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WATERFRONT HOTEL TIF REQUEST
6 Y changed to non-hotel uses. However, owner may change, alter or reconfigure more than ten (10) perce for any hotel use,including a restaurant, lounge, gymnasium, pool, lobby,without effecting this agreement. At no time,however, shall there be fewer than 75 hotel rooms. The Developer also agrees that the ownership structure and operation of the hotel is totally separate and distinct from the Pickering Wharf Condominium Association. The TIF schedule: *(see attached TIF expiration schedule) Year %oExemnted k 1-5 100 6-8 90 9 80 10 60 11 40 12 20 The hotel will also generate room tax calculated at 4% of projected room revenue. The long-term impact of the hotel's presence on the city's economy in terms of property tax, room tax and parking fees will justify the structure of this TIF plan. The location of the hotel will generate more business for local retailers, restaurants and tourist destinations. The Planning Department will begin working with the project proponent to assemble necessary materials for a TIF package. 2) Parking Garage The developer requires the lease of at least one parking space per hotel room on second and third floors Of the South Harbor Garage. The lease rate per parking space will be $45.00 per month or a prepaymond fate of $325 Annually and increase at the rate of other City Parking facilities. The lease will be in effect for. the life of the hotel. The -terms of the lease will be determined by the City of Salem and the Pickering Wharf Hotel . Entity. No parking spaces shall be reserved. 3) Waterfront Walkway The City pledges to work with the Entity in a public/private partnership to secure other state and federal funds such as CDAG and PWED funds for items such as increasing public access to the waterfront between Congress Street and the Finz Restaurant. This would complete the link from Congress Street to the NPS at Derby Street. In City Council November 21, 2002 Adopted as amended .Approved by the Mayor on December 2, 2002 ATTEST: ARA CITY CLERK s Andrew Shapiro Subject: Meeting re: Salem Waterfront Hotel and Jacqueline's update Location: Mayors Office Start: Wed 5/28/2014 10:00 AM End: Wed 5/28/2014 11:00 AM Recurrence: (none) Meeting Status: Accepted Organizer: Kim Driscoll Required Attendees: Lynn Duncan;Andrew Shapiro Thanks Jen. I appreciate the follow-up. The 28th works perfectly. See you then. Thanks again, Bobby Bobby Matthews 617-967-6283 (c) Principal Tax Incentives Consultants LLC http://www.taxincentivesconsultants.com This is approved for the week of May 19th at the earliest. Check for a date that also works for Lynn and Andrew. From: Kristian Hoysradt Sent: Thursday, May 08, 2014 1:46 PM To: Dominick Pangallo Subject: FW: Salem Waterfront Hotel and Jacqueline's update... From: Robert Matthews [mailto:BMatthews(dtaxincentivesconsultants.com] Sent: Thursday, May 08, 2014 1:41 PM To: Mayor Kim Driscoll Cc: Lynn Duncan; Andrew Shapiro; BMatthewsCaltaxincentivesconsultants.com Subject;,Salem Waterfront Hotel and Jacqueline's update... Mayor Driscoll—I hope all's well. I wanted to touch base to see if you had time in the next week or two for me to swing by and update you on both Salem Harbor Hotel's and Jacqueline's expansion plans and discuss potential participation in the EDIP Program. I'm sure you're up to speed with the hotel plans—but they're prepared to update you on job commitments for the future expansion (they've exceeded their 1998 TIF commitment). In addition,Jacqueline's has already met their 35 new job commitment from last year's TIF/expansion (they have approximately 110 employees now) and they are in negotiations to acquire an additional condo on Swampscott Road. If so,they'll spend another$4.5M in building acquisition, renovations and equipment and are prepared to commit to additional new jobs with this expansion. All good news. I've cc'd both Lynn Duncan and Andrew Shapiro on this e-mail and am available to sit down at your convenience. Let me know. Thanks much, Bobby Bobby Matthews 1 L 617-967-6283 (c) Principal Tax Incentives Consultants LLC http://www.taxincentivesconsultants.com IA Please oonsider the environment before printing this email 2 i ROCKETT MANAGEMENT & REALTY CO., INC. 190 PLEASANT STREET MARBLEHEAD,MASS.01945 TEL.(781)631-3070 FAX(781)639.2290 J. HILARY ROCKETT, JR. Vice President June 15, 1998 Economic Assistance Coordinating Council C/o Sean Calnan, Director Massachusetts Office of Business Development One Ashburton Place, Room 2101 Boston, MA 02108 To the Members of the Economic Assistance Coordinating Council: I am writing to express the commitment of Pickering Wharf Realty Trust to help revitalize the Salem waterfront/downtown area with our plans to build a hotel. As evidence of our commitment, we have filed an application for certified project status with the EACC. We would like to start construction this summer and hope to open in the summer of 1999. Our commitment to do business in Salem is based on an agreement with city officials in which the city will offer property tax credits to make this redevelopment project economically feasible. In addition, Pickering Wharf Realty Trust will take advantage of state investment tax credits offered through the Commonwealth's Economic Development Incentive Program primarily to build a seawalk to allow the public access to the waterfront. The numerous economic and community benefits of this project are described in our application for certified project status. It has been projected that an additional 50,000 people will visit Salem due to this hotel, which will give a tremendous boost to Salem's downtown/waterfront. If you have any questions about this matter or if you need further evidence of our commitment to Salem, please contact me at (781) 6 3070. Sin r ly J. ilary e , Jr. V' e Presiden JHR:nh 6. Nature and purpose of project: INTRODUCTION AND HISTORY OF PROJECT DEVELOPMENT Pickering Wharf Realty Trust seeks Certified Project designation for the Pickering Wharf Hotel to be developed at the corner of Derby and Congress Streets. Salem is a major New England tourist destination that draws over 650,000 visitors annually to its cultural, historic and maritime attractions. Due to a limited supply of overnight accommodations, tourist and business visitor dollars are spent in communities such as Danvers and Peabody which have numerous hotels with easy access to major highways. The trustees of Pickering Wharf Realty Trust recognized the need for additional hotel accommodations in Salem and that the potential space available at Pickering Wharf was an ideal location. The developers conducted an extensive financial analysis of the project and concluded that the development would not be economically feasible without property tax relief through a TIF agreement. Their findings were supported by a Hotel Study conducted by Landauer Group that indicated the Pickering Wharf hotel site was the most suitable location in Salem for new development and the one most likely to be supported by the market. Their analysis also concluded that the cash flow generated by the project for debt service would not be sufficient to attract private sector developers without economic assistance from the community. Rockett Management & Realty Company was established in 1968. The company develops, manages and owns several commercial and residential properties, including 400 Highland Place, Route 107 in Salem, the Village Plaza in Marblehead and several apartment buildings. The Pickering Wharf Realty Trust was established prior to the purchase of Pickering Wharf on May 2, 1996. Pickering Wharf Realty Trust acquired Pickering Wharf in June 1996 and initiated the successful revitalization of this popular waterfront destination. Pickering Wharf Realty Trust owns 67% of the condominiums in the form of commercial space. The remaining 33% of the space is comprised of residential condominiums. Twelve of the 54 residential condominiums are owned by Pickering Wharf Realty Trust. Pickering Wharf had been for sale since 1991 and had begun to show signs of neglect that have since been reversed under Rockett Management Company's ownership. As a part of the owner's plans for a major redevelopment of Pickering Wharf, a hotel development was proposed to be located at the corner of Derby and Congress Streets. Pickering Wharf Realty Trust plans to construct an eighty +/- room, three story hotel containing standard 14' x 36' rooms featuring kitchen facilities. The ground floor will offer 18,000 square feet of retail space. The development will be a total of four stories. The development cost of the hotel portion of the project is $3,541,100. The hotel will be approximately 50,000 square feet. 2 The overall project cost is $4,441,100. The retail portion of the project is estimated to cost $900,000. Please refer to the chart on page 4 for a cost breakdown. The project is projected to employ 60 persons in net, new permanent jobs for the ETA. The existing conditions of the hotel site include retail and office space contained in two buildings and an Eastern Bank. Ninety percent of the retail and office space has been abandoned for over two years. The two buildings housing retail and office will be demolished and the retail uses will be relocated to the ground floor of the hotel. The bank will be demolished and relocated next to the hotel site. The applicant seeks certification for the hotel portion of the project only. All newly constructed retail space, including the relocated Eastern Bank, will be taxed at full valuation. In addition, the City and the developer have entered into a Memorandum of Understanding in which each party has pledged to work in a public/private partnership to secure state and federal funds for items such as increasing public access to the waterfront. There is an unfinished segment of a seawalk from Congress Street to the Chase House restaurant to be addressed with the use of grant funds. 7. Is this business new to Massachusetts? d Yes ❑ No If no: • Where are the existing Massachusetts facilities? • Will this project require/trigger the closing or consolidation of any Massachusetts facilities? If yes, please explain. 8. Is this project an expansion of an existing business? ❑ Yes d No If yes, check the appropriate box: ❑ at existing location ❑ at new location in same municipality ❑ at new location in different municipality 3 Budget for Project Soft Costs Budget Architecture Fees 150,000 Structural/Mechanical Engineering 38,000 21 E Site Report 10,000 Legal Fees 18,000 General Conditions 85,000 Business Relocation Costs 125,000 Bank Loan Fees 150,000 Permit 15,000 Site Superintendent 75,000 Office Expense 30,000 Hard Costs Demolition 145,000 Site Preparation 45,000 Piles/Caps 160,000 Grade Beams 129,000 1st Floor Structural Slab 106,000 Structural Plank/Steel Structure 513,000 Concrete Slabs (3) 94,000 Roofing 145,000 Towers/Light Steel Framing 0 Staircases 51,000 Elevator 125,000 Exterior Wall System 397,000 Glass & Glazing 150,000 Misc. Exterior Allowance 50,000 4 Sprinkler System 130,000 Electrical 197,000 Plumbing 175,000 HVAC 365,000 Interior Demising Partitions 157,000 Interior Allowance 215,000 Fire Alarm System 56,000 Excavation 86,000 Materials 22,000 Grading/Compaction 26,000 Curbing 22,000 Landscaping 27,000 Sprinkler System 7,100 Paving 61,000 Walkway 49,000 Sidewalk Pavers 25,000 Special Landscaping 15,000 Total 4,441,100 Breakdown of costs Hotel 3,451,100 Retail 900,000 9. Job creation In order to qualify for Certified Project status, the governing statute and regulations require the creation of net, new, permanent full-time employees in Massachusetts. On the chart provided (see next page), please fill in the blanks provided. 5 Work Force Analysis and Job Creation Plan Current TOTAL NEWJOBS NEW JOBS NEW JOBS NEW JOBS NEW JOBS NEWJOBS employment projected new Year I Year 2 Year 3 Year 4 Year S Years 6-13 permanent jobs Total Employees at Certified Project 0 60 45 8 1 0 0 0 Facility Total Employees at Other Sites in 0 0 0 0 0 0 0 0 Mass. #of Employees at Certified Project 0 45 35 35 35 35 35 35 Location who live in the ETA #of Permanent Full-Time Employees 0 45 35 5 5 0 0 0 #of Permanent Part-Time Employees 0 IS 10 3 2 0 0 0 #of Temporary Full-Time Employees 0 10 0 0 0 0 0 0 construction #of Temporary Part-Time Employees 0 10 0 0 0 0 0 0 construction #of Management Positions 0 4 0 0 0 0 0 0 Average Salary of Management 0 $50,000 Positions #of Professional Positions 0 10 0 0 0 0 0 0 Average Salary of Professional 0 $40,000 Positions #of Technical Positions 0 4 0 0 0 0 0 0 Average Salary of Technical Positions 0 $30,000 #of Skilled Positions 0 18 0 0 0 0 0 0 Average Salary of Skilled Positions $30,000 #of Unskilled Positions 0 24 0 0 0 0 0 0 Average Salary of Unskilled Positions $15,000 6 10. Certification for Abandoned Buildings: Does the proposed project involve the renovation and reuse of an abandoned building? ❑ Yes d No ❑ Unsure If yes or unsure, please answer the following questions: (a) How long has the building been vacant? (If known, state date) (b) During this period of time, what percentage of the building was vacant and unused? If the percentage varied during this time period, provide information for each change in the percent of vacant space and the applicable time period. 11. Local Employment: What actions will you take to recruit employees from among residents of the ETA? The hotel developers believe that the majority of new employees will be ETA residents, as the company will advertise new positions exclusively in the Salem Evening News. Pickering Wharf Realty Trust has the intention and capacity to achieve the anticipated level of new permanent full-time jobs for residents of the municipality and the ETA. The local labor supply is well qualified for the nature of the positions that will be available in the hotel development. The hotel is located within walking distance of several neighborhoods which will assist in reaching the anticipated level of new permanent full-time jobs for residents of the municipality and the ETA. 12. Affirmative Action Statement: It is the policy and practice of Pickering Wharf Realty Trust to hire and promote that person determined to be the best qualified without regard to race, color, religion, sex, age, marital status, or national origin. 13. Agreement between the Business and Area Banks: Describe briefly the business' local banking relationship(s), if any. Does the institution with which the business banks participate in the Massachusetts Capital Access Program, which is designed to commit a portion of the business' deposits to fund loans to local businesses? Pickering Wharf Realty Trust banks with Eastern Bank, who participates in the Massachusetts Capital Access Program. 7 14. Economic benefits of project certification: Provide a description of the economic benefits that are anticipated for the business and the project, if the project is certified. Also, provide any information, documentation or studies demonstrating any additional benefits (i.e. reduction of blight, reuse of abandoned buildings, clean up of contaminated property, job training, provision of day care, any contributions to the community, etc.) likely to accrue to the area as a result of Certified Project designation. Please describe: Economic benefits to applicant The benefits of project certification are summarized below: • Development is economically feasible with the receipt of investment tax credits and property tax benefits • The developer will receive approximately $1,369,964 in local property tax benefits over 13 years • The construction of a $3,873,400 hotel will entitle the company to $193,670 in state 5% investment tax credits • The developer will receive additional state investment tax credits as a result of investment in equipment for the hotel • Project provides an anchor for the Pickering Wharf development and orients the visitor to Pickering Wharf and the waterfront • a 90 % abandoned building is removed from the site • quantity and quality of retail is greatly improved within Pickering Wharf Economic benefits to the City of Salem • The City's tax base will be expanded; room taxes in the amount of $968,927 will be received and parking fees in the amount of$451,710 will be generated • The reconfigured retail will generate additional tax revenue • After all local property tax exemptions expire, this project will generate $185,121 per year in property tax revenues • 60 new jobs will be generated through the staffing of the hotel • The hotel is to be located in the heart of Salem's waterfront area on one of Salem's main entrance corridors. The City has launched several initiatives to improve the appearance of commercial properties on Salem's entrance corridors. This project will be a catalyst for additional development and rehabilitation of the waterfront area • The City has historically suffered a loss of tourist revenue due to a limited supply of hotel rooms. The new hotel and retail property taxes, coupled with room tax and parking fees, will have a significant impact on 8 the City's economy. The waterfront location of the hotel will generate more business for local retailers, restaurants and tourist destinations. Special Requirements for Real Estate Projects 1. Will the business own or lease/rent the facility? d Own ❑ Lease/Rent If leasing/renting, please identify the developer/landlord, and state who will be the taxpayer of record for the purpose of paying local real estate taxes. If owning, will the business fully occupy the space? d Yes ❑ No If no, does the business intend to lease/rent the remaining space? 2. Describe how the various tax benefits and other economic incentives that will result from Certified Project designation will be allocated among the business(e's) developing the project (i.e. a developer or landlord) and the business(e's) intending to purchase, lease or rent space at the facility (i.e. tenant or tenants). N/A Supplemental Information 1. Name(s) of business(e's) intending to take advantage of state tax incentives: Business Name: Pickering Wharf Realty Trust Federal Employer ID:04-6805953 Address: 190 Pleasant Street Marblehead, MA 01945 Phone: (781) 631-3070 Fax: (781) 639-2290 Contact Person: J. Hilary Rockett, Jr., Trustee Type of Organization (check that which applies): ❑ Corporation: ❑ For profit; ❑ S Corp.; ❑ Non-Profit I Business Trust ❑ Partnership: ❑ General Partnership; ❑ Limited Partnership ❑ Individual 9 Level of interest: (Indicate the benefits the company seeks) 15% Investment Tax Credit ❑ 10% Abandoned Building Tax Deduction (if applicable) I Local Real Estate Tax Incentive Beneficiary 2. Names and Addresses of Organization (please respond according to type) Business Trust Beneficiaries: J. Hilary Rockett and M. Denise Rockett 10 Foster Street Marblehead, MA 01945 J. Hilary Rockett, Jr. 5 Corn Point Road Marblehead, MA 01945 T. Michael Rockett 36 Roosevelt Avenue Marblehead, MA 01945 Richard P. Rockett 7 Dunns Lane Marblehead, MA 01945 Pamela M. Rockett 14 Roosevelt Avenue Marblehead, MA 01945 3. Please provide names, addresses, phone numbers and contact persons for organizations which may own or control or be affiliated with the applicant organization: Not Applicable 4. Certificate of Good Standing: A Certificate of Good Standing is attached with this application. mcc:Vif\forms\cpap.wpd 10 Commonwealth of Massachusetts Department of Revenue Taxpayer Service Division Certificate Unit P.O. Box 7066 July 2, 1998 Boston, MA 02204 PICKERING WHARF REALTY TRUST PICKERING WHARF PICKERING WHARF SALEM, MA 01970 LETTER OF COMPLIANCE In response to your request for a certificate of good standing, please be advised that the statutory authorization for the issuance of Certificates of Good Standing extends only to incorporated entities. However, we have researched Department records relative to the filing and payment of the following taxes: IDSL 046805953 REALTY TRUST. The research discloses no assessed liabilities at this time. This statement is not a waiver issued under Massachusetts General Laws, Chapter 62C, Section 52, or a tax certificate issued under M.G.L., Chapter 1566, Section 99 or 100, and cannot be used for such purpose. Very Truly Yours, Assistant Chief, Collections Bureau NO. 44532 5055 - 59032 Mitchell Adams Commissioner ®printedon recycledpaper Nnm CITY OF SALEM In City Council, May 14, 1998 RESOLUTION — - APPROVING CERTIFIED PROJECT APPLICATION OF PICKERING WHARF REALTY TRUST WHEREAS, Pickering Wharf Realty Trust has applied for designation as a Certified Project under the Massachusetts Economic Development Incentive Program created by Chapter 23A of Massachusetts General laws; WHEREAS, Pickering Wharf Realty Trust meets the minimum standards of the Economic Development Incentive Program and the local economic development goals and criteria established as part of the documents creating the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS, the proposed certified project is located at the comer of Congress and Derby Streets, within the boundaries of the Salem Economic Opportunity Area. The legal description is as follows: The following condominium unit in the Pickering Wharf Condominium (the "Condominium") in Salem in the County of Essex and Commonwealth of Massachusetts, created by and described in the Master Deed of Pickering Wharf Condominium dated August 3, 1979 recorded with Essex South Registry of Deeds in Book 6624, Page 141, as amended by a First Amendment to Master Deed dated November 9, 1979, recorded with Essex South Registry of Deeds in Book 6653, Page 99, by a Second Amendment to Master Deed dated December 28, 1979, recorded with Essex South Registry of Deeds in Book 6667, Page 39, and as further amended by a Third Amendment to Master Deed dated April 4, 1980, recorded with Essex South Registry of Deeds in Book 6692, Page 336(said master deed as so amended is hereinafter referred to as the "Master Deed"): Building Unit Percentage Interest Derby A 10.8775 said unit A, Derby Building being a part of the total Master Deed described above. Together with the undivided percentage interests in the common areas and facilities of the Condominium described in the Master Deed as set forth for the unit above. Subject to and with the benefit of all easements, rights, reservations, restrictions, agreements and provisions contained in the Master Deed, in the Agreement and Declaration of Trust of the Pickering Wharf Condominium Trust dated August 3, 1979, recorded with Essex South Registry of Deeds in Book 6624, Page 168, in the By-Laws of Pickering Wharf Condominium recorded with Essex South Registry of Deeds in Book 6624, Page 179, and in any rules and regulations promulgated pursuant thereto, as any of the foregoing may be amended from time to time. Subject to and with the benefit of the provisions of Massachusetts General Laws Chapter 183A as now in force and as amended from time to time. The foregoing unit is intended to be used for any purpose allowed by applicable law, zoning law, license, permit,use regulation, special permit, exception or variance. WHEREAS the City of Salem has agreed to offer Pickering Wharf Realty Trust a Tax Increment Financing Agreement; WHEREAS, Pickering Wharf Realty Trust will invest approximately $3,541,100 to develop a hotel at Pickering Wharf, an investment which creates approximately 60, new, permanent jobs for residents of the Beverly & Salem Regional Economic Target Area. WHEREAS,the construction of a hotel at Pickering Wharf will substantially improve the aesthetic appearance of the property and reduce blight on one of Salem's entrance corridors; NOW THEREFORE BE IT RESOLVED that the Salem City Council approves the Certified Project application of Pickering Wharf Realty Trust, designating this project as a certified project for a period of thirteen years, and forwards said application for certification to the Massachusetts Economic Assistance Coordinating Council for its approval and endorsement. Adopted this 11th day of June, 1998, by the Salem City Council. Stanley J. Usov'c , Jr., Mayor Date �z Atte Deborah E. Burkinshaw, City Clerk SEAL CITY OF SALEM Via and Nay Vote of City Council upon the Question of 1991. Yea Nay Pas. Absent > mast E.B1aQ John J.Daoshme Regia R.Flynn Thomas H.For" Kevin R.Harvey Sarah M.Hayes Wiliam A.Kelley Joan B.Lovely Scott J.Md aegbla . Peter L Paslwwsm Leonard F.O'Leary,PreL TOTAL / CITY CLERK A TRUE COPY ATTEST CITY CLERK SALEM, MASS, - - Massachusetts Economic Development Incentive Program Tax Increment Financing Plan I. Location A. Economic Opportunity Area (EOA): Salem EOA B. Municipality: City of Salem C. Tax Increment Financing (TIF) Zone: Attached are: • map of the ETA map showing the general location of the proposed private project • parcel by parcel map • property lines and the outline of each building • map indicating infrastructure improvements, all thoroughfare, public rights of way and easements • zoning map • location of proposed private and public projects Common description of TIF Zone: The proposed TIF Zone is located at the corner of Congress and Derby Streets in the Salem Economic Opportunity Area (EOA). The tax parcel is Map 34, Lot 446. Legal description of TIF Zone: The following condominium unit in the Pickering Wharf Condominium (the "Condominium") in Salem in the County of Essex and Commonwealth of Massachusetts, created by and described in the Master Deed of Pickering Wharf Condominium dated August 3, 1979 recorded with Essex South Registry of Deeds in Book 6624, Page 141, as amended by a First Amendment to Master Deed dated November 9, 1979, recorded with Essex South Registry of Deeds in Book 6653, Page 99, by a Second Amendment to Master Deed dated December 28, 1979, recorded with Essex South Registry of Deeds in Book 6667, Page 39, and as further amended by a Third Amendment to Master Deed dated April 4, 1980, recorded with Essex South Registry of Deeds in Book 6692, Page 336 (said master deed as so amended is hereinafter referred to as the "Master Deed"): Building Unit- . - . Percentage Interest Derby A 10.8775 1 said unit A, Derby Building being apart of the total Master Deed,described above. Together with the undivided percentage interests in the common areas and facilities of the Condominium described in the Master Deed asset forth for the unit above. Subject to and with the benefit of all easements, rights, reservations, restrictions, agreements and provisions contained in the Master Deed, in the Agreement and Declaration of Trust of the Pickering Wharf Condominium Trust dated August 3, 1979, recorded with Essex South Registry of Deeds in Book 6624, Page 168, in the By-Laws of Pickering Wharf Condominium recorded with Essex South Registry of Deeds in Book 6624, Page 179, and in any rules and regulations promulgated pursuant thereto, as any of the foregoing may be amended from time to time. Subject to and with the benefit of the provisions of Massachusetts General Laws Chapter 183A as now in force and as amended from time to time. The foregoing unit is intended to be used for any purpose allowed by applicable law, zoning law, license, permit, use regulation, special permit, exception or variance. D. Narrative Description of TIF Zone: Needs, Problems and Opportunities: Designation of this TIF Zone meets the needs of, solves problems for and creates opportunities for Pickering Wharf Realty Trust and the City of Salem. DESCRIBE BELOW: Solving problems and meeting the needs of Pickering Wharf Realty Trust: The trustees of Pickering Wharf Realty Trust made a major investment in Salem upon the purchase of Pickering Wharf. The trustees were seeking an opportunity to enhance this important investment and recognized that one of the problems facing Salem was the need for additional hotel accommodations. The potential space available at Pickering Wharf was considered an ideal location. The developers conducted an extensive financial analysis of the project and concluded that the development would not be economically feasible without property tax relief through a TIF agreement. Their findings were supported by a Hotel Study conducted by Landauer Group that indicated the Pickering Wharf hotel site was the most suitable location in Salem for new development and the one most likely to be supported by the market. Their analysis also concluded that the cash flow generated by the project for debt service would not be sufficient to attract private sector developers without economic assistance from the community. 2 Creating Opportunity for Pickering Wharf Realty Trust: This project provides Pickering Wharf Realty Trust with an ideal opportunity to enhance the value of Pickering Wharf and to establish an anchor in the heart of Salem's busy waterfront district. In addition, the ground floor of the hotel will showcase an improved quality and quantity of retail shops that will further enliven Pickering Wharf. Pickering Wharf Realty Trust plans to construct an eighty +/- room, three story hotel containing standard 14' x 36' rooms featuring kitchen facilities. The ground floor will offer 18,000 square feet of retail space. The development will be a total of four stories The cost of the hotel portion of the project is $3,451,100. The construction timeframe is expected to be approximately one year, with construction commencing in August of 1998 and ending in June of 1999. The project is anticipated to employ 60 permanent, net, new jobs in the ETA. Solving problems and meeting the needs of the City of Salem: The hotel is to be located in the heart of Salem's waterfront area on one of Salem's main entrance corridors. The City has launched several initiatives to improve the appearance of commercial properties on Salem's entrance corridors. This project will be a catalyst for additional development and rehabilitation of the waterfront area The City has historically suffered a loss of tourist revenue due to a limited supply of hotel rooms. The new hotel and retail property taxes, coupled with room tax and parking fees, will have a significant impact on the City's economy. The waterfront location of the hotel will generate more business for local retailers, restaurants and tourist destinations. In addition, the City and the developer have entered into a Memorandum of Understanding in which each party has pledged to work in a public/private partnership to secure state and federal funds for items such as increasing public access to the waterfront. There is an unfinished segment of a seawalk from Congress Street to the Chase House restaurant to be addressed with the use of grant funds. Creating Opportunity for the City of Salem: Designation of the TIF Zone and approval of this TIF Plan will help Pickering Wharf Realty Trust establish a new hotel in Salem, which will generate jobs, room taxes, parking fees, and property taxes of$185,121 at the expiration of the TIF. The waterfront location of the hotel will generate more business for local retailers, restaurants and tourist destinations. 3 E. Property owners within the proposed TIF-Zone: - The property owner within the proposed TIF Zone is the Pickering Wharf Realty Trust. The Trustees are: J. Hilary Rockett M. Denise Rockett J. Hilary Rockett, Jr. T. Michael Rockett Richard P. Rockett Pamela M. Rockett II. Time The TIF Plan and TIF Zone described here will be in effect for a period of thirteen years. III. TIF Zone & Economic Development A. Economic Opportunities and Economic Benefits to the Community: Approval of the proposed TIF Zone will create the following economic development opportunities and benefits: • Creates jobs: 60 net, new permanent jobs • Generates tax revenue: see attached spreadsheet entitled "13 Year Tax Increment Financing Plan" • Improves appearance of 90% abandoned property through demolition • The City's tax base will be expanded; room taxes and parking fees will be generated, please see attached spreadsheet entitled "13 Year Tax Increment Financing Plan" • The reconfigured retail will generate approximately $20,000 in additional tax revenue per year in property tax revenues • The hotel is to be located in the heart of Salem's waterfront area on one of Salem's main entrance corridors. The City has launched several initiatives to improve the appearance of commercial properties on Salem's entrance corridors. This project will be a catalyst for additional development and rehabilitation of the waterfront area The City has historically suffered a loss of tourist revenue due to a limited supply of hotel rooms. The new hotel and retail property taxes, coupled with room tax and parking fees;will have a significant impact on the City's economy. The waterfront location of the hotel will generate more business for local retailers, restaurants and tourist destinations. 