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APPLICATION FOR PROJECT DESIGNATION Q�U�w�� � VJ�/�-�. �;F ��- - - Rip, ni ............. Akn-Z Z4 I ; I-, '4W .............. �j j'. �'x'I-A , i, la" l;z aa—, Pickering Wharf Hotel Application for Certified Project Designation Tax Increment Financing Plan CITY OF SALEM, MASSACHUSETTS ST ANLEY 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: Z� In June 1996, the Trustees of Pickering Wharf Realty Trust acquired two thirds 0 ownership of the well known Pickering Wharf in Salem. Members of the Trust own Rockett 0 Management and Realty, a successful realEy management firm. Approximately two years ago, representatives of Pickering Wharf Realty Trust expressed an interest in developing a hotel at 0 Plckerin� Wharf. The proposed location for the hotel is at the corner of Congress and Derby 0 Streets. At this site there are two office/retail buildings that are 90 percent vacant and a bank. The buildirip 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 p-ackage that was mutually beneficial. I welcomed the interest of Pickering Wharf Realty Trust and sought to ide development assistance to encourage the construction of a hotel on Salem's provi 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 i h a productive, attractive property that will serve as an anchor to Salem's vacant property wit waterfront. 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 reMil 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 mc:\t Ap ickering\ea=i u ROCKETT MANAGEMENT& REALTY CO., INC. 190 PLEASANT STREET MARBLEHEAD,MASS.01945 TEL.(781)631-3070 FAX(781)639-2290 J. HILARY ROCKET-�JR. Vice President June 15, 1998 Economic Assistance Coordinating Council C/o Sean CaInan,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. 3 0 0 Sin er ly,� J. ilary e Jr. V�c e Presiden 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--P,e qa- the entity applying fo�Certified Project des ignation,t hereby certify that the inforination 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 shall be binding for the duration of the project C Signatur9 I '\,A (Date) Signature (Date) Nature and purpose of project: INTRODUCTION AND HISTORY OF PROJECT DEVELOPMEENT 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, histori'c 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 anT 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? I Yes Cl 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? 13 Yes 4' No If yes, check the appropriate box: 0 at existing location ri at new location in same municipality 0 at new location in different municipality 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 .330,000 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 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 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 NEWIOBS NEW JOBS NEW JOBS NEWJOBS 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 0 60 45 8 7 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 70 0 0 0 0 0 0 construction #of Temporary Pari-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? 0 Yes I No 0 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 Ma§sachusetts 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 ap�21ican 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 5tate 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 Qf 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? I Own 11 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? I Yes 0 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. Narne(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): 0 Corporation: 11 For profit; 0 S Corp.; 11 Non-Profit I Business Trust cl Partnership: 0 General Partnership; 0 Limited Partnership 13 Individual 9 Level of interest: (Indicate the benefits the company seeks) 15% Investment Tax Credit 1:1 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:Vi fiforms\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 LET"I"ER 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 156B, 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 P�r� wycled U..'A ALEM CITY OF . S 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 14 1, 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 ),vith 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 Percentape 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 $3,54 1,100 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& 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 I th day of June, 1998, by the Salem City Council. Stanley J. Usov`ic2�Jr., Mayor Date A Deborah E. Burkinshaw, City Clerk SEAL CrrY OF SALEM 'Ity Councill Yes and Nay Vote of C Upon the Question of 2� e- 6&,7 12Q r-7L Date 1998 Yen Nay Pre& Absent mark E.Bbdr John.J.Denahme -7 Regina R,Ftymn L11 Thonsms EL Far" Kevilm R-Harvey Sarah P&Hayes W-miam A-Keucy Joan IL IATay Scoft J-MclAughlin Ll/ Peter I-pa*o;�*i Leonard F.OLeary,Prm TMAL Lo 04 CM CURK A TRUE COPY ATTEST CITY CLERK SALEM. MASS. Massachusetts Economic Development Incentive Program Tax Increment Financing Plan 1. 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 J9, 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 1J6 (said master deed as so amended is hereinafter referred to as the "Master Deed"): Buildim� 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 tile 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 ineeting 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. - o 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 $3,45 1,100. The construction tirneframe 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 Opportuniryfor the,��ity 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 11. Time The TIF Plan and TIF Zone described here will be in effect for a period of thirteen years. 111. 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 TIEF 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 LegalFees 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: .1 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 TIEF 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 B—eallty-I-r-u-st-Ea-U 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. nic:Vi fformsW fpIan 10 PICKERING WHARF HOTEL 13-YEAR TAX INCREMENT FINANCING PLAN (�7 Base Value $332,300 Tax Rate $34.5T 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 Each Year*� Each Year*** Tax Fees Benefit to Cityl Value Rate 100% Value Bill Increment 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 $128,986 $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 $135,516 $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 $83,7021 $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. pickfin.wM 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 -te day of "We24(L� 19 by the Salem City Couricil at a regular City Council meeting with a quorum present. 7— Neil J. Harrington, Mayor Date ATTEST: Deborah E. Burkinshaw, City Clerk SEAL -XI CITY OF SALEM RESOLUTION AUTHORIZING A TAX INCREMENT FINANCING AGREEMENT For Pickering.Wharf Realty Trust Ordered: WHEREAS, the City of Salem is part of thezarea 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; WHER-EAS, 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,lihis 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: 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 J, 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 %krith 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. 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 niles' and regulations promulgated pursuant thereto, as any of the foregoing may be amended from time In 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 I lth day of June, 1998 by the Salem City Council at a regular City Council meeting with a quorum present. Date Stanley J. Uso�v�iA, Jr., Mayor U ATTEST: Deborah E. Burkinshaw, City Clerk SEAL EXHIBIT A: Tax Increment Firimcing Agreement EXHIBITB: Map ofT�x Increment Financin,g Zone CrfY OF SALEM Yea.and Nay Vote of City.Coumg Upon the QueWm of e�2 Date 19% yen Pre& Absent unt F.Blair John I Domkwe-,, Regina IL Flym I Tbenm EL F*CY Kevin R.Erarvey sarabhCHUYes . WiRiaxo A.Kefley JeaulL.Lowdy scotti-mclAughun L/ Peter L.P*dw;6u. Leoumd R O'Leary,Pre& TOTAL ffff CUMK TAX INCREMENT FINANCING AGREEMENT CITY OF SALEM, MASSACHUSETTS and PICKERING WHARF REALTY TRUST This agreement is made this &day of -L A4:�, 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, 9') Washington Street, Salem, Massachusetts, 0 1970, 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 Financina 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, 0 1970. B. THE CITY'S OBLIGATIONS I The CITY shall grant a tax increment financing exemption to the COMPANY in accordance with Massachusetts General Laws, Chapter A, Section 3E, Chapter 40, Sectiom59, 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 rINCREN/lENT, 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 01 14.4,�W- Stanley J. Usovi��, Mayc-r-'�, J. Hilar�Ao6kert,��stee Notary Public I' My commission expires �=6 6 o Ij 11- 1- 4,9 WU -,,q 0 10 11014 .......... gq rv:R mn�owm4T�-gv 101 v m.z g uEs a j- �!V 011y( YU, CAI., rip P�O Z I L I..... - �"r "W'U, lx�i _X ell T Beverly & Salem Regional Economic Target Area ES�SE� \,��-c6v N��Y 'j -j > I A p BERTRAM rIELD p BERTRAM rIE11 'Qu MI. SALEM AA 5 OA. "I.BP Tff ZONE ;qp'.0 all, SAC IV 16 BE PARK SA Co. men 07- !