fitstelass mail, Posteg intpoid, addressed as
follows:
If to the City
City Manager
City of Bangor
73 Harlow Stren
Hangar, ME 04401
If to the Partnership:
Boyd Strect Housing Assuciates, I.P
247 Commercial Street
Rockporl,ME 04856
With a copy to:
Drumm rid Woodrum & MacMahon
P.D. Box 9781
245 Commercial Street
Portland, ME 04101
Attention: John S. Kaminski
Either of the patties may, by notice given to the other, designate any further or
different addresses to which subsequent notices, certificates, requests or other
communications shall be sent hereunder.
Section 7.8. Amendments.
This Agrcrvneat maybe amended only with the exprew written consent ofall of the
parties hereto.
Section 7.9. Bmflt of Assiane . or pleshroes,
The City agrees that this Agreement is executed in part to induce assignees or
pledgees to provide financing for the Noct and accordingly all covenants and agreements
on the part. ofthe City as to the amounts payable hereunder arc hereby declared to be for the
benefit of any such assignee or pledgee from nine to time of the I'Micrship's right, title and
interest herein.
20¢0.10-11
Section 7d0. Integration,
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This Agreement completely and fully supersedes all other prior a conecmporanmon
understandings or agaanen%bot) written end oral, between the City and the Partnership
rotating to the specific subject matter of this Agreement and the transactions contemplated
hereby.
IN WITNESS WHEREOF, the City and the Partnership have caused ibis Agreement
to be executed in their respective corporate names and their respective corporate seals to be
hereunto affixed and created by the duly authorized officers, all us of the date first above
written.
WITNESS: CITY OF BANGOR
BOYL STREET HOUSING
ASSOCIATES, LP
By JMC PARTNERS, LLC, Its General
Partner
it; hhmager