4 B. Proposed and Potential Land Uses: (analyze how the land uses are appropriate for anticipated economic development) The developer will construct a hotel and retail development at Pickering Wharf on the waterfront in downtown Salem. There is a demonstrated need for additional hotel accommodations due to Salem's popularity as a tourist destination. C. Zoning in the TIF Zone: The TIF Zone is located in district B-5, Central Development District. D. Hazardous Waste: (identify any parcels, public or private, in zone which are confirmed hazardous waste disposal sites, in accordance with chapter 21E, MGL. Describe any public or private site remediation activities and any reuse plans) Not Applicable IV. TIF Zone Projects A. Planned Private Project: Pickering Wharf Realty Trust will construct a 50,000 square foot, four story, approximately 80 room hotel,with the ground floor to be occupied by 18,000 square feet of retail uses. Existing retail and office buildings will be razed and a bank will be relocated on site. B. Provide Documentary evidence of the level of the developer's commitment to the proposed and required construction in the TIF project: The developer has retained architects, engineers, surveyors and attorneys for the development of this project. 5 C. Budget for Project: The costs of completing the project are as follows: Soft Costs Budget Architecture Fees 150,000 Structural/Mechanical Engineering 38,000 21 E Site Report 10,000 Legal Fees 18,000 General Conditions 85,000 Business Relocation Costs 125,000 Bank Loan Fees 150,000 Permit 15,000 Site Superintendent 75,000 Office Expense 30,000 Hard Costs Demolition 145,000 Site Preparation 45,000 Piles/Caps 160,000 Grade Beams 129,000 1st Floor Structural Slab 106,000 Structural Plank/Steel Structure 513,000 Concrete Slabs (3) 94,000 Roofing 145,000 Towers/Light Steel Framing 0 Staircases 51,000 Elevator 125,000 Exterior Wall System 397,000 Glass& Glazing 150,000 6 Misc. Exterior Allowance 50,000 Sprinkler System 130,000 Electrical 197,000 Plumbing 175,000 HVAC 365,000 Interior Demising Partitions 157,000 Interior Allowance 215,000 Fire Alarm System 56,000 Excavation A6,000 Materials 22,000 Grading/Compaction 26,000 Curbing 22,000 Landscaping 27,000 Sprinkler System 7,100 Paving 61,000 Walkway 49,000 Sidewalk Pavers 25,000 Special Landscaping 15,000 Total 4,441,100 Breakdown of costs Hotel 3,451,100 Retail 900,000 D. Relevant business plans: Time schedule for development: Scheduled construction commencement: August 1998 f 7 Scheduled construction completion: June.1999 Expected increases in job creation: 75 temporary construction jobs 60 permanent hotel jobs Estimates of tax revenue based upon increased valuation of parcel: E. Participation in other federal, state and local economic development programs and initiatives: The City intends to pursue grant funding such as CDAG or PWED. F. Planned Public Projects: The City and the developer have entered into a Memorandum of Understanding in which each party has pledged to work in a public/private partnership to secure state and federal funds for items such as increasing public access to the waterfront. There is an unfinished segment of a seawalk from Congress Street to the Chase House restaurant to be addressed with the use of grant funds. The details of this project will be forthcoming. V. Financing for TIF Zone Projects A. Anticipated Financing for Private Projects: Source: Amount: Unknown $4,000,000 B. Anticipated Financing for Public Projects: Source: Amount: PWED TBD CDAG TBD 8 C. Detailed Projection of Costs of Public Construction: TBD D. Will Betterments be used to finance any public-private projects, now or within the proposed life of the TIF Plan? N/A E. If Betterments or Special Assessments are a part of the TIF Plan: N/A Schedule for defrayal of construction costs: Agreement-of all participating parties-in the betterment:" F. Describe how private projects will be financed: Evidence of private financing commitments: Project proponent is investigating financing alternatives with local banks and lending institutions. VI. TAX INCREMENT FINANCING A. Authorization to use TIF: The attached City Council resolution dated March 9, 1995 authorizes the City of Salem to use TIF in the Salem EOA. Also attached is a City Council resolution approving this TIF Plan for Pickering Wharf Realty Trust. B. Amount of proposed tax increment exemptions from property taxes: As the attached spreadsheet shows, the Chairman of Salem's Board of Assessors estimates that property tax benefits will total approximately $1,369,964 over thirteen years. Also, see the description of the proposed TIF Plan in part D of this section. C. Maximum percentage of public project costs that can be recovered through betterments or special assessments: N/A 9 D. TIF exemption from property taxes: As the attached spreadsheet shows, the City estimates the tax benefits to total approximately $1,369,964 over 13 years. The exemption plan works as follows: Year Pickering Wharf Realty Trust Pays 1 - 5 Only the base tax bill 6 -8 10% of the increment, plus the base tax bill 9 20% of the increment, plus the base tax bill 10 40% of the increment, plus the base tax bill 11 60% of the increment, plus the base tax bill 12 80% of the increment, plus the base tax bill 13 100% of the increment, plus the base tax bill The effective date of increment exemption is July 1, 1999 (Fiscal Year 2000). Term of the exemption: 13 years VII. Approval of TIF projects TIF projects are approved by the Salem City Council. The Mayor and his staff are responsible for negotiating TIF Plans and, after Council approval, executing those plans. Evidence of local approvals of the proposed TIF Zone and TIF Plan is provided here in the form of a resolution authorizing a TIF agreement passed by the Salem City Council on June 11, 1998. ma\tiffotms\Hfplan 10 PICKERING WHARF HOTEL 13-YEAR TAX INCREMENT FINANCING PLAN Base Value $332,300 Tax Rate $34.50 Value After Hotel Constructed $3,873,400 Levy Percent Growth 2.5% Increment in Value $3,541,100 Base Year 1998 Year Property Tax Taxes at TIF %* Base Tax Taxes on Taxes Paid Tax Benefit Room Parking Total Tax Value Rate 100% Value Bill Increment Each Year* Each Year*`*.: Tax Fees Benefit:to Cit BASE $332,300 $34.67 $11,521 0% $11,464 $0 $11,464 $0 $0 $37,800 $49,264 1 $3,873,400 $35.54 $137,648 0% $11,809 $0 $11,809 $125,839 $55,188 $38,934 $105,931 2 $3,873,400 $36.43 $141,089 0% $12,104 $0 $12,104 $128,985 $59,686 $40,068 $111,858 3 $3,873,400 $37.34 $144,616 0% $12,407 $0 $12,407 $132,210 $65,324 $41,202 $118,933 4 $3,873,400 $38.27 $148,232 0% $12,717 $0 $12,717 $135,515 $70,181 $42,336 $125,234 5 $3,873,400 $39.23 $151,938 0% $13,035 $0 $13,035 $138,903 $72,112 $43,470 $128,617 6 $3,873,400 $40.21 $155,736 10% $13,361 $14,238 $27,598 $128,138 $74,044 $44,604 $146,246 7 $3,873,400 $41.21 $159,630 10% $13,695 $14,593 $28,288 $131,341 $75,975 $45,738 $150,002 8 $3,873,400 $42.24 $163,620 10% $14,037 $14,958 $28,995 $134,625 $77,907 $46,872 $153,774 9 $3,873,400 $43.30 $167,711 20% $14,388 $30,665 $45,053 $122,658 $79,839 $48,006 $172,897 10 $3,873,400 $44.38 $171,904 40% $14,748 $62,862 $77,610 $94,294 $81,770 $49,140 $208,520 11 $3,873,400 $45.49 $176,201 60% $15,116 $96,651 $111,767 $64,434 $83,702 $50,274 $245,743 12 $3,873,400 $46.63 $180,606 80% $15,494 $132,090 $147,584 $33,022 $85,633 $51,408 $284,625 13 $3,873,400 $47.79 $185,121 100% $15,882 $169,240 $185,121 $0 $87,565 $52,542 $325,228 TOTALS $2,095,573 $725,552 $1,369,964 $968,927 $632,394 $2,326,873 NOTES *TIF % = Percent of increment that is taxed Room Tax at 4% of Projected Room Revenue(based on 84 rooms) **Taxes Paid Each Year = Base Tax Bill plus Taxes on Increment Parking Fees for 84 spaces @ $450/space increase 3% per year. ***Tax Benefit Each Year= Benefit to Hotel Developers Value of Hotel=cost of construction plus base value Base Value consists of FY98 Assessed values of 5 condos: 221 Derby, 225 Derby(uhb), 225 Derby (uhc), 3 Pickering Way, 7 Pickering Way Does not include enhanced value of ground floor retail which will be fully taxed. pickfinmk4 RESOLUTION AUTHORIZING THE USE OF TAX INCREMENT FINANCING IN THE SALEM ECONOMIC OPPORTUNITY AREA WHEREAS,.the City of Salem is part of the area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS, there is strong support for economic development and the use of Tax Increment .Financing as an economic development tool to create jobs and encourage business expansion and relocation to the City of Salem; NOW THEREFORE BE IT RESOLVED by the City Council of the City of Salem that: (1) Tax Increment Financing may be used as a tool to encourage economic development within the Salem Economic Opportunity Area. (2) The Mayor is hereby authorized to execute and implement Tax Increment Financing agreements. Adopted this 7 day of GGA/ 19 / 5 by the Salem City Council at a regular City Council meeting with a.quorum present. Neil J. Harrington, Mayor Date ATTEST: fDeborah E. Burkinshaw, City Clerk SEAL 3 CITY OF ' SALEM seg RESOLUTION AUTHORIZING A TAX INCREMENT FINANCING AGREEMENT For Pickering Wharf Realty Trust Ordered:WHEREAS,the City of Salem is part of the area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS,the Mayor of the City of Salem has prepared a Tax Increment Financing Agreement in accordance of Chapter 40 and 751 CMR 11.00; WHEREAS,there is strong support for economic development and the use of Tax Increment Financing as an economic development tool to encourage business expansion in and relocation to the City of Salem; WHEREAS, there is strong support for using Tax Increment Financing to encourage the development of a Hotel at Pickering Wharf,the property owned by Pickering Wharf Realty Trust; WHEREAS,this property is located in the Salem Economic Opportunity Area; NOW THEREFORE BE IT RESOLVED by the Salem City Council that: (1) The Tax Increment Financing Agreement be adopted as it has been substantially submitted to the City Council. A copy of said Tax Increment Financing Agreement is attached as Exhibit A, and made part of this Resolution. ('_) The area to be designated as a Tax Increment Financing Zone is: The following condominium unit in the Pickering Wharf Condominium (the "Condominium") in Salem in the County of Essex and Commonwealth of Massachusetts, created by and described in the Master Deed of Pickering Wharf Condominium dated August 3, 1979 recorded with Essex South Registry of Deeds in Book 6624, Page 141, as amended by a First Amendment to Master Deed dated November 9, 1979, recorded with Essex South Registry of Deeds in Book 6653, Page 99, by a Second Amendment to Master Deed dated December 28, 1979, recorded with Essex South Registry of Deeds in Book 6667, Page 39, and as further amended by a Third Amendment to Master Deed dated April 4, 1980, recorded with Essex South Registry of Deeds in Book 6692, Page 336 (said master deed as so amended is hereinafter referred to as the"Master Deed"): Buildiniz Unit Percentage Interest Derby A 10.8775 said unit A, Derby Building being a part of the total Master Deed described above. i Together with the undivided percentage interests in the common areas and facilities of the Condominium described in the Master Deed as set forth for the unit above. Subject to and with the benefit of all easements, rights, reservations, restrictions, agreements and provisions contained in the Master Deed, in the Agreement and Declaration of Trust of the Pickering Wharf Condominium Trust dated August 3, 1979, recorded with Essex South Registry of Deeds in Book 6624, Page 168, in the By-Laws of _ Pickering Wharf Condominium recorded with Essex South Registry of Deeds in Book 6624, Page 179, and in any rules and regulations promulgated pursuant thereto, as any of the foregoing may be amended from time to time. Subject to and with the benefit of the provisions of Massachusetts General Laws Chapter 183A as now in force and as amended from time to time. The foregoing unit is intended to be used for any purpose allowed by applicable law, zoning law, license, permit, use regulation, special permit, exception or variance. (3) A map of the Tax Increment Financing Zone is hereby attached as Exhibit B and made part of this Resolution. (4) The Tax Increment Financing Agreement shall be binding on all subsequent owners of the property in the Tax Increment Financing Zone. The City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement, as specified in the Tax Increment Financing Agreement. (5) A copy of the adopted Tax Increment Financing Agreement shall be forwarded to the Massachusetts Economic Assistance Coordinating Council for its approval. (6) The effective date of the Tax Increment Financing Agreement shall be July 1, 1999 (Fiscal Year 2000), whichever is later. (7) The Mayor is hereby authorized to execute and implement the Tax Increment Financing Agreement. Adopted this 11th day of June, 1998 by the Salem City Council at a regular City Council meeting with a quorum present. iz 14g8 Stanley J. USOVI , Jr., MayorU Date ATTEST: &Deboirh E. Burkinshaw, City Clerk SEAL EXHIBIT A: Tax Increment Financing Agreement EXHIBIT B: Map of Tax Increment Financing Zone CITY OF SALEM Yea and Nay Vote of City,Canna Upon the Question of . . //— 1998 . Yea may, Pres. A6eenE Mmt E BIsQ Jobe J Dooah.e Reghm R.F1ym T�&Florey Hevm R.Harney Sarah M..Hayes . WiRiam A.Hdky JoanB..Lovdy seenJ-Mdaa in PeEer L Faal[owslo. Leoortd R O'Leary,Fare. TOTAL CffY CUMK - TRUE COP ATTEST C CLEAN SALEIWr MASS, TAX INCREMENT FINANCING AGREEMENT CITY OF SALEM, MASSACHUSETTS - - - - and PICKERING WHARF REALTY TRUST This agreement is made this day of JUN 4, 1998, by and between the CITY OF SALEM, a municipal corporation duly organized under the laws of the Commonwealth of Massachusetts, having a principal place of business at City Hall, 93 Washington Street, Salem, Massachusetts, 01970, acting through the Mayor, Stanley J. Usovicz, Jr., (hereinafter called "the CITY"), and PICKERING WHARF REALTY TRUST, with a principal place of business at 190 Pleasant Street, Marblehead, Massachusetts, 01945 (hereinafter called "the COMPANY") . This Agreement will take effect as of July 1, 1999 (Fiscal Year 2000). WHEREAS, the COMPANY wishes to construct a hotel at Pickering Wharf in Salem; and WHEREAS, the CITY is willing to grant tax concessions in return for guarantee of the construction of the hotel property and the creation of employment opportunities for local workers; and WHEREAS, the Salem City Council resolved on November 9, 1995 to allow the use of Tax Increment Financing as a tool to encourage economic development within the Salem Economic Opportunity Area; and WHEREAS, the Salem City Council resolved on June 11, 1998 to endorse the Tax Increment Financing Plan negotiated by the CITY and the COMPANY. NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties do mutually agree as follows: A. THE COMPANY'S OBLIGATIONS 1. The COMPANY shall develop the hotel property at Pickering Wharf in Salem. "The FACILITY" as used herein means a building containing approximately 50,000 square feet plus site improvements and refers to the Hotel portion only of the project. 2. During the life of this agreement, if the COMPANY decides to sell the FACILITY or the business or to otherwise transfer control of the FACILITY or business and/or operations thereof, the COMPANY shall give the CITY at least three months notice of said sale or transfer. Said notice shall be given by certified mail, return receipt requested, to the Mayor, City Hall, 93 Washington Street, Salem, Massachusetts, 01970. B. THE CITY'S OBLIGATIONS 1. The CITY shall grant a tax increment financing exemption to the COMPANY in accordance with Massachusetts General Laws, Chapter A, Section 3E, Chapter 40, Section 59, and Chapter 59, Section 5. Said exemption shall be granted on the improvements to the FACILITY. Said exemption shall be valid for a period of thirteen (13)years, beginning with fiscal year 2000 (July 1, 1999) and ending with fiscal year 2013. During each year of this agreement, the company will pay taxes based on the base value of the FACILITY and on that portion of the value of the FACILITY which is not exempted under the agreement. The base value is established by the Board of Assessors (the Board) and is the current value of the FACILITY unless an abatement is approved by the Board. The exemption schedule on the value of the FACILITY works as follows: For the first five (5) years, the COMPANY will pay only the base tax bill and will be granted an exemption of 100 percent of the full value of improvements to the FACILITY. The full value of improvements to the FACILITY is hereinafter called "the INCREMENT". In years six, seven and eight,the COMPANY will pay taxes on 10% of the full value of the INCREMENT, plus the base tax bill. In year nine, the COMPANY will pay taxes on 20% of the full value of the INCREMENT, plus the base tax bill. In year ten, the COMPANY will pay taxes on 40% of the INCREMENT, plus the base tax bill. In year eleven, the COMPANY will pay taxes on 60% of the INCREMENT, plus the base tax bill. In year twelve, the COMPANY will pay taxes on 80% of the INCREMENT, plus the base tax bill. In year thirteen, the COMPANY will pay taxes on the full value of the FACILITY. C. OTHER CONSIDERATIONS I. This Tax Increment Financing Agreement shall be binding on all subsequent owners of the property. The City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement. 2. If the COMPANY decides to expand the facility at any time during the life of the Tax Increment Financing Agreement, the CITY and the COMPANY may renegotiate the Tax Increment Financing Agreement to exempt all or part of the value of the expansion from property taxes. The exact amount of that exemption will be determined at the time of expansion. Executed as a sealed instrument on the day and year first above written. CITY OF SALEM PICKERING WHARF REALTY TRUST Stanley J. U,sovi<V, ., Mayor"" J. HilaryRockett,\F6tee ,h2f2� 1 C � 7 tc/ Notary Public E/ My commission expires 6 _ tNVA R 3 � 2R w� 3„ }} f L 1 5 , w Y P i NPI(AL SHITE FLOOR nAN,• - n' _TYPICAL INN FLOOR PLAN• a v ro sl ;© �' al f - ^ � c W-,+k w EA+K C IIP4 L<_ m _ 7' iy�y W ply � •jNR"' � l _ E� ( A8 k ��),.; 4 H `-x��I�lf� ��'�n a �n� la�o`F� ��I� S I �) � IxI� s���u +dF6�� ,. � a� � 17t•S • ,� A � ,_� � lI �' €� �• �1r '�Sa�R�s Il � I I �.�'I _� I � �}—, � � � �,•� m, K ,1 Ir 1 mw {I ' - 9 E vF'0¢ivEnHSVn u 3 {. .S H toP OFp Y C/\ •P/PNK FLOOR PLPNUJ Beverly & Salem Regional Economic Target Area ESSEX,,- TY SSEiTY � 1 \ / O f � 1J 1� .11 \ �J I if C \ I yy C+ +✓�aa ` It �I \ '`\��--_—��-�-_�- r_- E o r 4 00.n1[N•! � / Y '' 4kV tP>•L � �>(. V YOOOIYT I^ [bn �• p a >F[PILI tr'Lpe n JI / r g�'.• � ,ry a .fL� ty � rT '° . a'' G NuwYtnT�i I �/!Sr ar ira^ of > +,� ^ Y _ a<. + ; .•p<i i / � a' A. - * � •t' ' • r f caosa E n to a / EXTXAM EIE/ � ^ C e F i • +.R yo' > Tr d' ( I t !f O f f ° + `( \ /� �, Y i 4 tt i ��� +r >+. � al >;� wJ" u F°t a • F •+� 1 ♦f f f +R J f tR 44 + > OtL1M / Ja citpe +ru �� ® aP • t V.tt ° n t F� CO+ l.Vt. 'llRRr+��� fR F +� +•� ++°k+ ♦ ! 1 It - D D +Vt � • a C+ +�' ® S a [tPyO'L dr n Af a,+ y,L. I LMan1YOTOn a0,NOw01 p � ^ COMMON X AEI[ 8T, L L 1 n S V 1IEF ZONE Y 1 •rr +t of 4�p 1�Q. aatt 52ET e A aT ElA ^• . h+ °P�4>�a u ya u� Z cC 16 +C ^ F r lN. uy,�R' lyY / / 16 4+r•a'C a \/+td[' a?� > ' v ,-iii � F � -- _ D oke �' y Air Ir - MIYOMFL / • +Y +• 4 +t tf1>, a• 4°Y Jl �.i4 + O r LTJ ,fit O.Y N°, / (� Sq l +' ` 4R 's < I O t\ ML[Y YLIFTY[ • Y- ^ / Nf/n� r+ . y 1' M>T°NLL MITOFC • / NJ + 4a � � •+ artl / t�� ^ >t♦ / $E. / b•r t WILLOWS 4 E , - Ava. PARK • T N.ANi f & y` A. tFtrM .0.f naX c'. :nY l. Fow[ P r+> ° °+atP o.L•+ PALMER COVE LIG"T l U Jr °(.�, a + ♦ I / , C' \� e EpJlf}I iL001. � COVE1\� Vi • •y. l.+a GLENOALE (> 7 r+ COVE M�N��a Np • a +4tr• A>Y • •/ gii;ttN ` + O \ J U 14 1 P P 91N7 FON 1 ` \ • M 0 1 J aUG.T nOYat ------ - �� - p General Location Map @ mRS Lg um FEET ET Pickering Wharf Hotel Tif Zone Indicated aoo ° 197E - 1978 I 1981 989 1993 I ^ [ITT 9X.1.9[• SIN t ". ^%DERBY f�\eo V 2 220.223 2 ,P - L"3 09 14 go 3n tp•' a 9° } 1 HA�NTH°RNE 40 0 s Z. © 'o ` iALEM , MASSAC HUSETTS 4°9 P = q�, a-g ��9�, °P 'm 445 1825 m v 0 ASSESSORS MAPS ta. 10400 ` 446 \ © � A, P 595 tat N � 37r N\ ",o k.NogHr O 4 9 438 tPNGOONt 40 �l 24017 O GRE96f 3 • Y SPF\V a �e�o�� Fy.. \\ tea C7 as �8p0 O PICKER\N� (.1\ a�RBIV47EER 4$9 20 » 2 W �J 408 v aO P P48CI t• 1928 43 N a 4479 g( 4.55 AC 0 440 15, 523 m 129 600 lyyQRF \ 25,453 Ln v / az 1 °R4ND a9 441 \ 1n N — - - 76 1°RR °E o Z/,zoo �- Public Project 79 R7o 3 4611 a, ac 9° 89 7� S 0 U 1 � , RA Mp tP �— 436 w "` 435 ° P f N IF 54C m N z' TRgN 16,516 SPO R MfR m a _� p •\ lo. t9 y4 39 40 S dl -3 1 A4 385 R Rki D D Y eo'tt y4 38 7 1d2 T 38 f �c e 19 46 1 3384 3264 zepo �^ T 4,0r 5d 36C- i67 10 4 36•g0`�� eo 'C 397 2 � 37g 33p2 I 395 2896 23690 39 39 4 , 90 ' 49 2841O2 399 {--- --- —. 593 394 0Na 8 2288 a- 37 -es E E T 81 965 ` Assessors' Map- 10 ,T-1e T p ! l 44 so a-34 s9 -, ,4-4� •s-b'0 et-o4 ee-ee eo es 70 Public Project Indicated 4d .so 357 35 353 352 36 359 246. 2813 356 4000 3488 424 351 X49 348 5680 ❑ 5 60 4690 :023 289.9 37x50 760 � ��� 3476 4.560 r1I —J1 0 www 369 1 1 7 1 37Q 1 I � 4 6SS � NOW y , � '�� '. .F �'. � ms's I�� �4��+,. 59 � � �&a��� � •,' •• 1 R Attachments Letter from Project Proponent's Accountant Salem Evening News Article Excerpt from Landauer Hotel Study DEC-03-97 21 = 33 FRDM. I0. 1608740G728 iR PAGE 2/2 6 wN aaeFT;MaSS�Mtroay,NoVe nWer 17,1997 C3 ales_ I�Te usie store Co lav $AiRtd —Anew tam Opening rx�'y thts.;week.ou D Street Pt!orauaes tube a ba en Jbr musict • .. 'yt t'�i, loveis-wlio ivatu know mon hta7sto Bar r, is the had'. vmim�for C*1>cri; b Iatcry.. Aaaftaddmo fictn' Boilers . :abdrow isatariioh i 'The:i65d�p atsBY. .'by§r:wiII •hiveiSo,pop..m .tltla':on'`. 11 tDPv;.haa!MDk** 'We"=s.Viestaae astruty : �Pealuie3n says.Sua. wifewho wP�tIB tW t him,'It's dot jaa ,an. With bines,but. . Sen dm almo'®tt the 1Le>imdceleimato 1betlist'p(-;- Its]dud Ai oder CD erau -on =L- are 111M and .. er which rnatomers stand as a YO, �P the work .. :theyv'echoscyand P1ac0,in >�cIIktory_ . 17w narrative hight ariahil artists C "1113= I2WOr inwact en Q r2 bard tack.ZCohen Ariter Geuncs.. it -mawh9 People+1T , style or �RYt'06lIItd but t emt$IDt>iawith at 292 DNW St. �apre ..�.:. aVeaht�r It fg ?t I11re�'beaays .., W. q`,"��EM w1Il � sTafmns =• •: .:�. :..:::_�., - '�r.Y7,t::bx::;: • - hetptaeopleatane �vcfh� Dany'ecabbit' •,:'_:!��. ;. ' �� cea slits Hatt diaa a3 ;COmOu 1c rattan.. ..: ` .•..~:.: Cehen�the �9ntae>eldiviuoaslr Oo-m_oM ?" ailKey tlpiyyeaith=" detsBmtadl>mm wte6 fracttmvic�orertuaalmilarl ,teomtotbe 't b. een�comtpy�•bII0 fie/ d-neemrofmusic and idm) st Caonatttie>m alac>>z�•o Z"�"'�' Salem-�, _': 3s:'withiheDu'tiitic�arade Stm es, Inge Em is Sat to atreet.siDd 1�osslhLY a, °fit: 8e hel the com- the °Pe�ftldayat ;-�Ott of An l0em"�-� � � �s7i1C9Vhaif,ltseemeA .. s+ys Peahve Excerpts from Landauer Hotel Study Introduction The primary goals of the study were threefold as outlined below: To determine the market and financial feasibility of hotel development at three identified locations within the city: * The former site of the Parker Brothers manufacturing plan; * A site at Pickering Wharf, at the intersection of Derby and Congress Streets; * A site at the current location of the Hawthorne Hotel on its rear parking lot; To assess the economic benefits of the hotel and prospects for public sector financing; and, To develop a report and recruitment package which the city can use in the marketing of the project to both private and public sector entities. Hotel Projects Under-Construction (p. 6) 1. 120-Room Hampton Inn on Rt. 1 2. 85 Room Homewood Suites on Rt. 1 3. 97 Room Mainstay Suites in Centennial Park 4. 66 Room Microtel Hotel on Rt. 1 5. 115 Room Extended Stay America in Danvers Note - 500 Rooms are being built within five (5)miles Prospective Financial Investment Analysis (p. 6) A prospective financial analysis was conducted on each of the facility profiles outlined above (a 120 room full service facility and 66 room limited service facility). The result of this analysis indicated, that cash flow available for debt-service and investor return was not sufficient enough to generate private sector developer interest in either project. However, the cash flow generated by the limited service hotel scenario was closer to supporting the development costs associated with such a project. The gap which existed between the cashflows development supportability against industry supplied development costs was close enough to investigate public sector financing options which could be pledged as low cost of capital mezzanine financing. Site and Facilities Analysis (p. 6 & 7) Our analysis has concluded that the Pickering Wharf location is the most suitable for-hotel development utilization at this time. Land availability will be a limiting factor in the potential project's scale and range of facilities. Development Potential Analysis (p. 8) A small 66-room limited service hotel at Pickering Wharf appears market supportable. Significant concessions will be required from the City of Salem and a potential developer in order to render the project financially feasible. Initially, a franchise affiliation would be recommended. Potential affiliations include: Comfort Inn, Days Inn, Hampton Inn or a Holiday Inn Express. Conversely, an independently run hotel allied with a strong nationally or regionally recognized operator may be an alternative. Economic Benefits and Prospective Financing (p. 8 & 9) Employing discounted cash flow techniques to evaluate the financial viability of a 66-room limited-service hotel built in Salem provides indications of development supportability of approximately $48,500 to $51,500 per room. This level of estimated development supportability indicated that the prospective project is not financially feasible based on an anticipated development cost of$4.3 million to $4.6 million, less approximately $900,000 for retail space development or$51,500 to $56,000 per room, and probably would not attract private sector hotel developers or investors. However, a major stakeholder in Salem may be motivated to develop the project for other purposes such as: An opportunity to enhance the overall value of an existing major real estate investment; and The hotel use will create an anchor and provide additional synergy for a total redevelopment program. In any event, it will be necessary for the City of Salem to offer significant incentives in order to attract additional hotel development in Salem. These incentives might include, but are not limited to, real estate tax abatement or suspension, participation in below market financing such as bond or available government finance programs. Economic benefits may result from the development of a hotel in Salem include: * Increased City revenue generated from hotel occupancy taxes and real estate taxes. * Provide a catalyst to attract additional development interest within Salem * Redevelopment catalyst for waterfront * Increased area employment * Enhanced visitation and greater expenditures Proposed Hotel Development (p. 55) The hotels located in Salem will be particularly vulnerable to the hotel expansion currently taking place on the North Shore's highways (including 500 rooms now under construction). In most instances, these locations offer higher visibility, greater accessibility and closer proximity to the major demand generators in the North Shore market. As a result, expansion of the hotel supply in the future will have a greater impact on hotels with secondary locations such as Salem. Market Position (p. 64 & 65) Despite its waterfront location and close proximity to Salem's many attractions including tourist destinations, restaurants and shopping, the prospective hotel will still have a locational disadvantage when compared to the competitive hotels located on the area's highways. The prospective hotel will have a particular advantage in attracting vacationing families visiting the area due to envisioned amenities and waterfront location. The region's seasonal tourism pattern combined with the relatively low level of corporate hotel demand generated within the immediate Salem area will preclude large- scale hotel development in Salem. Financial analysis of a 120 room full-service hotel developed on either the Pickering Wharf or Parker Brothers site was deemed unfinancable due to relatively low revenue potential and high development costs associated with the meeting and dining facilities required to attract group business in the shoulder and off-season periods. Expansion of the Hawthorne Hotel does not appear financially feasible due to the high cost of replacing the current and expanded parking requirements of the hotel with structured and/or underground parking. Project Financing Analysis (p. 77 & 78) A comparison of what the prospective cashflow analysis would yield on a supportable development basis per room, against the costs provided by Miller Dyer Spears and national chain representative, indicate that the proposed project, as proposed, is not financially feasible under conventional private sector terms. Not only would the prospective cash flow not support the hard development costs associated with the above referenced costing, it would not begin to cover the costs associated with the underlying real estate or other hard and soft cost including, but not limited to planning, design, construction management, construction loan interest, permits, bond and developers fees, and legal services. Further, it would not address the typical private sector return on investment rates which range between 15% and 20%, on a cash basis. This scenario,would make it nearly impossible to entice private sector investment interest in the project, due to the inability to secure conventional mortgage loan financing and the lack of a suitable return. Conventional mortgage loan financing requires, amongst other things, a 50%to 70% loan to value, and a debt coverage ratio of approximately 1.35%to 1.45%. A detailed summary of equity and debt parameters are included in"The Hotel Investment Outlook"publication included as an addendum to this report. Despite the financing hurdles that appear to face the proposed project, and assuming that the City of Salem wants to continue to investigate ways in which to bring a hotel project to fiuition, there may be some creative ways of structuring a transaction by bringing public sector financing to the project that may make it more palatable for a private sector developer. However, it is also implied in this scenario, that the private sector developer identified would need to be flexible in their return expectations, and more probably, have other financial incentives for participating in the project. Should private sector developer interest be identified despite these project hurdles, participation and/or contingent participation on the city side could include the pledging of all or part of the following financing vehicles and/or incentives: * Urban Development Action Grant (UDAG) * Tax Increment Financing * Community Development Action Grant * Public Works Economic Development Grants We believe that the proposed hotel development project can meet the general private match requirements for the UDAG and that the project will generate construction jobs, and will create long term employment opportunities for low and moderate income families in the region. Provided that the UDAG is still available to the City we propose that it be made available, along with the City's funds, as a loan to the developer on, terms similar to those in the original UDAG Agreement. This will make available $1,094,180 to the owners or approximately $18,000 per room. The loan would have the meet HUD requirements for job creation and meet the match requirements of the UDAG program. The minimum private match for UDAG was generally 2.5 to 1 (private dollars to public). This would mean that to retain the UDAG the project would need to see at least $2.4 million in private investment, which the hotel project can meet. rnv, Sace�� £- ke! 4A4f-( at e_ 6c.. A5 i q Ka✓4�4 —1'104-a4-�a,iaaf- frojec-,f- � /GLH- C -Ci CUZQA Sios�1, A4.e Gt vt 4%QGc t�L �Bv+a.ugr t_ Ait¢Q•�. �_ . I v uGl �i vv�P,l��i.;�o i s suG i tX i�yt -E �M -�cL►a"'O✓1 Ort 4ac q t 4'vU 1 a • ,(rd mZ ._ _. - - _�.. _ . - - •.