Economic Development Committee — Portland, ME
Date: 2018-03-06

ECONOMIC DEVELOPMENT COMMITTEE
 DATE: March 6, 2018 (Tuesday)
 TIME: 5:30 – 7:30 p.m.
 LOCATION: Room 209
 Portland City Hall


1. Review and accept Minutes of previous meeting held on February 21, 2018.

2. Public Hearing and vote to recommend to the City Council a Purchase and Sale Agreement and
 City Lease Back for 44 Hanover Street.
 a. See enclosed memorandum from Greg Mitchell with proposed purchase and sale agreement
 and lease.
 NOTE: Pursuant to 1 M.R.S.A. 405(6)(C), the Committee may go into executive
 session to discuss real estate negotiations and provide guidance to staff.

3. Discuss Draft 2018 Work Plan for the Economic Development Committee.

4. Executive sessions: Pursuant to 1 M.R.S.A. 405(6)(C), the Committee will go into executive session
 to discuss real estate negotiations and provide guidance to staff for the following:
 a. Proposed Amendment to Ready Seafood Lease (see enclosed memo and backup)
 b. Proposed Amendments to the Bay Ferries, Ltd. Lease (see enclosed memo and backup);
 c. Proposed sale of City owned Riverside Street property (see enclosed memo and backup); and,
 d. Proposed Waterfront TIF District Credit Enhancement Agreement request (backup to be
 handed out at meeting)

 Councilor Justin Costa/Chair

 Next Meeting Date: March 20, 2018




 CITY OF PORTLAND/ECONOMIC DEVELOPMENT DEPT./389 CONGRESS ST./PORTLAND, ME 04101/(207) 874-8683
 Minutes
 Economic Development Committee
 February 20, 2018


 A meeting of the Economic Development Committee (EDC) of the Portland City

 Council was held on Tuesday, February 20, 2018 at 5:30 p.m. in Room 209 of Portland

 City Hall. Present from the Committee was its Chair Councilor Justin Costa and members

 Councilors Nicholas Mavodones and Spencer Thibodeau. Present from the City staff were

 Public Facilities Director Kathy Alves, Economic Development Director Greg Mitchell, and

 Senior Executive Assistant Lori Paulette.

 Item #1: Review and accept Minutes of previous meeting held on February 6, 2018.

 On motion made by Councilor Mavodones, seconded by Councilor Thibodeau, the

Committee voted unanimously to accept the Minutes as presented.

 Item #2: Review and Discussion of the 2018/2019 Work Plan of the Portland

Economic Vision and Plan (“Plan”) and vote to forward to the City Council as a

Communication.

 For clarification, Chair Costa noted that this Work Plan is separate from the City Council

goals, and the City Council will be meeting in March regarding future goals.

 Mr. Mitchell said that the 2018/2019 Work Plan is the fourth such Work Plan, which

started with 2012/2013. The Plan’s stakeholders, every two years, update the Work Plan.

Stakeholders, including the City, are Creative Portland, Portland Chamber of Commerce,

Portland Downtown, and Visit Portland and noted that all but Visit Portland are present today.

The Work Plan is a collaborative effort and has over 20 various items and provides a road map

for the stakeholders, and also notes which stakeholder takes the lead in various initiatives.




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 Councilor Thibodeau asked Mr. Mitchell what he is most proud of, and Mr. Mitchell

noted that all stakeholders had a part in welcoming the Arctic Council to Portland in October

2016. The Arctic Council represented over 25 countries, and the delegates were very impressed

with Portland. Another collaboration by the stakeholders regarded education about the need for a

cold storage facility on the waterfront. Lastly, Mr. Mitchell said that the Work Plan has provided

for increased collaboration between the stakeholders.

 Councilor Mavodones thanked all for their work for Portland.

 Chair Costa echoed that comment.

 Councilor Mavodones then made a motion to forward this to the City Council as a

Communication, and Councilor Thibodeau seconded the motion.

 Chair Costa asked if there was any public comment.

 Casey Gilbert, Executive Director of Portland Downtown, said that with the stakeholders

working in collaboration with each other has broken down the “silos” and decreased overlap,

using resources effectively and building relationships. She noted that the Economic

Development Department is an effective partner in the effort.

 Dinah Minot, Executive Director of Creative Portland agreed, as did Quincy Hentzel,

President of the Greater Portland Chamber of Commerce who noted that the increased working

relationships is beneficial for Portland and looked forward to continuing to collaborate.

 Seeing no further public comment, Chair Costa closed the public comment session.

 Chair Costa, thanked everyone again, and asked for a vote on the motion and it passed

unanimously.

 Item #3: Communication: Review of FYE2017 Annual Tax Increment Financing

Report and vote to forward to the City Council as a communication.




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 Mr. Mitchell said that Portland’s TIF Policy includes an annual report to the City

Council, and this FYE2017 Report is the fifth year in a row. In the report, there is a table that

shows the yearly trends, a listing of all approved TIF Districts, as well as a spreadsheet showing

FY2017 TIF District activity – OAVs and IAVs and associated taxes. During FY2017, the

Council approved the ImmuCell TIF District for a 12-year term; authorized the assignment of the

McAuley Place TIF District; and referred possible TIF Policy Amendments to this Committee

for a recommendation back to the City Council. Those TIF Policy amendments were approved

by the Council post-FY2017 on November 20, 2017.

 Mr. Mitchell also noted that one TIF CEA will expire with FY2018, and three others will

expire with FY2019, after which an additional $325,000 of taxes will go into the General Fund.

 Mr. Mitchell closed by saying that no other municipality in the state has this level of

information in a report.

 Councilor Mavodones thanked Mr. Mitchell and staff for such a comprehensive Report.

 Chair Costa agreed, and noted that the Finance Committee will be discussing TIF

revenues, particularly from the area-wide districts, and how they can be used for various CIP

projects, as well as how aggressive the City should be in pursuing additional Districts.

 Mr. Mitchell noted that the City Council Agenda for February 21 has item to amend the

Waterfront area TIF District by adding two properties currently under development, i.e., the

WEX development and the Union Wharf development. Regarding the Downtown TOD TIF

District, this district has a maximum allowable capture of 22%. If the City Council would want

to increase that capture it would need a formal amendment by both the City Council and

MDECD.




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 Councilor Mavodones made a motion to forward this to the City Council as a

Communication; Councilor Thibodeau seconded the motion.

 Chair Costa asked if there was any public comment; seeing none, the public comment

session was closed.

 Chair Costa asked for a vote on the motion, and it passed unanimously.

 Item #4: Discuss Draft 2018 Work Plan for the Economic Development Committee.

 Mr. Mitchell said that this has been edited pursuant to the direction at the last Committee

meeting.

 Councilor Thibodeau suggested having categories of long-term items and short-term

items.

 Chair Costa said that, with regard to the employee disparity study, this will be further

discussed during the Council’s goal setting session and is comfortable sharing this with the

Council during that session.

 Mr. Mitchell said that the Draft Work Plan will be brought to the next EDC meeting with

the long-term items and short-terms categorized.

 Item #5: Executive sessions: Pursuant to 1 M.R.S.A. 405(6)(C), the Committee will

go into executive session to discuss real estate negotiations and provide guidance to staff,

per the enclosed memos, for the following:

 a. Proposed Amendments to the Bay Ferries, Ltd. Lease;
 b. Proposed Amendments to the Ready Seafood Company Lease;
 c. Proposed sale of City-owned Riverside Street Property; and
 d. Proposed Waterfront TIF District Credit Enhancement Agreement.

 (Author’s Note: No public comment sessions were offered as, at this time, there was no

one from the public in attendance.)

 a. Proposed Amendments to the Bay Ferries, Ltd. Lease.




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 Councilor Thibodeau made a motion that, pursuant to 1 M.R.S.A. 405(6)(C), the

Committee go into executive session to discuss negotiations for proposed amendments to the Bay

Ferries, Ltd. Lease; Councilor Mavodones seconded the motion. Chair Costa asked for a vote on

the motion and it passed unanimously at 6:03 p.m. At approximately 6:25 p.m., the Committee

came out of executive session.

 b. Proposed Amendments to the Ready Seafood Company Lease

 Councilor Thibodeau made a motion that, pursuant to 1 M.R.S.A. 405(6)(C), the

Committee go into executive session to discuss negotiations for proposed amendments to the

Ready Seafood Company Lease; Councilor Mavodones seconded the motion. Chair Costa asked

for a vote on the motion and it passed unanimously at 6:25 p.m. At approximately 6:43 p.m., the

Committee came out of executive session.

 c. Proposed sale of City-owned Riverside Street Property

 Councilor Thibodeau made a motion that, pursuant to 1 M.R.S.A. 405(6)(C), the

Committee go into executive session to discuss negotiations for proposed sale of City-owned

Riverside Street property; Councilor Mavodones seconded the motion. Chair Costa asked for a

vote on the motion and it passed unanimously at 6:43 p.m. At approximately 7:00 p.m., the

Committee came out of executive session.

 d. Proposed Waterfront TIF District Credit Enhancement Agreement.

 Councilor Thibodeau made a motion that, pursuant to 1 M.R.S.A. 405(6)(C), the

Committee go into executive session to discuss negotiations for a proposed Waterfront TIF

District Credit Enhancement Agreement; Councilor Mavodones seconded the motion. Chair

Costa asked for a vote on the motion and it passed unanimously at 7:00 p.m. At approximately

7:25 p.m., the Committee came out of executive session and the meeting was then adjourned.




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Respectfully, Lori Paulette




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 Economic Development Department
 Gregory A. Mitchell, Director



 MEMORANDUM


TO: Economic Development Committee

FROM: Greg Mitchell, Economic Development Director

DATE: February 27, 2018

SUBJECT: Sale of and City Lease back of 44 Hanover Street


I. One Sentence Summary

A proposed Purchase and Sale Agreement to sell City owned property located at 44 Hanover Street to
Tom Watson & Co., LLC, for $1,275,000 and City Lease Agreement to lease back the property until
up to September 30, 2019 is requested for a vote to forward to the City Council for approval.

II. Background

It has been the long-term goal to sell this and other Public Works Bayside properties per the Year
2000 Bayside Vision. To support these property sales, the City Council approved the acquisition of
property along Canco Road which has been and continues to be redeveloped to support the relocation
of Public Works operations from Bayside and other City Departments.

The subject property has been used for Public Works “Fleet Services” large equipment maintenance
operations. See attached property location map.

Public meetings to discuss the sale of Bayside former Public Works Properties have been held on
1/3/2017, 1/31/2017, 2/27/2017, 3/7/2017, 6/272017, 7/19/2017, 9/19/2017, 11/28/2017, and
1/3/2018.

Under the direction of the EDC during 2017 and 2018, staff has been negotiating a Purchase and Sale
Agreement and Lease Agreement with Tom Watson & Co., LLC. Mr. Watson’s site redevelopment
proposal includes the following:

  Upwards of 16 separate units all with access to the street;
  One central space of over 3,500 square feet for public/communal user like pub, cafe, eatery;
  Glass overhead doors to promote openness and allow for artists to combine retail display
 space for their work and promote a marketplace environment; and
  Affordable/accessible to the creative economy at under $1,000/month.