�z COVM�Z�_ jLf Ove COVE -0 ('C u p o j fj r sr 4/v L.C.T O.n LGeneral Location Map @qALE OR FEEV Pickering Wharf Hotel Tif Zone Indicated 1970 1978 1951 1909 CITY t"61"t9m 41-11 T CS Z F DERBY 59 go ;(DW: 4V 0, 60 409C, M A SO S ACI` HU S ETTS ALEMV 4A5 �I.l V b 44 ASSESSORS MAPS 596 (G 37t. 3 00 40 V, r , 476S 24017 DEftel I J ".. III (D � C) I III 1A 0 0 J 83PRIVATErn 20800 -z* 0 408 All IP 19248 C1 4.55 AC A417 I., C5 0 :13 ARIF 440 rn 62 ?5,453 Ln INAND as of ?a UJ?IC Nroo 441 public Pr ject ?/, 200 so 84 Q 611 86 go S 0 U H v 37 FLA A Ln 436 0 4-55 0 P C F.54C Ll rP4AI N 16s516 0 R JW Lt.R rr\ -A 111$ 36 a at -S 34 S 0 1 go.ti W4 0 3264 00 3s4 3a 00 7 a 171 pxi C 0 10,2Z7 39 397 37.9 6 2872 3690 Assessors' Map 1 102 2610 4 43 I - 2 4 29 2186 --4 3� -965 Public Project indicated z E T 64-50 to 44 TO 6 t t4 30 U-34 30 40-42 Alf 1J J54 0 62 4T 42 4d10 8 3 40 ;6,9 0 357 353 94-9 34 356 00 5488 289S 60 2813 4 5 6n ACOn - d23 3750 3680 r I It Nil .PC!% ME m M.I a DAM.NTM UTTRE, to MOMAM: M;.ME It; RI Attachments Letter from Project Proponent's Accountant Salem Evening News Article Excerpt from Landauer Hotel Study CEC-03-97 21133 FROM, ID- IS0S743G72G PAGE 2/ �&err;NGS".Mor4ay, 17.1997 A -alemm ew. U814C store CO. BY GREGCRY L= S I*W*staff SAIZK A z;ew weluxog this Week on to'0-a hal to for music WhO*2W tC �Mow nior- v Irl Ob,6 Ear.I'fi me Inhest ?I�mnnm5pr a ut�ftL-rry..- Cobp4n,:-I�hQ"IItIP�d.-Borders' 'BoQkS add=Laic to tsirpei-xim zndnowjsstjrf�� !:Xt=is xt iby SLw hive.. ninsic LI.tit] - 'see the W as tr� t3 L�PCLCL�'mwjci't Cohen's wi5_ �V�Win rum: sw'�i -with Kct';m= blues.but. ycm cmcr�'40'Cct th�7 hfts�"� -:� . Tleab�jCiljl�to tbnr6'St�,(�,. T%e Or=ticn ' :rtmuor6�reaU7 Wluch =Ttom =md as a VoLce-over �71'1 the work theT�zhc� and pUca,in �ic T:LQ 13ve the . d c ics. ight ar�_st3 mid 3= =Aicrr act an hard 1( S L pmk; 51and "'e , PL" and re�e Cohen hopes it PeC910 to n7 -ocw --Ifau7 p=Dle iixp a stylp �f i" mod sa*r�i WOP64 affl prtp'�i but 222 cot*St .....6;kidw ,XZ71-be itbkel with wm beltp poople mb=g ZN*Lbmm ...... 7 ,dem. PumY�mbligh�p�ct dL� Cobcz t� the WIrIg BQr- obe.o(im=0�or Mko dmi==b� fam IM&ME av�to d. as its nr:A Insi- Lem tothe 6comt 5od at the now_dftmcr Lkcbmer, ag,bie.k'o she B utc pkrkimii� d vid,—AUT- st�- as:odasing_ac rseemed ojodtir.rw to tr7 this.- hel the Cora- LaV3id-yS podtive Sigm of an 10&�a.X. to open Yedsq:#,.:_bbtau*2Am-=Whzrf I Excerpts from Landauer Hotel Stud 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 Picketing Wharf, at the intersection of Derby and Congress Streets; • A site at the current location of the Hawthorne Hotel on its rear parking lot; I 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 casliflows 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 ftanchise 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 Financin (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 S56,000 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 Developmen (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 reaion'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 p rivate 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 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 S 1,094,180 to the owners or approximately $18,000 per room. The loan would have the meet HUD requirements forjob creation and meet the match requirements of the UDAG program. The minimum private match for UDAG was generally 2.5 to I (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. �. ��� �i+' `�/� 4 1L R 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 TIT 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 9781744-9327 ell 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 I th 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 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: I. Tax Parc-els - Map 34, Tax Parcels 408, 446 & 447 to be included in the Agreement and, 2. Area to be designeated as a Tax Increment Financing Zone The language in the orignal TIF is to be deleted and changed to the following: "Parcel I & 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 01':.,06/96 ij!:07 T ns� -:;4 CIL" 1 7=1-11-1 M C-7 Joseph M. Gibbons and Nicholas A. Caporale, Trustees of Picke W!Wf"NG@Tfme��C '� 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 -rants 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 interests4n 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"): Buildiag unit Percentaee Interest Bark Emerald A 2.4095 Bark Emerald B 1.8073 Privateer A 2.6529 1S REG io Pickering A 2.5602 OUTH Pickering B 2.4459 4k Pickering C 2.1483 06/66/ Wherry Row A 1.9544 Wherry Row B 1.7976 Wherry Row C .9195 TAX 7866.00 Square Rigge A 1.8221 CASH 70.66.00 Bowditch A 2.4082 9470A000 12:58 Tancook Crescent A 3.5773 EXCISE TAX Tancook Crescent B 2.0887 Tancook Crescent C 1.7079 .78828.59"(L U9 13 L449.(L- I PTTf__ - Buildine ILUit Percentas!e Interest Hawthorne A 1.6617 Hawthorne B 1.2949 Hawthorne C .9093 Arbella A 1.2628 BK 1359,:D F11-3; 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 Condonunium 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. Lo+� Parcel I q&l��-1 1�4 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 78829.50480 139 131449.d2 40196 A-02 -' R3 53- Lit-, Parcel 2 U�t -f 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 s&tY- 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 Pickeririg Wharf, Salem, Massachusetts. 3 78828.50480 139 131449.d2 -5:02 -* BK I �V�Q FE3 Executed under seal this day of June, 1996. Pickering Wharf Nominee Trust .0<oseph M. Gibbons, as Trustee By:7W Nicholas A. Caporale, Is Trustee eK 13592 PG 531 4 78828.50480 139 131449.d2 6/4/96 3:02 pm 4 COMMONWEALTH OF MASSACHUSETTS ss. June i�' , 1996 Then personally appeared the above-named Joseph M. Gibbons, and acknowled.ged the foregoing instrument to be his free act as trustee, before me _N9blic 4 C My commission expires: �/Ic-h':'- 35 BK F'13 5" COMMON-WEALTH OF MASSACHUSETTS iq<ell— , 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 M6. otary Public e.A�c My commission expires: 5 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 Vim Pmsident 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, if 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 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 Wh 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 heaxing from you. S* c J.Hi ck tt,Jr. V4C IlPresid Encl. JHR.nh AMFNDMENTTO TAX INCREMENT FINANCING AGREEMENT CITY OF SALEM, MASSACHUSETTS and pICXERING WRARF REALTy TRUST This agreement is made this day of 1 1998,by and between the CITY OF SALEM, a _ * d under the laws of the Commonwealth of Massachusetts, municipal corporation duly organize shington Street, Salem, Massachusetts, having a principal place of business at City Hall, 93 Wa Ited ,,the CITY"), and Stanley J. Usovicz Jr (hereinafter ca 0 197 0, arting through the Mayor, .1 :1 TRUST,with a principal place of business at 190 Pleasant PICKERING WHARF REALTY OMPANY") . This Street,Marblehead, Massachusetts, 01945 (hereinafter called "the C effect as of July 1,2000 (Fiscal Year 2001). Agreement will take hotel at Pickering Wharf in Salem; and the COMPANY wishes to construct a WHEREAS, grant tax concessions in return for guarantee of the WHEREAS,the CITY is willing to of employment opportunities for local construction of the hotel property and the creation workers; and uncil resolved on November 9, 1995 to allow the use of Tax WHEREAS,the Salem City Co .c development within the Salem Economic Increment Financing as a tool to encourage ec0r`0`m and opportunity Area; WHEREAS,the Salem City Council resolved on February 11, 1999 to endorse-the Tax increment Financing plan negotiated by the CITY and the COMPANY eration of the mutual promises contained herein, the parties do NOW,THEREFORE, in consid mutually agree as follows: A.THE COMpANY'S OBLIGATIONS I.The COMPANY shall develop the hotel proper.ty at Pickering Wharf in Salem. "The FACILITY" as used herein means a building containing approximately 50,00o square feet plus site improvements and refers to the Hotel portion Only of the project. ANY decides to sell the FACILITY or the 2.During the life of this agreement, if the COMP ILITY or business and/or operations thereof,. business Or to otherwise transfer control of the FAC .-e of said sale or transfer. Said ANY shall give the CITY at least three months notir City Hall, 93 the COMP return receipt requested,to the Mayor, notice shall be given by certified mail, Washington Street, Salem,Massachusetts, 01970. B.THE CITY'S OBLIGATIONS I.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 fall 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 fall 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 COMPANYArill 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. 