�.-T1 ,,;5.l�[ '>!t�,' :.i'-,.:r..._i �'s?JCi ! J_`j�W•i eY' '-�P.S,'. wa�--xa' y^! ' - _ -_. .._-... _ _ ._... __ �,.�yve\���f".t. „•i:, 4��..�w,�,S'J -'3 Y J3�1.`.�..?'!:�>d, e�\�a'�S.S~' ^ •'. _ .,..,T'�R�J=d—�.•T9-i'_qy— . { tit .�. J \4- t_ _ _ _ ° t s 'r"`T'-.�}. ,.—. !Y>.—,aj . - -.t �.'a••_. �+i`'•F. 'M1-fV '` -�=1'.' )1 �1 r _J C �ftG/Pwt;l� A�7PliGa-75vn s �� GJtLG�c CcryiP(p�� lax; "� Q 0. l✓rQ�T e - R e�uv ✓� � �� M� � Tir (CtS rm GFS Plate P? ��,,,d-+vC � I ; i� Y r Cern F�'ea� l2.-ajeaf- Opp/. '���� �naemA-, Vr �) rAcc ApervvAe -- zl ur)`7�- OQvts.j � ft,� 5tau, CecPi^a r` V4%&Vke pe �n-. -t,, g+-er a.1-2 pia jPc�• f PRESS RELEASE FOR MORE INFORMATION CONTACT: FOR IMMEDIATE RELEASE MAYOR STANLEY J. USOVICZ,JR. APRIL 8, 1998 (978) 745-9595, EXT. 201 Mayor Stanley J. Usovicz, Jr. announced today that the Pickering Wharf Hotel will be constructed on the Eastern Bank site. An agreement on the details of the proposal was reached late yesterday with Mr. J. HilaryR Rockett,, Jr. Vice President of Rockett Management& Realty Company. A mutually agreeable resolution on the structure of the Tax Increment Financing (TIF) plan offered by the City to Rockett Management was obtained,paving the way for the hotel development. The City will enter into a 13 year TIF Agreement, upon local and state approval, for the hotel portion of the project. The TIF is specifically targeted to the hotel development portion only. The retail development that will be housed on the first floor of the hotel will be assessed full property taxes, as will the newly relocated Eastern Bank. During years one through five of the TIF Agreement, the increase in value between the current development and the completed hotel development will be 100% exempt from taxation. This will be followed by three years at 90% exemption. The remaining five years will see a successive decline in the exemptions granted at 80%,,60%, 40%, 20% and 0% respectively. . Thus, in year 13 of the TIF, the hotel property will be fully taxed. The newly constructed retail that is a part of the project will be taxed at full value and will receive no exemptions. The new hotel and retail property taxes, coupled with room tax and parking fees, will have a significant impact on the City's economy. The location of the hotel will generate more business for local retailers, restaurants and tourist destinations. The hotel is proposed to have approximately 80 rooms on three floors, with the first story housing retail development. Eastern Bank will be relocated on the site. "The historic charm and unique features of Salem draw numerous visitors to our city throughout the year. The provision of hotel facilities in this convenient and attractive location will further stimulate economic vitality in our well known City,"Mayor Usovicz stated. "Salem, as a designated Economic Target Area, has a powerful economic development tool in the form of Tax Increment Financing. The City will reap positive effects from this project for years to come." �0cketf" ii4* re,l ah-Vv vlur -i� ('[ale j Prz) ecf- c vs t- /h vGst.3-tern¢ .- � roe fS 2 i 6-y- RucGe� Q9"Ze/rPi�9FF litr�P.v� 0�wyi'�t2�Lo °c ,6dyy �iiLC�iCJ6Ln�Q- . &OC,706 -5*X\A� �Q (gitq of �ilierett, Wttssttrhusetts (Office of the Ainvor PAUL M. MANIFF ^«` CITY HALL 02149 ADMINISTRATIVE ASSISTANT (617) 394-2270 FAX (617) 387.5770 M11for May 28, 1997 JamesAnderson, Administrator P. - School Governance, Environment and Structural Support Services Commonwealth of Massachusetts DepartmentofEducation, -; Boston, MA l Re: Edith Street Park Site/Proof of Ownership Dear Mr.'Anderson: The Edith Street Park or Robert McGrann Playground is located on a parcel of land containing apptoximately 4.9 acres. The parcel lies between Edith Street, Bryant Street and Rich Street in Everett. The real estate was conveyed to the city in individual parcels acid blocks'of parcels by various tax takings between 1934 and 1952. The land was designated as a park in 1950 and has been used exclusively for park and recreational purposes from that date to the present. This parcel will be the site of the new Lafayette School. I have attached copies of all supporting documents. % , . Very truly..yours, o John R. McCarthy Mayor The Massachusetts Economic Development Incentive Program Certified Project Application Applicant Information 1. Name and address of business(es) submitting this application: Pickering Wharf Realty Trust J. Hilary Rockett, Trustee 190 Pleasant Street Marblehead, MA 01945 Fiscal year end is: December 31 2. Name and address of project (if different from above): Pickering Wharf Hotel Corner of Congress Street & Derby Street Salem, MA 01970 3. Location of ETA: Beverly & Salem Regional ETA 4. Location of EOA: Salem 5. Authorization: I/We (print), of the entity applying for Certified Project designation, hereby certify that the information within this application is true and accurate, and reflects the project's intentions for job creation and investment."I understand that the information provided within this application shall be binding for the duration of the project certification. Signature (Date) Signature (Date) 1 6. Nature and purpose of project: Describe briefly the nature and history of the business as well as the specific expansion/growth/relocation plans: the level of new investment (with a breakdown of type of expense: construction, renovation, acquisition of equipment, etc.) and employment levels - both current and projected. Provide time frames for both the projected total investment and job creation. As part of this narrative, please explain why the business is seeking Certified Project designation. INTRODUCTION AND HISTORY OF PROJECT DEVELOPMENT Pickering Wharf Realty Trust seeks Certified Project designation for the Pickering Wharf Hotel to be developed at the corner of Derby and Congress Streets. Salem is a major New England tourist.destination that draws over 650,000 visitors annually to its cultural, historic and maritime attractions. Due to a limited supply of overnight accomodations, tourist and business visitor dollars are spent in communities such as Danvers and Peabody which have numerous hotels with easy access to major highways. The trustees of Pickering Wharf Realty Trust recognized the need for additional hotel accomodations in Salem and that the potential space available at Pickering Wharf was an ideal location. The developers conducted an extensive financial analysis of the project and concluded that the development would not be economically feasible without property tax relief through a TIF agreement. EXPLAIN REL. BETWEEN PWRT AND RMC. Rockett Management & Realty Company was established in— The Pickering Wharf Realty Trust established upon the purchase of Pickering Wharf *** Rockett Management & Realty Company acquired Pickering Wharf in June 1996 and initiated the successful revitalization of this popular waterfront destination. Pickering Wharf had been for sale since 1991 and had begun to show signs of neglect that have since been reversed under Rockett Mangagment Company's ownership. As a part of the owner's plans for a major redevelopment of Pickering Wharf, a hotel development was proposed to be located at the corner of Derby and Congress Streets. Rockett Management plans to construct an eighty +/- room, three story hotel containing standard 14' x 36' rooms featuring kitchen facilities. The ground floor will offer 18,000 square feet of retail space. The cost of the project is $_ The existing conditions of the hotel site include retail and office space contained in two buildings and an Eastern Bank. Ninety percent of the retail and office space has been abandoned for over two years. The two buildings housing retail and office will be demolished and the retail uses will be relocated to the ground floor of the hotel. The bank will be demolished and relocated on the hotel site. 2 The City of Salem had commissioned a Hotel Study, conducted by the Landauer Group, which supported the feasibility of developing a hotel at Pickering Wharf. However, the feasibility was based in part on the need for State and Local economic assistance to the developer. The City and the developer entered into negotiations on the possible use of public economic development assistance. The applicant seeks certification for the hotel portion of the project only. All newly constructed retail space, including the relocated Eastern Bank, will be taxed at full valuation. The City and the developer have entered into a Memorandum of Understanding in which each party has pledged to work in a public/private partnership to secure state and federal funds for items such as increasing public access to the waterfront. There is an unfinished segment of a seawalk from Congress Street to the Chase House restaurant. ECONOMIC IMPACT OF HOTEL AT PICKERING WHARF INVESTMENT JOB CREATION 3 7. Is this business new to Massachusetts? d Yes ❑ No If no: • Where are the existing Massachusetts facilities? • Will this project require/trigger the closing or consolidation of any Massachusetts facilities? If yes, please explain. 8. Is this project an expansion of an existing business? ❑ Yes d No If yes, check the appropriate box: ❑ at existing location ❑ at new location in same municipality ❑ at new location in different municipality 9. Job creation In order to qualify for Certified Project status, the governing statute and regulations require the creation of net, new, permanent full-time employees in Massachusetts. On the chart provided (see next page), please fill in the blanks provided. 4 Work Force Analysis and job Creation Plan Current TOTAL NEWJOBS NEW JOBS NEW JOBS NEW JOBS NEW JOBS NEW JOBS employment projected new Year I Year 2 Year 3 Year 4 Year S Years 6-13 permanent jobs Total Employees at Certified Project Facility Total Employees at Other Sites in Mass. #of Employees at Certified Project Location who live in the ETA #of Permanent Full-Time Employees #of Permanent Part-Time Employees #of Temporary Full-Time Employees #of Temporary Part-Time Employees #of Management Positions Average Salary of Management Positions #of Professional Positions Average Salary of Professional Positions #of Technical Positions Average Salary of Technical Positions #of Skilled Positions Average Salary of Skilled Positions #of Unskilled Positions Average Salary of Unskilled Positions 5 10. Certification for Abandoned Buildings: Does the proposed project involve the renovation and reuse of an abandoned building? ❑ Yes d No ❑ Unsure If yes or unsure, please answer the following questions: (a) How long has the building been vacant? (If known, state date) (b) During this period of time, what percentage of the building was vacant and unused? If the percentage varied during this time period, provide information for each change in the percent of vacant space and the applicable time period. 11. Local Employment: What actions mill you take to recruit employees from among residents of the ETA? The hotel developers believe that the majority of new employees will be ETA residents, as the company will advertise new positions exclusively in the Salem Evening News. Pickering Wharf Realty Trust has the intention and capacity to achieve the anticipated level of new permanent full-time jobs for residents of the municipality and the ETA. The local labor supply is well qualified for the nature of the postions that will be available in the hotel development. The hotel is located within walking distance of several neighborhoods which will assist in reaching the anticipated level of new permanent full-time jobs for residents of the municipality and the ETA. 12. Affirmative Action Statement: It is the policy and practice of Pickering Wharf Realty Trust** to hire and promote that person determined to be the best qualified without regard to race, color, religion, sex, age, marital status, or national origin. . 13. Agreement between the Business and Area Banks: Describe briefly the business' local banking relationship(s), if any. Does the institution with which the business banks participate in the Massachusetts Capital Access Program, which is designed to commit a portion of the business' deposits to fund loans to local businesses? 6 14. Economic benefits of project certification: Provide a description of the economic benefits that are anticipated for the business and the project, if the project is certified. Also, provide any information, documentation or studies demonstrating any additional benefits (i.e. reduction of blight, reuse of abandoned buildings, clean up of contaminated property, job training, provision of day care, any contributions to the community, etc.) likely to accrue to the area as a result of Certified Project designation. Please describe: (use separate page and it will be incorporated into document) Economic benefits to applicant The benefits of project certification are summarized below: • Development is economically feasible with the receipt of investment tax credits and property tax benefits • The developerwill receive approximately $ *** I nlocal property tax benefits over 13 years • The construction of a $*** hotel will entitle the company to $*** in state investment tax credits • The developer will receive additional state investment tax credits as a result of investment in equipment for the hotel • project provides an anchor for the Pickering Wharf development and orients the visitor to Pickering Wharf and the waterfront • a 90 % abandoned building is removed from the site • quantity and quality of retail is greatly improved within Pickering Wharf Economic benefits to the City of Salem • The City's tax base will be expanded; room taxes (amount***) and parking fees(amount***) will be generated • The reconfigured retail will generate $*** in additional tax revenue • After all local property tax exemptions expire, this project will generate $*** per year in property tax revenues • New jobs*** will be generated through the staffing of the hotel and the new retail uses • The hotel is to be located in the heart of Salem's waterfront area on one of Salem's main entrance corridors. The City has launched several initiatives to improve the appearance of commercial properties on Salem's entrance corridors • The City has historically suffered a loss of tourist revenue due to a limited supply of hotel rooms. The new hotel and retail property taxes, coupled with room tax and parking fees,will have a significant impact on the City's economy. The location of the hotel will generate more business for local retailers, restaurants and tourist destinations. 7 Special Requirements for Real Estate Projects 1. Will the business own or lease/rent the facility? X❑ Own ❑ Lease/Rent If leasing/renting, please identify the developer/landlord, and state who will be the taxpayer of record for the purpose of paying local real estate taxes. If owning, will the business fully occupy the space? X❑ Yes ❑ No If no, does the business intend to lease/rent the remaining space? 2. Describe how the various tax benefits and other economic incentives that will result from Certified Project designation will be allocated among the business(e's) developing the project (i.e. a developer or landlord) and the business(e's) intending to purchase, lease or rent space at the facility (i.e. tenant or tenants). N/A Supplemental Information 1. Name(s) of business(e's) intending to take advantage of state tax incentives: Business Name: Pickering Wharf Realty Trust Federal Employer ID:04-6805953 Address: 190 Pleasant Street Marblehead, MA 01945 Phone: (781) 631-3070 Fax: (781) 639-2290 _ Contact Person: J. Hilary Rockett, Jr., V4ee-P esi dnt Type of Organization (check that which applies): ❑ Corporation: ❑ For profit; ❑ S Corp.; ❑ Non-Profit I Business Trust ❑ Partnership: ❑ General Partnership; ❑ Limited Partnership ❑ Individual Level of interest: (Indicate the benefits the company seeks) 15% Investment Tax Credit ❑ 10% Abandoned Building Tax Deduction (if applicable) d Local Real Estate Tax Incentive Beneficiary 8 2. Names and Addresses of Organization (please respond according to type) A - If a corporation, please list the names and addresses of the officers and directors of said corporation, and any person and/or corporation with a financial interest of five percent or greater in said corporation. B - If a partnership, please list the names and addresses 'of all partners, and include the proportionate share owned by each partner. C - If a business trust, please name all members and beneficiaries of said trust. Business Trust Beneficiaries: J. Hilary Rockett M. Denise Rockett J. Hilary Rockett, Jr. T. Michael Rockett Richard P. Rockett Pamela M. Rockett 3. Please provide names; addresses, phone numbers and contact persons for organizations which may own or control or be affiliated with the applicant organization: Not Applicable 4. Certificate of Good Standing: A Certificate of Good Standing is attached with this application. m=W forms\cpap.wpd 9 Present Commercial Development Value $2,285,000 Value of Hotel When Constructed $5,400,000 Future Commercial Development Value $7,685,000 As Presently Developed Year Tax Rate Tax Base 1998 $34.50 $78,833 1999 $35.36 $80,803 2000 $36.25 $82,823 2001 $37.15 $84,894 2002 $38.08 $87,016 2003 $39.03 $89,192 2004 $40.01 $91,422 2005 $41.01 $93,707 2006 $42.03 $96,050 2007 $43.09 $98,451 2008 $44.16 $100,912 2009 $4527 $103,435 $ 2010 $46.40 $106,021 2011 $47.56 $108,671 $1,302,230 Mr. Alex Pszenny 27 Columbus Avenue Salem, MA 01970 Dinsmore Gruhl & Company, P,C, CERTIFIED PUBLIC ACCOUNTANTS 265 Essex Street Salem, MA 01970-9866 Tel.: (978) 741-4237 Fax: (978) 745-4424 E-mail: dgco@dgcopc.com January 14, 1998 Mr. J. Hilary Rockett, Jr. Rockett Management Company, Inc. 190 Pleasant Street Marblehead, MA 01945 Dear Mr. Rockett: Enclosed is our analysis of your proposed 80 room hotel at Pickering Wharf, which concludes that over the next twenty (20) years Pickering Wharf and the hotel project can be reasonably expected to directly generate, after taking into consideration the proposed TIF assistance, over $6,400,000 in revenue to the City of Salem. If the property remains as it is presently developed for the next twenty (20) years, revenue to Salem is projected to be approximately $2,300,000. Accordingly, if your proposed hotel is built at Pickering Wharf, then the City of Salem is likely to generate over $4,100,000 in additional revenue from real estate taxes, room taxes and parking garage fees. Additionally, indirect benefits to the City of Salem will be derived from a variety of sources. First, jobs will be created both during the construction phase and once the hotel is in operation. It is likely that many of these jobs will be held by Salem residents. Second, in excess of 50,000 additional overnight visitors are expected to come to Salem each year. As a result, residents and visitors alike will make additional expenditures for goods and services in the community. Both existing and new businesses in the vicinity of the hotel will benefit from this increased business activity. The hotel will also broaden the real estate tax base in the surrounding waterfront area of Salem. The combined effect of the projected $4,100,000 increase in revenue and indirect benefits cited above will substantially enhance the economy of the waterfront area and of the entire City of Salem. Very truly yours, 'T � N'�i t',e..,,,.,. Peter H. Dinsmore PICKERING WHARF & HOTEL PROJECTED REVENUE TO CITY OF SALEM AS PRESENTLY WITH DEVELOPMENT DEVELOPED OF HOTEL TOTAL REAL ESTATE REAL ESTATE TAX ROOM PARKING TAX BENEFIT YEAR TAX (1) PRESENT(1) M2) TOTAL TAX(3) FEES(4) TO CITY 1998 $65,000 ,,, $65,000 $0 $65,000 $0 $13,500 $78,500 1999 68,250 68,250 0 68,250 52,560 13;905 134,715 2000 71,663 71,663 0 71,663 56,844 14,322 142,828 2001 75,246 75,246 0 75,246 62,266 14,752 152,264 2002 79,008 79,008 0 79,008 67,006 15,194 161,208 2003 82,958 82,958 0 82,958 69,016 15,650 167,625 2004 87,106 87,106 0 87,106 71,087 16,1?O 174,313 2005 91,462 91,462 0 91,462 73,219 16,603 181,284 2006 96,035 96,035 _ 0 96,035 75,416 17,101 188,552 2007 100,836 100,836 0 100,836 77,678 17,614 196,129 2008 105,878 105,878 0 105,878 80,009 18,143 204,030 2009 111,172 111,172 0 111,172 82,409 18,687 212,268 2010 116,731 116,731 0 116,731 84,881 19,248 220,860 2011 122,567 122,567 61,678 184,246 87,428 19,825 291,498 2012 128,696 128,696 127,058 255,753 90,050 20,420 366,224 2013 135,130 135,130 196,304 331,434 92,752 21,033 445,219 2014 . 141,887 141,887 269,591 411,478 95,535 21,664 528,676 \ 2015 148,981 148,981 312,388 461,369 98,401 22,313 582,083 R 2016 156,430 156,430 357,511 513,941 101,353 22,983 638,277 2017 164,252 164,252 368,236 532,488 104,393 23,672 660,554 2018 172,464 172,464 3.7_9,283 551_,2 107,525 24,383 683,655 r TOTAL $2.321.751 $2.321.751 $2 072.049 $4.393.801 $1.629.827 $ 83 7.133 $6.4_, 10.761 (1) PRESENT TAX INCREASED 5% PER YEAR. PROJECTED REVENUE:__ (2)TAX INCREMENT FINANCING BASED ON: YEARS % EXEMPT AS PRESENTLY DEVELOPED $2,321,751 1-12 100 13 80 WITH DEVELOPMENT OF HOTEL $6,410,761 14 60 15 40 16 20 17 10 r 18 NONE � (3) ROOM TAX AT 4%OF PROJECTED ROOM REVENUE. (4) PARKING FEES FOR 60 SPACES AT$225 PER SPACE INCREASED 3% PER YEAR �^ t to Irk �rd,jf c�c cC fZe rGnv2 , g l� 7S/r�oU 3 0/ y ea-,t -4 Fe✓cr��2 /n `/ e�(� ;2 000• J lO0 % OC6y&- -? �c yQ61/1, 02 000 /1-4-� OL &3 0/0 a 00/ 6 0/ a dva -7 n a v OF rv�Pc/£6t /LFiI/2niU rZOvyYI i aX = Lf CLvL cmm P ;� _. � �� ��Q� z�-�, `�-�J � '�a�-� xvJ-4- -��•-aNt cru� � C11 r c QZ) 'I c2 G z I-V 1 ' o - L - L4fuaW n I O NW ' pp"_J& .L_A S Qt � alcl � sscc� � t ;F2d/45 -1�1C✓.w1�1 � ��-j CQ c y- ��avc�7 ah S--fl—I s z' -d w-Jx a a n G\ osy .h� CT �ry L7 p ) nn 1C T 1� >7s "�rY1 h//h �v.S'yy / �a/ �i cfua w�� DOP � rt� oCJ C l _✓ / � f7N1 u ��� /0 3 c1 7 ecl�e�l l �h� H t `1-Iey Jucic w, /sem Ti cu s lei nJ �cwth_ /v f - �Crv,�l 'sh l Lh a C'y e 5-- stvvt-/ ct, tz c / 04 Fl awA Stn /fig - S- iz�.f K0 S-n t y Gcn-rt p(e-f�c/ J ��y c� cLu� not l ow e _ spec h-c A 'eo7, cCQcGuC6 VK Whar. 7 o r . �w,jec� ice. c�t,C� ect — C l S I�.� erLluru`AM , 1 vcr,G� fzx //s byrf-C o)/7f-v,'r`/ 7 ins i� U f" G(Pil C)La 1� a �r�/ G.' So�Gy G Q /Uv �5 00' UCCI�P� G� �1� �/7 -,�y K . /Ov L A-Sit2�` r . - we iv. c( L) r vg�gONDIT - I" ., n CITY OF SALEM, MASSACHUSETTS STANLEY J. USOVICZ, JR. MAYOR February 24, 1999 To the City Council City Hall Salem Ladies and Gentlemen of the Council: ._ In June 1998, the Council approved passage of a Tax Increment Financing (TIF) Agreement between the City of Salem and Pickering Wharf Realty Trust. The TIF was granted for the purpose of a hotel development at Pickering Wharf. After the completion of Council approval, the developers recognized that an additional parcel, loon Congress Street, was a key component that needed to be included in the agreement. Therefore, the Application for Certified Project Designation, that was approved by the Massachusetts Office of Business Development, needs to be amended by the City Council to incorporate lot 447. In addition, the effective date of the TIF Agreement should be amended from its current effective date of July 1, 1999 to July-1, 2000. The effective date is intended to commence when the building is constructed; to date this has not occurred. The purpose of the amendment is to permit the recipient to take full advantage of all twelve years of the TIF Agreement. I have prepared amended resolutions and an amended TIF Agreement that incorporates lot 447 and the revised effective date of the TIF Agreement, which shall be July 1, 2000 (Fiscal Year 2001). Thank you for your consideration of this important request. Very truly yours, STANLEY J. USOVICZ Mayor SALEM CITY HALL•93 WASHINGTON STREET-SALEM,MASSACHUSETTS 01970-3592•978/745.9595•FAX 978/744-9327 u "` gONU11 n CITY OF SALEM . � ���rnneod' In City Council, May 14, 1998 RESOLUTION APPROVING CERTIFIED PROJECT APPLICATION OF PICKERING WHARF REALTY TRUST WHEREAS, Pickering Wharf Realty Trust has applied for designation as a Certified Project under the Massachusetts Economic Development Incentive Program created by Chapter DA of Massachusetts General laws; WHEREAS, Pickering Wharf Realty Trust meets the minimum standards of the Economic Development Incentive Program and the local economic development goals and criteria established as part of the documents creating the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS, the proposed certified project is located at the comer of Congress and Derby Streets, within the boundaries of the Salem Economic Opportunity Area. The legal description is as follows: The following condominium unit in the Pickering Wharf Condominium (the "Condominium") in Salem in the County of Essex and Commonwealth of Massachusetts, created by and described in the Master Deed of Pickering Wharf Condominium dated August 3, 1979 recorded with Essex South Registry of Deeds in Book 6624, Page 141, as amended by a First Amendment to Master Deed dated November 9, 1979, recorded with Essex South Registry of Deeds in Book 6653, Page 99, by a Second Amendment to Master Deed dated December 28, 1979, recorded with Essex South Registry of Deeds in Book 6667, Page 39, and as further amended by a Third Amendment to Master Deed dated April 4, 1980, recorded with Essex South Registry of - - Deeds in Book 6692, Page 336(said master deed as so amended is hereinafter referred to as the "Master Deed"): Building Unit Percentage Interest Derby A 10.8775 said unit A, Derby Building being a part of the total Master Deed described above. Together with the undivided percentage interests in the common areas and facilities of the Condominium described in the Master Deed as set forth for the unit above. Subject to and with the benefit of all easements, rights, reservations, restrictions, agreements and provisions contained in the Master Deed, in the Agreement and Declaration of Trust of the Pickering Wharf Condominium Trust dated August 3, 1979, recorded with Essex South Registry of Deeds in Book 6624, Page 168, in the By-Laws of Pickering Wharf Condominium recorded with Essex South Registry of Deeds in Book 6624, Page 179,and in any rules and regulations promulgated pursuant thereto, as any of the foregoing may be amended from time to time. Subject to and with the benefit of the provisions of Massachusetts General Laws Chapter 183A as now in force and as amended from time to time. The foregoing unit is intended to be used for any purpose allowed by applicable law, zoning law, license, permit, use regulation, special permit, exception or variance. t WHEREAS the City of Salem has agreed to offer Pickering Wharf Realty Trust a Tax Increment Financing Agreement; WHEREAS, Pickering Wharf Realty Trust will invest approximately $3,541,100 to develop a hotel at Pickering Wharf,an investment which creates approximately new, permanent jobs for residents of the Beverly & Salem Regionalional Economic Target Area. WHEREAS, the construction of a hotel at Pickering Wharf will substantially improve the aesthetic appearance of the property and reduce blight on one of Salem's entrance corridors; NOW THEREFORE BE IT RESOLVED that the Salem City Council approves the Certified Project application of Pickering Wharf Realty Trust, designating this project as a certified project for a period of thirteen years, and forwards said application for certification to the Massachusetts Economic Assistance Coordinating Council for its approval and endorsement. Adopted this 11 day of June 199 8 ,by the Salem City Council. Date Stanley J. Usovicz, Jr., Mayor s Z Deborah E. Burkinshaw, City Clerk SEAL �1" May 14 , 1998 �/ 'J`f 1 RESOLUTION: Approving *certified project application of Pickering Wharf Realty Trust In City Council May 14 , 1998 Motion report out of Committee at next mtg. defeated r.. ccv. 7-4-0 Move question-voted Ref. to Comm. on Comm. & Econ. Dev. C. Furey & Harvey "opposed" In City Council June 11, 1998 Adopted by a RCV 6-5-0 C. Harvey-Immed. Reconsider-Denied dee tedi to&G.A oym for tl�sProvded JUN 15.1998 Approved an19� MIN", IN -Vo�� . tee Hsb �cgg Fty^„jt.A' #a 4s i[ 'iyM �'"` �"*w�'� "i� 2r. -y��✓=`� � ,�'s' � tie k"�1��Pk. 6 .y u 'r r p y 4t4i,, 12 � J A. #A"'". `2'R. ,3 fifi t ee rnz ,ego'IJ»A .$yf5 ""=v"i°,: '�j �a �L; S,S pK•}* Y"s v r ROCKETT MANAGEMENT & REALTY CO, INC. 190 PLEASANT STREET MARBLEHEAD,MASS.01945 TEL.(781)631-3070 FAX(781)639-2290 J. HILARY ROCKETT,JR. November 20, 1998 Vice President ® �Salem City Hall s 93 Washington St. 1NO�� c/ Salem, MA 01970 v2 Mqr O Sq lyyB Attn: Mayor Usovicz 04. A o;�Ic�M Dear Mayor Usovicz, Per our conversation I have enclosed information regarding the inadvertent error to the TIF application for Pickering Wharf Realty Trust. The error is not with anything substantive, it's just regarding the legal description and tax parcel. Legal Description - The legal description simply should have been a copy of the deed from the Salem Five to Pickering Wharf Realty Trust, Book 13598 page 532. This includes all the commercial units in the condominium and the marina parcel (Parcel 2), which Pickering Wharf Realty Trust owns in fee. Tax Parcel - There are three (3) tax parcels at Pickering Wharf, Map 34 Lot 408, 446 & 447, but only Lot 446 is listed on the application. As I stated above, the intent was to allow the building of a hotel at "Pickering Wharf." There was never any mention of tax parcels or legal descriptions in the motion of the City Council, nor was there even any discussion of it. Additionally, isnot mentioned in the approval received from the State. I have enclosed the following materials for your review: 1. Complete TIF Package - I've highlighted the areas that need clarification. 