 CITY OF PORTLAND/ECONOMIC DEVELOPMENT DEPT./389 CONGRESS ST./PORTLAND, ME 04101/(207) 874-8683

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However, due to the fact that approximately two years will have passed between the time Mr. Watson
submitted his proposal for the property and the time he will take possession of it, he is requesting
some flexibility for his planned renovations given that community market demands may change.

III. Intended Result and/or Council Goal Addressed

The intended result would be the sale and City lease back of this property to support mixed use
development in Bayside after the City vacates the property, with the flexibility discussed above.
Also, it supports the Council’s long-term goal to sell Public Works Bayside properties to support
Public Works relocation out of Bayside.

IV. Financial Impact and Purchase and Sale Agreement and Lease Agreement Highlights

Purchase and Sale Agreement:

If sold, the City would realize property sale proceeds in the amount of $1,275,000 (subject to the rent
credit described below) and future new taxes from the proposed development.

Also, provisions are included to ensure future payment of property taxes in the event of non-profit
ownership.

The appraised value of this property in an “as is, where is” condition is $1,380,000. Buyer will
provide the City with environmental indemnification and be responsible for any site environmental
remediation costs.

Proceeds from the sale of this and other Bayside property will be utilized to fund the relocation of
remaining Public Works operations out of Bayside.

Also, Developer performance requirements are included in the Purchase and Sale Agreement.

Lease Agreement:

City occupancy of the property until September 30, 2019 for an upfront rent credit payment of
$12,500 per month, with a minimum credit of $75,000. The City lease back approach is needed to
access funds to support the Fleet Services operations relocation and provide enough time to construct
a building addition at the City Canco Road Campus.

One three-month renewal option beyond September 30, 2019 at the greater of $12,500 per month or
the then market rental rate is available, if needed. Note that the lease will require that the City
provide proof of certain insurance coverages, including general liability and pollution liability
coverage, some of the details of which are being negotiated by the Corporation Counsel’s office and
the buyer, and may be subject to the approval of the buyer’s insurer and lender. Some of the
insurance provisions of the lease are presently intentionally omitted from the Lease but will be
included before the Purchase and Sale Agreement and the Lease are presented to the City Council for
approval.




 CITY OF PORTLAND/ECONOMIC DEVELOPMENT DEPT./389 CONGRESS ST./PORTLAND, ME 04101/(207) 874-8683

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Taxes, Utilities and Maintenance (snow plowing):

City will be responsible for all property taxes, utilities, insurance, and maintenance expenses during
the rental period.

V. Staff Analysis and Recommendation

Staff is recommending that the EDC vote to forward the proposed Purchase and Sale Agreement and
Lease Agreement to the City Council with a recommendation for approval in substantial form as
attached.

VI. List Attachments

 - Property Location Maps
 - Proposed Purchase and Sale Agreement
 - Proposed City Lease Agreement




 CITY OF PORTLAND/ECONOMIC DEVELOPMENT DEPT./389 CONGRESS ST./PORTLAND, ME 04101/(207) 874-8683

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 PURCHASE AND SALE AGREEMENT

 THIS PURCHASE AND SALE AGREEMENT IS made this ______ day of _____, 2018
by and between the City OF PORTLAND, a body politic and corporate located in Cumberland
County, Maine, (hereinafter referred to as “Seller” or “City”), and Tom Watson & Co., LLC, or
assigns, a Maine limited liability company having a mailing address of 104 Grant Street,
Portland, ME 04101 (hereinafter, collectively, referred to as “Buyer”).

 RECITALS

 WHEREAS, the CITY is the owner of certain land and buildings located at or near 44
Hanover Street, Portland, Maine as generally depicted on the plan attached hereto as Exhibit A
together with all buildings and other improvements located thereon (the “Premises”) and
incorporated herein; and

 WHEREAS, Buyer desires to purchase the Premises, and the City desires to convey the
Premises to Buyer subject to the terms and conditions set forth herein.

 NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:

 1. SALE AND EFFECTIVE DATE. City agrees to sell the Premises to Buyer, and
 Buyer agrees to purchase the Premises in accordance with the terms and conditions
 set forth in this Agreement. This Agreement is for the sale of land and buildings
 located at or about 44 Hanover Street, Portland, Maine. This Agreement shall become
 effective after the City Council of the City approves it and after both Buyer and Seller
 have signed this Agreement. The date that the last of Buyer or City sign this
 Agreement shall be the effective date (the “Effective Date”), and the last signor shall
 insert that date in the first paragraph of this Agreement as the Effective Date. All
 deadlines and time periods set forth in this Agreement, including, without limitation,
 the Due Diligence Period, Financing Period and Closing Date (all as defined
 hereafter) shall be computed from the Effective Date.

 2. CONSIDERATION. The purchase price for the Premises shall be One Million Two
 Hundred Seventy-Five Thousand Dollars ($1,275,00.00) (the “Purchase Price”),
 subject to the following cost adjustments and conditions:

 a. Buyer shall deposit the sum of Twenty-Five Thousand Dollars ($25,000.00)
 (the “Deposit”) within 3 business days after the Effective Date of this
 Agreement that the parties agree will be held in escrow in a non-interest bearing
 account with CBRE | The Boulos Company; the Deposit shall be fully
 refundable until the later of the expiration of the Due Diligence Period or the
 Financing Period, as both are described herein; after the expiration of both such
 Periods, the Deposit shall be non-refundable except as expressly set forth
 herein, including, without limitation in paragraphs 3 and 10; and

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 b. The parties agree that the City will continue to occupy and lease the Premises
 from Buyer after Closing (as defined herein) until at least March 31, 2019 by
 entering into a lease agreement with Buyer or Buyer’s successor or assigns, as
 Buyer shall elect, in substantially the form attached hereto as Exhibit C (the
 “Lease”); provided, however, that the City shall have the right to continue to
 occupy the Premises until September 30, 2019. The City hereby agrees to
 notify Buyer in writing on or before the date that is sixty (60) days after the
 Effective Date if it intends to occupy the Premises beyond March 31, 2019 or
 the City shall be limited to a lease ending on March 31, 2019 unless Buyer and
 City shall otherwise agree.

 At Closing, Buyer shall receive a credit against (that is, a reduction of) the
 Purchase Price in the amount of Twelve Thousand Five Hundred Dollars
 ($12,500.00) per month for the number of months remaining between the
 Closing Date and the end of the term of the Lease, which shall be no earlier
 than March 31, 2019 (the “Rent Credit”). If the first month which the City will
 occupy the Premises after Closing is less than a full month, the Rent Credit for
 that month shall be prorated. The Rent Credit shall serve as City’s
 nonrefundable advance payment of rent for the Lease of the Premises to the
 City by the Buyer or the Buyer’s successor or assigns, as Buyer shall elect. At
 Closing, the parties shall execute a Lease in substantially the form attached
 hereto as Exhibit C. Regardless of the length of the term of the Lease or the
 date that the City vacates the Premises, in no event shall the Rent Credit be less
 than $75,000.00.

 c. The Buyer shall pay the remainder of the Purchase Price to the City after the
 Purchase Price is reduced by the full amount of the Rent Credit. Such payment
 shall be made by wire transfer (or as otherwise reasonably requested by the
 City) at Closing.


3. TITLE AND DUE DILIGENCE.

 a. Due Diligence Period. Subject to extension as set forth in Paragraph 3(b)
 and (d), Buyer will have from the Effective Date of this Agreement until
 4:00 PM Portland, Maine time on the day that is sixty (60) days after the
 Effective Date of this Agreement (the “Due Diligence Period”) to
 complete any survey, environmental review and title examinations, and to
 undertake such other investigations, testing or inspections as Buyer shall
 deem appropriate.

 b. Property Description. The property description contained in the deed will
 be a survey description based upon a Boundary Survey performed by a
 Maine Licensed Surveyor to be obtained by the City (the “Survey”) which
 will more specifically describe the property shown on Exhibit A hereto
 (the “Premises Description”) in form reasonably acceptable to the City and
 Buyer. The Premises Description will be distributed to the parties hereto at
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 least thirty (30) days prior to expiration of the Due Diligence Period. If
 the Premises Description is not received by City and Buyer at least thirty
 (30) days prior to the expiration of the Due Diligence Period, the Due
 Diligence Period shall be extended to a date thirty (30) days after it is
 received. The parties will agree on the final Premises Description prior to
 closing. If the parties cannot agree upon the final Premises Description
 prior to closing, then Buyer shall have the option to (1) terminate this
 Agreement and obtain a refund of the Deposit (after which neither party
 will have any further obligation or liability to the other under this
 Agreement) or (2) waive the approval provision and close using a
 description to which the City will agree.

c. Financing Contingency. Buyer shall have from the Effective Date of this
 Agreement until 4:00 PM Portland, Maine time on the day that is ninety
 (90) days after the Effective Date of this Agreement (the “Financing
 Period”) to obtain a commitment for commercially reasonable financing
 acceptable to Buyer, provided, however, if the Due Diligence Period shall
 be extended, then the Financing Period shall be extended to expire on the
 date which is thirty (30) days after the expiration date of the Due
 Diligence Period. Buyer shall take timely and commercially reasonable
 steps to secure such financing. If Buyer does not obtain a financing
 commitment acceptable to Buyer within the Financing Period, Buyer may
 terminate this Agreement by notice in writing to City, or may elect to
 close under the Agreement despite the lack of such commitment. If Buyer
 so exercises its right to terminate this Agreement, then the City shall
 refund to Buyer the Deposit, if previously paid, without interest, within ten
 (10) days after receipt of Buyer's termination notice, and neither party
 shall have any further obligations or liabilities under this Agreement
 except as expressly set forth in this Agreement. Any termination notice
 sent by Buyer with respect to this Agreement may merely state that Buyer
 elects to terminate this Agreement, shall have no formal requirements, and
 shall be immediately effective.

d. Title, Survey and Environmental Objections. In addition to the Survey
 described above, the City agrees it has caused a Phase II Environmental
 study of the Premises to be performed. Buyer will have until the end of
 the Due Diligence Period to deliver to City any written objections to title,
 environmental, or survey matters that Buyer determines materially affect
 insurability of title at standard rates, or the use of the Premises, the value
 of the Premises, the cost of development of or the cost or feasibility of
 construction on the Premises. Objections not made prior to the end of the
 Due Diligence Period will be deemed waived; provided, however, that
 objections pertaining to matters of record first appearing after the end of
 the Due Diligence Period may be made at any time prior to the closing. If
 the Survey and any environmental study (including, without limitation any
 Phase II Environmental study) are not completed and distributed to the
 parties at least thirty (30) days prior to the expiration of the Due Diligence
 Period, the Due Diligence Period will be extended (without the need for
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 further action by the parties hereto) to a date thirty (30) days after the date
 upon which the later of the Survey or any environmental study to be
 completed and received are completed and are received by Buyer and
 City.

e. Option to Cure.

 (1) In the event of a title, Survey or environmental objection by Buyer,
 City will have the option, but not the obligation, to cure the objection and
 will notify Buyer of its election within ten (10) business days after receipt
 of the objection. In the event that the City elects to cure the objection, it
 will have sixty (60) days from the date of the notice of election, or such
 other reasonable time as the parties may agree, to cure the objection. In
 the event that the City does not elect to cure the objection, or, having
 elected to cure the objection fails to timely do so to Buyer’s reasonable
 satisfaction, Buyer will have the option to (A) terminate this Agreement
 and obtain a refund of the Deposit (after which neither party will have any
 further obligation or liability to the other under this Agreement), (B) waive
 the objection and close, or (C) undertake the cure of such objection at its
 own expense (in which case it shall have 60 days to do so and the Closing
 Date shall be extended to a date ten (10) days after the expiration of such
 60 day period); if Buyer determines it is not satisfied with the results of its
 own cure efforts, Buyer shall be entitled at any time prior to the expiration
 of the ten (10) day period following Buyer’s sixty (60) day cure period set
 forth in this subsection (C) to terminate this Agreement as set forth in
 subsection (A) set forth above, or to waive its objection and close under
 this Agreement.

