Portland Development Corporation

PORTLAND DEVELOPMENT CORPORATION Board Meeting DATE: Thursday, July 17, 2025 TIME: 4:00 PM LOCATION: This meeting will take place remotely via Zoom. Please click below to join the webinar. https://portlandmaine- gov.zoom.us/j/85229414013?pwd=N2tESU9mMmUzZ000T1F4cVErZTRnQT09 Passcode:272505 Phone one-tap: +13126266799,,85229414013# US (Chicago) +16469313860,,85229414013# US Webinar ID: 852 2941 4013 International numbers available: https://portlandmaine-gov.zoom.us/u/kiIXpoqU0 AGENDA 1. President's comments 2. Review and accept Meeting Minutes a. March 5, 2025 Meeting Minutes b. June 25, 2025 Meeting Minutes 3. Review and vote on 89 Elm Street Brownfields Loan Modification Request a. See attached memorandum and backup materials. Review and vote on request from Maine Community Bank to release lien on 4. 580 Brighton Avenue (Rosemont Market). Page 1  a. NOTE: Pursuant to 1 M.R.S.A. 405(6)(F) and 5 M.R.S.A. 13119-A, the Board may go into executive session to discuss proprietary information regarding this loan. After the executive session, the Board will vote in public session. 5. Review and vote on the following Microenterprise Grant Applications: a. Luna LLC dba Leda, 265 Marginal Way b. Hope Home Care LLC, 640 Brighton Ave c. Kaboss Market, 21 Portland Street Note: Pursuant to 1 M.R.S.A. 405(6)(F) and 5 M.R.S.A. 13119—A, the Board may go into executive session to discuss any of the grants listed on the agenda. Review and vote on loan request from Another Round, 545 Congress St., 6. Unit 1A a. NOTE: Pursuant to 1 M.R.S.A. 405(6)(F) and 5 M.R.S.A. 13119-A, the Board may go into executive session to discuss proprietary information regarding this loan. After the executive session, the Board will vote in public session. Review and vote on a loan request by Cognitive Care LLC, 415 Congress 7. Street, Suite 418. a. NOTE: Pursuant to 1 M.R.S.A. 405(6)(F) and 5 M.R.S.A. 13119-A, the Board may go into executive session to discuss proprietary information regarding this loan. After the executive session, the Board will vote in public session. Review and vote on a new loan request by Eduardo's Brazilian Grill One, 11 8. W Presumpscott Street. a. NOTE: Pursuant to 1 M.R.S.A. 405(6)(F) and 5 M.R.S.A. 13119-A, the Board may go into executive session to discuss proprietary information regarding this loan. After the executive session, the Board will vote in public session. Review and vote on a new loan request by Aomori and Aomori Market, 52 9. Hanover Street. a. NOTE: Pursuant to 1 M.R.S.A. 405(6)(F) and 5 M.R.S.A. 13119-A, the Board may go into executive session to discuss proprietary information regarding this loan. After the executive session, the Board will vote in public session. City of Portland Commissions are not required to take public comment under FOAA and our Ordinance is silent regarding the duties of the Commission. The Commission has the discretion to not allow or allow public comment during its meetings, including the authority to limit the duration of comments. Since the Commission makes recommendations to the City Council, public comment is available at that level. Page 2  Review and vote on request by Gulf of Maine Sashmi dba True Fin loan, 10. 305 Commercial Street. a. NOTE: Pursuant to 1 M.R.S.A. 405(6)(F) and 5 M.R.S.A. 13119-A, the Board may go into executive session to discuss proprietary information regarding this loan. After the executive session, the Board will vote in public session. 11. Treasurer's Report - June 2025 a. Monthly Administrative Budget Report b. Cash Management Report c. Schedule of Loans Receivable d. Confidential Delinquency Report; update on loan modifications, if any. Note: Pursuant to 1 M.R.S.A. 405(6)(F) and 5 M.R.S.A. 13119—A, the Board may go into executive session to discuss/monitor any of the loans listed on the Report. 12. Staff verbal update 13. Other Items to be discussed/brought up by Board Directors 14. Next Regular Meeting Date: August 21, 2025 City of Portland Commissions are not required to take public comment under FOAA and our Ordinance is silent regarding the duties of the Commission. The Commission has the discretion to not allow or allow public comment during its meetings, including the authority to limit the duration of comments. Since the Commission makes recommendations to the City Council, public comment is available at that level. Page 3  DRAFT Minutes Portland Development Corporation Special Remote Zoom Meeting Held on March 5, 2025 ​ A special remote meeting, via Zoom, of the Portland Development Corporation (PDC) Board of Directors was held at 12:00 p.m. on Wednesday, March 5, 2025. Present from the Board of Directors were Board President Kierston Van Soest, Directors Jonathan Berg, Matthew Buonopane, Nathan Henry, Dena Libner, and Nikki Yanok. Board Directors Sam Dargan, Eamonn Dundon, Councilor Ben Grant, Scott Kleiman, and Beverly Werber could not be present. Present from City staff were Associate Corporation Counsel Avery Dandreta, ARPA Project Coordinator Kaela Gonzalez, Business Programs Manager Nancy Martin, Associate Corporation Counsel Amy McNally, Principal Administrative Officer Lori Paulette, and Housing and Economic Development Director Greg Watson. The City of Portland’s Qualified Environmental Professional on this project, Jedd Steinglass of Woodard and Curran, was also in attendance. Item #1: President’s comments. President Van Soest thanked