2. MOU- Again there is no mention of location,just "on site at Pickering". As you're aware, the total number of rooms between 70 and 140 was used in case we expanded our proposed 75 room hotel into a second building, per our master plan (see enclosed) 3. Master Plan - As mentioned above 4. Assessors Map of Pickering Wharf 5. State Approval 6. Deed a If you need any other information,please give me a call. As soon as this error is resolved, we will to file our plan with the Salem Planning Board. I look forward to hearing from you. Si ce J. Hi ck tt, Jr. Vic Presid Encl. JHR:nh i 4 ; ti. The Massachusetts Economic Development Incentive Program Certified Project Application Applicant Information 1. Name and address of business(es) submitting this application: Pickering Wharf Realty Trust J. Hilary Rockett, Trustee 190 Pleasant Street Marblehead, MA 01945 Fiscal year end is: December 31 2. Name and address of project (if different from above): Pickering Wharf Hotel Comer of Congress Street & Derby Street Salem, MA 01970 3. Location of ETA: Beverly & Salem Regional ETA 4. Location of EOA: Salem r 5. Authorization: I/We (print), of the entity applying for Certified Project designation, hereby certify that the information within this application is true and accurate, and reflects the project's intentions for job creation and investment. I understand that the information provided within this application shall be binding for the duration of the project certification. Signature (Date) Signature (Date) 1 r 6. Nature and purpose of project: INTRODUCTION AND HISTORY OF PROJECT DEVELOPMENT Pickering Wharf Realty Trust seeks Certified Project designation for the Pickering Wharf Hotel to be developed at the corner of Derby and Congress Streets. Salem is a major New England tourist destination that draws over 650,000 visitors annually to its cultural, historic and maritime attractions. Due to a limited supply of overnight accommodations,tourist and business visitor dollars are spent in communities such as Danvers and Peabody which have numerous hotels with easy access to major highways. The trustees of Pickering Wharf Realty Trust recognized the need for additional hotel accommodations in Salem and that the potential space available at Pickering Wharf was an ideal location. The developers conducted an extensive financial analysis of the project and concluded that the development would not be economically feasible without property tax relief through a TIF agreement. Their findings were supported by a Hotel Study conducted by Landauer Group that indicated the Pickering Wharf hotel site was the most suitable location in Salem for new development and the one most likely to be supported by the market. Their analysis also concluded that the cash flow generated by the project for debt service would not be sufficient to attract private sector developers without economic assistance from the community. Rockett Management & Realty Company was established in 1968. The company develops, manages and owns several commercial and residential properties, including 400 Highland Place, Route 107 in Salem, the Village Plaza in Marblehead and several apartment buildings. The Pickering Wharf Realty Trust was established prior to the purchase of Pickering Wharf on May 2, 1996. Pickering Wharf Realty Trust acquired Pickering Wharf in June 1996 and initiated the successful revitalization of this popular waterfront destination. Pickering Wharf had been for sale since 1991 and had begun to show signs of neglect that have since been reversed under Rockett Management Company's ownership. As a part of the owner's plans for a major redevelopment of Pickering Wharf, a hotel development was proposed to be located at the corner of Derby and Congress Streets. Pickering Wharf Realty Trust plans to construct an eighty +/- room, three story hotel containing standard 14' x 36' rooms featuring kitchen facilities. The ground floor will offer 18,000 square feet of retail space. The development will be a total of four stories. The development cost of the hotel portion of the project is $3,541,100. The hotel will be approximately 50,000 square feet. The overall project cost is $4,441,100. The retail portion of the project is estimated to cost $900,000. Please refer to the chart on page 4 for a cost breakdown. 2 The project is projected to employ in net, new permanent jobs for the ETA. The existing conditions of the hotel site include retail and office space contained in two buildings and an Eastern Bank. Ninety percent of the retail and office space has been abandoned for over two years. The two buildings housing retail and office will be demolished and the retail uses will be relocated to the ground floor of the hotel. The bank will be demolished and relocated next to the hotel site. The applicant seeks certification for the hotel portion of the project only. All newly constructed retail space, including the relocated Eastern Bank, will be taxed at full valuation. In addition, the City and the developer have entered into a Memorandum of Understanding in which each party has pledged to work in a public/private partnership to secure state and federal funds for items such as increasing public access to the waterfront. There is an unfinished segment of a seawalk from Congress Street to the Chase House restaurant to be addressed with the use of grant funds. 7. Is this business new to Massachusetts? d Yes ❑ No If no: • Where are the existing Massachusetts facilities? • Will this project require/trigger the closing or consolidation of any Massachusetts facilities? If yes, please explain. 8. Is this project an expansion of an existing business? ❑ Yes f No If yes, check the appropriate box: ❑ at existing location ❑ at new location in same municipality ❑ at new location in different municipality 3 Budget for Project Soft Costs Budget Architecture Fees 150,000 Structural/Mechanical Engineering 38,000 21 E Site Report 10,000 Legal Fees 18,000 General Conditions 85,000 Business Relocation Costs 125,000 Bank Loan Fees 150,000 Permit 15,000 Site Superintendent 75,000 Office Expense 30,000 Hard Costs Demolition 145,000 Site Preparation 45,000 Piles/Caps 160,000 Grade Beams 129,000 1st Floor Structural Slab 106,000 Structural Plank/Steel Structure 513,000 Concrete Slabs (3) 94,000 Roofing 145,000 Towers/Light Steel Framing 0 Staircases 51,000 Elevator 125,000 Exterior Wall System 397,000 Glass & Glazing 150,000 Misc. Exterior Allowance 50,000 4 Work Force Analysis and Job Creation Plan Current TOTAL NEWJOBS NEWJOBS NEWJOBS NEW JOBS NEW JOBS NEW JOBS employment projected new Year I Year 2 Year 3 Year 4 Year 5 Years 6-13 permanent jobs Total Employees at Certified Project Facility Total Employees at Other Sites in Mass. #of Employees at Certified Project Location who live in the ETA #of Permanent Full-Time Employees #of Permanent Part-Time Employees #of Temporary Full-Time Employees #of Temporary Part-Time Employees #of Management Positions Average Salary of Management Positions #of Professional Positions Average Salary of Professional Positions #of Technical Positions Average Salary of Technical Positions #of Skilled Positions Average Salary of Skilled Positions #of Unskilled Positions Average Salary of Unskilled Positions 6 10. Certification for Abandoned Buildings: Does the proposed project involve the renovation and reuse of an abandoned building? ❑ Yes I No ❑ Unsure If yes or unsure, please answer the following questions: (a) How long has the building been vacant? (If known, state date) (b) During this period of time, what percentage of the building was vacant and unused? If the percentage varied during this time period, provide information for each change in the percent of vacant space and the applicable time period. 11. Local Employment: What actions will you take to recruit employees from among residents of the ETA? The hotel developers believe that the majority of new employees will be ETA residents, as the company will advertise new positions exclusively in the Salem Evening News. Pickering Wharf Realty Trust has the intention and capacity to achieve the anticipated level of new permanent full-time jobs for residents of the municipality and the ETA. The local labor supply is well qualified for the nature of the positions that will be available in the hotel development. The hotel is located within walking distance of several neighborhoods which will assist in reaching the anticipated level of new permanent full-time jobs for residents of the municipality and the ETA. 12. Affirmative Action Statement: It is the policy and practice of Pickering Wharf Realty Trust to hire and promote that person determined to be the best qualified without regard to race, color, religion, sex, age, marital status, or national origin. 13. Agreement between the Business and Area Banks: Describe briefly the business' local banking relationship(s), if any. Does the institution with which the business banks participate in the Massachusetts Capital Access Program, which is designed to commit a portion of the business' deposits to fund loans to local businesses? Pickering Wharf Realty Trust banks with Eastern Bank, who participates in the Massachusetts Capital Access Program. 7 14. Economic benefits of project certification: Provide a description of the economic benefits that are anticipated for the business and the project, if the project is certified. Also, provide any information, documentation or studies demonstrating any additional benefits (i.e. reduction of blight, reuse of abandoned buildings, clean up of contaminated property, job training, provision of day care, any contributions to the community, etc.) likely to accrue to the area as a result of Certified Project designation. Please describe: .Economic bene s to applicant The benefits of project certification are summarized below: • Development is economically feasible with the receipt of investment tax credits and property tax benefits • The developer will receive approximately $1,369,964 in local property tax benefits over 13 years • The construction of a $3,873,400 hotel will entitle the company to $193,670 in state 5% investment tax credits • The developer will receive additional state investment tax credits as a result of investment in equipment for the hotel • Project provides an anchor for the Pickering Wharf development and orients the visitor to Pickering Wharf and the waterfront • a 90 % abandoned building is removed from the site • quantity and quality of retail is greatly improved within Pickering Wharf .Economic benefits to the City of Salem • The City's tax base will be expanded; room taxes in the amount of $968,927 will be received and parking fees in the amount of$451,710 will be generated • The reconfigured retail will generate additional tax revenue • After all local property tax exemptions expire, this project will generate $185,121 per year in property tax revenues • New jobs*** will be generated through the staffing of the hotel and the new retail uses • The hotel is to be located in the heart of Salem's waterfront area on one of Salem's main entrance corridors. The City has launched several initiatives to improve the appearance of commercial properties on Salem's entrance corridors. This project will be a catalyst for additional development and rehabilitation of the waterfront area • The City has historically suffered a loss of tourist revenue due to a limited supply of hotel rooms. The new hotel and retail property taxes, 8 coupled with room tax and parking fees, will have a significant impact on the City's economy. The waterfront location of the hotel will generate more business for local retailers, restaurants and tourist destinations. Special Requirements for Real Estate Projects 1. Will the business own or lease/rent the facility? d Own ❑ Lease/Rent If leasing/renting, please identify the developer/landlord, and state who will be the taxpayer of record for the purpose of paying local real estate taxes. If owning, will the business fully occupy the space? d Yes ❑ No If no, does the business intend to lease/rent the remaining space? 2. Describe how the various tax benefits and other economic incentives that will result from Certified Project designation will be allocated among the business(e's) developing the project (i.e. a developer or landlord) and the business(e's) intending to purchase, lease or rent space at the facility (i.e. tenant or tenants). N/A Supplemental Information 1. Names) of business(e's) intending to take advantage of state tax incentives: Business Name: Pickering Wharf Realty Trust Federal Employer ID:04-6805953 Address: 190 Pleasant Street Marblehead, MA 01945 Phone: (781) 631-3070 Fax: (781) 639-2290 Contact Person: J. Hilary Rockett, Jr., Trustee Type of Organization (check that which applies): ❑ Corporation: ❑ For profit; ❑ S Corp.; ❑ Non-Profit I Business Trust ❑ Partnership: ❑ General Partnership; ❑ Limited Partnership ❑ Individual 9 Level of interest: (Indicate the benefits the company seeks) 15% Investment Tax Credit ❑ 10% Abandoned Building Tax Deduction (if applicable) I Local Real Estate Tax Incentive Beneficiary 2. Names and Addresses of Organization (please respond according to type) Business Trust Beneficiaries: J. Hilary Rockett and M. Denise Rockett 10 Foster Street Marblehead, MA 01945 J. Hilary Rockett, Jr. 5 Com Point Road Marblehead, MA 01945 T. Michael Rockett 36 Roosevelt Avenue Marblehead, MA 01945 Richard P. Rockett 7 Dunns Lane Marblehead, MA 01945 Pamela M. Rockett 14 Roosevelt Avenue Marblehead, MA 01945 3. Please provide names, addresses, phone numbers and contact persons for organizations which may own or control or be affiliated with the applicant organization: Not Applicable 4. Certificate of Good Standing: A Certificate of Good Standing is attached with this application. mcc:\tif\for ms\cpap.wpd 10 Sprinkler System 130,000 Electrical 197,000 Plumbing 175,000 HVAC 365,000 Interior Demising Partitions 157,000 Interior Allowance 215,000 Fire Alarm System 56,000 Excavation 86,000 Materials 22,000 Grading/Compaction 26,000 Curbing 22,000 Landscaping 27,000 Sprinkler System 7,100 Paving 61,000 Walkway 49,000 Sidewalk Pavers 25,000 Special Landscaping 15,000 Total 4,441,100 Breakdown of costs Hotel 3,451,100 Retail 900,000 9. Job creation In order to qualify for Certified Project status, the governing statute and regulations require the creation of net, new, permanent full-time employees in Massachusetts. On the chart provided (see next page), please fill in the blanks provided. 5 RESOLUTION APPROVING CERTIFIED PROJECT APPLICATION OF PICKERING WHARF REALTY TRUST WHEREAS, Pickering Wharf Realty Trust has applied for designation'as a Certified Project under the Massachusetts Economic Development Incentive Program created by Chapter 23A of Massachusetts General laws; WHEREAS, Pickering Wharf Realty Trust meets the minimum standards of the Economic Development Incentive Program and the local economic development goals and criteria established as part of the documents creating the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS,the proposed certified project is located at the corner of Congress and Derby Streets, within the boundaries of the Salem Economic Opportunity Area. The legal d_escripti � -follows: The following condominium unit in the Pickering Wharf Condominium(the "Condominium'.) in Salem in the County of Essex and_Commonwealth of Massachusetts; created'by and described in the Master Deed of Pickering Wharf Condominium dated Augustr3, 1979 recorded with Essex South Registry of Deeds in Book 6624, Page 14 as amended by a First Amendment to Master Deed dated r—November 9, 1979, recorded A. Essex South Registry of Deeds in Book 6653, Page 99, by a Second Amendment to Master Deed dated December 28, 1979,recorded with Essex South Registry of Deeds in Book 6667, Page 39, and as further amended by a Third Amendment to Master Deed dated April 4, 1980, recorded with Essex South Registry of Deeds in Book 6692, Page 336 (said master deed as so amended is hereinafter referred to as the "Master Deed"): Buildina Unit Percentage Interest Derby A 10.8775 saidunit A;-Derby Building being a part of the total Master Deed described above. Together with the undivided pert entage interests in the common areas and facilities of the Condominium described in the Master Deed as set forth for the unit,above. I Subject to and with the benefit of all easements, rights, reservations, restrictions, agreements and provisions contained in the Master Deed, in the Agreement and Declaration of Trust of the Pickering Wharf Condominium Trust dated August 3, 1979, recorded with Essex South Regnstry of Deeds in Book 6624, Page 168, in the By-Laws of Pickering Wharf Condominium rcorded with Essex South Registry of Deeds in Book 6624, Page 179, and in any rules and regulations promulgated pursuant thereto, as any of theregoing may be amended from time to time. - Subject to and with the benefit of the provisions of Massachusetts General Laws Chapter 183A as now in force and as,,amended from time to time. 1 The foregoing unit is intended to be used for any purpose allowed by applicable law, zoning law;-license;-permit,_s e.regulatio`n,special peimit;exception_,or variance. WHEREAS the City of Salem has agreed to offer Pickering Wharf Realty Trust a Tax Increment Financing Agreement; WHEREAS, Pickering Wharf Realty Trust will invest approximately $3,541,100 to develop a hotel at Pickering Wharf, an investment which creates approximately new, permanent jobs for residents of the Beverly & Salem Regional Economic Target Area. WHEREAS, the construction of a hotel at Pickering Wharf will substantially improve the aesthetic appearance of the property and reduce blight on one of Salem's entrance corridors; NOW THEREFORE BE IT RESOLVED that the Salem City Council approves the Certified Project application of Pickering Wharf Realty Trust, designating this project as a certified project for a period of thirteen years, and forwards said application for certification to the Massachusetts Economic Assistance Coordinating Council for its approval and endorsement. Adopted this day of 199_, by the Salem City Council. Date Stanley J. Usovicz, Jr., Mayor Attest: Deborah E. Burkinshaw, City Clerk SEAL Massachusetts Economic Development Incentive Program Tax Increment Financing Plan I. Location A. Economic Opportunity Area (EOA): Salem EOA B. Municipality: City of Salem C. Tax Increment Financing (TIF) Zone: Attached are: • map of the ETA • map showing the general location of the proposed private project • parcel by parcel map • property lines and the outline of each building • map indicating infrastructure improvements, all thoroughfare, public rights of way and easements • zoning map • location of proposed private and public projects Common description of TIF Zone: The proposed TIF Zone is located at the comer of Congress and Derby Streets in the Salem Economic Opportunity Area (EOA). The-taxparcel-isMap 34—, Lot`446. t Legal description of TIFZone: The following condominium unit in the Pickering Wharf Condominium (the "Condominium") in Salem in the County of Essex and Commonwealth of Massachusetts, created by and described in the Master Deed of Pickering Wharf Condominium datedAugust3,.1979 recorded with Essex South Registry of Deeds in EBook'6624, Page 141, as amended by a First Amendment to Mastei Deed dated November 9, 1979, recorded with Essex South Registry of Deeds in Book 6653, Page 99, by a Second Amendment to Master Deed dated December 28, 1979, recorded with Essex South Registry of Deeds in Book 6667, Page 39, and as further amended by a Third Amendment to Master Deed dated April 4, 1980, recorded with Essex South Registry of Deeds_in-Book 6692;Page 336(said master deed as so amended is hereinafter referred to as-the"Master Deed")__ _ a Building Unit Percentage Interest Derby A 10.8775 1 said unit A;Derby Building being a part of the total Master Deed described above. Together with the undivided percentage interests in the.common areas and facilities of the Condominium described in the Master Deed as set forth for the unit above. Subject to and with the benefit of all easements, rights, reservations, restrictions, agreements and provisions contained in the Master Deed, in the Agreement and �De`claration of Trust of the Pickering Wharf Condominium Trust dated August 3, 1979, recorded with Essex South Registry of Deeds in Book 6624, Page 168, in the By-Laws of Pickering Wharf Condominium recorded with Essex South Registry of Deeds in Book 4,Page-179,and in any rules and regulations promulgated pur_suant'tl_ieieto,as my of the foregoing may be amended from time to time. Subject to and with the benefit of the provisions of Massachusetts General�Laws Chapter 183A ass now_m.force and-as amended from time to time. The foregoing unit is intended to be used for any purpose allowed by applicable law, zoning law, license,permit, use regulation, special permit, exception or variance. D. Narrative Description of TIF Zone: Needs, Problems and Opportunities: Designation of this TIF Zone meets the needs of, solves problems for and creates opportunities for Pickering Wharf Realty Trust and the City of Salem. G �_(`t1 Pickering Wharf Realty Trust: The tru flu`l cS : g — S �— i major investment in Salem upon the purcha; bw^ �e u'Ox ting an opportunity to enhance this importa ' " problems facing Salem was the need for addi cS ,pace available at Pickering Wharf was con,� 3 G^ The dev / _ ysis of the project and concluda n nia,,/ iically feasible without property tax relief thr l�!f/' oupported by a Hotel Study conducte ;ring Wharf hotel site was the r I (� opment and the one most likely to be suppo uded that the cash flow generated by the pr,-,--. ,..,UL survrce would not be sufficient to attract private sector developers without economic assistance from the community. 2 Creating Opportunity for Pickering Wharf Realty Trust: This project provides Pickering Wharf Realty Trust with an ideal opportunity to enhance the value of Pickering Wharf and to establish an anchor in the heart of Salem's busy waterfront district. In addition, the ground floor of the hotel will showcase an improved quality and quantity of retail shops that will further enliven Pickering Wharf. Pickering Wharf Realty Trust plans to construct an eighty +/- room, three story hotel containing standard 14' x 36' rooms featuring kitchen facilities. The ground floor will offer 18,000 square feet of retail space. The cost of the hotel portion of the project is $3,451,100. The construction timeframe is expected to be approximately one year, with construction commencing in August of 1998 and ending in June of 1999. The project is anticipated to employ****... Solving problems and meeting the needs of the City of Salem: The hotel is to be located in the heart of Salem's waterfront area on one of Salem's main entrance corridors. The City has launched several initiatives to improve the appearance of commercial properties on Salem's entrance corridors. This project will be a catalyst for additional development and rehabilitation of the waterfront area The City has historically suffered a loss of tourist revenue due to a limited supply of hotel rooms. The new hotel and retail property taxes, coupled with room tax and parking fees, will have a significant impact on the City's economy. The waterfront location of the hotel will generate more business for local retailers, restaurants and tourist destinations. In addition, the City and the developer have entered into a Memorandum of Understanding in which each party has pledged to work in a public/private partnership to secure state and federal funds for items such as increasing public access to the waterfront. There is an unfinished segment of a seawalk from Congress Street to the Chase House restaurant to be addressed with the use of grant funds. Creating Opportunity for the City of Salem: Designation of the TIF Zone and approval of this TIF Plan will help Pickering Wharf Realty Trust establish a new hotel in Salem, which will generate jobs, room taxes, parking fees, and property taxes of$185,121 at the expiration of the TIF. The waterfront location of the hotel will generate more business for local retailers, restaurants and tourist destinations. 3 E. Property owners within the proposed TIF Zone: The property owner within the proposed TIF Zone is the Pickering Wharf Realty Trust. The Trustees are: J. Hilary Rockett M. Denise Rockett J. Hilary Rockett, Jr. T. Michael Rockett Richard P. Rockett Pamela M. Rockett H. Time The TIF Plan and TIF Zone described here will be in effect for a period of thirteen years. III. TIF Zone & Economic Development A. Economic Opportunities and Economic Benefits to the Community: Approval of the proposed TIF Zone will create the following economic development opportunities and benefits: • Creates jobs: (add # of jobs) • Generates tax revenue: see attached spreadsheet entitled "13 Year Tax Increment Financing Plan" • Improves appearance of 90% abandoned property through demolition • The City's tax base will be expanded; room taxes and parking fees will be generated, please see attached spreadsheet entitled "13 Year Tax Increment Financing Plan" • The reconfigured retail will generate approximately $20,000 in additional tax revenue per year in property tax revenues • The hotel is to be located in the heart of Salem's waterfront area on one of Salem's main entrance corridors. The City has launched several initiatives to improve the appearance of commercial properties on Salem's entrance corridors. This project will be a catalyst for additional development and rehabilitation of the waterfront area • The City has historically suffered a loss of tourist revenue due to a limited supply of hotel rooms. The new hotel and retail property taxes, coupled with room tax and parking fees, will have a significant impact on the City's economy. The waterfront location of the hotel will generate more business for local retailers, restaurants and tourist destinations. 4 B. Proposed and Potential Land Uses: (analyze how the land uses are appropriate for anticipated economic development) The developer will construct a hotel and retail development at Pickering Wharf on the waterfront in downtown Salem. There is a demonstrated need for additional hotel accommodations due to Salem's popularity as a tourist destination. C. Zoning in the TIF Zone: The TIF Zone is located in district B-5, Central Development District. D. Hazardous Waste: (identify any parcels, public or private, in zone which are confirmed hazardous waste disposal sites, in accordance with chapter 21E, MGL. Describe any public or private site remediation activities and any reuse plans) Not Applicable IV. TIF Zone Projects A. Planned Private Project: Pickering Wharf Realty Trust will construct a 50,000 square foot, four story, approximately 80 room hotel,with the ground floor to be occupied by 18,000 square feet of retail uses. Existing retail and office buildings will be razed and a bank will be relocated on site. B. Provide Documentary evidence of the level of the developer's commitment to the proposed and required construction in the TIF project: The developer has retained architects, engineers, surveyors and attorneys for the development of this project. 5 C. Budget for Project: The costs of completing the project are as follows: Soft Costs Budget Architecture Fees 150,000 Structural/Mechanical Engineering 38,000 21 E Site Report 10,000 Legal Fees 18,000 General Conditions 85,000 Business Relocation Costs 125,000 Bank Loan Fees 150,000 Permit 15,000 Site Superintendent 75,000 Office Expense 30,000 Hard Costs Demolition 145,000 Site Preparation 45,000 Piles/Caps 160,000 Grade Beams 129,000 1 st Floor Structural Slab 106,000 Structural Plank/Steel Structure 513,000 Concrete Slabs (3) 94,000 Roofing 145,000 Towers/Light Steel Framing 0 Staircases 51,000 Elevator 125,000 Exterior Wall System 397,000 Glass & Glazing 150,000 6 Misc. Exterior Allowance 50,000 Sprinkler System 130,000 Electrical 197,000 Plumbing 175,000 HVAC 365,000 Interior Demising Partitions 157,000 Interior Allowance 215,000 Fire Alarm System 56,000 Excavation 86,000 Materials 22,000 Grading/Compaction 26,000 Curbing 22,000 Landscaping 27,000 Sprinkler System 7,100 Paving 61,000 Walkway 49,000 Sidewalk Pavers 25,000 Special Landscaping 15,000 Total 4,441,100 Breakdown of costs Hotel 3,451,100 Retail 900,000 D. Relevant business plans: Time schedule for development: Scheduled construction commencement: August 1998 7 i Scheduled construction completion: June 1999 Expected increases in job creation: 75 temporary construction jobs 35 permanent hotel jobs Estimates of tax revenue based upon increased valuation of parcel: E. Participation in other federal, state and local economic development programs and initiatives: The City intends to pursue grant funding such as CDAG or PWED. F. Planned Public Projects: The City and the developer have entered into a Memorandum of Understanding in which each party has pledged to work in a public/private partnership to secure state and federal funds for items such as increasing public access to the waterfront. There is an unfinished segment of a seawalk from Congress Street to the Chase House restaurant to be addressed with the use of grant funds. The details of this project will be forthcoming. V. Financing for TIF Zone Projects A. Anticipated Financing for Private Projects: Source: Amount: Unknown $4,000,000 B. Anticipated Financing for Public Projects: Source: Amount: PWED TBD CDAG TBD 8 f C. Detailed Projection of Costs of Public Construction: TBD D. Will Betterments be used to finance any public-private projects, now or within the proposed life of the TIF Plan? N/A E. If Betterments or Special Assessments are a part of the TIF Plan: N/A Schedule for defrayal of construction costs: Agreement of all participating parties in the betterment: F. Describe how private projects will be financed: Evidence of private financing commitments: Project proponent is investigating financing alternatives with local banks and lending institutions. VI. TAX INCREMENT FINANCING A. Authorization to use TIF: The attached City Council resolution dated March 9, 1995 authorizes the City of Salem to use TIF in the Salem EOA. Also attached is a City Council resolution approving this TIF Plan for Pickering Wharf Realty Trust. B. Amount of proposed tax increment exemptions from property taxes: As the attached spreadsheet shows, the Chairman of Salem's Board of Assessors estimates that property tax benefits will total approximately $1,369,964 over thirteen years. Also, see the description of the proposed TIF Plan in part D of this section. C. Maximum percentage of public project costs that can be recovered through betterments or special assessments: N/A 9 D. TIF exemption from property taxes: As the attached spreadsheet shows, the City estimates the tax benefits to total approximately $1,369,964 over 13 years. The exemption plan works as follows: Year Pickeriniz Wharf Realty Trust Pays 1 - 5 Only the base tax bill 6 -8 10% of the increment, plus the base tax bill 9 20% of the increment, plus the base tax bill 10 40% of the increment, plus the base tax bill 11 60% of the increment, plus the base tax bill 12 80% of the increment, plus the base tax bill 13 100% of the increment, plus the base tax bill The effective date of increment exemption is July 1, 1999 (Fiscal Year 2000). Term of the exemption: 13 years VII. Approval of TIF projects TIF projects are approved by the Salem City Council. The Mayor and his staff are responsible for negotiating TIF Plans and, after Council approval, executing those plans. Evidence of local approvals of the proposed TIF Zone and TIF Plan is provided here in the form of a resolution authorizing a TIF agreement passed by the Salem City Council on INSERT DATE. mcdtif\fo=\fifp1an 10 a CITY OF SALEM, MASSACHUSETTS STANLEY J. LISOVICZ, JR. MAYOR MEMORANDUM OF UNDERSTANDING between the PICKERING WHARF HOTEL ENTITY and the CITY OF SALEM This document will serve as a Memorandum of Understanding between the City of Salem and the Pickering Wharf Hotel ENTITY. The items included outline the expectations of the two signatory parties. The City of Salem, (CITY) and the Pickering Wharf Hotel (ENTITY), agree that this Memorandum of Understanding reflects the status of the project as of 4/8/98. Whereas, the ENTITY has an interest in building a new hotel at Pickering Wharf, and Whereas,the CITY agrees that in order to make the project feasible it must provide public development assistance to the developer, Now therefore,the CITY and the ENTITY, agree to the following: If the Hotel Entity does the following: 1. Purchases and demolishes the Eastern Bank building. 2. Relocates Eastern Bank on site- at Pickering Wharf. 3. Develops a hotel of not less than 70 and not more than 140 rooms. 4. Provides a similar amount of retail space to what currently exists at Pickering Wharf. 