 (2) In the event City shall elect not to cure any objection by Buyer,
 Buyer shall have fourteen (14) days after receipt of the City’s notice of
 election not to cure such Buyer’s objection in which to make its choice
 and to notify City whether it elects option A, B or C set forth in the
 previous subparagraph . In the event City shall elect to cure Buyer’s
 objection, Buyer shall have fourteen (14) days following the end of the
 City’s 60-day cure period to make its choice and to notify City whether it
 accepts the City’s cure with respect to the particular objection or whether
 it elects option A, B or C set forth in the previous subparagraph.


f. Deed. City shall convey the Premises to Buyer at the closing in fee simple
 by a municipal quitclaim deed without covenant. Title shall be good and
 insurable title at standard rates, free and clear of all encroachments, liens
 and encumbrances except (i) easements consented to by Buyer; (ii)
 easements for utilities servicing the property, (iii) City ordinances, and (iv)
 real estate taxes not yet due and payable. Buyer further acknowledges that
 the deed shall contain a restriction stating that in the event that the
 Premises or any portion thereof shall be exempt from real and personal
 property taxes, by transfer, conversion, or otherwise, then the then-owner
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 of the exempt portion shall make annual payments to the City in lieu of
 taxes in the amount of the lesser of (a) the amount of property taxes that
 would have been assessed on the exempt portion of the real and personal
 property situated on the Premises had such property remained taxable, or
 (b) such other target percentage as may be approved as part of a City
 PILOT policy that may be in effect at the time taxes are due on such
 property. Such restriction shall also confirm that Buyer and its successors
 and assigns shall possess and be vested with all rights and privileges as to
 abatement and appeal of valuations, rates, and the like as are accorded
 owners of real and personal property in Maine.

 3.1 TITLE DOCUMENTATION:

 The City agrees to reasonably cooperate with Buyer’s requests for documentation
related to the title of the Premises or any tax taking of the Premises.

 4. INSPECTIONS.

 a. During the Due Diligence Period, Buyer and its employees, consultants,
 contractors and agents shall have the right, at Buyer’s expense, to enter on
 the Premises at reasonable times in order to (i) inspect the same, (ii)
 conduct engineering studies, percolation tests, geotechnical exams,
 environmental assessments, and other such studies, tests, exams, and
 assessments as Buyer shall deem appropriate or desirable, and (iii) do such
 other things as Buyer determines, it is sole discretion, to be required to
 determine the suitability of the Premises for Buyer's intended use
 (collectively, the “Inspections”). The City acknowledges that such
 Inspections may include the digging of test pits, which the City hereby
 approves.

 b. Buyer agrees to defend, indemnify and hold harmless the City against any
 mechanics liens that may arise from the activities of Buyer and its
 employees, consultants, contractors and agents on the Premises, except
 those arising from labor or materials furnished at the City’s request.

 c. Buyer shall exercise the access and inspection rights granted hereunder
 at its sole risk and expense, and Buyer hereby releases the City from, and
 agrees to indemnify, defend, and hold the City harmless against, any and all
 losses, costs, claims, expenses and liabilities (including without limitation
 reasonable attorney fees and costs) (collectively, "Damages") suffered by
 the City on account of any injury to person or damage to property arising
 out of the exercise by Buyer of its rights hereunder, except to the extent
 that such Damages result from the act or omission of the City.

 d. Buyer shall cause any contractors, consultants or any other party
 conducting the Inspections to procure automobile insurance, if applicable,
 and general public liability insurance coverage in amounts of not less than
 Four Hundred Thousand Dollars ($400,000.00) per occurrence for bodily
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 injury, death and property damage, listing the City as an additional insured
 thereon, and also Workers’ Compensation Insurance coverage to the
 extent required by law; the forms of all such insurance to be subject to
 City’s Corporation Counsel’s reasonable satisfaction.

 e. In the event that Buyer does not purchase the Premises, Buyer agrees to
 either return the Premises as nearly as reasonably possible to its original
 condition after conducting the Inspections, or, at the City’s option,
 reimburse the City for any material physical damage caused to the
 Premises in connection with the Inspections; provided, however, the City
 hereby acknowledges and agrees that the term "physical damage" does not
 include any disturbance of any pre-existing environmental contamination
 on the Premises caused by such inspections, nor any studies, tests
 (including test borings or pits), exams, and assessments, and that Buyer
 shall have no obligation to clean-up, remove or take any other action with
 respect to any pre-existing environmental contamination disturbed
 thereby.

 f. The parties hereto acknowledge and agree that it is a condition to Buyer's
 obligations under this Agreement that the results of the Inspections and
 other due diligence be acceptable to Buyer in its sole discretion. If the
 results of such Inspections or other due diligence are not acceptable to
 Buyer in its sole discretion Buyer may terminate this Agreement. If Buyer
 exercises its right to terminate this Agreement, then the City shall refund
 to Buyer the Deposit, if previously paid, without interest, within ten (10)
 days after receipt of Buyer's termination notice, and neither party shall
 have any further obligations or liabilities under this Agreement except as
 expressly set forth in this Agreement. Any termination notice sent by
 Buyer with respect to this Agreement may merely state that Buyer elects
 to terminate this Agreement, shall have no formal requirements, and shall
 be immediately effective.

5. REAL ESTATE TAXES, PRORATIONS AND TRANSFER TAX. Buyer shall
 be liable for all real estate taxes beginning as of the start of fiscal year following the
 closing and continuing thereafter except as provided in this Agreement and in the
 Lease. Because the Premises is currently owned by the City of Portland, which is
 exempt from real estate taxes, no taxes were assessed or will be due for any portion of
 the current fiscal year, and no taxes will be prorated at the closing. In the event that
 the Parties agree to not execute the Lease and the City does not continue to occupy
 the Property after the Closing Date, any utilities for the Property shall be prorated as of
 the Closing Date. The Buyer’s one half share of Maine real estate transfer tax shall be
 paid for by Buyer in accordance with 36 M.R.S.A. § 4641-A. City is exempt from
 paying the transfer tax pursuant to 36 M.R.S.A. § 4641-C. The recording fee for the
 deed of conveyance and any expenses relating to Buyer’s financing or closing shall
 be paid for by Buyer.

6. DEFAULT AND REMEDIES. In the event that Buyer defaults hereunder for a
 reason other than the default of the City, City shall retain the deposit as liquidated
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 damages as its sole remedy. In the event City defaults under this Agreement, and if
 Buyer is not then in default hereunder, Buyer shall have the right to pursue specific
 performance and the City agrees it shall not invoke any sovereign immunity defense
 nor any defense based upon its status as a City, municipality, body politic or the like.
 Buyer at all times may elect in substitution for any other remedies available under this
 Agreement, as its sole remedy, the right to a return of its deposit.

7. RISK OF LOSS. The risk of loss or damage to the Premises by fire, eminent
 domain, condemnation, or otherwise, until transfer of title hereunder, is assumed by
 the City. The Premises is to be delivered in substantially the same condition as of the
 date of this Agreement unless otherwise stated. In the event City is not able to deliver
 the Premises as stated, Buyer may terminate this Agreement and receive a refund of
 the Deposit without interest, and neither party shall have any further obligations or
 liabilities under this Agreement except as expressly set forth in this Agreement, or
 Buyer may elect to close hereunder and receive an assignment of any applicable
 insurance proceeds payable to the City relating to such loss or damage.

8. PROPERTY SOLD “AS IS, WHERE IS.” Buyer acknowledges that Buyer will
 have an opportunity to inspect the Premises, and to hire professionals to do so, and
 that Premises will be sold “as is, where is” and “with all faults.” City, and its agents,
 make no representations or warranties with respect to the accuracy of any statement
 as to boundaries or acreage, or as to any other matters contained in any description of
 the Premises, or as to the fitness of the Premises for a particular purpose, or as to
 development rights, merchantability, habitability, or as to any other matter, including
 without limitation, land use, zoning and subdivision issues (other than City’s
 agreement to obtain subdivision approval as set forth in Paragraph 10 of this
 Agreement) or the environmental, mechanical, or structural condition of the Premises.
 Acceptance by Buyer of the Deed at closing and payment of the purchase price shall
 be deemed to be full performance and discharge by the City of every agreement and
 obligation contained herein except as set forth in the Lease, if executed by the parties,
 and except as otherwise expressly set forth herein.

9. ENVIRONMENTAL INDEMNIFICATION. Buyer covenants and agrees to
 indemnify, defend, and hold the City harmless from and against any and all claims,
 damages, losses, liabilities, obligations, settlement payments, penalties, assessments,
 citations, directives, claims, litigation, demands, defenses, judgments, costs, or
 expenses of any kind, including, without limitation, reasonable attorneys’,
 consultants’, and experts’ fees incurred in investigating, defending, settling, or
 prosecuting any claim, litigation or proceeding, that may at any time be imposed
 upon, incurred by or asserted or awarded against Buyer or the City and relating
 directly or indirectly to the violation of or compliance with any federal, state, or local
 environmental laws, rules, or regulations governing the release, handling or storage of
 hazardous wastes or hazardous materials and affecting all or any portion of the
 Premises, except to the extent that such a claim results directly from the City’s
 release, handling or storage of hazardous wastes or hazardous materials on the
 Premises. This duty to indemnify, defend, and hold harmless shall be included in a
 covenant in the deed and shall run with the land conveyed and be binding upon
 Buyer’s successors, assigns, and transferees.
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 .




 Notwithstanding the foregoing, during the longer of the Lease term or the period in
 which the City occupies the Premises, the City shall be responsible for complying
 with all applicable state, federal and municipal environmental obligations, laws and
 regulations.

10. CONDITIONS PRECEDENT TO CLOSING. It is a condition precedent to
 Closing that:

 a. The City shall obtain subdivision approval by the City of Portland
 Planning Board, in order to obtain approval for the creation of the parcel
 which constitutes the Premises, unless the City as Seller and Buyer agree
 in writing, such subdivision approval is not required (hereinafter the
 “Subdivision Approval”).

 b. In the event the City is unable to obtain the Subdivision Approval prior to
 the Closing Date, as defined below, then the Buyer may either (1) extend
 the Closing Date set forth in Paragraph 11 by a time period not to exceed
 one hundred eighty (180) days to permit the approvals to be obtained or
 (2) elect to terminate this Agreement prior to the later of the scheduled
 Closing Date or the expiration date of any extension period based on an
 extension as provided above. In the event Buyer shall elect to so extend
 the Closing Date, the City agrees to make reasonable efforts to pursue the
 Subdivision Approval.

 c. If Buyer shall elect to terminate this Agreement then the City shall refund
 the Deposit, if previously paid, without interest, and this Agreement shall
 be terminated and neither party shall have any further obligations or
 liabilities under this Agreement, unless the parties mutually agree to
 extend this Agreement. Buyer acknowledges and agrees that the City is
 acting as Seller, and not in its regulatory capacity, in connection with this
 Agreement. The delivery to Buyer, and acceptance and recording by the
 Buyer of a deed to the Buyer of the Premises, will evidence conclusive
 and final consent by the Buyer to the waiver or completion of all these
 conditions.