2.1f 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 Pickering NVharf Realty Tru Tax Increment Financing(11F)Agreemen Tms AMENDMENT OF TiF effective ofFebrua ry 11, 1999 re-gai-di:ng the Tax Increment Financing(T]F)Agreement between the Cityof Salem and Picke=g Wharf Realty Thist,including the Application for Cclified Project Designation. Background In June 1998,the Council approved passage of a TEF Agreemew.between the City of Salemand Pickering Wharf Realty Trust After the approval,it was discovered that- certain tax parcels were erroneously omitted_ Only.parcel 446 Map 34 was included. WlTNESSETH NOW,THEREFORE,the C]TY agrees with the following- I Tax Parcels-Map 34,Tax Parcels 408,446& 447 to be included in the Agreement and, 2. Axea to be designated as a Tax Increment Financing Zone The language in the original TIF is to be deleted and changed to-the following- 'Parctl 1 &Parcel 2 in a deed dated June 6, 1996 from Joseph M. Ghbbons and Nicholas A- Caporale,Trustees of Pickering Wharf'Nominee Trust to J.Hilary Rockett,Trirlee of Pickering Wharf Really Trust,which deed is r=rded with Essex South Deeds 'in Book 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 Burkioslrw, City Clerk Date Executed as a sealed instnunent on the day and year first above written. CITY OF SALEMPICKERING VVHARF REALTY TRUST Stanley J. Usovicz, Jr., Mayor J. Hilary Rockett,Trustee Notary Public My conunission expires IEssex as. Received July 11 194" 10 'a- Past 12 P.M. Recorded and Ex ---------- Wetmore KNOW ALL I=-By-THESE PRESENTS-THAT-WE- ----------------------------- at al Frank U. Wetmore being unmar. to 'and Frank H- Wetmore, both of Danvers, Essex County Hassachusetts,fc sideration paid Hanson grant to Andrew 0. Hanson Of Kewmarkst,.xaw Hampshiz One Qum the land in SALEM, said County and Commonwealth' One .50' One the build & One 10 R.Stamp 'ngO thereon, bounded and described as follows: Documentary a St t westerly by Canceled. grass. ree one hundred thirty and nine tenths -9) feet (130 land now or f ormerly of the Hawthorne Garage Inc. norther- six and gixty eight one-huadredths (16.6.68) f , t' about one hundred ea esaterly by land no% formerly-of,Sb&luk, One hundred thirty.eight and,, ' (138-72) feet and southerly by eveAty two One-huadr, the outer edge of ths hulkh , ead.as shown an �—titled '!Land conveyed by Frank U- Wetmore at al to A6cbL.0 w' Salem, Mass- Jliae 1941,' T- A. Appleton, C.B."' recorded her -seventy and ninety 4wo one-hundre ewith one hun-, dths (17o.q� Seat' Togethe:'.*ith the 4. flats to low-water line t .1, Atppu�r enant ' adjacent thereto as ahow� an as Diva Plan. Subject to taxes .fOr_jq!ff -see Book 3 For title: 206 page - P 130,#nd 3=, Page _05- Aad::1.-Jois T. Wetmore w:Lta Of said grantor, Freak H.We- -all xi ore release to said grantee ght"r dower and homestead and othe] interests th in. WITEESS our are hands and seal 0" a this 2ad.day of July 1942 THE COJW NNRALTH OF wSAcRuSKM Frenk-IT. Wetmore as. July 2 9 1 41 2hen per-) Frank H. Watmor�6 appeared the abo Lois T. Watmo,. ve named ing Wetmore and acknowledged the InstrUMent to be his fre, A: forego lact and deed, before me Elmer W. Liebsch :Ustic8 Of the Peace Essex as. Received July 14' 1941. 52 m. past I P.M. Recorded and Examined ljs; -----—---—----- -------------------------------------——----—------- ;r Friond JKNOW ALL IM BY MM let al PRESE� THAT We, Lester D. Friend and Frank L.Ord- way of Marble to head and Danvers, respectively, Essex County,- Ifor consideration paid' Massachusetts, Hanson grant to Andrew 0. Hanson 0 f Kewmarket, New Ham- Ishire with 4U1TrLLIX COVENAKS All our rights in and t.0 all the flats ap- purtenant to.the parcel of real estate conve yed by us to Frank U. Wetmore ' let 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 0. Hanson dated IJUlY 2, 1941. Consideration is under One hundred dollars. And I' juliette 1C. Friend wife of said Lester D. Friend and I" Helen C. Ordway wife of sa��d )Frack L. Ordway release to said grantee all rights of dower and homestead and other interests therein. WJ�X= our hands and seals this 7th day of IL July 1941 Lester D. Friend 4- 1;4�S� ID lei C-9 al Z 7 r7 z vo ou 4-cle, GCSV Cft,. a In LJ 7:r.;4 i V.S a 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 aX T Taxes aC TIF %* Base Tax Taxes on: TaxesPaid, JaxBonefit Room.. Farking Taal Tax Valua.� Rate 100% Value MIL:, lncrement,�� EachYeart Each Y�ae- tax Fees Benefit to Cit�f 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 $126,839 $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 $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 $135,615 $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 $122,668 $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. Pickfinmm MEMORANDUM OF UNDERSTANDING Now therefore, the CITY and the ENTITY, agree to the following: If the Hotel Entity does the—following: I. 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). I. TIF Agreement The TIF Agreement is applicable only to the use of the structure as a hotel. Should more than 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 %Exempted 1-5 100 6-8 90 9 80 10 60 11 40 12 20 13 0 Approved on June 11, 1998 10410412@V- 15:52 9700254�41 ANNE GOLDEN PAGE 02/02 HAV NE HOTEL R T-P G r!�;i��000 March 21,2002 Nk.Joseph P- Walsh Director Fax#979-740-0404 Re: Pickering Witarf files Dear Joe: confming in),conversation with Ellen of WednesdaY,March 20, 1 am requesting the opportunity to review all materials developed by the City of Salem relative to the proposed hotLI initiative at picktring Wharf. This,I assume,should encompass Plarming and Conservation Deparinient records, along witi,materials developed by the Planning.and Conservation Commission Boards. Thanks for your anticipated cooperation. Michael L Harrington, On The Common-Salep,,Massachusetu 0 1970 Telephone:-(Sk78)744-4080-Fax (978)745-9842 -www.hawrliorTichotel.coni M-1 ENOUGHISENOUGH! Mayor Usovicz asks Michael Harrington one more time to end the appeals of the Pickering Wharf Hotel, "Enough is enough. We can't afford to have this property sit vacant, especially now when we are in a budget crunch." "Police Chief St. Pierre is going to have to cut programs such as patrols and criminal investigations. Fire Chief Turner may have to lay off firefighters. With the money the city will receive from the hotel room tax and garage lease, which is approximately$2,000,000 over the next ten years,those public safety programs and city employees may be safe from cuts." Additionally, the hotel will bring approximately$15,000,000 annually to our businesses and create dozens of new jobs. This hotel is good for all of Salem and must be built now. TIF- CITY OF SALEM - MASSACHUSETI'S WILLIAM J.LUNDREGAN Legal Department JOHN D.KEENAN City Solicitor 93 Washington Street Assistant City Solicitor 81 Washington Street 60 Washington Street Tel:978-741-3888 Salem, Massachusetts 01970 Tel'.978-741-4453 Fax:978-741-8110 Fax:978-740-0072 February 3 , 1999 Jr. Mayor Stanley J. Usovicz, Salem City Hall f 93 Washington Street Salem, MA 01970 w" RE : Pickering Wharf Hotel TIF Dear Mayor Us.ovicz : Please find enclosed my opinion relative to the status of the Pickering Wharf Hotel TIF. If you have any questions with reference to this matter, please do not hesitate to call me . Very truly yours W/LLIAM J. LUNDREGAIN a%------0 CITY SOLICITOR WJL/amc Enclosure Memo to: StanleyJ. .Usovi6z, Jr. , Mayor From: William J. Lundregan, City Solicitor Dated: February 2, 1999 RE: Pickering Wharf Hotel TIF You have asked me to review the Application for Certified Project... Designation - Tax increment Financing Plan (TIF Applicatio6)' submitted by the City and Pickering Wharf Realty Trust . and to answer the following question: where the City Council Resolutions authorizing the TIF application specifically designate one o f three subject parcels as the parcel to which the TIF is to apply, but where the applicants originally intended that the TIF apply to all three parcels, is there anything in the official record which permits us to argue to the state that the Resolutions should be deemed to apply to all three parcels, rather than the one specifically designated by the Council? In seeking an answer to this question, I have thoroughly reviewed the documents that were provided to me, to wit: 1 . the Application for Certified Project Designation - Tax increment Financing Plan (TIF Application) ; 2. the Memorandum of Understanding executed by J. Hilary Rocket, Trustee, for the Pickering Wharf Realty Trust, and by Stanley J. Usovicz, Jr. , Mayor, for the City of Salem; 3. a letter dated January 14, 1999 to George Mazareas, Director of Economic Assistance Coordinating Council, written by someone whose name and signature have been removed from my copy; 4 . a letter dated November 20, 1998 to Mayor Usovicz from J. Hilary Rockett, Jr. ; and 5. the original deed of the subject property from the Trustees of the Pickering Wharf Nominee Trust to J. Hilary Rockett, Trustee of Pickering Wharf Realty Trust. This deed is dated June 6, 1996 and recorded at the Essex South District Registry of Deeds in Book 13598, Page 532 . T have also reviewed the applicable law, specifically: G.L. c. 40, . Sec. 59, the statute which authorized TIF financing, and the supporting regulations at 760 C.M.R. 22. 