5. Improves accessibility to the waterfront by utilizing State grant funding to rebuild the sea-walk around Pickering Wharf(from Congress Street to the Chase House). Then the City agrees to provide the following assistance: 1. TIF Plan In order for the hotel project to be economically viable, the developer requires a multi-year TIF for the hotel portion of the site only. All newly constructed retail space, including the relocated Eastern Bank, will be taxed at full valuation. The new retail located in the development will increase the city's tax base over what is currently received in taxes for the existing retail. TIF Agreement The TIF Agreement is applicable only to the use of the structure as a hotel. Should more than SALEM CITY HALL•93 WASHINGTON STREET•SALEM,MASSACHUSETTS 01970-3592•979/745-9595•FAX 979/7449327 i' ten (10)percent of the total hotel rooms be changed, altered or reconfigured into non-hotel uses by the developer or subsequent owner, the City reserves the right to negate or renegotiate the TIF Agreement. However, owner may change, alter or reconfigure more than ten (10) percent for any hotel use, including a restaurant, lounge, gymnasium, etc., without effecting this agreement. The Developer also agrees that the ownership structure and operation of the hotel is totally separate and distinct from the Pickering Wharf Condominium Association. The TIF schedule: Year MoExemnted 1-5 100 6-8 90 9 80 10 60 11 40 12 20 13 0 The hotel will also generate room tax calculated at 4% of projected room revenue. The of the hotel's presence on the city's economy in terms of room tax and parking fimpact ll justify the structure of this TI plan. Thelocation f thehotel ills generate more business for local retailers,restaurants and tourist destinations. The Planning Department will begin working with the project proponent to assemble necessary materials for a TIF package. 2) Parking Garage The developer requires the lease of at least one parking space per hotel room on the second and third floors of the South Harbor Garage(currently under construction). The lease rate per parking space will be $1.25 per diem or$456.25 annually and increase at the rate of other City Parking garages that are leased on an annual basis. The lease will be in effect for the life of the hotel. 3) CDAG/PWED Funds The City pledges to work with the Entity in a public/private partnership to secure other state and federal funds such as CDAG and P WED funds for items such as increasing public access to the waterfront between Congress Street and the Chase House. This would complete the link from Congress Street to the NPS at Derby Street. Dated this d day of April 8, 1998. CITY of Salem by its Mayor, duly authorized Pickering Wharf Realty Trust Stanley J. Uso ' Jr. Ma or J. Hilary Roc l tt, Trustee V II V F It y (J Y l r t 11 h y f - . k � 4 ! m p y t5 r rr LL 11 AN Ir �y4j 4 1 t �'n% I I o r 9 NOV-16-96 13.01 FROM: IO= 15067406728 PAGE 9/9 w i''♦ 4m-4 e ro`1 S_Ss1 _ w y,1 _ N 001 • `�� m Im v 9 M � , O f 1A J > k P 1 1 �z q N ° — ' ^o no A fr 1' y91 ' r \aa� Q ro m P 1•A d b y 96 0 A O ;.a VI Q h m / COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF ECONOMIC DEVELOPMENT MASSACHUSETTS OFFICE OF BUSINESS DEVELOPMENT C/O SPRINGFIELD STATE OFFICE BUILDING 436 DWIGHT STREET, ROOM B40 SPRINGFIELD,MA 01103 Intemet:http:/hvNvw.state.ma.us/mobd ARGEO PAUL CELLUCCI TELEPHONE: GOVERNOR (413) 794-1560 DAVID A.TIBBETTS FACSIMILE: DIRECTOR OF ECONOMIC DEVELOPMENT (413) 739.9175 MOTION TO APPROVE PICKERING WHARF HOTEL (PICKERING WHARF REALTY TRUST), AS A CERTIFIED PROJECT WITHIN THE SALEM City-wide EOA WHEREAS. Chapter 23A, Sections 3A through F as amended by Chapter 19 of the Acts of 1993, established the Economic Development Incentive Program (EDiP); WHEREAS, th_ EDIP is designed to promote increased business development and expansion in Economic Target Areas (ETAS) and Economic Opportunity Areas (EOAs) of the Commonwealth; WHEREAS. the Economic Assistauce Coordinating Council (EACs), estabiished by Section, 3B of said Chapter 23A, is charged with administering the EDIP, including till- review and approval of applications from municipalities for the designation of areas as ETAS and EOAs; WHEREAS, the City of Salem has been designated by the EACC as part of the Beverly-Salem Economic Target Area; WHEREAS, the EACC approved the City-wide Economic Opportunity Area within the Salem Economic Target Area; WHEREAS, Pickering Wharf Hotel (Pickering Wharf Realty Trust) has committed w. creatir, 45 new permanent full-time jobs; WHEREAS. Pickering Wharf Hotel (Pickering Wharf Realty Trust) intends to invcs- approximately $4.5 million in construction costs and related expenses during the life of the project; C.t WHEREAS, Pickering Wharf Hotel (Pickering Wharf Realty Trust) filed a Certified Project application with the City of Salem, which the city approved by a Vote of City Council; WHEREAS, the City of Salem approved a Tax Increment Financing Agreement for the project at its meeting; WHEREAS, the EACC finds that the proposed Certified Project in the City-wide EOA meets the mandatory criteria required in MGL C. 23A; WHEREAS, the EACC finds that the proposed Certified Project has received the appropriate municipal approval at the Salem City Council Meeting, in accordance with the statute; and WHEREAS, the EACC finds that the proposed Certified Project, if so certified, will have a reasonable chance for increasing employment opportunities for the residents of the City of Salem and the ETA, thereby reducing conditions of blight, economic depression, and widespread reliance on public assistance; NOW THEREFORE BE IT RESOLVED by the Economic Assistance Coordinating Council that: 1. The Pickering Wharf Hotel (Pickering Wharf Realty Trust) Certified Project is approved. 2. Pickering Wharf Hotel (Pickering Wharf Realty Trust) is eligible for the Massachusetts 5% Economic Opportunity Area Tax Credit. MOTION by Mr. Ebersole, seconded by Mr. Raymond at the June 25, 1998 meeting of the Economic Assistance Coordinating Council, at which a quorum was present. Ayes _8 Nays _0 Abstentions 0 Absent _2 Page 3 APPROVED: vid A. Tibbetts, Director Department of Economic Development Co-Chairperson, Economic Assistance Coordinating Council Jane Wallis ble, or Department f b4 8c Community Development Co-Chairperson, Econ c Assistance Coordinating Council b , S3+y+ fri,.. f a 78828.50480 139 131449.d2 F ._ dies 3:o2Q,,, DEER . 06/06/96 001s0077�f Irmt 394 Joseph M. Gibbons and Nicholas A.Caporele,Trustees of PickcWh w1t0t'(yy6ltOtxb G 532 Trust u/d/t August 31, 1995 and recorded September 14, 1995 with the Essex South Registry qf of Deeds in Book 13191,Page 144(the'Grantor'),for consideration of One Million Seven Hundred Twenty-Five Thousand Dollars($1,725,000),hereby grants to J.Hilary Rockett, Trustee of Pickering Wharf Realty Trust u/d/t May 2, 1996 and recorded with said Deeds ky herewith of 190 Pleasant Street,Marblehead,Massachusetts 01945(the 'Grantee),with QUITCLAIM COVENANTS,the following condominium units,percentage interests in condominium common areas and facilities and parcels of land in Salem,Essex County, Massachusetts: C011dnminll}m T!n't< � SI V The following condominium units in the Pickering Wharf Condominium(the _,. 'Condominium')in Salem, Essex County,Massachusetts created by and described in the Master Deed of Pickering Wharf Condominium dated August 3,1979 recorded with Essex South Registry of Deeds in Book 6624,Page 141,as amended by a First Amendment to Master Deed dated November 9, 1979,recorded with Essex South Registry or Deeds In Book 6653, �- Page 99, by a Second Amendment to Master Deed dated December 28,1979,recorded with Essex South Registry of Deeds In Book 6667,Page 39,and as further amended by a Third {l Amendment to Master Deed dated April 4,1980,recorded with Essex South Registry of Deeds ' in Book 6692,Page 336(said master deed as so amended Is hereinafter referred to as the 'Master Deed'): l Building �lIy mrng in�r et Bark Emerald A 2.4095 Bark Emerald B Privateer 1.8073 ^ A 2.6529 40 q g ggc 10 , Pickering A 2.5602 1����,;� Pickering B 2.4459TH }. Pickering C 2.1483 06/06 (� 3 Wherry Row A 1.9544 Wherry Row B 1.7976 Wherry Row C .9195 TAX 7866.00 Square Rigge A 1,8221 CASH 7066.00 Bowditc4 A 2.4082 Tancook Crescent A 3,5773 947CA000 12h80 Tancook Crescent B 2.0887 EXCISE TAX Tancook Crescent C 1.7079 F f ' 1 5• j it"i. talL���$411atY03tn11:19.��= Building Percentave Interest Hawthorne A 1.6617 Hawthorne B 1.2949 Hawthorne C .9093 Arbella A 1.2628 BK 13588 PG 533 Arbella B 1.3621 Gentoo A 1.1653 Gentoo B 3.6888 Gentoo, C 1.7788 Grand Turk A 3.2700 Grand Turk B 6.3601 Derby A 10.8775 Derby B 2.8439 Together with the undivided percentage interests in the common areas and facilities of the Condominium described in the Master Deed as set forth for each unit above. Subject to and with the benefit of all easements,rights,reservations. restrictions, agreements and provisions contained in the Master Deed,In the Agreement and Declaration of Trust of the Pickering Wharf Condominium Trust dated August 3,1979,recorded with Essex b South Registry of Deeds in Book 6624,Page 168,In the By-Laws of Pickering Wharf Condominium recorded with Essex South Registry of Deeds In Book 6624,Page 179,and in any rules and regulations promulated pursuant thereto,as any of the foregoing may be amended from time to time. Subject to and with the benefit of the provisions of Massachusetts General Laws Chapter 193A as now in force and as amended from time to time. Each of the foregoing units is intended to be used for any purpose allowed by applicable law,zoning taw,license,permit,use regulation,special permit,exception or variance. Parcel I All right,title and interest in and to the South River in Salem,Essex County, Massachusetts and any and all rights of access thereto and egress therefrom as more particularly described in Exhibit A to the Master Deed. As provided in the Master Deed,such right,titre arxi interest and rights of access and egress were specifically excluded from the premises submitted to Massachusetts General Laws Chapter 183A by the Master Dad and from the Condominium crated thereby. 2 I i )9878.SOIaO 139 131N9.d2 ' I. BK 11n$mPG 534 1 i I 1 Parcel The land with the buildings and improvements thereon In Salem, Essex County, Massachusetts bounded and described as follows: NI: WESTERLY by Congress Street,about fifty-nine and 09/100(59.09) fat; ; NORTHERLY by land now or formerly of Wetmore,about one hundred sixty-six(166)feet; 1 it EASTERLY by land now or formerly of Shaluk,about sixty- one and 72/100(61.72)feet;and ,l SOUTHERLY by the outer edge of the bulkhead shown on the ' plan recorded with Essex County Registry of Deeds In Book 3263,Page 40,about one hundred seventy and 92/100(170.92)feet. ''!f Together with the flats to low center line appurtenant and adjacent to 01e aforesaid parcel as shown on said plan recorded in Book 3263,Page 40. Together with any other rights in any other flats which may be appurtenant to the -uk aforesaid parcel. 1 j The premises described above are conveyed subject to and with the benefit of all .. easements,covenants and restrictions of record. Being the same premises conveyed to Grantor by Deed of Salem Five Cents Savings g Bank,recorded with the Essex South Registry of Deeds on September 14, 1995,In Book 13191,Page 144. The address of the premises conveyed by this Deed is Pickering Wharf,Salem, Massachusetts. e 3 i 73822.30490 139 13I449.a BK 13598"M 535 Executed under seal this day of June, 1996. Pickering Wharf Nominee Trust Joseph M.GbTrustee By: icholas A.Caporale,is Trustee BK 13598 PG 535 I w 1 1 4 i i ' I I Ir PICKERING WHARF REALTY TRUST . 84 WHARF STREET SALEM, MASSACHUSETTS 01970 ,ter , August 31, 1998 %� > City of Salem SEP 02 tjl Salem City Planner 1 Salem Green Salem : .,_. , - :P Salem, MA 01970 ATTN: Craig Wheeler RE: Union Street - Ownership: Pickering Wharf Condominium Trust Dear Craig: This is notification that Union Street in Pickering Wharf is owned exclusively by Pickering Wharf Condominium Trust and Pickering Wharf Condominium Trust has maintained - the way since the inception of the Trust, the same as all prior owners of the street. The ownership of the street is recorded in the Pickering Wharf Condominium Deed in Book 6624 Page 153, "(c) Phase IV. The land described in Exhibit C attached hereto and made a part hereof as Union Street...(please see attached copy of Book 6624,Page 153).,The description shown in Exhibit C, is also attached and is recorded in Book 6624, Page 167. Both documents were recorded on August 22, 1979. Additionally, I am enclosing a letter by Attorney Morris Tobin, who did a title search of Union Street, a 40 foot way, and his letter states, "that the City of Salem has no interest in the property and that title is solely vested in Pickering Wharf Condominium." If you have any further questions please contact me. Pickering Wharf Realty Trust, Hil�ockett, Trustee r cc: 1 Capt. Robert Callahan, Salem Police Department J;. Hilary Rockett, Jr,and Pamela Rockett, Trustees of Pickering Wharf Condominium . - Trust _ HUU-'L/-`.1C 4Jb=T! Y rtUM= lU+ ibWb/Ybb/gib ['Hl.t 2/y BK66Z4 PG 153 Chapter 18::a as from time to time amended, pursuant to this .� Paragraph, and the percentage interest of each Unit owner in Phase II in the commor. areas and facilities shall be as shown on said Exhibit B. (b) Phase III. The buildings shown on Site Plan as "Gentoo", _ and 'Arbella" and the areas shown c•n the Site Plan and/or. Building Plans as "Reserved For Future Construction", and 'Reserved For New Construction" together with all improve- ments herein. Any such Amendment shall contain with re- spect to Phase III all of the particulars and plans required by General Laws, Chapter 183a, as from time to time amended, g'. and from and after the recording of such Amendment with 9a Essex South District Registry of Deeds Pickering 94harf Condo- minium shall include phase XII. The buildings to be in- cluded in Phase IYI of the Condominium will consist of two (2) separate buildings, one containing three stories, and _ the other a combined two and four stories, containing nine- teen (19) Units, a total of nineteen (19) units, located on the Premises described in Exhibit A. The Percentage in- terest Of each Unit Owner in Phase I and Phase II in tha common areas and faeilities will decrease to the percentage interest shown on Exhibit H if Phase III shall be submitted i -�` to the provisions Of General Laws Chapter 183a, as from i time to. time amended, pursuant to this Paragraph, and the percentage interest of. each Unit Owner in Phase ;iI in the co,maan areas and facilities shall be as shown on ,paid Ex- hibit a. r;��/�}p,�Y��'(C) PhdSe IV. The laud described in Exhibit C attached �/ hereto and made a udit hereof as Union Street- %nY such -17- nuu—z,—acs ney:zd Y12uM: IDaIS0874OG728 PAGE 3/5 i BK6619 PG 1 5q i Amendment shall contain with respect to Phase IV all of they particulars and plans required by General Laws, Chapter 181a as from time to time amended- There will be no building nor any Units on Phase IV. From and after the recording of such: Amendment with Esser south District Registry of Deeds, Pick- ering Wharf Condominium Shall include Phase IV. The percen- tage interest Of each Unit Owner of Phases I, II and III or any of them will be unaffected by the addition to the Condo- minium of Phase IV. 12. The Declarants further reserve to themselves, tt.eir successors and assigns, as hereinafter set forth, notwithstanding the provisions Of Paragraphs 10. and 11. hereof the right at any time and from time to tine to amend the Master Deed, without the consent of ariy Unit owner or Mortgagee or of anyone claiming by, through, or under Declarants or their successors in interest, so as to subdivide or re— Subdivide each or every lettered Or Non-residential Unit contained in Phase I, Phase II ani: Phase III into smaller Non-residential Units in such number Of smaller Units Vs may be allowed by applicable law. Upon any such division or re-division, the resulting Units shall share the percentage interest in the common areas and facilities as was ap- plicable to the Unit so divided :n the approximate relation that .the fair value of each such smaller Unit then bears to the aggregate fair_ value of all such smaller Units obtained from the Unit so divided. From and after the recording of such Amendment or Amendments with Essex south District Registry of. Deeds Pickering wharf Condominium 1 shall include such smaller Units. The Declarants hereby reserve to themselves, and each Unit owner and successor in 1.i tle tc any Unit, by acceptance of and recording of a deed to such Unit or ty otherw;se acquirirac title thereto, hereby covenants to and does hereby irr2v*?- -14- A un roe- Salem, County o. Essex, a., land s, d as follows : bounded and Cescr�,be . Commonwealth Of of jjnion 'a- Be,3ihnlnq at 8 spike sec ac the t4es ,y the North- being Sideline� of Ce�bv Street, -Stleet on the Southerly - and jos,oh� ,, vabiSzews%� - east corner or land, now or formerly of Mary i CA 17 4 .13 C) �el t t I Land c�'t 17 , OW or for.�Ierl-, 0, St. Thence running SO- land n n(j Jana Of fel;rage q. Fab' s,ewski ana Inc. N I-,I,, Russian uenefLL soc-� Trust • IC -3 k ,ail set". land Of said Heritage tal� r,usr to a ,,..C.e 40.0o feet by !':" Thence, �,87 3z - 20 F s`167 .55 �t I land of said ritage T I , LO a drill hale 167 .55 feet L,Y - Sidel ine Of - �011E easterly NU::'- 1-7- 1 . 1 set at the Thence, stake Z�,rjcj nal.- TrustDe ile -,a a r'oy Street; to a point; 5�j leet ). 24 Feet to the point a' beginning; Thence ;76 20 - 5 ' , 3* 1 3. - 33^;;- , located south Then,,!, !17(1 Ction of Union 1-t�C�' 1. to describe "a . n,I nq 6831 quare a way, 40 feet wide; contain;)f Derby Street, being 0, he Site plan referred to in the Master feet, nj being show', to be recorded t,erewLth- Deed 1'.17 _. W CWDt") l•'. SI: J MORRIS TOBIN ATTORNEY AT LAW 990 PARADISE ROAD SWAMPSCOTT, MASSACHUSETTS 01907 (781)595-3189 FAX(781)595-9790 August 19, 1998 J. Hilary Rockett, Jr. Rockett Realty 190 Pleasant Street Marblehead, MA 01945 Re : Pickering Wharf Condominium Union Street, 40' Way Dear Hilary, My title examination does not indicate that the City of Salem has any interest in the above entitled property, and it is my opinion that title ' s solely vested in Pickering Wharf Condominium. ve ru ours, M T IN MT:m a� firs �a��s � n��C'' r�P ?y+d a�$��✓� s� a�'i«fw ar x � ^7�.� £S r�'� 45J5rr FL,S� k° jd?j£t. m 4 ."^'Nt���� (,3� �+��5_ ( ✓�t��y�pct[ I�Y�ryr'j�{, �r(ltr.Ii�3�7� ��yY � -Py4,?� }w ,-� �k2=•� � l . 4''�rl �— r r l 4 '.. '�.�` i s int• t rM1 f�3� t t t t � t / ss• 'l� l�f r7fyl�nfl ` '�� o r[ YFs +gah ss c`F� fyt; kt 1' t y a M S. °�F^r�i r 000 5,; samo so • Pickering Wharf Hotel Application for Certified Project Designation Tax Increment Financing Plan CITY OF SALEM, MASSACHUSETTS STANLEY J.USOVICZ, JR. _-- - - - MAYOR June 15, 1998 Economic Assistance Coordinating Council Sean Calnan, Director Massachusetts Office of Business Development One Ashburton Place, Room 2101 Boston, MA 02108 To the Members of the Economic Assistance Coordinating Council: In June 1996, the Trustees of Pickering Wharf Realty Trust acquired two thirds ownership of the well known Pickering Wharf in Salem. Members of the Trust own Rockett Management and Realty, a successful realty management firm. Approximately two years ago, representatives of Pickering Wharf Realty Trust expressed an interest in developing a hotel at Pickering Wharf. The proposed location for the hotel is at the corner of Congress and Derby Streets. At this site there are two office/retail buildings that are 90 percent vacant and a bank. The buildings will be demolished, with the bank being relocated on site. One of the first actions I undertook as the newly elected Mayor was to enter into negotiations with the Trust representatives to offer an economic incentive package that was mutually beneficial. I welcomed the interest of Pickering Wharf Realty Trust and sought to provide development assistance to encourage the construction of a hotel on Salem's waterfront. My administration has closely followed the economic impact that has occurred due to a lack of hotel accommodations. Extensive studies support the need for additional hotel rooms in the City. The hotel project at Pickering Wharf is an appropriate candidate for the Economic Development Incentive Program. The company proposes to create 60 new jobs and replace a vacant property with a productive, attractive property that will serve as an anchor to Salem's water-front. The Trust plans to make a significant, highly visible investment, complementing the City's own plans for the area, which include extensive harbor planning and the construction of an attractive garage with retail space. EACC Page 2 June 15, 1998 The timing of the hotel project is ideal for the City of Salem. The City is experiencing an exciting time of growth as important projects are completed and planning for new opportunities is ongoing. There is a demonstrated need for a hotel and we believe that this endeavor will be successful in Salem and that its success would help to improve the stability and image of the area and attract the interest of investors. On June 11, 1998, the Salem City Council voted to designate the hotel a certified project and endorsed a thirteen-year tax increment financing (TIF) plan. The enclosed TIF plan and application for certified project status describe the City's reasons for offering incentives and the many benefits which the Pickering Wharf hotel project will bring to the waterfront area. The City of Salem has used the Economic Development Incentive Program to assist five growing Salem companies. I appreciate your support of our economic development efforts and hope that, once again, you will vote to certify a Salem project. Sincerely, Stanley J. Usovicz,Jr. Mayor ma\ti f\picke ring\eacuju ROCKETT MANAGEMENT & REALTY CO., INC. 190 PLEASANT STREET MARBLEHEAD,MASS.01945 TEL.(781)631-3070 FAX(761)639-2290 J.BILARY ROCKETT,JR. Vice President June 15, 1998 Economic Assistance Coordinating Council C/o Sean Calnan, Director Massachusetts Office of Business Development One Ashburton Place, Room 2101 Boston, MA 02108 To the Members of the Economic Assistance Coordinating Council: I am writing to express the commitment of Pickering Wharf Realty Trust to help revitalize the Salem waterfront/downtown area with our plans to build a hotel. As evidence of our commitment, we have filed an application for certified project status with the EACC. We would like to start construction this summer and hope to open in the summer of 1999. Our commitment to do business in Salem is based on an agreement with city officials in which the city will offer property tax credits to make this redevelopment project economically feasible. In addition, Pickering Wharf Realty Trust will take advantage of state investment tax credits offered through the Commonwealth's Economic Development Incentive Program primarily to build a seawalk to allow the public access to the waterfront. The numerous economic and community benefits of this project are described in our application for certified project status. It has been projected that an additional 50,000 people will visit Salem due to this hotel, which will give a tremendous boost to Salem's downtown/waterfront. If you have any questions about this matter or if you need further evidence of our commitment to Salem, please contact me at (781) 6N70. e Jr. JHR:nh The Massachusetts Economic Development Incentive Program Certified Project Application Applicant Information 1. Name and address of business(es) submitting this application: Pickering Wharf Realty Trust J. Hilary Rockett, Trustee 190 Pleasant Street Marblehead, MA 01945 Fiscal year end is: December 31 2. Name and address of project (if different from above): Pickering Wharf Hotel Corner of Congress Street & Derby Street Salem, MA 01970 3. Location of ETA: Beverly & Salem Regional ETA 4. Location of EOA: Salem 5. Authorization: I/We (print) of Ie 'J. kLA the entity applying fo Certified Project designation, hereby certify that the information within this application is true and accurate, and reflects the project's intentions for job creation and investment. I understand that the information provided within t s licatio shall be bindi for the duration of the project ce ific on. Signature (Date) Signature (Date) I 6. Nature and purpose of project: INTRODUCTION AND HISTORY OF PROJECT DEVELOPMENT Pickering Wharf Realty Trust seeks Certified Project designation for the Pickering Wharf Hotel to be developed at the corner of Derby and Congress Streets. Salem is a major New England tourist destination that draws over 650,000 visitors annually to its cultural, historic and maritime attractions. Due to a limited supply of overnight accommodations, tourist and business visitor dollars are spent in communities such as Danvers and Peabody which have numerous hotels with easy access to major highways. The trustees of Pickering Wharf Realty Trust recognized the need for additional hotel accommodations in Salem and that the potential space available at Pickering Wharf was an ideal location. The developers conducted an extensive financial analysis of the project and concluded that the development would not be economically feasible without property tax relief through a TIF agreement. Their findings were supported by a Hotel Study conducted by Landauer Group that indicated the Pickering Wharf hotel site was the most suitable location in Salem for new development and the one most likely to be supported by the market. Their analysis also concluded that the cash flow generated by the project. for debt service would not be sufficient to attract private sector developers without economic assistance from the community. Rockett Management & Realty Company was established in 1968. The company develops, manages and owns several commercial and residential properties, including 400 Highland Place, Route 107 in Salem, the Village Plaza in Marblehead and several apartment buildings. The Pickering Wharf Realty Trust was established prior to the purchase of Pickering Wharf on May 2, 1996. Pickering Wharf Realty Trust acquired Pickering Wharf in June 1996 and initiated the successful revitalization of this popular waterfront destination. Pickering Wharf Realty Trust owns 67% of the condominiums in the form of commercial space. The remaining 33% of the space is comprised of residential condominiums. Twelve of the 54 residential condominiums are owned by Pickering Wharf Realty Trust. Pickering Wharf had been for sale since 1991 and had begun to show signs of neglect that have since been reversed under Rockett Management Company's ownership. As a part of the owner's plans for a major redevelopment of Pickering Wharf, a hotel development was proposed to be located at the comer of Derby and Congress Streets. Pickering Wharf Realty Trust plans to construct an eighty +/- room, three story hotel containing standard 14' x 36' rooms featuring kitchen facilities. The ground floor will offer 18,000 square feet of retail space. The development will be a total of four stories. The development cost of the hotel portion of the project is $3,541,100. The hotel will be approximately 50,000 square feet. 2 The overall project cost is $4,441,100. The retail portion of the project is estimated to cost $900,000. Please refer to the chart on page 4 for a cost breakdown. The project is projected to employ 60 persons in net, new permanent jobs for the ETA. The existing conditions of the hotel site include retail and office space contained in two buildings and-an Eastern Bank. Ninety percent of the retail and office space has been abandoned for over two years. The two buildings housing retail and office will be demolished and the retail uses will be relocated to the ground floor of the hotel. The bank will be demolished and relocated next to the hotel site. The applicant seeks certification for the hotel portion of the project only. All newly constructed retail space, including the relocated Eastern Bank, will be taxed at full valuation. In addition, the City and the developer have entered into a Memorandum of Understanding in which each party has pledged to work in a public/private partnership to secure state and federal funds for items such as increasing public access to the waterfront. There is an unfinished segment of a seawalk from Congress Street to the Chase House restaurant to be addressed with the use of grant funds. 7. Is this business new to Massachusetts? d Yes ❑ No If no: • Where are the existing Massachusetts facilities? • Will this project require/trigger the closing or consolidation of any Massachusetts facilities? If yes, please explain. 8. Is this project an expansion of an existing business? ❑ Yes d No If yes, check the appropriate box: ` ❑ at existing location ❑ at new location in same municipality ❑ at new location in different municipality 3 Budget for Project Soft Costs Budget Architecture Fees 150,000 Structural/Mechanical Engineering 38,000 21 E Site Report 10,000 Legal Fees 18,000 General Conditions 85,000 Business Relocation Costs 125,000 Bank Loan Fees 150,000 Permit 15,000 Site Superintendent 75,000 Office Expense 30,000 Hard Costs Demolition 145,000 Site Preparation 45,000 Piles/Caps 160,000 Grade Beams 129,000 1st Floor Structural Slab 106,000 Structural Plank/Steel Structure 513,000 Concrete Slabs (3) 94,000 Roofing 145,000 Towers/Light Steel Framing 0 Staircases 51,000 Elevator 125,000 Exterior Wall System 397,000 Glass & Glazing 150,000 Misc. Exterior Allowance 50,000 4 Sprinkler System 130,000 Electrical 197,000 Plumbing 175,000 HVAC 365,000 Interior Demising Partitions 157,000 Interior Allowance 215,000 Fire Alarm System 56,000 Excavation 86,000 Materials 22,000 Grading/Compaction 26,000 Curbing 22,000 Landscaping 27,000 Sprinkler System 7,100 Paving 61,000 Walkway 49,000 Sidewalk Pavers 25,000 Special Landscaping 15,000 Total 4,441,100 Breakdown of costs Hotel 3,451,100 Retail 900,000 C 9. Job creation In order to qualify for Certified Project status, the governing statute and regulations require the creation of net, new, permanent full-time employees in Massachusetts. On the chart provided (see next page), please fill in the blanks provided. 5 Work Force Analysis and Job Creation Plan Current TOTAL NEWJOBS NEW JOBS NEWJOBS NEW JOBS NEWJOBS NEWJOBS employment projected new Year I Year 2 Year 3 Year 4 Year 5 Years 6-13 permanent jobs Total Employees at Certified Project 0 60 45 8 1 0 0 0 Facility Total Employees at Other Sites in 0 0 0 0 0 0 0 0 Mass. #of Employees at Certified Project 0 45 35 3S 35 35 35 35 Location who live in the ETA #of Permanent full-Time Employees 0 45 35 5 5 0 0 0 #of Permanent Part-Time Employees 0 IS 10 3 2 0 0 0 #of Temporary full-Time Employees 0 10 0 0 0 0 0 0 construction #of Temporary Part-Time Employees 0 10 0 0 0 0 0 0 construction #of Management Positions 0 4 0 0 0 0 0 0 Average Salary of Management 0 $50,000 Positions #of Professional Positions 0 10 0 0 0 0 0 0 Average Salary of Professional 0 $40,000 Positions #of Technical Positions 0 4 0 0 0 0 0 0 Average Salary of Technical Positions 0 $30,000 #of Skilled Positions 0 18 0 0 0 0 0 0 Average Salary of Skilled Positions $30,000 #of Unskilled Positions 0 24 0 0 0 0 0 0 Average Salary of Unskilled Positions $15,000 6 10. Certification for Abandoned Buildings: Does the proposed project involve the renovation and reuse of an abandoned building? ❑ Yes I No ❑ Unsure If yes or unsure, please answer the following questions: (a) How long has the building been vacant? (If known, state date) (b) During this period of time, what percentage of the building was vacant and unused? If the percentage varied during this time period, provide information for each change in the percent of vacant space and the applicable time period. 