11. CLOSING. Time is of the essence in the performance of this Agreement. The
 closing shall be held at the offices of Buyer’s counsel or Buyer’s Lender’s counsel at
 a time agreeable to the parties on or before the day that is the later of five months
 after the Effective Date of this Agreement or thirty (30) days after the later of (i) the
 expiration of the Due Diligence Period; (ii) the deadline for the City to resolve any
 title, Survey or environmental objections; or (iii) the date to which Buyer elects to
 extend the Closing Date under Paragraph 10 (the “Closing Date”). Notwithstanding
 the foregoing, City agrees to close on a date earlier than that specified above upon
 Buyer’s request at least 10 days prior to Closing. At the Closing:

 a. City shall execute, acknowledge and deliver to Buyer a municipal
 quitclaim deed conveying to Buyer good, insurable title to the Premises at
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 .


 standard rates, free and clear of all liens and encumbrances except as
 otherwise set forth herein.

 b. Buyer shall deliver the balance of the Purchase Price, subject to any
 adjustments set forth in section 2 of this Agreement, including, without
 limitation, reduction by the Rent Credit, to the City by wire transfer (or as
 otherwise reasonably requested by the City); and

 c. Each party shall deliver to the other such other documents, certificates and
 the like as may be required herein or as may be necessary to carry out the
 obligations under this Agreement, and for the Buyer to obtain owners and
 lenders title insurance at standard rates in form reasonably acceptable to
 Buyer and to Buyer’s lender.

 d. Buyer shall deliver evidence, reasonably satisfactory to City’s Corporation
 Counsel, that the entity receiving title to the Premises is in good standing
 under Maine law, and that the individuals acting with respect to the
 Closing and executing documents on behalf of Buyer are authorized to do
 so.

 e. City shall deliver to Buyer a copy of all City Council Orders approving
 this Agreement and authorizing the City Manager or other City officials to
 execute this Agreement, the deed, the Lease, and any other documents
 necessary to effectuate the intent and purpose of this Agreement.

 f. Except as otherwise provided in section 2(b), the parties shall execute the
 Lease.

12. BUYER’S POST CLOSING OBLIGATIONS; ESCROW AGREEMENT. Buyer
 agrees as follows:

 a. Buyer agrees at Closing (and only upon Closing) to deposit $50,000.00 to
 be held in escrow (the “Escrow Account”) pursuant to an escrow
 agreement in form mutually acceptable to Buyer and City with a mutually
 acceptable escrow agent.

 b. Buyer agrees to commence development of a project at the Premises in
 substantially the form described in the portion of the plans depicting the
 Premises that are attached hereto as Exhibit B and incorporated herein by
 reference, and which project was presented to the City’s Economic
 Development Committee on or about July 19, 2017 (the “Project”), within
 one (1) year after the later of the end of the term of the Lease or the last
 date of the City’s occupancy of the Premises (the later of the two such
 dates hereinafter is referred to as the “City’s End Date”). The Project shall
 be deemed to be "in substantially the form described in the portion of the
 plans depicting the Premises that are attached hereto as Exhibit B" if it
 proposes to include (or is constructed to include): (i) multiple separate
 spaces, which may have separate or shared access to the street; (ii) one
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 .


 large central space of a size and for a use to be determined; and (iii) an
 emphasis on rental affordability. The Project may also be modified in a
 manner that is reasonably necessary for Buyer to obtain City Planning
 board, City Council or any other municipal or other necessary approval,
 and the Project, if otherwise "in substantially the form described in the
 portion of the plans depicting the Premises that are attached hereto as
 Exhibit B" shall, notwithstanding any such modifications, continue to be
 so considered. In addition, if Buyer determines that interest rates or
 community demand for the use of the Premises change such that Buyer
 wishes to make changes to the Project, or if Buyer wishes to make other
 changes to the Project, Buyer may request the City’s approval of such
 changes.

c. Buyer’s commencement of development of the Project shall be effected by
 Buyer or its successors, assigns, or transferees submitting a site plan
 review application (an “Application”) for the Project within one (1) year
 after the City’s End Date.

d. If Buyer does not submit an Application for the Project (which
 Application may include modifications as described above) within one (1)
 year of the City’s End Date, then $10,000.00 shall be released from
 escrow to the City’s Housing Trust Fund, and until an Application has
 been filed, an additional $10,000.00 shall be released from escrow to the
 City’s Housing Trust Fund each ninety (90) days thereafter.

e. Within thirty (30) days after the submission of an Application for the
 Project, the remaining balance of the Escrow Account shall be released to
 Buyer. If no Closing takes place under this Agreement, the Buyer shall
 not be required to fund the Escrow Account nor make any payment.
 Notwithstanding anything to the contrary above, in the event that a
 Closing on the sale of the Premises to Buyer under this Agreement takes
 place and Buyer fails to submit any Application for the Project within the
 later of 5 years from the Closing Date or 4 years after the City’s End Date,
 the entire remaining balance of the Escrow Account shall be released to
 the City’s Housing Trust Fund.

f. City hereby agrees that despite the references in this Agreement to Buyer
 as the developer with respect to the Project, that the Project will be
 undertaken by a different Limited Liability Company (“LLC”) to be
 formed, or corporation to be formed, which will be an assignee of Buyer,
 and the City hereby consents to the same and consents to Buyer’s
 assignment of its rights and obligations under this Agreement to any such
 LLC or corporation, provided that Thomas Watson will be a manager or
 co-manager of any such LLC and President or Vice President of any such
 corporation.

g. The provisions of this section shall survive closing.


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 .


13. ENTIRE AGREEMENT. This Agreement represents the entire and complete
 Agreement and understanding between the parties and supersedes any prior
 agreement or understanding, written or oral, between the parties with respect to the
 acquisition or exchange of the Premises hereunder. This Agreement cannot be
 amended except by written instrument executed by City and Buyer.

14. NON-WAIVER. No waiver of any breach of any one or more of the conditions of
 this Agreement by either party shall be deemed to imply or constitute a waiver of any
 succeeding or other breach hereunder.

15. HEADINGS AND CAPTIONS. The headings and captions appearing herein are for
 the convenience of reference only and shall not in any way affect the substantive
 provisions hereof.
16. BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit
 of the parties hereto and their respective heirs, administrators, successors and assigns,
 provided, however that this Agreement shall not be assigned by the City.
17. TIME. The City and Buyer each confirm and agree that each of the time periods set
 forth herein are essential provisions of the terms of this Agreement.

18. GOVERNING LAW. This Agreement shall be construed in all respects in
 accordance with, and governed by, the laws of the State of Maine. All parties hereto
 hereby consent to the exclusive jurisdiction of the Superior Court for the County of
 Cumberland in the State of Maine, for all actions, proceedings and litigation arising
 from or relating directly or indirectly to this Agreement or any of the obligations
 hereunder, and any dispute not otherwise resolved as provided herein shall be
 litigated solely in said Court. If any provision of this Agreement is determined to be
 invalid or unenforceable, it shall not affect the validity or enforcement of the
 remaining provisions hereof.

19. NOTICE. All notices, demands and other communications hereunder shall be in
 writing and shall be deemed to have been duly given on the date of service if served
 personally on the party to whom notice is to be given, or on the first business day
 after mailing if mailed to the party to whom notice is to be given by first class mail,
 postage prepaid, certified, return receipt requested, addressed to the recipient at the
 addresses set forth below. Hand delivery to the City Manager’s office shall be
 effective as personal delivery to the City Manager on the date of delivery. Either
 party may change addresses for purposes of this paragraph by giving the other party
 notice of the new address in the manner described herein.

 FOR THE City: City of Portland
 ATTN: City Manager
 389 Congress Street
 Portland, ME 04101

 With a copy to : The Office of the Corporation Counsel at the
 same address.

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 .




 FOR Buyer: Mr. Thomas Watson
 Tom Watson & Co., LLC
 104 Grant Street
 Portland, ME 04101

 With a copy to: William H. Leete, Jr., Esq.
 Leete & Lemieux, P.A.
 511 Congress Street, Suite 502
 Portland, ME 04101

 20. SIGNATURES; MULTIPLE COUNTERPARTS. This Agreement may be
 executed in any number of counterparts and by different parties in separate
 counterparts. Each counterpart when so executed shall be deemed to be an original
 and all of which together shall constitute one and the same agreement.
 21. BROKERS. The City shall be responsible for paying all its brokers, including CBRE |
 The Boulos Company, at closing. Buyer has no broker other than Joseph Porta of Porta
 & Co., who Buyer understands is to be compensated by CBRE | The Boulos Company.
 Buyer agrees to indemnify and hold harmless City from any claims made by any broker
 should Buyer's representation in this paragraph be false. Subject to the limitations of
 liability set forth in the Maine Tort Claims Act, if applicable, City agrees to indemnify
 and hold harmless Buyer from any claims made by any broker should City's
 representation in this paragraph be false. The foregoing indemnities shall include all
 legal fees and costs incurred in defense against any such claim, and shall survive
 closing.

 22. RECITALS INCORPORATED BY REFERENCE. The recitals set forth above
 are incorporated herein by reference and made a part of this Agreement.

 23. EXTENSIONS: Wherever this Agreement provides that a deadline will be extended,
 including without limitation any extension(s) which may be elected by Buyer or City
 as well as any extensions based upon the occurrence or non-occurrence of any event
 (such as, for example, the delivery of a survey or Phase II environmental report), then
 any such extension will be deemed to have automatically occurred, without the need
 for any additional action by Buyer or City.

 IN WITNESS WHEREOF, the parties have hereunto have caused this instrument to be
executed on their behalf by their duly authorized officers or representatives, as of the day and
year first written above.
 CITY OF PORTLAND



WITNESS Jon P. Jennings
 Its City Manager
 Dated: _________________

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 .


 TOM WATSON & CO., LLC


 _
WITNESS Thomas E. Watson
 Its Manager
 Dated: _________________



Approved as to Form:


Corporation Counsel’s Office




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 LEASE AGREEMENT


 This Lease Agreement, is made as of the ________ day of ________, 2018, by and
between ______________________ with a mailing address of 104 Grant Street, Portland, Maine
04101 (hereinafter referred to as “Landlord”) and the CITY OF PORTLAND, a Maine
municipal corporation having its principal place of business at 389 Congress Street, Portland,
Maine (hereinafter referred to as “Tenant”).

 WHEREAS, Tenant has recently conveyed to Landlord certain property located at or
about 44 Hanover Portland Street in Portland, Maine and wishes to continue to occupy and use
such property; and

 WHEREAS, Landlord has sufficient right, title and interest in and to the real property
and has full power and authority to enter into this Agreement in respect thereto, and is willing to
have Tenant occupy and use the 44 Hanover Street property on the terms and conditions set forth
herein;

 NOW, THEREFORE, in consideration of the mutual promises herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are hereby mutually
acknowledged, Landlord and Tenant hereby mutually agree as follows:

1. Premises.

Tenant, as of the date of this Lease, exclusively occupies certain land and a building or buildings
located at or about 44 Hanover Street, Portland, Maine (hereinafter the “Building”) (the land and
Building are referred to herein as the “Premises”) as generally depicted on the plan attached
hereto as Exhibit A. Landlord does hereby agree to lease, demise, and let the Premises unto
Tenant, subject to the access and parking easement benefitting the owner of the property located
at 55 Portland Street (the “Access Easement”), which easement is depicted on Exhibit A. Tenant
shall have no authority to modify or make any substantial changes (whether cosmetic, structural
or otherwise) to the Premises without the prior written consent of Landlord.

