8/8/2008 - NEWS RELEASE
City of Portland
389 Congress Street
Portland, Maine 04101
www.portlandmaine.gov
CONTACT: Nicole Clegg, 207-756-8173, 207-272-4477 (cell) nicoleclegg@portlandmaine.gov

FOR IMMEDIATE RELEASE
August 12, 2008

Portland City Council Community Development Committee Unanimously Recommends Approval of the Agreement with The Olympia Companies
$18 million to be invested in the rehabilitation of the Maine State Pier

PORTLAND, Maine – After taking public testimony and answering questions posed by citizens and Councilors, the Community Development Committee (CDC) voted unanimously to recommend approval of the Term Sheet for the Maine State Pier project yesterday. The Term Sheet establishes the business agreement between the City of Portland and The Olympia Companies as well as lays out the timeline for the completion of the project and the financial obligations of the developer. The CDC is comprised of Councilors Cheryl Leeman, Chair, and Councilors Nick Mavodones and Jon Anton. The project now moves to the full City Council for a public hearing on and vote scheduled for August 18.

In keeping with the original proposal made by The Olympia Companies, the agreement includes an $18 million investment to rehabilitate the Maine State Pier, restoring its capacity to serve large cruise ships, the Coast Guard, tug boat fleets, and other maritime uses. The Olympia Companies will also construct a waterfront office and retail building, a waterfront park, a hotel on the pier, and additional buildings designated for marine related uses. When fully built, the project will bring an estimated $1 million in property taxes to the city, lease payments for use of the pier and city land, and the rehabilitation of the Maine State Pier, an essential asset of the public’s waterfront.

"The negotiation process was incredibly deliberate and thoughtful and at the end of the day we have a product that honors the originally approved proposal," stated City Councilor and member of the negotiation team, Cheryl Leeman. "The rehabilitation project provides significant resources to the city, increases public access to the waterfront, creates a public park in the heart of Commercial Street, and encourages economic development on the eastern side of the city's waterfront."

The term sheet provides significant financial protection to the city as all risks and costs of the development, permitting and construction are the responsibility of the developer and the Portland is protected should the developer incur debt for the project including the pier rehabilitation. In addition, the term sheet lays out certain benchmarks that the Olympia Companies must meet throughout the development process.

The negotiation team, comprised of Council Cheryl Leeman, City Manager Joe Gray, and attorney Jamie Broder, made the decision to recommend to the City Council that the original proposal by the Olympia Companies be honored and a separate track should be established for the construction of a megaberth. The CDC endorsed that approach and voted to recommend that the City Council refer the development of the megaberth to the CDC for consideration at its August 20 meeting.

The City Council will hold a public hearing on the Term Sheet August 18 at 7:00 PM. Following approval of the term sheet, the negotiating team will have up to ninety days to finalize a Master Development Agreement with the Olympia Companies, which is the binding legal agreement between Portland and the Olympia Companies.
The term sheet and exhibits are available online at www.portlandmaine.gov.


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Maine State Pier Rehabilitation and Development Project

On December 3, 2007, the City Council passed ORDER 42A (attached) which authorized the City Manager to:

“enter into negotiations with the Olympia Companies regarding the lease and redevelopment of the Maine State Pier and any other city property related thereto; and the development of a mega-berth at eth Ocean Gateway facility”

The business agreement being proposed is consistent with the City Council’s vote and the guidance the Community Development Committee (CDC) and City Council gave to the City’s Negotiating Committee: Councilor Cheryl Leeman, City Manager Joe Gray, and attorney Jamie Broder.

Key Terms of the Maine State Pier Agreement

The project: The project will be developed as one project; permits for the entire project must be in place before construction of any part of the proposal starts.

Developer’s Performance Guarantees: The Olympia Companies is required to perform in accordance with a Project Schedule, which establishes specific timelines and benchmarks the developer must be complete.

Funding: The Olympia Companies is 100% responsible for financing the public improvements (Pier and Casco Bay Park) and the private development of the hotel, office building, and additional buildings.

Developer’s costs: $18 million for the Public Improvements

City Financing or Bond Issue: None

Maine State Pier: Rehabilitate the Maine State Pier to its full capacity; the Pier restoration is the first project to completed.

Future Pier Maintenance: The Olympia Companies is responsible for maintenance costs of the Pier during the term of the leases.

Permits: The Olympia Companies is responsible for applying for and obtaining at its sole cost all necessary municipal, county, state and federal permits for the Project.

Taxes: The Olympia Companies will pay full taxes on the value of the buildings. When the project is completed, the total taxes will be approximately $1 million.

Property tax breaks: None

Lease term: 75 Years.

Lease Fees: In addition to the up to $18 million for the rehabilitation of the Maine State Pier, starting in year 21 of the lease The Olympia Companies will pay the City $1.4 million annually with a 2% escalator.

Annual Cash Benefit to the City: $18 million in public improvements paid for by private developer, annual taxes of over $1million upon full project build-out, annual lease fees on $1.4 starting in year 21, and annual maintenance costs of the Pier paid for by the developer throughout the term of the lease.



Term Sheet

Exhibit A Project Plan Sketch

Exhibit B Performance Specifications of
Infrastructure Improvements

Exhibit C Project Schedule (
Best Case and Contracted)

Exhibit D Lease Fee Schedule

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