11. Local Employment: What actions will you take to recruit employees from among residents of the ETA? The hotel developers believe that the majority of new employees will be ETA residents, as the company will advertise new positions exclusively in the Salem Evening News. Pickering Wharf Realty Trust has the intention and capacity to achieve the anticipated level of new permanent full-time jobs for residents of the municipality and the ETA. The local labor supply is well qualified for the nature of the positions that will be available in the hotel development. The hotel is located within walking distance of several neighborhoods which will assist in reaching the anticipated level of new permanent full-time jobs for residents of the municipality and the ETA. 12. Affirmative Action Statement: It is the policy and practice of Pickering Wharf Realty Trust to hire and promote that person determined to be the best qualified without regard to race, color, religion, sex, age, marital status, or national origin. 13. Agreement between the Business and Area Banks: Describe briefly the business' local banking relationship(s), if any. Does the institution with which the business banks participate in the Massachusetts Capital Access Program, which is designed to commit a portion of the business' deposits to fund loans to local businesses? Pickering Wharf Realty Trust banks with Eastern Bank, who participates in the Massachusetts Capital Access Program. 7 14. Economic benefits of project certification: Provide a description of the economic benefits that are anticipated for the business and the project, if the project is certified. Also, provide any information, documentation or studies demonstrating any additional benefits (i.e. reduction of blight, reuse of abandoned buildings, clean up of contaminated property, job training, provision of day care, any contributions to the community, etc.) likely to accrue to the area as a result of Certified Project designation. - Please describe: Economic benefits to alllicant The benefits of project certification are summarized below: • Development is economically feasible with the receipt of investment tax credits and property tax benefits • The developer will receive approximately $1,369,964 in local property tax benefits over 13 years • The construction of a $3,873,400 hotel will entitle the company to $193,670 in State 5% investment tax credits • The developer will receive additional state investment tax credits as a result of investment in equipment for the hotel • Project provides an anchor for the Pickering Wharf development and orients the visitor to Pickering Wharf and the waterfront • a 90 % abandoned building is removed from the site • quantity and quality of retail is greatly improved within Pickering Wharf Economic benefits to the Cio� 12f Salem • The City's tax base will be expanded; room taxes in the amount of $968,927 will be received and parking fees in the amount of$451,710 will be generated • The reconfigured retail will generate additional tax revenue • After all local property tax exemptions expire, this project will generate $185,121 per year in property tax revenues • 60 new jobs will be generated through the staffing of the hotel • The hotel is to be located in the heart of Salem's waterfront area on one of Salem's main entrance corridors. The City has launched several initiatives to improve the appearance of commercial properties on Salem's entrance corridors. This project will be a catalyst for additional development and rehabilitation of the waterfront area • The City has historically suffered a loss of tourist revenue due to a limited supply of hotel rooms. The new hotel and retail property taxes, coupled with room tax and parking fees, will have a significant impact on 8 the City's economy. The waterfront location of the hotel will generate more business for local retailers, restaurants and tourist destinations. Special Requirements for Real Estate Projects 1. Will the business own or lease/rent the facility? f own ❑ Lease/Rent If leasing/renting, please identify the developer/landlord, and state who will be the taxpayer of record for the purpose of paying local real estate taxes. If owning, will the business fully occupy the space? d Yes ❑ No If no, does the business intend to lease/rent the remaining space? 2. Describe how the various tax benefits and other economic incentives that will result from Certified Project designation will be allocated among the business(e's) developing the project (i.e. a developer or landlord) and the business(e's) intending to purchase, lease or rent space at the facility (i.e. tenant or tenants). N/A Supplemental Information 1. Name(s) of business(e's) intending to take advantage of state tax incentives: Business Name: Pickering Wharf Realty Trust Federal Employer ID:04-6805953 Address: 190 Pleasant Street Marblehead, MA 01945 Phone: (781) 631-3070 Fax: (781) 639-2290 Contact Person: J. Hilary Rockett, Jr., Trustee Type of Organization (check that which applies): ❑ Corporation: ❑ For profit; ❑ S Corp.; ❑ Non-Profit I Business Trust ❑ Partnership: ❑ General Partnership; ❑ Limited Partnership ❑ Individual 9 Level of interest: (Indicate the benefits the company seeks) 15% Investment Tax Credit ❑ 10% Abandoned Building Tax Deduction (if applicable) I Local Real Estate Tax Incentive Beneficiary 2. Names and Addresses of Organization (please respond according to type) Business Trust Beneficiaries: J. Hilary Rockett and M. Denise Rockett 10 Foster Street Marblehead, MA 01945 J. Hilary Rockett, Jr. 5 Corn Point Road Marblehead, MA 01945 T. Michael Rockett 36 Roosevelt Avenue Marblehead, MA 01945 Richard P. Rockett 7 Dunns Lane Marblehead, MA 01945 Pamela M. Rockett 14 Roosevelt Avenue Marblehead, MA 01945 3. Please provide names, addresses, phone numbers and contact persons for organizations which may own or control or be affiliated with the applicant organization: Not Applicable 4. Certificate of Good Standing: A Certificate of Good Standing is attached with this application. mccAtif\formskpap.wpd 10 Commonwealth of Massachusetts Department of Revenue Taxpayer Service Division Certificate Unit P.O.Box 7066 July 2, 1998 Boston,MA 02204 PICKERING WHARF REALTY TRUST PICKERING WHARF PICKERING WHARF SALEM, MA 01970 LETTER OF COMPLIANCE In response to your request for a certificate of good standing, please be advised that the statutory authorization for the issuance of Certificates of Good Standing extends only to incorporated entities. However, we have researched Department records relative to the filing and payment of the following taxes: ID# 046805953 REALTY TRUST. The research discloses no assessed liabilities at this time. This statement is not a waiver issued under Massachusetts General Laws, Chapter 62C, Section 52, or a tax certificate issued under M.G.L., Chapter 1566, Section 99 or 100, and cannot be used for such purpose. Very Truly Yours, 4 Assistant Chief, ° Collections Bureau N0. 44532 5055 - 59032 Mitchell Adams Commissioner ®0^�retl an recycleC OaOer �ONDIT CITY OF SALEM 9p�mNe In City Council, May 14 , 1998 RESOLUTION - - - - APPROVING CERTIFIED PROJECT APPLICATION OF PICKERING WHARF REALTY TRUST WHEREAS, Pickering Wharf Realty Trust has applied for designation as a Certified Project under the Massachusetts Economic Development Incentive Program created by Chapter 23A of Massachusetts General laws; WHEREAS, Pickering Wharf Realty Trust meets the minimum standards of the Economic Development incentive Program and the local economic development goals and criteria established as part of the documents creating the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS, the proposed certified project is located at the comer of Congress and Derby Streets, within the boundaries of the Salem Economic Opportunity Area. The legal description is as follows: The following condominium unit in the Pickering Wharf Condominium (the ' "Condominium") in Salem in the County of Essex and Commonwealth of Massachusetts, created by and described in the Master Deed of Pickering Wharf Condominium dated August 3, 1979 recorded with Essex South Registry of Deeds in Book 6624, Page 141, as amended by a First Amendment to Master Deed dated November 9, 1979, recorded with Essex South Registry of Deeds in Book 6653, Page 99, by a Second Amendment to Master Deed dated December 28, 1979, recorded with Essex South Registry of Deeds in Book 6667, Page 39, and as further amended by a Third Amendment to Master Deed dated April 4, 1980, recorded with Essex South Registry of Deeds in Book 6692, Page 336 (said master deed as so amended is hereinafter referred to as the "Master Deed"): Building Unit Percentaee Interest Derby A 10.8775 said unit A, Derby Building being a part of the total Master Deed described above. Together with the undivided percentage interests in the common areas and facilities of the Condominium described in the Master Deed as set forth for the unit above. Subject to and with the benefit of all easements, rights, reservations, restrictions, agreements and provisions contained in the Master Deed, in the Agreement and Declaration of Trust of the Pickering Wharf Condominium Trust dated August 3, 1979, recorded with Essex South Registry of Deeds in Book 6624, Page 168, in the By-Laws of Pickering Wharf Condominium recorded with Essex South Registry of Deeds in Book 6624, Page 179, and in any rules and regulations promulgated pursuant thereto, as any of the foregoing may be amended from time to time. Subject to and with the benefit of the provisions of Massachusetts General Laws Chapter 183A as now in force and as amended from time to time. The foregoing unit is intended to be used for any purpose allowed by applicable law, zoning law, license, permit, use regulation, special permit, exception or variance. WHEREAS the City of Salem has agreed to offer Pickering Wharf Realty Trust a Tax Increment Financing Agreement; WHEREAS, Pickering Wharf Realty Trust will invest approximately $3,541,100 to develop a hotel at Pickering Wharf, an investment which creates approximately 60, new, permanent jobs for residents of the Beverly & Salem Regional Economic Target Area. WHEREAS, the construction of a hotel at Pickering Wharf will substantially improve the aesthetic appearance of the property and reduce blight on one of Salem's entrance corridors; NOW THEREFORE BE IT RESOLVED that the Salem City Council approves the Certified Project application of Pickering Wharf Realty Trust, designating this project as a certified project for a period of thirteen years, and forwards said application for certification to the Massachusetts Economic Assistance Coordinating Council for its approval and endorsement. Adopted this 11 th day of June, 1998, by the Salem City Council. Stanley J. Usovlc , Jr., Mayor Date �Z ^EAttej Deborah E. Burkinshaw, City Clerk SEAL CITY OF SALEM Yes and Nay Vote of City Council Upon the Question of � U Ove Aw Ic Date 1998- Yes Nay Pres Absent Mat K Blair . Join J.Dum►.e Regina B.Ilym . Thomas H_Furey J .Kevin R-Havey Swab ASL Hayes William A.Kelley Juan B.Lovely Scott J.Mdaagblin . Peter L,Paskewr*i Lenard F.O'Leary,Pres. TOTAL lY C1TY CLERK A TRUE COPY ATTEST CITY CLERK SALEM. MASS. Massachusetts Economic Development Incentive Program Tax Increment Financing Plan I. Location A. Economic Opportunity Area (EOA): Salem EOA B. Municipality: City of Salem C. Tax Increment Financing (TIF) Zone: Attached are: • map of the ETA • map showing the general location of the proposed private project • parcel by parcel map • property lines and the outline of each building • map indicating infrastructure improvements, all thoroughfare, public rights of way and easements • zoning map • location of proposed private and public projects Common description of TIF Zone: The proposed TIF Zone is located at the corner of Congress and Derby Streets in the Salem Economic Opportunity Area (EOA). The tax parcel is Map 34, Lot 446. Legal description of TIF Zone: The following condominium unit in the Pickering Wharf Condominium (the "Condominium") in Salem in the County of Essex and Commonwealth of Massachusetts, created by and described in the Master Deed of Pickering Wharf Condominium dated August 3, 1979 recorded with Essex South Registry of Deeds in Book 6624, Page 141, as amended by a First Amendment to Master Deed dated November 9, 1979, recorded with Essex South Registry of Deeds in Book 6653, Page 99, by a Second Amendment to Master Deed dated December 28,- 1979, recorded with Essex South Registry of Deeds in Book 6667, Page 39, and as further amended by a Third Amendment to Master Deed dated April 4, 1980, recorded with Essex South Registry of Deeds in Book 6692, Page 336 (said master deed as so amended is hereinafter referred to as the "Master Deed"): Buildine Unit Percentage Interest Derby A 10.8775 1 said unit A, Derby Building being a part of the total Master Deed described above. Together with the undivided percentage interests in the common areas and facilities of the Condominium described in the Master Deed as set forth for the unit above. Subject to and with the benefit of all easements, rights, reservations, restrictions, agreements and provisions contained in the Master Deed, in the Agreement and Declaration of Trust of the Pickering Wharf Condominium Trust dated August 3, 1979, recorded with Essex South Registry of Deeds in Book 6624, Page 168, in the By-Laws of Pickering Wharf Condominium recorded with Essex South Registry of Deeds in Book 6624, Page 179, and in any rules and regulations promulgated pursuant thereto, as any of the foregoing may be amended from time to time. Subject to and with the benefit of the provisions of Massachusetts General Laws Chapter 183A as now in force and as amended from time to time. The foregoing unit is intended to be used for any purpose allowed by applicable law, zoning law, license, permit, use regulation, special permit, exception or variance. D. Narrative Description of TIF Zone: Needs, Problems and Opportunities: Designation of this TIF Zone meets the needs of, solves problems for and creates opportunities for Pickering Wharf Realty Trust and the City of Salem. DESCRIBE BELOW: Solving problems and meeting the needs of Pickering Wharf Realry Trust: The trustees of Pickering Wharf Realty Trust made a major investment in Salem upon the purchase of Pickering Wharf. The trustees were seeking an opportunity to enhance this important investment and recognized that one of the problems facing Salem was the need for additional hotel accommodations. The potential space available at Pickering Wharf was considered an ideal location. The developers conducted an extensive financial analysis of the project and concluded that the development would not be economically feasible without property tax relief through a TIF agreement. Their findings were supported by a Hotel Study conducted by Landauer Group that indicated the Pickering Wharf hotel site was the most suitable location in Salem for new development and the one most likely to be supported by the market. Their analysis also concluded that the cash flow generated by the project for debt service would not be sufficient to attract private sector developers without economic assistance from the community. 2 Creating Opportunity for Pickering Wharf Realty Trust: This project provides Pickering Wharf Realty Trust with an ideal opportunity to enhance the value of Pickering Wharf and to establish an anchor in the heart of Salem's busy waterfront district. In addition, the ground floor of the hotel will showcase an improved quality and quantity of retail shops that will further enliven Pickering Wharf. Pickering Wharf Realty Trust plans to construct an eighty +/- room, three story hotel containing standard 14' x 36' rooms featuring kitchen facilities. The ground floor will offer 18,000 square feet of retail space. The development will be a total of four stories The cost of the hotel portion of the project is $3,451,100. The construction timeframe is expected to be approximately one year, with construction commencing in August of 1998 and ending in June of 1999. The project is anticipated to employ 60 permanent, net, new jobs in the ETA. Solving problems and meeting the needs of the City of Salem: The hotel is to be located in the heart of Salem's waterfront area on one of Salem's main entrance corridors. The City has launched several initiatives to improve the appearance of commercial properties on Salem's entrance corridors. This project will be a catalyst for additional development and rehabilitation of the waterfront area The City has historically suffered a loss of tourist revenue due to a limited supply of hotel rooms. The new hotel and retail property taxes, coupled with room tax and parking fees, will have a significant impact on the City's economy. The waterfront location of the hotel will generate more business for local retailers, restaurants and tourist destinations. In addition, the City and the developer have entered into a Memorandum of Understanding in which each party has pledged to work in a public/private partnership to secure state and federal funds for items such as increasing public access to the waterfront. There is an unfinished segment of a seawalk from Congress Street to the Chase House restaurant to be addressed with the use of grant funds. Creating Opportunity for the City of Salem: Designation of the TIF Zone and approval of this TIF Plan will help Pickering Wharf Realty Trust establish a new hotel in Salem, which will generate jobs, room taxes, parking fees, and property taxes of$185,121 at the expiration of the TIF. The waterfront location of the hotel will generate more business for local retailers, restaurants and tourist destinations. 3 E. Property owners within the proposed TIF Zone: The property owner within the proposed TIF Zone is the Pickering Wharf Realty Trust. The Trustees are: J. Hilary Rockett M. Denise Rockett J. Hilary Rockett, Jr. T. Michael Rockett Richard P. Rockett Pamela M. Rockett II. Time The TIF Plan and TIF Zone described here will be in effect for a period of thirteen years. III. TIF Zone & Economic Development A. Economic Opportunities and Economic Benefits to the Community: Approval of the proposed TIF Zone will create the following economic development opportunities and benefits: • Creates jobs: 60 net, new permanent jobs • Generates tax revenue: see attached spreadsheet entitled "13 Year Tax Increment Financing Plan" • Improves appearance of 90% abandoned property through demolition • The City's tax base will be expanded; room taxes and parking fees will be generated, please see attached spreadsheet entitled "13 Year Tax Increment Financing Plan" • The reconfigured retail will generate approximately $20,000 in additional tax revenue per year in property tax revenues • The hotel is to be located in the heart of Salem's waterfront area on one of Salem's main entrance corridors. The City has launched several initiatives to improve the appearance of commercial properties on Salem's entrance corridors. This project will be a catalyst for additional development and rehabilitation of the waterfront area • The City has historically suffered a loss of tourist revenue due to a limited supply of hotel rooms. The new hotel and retail property taxes, coupled with room tax and parking fees, will have a significant impact on the City's economy. The waterfront location of the hotel will generate more business for local retailers, restaurants and tourist destinations. 4 B. Proposed and Potential Land Uses: (analyze how the land uses are appropriate for anticipated economic development) The developer will construct a hotel and retail development at Pickering Wharf on the waterfront in downtown Salem. There is a demonstrated need for additional hotel accommodations due to Salem's popularity as a tourist destination. C. Zoning in the TIF Zone: The TIF Zone is located in district B-5, Central Development District. D. Hazardous Waste: (identify any parcels, public or private, in zone which are confirmed hazardous waste disposal sites, in accordance with chapter 21E, MGL. Describe any public or private site remediation activities and any reuse plans) Not Applicable IV. TIF Zone Projects A. Planned Private Project: Pickering Wharf Realty Trust will construct a 50,000 square foot, four story, approximately 80 room hotel,with the ground floor to be occupied by 18,000 square feet of retail uses. Existing retail and office buildings will be razed and a bank will be relocated on site. B. Provide Documentary evidence of the level of the developer's commitment to the proposed and required construction in the TIF project: The developer has retained architects, engineers, surveyors and attorneys for the development of this project. ` 5 C. Budget for Project: The costs of completing the project are as follows: Soft Costs Budget Architecture Fees 150,000 Structural/Mechanical Engineering 38,000 21 E Site Report 10,000 Legal Fees 18,000 General Conditions 85,000 Business Relocation Costs 125,000 Bank Loan Fees 150,000 Permit 15,000 Site Superintendent 75,000 Office Expense 30,000 Hard Costs Demolition 145,000 Site Preparation 45,000 Piles/Caps 160,000 Grade Beams 129,000 Ist Floor Structural Slab 106,000 Structural Plank/Steel Structure 513,000 Concrete Slabs (3) 94,000 Roofing 145,000 Towers/Light Steel Framing 0 Staircases 51,000 Elevator 125,000 Exterior Wall System 397,000 Glass & Glazing 150,000 6 Misc. Exterior Allowance 50,000 Sprinkler System 130,000 Electrical 197,000 Plumbing 175,000 HVAC 365,000 Interior Demising Partitions 157,000 Interior Allowance 215,000 Fire Alarm System 56,000 Excavation 86,000 Materials 22,000 Grading/Compaction 26,000 Curbing 22,000 Landscaping 27,000 Sprinkler System 7,100 Paving 61,000 Walkway 49,000 Sidewalk Pavers 25,000 Special Landscaping 15,000 Total 4,441,100 Breakdown of costs Hotel 3,451,100 Retail 900,000 D. Relevant business plans: Time schedule for development: Scheduled construction commencement: August 1998 7 Scheduled construction completion: June 1999 Expected increases in job creation: 75 temporary construction jobs 60 permanent hotel jobs Estimates of tax revenue based upon increased valuation of parcel: E. Participation in other federal, state and local economic development programs and initiatives: The City intends to pursue grant funding such as CDAG or PWED. F. Planned Public Projects: The City and the developer-have entered into a Memorandum of Understanding in which each party has pledged to work in a public/private partnership to secure state and federal funds for items such as increasing public access to the waterfront. There is an unfinished segment of a seawalk from Congress Street to the Chase House restaurant to be addressed with the use of grant funds. The details of this project will be forthcoming. V. Financing for TIF Zone Projects A. Anticipated Financing for Private Projects: Source: Amount: Unknown $4,000,000 B. Anticipated Financing for Public Projects: Source: Amount: PWED TBD CDAG TBD 8 C. Detailed Projection of Costs of Public Construction: TBD D. Will Betterments be used to finance any public-private projects, now or;within the proposed life of the TIF Plan? N/A E. If Betterments or Special Assessments are a part of the TIF Plan: N/A Schedule for defrayal of construction costs: Agreement of all participating parties in the betterment: F. Describe how private projects will be financed: Evidence of private-financing commitments: Project proponent is investigating financing alternatives with local banks and lending institutions. VI. TAX INCREMENT FINANCING A. Authorization to use TIF: The attached City Council resolution dated March 9, 1995 authorizes the City of Salem to use TIF in the Salem EOA. Also attached is a City Council resolution approving this TIF Plan for Pickering Wharf Realty Trust. B. Amount of proposed tax increment exemptions from property taxes: As the attached spreadsheet shows, the Chairman of Salem's Board of Assessors estimates that property tax benefits will total approximately $1,369,964 over thirteen years. Also, see the description of the proposed TIF Plan in part D of this section. C. Maximum percentage of public project costs that can be recovered through betterments or special assessments: N/A 9 D. TIF exemption from property taxes: As the attached spreadsheet shows, the City estimates the tax benefits to total approximately $1,369,964 over 13 years. The exemption plan works as follows: Year Pickering Wharf Realty Trust Pays 1 - 5 Only the base tax bill 6 -8 10% of the increment, plus the base tax bill 9 20% of the increment, plus the base tax bill 10 40% of the increment, plus the base tax bill 11 60% of the increment, plus the base tax bill 12 80% of the increment, plus the base tax bill 13 100% of the increment, plus the base tax bill The effective date of increment exemption is July 1, 1999 (Fiscal Year 2000). Term of the exemption: 13 years VII. Approval of TIF projects TIF projects are approved by the Salem City Council. The Mayor and his staff are responsible for negotiating TIF Plans and, after Council approval, executing those plans. Evidence of local approvals of the proposed TIF Zone and TIF Plan is provided here in the form of a resolution authorizing a TIF agreement passed by the Salem City Council on June 11, 1998. mc:viRfo ms\ti(plan 10 PICKERING WHARF HOTEL 13-YEAR TAX INCREMENT FINANCING PLAN Base Value $332,300 Tax Rate $34.50 Value After Hotel Constructed $3,873,400 Levy Percent Growth 2.5% Increment in Value $3,541,100 Base Year 1998 Year Property Tax Taxes at TIF %" Base Tax Taxes on Taxes Paid Tax Benefit Room Parking Total Tax Value Rate 100% Value Bill Increment Each Year" Each Year""" Tax Fees Benefit to City BASE $332,300 $34.67 $11,521 0% $11,464 $0 $11,464 $0 $0 $37,800 $49,264 1 $3,873,400 $35.54 $137,648 0% $11,809 $0 $11,809 $125,839 $55,188= $38,934 $105,931 2 $3,873,400 $36:43 $141,089 0% $12,104 $0 $12,104 $128,985 $59,686 $40,068 $111,858 3 $3,873,400 $37.34 $144,616 0% $12,407 $0 $12,407 $132,210 $65,324 $41,202 $118,933 4 $3,873,400 $38.27 $148,232 0% $12,717 $0 $12,717 $135,515 $70,181 $42,336 $125,234 5 $3,873,400. $39.23 $151,938 0% $13,035 $0 $13,035 $138,903 $72,112 $43,470 $128,617 6 $3,873,400 $40621 $155,736 10% $13,361 $14,238 $27,598 $128,138 $74,044 $44,604 $146,246 7 $3,873,400 $41.21 $159,630 10% $13,695 $14,593 $28,288 $131,341 '$75,975 $45,738 $150,002 8 $3,873,400 $4224 $163,620 10% $14,037 $14,958 $28,995 $134,625 $77,907. $46,872 $153,774 9 $3,873,400 $43.30 $167,711 20% $14,388 $30,665 $45,053 $122,658 $79,839; $48,006 $172,897 10 $3,873,400 $44.38 $171,904 40% $14,748 $62,862 $77,610 $94,294 $81,770' $49,140 $208,520 11 $3,873,400 $45'.49 $176,201 60% $15,116 $96,651 $111,767 $64,434 $83,702 $50,274 $245,743 12 $3,873,400 $46.63 $180,606 80% $15,494 $132,090 $147,584 $33,022 $85,633 $51,408 $284,625 13 $3,873,400 $47:79 $185,121 100% $15,882 $169,240 $185,121 $0 $67,565 $52,542 $325,228 TOTALS $2,095,573 $725,552 $1,369,964 $968,927 $632,394 $2,326,873 NOTES "TIF % = Percent of increment that is taxed Room Tax at 4% of Projected Room Revenue(based on 84 rooms) "Taxes Paid Each Year= Base Tax Bill plus Taxes on Increment Parking Fees for 84 spaces @ $450/space increase 3% per year. ""`Tax Benefit Each Year= Benefit to Hotel Developers Value of Hotel=cost of construction plus base value Base Value consists of FY98 Assessed values of 5 condos: 221 Derby, 225 Derby(uhb), 225Derby (uhc), 3 Pickering Way, 7 Pickering Way Does not include enhanced value of ground floor retail which will be fully taxed. pickrin.wka RESOLUTION AUTHORIZING THE USE OF TAX INCREMENT FINANCING IN THE SALEM ECONOMIC OPPORTUNITY AREA WHEREAS,.the City of Salem is part of the area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS,there is strong support for economic development and the use of Tax Increment Financing as an economic development tool to create jobs and encourage business expansion and relocation to the City of Salem; NOW THEREFORE BE IT RESOLVED by the City Council of the City of Salem that: (1) Tax Increment Financing may be used as a tool to encourage economic development within the Salem Economic Opportunity Area. (Z) The Mayor is hereby authorized to execute and implement Tar Increment Financing agreements. .-adopted this 9 � day of '�GC�/� 19by the Salem City Council at a regular City Council meeting with a quorum present. Neil J. Harrington, Mayor Date .-ATTEST: Deborah E. Burkinshaw, City Clerk SEAL ' � toxn�r CITY OF SALEM n Sa I - ,)t �Ggm RESOLUTIO'_`: AUT_ HORIZING A TAX INCREMENT FINANCING AGREEMENT _ For Pickering Wharf Realty Trust Ordered:WHEREAS,the City of Salem is part of the�area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS,the Mayor of the City of Salem has prepared a Tax Increment Financing Agreement in accordance of Chapter 40 and 751 CMR 11.00; WHEREAS, there is strong support for economic development and the use of Tax Increment Financing as an economic development tool to encourage business expansion in and relocation to the City of Salem; WHEREAS, there is strong support for using Tax Increment Financing to encourage the development of a Hotel at Pickering Wharf, the property owned by Pickering Wharf Realty Trust; WI IEREAS.'this property is located in the Salem Economic Opportunity Area; NOW THEREFORE BE IT RESOLVED by the Salem City Council that: ( 1) The Tax Increment Financing Agreement be adopted as it has been substantially submitted to the City Council. A copy of said Tax Increment Financing Agreement is attached as Exhibit A, and made part of this Resolution. (') The area to be designated as a Tax Increment Financing Zone is: The following condominium unit in the Pickering Wharf Condominium (the "Condominium") in Salem in the County of Essex and Commonwealth of Massachusetts, created by and described in the Master Deed of Pickering Wharf Condominium dated August 3, 1979 recorded with Essex South Registry of Deeds in Book 6624, Page 141, as amended by a First Amendment to Master Deed dated November 9, 1979, recorded with Essex South Registry of Deeds in Book 6653, Page 99, by a Second Amendment to Master Deed dated December 28, 1979, recorded with Essex South Registry of Deeds in Book 6667, Page 39, and as further amended by a Third Amendment to Master Deed dated April 4, 1980, recorded with Essex South Registry of Deeds in Book 6692, Page 336 (said master deed as so amended is hereinafter referred to as the "Master Deed"): Building unit Percentage Interest Derby A 10.8775 said unit A, Derby Building being a part of the total Master Deed described above. Condominium described in the Master Deed as set forth for the unit above. Subject to and with the benefit of all easements, rights, reservations, restrictions, agreements and provisions contained in the Master Deed, in the Agreement and Declaration of Trust of the Pickering Wharf Condominium Trust dated August 3, 1979, recorded with Essex South Registry of Deeds in Book 6624, Page 168, in the By-Laws of Pickering Wharf Condominium recorded with Essex South Registry of Deeds in Book 6624, Page 179, and in any rules and regulations promulgated pursuant thereto, as any of the foregoing may be amended from time;o time. Subject to and with the benefit of the provisions of Massachusetts General Laws Chapter 183A as now in force and as amended from time to time. The foregoing unit is intended to be used for any purpose allowed by applicable law, zoning law, license, permit, use regulation, special permit, exception or variance. (3) A map of the Tax Increment Financing Zone is hereby attached as Exhibit B and made part of this Resolution. (4) The Tax Increment Financing Agreement shall be binding on all subsequent owners of the property in the Tax Increment Financing Zone. The City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement, as specified in the Tax Increment Financing Agreement. (5) A copy of the adopted Tar Increment Financing Agreement shall be forwarded to the Massachusetts Economic Assistance Coordinating Council for its approval. (6) The effective date of the Tax Increment Financing Agreement shall be July 1, 1999 (Fiscal Year 2000), whichever is later. (7) The Mayor is hereby authorized to execute and implement the Tax Increment Financing Agreement. Adopted this 11th day of June, 1998 by the Salem City Council at a regular City Council meeting with a quorum present. Stanley J. Usovl , Jr., Mayor U Date ATTEST: Deborah E. Burkinshaw, City Clerk SEAL EXHIBIT A: Tax Increment Financing Agreement EXHIBITS: Map of Tax Increment Financing Zone CITY OF SALEM Yea and Nay Vote of C1ity.Coundl Upon the Question of Ax e e >. r %u�71 Date .