2. Term.

The initial term of this Lease shall commence ________, 2018 (the “Effective Date”) and
terminate _______________, 2019 (the “Initial Term”), unless earlier terminated as provided
herein, or extended as provided herein. The Initial Term together with any Renewal
Term (as defined herein) are referred to collectively hereinafter as the “Term.”

In the event Tenant shall continue in occupancy of the Premises after the expiration of the Initial
Term or any Renewal Term (as defined herein), such occupancy shall not be deemed to extend or
renew the terms of this Lease, but occupancy shall, at the option of the Landlord, continue as a
tenancy at will from month to month upon covenants, provisions, and conditions herein
contained, and at the rent in effect prior to the expiration of the Initial Term or Renewal Term (as

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defined herein) whichever last occurred, increased by twenty five (25%) percent, prorated and
payable month to month on the first day of each month for the period of such hold-over
occupancy. This paragraph shall not be deemed or construed as giving the Tenant any right to
hold over after the expiration of the Initial Term or any Renewal Term thereof.

2.1. Renewal.

Upon expiration of the Initial Term, at the request of the Tenant, the term of this Lease may be
renewed for one (1) three (3) month extension (which such extension hereinafter will be referred
to as the “Renewal Term”) subject to and conditioned upon Landlord’s written consent, and
provided that the Tenant is not in default of the terms of this Lease prior to the expiration of the
Initial Term and provided that Tenant gives Landlord at least three (3) months’ notice in writing
of its request for a Renewal Term. Landlord’s consent shall not be unreasonably withheld,
delayed, or conditioned.

The Renewal Term shall commence the day following the expiration of the Initial Term of the
Lease. If the Tenant exercises its option to renew Tenant agrees to pay to Landlord, or its
designee, rent on the terms described in Paragraph 4 below at the new rental rate for the Renewal
Term as set forth in Paragraph 4.

Except as otherwise set forth in Paragraph ___ herein, Tenant shall be responsible for all costs
and expenses relating to the Premises during the entire period in which the Tenant occupies any
part of the Premises (hereinafter the “Occupancy Period”) including, without limitation, for the
entire Term of this Lease (and any Renewal Term if applicable), and including, without
limitation, all costs and expenses with respect to utilities as set forth in this Lease Agreement.

3. Permitted Uses.

The Premises may be used by Tenant for the current use of the Premises and for any other
similar, lawful purposes. Tenant shall not use or occupy or permit the Premises to be used or
occupied, nor do or permit anything to be done in or on the Premises, in a manner which will in
any way violate any applicable laws, ordinances or regulations of any municipal, State or other
governmental authority.

4. Rent.

a. Rent Paid in Advance at Closing. The rent for the lease to the Tenant for the Initial Term
shall be in the amount of ________________ Dollars ($_________.00). As stated in the related
Purchase and Sale Agreement dated on or about _____________, 2018 between the City of
Portland, Maine and Landlord (the “Purchase and Sale Agreement”) with respect to the Premises,
the full Rent Credit (as that term is defined in the Purchase and Sale Agreement) for the Initial
Term is to be paid at the closing by the City of Portland, Maine as seller upon Landlord’s purchase
of the Premises (the “Closing”), granting a credit to Buyer in the full amount of said Rent Credit
against and reducing the purchase price for the Premises by that amount. Landlord, by its initials
here: ______ acknowledges receipt of the Rent Credit in the amount of $____________. Tenant
agrees that the agreement to pay rent in advance is a substantial inducement for Landlord to

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purchase the Premises at the purchase price set forth in the Purchase and Sale Agreement, and
accordingly, all of the rent paid and credited at Closing, including, without limitation, the Rent
Credit, shall be non-refundable.

b. Rent During Renewal Term. If there is a Renewal Term of this Lease, the rent during the
Renewal Term of this Lease shall be in the amount of the greater of Twelve Thousand Five
Hundred and 00/100 Dollars ($12,500.00) per month or the then market rate of rent for the
Premises, as determined by an independent commercial real estate agent or appraiser chosen by
the Landlord, from three qualified agents or appraisers with at least ten (10) years’ experience in
the profession proposed by the Tenant, at least two months prior to the date when this Lease
would terminate if not renewed. If none of the agents or appraisers proposed by Tenant are
acceptable to Landlord, Landlord may request an appraisal from Landlord’s agent which shall
be averaged with one from an agent or appraiser selected by Tenant from the three proposed by
Tenant to determine the then market rental rate.

c. Renewal Term Rent Payments; When Due. Rent during the Renewal Term (and rent for
any time period for which rent is not fully paid in advance at the Closing on the sale of the
Premises) shall be payable in advance the first day of each and every calendar month during such
Renewal Term (and any other applicable period during which rent is due) and rent payments
shall be made to the Landlord’s manager, Port Property Management, 104 Grant Street, Portland,
ME 04101 or such other address as Landlord shall in writing direct. Any rent payment received
by the Landlord after the 7th of the applicable month shall be subject to a 5% late fee.

d. Additional Rent. Tenant shall also pay as additional rent all expenses and costs relating
to the Premises, including, without limitation, taxes, utilities and insurance, and including,
without limitation, those set forth in Paragraphs 5, 6, 7, 8, 10 and 10.1 of this Lease, subject only
to the exceptions set forth in paragraph ___.


5. Taxes and Utilities.

a. Taxes. The Tenant shall be responsible for timely payment of all taxes of any kind as
well as any other fees due to the City of Portland, Maine, including, without limitation, all
municipal real property taxes on or assessed against the Premises and all personal property taxes
with respect to all personal property on or about the Premises. In the event the Premises are
determined to be tax exempt, either wholly or partially, Tenant shall be required to pay any and
all amounts due to the City of Portland, Maine in lieu of or as a replacement for real and personal
property tax payments, including, without limitation, all amounts specified in Paragraph 3(f) of
the Purchase and Sale Agreement.

b. Utilities. Tenant shall also be responsible for paying all the costs of all utilities servicing
the Premises during the Initial Term of this Lease and any Renewal Term, including but not
limited to electrical, gas, water, sewer, heat and air conditioning (together with all other HVAC
expenses), internet, cable and telephone. Tenant shall also be responsible for payment of all
stormwater fees and stormwater service charges due to the Portland Water District or City of
Portland, as well as any other assessments or fees against the Premises by the City of Portland,

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Maine or the Portland Water District. Landlord is not responsible for payment of any such
assessments or fees, nor for providing heat nor any other utilities to the Premises, nor for paying
the costs of any such utilities, all of which are Tenant’s sole responsibility.

6. Tenant to Plow and Remove Snow.

Tenant, at Tenant’s expense, shall be responsible for plowing and removing snow and ice from
the Premises in accordance with applicable City ordinances. Landlord shall have no obligation to
remove snow or ice from the Premises.

7. Tenant to Remove Trash and Debris; Maintenance.

Tenant, at Tenant’s expense, shall maintain the entire portion of the Premises in the same
condition and repair as it is in as of the Effective Date, except only for reasonable wear and tear,
and shall remove from the Premises all trash and debris which it shall create, which is located
upon the Premises or which is otherwise attributable to Tenant. Tenant shall not do anything to
cause nor permit the Premises nor the activities therein or thereon to violate any municipal,
county, state or federal law, ordinance or requirement, and shall promptly act upon direction of
any officer of competent authority.

8. Responsibility for Repairs and Maintenance; Tenant’s Acceptance Of Premises In
“As Is” Condition.

a. Maintenance and Repair. Tenant is currently in possession of the Premises and does
hereby accept the Premises and Common Areas in their present “AS IS” condition as of the
Effective Date. During the Term of the Lease, Tenant shall, at its sole expense, maintain and
make any reasonably necessary repairs to the Premises at its sole expense.

b. Capital Repairs. Tenant hereby warrants and represents that it has inspected the Premises
and that it knows of no capital repairs that are presently necessary. The term “Capital Repair” is
agreed to mean the repair or replacement of a major component or structural part of the Premises
and shall also include the rebuilding of a major component or structural part of the Premises after
the end of its useful life. Based on the information acquired in its inspection, together with its
historic use of the Premises, Tenant represents that it has no actual knowledge that any Capital
Repairs will be required during the Initial Term or if the Lease is renewed, during any Renewal
Term. In the event any Capital Repairs to the Premises are reasonably necessary during the
Term and Tenant does not wish to make such Capital Repair at Tenant’s sole expense, Tenant
shall so advise Landlord in writing and Landlord may, in its sole discretion, elect to make, or not
to make, such Capital Repair. Notwithstanding the foregoing, Tenant agrees that whenever it
determines that it is reasonably possible to make a temporary repair or patch and defer the need
for a Capital Repair, it shall make such temporary patch or replacement. In the event Landlord
elects not to make any Capital Repairs, Tenant shall have the right, but not the obligation to
make such repairs at its own expense. Tenant acknowledges and agrees that even if Tenant
determines it is unable to occupy the Premises due to the condition of the Building or the
Premises, all of its rent payments shall continue to be non-refundable even if Tenant determines
that it could occupy the Building or the Premises if a Capital Repair was made.

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Notwithstanding the foregoing, Landlord and Tenant agree that in the event of a casualty loss or
event (hereinafter “Casualty”) causing material physical damage to the Premises or Building for
which there is insurance coverage as determined by the insurer issuing the applicable policy of
insurance, that subject to and conditioned upon any requirements or conditions imposed by
Landlord’s lender (including, without limitation, any restrictions or conditions on disbursement
of insurance payments or proceeds), funds paid by an insurer with respect to such Casualty shall
be released to fund the cost of a Capital Repair resulting from such Casualty, upon such terms as
shall be reasonably acceptable to Landlord and provided that Landlord shall not be required to
make any payment of any kind toward such Capital Repair.

8.1 Improvements/Alterations. No improvements or alterations to the Premises which
materially change or alter the Premises shall be made without Landlord’s written approval,
which shall not be unreasonably withheld, delayed, or conditioned. Any request by Tenant for
such approval shall be submitted with written specifications and drawings reasonably
satisfactory to Landlord. All improvements made to the Premises by Tenant must be done in
accordance with all local Building codes and ordinances and all applicable State and Federal
statutes and regulations, and Tenant must obtain all necessary permits prior to commencing
improvements. Tenant shall promptly pay for any and all trades furnishing services and/or
alterations to the Leased Premises. With the exception of any of Tenant’s removable property,
including without limitation, all of its personal property and trade fixtures, any and all property
left by Tenant in the Leased Premises shall become property of the Landlord at the expiration or
termination of Tenant’s tenancy. A list of trade fixtures which are owned and controlled
exclusively by Tenant and which Tenant shall remove at the end of the Term or when Tenant
vacates the Premises, whichever shall be earlier, is attached as Exhibit B.

9. Compliance with Laws.

Tenant shall, at its own cost and expense, promptly observe and comply with all applicable laws,
ordinances, requirements, orders, directives, rules and regulations of the federal, state, and
county and city government.