01, et seq. After an extensive review of the foregoing materials, it is my opinion that there is no valid way to argue that the TIF authorized by the city Council can be construed to extend to the other, neighboring parcels. I see no alternative but to return to the City Council with a corrective resolution, if the presently- designated parcel is not intended to be the site where the hotel is to be built. Permit me to call your attention to the following matters : 1 . The subject lots are designated as Lots 408, 446 and 447 on the assessor' s map. The lots correspond to parcel I (lots 446 and 408) and parcel 2 (lot 447) which were conveyed to the Pickering Wharf Realty Trust by the deed hereinbefore referenced. The said deed also conveyed twenty-six condominium units comprising the Pickering Wharf Condominium. According to the November 20, 1998 letter from Rockett to Usovicz, all of this property was intended to be the beneficiary of the T.I .F. plan. 2. The Memorandum of Understanding did not designate the property to be the beneficiary of T.I . F. financing with any greater specificity than "Pickering Wharf. " Rockett's letter to Usovicz agrees with this; however, where Rockett seems to think that the absence of any greater designation adds weight to his argument that therefore the T. I .F. plan applies to all of his property, I 2 am of the opposite opinion: that the absence of any designation deprives this document of any value as a guide to determining which properties were supposed to be involved. 3. Within the T. I . F. Application is a letter dated June 15, 1998 from Mayor Usovicz to Sean Calnan, Director, Massachusetts Office of Business Development. This letter - evidently meant as an introduction to the T. I . F. Application - states that, (t) he proposed location of the hotel is at the corner of Congress and Derby Streets . " There is a lot at the corner of Congress and Derby Streets, but it is Lot 445. Although this lot is also owned by Rockett, it is not one of the three lots under discussion. Looking at the map, one might be able to argue for an expansive understanding of the phrase "corner of Congress and Derby Streets" that would include the abutting Lot 446; however, by no stretch could that phrase be applied to Lot 447 or 408, neither of which are anywhere near Derby Street. 4. Also within the T. I . F. , within the section entitled "Applicant Information, " is a dc5ignation of the- name- a�ndd Qd6ross of -tho proposed project. This is given as "Pickering Wharf Hotel, Corner of Congress Street & Derby Street, Salem, MA 01970 . " The "Introduction and History of Project Development" which appears in the body of the Application, itself, also identifies the project locus as "the corner of Derby and Congress Streets . " 5. In Section I (C) of the Application, the "tax parcel" is identified as "Map 34, Lot 446. " There immediately follows the following "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 3 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") : Bl� Uni EarcentaaQ Tnrerest Derby A 10 . 8775 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 . . . . There is simply no way to interpret this designation as being anything other than what is manifestly is: a very carefully drawn, particularized designation of a single unit of the condominium as the intended beneficiary of the T.I .F. financing! 6. Three (3) City Council Resolutions are included within the T. T . F. Application. The first, dated March 9, 1995, is merely a general authorization for the City to employ T. I . F. financing as an economic development tool. The second Resolution, dated June 11, 1998, is the Resolution which specifically approved the T. I . F. Application on behalf of the Pickering Wharf Realty Trust. This Resolution recites that, "the proposed certified project is located at the corner of Congress and Derby Streets, " and gives the legal description 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, 4 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 1,,jr-ler amended by a �- I,- 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") : Buildin 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 11.-St�-r Deed as set forth for the unit above . . . . (Emphasis added. ) Once more, there is no way, in good faith, to interpret this designation as being anything other than what is manifestly is : a very carefully drawn, particularized designation of a single unit of the condominium as the intended beneficiary of the T. I .F. financing! The third resolution, also dated June 11, 1998, authorized the City to enter into a T. I . F. Financing Agreement. Once again, this Resolution designates the "area to be designated as a Tax Increment Financing Zone" in the identical language used in the Second Resolution. Thus, there is simply no basis, in any of the Resolutions which passed the City Council, for arguing that the Resolutions authorized T. I . F. financing on all of the Rockett Pickering Wharf property! 7 . The Tax Increment Financing Agreement between the City of Salem and the Pickering Wharf Realty Trust contains no further property designations . 8. The letter dated January 14, 1999 to George Mazareas, Director of Economic Assistance Coordinating Council, contains the statement that, " (t) he City voted to approve a TIF to allow Pickering Wharf Realty Trust to development (sic.) a hotel with 70-140 rooms at Pickering Wharf. " Unfortunately, as we have seen, the City did no such thing. No such language appears in any of the votes of the City Council . 9. The letter dated November 20, 1998 from Rockett to Usovicz contains the following statement: " (t) here 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. " I do not know whether there was any mention of tax parcels of legal descriptions in the motions that were presented to the Council, as I do not have those before me; however, as we have already seen, there certainly was mention of these matters in the two resolutions that the Council passed authorizing the T, I . F. application ! 10. The law governing T. I . F. applications is clear that they must be specific to designated parcels of property. G.L. c. 40, Sec. 59 provides, in pertinent part, that: . . . any city or town by vote of its town meeting, town council, or city council with the approval of the mayor where required by law, on its own behalf or in conjunction with one or more cities or towns, and pursuant to regulations issued by the secretary of the executive office of communities and development, may adopt and prosecute a tax increment financing hereinafter referred to as TTF plan, and do any and all things necessary thereto; provided, however, that the TIF plan . . . . (iii) authorizes tax increment exemptions from property taxes, in accordance with the Provisions of clause fifty-first of secti-oln five of chapter fifty-nine, for a specified term not to exceed twenty years, for any parcel of real property which is located in the TIF zone and for which an agreement has been executed with the owner thereof in accordance with the provisions of paragraph (v) . . . . (v) includes executed agreements between such city or town and each owner of a parcel of real property which is located in such TIF zone; provided, however, that each such agreement shall include: (1) all material representations of the parties which served as the basis for the descriptions contained in the TTF plan in accordance with the provisions of paragraph (ii) ; (2) a detailed recit_'tjn� 'f �h� t �' jn"eme':�' maximum percentage of the cost of public improvements that can be recovered through betterments or special assessments regarding such parcel of Leal property pursuant to paragraphs (iii) and (iv) ; (3) a detailed recitation of all other benefits and responsibilities inuring to and assumed by the parties to such agreement; and (4 ) a provision that such agreement shall be binding upon subsecruent owners of such parcel of real property (vii) is certified as an approved TIF plan by the economic assistance coordinating council established by section three B of chapter twenty-three A pursuant to regulations adopted by said council; provided, however, that the economic assistance coordinating council shall find, based on the information submitted in support of the TIF plan by the city or town and such additional investigation as the economic assistance coordinating council shall make, and incorporate in its minutes, that the plan is consistent with the requirements of this section and will further the public purpose of encouraging increased industrial and commercial activity in the commonwealth; provided, further, that a city or town may at any time revoke its designation of a TTF zone and, as a consequence of such revocation, shall immediately cease the execution of any additional agreements pursuant to paragraph (v) ; provided, further, such revocation shall not affect agreements relative to property tax exemptions and limitations on betterments and special assessments pursuant to said paragraph (v) which were executed prior thereto; and provided, further, that the board, agency or officer of the city or town authorized pursuant to paragraph (vi) to execute agreements shall forward to the board of assessors a copy of each 7 such agreement, together with a list of the parcels included therein. (Fmphasis added. ) Similar provisions appear in 760 C.M.R. 22. 