�:��— 1498 . Yea 1Wy Pres. Absent Mark E Blair John J.Danahae' Regina B.Flynn Thomas$Furey %ev a R Havey Sarah AL Bay" William A.Kelley Joan B.Lovely Scott J.MCIA09blim Peter L.Paalcowsu I emard R O'Leary,Pres. TOTAL (se. CITY a"K TRUE COP ATTEST QAI rag .f.nw TAX INCREMENT FINANCING AGREEMENT CITY OF SALEM, MASSACHUSETTS - — — and PICKERING WHARF REALTY TRUST 1, This agreement is made this day of JUq-f, 1998, by and between the CITY OF SALEM, a municipal corporation duly organized under the laws of the Commonwealth of Massachusetts, having a principal place of business at City Hall, 93 Washington Street, Salem, Massachusetts, 01970, acting through the Mayor, Stanley J. Usovicz, Jr., (hereinafter called "the CITY"), and PICKERING WHARF REALTY TRUST, with a principal place of business at 190 Pleasant Street, Marblehead, Massachusetts, 01945 (hereinafter called "the COMPANY") . This Agreement will take effect as of July 1, 1999 (Fiscal Year 2000). WHEREAS, the COMPANY wishes to construct a hotel at Pickering Wharf in Salem; and WHEREAS, the CITY is willing to grant tax concessions in return for guarantee of the construction of the hotel property and the creation of employment opportunities for local workers; and WHEREAS, the Salem City Council resolved on November 9, 1995 to allow the use of Tax Increment Financing as a tool to encourage economic development within the Salem Economic Opportunity Area; and WHEREAS, the Salem City Council resolved on June 11, 1998 to endorse the Tax Increment Financing Plan negotiated by the CITY and the COMPANY. NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties do mutually agree as follows: A. THE COMPANY'S OBLIGATIONS I. The COMPANY shall develop the hotel property at Pickering Wharf in Salem. "The FACILITY" as used herein means a building containing approximately 50,000 square feet plus site improvements and refers to the Hotel portion only of the project. 2. During the life of this agreement, if the COMPANY decides to sell the FACILITY or the business or to otherwise transfer control of the FACILITY or business and/or operations thereof, the COMPANY shall give the CITY at least three months notice of said sale or transfer. Said notice shall be given by certified mail, return receipt requested, to the Mayor, City Hall, 93 Washington Street, Salem, Massachusetts, 01970. B. THE CITY'S OBLIGATIONS 1. The CITY shall grant a tax increment financing exemption to the COMPANY in accordance with Massachusetts General Laws, Chapter A, Section 3E, Chapter 40, Section 59, and Chapter 59, Section 5. Said exemption shall be granted on the improvements to the,FACILITY. Said exemption shall be valid for a period of thirteen (13)years, beginning with fiscal year 2000 (July 1, 1999) and ending with fiscal year 2013. During each year of this agreement, the company will pay taxes based on the base value of the FACILITY and on that portion of the value of the FACILITY which is not exempted under the agreement. The base value is established by the Board of Assessors (the Board) and is the current value of the FACILITY unless an abatement is approved by the Board. The exemption schedule on the value of the FACILITY works as follows: For the first five (5) years, the COMPANY will pay only the base tax bill and will be granted an exemption of 100 percent of the full value of improvements to the FACILITY. The full value of improvements to the FACILITY is hereinafter called "the INCREMENT". In years six, seven and eight, the COMPANY will pay taxes on 10% of the full value of the INCREMENT, plus the base tax bill. In year nine, the COMPANY will pay takes on 20% of the frill value of the INCREMENT, plus the base tax bill. In year ten, the COMPANY will pay tares on 40% of the INCREMENT, plus the base tax bill. In year eleven, the COMPANY will pay tares on 60% of the INCREMENT, plus the base tax bill. In year twelve, the COMPANY will pay takes on 30% of the INCREMENT, plus the base tax bill. In year thirteen, the COMPANY will pay taxes on the full value of the FACILITY. C. OTHER CONSIDERATIONS I. This Tax Increment Financing Agreement shall be binding on all subsequent owners of the property. The City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement. 2. If the COMPANY decides to expand the facility at any time during the life of the Tax Increment Financing Agreement, the CITY and the COMPANY may renegotiate the Tax Increment Financing Agreement to exempt all or part of the value of the expansion from property taxes. The exact amount of that exemption will be determined at the time of expansion. Executed as a sealed instrument on the day and year first above written. CITY OF SALEM PICKERING WHARF REALTY TRUST a , � Stanley J. Usovi ;.\ Mayor J. Hilary P oEkett, Austee Notary Public My commission expires 6 AV A!Vn wpppp- 1 ' 2 -1.+'i�a. fTM 'i A},.�d ^ ,- .'E, �" .+�Td F t Y `MYg ty�* nj � � 7��( C.v',.E`'�+�'. �� Y�L ��< � y`�,�, sr�'y§�•".Til9 ,5��,� f jai+^t ' �r�r.?�3.i,� �•AF��Y�� �'+J� LL.�RJ D` )'Gl�� rYl �+ � x /t h4� Ft+�rtE'F a z + ♦ Y � tC7r + t drT tz fb tac �^. d4 t t...�,� Fs x.,me7...a. Im.Aal f C '-r s C rx yY�.�"�a'�yl�lh• q �i y nt" �''' _ Y, � N— Gi. t_ tl3Rl \\\ r`: Y 1 s3 Pj, FKta r'35{� N1.a -evY Y ..t Y .,. 1w, tls S _ r`.J +. 1(•_ a 17`4 a aWK 1 u <C�" 2 �2 2 k ♦ r �' ' is t}:_ r--s '^�-....�.-•---•-.z� 't 'IF t _S5iya f 3yt 4 'SFS JJ tf , y 7Nt �b N's' r.. o n<I r t ( r zip.t,h a _{%+'- Beverly & Salem Regional = �' Economic Target Area ESSEX tir , +i � i - Z •-I/M'O J � a � � ya \ � N.rnww.NNw'w'I"`�'�.'�'wo'w••n......... . I ' n ^ 1 ' ]� .I.flRd1[X� XiD � Y V 4 ♦ { I I ' IY ♦ I I / Y A p ,VP (� SM1 ° a11lYY a � NOOOIVT IX ! 40N • ].11tln o�,, 11',0° , ~Z. 1�0 xuNN,n / I / J F�• _�J .fl s a w �' G e,. l r i.1T. � __.___. .— / 9tflTflAN IICCO�./ �• a °�' . / \ �(V' t � p C.01> / ff J H( 1,r ♦ Jr' dl 1t C! ♦4 M, , 11� ON,, ] � rT. J • ♦ t P C I�V`��`c0'Y� lw1T C y r01, JT '!p. O J Y � � 4 r IY { \ •O 1 JrrRA �� JT •F � JJ a V�Y 1,0 j`j a _ wy G. iON t1F � l,aP•pN JT. ! N a wr ',r' •,y f I ry ! Y,.]IIINCION ]p,NOIIIM P ] ° �\�� SALEM nt1 ir• 'r ,a' A as a f ar i ) rFp COMMON ° OAN U TIF ZONE \T ` l r J � . ` f V t "^ , � •, Y � 4J I�n ` rf a� o1N a e'' a ♦ D t�.. kip;% f` a,. r "l far ^' O `1� � '� o♦� ^ x �� l^� r � ! i N o M'YarO �� 1 t• m ! r, � 'O, J1 4•a,! i yA' w • 1' J IC r, ♦ ar lr*L a coa ^ �. f t, 1 � J• o Ir ACICAfi , t 4 a' •I l V 11,1011.E N.TOIIK / ro11r OAflM 1'' �.'• / yF M14• \nL[M .w ]TwT1 —� 1.. IOM9 0N II • r4 r .°fh OJ°' PAL MER : r Troll J t se./�P awr c n COVE I ucNT wv>a ' ✓!M J J r ��OVE�` j JTa a� 1i GLENDALE e. Y J COVE \,SLP � a3 4 aYf A10 8 0 \ 'J MITI 1 POIrlY o / FORf P T RVfD � tJa1y1 / P^RK �• f o ��0 0 [� 0000L� UVU C► o 0 0 General Location Map omiQLz CH F997 Pickering Wharf Hotel Tif Zone Indicated ] f r 1 1970 - 19T8 1981 1989 1993 I u.T [Xw. • i �T a !a ti DERBY ° C go HANTHORH[ © p ALEM MASSACHUSETTS ` °� , 4°9° 9/ 'f 445 ! ' " ASSESSORS MAPS �,. I2400 4` 61. N t4, N 311 a g0 438 TAH g�ENt 40 24017 a cRE =m \ :e° ° \1 pBFBy T \VATEI c�O ° WAY e �8'7 p\CKEa,NG J63RIVATEER 406 9� `\ \i 439 20800 Z W ol O P P 10 19248 n o _ 431 44"f \\ 9� 4.55 AC \ o ' 440 15, 523 :., .n 12i60�� HQRF ez Tung 21,40 5,453 to o en ee 441 1 Ano N 1 `� � Public ProjectAt 2/, 200 Te O so 1817 34 86 90 - 70 S 0 U R V E R I � i 37 RA Mp Ui �-- 436 0 NO 435 ° P e zs,4c N 16,516 T�gNS'oRN �^ In 2e MeR a d a •\ A 1 -�� le.Y 34 3e 4e S el y4'685 Le 38 n 3e T R E D ,o-xx ` N ie 0 670 382 R7 3264 ?60 36e�1 E T 6 eo a 3•,c lo, 396 397379 33Pt j3 3988 3a4 102 2872 3690 26/0 4 ee - 49 399 3- 37 '43 7 {� E E T 965 : Assessors' Map U 17-u x4 30 3t-3 7e - - yN-bo x-es ee-ee w N4 �o o w� Public Project Indicated DI, _, - q0 47 m42 63 62 n9 346a o 35 I 3g ,023 �9 1460 2853 356 sono is 352 351 S49 348 5se'o 3039 - ❑ 5 60 4690 4.560 3750 3680 f97 3476 I I �, _ ism I al r-�'—� 1 1 z `�t31' ti �\ �- 61. i( T S 1 k4_{ijl "IYI kp i� � xi :Y lirl" i� l j If '� all ( I i - ^ a .�II IQI� oto III ui,m5iiunom��r' xiy�•-ly-i 1p� ii��Wo Pya .�^�. I�ji����; �1� yri Y, P !}a. 12 i'P 1&F r Ii. l t i4 i� is v � ! � • • pIl�a' a i� i (�IIA4�tJ r ���� iy�t il� +Iw74kgl y4 ii � I, AI . i�i� I If f t xt 4i !�S Ili@n16i �5 } ' } .SLy_ �1 `'�A��Y�fY�P'I 1�n�y , 5 v,li1iH`� • •. � .. i t �i i yil li i i I pr 'S: p .- ! CO;' x i 1 3 {{ 1EI 9 ! � w I4�ip9 :Ik�'NW All. PI'� ! �x �•�. 11 I 4 'ti'1e.,am+>r c i I Attachments Letter from Project Proponent's Accountant Salem Evening News Article Excerpt from Landauer Hotel Study CEC-83-97 21 : 33 FROM. ID. 15n97406729 PACE 2/ •••,d g,�� aaer�Maw Morday fk,•van0er 17,1997 New. usic store c7 LAIC s SdL43t—Anew :tSis.'-week oa D Street -:.s Pr set to'be a ha dor music - 'lnveis arlio'watu know more - •.:., u.% . the Cahsn,;,.>zo'hel 'Borders' . 'B=ks add=Laic to" seyM-Xftz :mct rrw'is.startisg place of his " : :si282" b9 St. 'biva'LOJ)Op.m .titla':ua'` crs>hl agSrzmi �'a�es1';; 'Wesee'.tlsstar$ .. ys.tr.uly•. ?phi 77 '..San.. :�c�>w-a_;ublirst .tkhrn•3 k x1 n vv1Il rmr 'Stara With lan.'IYs I=z .Mars.hut' $�21 esir at5o gett1:c 7 T3tsicii"N.:...:to thenra cf:- b �d tD offer CD ormaiian statical..l�;e si=tior are really _ 'vWQc";.�7¢speakrr I.LLId� Sueh c.utamez stand as a vor`s-Qver �p the work they've chosen and plaeu,is �. -hist�y. .. Z?rQ naxT7tive higbaight the recosmized CLI�ics, top ar"s-bamd ks that hm�6 had major impact an ot�Pra. hard I rv6L�d oflrr m,..s. 11�r Cohan hopes It corsages 'oto tryv " `arty LxoDle like a style of 1� 73:ubeu aql sash ' . - ..`. T-� y. StYJto7!exry. but thrt 'ra ar[n arwith �t 2m Dot*SL Loapold ° rart}.e .. it hlkE,-�, he=a&-1h<sLxli�s - :�.., - - �'��--'.7•r_': :::..x:: _ w>y help people ataal; ' eve them pagyer4bliah co. mpact di-so '' .��t:'; _.!�-,.. .-'� •- Cckxm,omed the r di+ivarslc cocoaomlc renalssanco in Sz'(cm :::.'Salam vi lhe'yut2pa yen's has dcxs i'rr3a m as East 6 oyer 1 simile Pte. rem to the ,.$ted �C G'Mek;":she If duxes �mcsic ad vidrn. 5tR at tht aDwddlmU Le�ev T�a�de tCe' $a em '— `�➢ :�PVSth fh..P4.kinL?ar*a= 13t h the mm- Satires,... Tn Om Fes'is x to $deer �' �`�the'itii'�znd Oosslhiy a, �"Idsly,st. - Et Says Pc�ves�'4an 10 Cox"` .. .' ....,.. ... ., _ � �1CSecned ' ... a Raraftdtry ' Excerpts from Landauer Hotel Study Introduction The primary goals of the study were threefold as outlined below: To determine the market and financial feasibility of hotel development at three identified locations within the city: * The former site of the Parker Brothers manufacturing plan; * A site at Pickering Wharf, at the intersection of Derby and Congress Streets; * A site at the current location of the Hawthome Hotel on its rear parking lot; To assess the economic benefits of the hotel and prospects for public sector financing; and, To develop a report and recruitment package which the city can use in the marketing of the project to both private and public sector entities. Hotel Projects Under-Construction (p. 6) 1. 120- Room Hampton Inn on Rt. 1 2. 85 Room Homewood Suites on Rt. 1 3. 97 Room Mainstay Suites in Centennial Park 4. 66 Room Microtel Hotel on Rt. 1 5. 115 Room Extended Stay America in Danvers Note - 500 Rooms are being built within five (5) miles Prospective Financial Investment Analysis (p. 6) A prospective financial analysis was conducted on each of the facility profiles outlined above (a 120 room full service facility and 66 room limited service facility). The result of this analysis indicated, that cash flow available for debt-service and investor return was not sufficient enough to generate private sector developer interest in either project. However, the cash flow generated by the limited service hotel scenario was closer to supporting the development costs associated with such a project. The gap which existed between the cashflows development supportability against industry supplied development costs was close enough to investigate public sector Financing options which could be pledged as low cost of capital mezzanine financing. Site and Facilities Analysis (p. 6 & 7) Our analysis has concluded that the Pickering Wharf location is the most suitable for hotel development utilization at this time. Land availability will be a limiting factor in the potential project's scale and range of facilities. Development Potential Analysis (p. 8) A small 66-room limited service hotel at Pickering Wharf appears market supportable. Significant concessions will be required from the City of Salem and a potential developer in order to render the project financially feasible. Initially, a franchise affiliation would be recommended. Potential affiliations include: Comfort Inn, Days Inn, Hampton Inn or a Holiday Inn Express. Conversely, an independently run hotel allied with a strong nationally or regionally recognized operator may be an alternative. Economic Benefits and Prospective Financing (p. 8 & 9) Employing discounted cash flow techniques to evaluate the financial viability of a 66-room limited-service hotel built in Salem provides indications of development supportability of approximately $48,500 to $51,500 per room. This level of estimated development supportability indicated that the prospective project is not financially feasible based on an anticipated development cost of$4.3 million to $4.6 million, less approximately $900,000 for retail space development or$51,500 to $56,000 per room, and probably would not attract private sector hotel developers or investors. However, a major stakeholder in Salem may be motivated to develop the project for other purposes such as: An opportunity to enhance the overall value of an existing major real estate investment; and The hotel use will create an anchor and provide additional synergy for a total redevelopment program. In any event, it will be necessary for the City of Salem to offer significant incentives in order to attract additional hotel development in Salem. These incentives might include, but are not limited to, real estate tax abatement or suspension, participation in below market financing such as bond or available government finance programs. Economic benefits may result from the development y of a hotel in Salem include: * Increased City revenue generated from hotel occupancy taxes and real estate taxes. * Provide a catalyst to attract additional development interest within Salem * Redevelopment catalyst for waterfront * Increased area employment * Enhanced visitation and greater expenditures Proposed Hotel Development (p. 55) The hotels located in Salem will be particularly vulnerable to the hotel expansion currently taking place on the North Shore's highways (including 500 rooms now under construction). In most instances, these locations offer higher visibility, greater accessibility and closer proximity to the major demand generators in the North Shore market. As a result, expansion of the hotel supply in the future will have a greater impact on hotels with secondary locations such as Salem. Market Position (p. 64 & 65) Despite its waterfront location and close proximity to Salem's many attractions including tourist destinations, restaurants and shopping, the prospective hotel will still. have a locational disadvantage when compared to the competitive hotels located on the area's highways. The prospective hotel will have a particular advantage in attracting vacationing families visiting the area due to envisioned amenities and waterfront location. The region's seasonal tourism pattern combined with the relatively low level of corporate hotel demand generated within the immediate Salem area will preclude large- scale hotel development in Salem. Financial analysis of a 120 room full-service hotel developed on either the Pickering Wharf or Parker Brothers site was deemed unfinancable due to relatively low revenue potential and high development costs associated with the meeting and dining facilities required to attract group business in the shoulder and off-season periods. Expansion of the Hawthorne Hotel does not appear financially feasible due to the high cost of replacing the current and expanded parking requirements of the hotel with structured and/or underground parking. Project Financing Analysis (p. 77 & 78) A comparison of what the prospective cashflow analysis would yield on a supportable development basis per room, against the costs provided by Miller Dyer Spears and national chain representative, indicate that the proposed project, as proposed, is not financially feasible under conventional private sector terms. Not only would the prospective cash flow not support the hard development costs associated with the above referenced costing, it would not begin to cover the costs associated with the underlying real estate or other hard and soft cost including, but not limited to planning, design, construction management, construction loan interest, permits, bond and developers fees, and legal services. Further, it would not address the typical private sector return on investment rates which range between 15% and 20%, on a cash basis. This scenario, would make it nearly impossible to entice private sector investment interest in the project, due to the inability to secure conventional mortgage loan financing and the lack of a suitable return. Conventional mortgage loan financing requires, amongst other things, a 50%to 70% loan to value, and a debt coverage ratio of approximately 1.35% to 1.45%. A detailed summary of equity and debt parameters are included in"The Hotel Investment Outlook"publication included as an addendum to this report. Despite the financing hurdles that appearto face the proposed project, and assuming that the City of Salem wants to continue to investigate ways in which to bring a hotel project to fruition, there may be some creative ways of structuring a transaction by bringing public sector financing to the project that may make it more palatable for a private sector developer. However, it is also implied in this scenario, that the private sector developer identified would need to be flexible in their return expectations, and more probably, have other financial incentives for participating in the project. Should private sector developer interest be identified despite these project hurdles, participation and/or contingent participation on the city side could include the pledging of all or part of the following financing vehicles and/or incentives: * Urban Development Action Grant (UDAG) * Tax Increment Financing * Community Development Action Grant * Public Works Economic Development Grants We believe that the proposed hotel development project can meet the general private match requirements for the UDAG and that the project will generate construction jobs, and will create long term employment opportunities for low and moderate income families in the region. Provided that the UDAG is still available to the City we propose that it be made available, along with the City's funds, as a loan to the developer on, terms similar to those in the original UDAG Agreement. This will make available $1,094,180 to the owners or approximately $18,000 per room. The loan would have the meet HUD requirements for job creation and meet the match requirements of the UDAG program. The minimum private match for UDAG was generally 2.5 to 1 (private dollars to public). This would mean that to retain the UDAG the project would need to see at least $2.4 million in private investment, which the hotel project can meet. U3 )3) 131 6�.0Irk CITY OF SALEM, MASSACHUSETTS STANLEY J.USOVICZ.JR. MAYOR February 11, 1999 To the City Council City Hall Salem Ladies and Gentlemen of the Council: In June 1998,the Council approved passage of a Tax Increment Financing (TIF) Agreement between the City of Salem and Pickering Wharf Realty Trust. The TIF was granted for the purpose of a hotel development at Pickering Wharf After the completion of Council approval,the developers recognized that an additional parcel, lot 447 and 408 on Congress Street, was a key component that needed to be included in the � agreement. Therefore,the Application for Certified Project Designation, that was approved by the Massachusetts Office of Business Development, needs to be amended by the City Council to incorporate lot 447 and 408. In addition,the effective date of the TIF Agreement should be amended from its current effective date of July 1, 1999 to July 1, 2000. The effective date is intended to commence when the building is constructed;to date this has not occurred. The purpose of the amendment is to permit the recipient to take full advantage of all twelve years of the TIF Agreement. I have prepared amended resolutions and an amended TIF Agreement that incorporate lot 447 and the revised effective date of the TIF Agreement, which shall be July 1,2000 (Fiscal Year 2001). Thank you for your consideration of this important request. Very truly yours, STANLEY J. U&ICZ ' Mayor SALEM CITY HALL• 93 WASHINGTON STREET•SALEM,MASSACHu5ETT5 01970-3592•9781745.9595•FAX 9781744-9327 r- Economic Target Area. WHEREAS,the construction of a hotel at Pickering Wharf will substantially improve the aesthetic appearance of the property and reduce blight on one of Salem's entrance corridors; NOW THEREFORE BE IT RESOLVED that the Salem City Council approves the Certified Project application of Pickering Wharf Realty Trust; designating this project as a certified project for a period of thirteen years, and forwards said application for certification to the Massachusetts Economic Assistance Coordinating Council for its approval and endorsement. Adopted this I Ith day of February, 1999, by the Salem City Council. Stanley J. Usovicz, Jr., Mayor Date Attest: Deborah E. Burkinshaw, City Clerk SEAL AMENDMENT TO RESOLUTION AUTHORIZING A TAX INCREMENT FINANCING AGREEMENT For Pickering Wharf Realty Trust WHEREAS,the City of Salem is part of the area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS,the Mayor of the City of Salem has prepared a Tax Increment Financing Agreement in accordance of Chapter 40 and 751 CMR 11.00; WHEREAS,there is strong support for economic development and the use of Tax Increment Financing as an e p economic development tool to encourage business expansion in and relocation to the City of Salem; WHEREAS,there is strong support for using Tax Increment Financing to encourage the development of a Hotel at Pickering Wharf,the property owned by Pickering Wharf Realty Trust; WHEREAS, this property is located in the Salem Economic Opportunity Area; NOW THEREFORE BE IT RESOLVED by the Salem City Council that: (1) The Tax Increment Financing Agreement be adopted as it has been substantially submitted to the City Council. A copy of said Tax Increment Financing Agreement is attached as Exhibit A, and made part of this Resolution. (2) The area to be designated as a Tax Increment Financing Zone is: 1. Tax Parcels - Map 34, Tax Parcels 408,446 &447 to be included in the Agreement and, 2. Area to be designated as a Tax Increment Financing Zone The language in the orignal TIF is to be deleted and changed to the following: "Parcel 1 & Parcel 2 in a deed dated June 6, 1996 from Joseph M. Gibbons and Nicholas A. Caporale,Trustees of Pickering Wharf Nominee Trust to J. Hilary Rockett,Trustee of Pickering Wharf Realty Trust, which deed is recorded with Essex South Deeds in Book 13598, Page 532." (See attached deed) Being the same premises conveyed to Grantor by Deed of Salem Five Cents Savings Bank, recorded with the Essex South Registry of Deeds on September 14, 1995, in Book 13191, Page 144. The address of the premises conveyed by this Deed is Pickering Wharf, Salem, Massachusetts. 78828.50480 139 131449.d2 6/4/96 3:02 pm DEED 06•'06/96 01:Cf1 Ir'.st 3-4 Ml. I r c'=P4 1J., Joseph M. Gibbons and Nicholas A. Caporale, Trustees of Pickj Whaff`'bhfinee Trust u/d/t August 31, 1995 and recorded September 14, 1995 with the Essex South Registry of Deeds in Book 13191, Page 144 (the "Grantor"), for consideration of One Million S6ven Hundred Twenty-Five Thousand Dollars ($1,725,000), hereby grants to J. Hilary Rockett, Trustee of Pickering Wharf Realty Trust u/d/t May 2, 1996 and recorded with said Deeds herewith of 190 Pleasant Street, Marblehead, Massachusetts 01945 (the "Grantee), with QUITCLAIM COVENANTS, the following condominium units, percentage interests-in condominium common areas and facilities and parcels of land in Salem, Essex County, Massachusetts: Condominium Units The following condominium units in the Pickering Wharf Condominium (the "Condominium") in Salem, Essex County, Massachusetts created by and described in the Master Deed of Pickering Wharf Condominium dated August 3, 1979 recorded with Essex South Registry of Deeds in Book 6624, Page 141, as amended by a First Amendment to Master Deed dated November 9, 1979, recorded with Essex South Registry of Deeds in Book 6653, Page 99, by a Second Amendment to Master Deed dated December 28, 1979, recorded with Essex South Registry of Deeds in Book 6667, Page 39, and as further amended by a Third Amendment to Master Deed dated Apri14, 1980, recorded with Essex South Registry of Deeds in Book 6692, Page 336 (said master deed as so amended is hereinafter referred tows the "Master Deed"): Buildinz 1111i1 Percentage Interest Bark Emerald A 2.4095 Bark Emerald B 1.8073 Privateer A 2.6529 iS REG SU Pickering A 2.5602 �oUTH Pickering B 2.4459 Pickering C 2.1483 Ov/UG/. fjl, z`/ Wherry Row A 1.9544 C Wherry Row B 1.7976 Wherry Row C .9195 TAX 7866.60 Square Rigge A 1.8221 CASH 7866.00 Bowditch A 2.4082 Tancook Crescent A 3.5773 EXCISE T 1 :58 E Tancook Crescent B 2.0887 EXCISE TAX Tancook Crescent C 1.7079 _3?78828-ValL 139 131.¢49.42 _ Buildine Uail Percentage Interest Hawthorne A 1.6617 Hawthorne B 1.2949 Hawthorne C .9093 Arbella A 1.2628 (L. i '58 F'G , Arbella B 1.3621 Gentoo A 1.1653 Gentoo B 3.6888 Gentoo C 1.7788 Grand Turk A 3.2700 Grand Turk B 6.3601 Derby A 10.8775 Derby B 2.8439 Together with the undivided percentage interests in the common areas and facilities of the Condominium described in the Master Deed as set forth for each unit above. . Subject to and with the benefit of all easements, rights, reservations, restrictions, agreements and provisions contained in the Master Deed, in the Agreement and Declaration of Trust of the Pickering Wharf Condominium Trust dated August 3, 1979, recorded with Essex South Registry of Deeds in Book 6624, Page 168, in the By-Laws of Pickering Wharf Condominium recorded with Essex South Registry of Deeds in Book 6624, Page 179, and in any rules and regulations promulated pursuant thereto, as any of the foregoing may be amended from time to time. Subject to and with the benefit of the provisions of Massachusetts General Laws Chapter 183A as now in force and as amended from time to time. Each of the foregoing units is intended to be used for any purpose allowed by applicable law, zoning law, license, permit, use regulation, special permit, exception or variance. Parcel 1 4' qo� Lo{S All right, title and interest in and to the South River in Salem, Essex County, Massachusetts and any and all rights of access thereto and egress therefrom as more particularly described in Exhibit A to the Master Deed. As provided in the Master Deed, such right, title and interest and rights of access and egress were specifically excluded from the premises submitted to Massachusetts General Laws Chapter 183A by the Master Deed and from the Condominium created thereby. 2 78828.50480 139 131449.d2 ('''' lu7 53, Parcel 2 �cr� N q 7 The land with the buildings and improvements thereon in Salem, Essex County, Massachusetts bounded and described as follows: WESTERLY by Congress Street, about fifty-nine and 09/100 (59.09) feet; NORTHERLY by land now or formerly of Wetmore, about one hundred sixty-six (166) feet; EASTERLY by land now or formerly of Shaluk, about sixty- one and 72/100 (61.72) feet; and , SOUTHERLY by the outer edge of the bulkhead shown on the plan recorded with Essex County Registry of Deeds in Book 3263, Page 40, about one hundred seventy and 92/100 (170.92) feet. Together with the flats to low center line appurtenant and adjacent to the aforesaid parcel as shown on said plan recorded in Book 3263, Page 40. Together with any other rights in any other flats which may be appurtenant to the aforesaid parcel. The premises described above are conveyed subject to and with the benefit of all easements, covenants and restrictions of record. Being the same premises conveyed to Grantor by Deed of Salem Five Cents Savings Bank, recorded with the Essex South Registry of Deeds on September 14, 1995, in Book 13191, Page 144. The address of the premises conveyed by this Deed is Pickering Wharf, Salem, Massachusetts. 3 78828.50480 139 131449.d2 L'K :02 _ 8 � 5 _i. Executed under seal this day of June, 1996. Pickering Wharf Nominee Trust Joseph M. Gibbons, as Trustee Nicholas A. Caporale, Trustee BK 13592 PG CTs 4 78828.50480 139 131449.42 6/4/96 3:02 pm Ell COMMONWEALTH OF MASSACHUSETTS �S f ss June 1! , 1996 Then personally appeared the above-named Joseph M. Gibbons, and acknowledged the foregoing instrument to be his free act as trustee, before mqqe. N blicSaA+�I�. ;•4G� fc-, My commission expires: ?�tcazu COMMONWEALTH OF MASSACHUSETTS C�tt� ss June , 1996 Then personally appeared the above-named Nicholas A. Caporale, and acknowledged the foregoing instrument to be his free act and deed and the free act and deed as trustee, before Jotary Public c-nNc! My commission expires: Zcc,`� 5 ROCKETT MANAGEMENT& REALTY CO., INC. 190 PLEASANT STREET MARBLEHEAD,MASS.01965 TEL(781)631-3070 FAX(781)639-2290 J.HILARY ROCKETT,JR. November 20, 1998 Viee President Salem City Hall 93 Washington St. Salem,MA 01970 Atm: Mayor Usovicz Dear Mayor Usovicz, Per our conversation I have enclosed information regarding the inadvertent error to the TIF application for Pickering Wharf Realty Trust. The error is not with anything substantive, it's just regarding the legal description and tax parcel. Legal Description -The legal description simply should have been a copy of the deed from the Salem Five to Pickering Wharf Realty Trust,Book 13598 page 532. This includes all the commercial units in the condominium and the marina parcel (Parcel 2),which Pickering Wharf Realty Trust owns in fee. Tax Parcel -There are three(3)tax parcels at Pickering Wharf,Map 34 Lot 408, 446 &447,but only Lot 446 is listed on the application. As I stated above,the intent was to allow the building of a hotel at"Pickering Wharf." There was never any mention of tax parcels or legal descriptions in the motion of the City Council,nor was there even any discussion of it. Additionally, is not mentioned in the approval received from the State. i i I have enclosed the following materials for your review: 1. Complete TIF Package-I've highlighted the areas that need clarification. 2. MOU-Again there is no mention of location,just"on site at Pickering'. As you're aware,the total number of rooms between 70 and 140 was used in case we expanded our proposed 75 room hotel into a second building,pet our master plan, (see enclosed) 3. Master Plan-As mentioned above 4. Assessors Map of Pickering Wharf 5. State Approval 6. Deed If you need any other information,please give me a call. As soon as this error is resolved,we will to file our plan with the Salem Planning Board. I look forward to hearing from you. SIlPresid Jtt,Jr. V �s Encl. JHR:nh AMENDMENT TO TAX INCREMENT FINANCING AGREEMENT CITY OF SALEM, MASSACHUSETTS and DICKERING WHARF REALTY TRUST This agreement is made this_day of —1 1999, by and between the CITY OF SALEM, a municipal corporation duly organized under the laws of the Commonwealth et, Salem, Massachusetts, having a principal place of business at City Hall, 93 Wir (hereinafter t called "the CITY"), 01970, acting through the Mayor, Stanley J.