Committee forwards leasehold mortgage enabling Hope House to seek Maine State Housing Authority funding

The Bangor City Finance Committee on Dec. 1 forwarded to the full council an order authorizing execution of a leasehold mortgage and security agreement concerning Hope House.

An assistant city solicitor told the committee that the city leases the land where Hope House operates to an entity identified in the transcript as BCFC and that the lease (memo referenced a date noted in the record) permits the lessee (referred to in the transcript as PCHC) to mortgage, assign or transfer its leasehold interest in order to secure funding. The solicitor said the funding source identified was the Maine State Housing Authority and that the city solicitor's office had reviewed the mortgage and security agreement and recommended moving it to council.

A councilor asked what the city’s liability would be if the lessee defaulted. The assistant city solicitor said the Maine State Housing Authority would "step into the shoes" of the lessee in that scenario and that the city would be required to consent to any subsequent transfer; the solicitor stated the terms described in the memo would not cause the city to lose money or the land. Councilman Mallett additionally asked whether any successor would be bound by the same lease conditions; the solicitor confirmed the lease requires consistent operation under the same conditions.

A committee member moved and a colleague seconded to forward the item; the chair said it will appear on the next council agenda. The committee also asked staff to include the RFP and submitted proposals with future packets; staff agreed to include those materials.