00, et seq. ; see especially Sec. 22 . 03 (2) , 22. 05, 22. 07 . To conclude: the law is clear: T.I. F. Applications must be approved by the City Council and must specifically identify I:he parcel (s) to which they are to apply. The T. I .F. Application approved by the City Council did specifically identify, in clear and unambiguous fashion, a single parcel as the intended recipient of the T. I . F. financing. There is simply no "wriggle room" in any of the official documents to argue - after the fact - that the T. I. F. plan approved by the City Council was intended to apply to all of the Rockett property on Pickering Wharf. If such was the intent of the Council, and the applicants, then they should have manifested that intent in the Resolutions . At this time, I fear that I see no alternative but to return to the Council with a corrective resolution, and (hopefully) prevail upon a majority of the members to pass it. I hope that the foregoing has been of assistance. If you have any further comments or questions regarding this matter, please do not hesitate to contact me. 8 CITY OF SALEM - MASSACHUSETTS WILLIAM J.LUNDREGAN Legal Department JOHN D.KEENAN City Solicitor Assistant City Solicitor 81 Washington Street 93 Washington Street 60 Washington Street Tel:978-741-3888 Salem, Massachusetts 01970 TeL 978-741-4453 Fax:978-741-8110 Fax:978-740-0072 February 3 , 1999 Mayor Stanley J. Usovicz, Jr. Salem City Hall ? 93 Washington Street Salem, MA 01970 RE : Pickering Wharf Hotel TIF Dear mayor Usovicz : Please find enclosed my opinion relative to the status of the Pickering Wharf Hotel TIF . If you have any questions with reference to this matter, please do not hesitate to call me . Very truly ours yours W/LLIAM J. LUNDREGAN CITY SOLICITOR WJL/amc Enclosure Memo to: Stanley J. Usovicz, Jr. , Mayor From: William J. Lundregan, City Solicitor Dated: February 2, 1999 RE: Pickering Wharf Hotel TIF You have asked me to review the Application for Certified Project.. Designation - Tax increment Financing Plan (TIF Application)' submitted by the City and Pickering Wharf Realty Trust. and to answer the following question: where the City Council Resolutions authorizing the TIF application specifically designate one of three subject parcels as the parcel to which the TIF is to apply, but where the applicants originally intended that the TIF apply to all three parcels, is there anything in the official record which permits us to argue to the state that the Resolutions should be deemed to apply to all three parcels, rather than the one specifically designated by the Council? In seeking an answer to this question, I have thoroughly reviewed the documents that were provided to me, to wit: 1 . the Application for Certified Project Designation - Tax increment Financing Plan (TIF Application) ; 2. the Memorandum of Understanding executed by J. Hilary Rocket, Trustee, for the Pickering Wharf Realty Trust, and by Stanley J. Usovicz, Jr. , Mayor, for the City of Salem; 3. a letter dated January 14, 1999 to George Mazareas, Director of Economic Assistance Coordinating Council, written by someone whose name and signature have been removed from my copy; 4 . a letter dated November 20, 1998 to Mayor Usovicz from J. Hilary Rockett, Jr. ; and S. the original deed of the subject property from the Trustees of the Pickering Wharf Nominee Trust to J. Hilary Rockett, Trustee of Pickering Wharf Realty Trust . This deed is dated June 6, 1996 and recorded at the Essex South District Registry of Deeds in Pock 13598, Page 532 . I have also reviewed the applicable law, specifically: G.L. c. 40, Sec. 59, the statute which authorized TIF financing, and the supporting regulations at 760 C.M.R. 22. 01, et seq. After an extensive review of the foregoing materials, it is my opinion that there is no valid way to argue that the TIF authorized by the City Council can be construed to extend to the other, neighboring parcels. I see no alternative but to return to the City Council with a corrective resolution, if the presently- designated parcel is not intended to be the site where the hotel is to be built . Permit me to call your attention to the following matters : 1 . The subject lots are designated as Lots 408, 446 and 447 on the assessor' s map. The lots correspond to parcel 1 (lots 446 and 408) and parcel 2 (lot 447) which were conveyed to the Pickering Wharf Realty Trust by the deed hereinbefore referenced. The said deed also conveyed twenty-six condominium units comprising the Pickering Wharf Condominium. According to the November 20, 1998 letter from Rockett to Usovicz, all of this property was intended to be the beneficiary of the T. I .F. plan. 2 . The Memorandum of Understanding did not designate the property to be the beneficiary of T. I . F. financing with any greater specificity than "Pickering Wharf. " Rockett' s letter to Usovicz agrees with this; however, where Roo ett seems 0 in a e absence of any greater designation adds weight to his argument that therefore the T . I . F. plan applies to all of his property, I 2 am of the opposite opinion : that the absence of any designation deprives this document of any value as a guide to determining which properties were supposed to be involved. 3 . Within the T. I . F. Application is a letter dated June 15, 1998 from Mayor Usovicz to Sean Calnan, Director, Massachusetts Office of Business Development. This letter - evidently meant as an introduction to the T. I . F. Application - states that, " (t) he proposed location of the hotel is at the corner of Congress and Derby Streets . " There is a lot at the corner of Congress and Derby Streets, but it is Lot 445 . Although this lot is also owned by Rockett, it is not one of the three lots under discussion. Looking at the map, one might be able to argue for an expansive understanding of the phrase "corner of Congress and Derby Streets" that would include the abutting Lot 446; however, by no stretch could that phrase be applied to Lot 447 or 408, neither of which are anywhere near Derby Street . 4 . Also within the T. I . F. , within the section entitled "Applicant T-for- J s I cci;g n,at 4 o n of I I& n a7me- or, a ,Ia�ion, " a proposed project . This is given as "Pickering Wharf Hotel, Corner of Congress Street & Derby Street, Salem, MA 01970 . " The "Introduction and History of Project Development" which appears in the body of the Application, itself, also identifies the project locus as "the corner of Derby and Congress Streets . " 5 . In Section I (C) of the Application, the "tax parcel" is identified as "Map 34, Lot 446. " There immediately follows the following "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 3 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") : Buildin Uni EercentAOQ Interest Derby A 10 . 8775 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 . . . . There is simply no way to interpret this designation as being anything other than what is manifestly is: a very carefully drawn, particularized designation of a single unit of the condominium as the intended beneficiary of the T.I .F. financing! 6. Three (3) City Council Resolutions are included within the T. I . F. Application. The first, dated March 9, 1995, is merely a general authorization for the City to employ T. I . F. financing as an economic development tool. The second Resolution, dated June 11, 1998, is the Resolution which specifically approved the T. I . F. Application on behalf of the Pickering Wharf Real 6 ty Trust . This Resolution recites that, "the proposed certified project is located at the corner of Congress and Derby Streets, " and gives the legal description 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, 4 Page 99, by a Second Amendment to Master Deed dated December 28, 1979, recorded with Essex South Registry of Deeds in Book 6667, Page 311, -- ----�-A �— - M�� -A. -- .1�u .. LU LIL=L ILMII� �y . IL��LU IU��IU�Ll�l 11 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") : Buildin Unit Percentage Interes 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 faCi.14ties of the Condominium described in t�e Deed as set forth for the unit above . . . . (Emphasis added. ) Once more, there is no way, in good faith, to interpret this designation as being anything other than what is manifestly is : a very carefully drawn, particularized designation of a single unit of the condominium as the intended beneficiary of the T.I .F. financing! The third resolution, also dated June 11, 1999, authorized the City to enter into a T. I . F. Financing Agreement. Once again, this Resolution designates the "area to be designated as a Tax Increment Financing Zone" in the identical language used in the Second Resolution. Thus, there is simply no basis, in any of the Resolutions which passed the City Council, for arguing that the Resolutions authorized T. I . F. financing on all of the Rockett Pickering Wharf property! 7 . The Tax Increment Financing Agreement between the City of Salem and the Pickering Wharf Realty Trust contains no further property designations . 