Committee advances leasehold mortgage for Main State House health center; city consent required on assignment

The Finance Committee voted to forward to the full council an order authorizing execution of a leasehold mortgage and security agreement that would allow PCHC to mortgage, assign or transfer its leasehold interest in the Main State House health center in order to secure funding.

The Assistant City Solicitor explained that PCHC approached the city seeking funding through Maine State Housing Authority and that the proposed leasehold mortgage and security agreement is consistent with the existing lease terms. “Maine State Housing Authority would step into the shoes of PCHC, basically, if that were to happen,” the Assistant City Solicitor said, describing the likely process in the event of a default; the city would then be asked to consent to any assignment to a third party. The solicitor stated this structure preserves the city’s interests on the land and that the city would not lose land or funds under the presented arrangement.

Councilor Beck sought clarification about liabilities if PCHC defaulted; the solicitor reiterated that the authority would assume PCHC’s role under the lease and the city’s consent would be required for assignment. Councilor Malorie asked whether a future assignee would be bound to the same operational conditions in the lease (for example, not converting the site to an unrelated business); the Assistant City Solicitor confirmed those conditions are carried forward.

A motion to forward the recommendation to council passed on a second and the order will be placed on the next council agenda for final action.