HomeMy WebLinkAbout2017-05-08 17-170 ORDERCOUNCIL ACTION
Item No. 17-170
Date: May 8, 2017
Item/Subject: ORDER, Authorizing Execution of a Property Tax Development Agreement for a
Planned Development by Penquis - Map -Lot (R41-038)
Responsible Department: Community and Economic Development
Commentary: This Order will authorize the City Manager to execute a Tax Revenue and PILOT
Agreement with Penquis for the development of housing on a parcel of land located off of Grandview
Avenue.
Council Order 17-120, adopted on March 27, 2017, authorized an Option and Development Agreement
between the City of Bangor and Penquis for a portion property located near the corner of Grandview
Avenue, Map -Lot (R41-038). Penquis needed this parcel to move forward on a 37 unit affordable
housing development on an adjacent parcel.
Penquis intends to use low-income tax credits to make the project financially feasible. This will require
Penquis to transfer the property to a for-profit, taxable subsidiary, for the term of the tax credit. Once
the term of the tax credits is over, the property will be conveyed to a non-profit and the property
becomes tax exempt. Penquis is requesting a tax revenue agreement to allow them to receive a credit
of 70% of the taxes for the period of the low-income tax credits followed by a 30% PILOT once the
property become tax exempt. This is similar to an arrangement the City has with Penquis on Ernst
Manor. If approved, it allows the project to move forward on constructing low income housing using tax
credits and guarantees that the City will receive payments in lieu of taxes in perpetuity.
This was item was reviewed and approved by the Business and Economic Development Committee on
May 2, 2017.
Tanya L. Emery
Department Head
Manager's Comments:
Associated Information:
Budget Approval:
Legal Approval:
Introduced for
X Passage
First Reading
Referral
Finance Director
City licitor
Page 1 of _1_
Assigned to Councilor Perry
CITY OF BANGOR
17-170
MAY 8, 2017
(TITLE.) ORDER, Authorizing Execution of a Property Tax Development Agreement
for a Planned Development by Penquis - Map -Lot (1141-038)
WHEREAS, the City of Bangor, Maine is the owner of land located at the corner of
Grandview Ave and Hillside Ave in Bangor, County of Penobscot, State of Maine; and
WHEREAS, the City and Penquis have negotiated terms under which a portion of that lot
can be sold to Penquis; and
WHEREAS, Penquis wishes to acquire the land to incorporate into a housing
development project in the immediate area; and
WHEREAS, Penquis will apply to the Maine State Housing Authority for low-income
housing tax credits and other available programs to provide a majority of the funds necessary
to address the capital needs of the project; and
WHEREAS, Penquis is required to and will transfer ownership to for-profit subsidiary in
order to receive low-income tax credits; and
WHEREAS, Penquis or affiliated subsidiary organization is requesting reimbursement by
the City of 70% of the real estate taxes generated by the property for a period of 15 years to
assist in supporting annual operating expenses thereby keeping rents affordable; and
WHEREAS, after the expiration of 15 years of for-profit ownership, ownership may revert
to Penquis , a non-profit entity and they agree to enter into an agreement for payment in lieu
of taxes (PILOT); and
WHEREAS, reimbursement of real estate taxes to Penquis shall be done through a Tax
Revenue and Credit Enhancement Agreement.
NOW, THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF
BANGOR,
THAT Catherine, M. Conlow, City Manager, is hereby authorized on behalf of the City of Bangor
to execute any documents necessary to meet the terms and conditions of the Development
Agreement including a Tax Revenue and Credit Enhancement Agreement. Said documents shall
be in a final form as approved by the City Solicitor or Assistant City Solicitor.
IN CITY COUNCIL
MAY 8, 2017
CO 17-170
COUNCILOR TREMBLE LEFT THE MEETING AS IT WAS DETERMINED -AT
COMMITTEE THAT HE HAD A CONFLICT OF INTEREST WITH THIS ITEM
MOTION MADE AND SECONDED FOR PASSAGE
PASSED
CITY CLERK