8. The letter- dated January 14, 1999 to George Mazareas, Director of Economic Assistance Coordinating Council, contains the statement that, " (t) he City voted to approve a TIF to allow Pickering Wharf Realty Trust to development (sic. ) a hotel with 70-140 rooms at Pickering Wharf. " Unfortunately, as we have seen, the City did no such thing. No such language appears in any of the votes of the City Council . 9. The letter dated November 20, 1998 from Rockett to Usovicz contains the following statement: " (t) here 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 ." I do not know whether there was any mention of tax parcels of legal descriptions in the motions that were presented to the Council, as I do not have those before me; however, as we have already seen, there certainly was mention of these matters in the two resolutions that the Council passed authorizing the T. I . F. application ! 10. The law governing T. I . F. applications is clear that they must be specific to designated parcels of property. G. L. c. 40, Sec. 59 provides, in pertinent part, that : . . . any city or town by vote of its town meeting, town council, or city council with the approval of the mayor where required by law, on its own behalf or in conjunction with one or more cities or towns, and pursuant to regulations issued by the secretary of the executive office of communities and development, may adopt and prosecute a tax increment financing hereinafter referred to as TIF plan, and do any and all things necessary thereto; p-rovided, however, that the TIF plan . . . . 6 (iii) authorizes tax increment exemptions from property taxes, in accordance with the Provisions of clause fiftly-fi.rst of section five of chapter fifty-nine, for a specified term not to exceed twenty years, for any parcel of real property which is located in the TIF zone and for which an agreement has been executed with the owner thereof - in accordance with the provisions of paragraph (v) . . . . (v) includes executed agreements between such city . or town and each owner of a parcel of real property which is located in such TIF zone; provided, however, that each such agreement shall include: (1) all material representations of the parties which served as the basis for the descriptions contained in the. TIF-Plan in accordance with the provisions of paragraph (ii) ; (2) a �i t-��i �n 'f� the ta, _J 1,c r_-M e_1, maximum percentage of the cost of public improvements that can be recovered through betterments or special assessments regarding such parcel of real property pursuant to paragraphs (iii) and (iv) ; (3) a detailed recitation of all other benefits and responsibilities inuring to and assumed by the parties to such agreement; and (4 ) a pro-vision that such agreement shall be binding upon subsequent owners of such parcel of real property (vii) is certified as an approved TIF plan by the economic assistance coordinating council established by section three B of chapter twenty-three A pursuant to regulations adopted by said council; provided, however, that the economic assistance coordinating council shall find, based on the information submitted in support of the TIF plan by the city or town and such additional investigation as the economic assistance coordinating council shall make, and incorporate in its minutes, that the plan is consistent with the requirements of this section and will further the public purpose of encouraging increased industrial and commercial activity in the commonwealth; provided, further, that a city or town may at any time revoke its designation of a TIF zone arid, as a consequence of such revocation, shall immediately cease the execution of any additional agreements pursuant to paragraph (v) ; provided, further, such revocation shall not affect agreements relative to property tax exemptions and limitations on betterments and special assessments pursuant tz� said paragraph (v) which were executed prior thereto; and provided, further, that the board, agency or officer of the citv or town authorized pursuant to paragr2ph (vi) to execute agreements shall forward to the board of assessors a copy of each 7 such agreement, together with a list of the parcels included therein. (Emphasis added. ) Similar provisions appear in 760 C.M.R. 22 . 00, et seg. ; see especially Sec. 22 . 03 (2) , 22. 05, 22 . 07 . To conclude: the law is clear: T. I. F. Applications must be approved by the City Council and must specifically identify the parcel (s) to which they are to apply. The T. I .F. Application approved by the City Council did specifically identify, in clear and unambiguous fashion, a single parcel as the intended recipient of the T. I . F. financing. There is simply no "wriggle room" in any of the official documents to argue - after the fact - that the T. I . F. plan approved by the City Council was intended to apply to all of the Rockett property on Pickering Wharf. If such was the intent of the Council, and the applicants, then they should have manifested that intent in the Resolutions . At this time, I fear that I see no alternative but to return to the Council with a corrective resolution, and (hopefully) prevail upon a majority of the members to pass it . I hope that the foregoing has been of assistance. If you have any further comments or questions regarding this matter, please do not hesitate to contact me. 8 CITY OF SALEM - MASSACHUSETTS WILLIAM J.LUNDREGAN Legal Department JOHN 0.KEENAN City Solicitor Assistant City Solicitor 81 Washington Street 93 Washington Street 60 Washington Street Tel:978-741-3888 Salem, Massachusetts 01970 Tel:978-741-4453 Fax:978-741-8110 Fax:978-740-0072 February 3 , 1999 I - %-2 Mayor Stanley J. USOViCz, Jr. Salem City Hall 93 Washington Street Salem, MA 01970 RE : Pickering Wharf Hotel TIF Dear Mayor USOViCZ : Please find enclosed my opinion relative to the status of the Pickering Wharf Hotel TIF . If you have any questions with reference to this matter, please do not hesitate to call me . Very truly ours /yours W/LLIAM J. LUNDREGAN CITY SOLICITOR WJL/amc Enclosure Memo to: Stanley J. Usovi6z, Jr. , Mayor From: William J. Lundregan, City Solicitor Dated: February 2, 1999 RE: Pickering Wharf Hotel TIF You have asked me to review the Application for Certified Project., Designation Tax increment Financing Plan (TIF Application)' submitted by the City and Pickering Wharf Realty Trust. and to answer the following question: where the City Council Resolutions authorizing the TIF application specifically designate one o f three subject parcels as the parcel to which the TIF is to apply, but where the applicants originally intended that the TIF apply to all three parcels, is there anything in the official record which permits us to argue to the state that the Resolutions should be deemed to apply to all three parcels, rather than the one specifically designated by the Council? In seeking an answer to this question, I have thoroughly reviewed the documents that were provided to me, to wit: 1 . the Application for Certified Project Designation - Tax increment Financing Plan (TIF Application) ; 2 . the Memorandum of Understanding executed by J. Hilary Rocket, Trustee, for the Pickering Wharf Realty Trust, and by Stanley J. Usovicz, Jr. , Mayor, for the City of Salem; 3. a letter dated January 14, 1999 to George Mazareas, Director of Economic Assistance Coordinating Council, written by someone whose name and signature have been removed from my copy; 4 . a letter dated November 20, 1998 to Mayor Usovicz from J. Hilary Rockett, Jr. ; and S. the original deed of the subject property from the Trustees of the Pickering Wharf Nominee Trust to J. Hilary Rockett, Trustee of Pickering Wharf Realty Trust . This deed is dated June 6, 1996 and recorded at the Essex South District Registry of Deeds in Book 13598, Page 532 . I have also reviewed the applicable law, specifically: G.L. c. 40, Sec. 59, the statute which authorized TIF financing, and t he supporting regulations at 760 C.M.R. 22. 01, et seq. After an extensive review of the foregoing materials, it is my opinion that there is no valid way to argue that the TIF authorized by the City Council can be construed to extend to the other, neighboring parcels. I see no alternative but to return to the City Council with a corrective resolution, if the presently- designated parcel is not intended to be the site where the hotel is to be built . Permit me to call your attention to the following matters : 1 . The subject lots are designated as Lots 408, 446 and 447 on the assessor' s map. The lots correspond to parcel I (lots 446 and 408) and parcel 2 (lot 447) which were conveyed to the Pickering Wharf Realty Trust by the deed hereinbefore referenced. The said deed also conveyed twenty-six condominium units comprising the Pickering Wharf Condominium. According to the November 20, 1998 letter from Rockett to Usovicz, all of this property was intended to be the beneficiary of the T. I.F. plan. 2. The Memorandum of Understanding did not designate the property to be the beneficiary of T. I . F. financing with any greater specificity than "Pickering Wharf. " Rockett's letter to Usovicz agrees with this; however, where Rockett seems to think that the absence of any greater designation adds weight . to his argument that therefore the T . I . F. plan applies to all of his property, I 2 am of the opposite opinion: that the absence of any designation deprives this document of any value as a guide to determining which properties were supposed to be involved. 