10. Insurance.

Prior to the execution of this Lease and continuing during the term of the Lease or for such
longer period during which Tenant shall occupy the Premises, Tenant shall obtain, maintain and
pay for all the costs of the insurance listed in the following subsections a - e:

 a. Tenant shall maintain occurrence based General Liability Insurance in the amount of
 $400,000 per occurrence for causes of action pursuant to the Maine Tort Claims Act,
 and the policy for such insurance shall name Landlord as an additional insured.
 Tenant shall be responsible for covering its personal property with such property and
 casualty insurance as it deems reasonably necessary. Landlord shall not be
 responsible for any damage to Tenant’s personal property except for damage caused
 by Landlord. Except with respect to claims brought by Landlord against Tenant for
 damage to the Premises that are not covered by an insurance policy insuring Tenant,

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 this provision shall not be deemed a waiver of any defenses, immunities or limitations
 of liability or damages, available to the Tenant under the Maine Tort Claims Act,
 other Maine statutory law, judicial precedent, common law, or any other defenses,
 immunities or limitations of liability available to the Tenant. For the purposes of this
 Lease, an insurance claim will be deemed to be “not covered by an insurance policy
 insuring Tenant” if such claim is denied by the insurer issuing the policy against
 which the claim is made.

 b. Glass. Tenant shall be solely responsible for the cleaning, maintenance and
 replacement of plate glass and other windows located within the Leased Premises and
 is advised to obtain insurance coverage with respect to damage thereto. Tenant
 agrees to repair promptly any damage to such glass and windows at its sole expense.
 Tenant shall not be responsible for damage to glass or windows caused by Landlord,
 its employees or subcontractors.

 c. Workers Compensation. Tenant self-insures for workers compensation coverage and
 shall provide Landlord with evidence of its self-insured status.

 d. Property and Casualty Insurance. (To be added prior to Council approval)

 e. Pollution Liability Insurance. (To be added prior to Council approval)

 f. Self-Insurance, Large Deductibles and/or Retentions. (To be added prior to Council
 approval)

 g. Waiver of Subrogation. (To be added prior to Council approval)

 h. Notice. All of the insurance policies to be obtained by Tenant under the terms of the
 Lease shall contain a clause that the insurer shall not cancel or reduce the coverage of
 the insurance without first giving Landlord and any mortgagees of Landlord thirty
 (30) days’ prior written notice.

10.1 Tenant’s Responsibilities.

 a. To the fullest extent permitted by law, Tenant hereby agrees to assume all risk of
 injury, harm or damage to any person or property (any such injury, harm or damage
 hereinafter is referred to as a “Liability Event”), including but not limited to all risk of
 injury, harm or damage to Tenant's officers, agents, employees, contractors,
 customers and invitees (all of whom hereinafter are referred to as “Tenant’s
 Affiliates” in the plural or as a “Tenant Affiliate” in the singular) or to any of their
 property, arising out of, during, or in connection with Tenant’s lease of the Premises
 from Landlord, Tenant’s occupancy of the Premises or any other use by Tenant of the
 Premises (all such risks are hereinafter collectively referred to as the “Assumed
 Risks”), but only to the extent (i) any such Liability Event is a result of actions or
 omissions by Tenant, one of Tenant’s Affiliates or any other person or entity for

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 whom Tenant may be liable and (ii) is a negligent act or omission, an intentional act
 which is not a discretionary function, or an act or omission for which Tenant is liable
 under the Maine Tort Claims Act. Such Assumed Risks do not include injury, harm,
 or damage caused by (1) any act or omission of Landlord, its officers, agents,
 employees, contractors or anyone else for whom Landlord may be liable except
 Tenant or a Tenant Affiliate, or (2) any act or omission of any third party who is not a
 Tenant Affiliate utilizing the Access Easement. Tenant’s obligations hereunder are
 subject to and limited by the defenses, immunities and limitations of liability
 available to the Tenant under the Maine Tort Claims Act, 14 M.R.S.A. § 8101 et seq,
 and other applicable law.

b. Tenant and Landlord agree that, subject to Landlord’s right to enforce the terms of
 this Lease and to terminate this Lease as provided herein, and except to the extent that
 the Access Easement is used by others, Tenant shall have during the Term until the
 later of the expiration of the Lease, the earlier termination of the Lease, or when
 Tenant vacates the Premises, full control over the Premises (including, without
 limitation, all buildings or structures located on the Premises, including, without
 limitation, the Building and any parking lot, or walkways or other grounds located on
 the Premises) and shall be solely responsible for all maintenance and repairs to the
 Building and Premises except as expressly set forth in this Lease.

c. Covenant against liens: Tenant shall not cause nor permit any lien against the
 Landlord’s property or the Premises or any improvements thereto to arise out of or
 accrue from any action, omission or use thereof by Tenant; provided, however, that
 Tenant may in good faith contest the validity of any alleged lien. In the event Tenant
 contests such lien, upon the request of the Landlord, Tenant shall post a bond
 approved by the court in which such lien claim is pending or if not yet pending, a
 court with jurisdiction over such lien, warranting payment of any such lien. If
 Tenant does not contest a lien, it shall pay off and cause the discharge of any such
 lien within twenty (20) days of its recording. If a court or other proceeding is
 commenced, Tenant shall cause such lien to be “bonded off” to Landlord’s
 satisfaction within forty-five (45) days of commencement of such proceeding.
 Should Landlord be subjected to any claim(s), suit(s) or lien(s), including, without
 limitation, any claim(s), suit(s) or lien(s) relating to any mechanic’s lien claim for any
 services or materials associated with Tenant’s improvements or alterations to the
 Leased Premises, Tenant shall indemnify and hold harmless Landlord from all
 damages and costs (including any attorneys’ fees incurred by Landlord) arising out of
 or relating to any such claim(s), suit(s) or lien(s), and shall pay any and all costs
 (including attorneys’ fees) incurred by Landlord in defense or prosecution of such
 actions within ten (10) days of demand by Landlord. Tenant’s failure to comply with
 the foregoing requirements regarding liens shall constitute a default under the terms
 of this Lease.




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11. Assignment/Subletting.

Tenant shall not sublet all or any portion of the Premises, nor sublease, transfer or assign this
Agreement or the rights granted hereunder at any time during the Term of this Agreement
without the prior written approval of Landlord, which may be granted or withheld in Landlord’s
sole discretion. No such assignment or subletting shall relieve Tenant of any obligations
hereunder, all of which shall remain in full force and effect, including, without limitation, with
respect to payment and any person accepting such assignment shall take the Agreement subject
to all prior breaches and shall be liable therefore in the same manner as Tenant.

12. Casualty Damage.

a. If the Premises or any part thereof shall be destroyed or damaged by fire or other
unavoidable casualty so that the same shall be thereby rendered unfit for use, then, and in such
case: (i) if such fire or unavoidable casualty occurs during the Initial Term, then Tenant shall
have the right to terminate this Lease; or (ii) if such fire or unavoidable casualty shall occur
following the expiration of the Initial Term and during the Renewal Term or any other term,
either Landlord or Tenant shall have the right to terminate this Lease. Such right of termination,
if available, shall be exercised by giving the other party written notice of such termination within
thirty (30) days after such damage or destruction, and upon the giving of such notice, the Term
of this Agreement shall cease and come to an end as of the earlier of the date Tenant fully moves
out of the Premises or the expiration or earlier termination of the then application term of the
Lease. Upon the date Tenant fully moves out of the Premises, Tenant’s obligation to pay utilities
shall end, except for such charges for utilities as shall have accrued prior to the date of move-out.
Notwithstanding anything else contained in this Lease Agreement, Tenant shall not receive any
rent refund or credit for such early termination of the Lease or for any early move out, but
Tenant shall not be obligated to continue to pay rent due if the Lease is so terminated during any
Renewal Term. For avoidance of doubt, Landlord and Tenant hereby agree no rent shall be
refunded to Tenant upon such termination (or under any other circumstance) and that the Rent
Credit shall be permanently retained by Landlord.

b. Tenant shall be responsible for covering its equipment and supplies with such property
and casualty insurance as it deems necessary and Landlord shall have no responsibility therefor.
Tenant assumes all risk of damage, loss or casualty to its property, equipment and/or supplies
while located at the Premises, whether it is owned or leased by Tenant.

12.1 Condemnation. If the Premises or any part thereof are taken or condemned by a duly
constituted public authority, this Lease shall, as to the part taken, terminate and all proceeds and
awards shall be paid to the Landlord. Tenant shall have no claim against Landlord with respect to
any such taking or condemnation. In the event that a substantial portion of the Premises itself is
taken or condemned, both Landlord and Tenant shall have the right to terminate this Lease upon
giving notice in writing ten (10) days in advance of proposed termination date. Notwithstanding
any such condemnation, taking or termination, no rent shall be refunded to Tenant, and all rent
shall be permanently retained by Landlord.




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13. Default; Termination.

a. This Lease is made on the condition that if the Tenant shall fail to pay any rent or any
other monetary obligation to Landlord within five (5) days of its due date, or fail to perform any
other obligation to Landlord within thirty (30) days after written notice thereof, or in case of an
obligation that cannot with due diligence be cured within said thirty (30) day period, fail to proceed
within said thirty (30) day period to commence to cure the same and thereafter to prosecute the
performance of such obligation with due diligence and within a period of time that under all prevailing
circumstances shall be reasonable or if Tenant shall violate or fail to comply with any of the terms or
provisions of this Lease and such failure to comply or violation of this Lease shall reoccur or continue
after written notice of such violation from Landlord, or if the estate hereby created shall be taken
on execution or other process of law, or if Tenant shall be declared bankrupt or insolvent
according to law, or if Tenant shall file bankruptcy, or if an involuntary bankruptcy shall be filed
against Tenant which shall not be dismissed within thirty (30) days, or if the Tenant shall hold
over at the termination of the Lease as herein provided, then and in any of said cases,
notwithstanding any license or any former breach of covenants or waiver or consent in former
instances, the Landlord lawfully may, in addition to and not in derogation of any remedies for
breach of covenant, immediately or at any time thereafter, without prior demand or prior notice
whatsoever, (a) terminate this Lease by notice in writing which termination shall be effective
immediately or at Landlord’s election on a date stated in said notice; (b) with or without process
of law, enter into and upon the leased Premises or any part thereof and repossess the same; and
(c) expel the Tenant and those claiming through or under the Tenant and remove its effects
(together with any third parties’ property) without being deemed guilty of any manner of trespass
and without prejudice to any remedies which might otherwise be used for arrears of rent or
preventing a breach of covenant, and upon entry as aforesaid, all rights of Tenant hereunder shall
terminate; and Tenant covenants that in case of such termination, Tenant will during the
remainder of the then-current term or any Renewal Term pay to Landlord on the last day of each
calendar month the difference, if any, between the rental, and other monetary obligations of
Tenant, which would have been due for such month had there been no such termination and the
sum of the amounts being received by the Landlord from occupants of the leased Premises, if
any. In addition, Tenant agrees to pay the Landlord, as damages for any above-described breach,
all costs of reletting the Leased Premises including, without limitation, real estate commissions,
costs of advertising, costs of damage repair, cleaning, costs of renovation of the Premises to suit
a new tenant, and costs of moving and storing Tenant’s personal and trade fixtures.

b. Legal Fees and Expenses.