�Us a pnncipal lace of business at 190 Pleasant PICKERING WHARF REALTY TRUST, Street,Marblehead,Massachusetts, 01945 (hereinafter called "the COMPANY") • This Agreement will take effect as of July 1,2000(Fiscal Year 2001). Salem; and AREAS,the COMPANY wishes to construct a hotel at Pickering Wharf m tee of the WHEREAS,the CITY is willing to grant tax concessions in return for rtunities for local construction of the hotel property and the creation of employm PP workers; and ved on ber 1995 to allow the use of Tax WHEREAS,the Salem City Council res leconomic development 9 entSalem the em Economic Increment Financing as a tool to encourageArea;and Opportunity Council resolved on February 11, 1999 to endorse the Tax WHEREAS,the Salem City Increment Financing Plan negotiated by the CITY and the COMPANY- NOW,THEREFORE,in consideration of the mutual promises contained herein,the parties do mutually agree as follows: A.THE COMPANY'S OBLIGATIONS "The 1.The COMPANY shall develop the hotel property at Pickering Wharf in Salem. FACILITY" as used herein meanf the projs a building contauung approximately a prof feet plus site improvements and refers to the Hotel portion only oect.t. CILITY or the 2.During the life of this agreement, if the COMPANY decides n sell the r operations thereof, business or to otherwise transfer control of the FACILITY or businef said sale ss and/or o Hall, 93 the COMPANY shall give the I mail leastretuthree rec monthsipt noticeed,to the Mayor, City Heal Said notice shall be givenWashington emfStreet, Salem,Massachusetts, 01970. B.THE CITY'S OBLIGATIONS l.The CITY shall grant a tax increment financing exemption to the COMPANY in accordance with Massachusetts General Laws, Chapter A, Section 3E, Chapter 40, Section 59, and Chapter 59, Section 5. Said exemption shall be granted on the improvements to the FACILITY. Said exemption shall be valid for a period of thirteen (13) years, beginning with fiscal year 2001 (July 1,2000) and ending with fiscal year 2014. During each year of this agreement,the company will pay taxes based on the base value of the FACILITY and on that portion of the value of the FACILITY which is not exempted under the agreement. The base value is established by the Board of Assessors (the Board) and is the current value of the FACILITY unless an abatement is approved by the Board. The exemption schedule on the value of the FACILITY works as follows: For the first five (5) years,the COMPANY will pay only the base tax bill and will be granted an exemption of 100 percent of the full value of improvements to the FACILITY. The full value of improvements to the FACILITY is hereinafter called"the INCREMENT". In years six, seven and eight, the COMPANY will pay taxes on 10% of the full value of the INCREMENT,plus the base tax bill. In year nine,the COMPANY will pay taxes on 20% of the full value of the INCREMENT,plus the base tax bill. In year ten,the COMPANY will pay taxes on 40% of the INCREMENT,plus the base tax bill. In year eleven,the COMPANY will pay taxes on 60% of the INCREMENT, plus the base tax bill. In year twelve,the COMPANY will pay taxes on 80% of the INCREMENT, plus the base tax bill. In year thirteen,the COMPANY will pay taxes on the full value of the FACILITY. C.OTHER CONSIDERATIONS 1.This Tax Increment Financing Agreement shall be binding on all subsequent owners of the property. The City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement. 2.If the COMPANY decides to expand the facility at any time during the life of the Tax Increment Financing Agreement,the CITY and the COMPANY may renegotiate the Tax Increment Financing Agreement to exempt all or part of the value of the expansion from property taxes. The exact amount of that exemption will be determined at the time of expansion. Amendment to Pickeriu% Wharf Realty Trust Tax Increment Financing(Tfk]Agreement TMS AMENDMENT OF TIF effective of February 11, 1999 regarding the Tax Increment Fimancing(TIF)Agreement between the City of Salem and PiekeriMg Wharf . Realty Trust,including the Application far Certified Project Designation. . . Ba and In Jane 1998,the Council approved passage of a TIF Agreementbetween the City of Salem and Pickcrmg Realty Wharf Real TrusL After the approval,it was discovered that: certain tax parcels were erroneously omitted. Only Parcel 446 Map 34 was included. WITNESSETH NOW,THEREFORE,the CITY agrees with the followmg. 1. Tax Parcels-Map 34,Tax Parcels 40 8,446& 447 to be included in the Agreement and. 2. Area to be designated as a Tax Increment Financing Zone The language m the original TIF is to be deleted and changed to the following. "Parc;l l &Parcel 2 in a deed dared June 6, 1996 from Joseph M.Gibbons and Nicholas A. Caporale,Trustees of Pickering Wharf Nominee Trust to J.Hilary Rockett,Thrice of Pickering Wharf Realty Trust,which deed is recorded with Essex South Deeds in Boole 13598,Page 532." (see attached deed) 3. Effective Date-"July 1, 1999"deleted and change to"July 1,2000." Stanley J.Usovicz,Jr,Mayor Date Deborah E.Burlaashw, City Clerk Date Executed as a sealed instrument on the day and year first above written. CITY OF SALEMPICKERING WHARF REALTY TRUST Stanley J. Usovicz, Jr., Mayor J. Hilary Rockett,Trustee Notary Public My commission expires ISssea as. Received July ll, 1941' 10 m. past 12 P.N. Recorded and &i --------------- KNOW ALL MEN HY THi�SS PRffiIIP15 THAT WE F ------ Wetmore r #', et al , rank U. Wetmore being unmar. to and Freak % Wetmore, both of Danvers, Easel County Massachusetts' sideration paid, grant to Andrew 0. Hanson k lea Beason of Newmarket, How, Hampahix 1 QDITCLABS GOV)3NANTS One 02.;One the land in SALk7d, said County and Commonwealth'. One 50 One 2� the buildings thereon, bounded and described follows: Westerly by & One .10 R.Stampa as f .j ; Documentary Igress, Street one hundred Chir Ceaceled. ty and nine tenths (130.9) feet, norther. ` land now or formerly of the Hawthorne Garage Inc, about one hundred s' six and -sixty eight one-hundredths '(166.68) Yeet, easterly by lead moo formerly of-Sheluk, one hundred thirty-eight aad:sevea ty two one-hundr �# (138.72) feet and southerly by the outer edge of the J��,l k��dn plan entitled *,head conveyed by Frank U. Wetmore et al to Andrew-0-Hang j Salem, Mass. Tune 1941, T. A. Appleton, C.S." recorded herewith one huF seventy and ninety 3wo one-huadredths (170.92) feet. To et ha _*ith the 4! flats to low"dater line Appurtenant.mia, adjacent thereto as aho>a on as plan. Subject .to taxes for_Btr For title eee Book 3206 p 3221, Page, 205. .Aad age 130, d Tine T. We :ire .of said grantor, Fran H.We- (�}; j ore release to said grantee-all rights C�.dower and homestead and other t 1 1 interests therein. WITHffi8 .Our hands and- seals this tad.day of July 1941 �. �8 C010fONW2SALTH OF VASSACHIr T'L'S ) Frank-H. Wetmore Basez; so. Julp 2, 1941 Then per) Frank H. Wetmore sonally appeared the above named ) Lois T. Wetmore ' ranJc U. Wetmore and acknowledged the foregoing inatruoleat to be his fre fact and deed, before me' Elmer W. Liebsch Justice of the peace (Essex as. Received July 14, 1941. 52 m. past 1 P.Y. Recorded and !----------- --KWe'et al Friend and Frank L.Ord- j to (Way of Marblehead and Danvers, respectively, Essex County,-Masaachusetts, Ifor consideration paid, grant to Andrew 0. Hanson of c Hanson Newmarket, New Ham- shire with QUITCLAIM COVENANTS All our rights in and to all the flats ap- purtenant to the parcel of'real estate conveyed by us to Frank U. Wetmore !et al by our deed dated January 11, 1940 recorded with Essex South Dis- ' Itrict Registry of Deeds in Book 3206 Page 130 and shown on a plan to be recorded with deed from Frank U. Wetmore at al to Andrew O. Hanson dated July 2, 1941. Consideration' is under one hundred dollars. And 1, Juliette IC. Fiend wife of said Lester D. Friend and I, Helen C. Ordway rife of eat } : !Frank L. Ordway release to said grantee all rights of dower and homestead' ? - :and other interests therein. WITNBSS our hands and seals this 7th day of �` July 1941 Lester D. Friend SALeM;1-4i9►S8 - Sewa a 6N.-3orr. - - JuNr, 1941. _3J Halt ? <' QQ ,; Za7t7ev.nt .6 su a -; a Or `l ey- Y� _2. FAX FROM: CITY OF SALEM, MA PLANNING DEPARTMENT ONE SALEM GREEN SALEM, MA 01970 (978) 745-9595 FAX (978) 740-0404 DATE: TIME: TO: FROM: s �' FAX #: 79s- 3c o7 SUBJECT: O'(cAe t,`�Iy W Gia q "j)k-e7-/t-::- PAGES: t_ PAGES: (Not including cover sheet) COMMENTS: 13f // - IL lat) Gwe-A o-6 z1q(, c1y -) a `I°e ; /2e la�� AIA _ ROCKETT MANAGEMENT& REALTY CO., INC. 190 PLEASANT STREET MARBLEHEAD,MASS.01945 TEL.(781)631-3070 FAX(781)639-2290 J.HILARY ROCKETT,JR. November 20, 1998 Vice President Salem City Hall 93 Washington St. - Salem,MA 01970 Attn: Mayor Usovicz Dear Mayor Usovicz, Per our conversation I have enclosed information regarding the inadvertent error to the TIF application for Pickering Wharf Realty Trust. The error is not with anything substantive, it's just regarding the legal description and tax parcel. Legal Description -The legal description simply should have been a copy of the deed from the Salem Five to Pickering Wharf Realty Trust,Book 13598 page 532. This includes all the commercial units in the condominium and the marina parcel (Parcel 2),which Pickering Wharf Realty Trust owns in fee. Tax Parcel -There are three(3)tax parcels at Pickering Wharf,Map 34 Lot 408, 446 &447,but only Lot 446 is listed on the application. As I stated above, the intent was to allow the building of a hotel of"Pickering Wharf." There was never any mention of tax parcels or legal descriptions in the motion of the City Council, nor was there even any discussion of it. Additionally, is not mentioned in the approval received from the State. I have enclosed the following materials for your review: 1. Complete TIF Package-I've highlighted the areas that need clarification. 2. MOU- Again there is no mention of location,just"on site at Pickering". As you're aware,the total number of rooms between 70 and 140 was used in case we expanded our proposed 75 room hotel into a second building,per our master plan (see enclosed) 3. Master Plan- As mentioned above 4. Assessors Map of Pickering Wharf 5. State Approval 6. Deed If you need any other information,please give me a call. As soon as this error is resolved, we will to file our plan with the Salem Planning Board. I look forward to hearing from you. SIce Jck tt,Jr. Vsid Encl. JHR:nh • 78828.50480 139 131449.d2 6/4/96 3:02 pm DEED I r..±06/96 01 :07 ?'i':St '.'4 Joseph M. Gibbons and Nicholas A. Caporale, Trustees of PickeFQ Whaff`N6Kinee Trust u/d/t August 31, 1995 and recorded September 14, 1995 with the Essex South Registry of Deeds in Book 13191, Page 144 (the "Grantor"), for consideration of One Million Seven Hundred Twenty-Five Thousand Dollars ($1,725,000), hereby grants to J. Hilary Rockett, Trustee of Pickering Wharf Realty Trust u/d/t May 2, 1996 and recorded with said Deeds herewith of 190 Pleasant Street, Marblehead, Massachusetts 01945 (the "Grantee), with QUITCLAIM COVENANTS, the following condominium units, percentage interests--in condominium common areas and facilities and parcels of land in Salem, Essex County, Massachusetts: Condominium Units The following condominium units in the Pickering Wharf Condominium (the "Condominium") in Salem, Essex County, Massachusetts created by and described in the Master Deed of Pickering Wharf Condominium dated August 3, 1979 recorded with Essex South Registry of Deeds in Book 6624, Page 141, as amended by a First Amendment to Master Deed dated November 9, 1979, recorded with Essex South Registry of Deeds in Book 6653, Page 99, by a Second Amendment to Master Deed dated December 28, 1979, recorded with Essex South Registry of Deeds in Book 6667, Page 39, and as further amended by a Third Amendment to Master Deed dated April 4, 1980, recorded with Essex South Registry of Deeds in Book 6692, Page 336 (said master deed as so amended is hereinafter referred to as the "Master Deed"): Buildiniz UnitPercentage Interest Bark Emerald A 2.4095 Bark Emerald B 1.8073 /1 Privateer A 2.6529 E;rD iS REG 10 Pickering A 2.5602 oUTH Pickering B 2.4459 Pickering C 2.1483 06/u6/. Wherry Row A 1.9544 C Wherry Row B 1.7976 Wherry Row C .9195 TAX 7866.00 Square Rigge A 1.8221 CASH 7866.00 Bowditch A 2.4082 Tancook Crescent A 3.5773 EXCISE ISE T j7_-:-a8j7_-:-a8EXCTAX Tancook Crescent B 2.0887 Tancook Crescent C 1.7079 ,78828.59"0, 139 UTA49.CP___ Bui d' Unit Percentage Interest Hawthorne A 1.6617 Hawthorne B 1.2949 Hawthorne C .9093 Arbella A 1.2628 BK 13598 PG 5313 Arbella B 1.3621 Gentoo A 1.1653 Gentoo B 3.6888 Gentoo C 1.7788 Grand Turk A 3.2700 Grand Turk B 6.3601 — Derby A 10.8775 Derby B 2.8439 Together with the undivided percentage interests in the common areas and facilities of the Condominium described in the Master Deed as set forth for each unit above. Subject to and with the benefit of all easements, rights, reservations, restrictions, agreements and provisions contained in the Master Deed, in the Agreement and Declaration of Trust of the Pickering Wharf Condominium Trust dated August 3, 1979, recorded with Essex South Registry of Deeds in Book 6624, Page 168, in the By-Laws of Pickering Wharf Condominium recorded with Essex South Registry of Deeds in Book 6624, Page 179, and in any rules and regulations promulated pursuant thereto, as any of the foregoing may be amended from time to time. Subject to and with the benefit of the provisions of Massachusetts General Laws Chapter 183A as now in force and as amended from time to time. Each of the foregoing units is intended to be used for any purpose allowed by applicable law, zoning law, license, permit, use regulation, special permit, exception or variance. Lots Par qq� 't qq All right, title and interest in and to the South River in Salem, Essex County, Massachusetts and any and all rights of access thereto and egress therefrom as more particularly described in Exhibit A to the Master Deed. As provided in the Master Deed, such right, title and interest and rights of access and egress were specifically excluded from the premises submitted to Massachusetts General Laws Chapter 183A by the Master Deed and from the Condominium created thereby. 2 788{{28.504480 139 131449.d2 4LU16 *"12 Fu 534 Parcel 2 N c{7 The land with the buildings and improvements thereon in Salem, Essex County, Massachusetts bounded and described as follows: WESTERLY by Congress Street, about fifty-nine and 09/100 (59.09) feet; NORTHERLY by land now or formerly of Wetmore, about one hundred sixty-six (166) feet; EASTERLY by land now or formerly of Shaluk, about sixty- one and 72/100 (61.72) feet; and SOUTHERLY by the outer edge of the bulkhead shown on the plan recorded with Essex County Registry of Deeds in Book 3263, Page 40, about one hundred seventy and 92/100 (170.92) feet. Together with the flats to low center line appurtenant and adjacent to the aforesaid parcel as shown on said plan recorded in Book 3263, Page 40. Together with any other rights in any other flats which may be appurtenant to the aforesaid parcel. The premises described above are conveyed subject to and with the benefit of all easements, covenants and restrictions of record. Being the same premises conveyed to Grantor by Deed of Salem Five Cents Savings Bank, recorded with the Essex South Registry of Deeds on September 14, 1995, in Book 13191, Page 144. The address of the premises conveyed by this Deed is Pickering Wharf, Salem, Massachusetts. 3 _ 78828.50480 139 131449.d2 BK 1 02 -T , Executed under seal this C day of June, 1996. Pickering Wharf Nominee Trust Joseph M. Gibbons, as Trustee By: _�./_=Q r Nicholas A. Caporale, s Trustee BK 1 3598 P cT 4 78828.50480 139 131449.d2 6/4/96 3:02 pm COMMONWEALTH OF MASSACHUSETTS K S f to ss June 1! , 1996 Then personally appeared the above-named Joseph M. Gibbons, and acknowledged the foregoing instrument to be his free act as trustee, before me. N blicgAwZ I• „tic' fc My commission expires: .�1. COMMONWEALTH OF MASSACHUSETTS L!�t�iC ss June -b , 1996 Then personally appeared the above-named Nicholas A. Caporale, and acknowledged the foregoing instrument to be his free act and deed and the free act and deed as trustee, before JotaryPublic �N I . My commission expires: i �I 5 hat was here when the Balches were here. R0, telpi an ears of history on the site.° rical Society director David Goss may lack . . parking By TOM DALTON - ��� S" Jltw�S News staff SALEM—While all eyes have been fixed on a com. plex tax deal, the more mundane matter of parking may determine whether a waterfront hotel proposal ,•e, sinks or swims. - A City Council committee was told last night that the city cannot designate pat t of a Parking garage to the developer of the proposed Pickering Wharf -; of the hotel until the spaces have gone Pickering out to public bid. The city must seek proposals for Wharf Wharthe 80 spaces promised to devel- Hotel l oper J. Hilary Rockett in the new Page A10 South Harbor Garage because they I e are worth more than the state lease bid limit of$25,000, according to the city's purchasing agent,Albert Hill. The city offered Rockett the parking spaces for $36,000 a year, according to a memorandum of under- standing signed last month. Although Mayor Stanley.Usovicz seemed to take the latest news in stride, it came as a surprise to the de- veloper.in trash "I had no idea,"Rockett said last night. j The multi-million-dollar hotel deal depends on those L 7 parking spaces in the public garage now under con- struction to Balch at the corner of Derby and Congress streets, which is right across the street from the proposed hotel at Pickering Wharf. "Another archaeologist said it best,"Baker said. "The parking is just as important as the(tax deal)," "What we're looking for is other people's garbage.To us said Rockett. "Without the security of knowing we it's studying that trash—that everyday stuff—that's have those parking spaces indefinitely,we couldn't do sli so exciting." the hotel. We've always been under the assumption There's a lot to be found. it's for the lifetime of the hotel.,, is a Baker said in those days people threw trash out the Rockett said he doesn't know what impact this ' window instead of putting it in a garbage can.Some latest development will have on his plans to build a$5 G :ever- simply pushed garbage through the floorboards in their million,80 room hotel in his family's Pickering Wharf cts home. development on the waterfront. Baker said people shared one plate at dinner,slept In an earlier interview yesterday,Rockett stressed be- three to a bed and used a privy,something Baker and that the timing on the deal was crucial because of fl- 'i st his crew would be pleased to find. nancing, the construction season and the changing They believe they're more likely to find a pit left over hotel market on the North Shore. td his from a privy than the actual structure. Hill, who appeared Tuesday night before a City vo ,' Although the waste will no longer be there,seeds that Council subcommittee,said the bidding process could that 'once were ingested-and then digested—will help ar- take from 30-60 days. chaeologists learn what members of the Balch family The mayor countered there was no reason the h pit. TREASURES, page A10 parking issue had to slow down the hotel project. j The key piece,he said,was a so-called tax incentive HOTEL page A10 now home` on the range �g � L � _k,'x *` "Fr`Z+- to j �dn.i P $.�=-J ! lack, a Middleton livestock dealer whose son, �A t11 unsettled %bthmgsbecame'cieapatfast P,rinn. hPlIwd nah+1,.animal nn A...dl 10 +--+^ _ _ .. . . A10 Wednesday,May 27,1998 The Evening News; Salem,Mass. FromPage One Hotel i Multi-million dollar hotel ar on s deal.._de endkin garage p parking . g ge spaces .. Continued from page Al tain how much . lobbying he could parking issue is settled77, financing package worked out do. cLauhlin said. ' e gt J orzqP, with Rockett. After last night's meeting, Uso "The (committee) wants to pre 9 The Pickering Wha�f,;Hot@i flea: Under that deal,the hotel would viez's relations with Councilor-at- sent the total package to the „sss ( , r,, >; �yiY. be exempt from city property large Scott McLaughlin,cha rman council, including the taxes and as SALEM„ The Picker�ng ii'dr- totes deal reached last# f ye years 90npercent of taxes for years 6 8 $0 percent s, taxes for five years, and then pay of the economic development com- the parking,"he said. ,p or th between Mayor Slaniey Usovicz and developer, ,for ye§r,9,.60,percent forsy,'ear 10 40 percent for year 11ta ; a gradually increasing tax over mittee, appeared even more McLaughlin did not say ,t1.Hilary"Rockett Includes,tax Incentives and other agree 20,p cent for'tybar 12;kand1 O perc6ntzf6r year 13 ,�'' {i,{�. the next eight years. strained than they were before whether Hill's ruling resolves the = , mems >q t ' t l% r r l.` S ,3 r yx ,,G[i Tax all new retail space at full,valuatlon ice} rf tl Rockett can move.forward; the the meeting.. parking issue, or whether he feels e i ii {{�o {f � � $ ��,l� yg ra��x4ry Allow the•lease o/one parking space per ahotAlgtoomdk l mayor said, if he has council ap- The mayor has accused the matter can't be brought to a e ,�i;The hdtel a tees to to proval of the tax plan. McLaughlin of dragging his feet vote until the bidding process isPuiclieee and'de ol1s stemBan� l i i "R0410'F1'at eon�ets oar Dr Garage cdrrentlY under-coi strocti, ; . The tax proposal,however, is on the hotel.He said the councilor complete. , „ ,,ted,r: . jjC g X nd erby_streets The_lease will tie for`A . stuck in the Community and Eco- has known the details of the tax The committee is only doing its :45 V, 1te;EasternP69 on slue at;Plclfering WhaH,. `6 25'annually per space,($i 25 per',d`ay)rand,Inctease n'r0'ev01op',a otei,ofn t less than=70 a d nof, o e 't',t1h sae t as other cit ara es' a '{} " =i nomic Development subcom- deal for more than six weeks and job, McLaughlin said, which is to tff i<i , :_„�. �, �';a o-" ,$ rfA3t ®K 'El-, �,3 ¢( j;,?,,>' ,, }ff mittee, which;met with the pur- has not•brought it to the full make sure the hotel deal is legal rha(r 140,00 s,, � � a �� A ` 1v afJ. EWok wlthJhe developer to secure,statb,and federal,, chasing agent last night for no. council for a vote. • It became clear last night, he t'}k,p Provide a;slrtllaremouM of YPtailsQace to what;cur ritnds to increase public,access tb the wateifi[ont be; more than 10 minutes and did not "If procrastination is his goal, said, that there were problems rently exis'tsrat,Plckenng Wharf ,* ' 3r# ,t}r �tgtween Congress Street„and the Chase House� n {A vote to bring anything before the then he clearly has achieved it, with the parking plan, just as ; Rebuild the sea walk trom Congress Street,t0 Chas s Renegotiate or cancel;the tax-increment,financing m : full council Thursday night. Usovicz said. And, frankly, he's `there were problems a few•weeks tHo ise using state`and,federal grants:, `'t,[ x,;�w� sidee should mp a than 10 percent of thextotal hotol ooms ,a "As far as I know, there will be not operating in tune with the ago when the mayor tried to hand it g+ya ? ' t yN t y' ' A”V" ” "° " _ i be.convetted td condos of other non hofel uses Howeven,lii ; no committee report," said.Ward rest of the city." over a school construction con ,:t The city agrees to " :fit ; 4 d'r "a ' r6wooer ma -chap a mope'ilian 10 ercentefornan"'hut@l y' 1 Councilor Peter Paskowski, a Usovicz called the parking issue tract to a Boston firm without as,a;y Exetnptiah prdpery t8es o�n the hotel fof➢ite firspruse;Ir clud n `a9resta rant,'loun e,.'p' nasium`eto 1 committee member. a "red herring." going out to bid. ,, .y totih xLe>, r,,tneT us fr g x r ; ,4£ g g g" g g of a i es r rw# x s r i J That being the case, Usovicz in- McLaughlin said his committee,'. "I'm just making sure the cityk§ dicated he may contact other has only had the tax agreement isn't at risk,"hesaid. •• councilors in an attempt to force for a short period of time, and has The mayor insisted the parking, the tax agreement out of the com- held three meetings in less than issue was not a problem. council needs to get this done." the potential delay. essence," she said. ',The deal has mittee by a two-thirds vote. two weeks. , "It's never been a problem," he Annie Harris, executive di- Echoing the mayor, she argued been negotiated and negotiated, However, the mayor was The committee voted last week said. "It's not going to cause any rector of The Salem Partner- that the council should vote sepa and it's important to get it: headed to Buffalo.N.Y., today on to "make no recommendation delay.What is holding up progress ship, attended last night's rately on the tax deal. moving.These opportunities don't city business, and it was cancer- with the (tax deal) until the right now is the (tax deal)'..The meeting and seemed troubled by "I just think time is of the come along every day.", 1 Alarms: False alarms Treasure: Archaeologist seeks treasures in Beverly . g - Y in schools anger Lupini g p Continued from page Al and the Cummings Center is Continued from page Al ate. providing storage space. "We can learn some of the "What we're looking for is "And I resent it. I will not have LL... If people want to do details that aren't in the his- g, what was here when the c kindergartners and preschoolers this kind of thintory books," Baker said. "What Balches.were here," said Bev chased out of the classroom because they ate for dinner, what toys erl Historical Societydirector someone wants to have'a they'll have to deal,with David " - good time.... . c their kids played with, what v d Goss. There is 360 If the once and deal with people want to do this kind of thing; P N plates they ate off of." years of history on the site." }hndll havn to Anal with fho mliro anA _ emulsion- 'rd , I ♦r<_._..4_,,,, ,,,;,,,,, ,,,, ,,_ ..- ...1- - . i Salem own r fickerinawharfe s propos By GREGORY LIAKOS Parker Brothers site on Bridge coming into Salem in big num- News staff Street. bers around June. ' Is The two sides are still talking, Rockett had put the price tag of 'SALEM—Rockett Realty Corp. but chances of a deal at this point the project at about $1 million Dr filed a proposal this week to re- look slim. last year.Firm principal J.Hilary design the entrance to Pickering So now Rockett is returning to Rockett Jr. was traveling yes. . Wharf plans it first unveiled last July. terday and couldn't be reached Plans to build a new entrance The firm wants to demolish the for comment. to the waterfront complex come Derby and Eastern Bank build- The firm had initially scrapped -- after Rockett and Mayor Stanley ings at the corner of.Derby and its redesign plans when it reached Usovicz failed to reach a compro- Congress streets.. an agreement with former Mayor mise on a proposed hotel. In their place will be a new, Neil Harrington to build a hotel .The, Marblehead developers . two-story retail center and a new on that corner. Usovicz rejected Who bought Pickering Wharf in Eastern Bank building. The re- the plan after he took office in 1996 wanted the new hotel to be design will add 26 new parking January. free from property taxes for 12 spaces,new brick walkways, and The Planning Board is sched- years, a provision Usovicz said better landscaping. uled to review the plans at its was too generous. Rockett wants to start building meting tomorrow night. The mayor also believes the . in the spring and have the re- Usovicz hadn't seen the pro- city will get,A better deal from a designed complex ready for the, posal, but said he is "absolutely" hotel interested in the former thousands of tourists that start supportive of the idea. An artist's rendition of tl Witchcraft Heights School Tkeasurer Sa S m Y By GREGORY LIAKOS problems pointed out in twt loses one of its originals News staff of city finances. He reiterated that stat By .TOM DALTON SALEM—The lawyer for City terday,saying political cor. News staff Treasurer William O'Connor said tions were not part of his d yesterday that politics, not perfor- to suspend O'Connor and p SALEM-One of the'originals"retired last week from Witch- mance,is the real reason O'Connor his dismissal: craft Heights School is being ousted. 'We're Fourth-grade teacher Ann Porcello,retired Friday.agoing to go abou fter 31 _-'Salem attorney Loretta Attardo the right thing," Usovic .years in the Salem public schools, including 26 at the Witchcraft said Mayor.Stanley. Usovicz "And the right thing is ti elementary school. . ,.. wanted to replace O'Connor after, people on their performan ; She has been at the school since it opened. She's one of the, winning the November election. on politics." originals, said 'And,when O'Connor refused to The audits by the acco re- Sharon Jaworski, a sign, she said Usovicz cooked up firm Tucci and Roselli said fellow fourth grade 3, some performance-related issues nor's office was unable to, m, teacher " to force him out. cile cash, meaning he co e ;Porcello;' a Lynn •.9 This is really a political square his books with those Ynative, taught in the matter,"said Attardo. "It was very city's banks and other mu Lynn schools and at' clear in November; when the departments. " mayor posted a She 'Horace Mann wasn't't of him that heint nded to "v 996 a $130,re School before mov' vacancy from to Witchcraft. vacantla ye. "She's a wonderful The City Council is set to decide Connor couldn't account t teacher," said Ja- T tomorrow night whether to fire difference after much_effo worski. ,'She lust • O'Connor, who has. held the. . audits state. - never lost:her love of, P $56,000-a=year post for two years. But Attardo said the city:. teaching' `and of Usovicz said he decided to dis= lems with reconciling cash kids.", miss O'Connor because the trea- long before.O'Connor took Porcello was hon-, surer-collector collector had failed to ad- The problems had as mucl _merit withtworetire a dress a number of bookkee p in with lack of staff support merit parties._. �§ �!'�, p g an e:On Friday,,, she tl w hosted a pizza party for her class. Among vh' Salem in brief '�ra PICKERING WHARF Salem, Massachusetts PROPERTY DESCRIPTION It I Pickering Wharf is located at the corner of Derby and Congress Streets in Salem, Massachusetts, and consists of 85 retail and condominium units and their undivided interest in the common areas, and the adjacent marina. The property consists of twelve buildings, which include retail, office, and residential use, plus an additional building used as a marina. ,The first floor of each building (except the marina) is used as retail space. The upper floors contain office and residential condominiums. The residential condominiums are individually "owned and are not a part of the property for sale. The area of Pickering Wharf is 104,053 ,,square feet. Major tenants at the property include the restaurants Victoria Station and The 'Chase House. The following is a summary of the specifications of the subject property. Building Names: Building A - Bark Emerald Building B - Privateer Building C - Pickering Building D - Wherry Row Building E - Square Rigger Building F - Bowditch ";. Building G - Tancook Crescent Building H - Hawthorne Building J - Arbella Building K - Gentoo Building L - Grand Turk N Date of Construction: 1979 a ,z Building Area- 103,832 square feet Land Area- 5.7 acres Zoning District- Central Development (B-5) g: Foundation, Concrete footers, foundations, and slabs ` 'ro Era min • Wood frame with some steel components Exterior Walls: Clapboard, shingle, or brick p Mcr(clifh R (�r('15'. hicorlX11-'Il(ld