3. Within the T.I . F. Application is a letter dated June 15, 1998 from Mayor Usovicz to Sean Calnan, Director, Massachusetts Office of Business Development . This letter - evidently meant as . an introduction to the T. I . F. Application - states that, " (t) he proposed location of the hotel is at the corner of Congress and Derby Streets . " There is a lot at the corner of Congress and Derby Streets, but it is Lot 445 . Although this lot is also owned by Rockett, it is not one. of the three lots under discussion. Looking at the map, one might be able to argue for an expansive understanding of the phrase "corner of Congress and Derby Streets" that would include the abutting Lot 446; however, by no stretch could that phrase be applied to Lot 447 or 408, neither of which are anywhere near Derby Street. 4 . Also within the T. I . F. , within the section entitled "Applicant TnIormation, " is a dco4gnatJon of I'& name— a�nl al&css of -`C .proposed project . This is given as "Pickering Wharf Hotel, Corner of Congress Street & Derby Street, Salem, MA 01970 . " The "Introduction and History of Project Development" which appears in the body of the Application, itself, also identifies the project locus as "the corner of Derby and Congress Streets . " 5 . In Section I (C) of the Application, the "tax parcel" is identified as "Map 34, Lot 446. 1' There immediately follows the following "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 3 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") : Buildin Unit, PercenraaQ Interest Derby 11� 10 . 8775 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 . . . . There is simply no way to interpret this designation as being anything other than what is manifestly is: a very carefully drawn, particularized designation of a single unit of the condominium as the intended beneficiary of the T.I .F. financing! 6. Three (3) City Council Resolutions are included within the T. I. F. Application. The first, dated March 9, 199S, is merely a general authorization for the City to employ T. I . F. financing as an economic development tool. The second Resolution, dated June 11, 1998, is the Resolution. which specifically approved the T. I . F. Application on behalf of the Pickering Wharf Realty Trust. This Resolution recites that, "the Proposed certified project is located at the corner of Congress and Derby Streets, " and gives the legal description 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, 4 Page 99, by a Second Amendment to Master Deed dated December 28, 1979, recorded with Essex South Registry of Deeds in Book 6667, Page 3 9, --A -- 1-y a `4 rd t- .LIU . LUL UIL�L I(MILU�u JJ lli� U U 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") : Buildin Unit Percentac(e 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 tI�e 1I.-S-1�-1- Deed as set forth for the unit above . . . . (Emphasis added. ) Once more, there is no way, in good faith, to interpret this designation as being anything other than what is manifestly is : a very carefully drawn, particularized designation of a single unit of the condominium as the intended beneficiary of the T. I .F. financing! The third resolution, also dated June 11, 1998, authorized the City to enter into a T. I . F. Financing Agreement. Once again, this Resolution designates the "area to be designated as a Tax Increment Financing Zone" in the identical language used in the Second Resolution. Thus, there is simply no basis, in any of the Resolutions which passed the City Council, for arguing that the Resolutions authorized T. I . F. financing on all of the Rockett Pickering Wharf property! 7. The Tax Increment Financing Agreement between the City of Salem and the Pickering Wharf Realty Trust contains no further property designations . 8. The letter- dated January 14, 1999 to George Mazareas, Director of Economic Assistance Coordinating Council, contains the statement that, " (t) he City voted to approve a TIF to allow Pickering Wharf Realty Trust to development (sic. ) a hotel with 70-140 rooms at Pickering Wharf." Unfortunately, as we have seen, the City did no such thing. No such language appears in any of the votes of the City Council . 9. The letter dated November 20, 1998 from Rockett to Usovicz contains the following statement : " (t) here 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. " I do not know whether there was any mention of tax parcels of legal descriptions in the motions that were presented to the Council, as I do not have those before me; however, as we have already seen, there certainly was mention of these matters in the two resolutions that the Council passed authorizing the T. I . F. application ! 10. The law governing T. I . F. applications is clear that they must be specific to designated parcels of property. G. L. c. 40, Sec. 59 provides, in pertinent part, that: . . . any city or town by vote of its town meeting, town council, or city council with the approval of the mayor where required by law, on its own behalf or in conjunction with one or more cities or towns, and pursuant to regulations issued by the secretary of the executive office of communities and development, may adopt and prosecute a tax increment financing hereinafter referred to as TIF plan, and do any and all things necessary thereto; provided, however, that the TIF plan . . . . 6 (iii) authorizes tax increment exemptions from property taxes, in accordance with the P.-ovisio-S of clause fifty-fi�-st of section five of chapter fifty-nine, for a specified term not to exceed twenty years, for any parcel of real property which is located in the TIF zone and for which an agreement has been executed with the owner thereof ' in accordance with the provisions of paragraph (v) . . . . (v) includes executed agreements between such city or town and each owner of a parcel of real property which is located in such TIF zone; provided, however, that each such agreement shall include: (1) all material representations of the parties which served as the basis for the descriptions contained in the TIF-plan in accordance with the provisions of paragraph (ii) ; (2) a maximum percentage of the cost of public improvements that can be recovered through betterments or special assessments regarding such parcel of real property pursuant to paragraphs (iii) and (iv) ; (3) a detailed recitation of all other benefits and responsibilities inuring to and assumed by the parties to such agreement; and (4 ) a provision that such agreement shall be binding upon subsequent owners of such parcel of real property (vii) is certified as an approved TIF plan by the economic assistance coordinating council established by section three E3 of chapter twenty-three A pursuant to regulations adopted by said council; provided, however, that the economic assistance coordinating council shall find, based on the information submitted in support of the TIF plan by the city or town and such additional investigation as the economic assistance coordinating council shall make, and incorporate in its minutes, that the plan is consistent with the requirements of this section and will further the public purpose of encouraging increased industrial and commercial activity in the commonwealth; provided, further, that a city or town may at any time revoke its designation of a TIF zone and, as a consequence of such revocation, shall immediately cease the execution of any additional agreements pursuant to paragraph (v) ; provided, further, such revocation shall not affect agreements relative to property tax exemptions and limitations on betterments and special assessments pursuant to said paragraph (v) which were executed prior thereto; and provided, further, that the board, agency or officer of the city or town authorized pursuant to paragraph (vi) to execute agreements shall forward to the board of assessors a copy of each 7 such agreement, together with a list of the parcels included therein. (Emphasis added. ) Similar provisions appear in 760 C.M.R. 22 . 00, et seq. ; see especially Sec. 22. 03 (2) , 22. 05, 22 . 