 (i) Tenant further agrees to pay and indemnify the Landlord against all reasonable
 legal costs and charges, including, without limitation, all reasonable attorney’s
 fees and expenses (hereinafter collectively referred to as “Legal Expenses”)
 incurred by Landlord if Landlord prevails in a civil action to obtain possession of
 the leased Premises (including, without limitation, in any forcible entry and
 detainer or eviction action).
 (ii) Tenant shall pay to Landlord all such Legal Expenses within ten (10) days
 following the entry of a final judgment and the passing of any applicable appeals
 period in such civil action.


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c. Surrender. Upon any termination of this Lease, Tenant shall quit and surrender to
Landlord the Premises in accordance with the provisions of this Lease. If this Lease is
terminated, Tenant shall remain liable to Landlord for all Rent due under this Lease Agreement
which has not yet been paid to Landlord. The Rent Credit shall remain nonrefundable and shall
be permanently retained by Landlord. In no event shall either party be liable to the other for
incidental, special, or consequential damages of any nature claimed as a result of the breach of
any term of this Agreement or termination of this Agreement.

d. Termination for Convenience. Tenant may terminate this Lease for its convenience upon
no less than thirty (30) calendar days’ prior written notice to Landlord. If Tenant so terminates
this Lease for its convenience, no rent shall be refunded to Tenant, and the Rent Credit shall be
permanently retained by Landlord.

14. Access.

Landlord shall provide at least 24 hours advance notice of its intention to enter the Premises,
except in the case of an emergency. Upon such notice, the Landlord and its representatives,
agents, or employees, may enter the Premises.

15. Signs.

Tenant shall not erect, install or place any signage upon the interior or exterior of the Premises
except with the written approval of Landlord, which approval Landlord agrees not to withhold
unreasonably. Tenant shall pay any and all costs associated with any such signage approved by
Landlord.

16. Zoning.

It is the responsibility of Tenant to determine all zoning information and secure all necessary or
required permits and approvals of its proposed use of the subject premises. Landlord makes no
representations or warranties as to the suitability of, or the ability to obtain regulatory approval
for, the subject premises for Tenant’s intended use.

17. Self-Help.

In the event of a dispute between Tenant and Landlord, Tenant shall not be permitted to withhold
all or any part of the rental payment then due unless and until a forum of appropriate jurisdiction
has so ruled. The acceptance of a check by the Landlord for a lesser amount with an
endorsement or statement thereon, or upon any letter accompanying such check, to the effect that
such lesser amount constitutes payment in full shall be given no effect and Landlord may accept
such check without prejudice to any other rights or remedies which Landlord may have against
Tenant.




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18. Miscellaneous Provisions.

Subject to the foregoing, the covenants and agreements of the Landlord and Tenant shall run
with the land and be binding upon and inure to the benefit of them and their respective
successors and assigns, but no covenant or agreement of Landlord, expressed or implied, shall be
binding individually upon any LLC manager or member nor any fiduciary nor any trustee or
beneficiary under any trust.

19. Subordination.

Tenant shall, from time to time, upon request of the Landlord, subordinate this Lease to any
mortgage deed, and/or other security indenture hereafter placed upon the leased Premises, and to
any renewal, modification, replacement or extension of such mortgage or security indenture, if,
and only if, any mortgagee of Landlord and Landlord (if required by lender) execute (either
before or after) such subordination agreement or subordination, non-disturbance and attornment
agreement (“SNDA”). Landlord agrees to make reasonable efforts to negotiate with its lender
with respect to the terms of any such SNDA, and shall advise such lender of any Tenant
objections to such SNDA. Tenant hereby agrees it shall execute and deliver to Landlord within
five (5) days of Landlord’s request such subordination agreement or SNDA submitted to Tenant
by Landlord or Landlord’s lender.

20. Estoppel Certificates.

Tenant shall, within five (5) days after each and every request by Landlord execute, acknowledge
and deliver to Landlord a statement in writing including any or all of the following as determined
by Landlord: (a) certifying that the Lease is unmodified and in full force or effect (or if there
have been modifications, that the same is in full force and effect as modified, and stating the
modifications), (b) specifying dates to which the annual rent has been paid, (c) stating whether or
not Landlord is in default in performance or observance of its obligations under the Lease, and, if
so, specifying each such default, (d) stating whether or not to the best of the knowledge of the
Tenant, any event has occurred which, with giving of notice or passage of time, or both, would
constitute a default by Landlord under Lease, and, if so, specifying each such event, and (e)
certifying that Tenant, as of the date of the statement, has no charge, lien or claim of offset under
the Lease, or otherwise, against rents or other charges due or to become due thereunder. Any
such statement delivered pursuant to this Article may be relied upon by any prospective assignee,
transferee or mortgagee of the Leased Premises or any interest therein.

21. Return of Premises; Trade Fixtures.

Tenant at the expiration or termination of this Lease Agreement shall peaceably yield up to
Landlord the Premises in broom clean condition, in good repair in all respects, reasonable use
and wear and damage by fire and all other unavoidable casualties not caused by the acts or
omissions of Tenant, its officers, employees, agents, invitees or contractors excepted. At such
time, Tenant shall also remove all trade fixtures, equipment and other personal property installed
or placed by it at its expense in, on or about the Premises, including, without limitation, those
listed on Exhibit B. Should Tenant fail to remove its trade fixtures, equipment or other personal

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property within Thirty (30) days of a notice to do so from Landlord, ownership of such fixtures,
equipment and property shall automatically be vested in Landlord and Landlord have the right to
dispose of such fixtures, equipment and property in any manner it sees fit, and retain all proceeds
therefrom.

22. Covenants.

Landlord covenants that it is the owner in fee of the Premises and can and will provide quiet
enjoyment of the Premises during the Initial Term of this Agreement, or if applicable, any
Renewal Term. Each party covenants that the Agreement is signed by a duly authorized
individual.

23. Notices.

Any notice required to be given under this Lease shall be in writing and shall be hand-delivered
or sent by U.S. certified mail, return receipt requested, postage prepaid, addressed to the parties
as stated below or such other address as either party may designate in writing to which its future
notices shall be sent. Notices shall be deemed to have been duly given on the date of service if
served personally on the party to whom notice is to be given, or on the first business day after
mailing if mailed to the party to whom notice is to be given by first class mail, postage prepaid,
certified, return receipt requested, addressed to the recipient at the addresses set forth below.
Hand delivery at the addresses below shall be effective as personal delivery to the party specified
on the date of delivery. Either party may change addresses for purposes of this paragraph by
giving the other party notice of the new address in the manner described herein.

To Tenant: City of Portland
 ATTN: City MANAGER
 389 Congress Street
 Portland, ME 04101

With a copy to : The Office of the Corporation Counsel
 at the same address

To Landlord: Mr. Thomas Watson
 ________________________
 104 Grant Street
 Portland, ME 04101

With a copy to: William H. Leete, Jr., Esq.
 Leete & Lemieux, P.A.
 511 Congress Street, Suite 502
 Portland, ME 04101




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24. Amendment.

Both parties hereto acknowledge and agree that they have not relied upon any statements,
representations, agreements or warrantees except such as are expressed herein. The terms of this
Lease may be modified or amended by the mutual assent of the parties hereto; provided,
however, that no such modification or amendment to this Lease shall be binding until in writing
and signed by both parties.

25. Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of the State of
Maine.

26. Force Majeure.

Neither Tenant nor Landlord shall be deemed in violation of this Lease if it is prevented from
performing any of its obligations hereunder by reason of strikes, boycotts, labor disputes, acts of
God, war, acts of superior governmental authority or other reason over which it has no control;
provided, however, that the suspension of performance shall be no longer than that required by
the force majeure and a suspension of performance shall only be permitted if the party prevented
from performance has given written notice thereof to the other party.

27. Non-Waiver.

No waiver of any breach of any one or more of the conditions of this Lease by the Landlord or
Tenant shall be deemed to imply or constitute a waiver of any succeeding or other breach
hereunder.

28. Limitations of Liability. Tenant agrees to look solely to the Landlord’s interest in 44
Hanover Street, for recovery of any judgment from Landlord, it being agreed that Landlord is not
personally liable for any such judgment beyond its interest in 44 Hanover Street (except to the
extent that insurance proceeds may be available to satisfy any such judgment).

29. Brokers.

Landlord and Tenant each represent and warrant to the other that it has not dealt with any agents,
brokers or finders in connection with this Agreement, other than the related purchase transaction
for the Premises between Landlord and Tenant, and Tenant hereby warrants and represents that
its broker [CBRE | The Boulos Company] has been paid in full for its services rendered in
connection with that transaction and is not entitled to any compensation with respect to this
Lease. Each party agrees to hold and indemnify the other harmless from and against any losses,
damages, costs or expenses (including attorneys’ fees) that either party may suffer as a result of
claims made or suits brought by any broker in connection with this transaction, the obligated
party hereunder to be the party whose conduct gives rise to such claim or whose statement
contained in this Paragraph 29 shall be untrue.



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30. Tenant agrees that is obligations to Landlord under this Lease Agreement are contractual
and are not subject to any defenses available under the Maine Tort Claims Act and Tenant
further agrees not to seek to invoke any such defenses.

31. Memorandum of Lease.

Landlord and Tenant agree that this Lease shall not be recorded but each party hereto agrees, on request
of the other, to execute a Memorandum of Lease in recordable form and mutually satisfactory to the
parties.

 IN WITNESS WHEREOF, the parties hereto have caused this Lease to be duly
executed the day and year first above written.

WITNESS: LANDLORD


_________________________ By: _______________________
 Thomas E. Watson
 Its Manager


WITNESS CITY OF PORTLAND

__________________________ By: __________________________
 Jon P. Jennings
 Its City Manager

Approved as to Form:


Corporation Counsel’s Office




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 EXHIBIT A
(Insert Copy of Plan of Premises)




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 EXHIBIT B
 Tenant’s Property To Be Removed At End Of Term

Lifts –
 - 2 Post Forward model DP15SN000M, 15,000 lb, 230 volt – Pickup Bay
 - 2 Post Forward model DP10A2, 10,000 lb, 230 volt – Police Bay 2
 - 2 Post Forward model 110N000M, 10,000 lb, 230 volt – Police Bay 1
 - 4 post Rotary model SM18N000, 18,000 lb, 230 volt – Medcu Bay
 - (4) sets of 4 Stertil Koni mobile column lifts, 18,000 lb each post, 230 volt, 3 phase

Tire Machines –
 - Atlas tire changer – 110 volt
 - Accuturn tire balancer – 110 volt
 - Brunick tire spreader – 110 volt
 - Old tire changer

Crane
 - Demag 10 ton.

Air Compressor – Replace with new
 - Champion 3 phase, 230 volt compressor, circa 1992, with air drier 110 volt

Misc Shop Equipment 110 volt
 - 2 ac machines, 110 volt
 - 1 transmission service machine – 110 volt
 - 110 welders for mechanics (2)
 - Diesel transfer tank 110 volt
 - Multiple waste oil transfer tanks 110 volt

Machine Shop
  - Shop press, 110 volt
  - Fume extraction – 110 – 220 volt depending on size.
  - Millermatic 252 mig welder, 220 volt (work bay)
  - Older mig welder, 220 volt (work bay)
  - Tig welder – 220 volt (work bay)
  - Plasma cutter, 220 volt (work bay)
  - Jet bandsaw – 110 volt (in machine shop)
  - Vertical bandsaw, 220 volt, 3 phase (machine shop)
  - Ironworker, Scotchman, 110 volt (machine shop)
  - Lathe, 220 volt, 3 phase (machine shop)
  - Milling machine, 220 volt, 3 phase (machine shop)
  - Large drill press, 220 volt, 3 phase (machine shop)
  - Small drill press, 110 volt (machine shop)

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Other/Misc Equipment
- (2) Generators (Admin and Fleet)
- Misc hose / cord / wiring reels
- Tire bay water tank
- Spring compressor – wall mounted in Fire bay
- Bulk fluid tanks
- Paint mix room
- Newer floro body shop lights
- 2 new Fleet building dumpsters
- Misc shelving




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 Economic Development Department
 Gregory A. Mitchell, Director


 MEMORANDUM

TO: Economic Development Committee

FROM: Greg Mitchell, Economic Development Director

DATE: February 28, 2018

SUBJECT: 2018 Draft Economic Development Committee Work Plan


As a follow-up to the February 6, 2018, EDC meeting discussion, the Draft 2018 Work Plan is now
categorized with short-term (2018 timeframe) and long-term (beyond 2018) items as follows:

SHORT-TERM

Tax Increment Financing

Employment Disparity Study and Workforce Job Training Program

The 2017 EDC recommended that the City Manager and/or his/her designee undertake an analysis of
the costs associated with the City undertaking an Employment Disparity Study and report back to the
EDC in January 2018, and to explore the establishment of a City workforce job training program,
utilizing funds from area-wide TIF Districts to fund the program.

Next Steps: Staff is researching the scope and cost of conducting an employment disparity study.
Results of that research are expected to be presented at the EDC March 20, 2018, meeting.

Also, staff will look at other municipal TIF programs regarding utilizing TIF revenue for adult
education and workforce job training programs and report back to the Committee on its findings.

 FYE2017 Annual TIF Report to City Council: Annually the Economic Development Department
issues a City Fiscal Year Report related to Portland TIF District activity. This report is available on
the City web page at: http://www.portlandmaine.gov/529/Tax-Increment-Financing. The 2017
Annual Report was presented to the EDC at its February 20, 2018 meeting, at which time it voted to
forward the Report to the City Council as a communication. This will be on the March 6, 2018
Council Agenda as a communication.

Waterfront TIF:

Amendment to add two development parcels: At the February 6, 2018 EDC meeting, it reviewed
proposed amendments to the WTIF to add two development sites to the District, those being the
WEX development at Thames and Hancock Streets, and Union Wharf development project. After
 1
review, the EDC voted unanimously to recommend to the City Council to approve the proposed
amendments. This had a first reading at the City Council’s February 21, 2018, and a second reading,
public hearing, and vote is on the March 6, 2018 Council Agenda.

Possible Amendments to Waterfront TIF District: One recommended TIF District amendment to
discuss, in 2018, is the possible geographic expansion of the Waterfront TIF District. The areas to
consider including in the Waterfront TIF District are East and West Commercial Street properties due
to planned private sector investment projects and supporting public infrastructure needs.

Next Steps: Presenting any private TIF District requests to the EDC for direction, along with
revisiting the Waterfront TIF District boundaries for possible expansion.

Payment In Lieu of Taxes (PILOT) New City Policy

Staff prepared a draft policy for 2017 EDC consideration for non-profit tax exempt organizations to
contribute annually to cover the cost of municipal services.

At the September 5, 2017 EDC meeting, City Finance Director Brendan O’Connell provided a
general overview of a proposed policy, and at the November 28 EDC meeting, provided a draft
policy for review, discussion, and feedback. City staff is targeting a June EDC meeting presentation
for Committee direction.

Increase Utilization of Portland Ocean Terminal (POT) (2017 Mayor and City Council Goal)

Establish direction on the future of the Portland Ocean Terminal, including waterfront concerts and
Compass Park. With as much as 70,000 square feet of vacant space, the Portland Ocean Terminal on
the Maine State Pier needs a plan for investment and optimized utilization. Existing uses, including
City cruise ship port of call support (and storage in the winter for cruise ship activities), Portland
Tugboat, and Ready Seafood, provide a solid basis for growth; however, the building’s age,
condition, location within a Federal security area, and lack of supporting infrastructure (parking,
loading, sidewalks …) severely limit the potential reuse of the building as currently configured.

At the September 5, 2017 EDC meeting, City Waterfront Coordinator Bill Needelman provided the
Committee with an overview and process to go forward, including conducting an inventory of uses,
understanding current conditions, and coordination with existing operations. In the short-term,
provide basic circulation and utilities changes and moving utilities into the main building.

On October 2, 2017, the City Council held a workshop on suggested plans for the future of the POT,
which was then followed by an EDC meeting on November 28, 2017, with staff providing illustrative
redevelopment concepts for feedback from the Committee, including a draft updated Policy
Statement for the POT. Under direction of the EDC, public outreach is underway during February
and March. City staff is targeting the March 20, 2018, EDC meeting to present stakeholder input and
discuss policy direction.

As the process moves forward, the evaluation of supporting infrastructure to attract anticipated
increased commercial and marine tenant use of the space will be undertaken.



 2
Lease of City Properties

Leasing City owned properties requires City Council approval. Policy discussion regarding the
leasing of City owned properties needs to be discussed. Examples of commercial leases requiring
EDC (in the form of a recommendation to the City Council) and City Council action include:

 Ocean Gateway to support ferry operator lease. An amendment to the Bay Ferries Lease is
 under negotiation to extend ferry service in 2018 subject to conditions. This was reviewed by
 the EDC in executive session on February 20, 2018. Next step is a public review by the EDC
 and recommendation to the City Council for approval.


 Portland Ocean Terminal tenant lease for Ready Seafood Companies. Proposed
 amendments for extending Lease were reviewed by the EDC in executive session on February
 20, 2018. Next step is a public review by the EDC and recommendation to the City Council
 for approval.

 Spring Street Parking Garage Commercial tenant leases including the former Pirates space,
 with 2,400 square feet. At the February 6, 2018 EDC meeting, it reviewed proposed Lease
 and Parking Revenue Sharing Agreement with Portland Hockey, LLC. The EDC voted
 unanimously to forward this to the City Council for approval. The City Council took action
 on this at its February 21, 2018 Council meeting voting to approve both the Lease and Parking
 Revenue Sharing Agreement.

 Casco Bay Island Transit District (CBITD) Lease: Staff is beginning its review of the
 existing Lease to recommend, at the appropriate time, amendments. This current 30-year
 lease expires June 2018. City staff will update the EDC in executive session for direction.

City Properties (Sales and Acquisitions)

 Sales

 Bayside former Public Works property at 44 Hanover Street. City staff discussed this in
 executive session at the February 6, 2018 EDC meeting and continues negotiations for a
 Purchase and Sale Agreement for EDC review and recommendation to the City Council.

 Portland Technology Park. Three available sites.

 Riverside Street Seven (7) Acre Industrial Property. City staff will continue its marketing
 this property for sale.

 This was discussed in executive session at the February 20, 2018 EDC meeting, and will be
 discussed in executive session at the March 6, 2018 EDC meeting for direction related to
 buyer interest.

 Thames Street Gravel Parking Lot. It is anticipated that during 2018, the EDC will consider
 options for the possible sale of the remaining portion of the Thames Street gravel parking lot.


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 Acquisitions

 The Land Bank Commission is interested in accepting donations and acquiring privately-
 owned vacant land in the Redlon area of Portland, as well as other areas, to be placed into the
 Land Bank. Because of the property acquisition, this will come before the EDC, as well as
 the Land Bank Commission (LBC) for recommendations to the City Council.

Outdoor Seating for Food Service Establishments: Review current permitting process/ordinance
and any barriers, particularly for older buildings. Staff is working on this topic. Updates will be
provided when appropriate.

Open Forum for Restauranteurs: Forum for restaurant owners to talk about what is going well,
what is not, and any other issues or comments they may have.

LONG-TERM

Broadband Access (2017 Mayor and City Council Goal). High speed infrastructure; broad band.

IN PROCESS AND NEXT STEPS. At the July 26th, 2016, EDC meeting, staff provided a summary
of a proposed Master Lease Agreement with Verizon to support small cell technology investment in
Portland. The City Council approved this Master Lease on August 1, 2016.

Also, it is noted the City issued a News Release on July 19th, 2016, with the topic “City Seeks
Citizens to Complete Internet Services Survey” and noting “Selects SiFi Networks to explore
potential citywide fiber network”. Staff continues to work with SiFi Networks to move forward with
a public-private partnership.

A City Council workshop was held on December 12, 2016 with Council direction to refer
negotiations to the EDC to finalize partnership documents for recommendation to the City Council.

At the February 6, 2018 EDC meeting, Jon Jennings updated the Committee that a company is
looking to do this on its own at no cost to the City.

Updates will be provided as they become available.

Eastern Waterfront Public Infrastructure Investment (2017 Mayor and City Council Goal)

Investing in public infrastructure is an important municipal government responsibility to attract
private sector investment. Locations which require public infrastructure planning include both
implementation of existing policies and creating new policy direction for investment:

 Implementing Existing Policy:

 Private Development Integration. The Economic Development Department is leading a
 Planning, Public Works, and Parks & Recreation Department discussion to plan road, parking
 garage, and utility extensions in Portland’s Eastern Waterfront, facilitating planned and future
 development consistent with the Eastern Waterfront Master Plan (EWMP.)


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 Next Steps. Public/private partnerships to develop public infrastructure improvements and
 revenues to finance the investments.

 Amethyst Lot Open Space Development. Implementing recommendations from the EWMP
 and conditions of approval from Ocean Gateway, to define program and design elements for
 signature waterfront open space promoting recreation and active use of the water.

 The 2017 EDC was provided a concept of redevelopment at its August 22, 2017, meeting,
 with overall consensus of agreement with the concept, which has been informally called
 “Portland Landing”. The EDC will be kept updated on the continued public process.

 Establishing New Policy Direction:

 Ocean Gateway to discuss reconfiguration of the “queuing area” located behind the fence to
 free up property for more diversified marine activity, support for the Portland Ocean
 Terminal, and expanded access to the water for commercial and public uses. The City
 Manager met with Custom Border Protection (CBP) personnel to discuss relocating U.S.
 Customs pre-clearance to Yarmouth, Nova Scotia. Staff is researching options; update
 forthcoming.

 Possible new Pier development between Ocean Gateway and the Maine State Pier to
 support increased commercial use of the waterfront and support for the marine passenger
 industry. Staff is exploring Federal funding opportunities and updates will be provided when
 appropriate.

Portland Transportation Center (PTC)

In partnership with the MDOT, NNEPRA, and private sector property owners, work to develop an
expanded intermodal passenger station in the Thompson Point area.

Next Steps. Staff to work with the transportation agencies and private partners to establish timeline
and work plan for PTC improvements. Present briefing to the EDC when appropriate.

Establish Development Impact Fees

Staff will work with the EDC to create a formula that standardizes fees - providing certainty to the
development community and City resources.

At the September 5, 2017 EDC meeting, Planning and Urban Development Director Jeff Levine
provided a general overview of the current City current impact fees, determined through development
review. Next step is to bring a proposed overall impact fee policy to the EDC so that both the City
and developers know formulas for impact fees and can insert them into pro formas.




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