07 . To conclude: the law is clear: T. I. F. Applications must be approved by the City Council and must specifically identify the parcel (s) to which they are to apply. The T . I . F. Application approved by the City Council did specifically identify, in clear and unambiguous fashion, a single parcel as the intended recipient of the T. I . F. financing. There is simply no "wriggle room" in any of the official documents to argue - after the fact - that the T. I.F. plan approved by the City Council was intended to apply to all of the Rockett property on Pickering Wharf. If such was the intent of the Council, and the applicants, then they should have manifested that intent in the Resolutions . At this time, I fear that I see no alternative but to return to the Council with a corrective resolution, and (hopefully) prevail upon a majority of the members to pass it. I hope that the foregoing has been of assistance . If you have any further comments or questions regarding this matter, please do not hesitate to contact me. CITY OF SALEM, MASSACHUSETTS STANLEY J. USOVICZ, JR. MAYOR May 14, 1998 To the City Council City Hall Salem, Massachusetts Ladies and Gentlemen of the Council: Enclosed herewith for your review and approval is a Tax increment Financing Plan containing the resolutions and applications necessary for the development of the Pickering Wharf Hotel. As noted in the attached Tax Increment Financing (TIF) package prepared by the Planning Department,the city has proposed a thirteen-year (TIF) schedule as follows: Year %Exempte 1-5 100 6-8 90 9 80 10 60 11 40 12 20 13 0 This TIF plan pertains exclusively to the hotel portion of the site development. All newly constructed retail space, and the relocated Eastern Bank, will be taxed at full valuation. This will create new tax revenue for the City and additionally, it will provide opportunities for employment. SALEM CITY HALL-93 WASHINGTON STREET-SALEM,MASSACHUSETTS 01970-3592-978/745-9595-FAX 978/744-9327 The construction of additional hotel accommodations in one of our more desirable- locations is a very exciting and positive increment in our plans for providing economic development opportunities within the City of Salem. I respectfiffly request your endorsement of the enclosed Tax Increment Financing Plan and thank you for your consideration. Very truly yours, S TANL 2EY J.USOVICZ, JR. Mayor SJU/smc In City Council May 14, 1998 A motion to report the matter out of Committee at the next meeting was defeated by a roll call vote of 4 yeas, 7 nays, and 0 absent A motion to move the question was voted The matter was referred to the Committee on Community and Economic Development ATTEST: DEBORAH E. BURKINSHAW CITY CLERK COMMONWEALTH OF MASSAC14USETTS DEPARTMENT OF ECONOMIC DEVELOPMENT MASSACHUSETTS OFFICE OF BUSINESS DEVELOPMENT C/O SPRINGFIELD STATE OFFICE BUILDING 43 6 DWIGHT STREET, ROOM B-40 SPRINGFIELD,MA 0 1103 Intemet:http://iNr%vw.state.nia.us/mobd ARGEO PAUL CELLUCCI TELEPHONE GOVERNOR (413) 784-1580 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 1A through F as amended by Chapter 19 of the jkcts oi r 1991, established the Economic Development Incentive Program (EDAI). IVHERE�ILS� th- EDIP is designed to promote increased business development and expansion in Economic Target Areas (ETAS) and Economic Oppur[unity Y-\f-a-, (FOAs) of the Commonv.,ealth: WHEREAS, Lae Economic Assistance Coor 61nating Council (EACC), estabiished by Secoon 113 of said Chapter 23A, is charged with administering the EDIP, mcludin2 thl- rcvie,,v and approval of applications from municipalities for the designaLion of areas as ETAS and EOAs; WHEREAS, the City of Salem has boen designated by the EACC as part of the Belve-ly-Salern Economic Target Area; WHEREAS. the EACC approved the City-wide Economic Opportunity Area within the S--ileni , Economic Target Area; WHEREAS, Pick-cring Wharf Hotel (Pickering Wharf Realty Trust) has comintited io crealm�-�, 45 new permanent full-time jobs; INHFREAS� Pickering Whari Hotel (Pickering Wharf Realt), TrUst) intends to invcs' approximately S4.5 million in construction costs and related expcilses ouring the life, of the project; 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 Page 3 APPROVED: q)6vid A. Tibbetts, Director Department of Econormic Development Co-Chairperson, Economic Assistance Coordinating Council Jane Wallis le, tor Department f ousin & Community Development Co-Chairperson, Erco Assistance Coordinating Council Mb f n & nVe' o .1(fakIn,l JL&wdw",ff& 6��(, 61,4 5r.11 June 15, 1998 Mr. Craig Wheeler City Planner City of Salem Salem, MA 01970 Dear Mr. Wheeler: At a regular meeting of the City Council held in the Council Chamber on June 11, 1998, the following two (2 ) Resolutions were adopted by a roll call vote: 1 . Resolution approving the certified project application of Pickering Wharf Realty Trust 2 . Resolution authorizing a tax increment financing agreement for Pickering Wharf Realty Trust This action was approved by Mayor Stanley J. Usovicz, Jr. , on June 15, 1998 . Enclosed are certified copies of the above two (2 ) Resolutions for your use. 4 er DEBO� CITY CLERK Enclosures GRAPHIC SCALE P 20 0 10 20 40 80 I — I I — I I IN � NEW PUBLIC 4� Q3 I inch 20 M SIDEWALK ter I Island EXISTING CONDITIONS New Engla nd NOT PAR T OF Power C ES PROJECT AREA Nno". 4 PMT "ME k_�JTE S1. Derb /Salem UAmTl Wharf Harbor GRAPMC SCAM 2M) LOCUS 7^2 SCAH: 1"=2000' PROJECT X AREA "CHOWDER 43, 472 ± SF HOUSE" PICKERING" L BUILDING FOOTPRINTS ( HOTEL AND BANK) AREAS 182460 ± SF RUSSIAN M416±SF AID BANK AREA= SOCIETY LANDSCAPING HOTEL/RETAIL AND WALKS L #223-231 DERBY STO AREA BANK FOOTPRINT= 16, 198±SF CONGRESS 132898 ± SF STREET FOOTPRINT= HOTEL & BANK AREA= 8, 728 ± SF 21262±SF TANCOOK LOWER AREA 5, 170± SF CRESCENT" NEW PUBLIC "IVHERRY SIDEWALK ROW PARKING WITHIN HOTEL AND BANK AREAS 28 , 700 ± SF L a- C) 0 ee --7 C) LLJ Uj ARBELLA" SITE PLAN 0 0 PROPOSED HOTEL for a portion of LP C? Firing EXISTING ---- ---.RENOVATED Picke ff*lyrf il NEW PUBLIC Uow SIDEWALK PARKING SEATING AREA EXISTING # 223- 231 Derby Street z cnd "PRIVATEER" W MARINA BUILDING # 23 Congress Street Salem, Massachusetts Prepared for: Pickering Wharf Realty Trust (978) 740-6990 0 MOP 84 Wharf Street, Salem, MA 01970 W _j Date: February 11, 2000 < PLDE #99-04 Scale: 1" = 20' Sheet 1 of 1 SOUTH ARBELLA" PATROWICZ RIVER CANTILEVERED WALKWAY 0 LAND DEVELOPMENT ENGINEERING a. 60 Washington Street, Salem, MA 01970 PURSUANT TO DEP W97- 8421 (978)745-2288 __4 Wti GRAPHIC SCALE 20 0 so 20 4 0 a a 1 1 ri IC 76 V10 A Zi- Bill rw 1 Inch 20 tL Winki #235 DERBY STREET New England Pi Co. AREA= 12, 416± SF z if r (AREA Vili WADINGS AND LAND) NIF NAUMKFAG REALTY TRUST 0 CIO EASTERN BANK '""i A76.13, Noi z in SALEM ASSESSOR'S MAP 34. LOT 445 BOOK 6087. PACE 38 SITE /Salern Derby LEAVI Wharf z H6rb,)r GRAPHIC S76013 drill C., '3 SCALE 0 2= Li found z N76*a*57'E SCALE: 10-2000' HAN I LLq 76-13 158' N87*46'01'W C/) Li r: PLAN REFERENCES: 914' 63 BUILDI PLAN BOOK 154 PLAN 75 00 PLAN BOOK 145 PLAN 75 toj� M8 PLAN BOOK 327 PLAN 85 PLAN BOOK 338 PLAN 30 029, PLAN BOOK 342 PLAN 35 BLOWU 10' WIDE EASEMENT zo ( '110WI)EN 110l Not to Scale BUILDING v S86*17'49-E BOOK 6347, PAGE 408 ?1 E; NIP JEANAN REALTY TRUST 0,36. BOOK 11444. PACE 27 13LOWUP A P Not to Scale IT LEGEND VP& CU Q) * 9 11 PROPOSED PROPERTY LINE 009' BUILDING EXISTING PROPERTY LINE 00 iaaaa aaaaaaaa IN I, I A N 67.25, NIF STNICHOLAS RUSSIAN BENEFIT SOCIETY, LW. ACCESS EASEMENT 54g Sr 13LOWUP R 9 BOOK 2549. PAGE Z77 S"*14'%7'E I IV, _j Not to Scale > In NOTES V.) PARCEL 1A BUILDING 1. THE IAETLANDS DISTRICT LINE CORRESPONDS TO ELEVATION 4.44 (NG\O-MSL DATUM). THE FLOOD HAZARD DISTRICT LINE CORRESPONDS TO ELEVATION 10.0 (NGVD-USL DATUM). THESE #223- 231 DERBY STREET —58 Ail— ELEVATIONS ARE SPEWED IN TKE CITY OF SALEM ZONING ORDINANCE SECTION 7-16. THE I 100-YEM FLOW ELEVATION IS SHOi ON FEMA, MAP #250102-00018 DATED AUGUST 5. 1985 1 PARCEL 1B AREA= 39,646± SF Li AS ELEVATION 10.0 (ZONE A-2� AREA= 6,983± S N/F PICKERINC WHARF CONDOMINIUM TRUST C? tal F HILARY J. ROCKETT, TP 2 SALEM ASSSSSOR*S MAP 34. LOT 446 In BOOK 66Z4. PAGE 141 BLOWUP Q -2 0, BUILDING 0 2"' Not to Scale PLANNING BOARD APPROVAL UNDER III su THE SUBDIVISION CONTROL LAW NOT REQUIRED w TAl 1.0 SALEM PLANNING BOARD 1, 1 1 CRES'CENT" RO W­ 47*32'201w 40-i J/ 67.26' -.0i GAIL A` N85-53'03'�._ L 97� IAN "�/Snwo JII - PARCEL 3 -at I goviiI, 1 RZMAIi LAND OF PICANJUM0 WHARF CONDOMINIUM TRUST MAL It-A J I --- PARCEL 2A 16a3W HILARY J. ROCKETT. TR 9* (NOT A SEPERATE SALEM ASSASSOR'S MAP 34. LOT 408 BUILDING LOT) BOOK 6624. PAGE 141 AREA= 4,749± SF PROPOSED NIF PICKERING WHARF CONDOMINIUM TRUST iron HILARY J. ROCKVTT, TA rod SALEM ASSESSOR'S MAP 84, LOT 446 PROPERTY SUBDIVISION BOOK 8624. PACE 141 a. Lid S"*23'03'E 169.39, L, Z PLAN OF LAND I CERTIFY ZHA THIS PLAN HAS F, BEEN PREPA IN ACCORDANCE z RT, C__ 'Iz� CLI - CREATING PARCELS 1A & 1B WITH THE I L AND RECULATIONS LINE N01*45*48'E < OF THE I Y OF DEEDS. 17 for a portion of FLOOD D A�ARD Q) ',�Tk"CT *_LjN-iL�,;,--T�, - -I- E 0.0) co I ic P PARCEL 2B - > in FOR REGISTRY USE ONLY . .Oot # 223- 231 Derby Street #23 CONGRESS STREET AREA= 14,127± SF a and I,'.\,ISTI N (AREA 04CLLOES 111.1111DINGS AND LAND) # 23 Congress Street MARINA N/1 PICKERLW WHARF REALTY TRUST RAN 8000 Y" 10 W HILARY J. ROCKETT, TR P R I ATE 1:R' <Z Salem, Massachusetts N:� SALEM ASSESSOR'S MAP 34. LOT 447 EXISTING L X E- BOOK 134598. PAGE 632 PROPERTY LINES Property of: Pickering Wharf Realty Trust (978) 740-6990 L) TO REMAIN 84 Wharf Street, Salem, MA 01970 NOMM4. gag" CI , drill 0 � Date: July 12, 2000 hi 4 69 —04 Scale: 1" = 20' Sheet 1 of 1 wt SGG� DO PUDE #99 N95-onvaii, cod' PATROWICZ 19W71- low too E. LAND DEVELOPMENT ENGINEERING j � SOUTH WALL — 60 Washington Street, Salem, MA 01970 (978)745-2288 ' RIVER WETLANDS NORTH SHORE SURVEY CORP. DISTRICT LINE 47 Linden Road, Salem, MA 01970 (ELEVATION 4.44) (978)744-4800