the Directors for their attendance at this special meeting. Item #2: Review and vote on a waiver request from Avesta Housing Development Corporation for 89 Elm Street. Ms. Martin gave an overview of the history of the subgrant and loan to Avesta Housing Development Corporation for 89 Elm Street, approved on July 18, 2024. Avesta requests a waiver asking the City to reimburse Avesta once they incur costs with both the subgrant and loan. The staff recommends approving Avesta’s request to provide reimbursement based on incurred costs for the $500,000 Brownfields remediation subgrant and table the request for the 1 Page 4  DRAFT loan, with the requirement that Avesta provide proof of payment within 30 days from receipt of grant funds. Nate Howes with Avesta Housing Development Corporation further explained the reason for the request and reiterated that this request is due to the uncertainty of funding at the Federal level. Mr. Howes and staff answered a few questions posed by the Directors. On a motion made by Mr. Buonopane and seconded by Mr. Henry, the Board voted 5-0-1 (Mr. Berg abstained) to approve the waiver request by Avesta Housing Development Corporation as recommended by the memorandum included in the backup materials to the PDC by staff. Item #3: Other Items to be discussed/brought up by Board Directors No other items were discussed. Item #4: Next Regular Meeting Date: March 20, 2025. ​ There being no further business, on a motion by Mr. Berg and seconded by Ms. Yanok, the Board voted 6-0 to adjourn the meeting at 12:21 p.m. ​ ​ ​ Respectfully, Kaela Gonzalez 2 Page 5  DRAFT Minutes Portland Development Corporation Special Remote Zoom Meeting Held on June 25, 2025 ​ A special remote meeting, via Zoom, of the Portland Development Corporation (PDC) Board of Directors was held at 12:00 p.m. on Wednesday, June 25, 2025. Present from the Board of Directors were Directors Jonathan Berg, Matthew Buonopane, Sam Dargan, Eamonn Dundon, Councilor Ben Grant, Assistant City Manager Dena Libner (arriving shortly after Item #2 was taken up), and Beverly Werber. Board President Kierston Van Soest and Directors Nathan Henry, Scott Kleiman, and Nikki Yanok could not be present. Present from City staff were Associate Corporation Counsel Avery Dandreta, Program Coordinator Kaela Gonzalez, Business Programs Manager Nancy Martin, Principal Administrative Officer Lori Paulette, and Housing and Economic Development Director Greg Watson. Item #1: President’s comments. Director Dundon opened the meeting at approximately 12:04 p.m. and said he would be chairing in President Van Soest’s absence. Item #2: Review and vote to accept Meeting Minutes. a.​ March 5, 2025 Meeting Minutes This item was not discussed.. b.​ May 15, 2025 Meeting Minutes ​ On a motion made by Ms. Werber and seconded by Mr. Berg, the Board voted 6-0 to approve the May 15, 2025 Meeting Minutes. Item #3: Review and vote on approval and recommendation to the City Council regarding the proposed Business Assistance (BAP) for Job Creation Guidelines. Page 6  DRAFT Ms. Martin provided a history of the Job Creation Grant Program, which first received funding in 2012 and was recently recapitalized with $205,000 in Community Development Block Grant (CDBG) funding in May of 2025. Key changes from the 2024 program include clarification on full-time and part-time hours, employers must maintain the job for six months, grantees will receive grant funding incrementally to accompany quarterly reporting, and eligible uses have been limited to just commercial rent to streamline the process and promote commercial occupancy in Portland. On a motion made by Ms. Werber and seconded by Mr. Berg, the Board voted 7-0 to recommend to the City Council the proposed Business Assistance (BAP) for Job Creation Guidelines with an amendment to add the word “each” to the second bullet point under Grant Terms to read “Business will create one (1) full-time job at least 40 hours/week or two (2) part-time jobs at least 20 hours/week each for every $10,000 of approved grant funding.” Item #4: Review and vote on a recommendation for a loan application by Cognitive Community Care LLC, 415 Congress Street, Suite 418. Ms. Martin introduced a loan request from Cognitive Care LLC, a community-based behavioral health agency owned by Leah Killinger, who is seeking $100,000 to provide permanent working capital. The company, in operation since May, currently has three employees and plans to hire an additional fifteen. The primary revenue source is Medicaid reimbursements, which can take up to 30 to 60 days to process. Ms. Martin introduced Ms. Killinger, who provided details on the services provided, referral sources, marketing efforts, and strategy for attracting and training new personnel. On a motion made by Mr. Dargan and seconded by Mr. Berg the Board voted 7-0 to enter into executive session at approximately 12:30 p.m. Page 7  DRAFT At approximately 1:05 p.m. the Board returned to the public session. On a motion made by Mr. Dargan and seconded by Ms. Werber, the Board voted 6-0 (Ms. Libner left the meeting at approximately 1:00 p.m.) to table the loan request from Cognitive Community Care LLC. Item #5: Review and vote on ARPA Microenterprise Grant Application from Babb’s Ceramics, 62 Mellen Street. Ms. Martin introduced a grant application by Babb’s Ceramics, an art business selling handmade, one-of-a-kind ceramics. Funds would be used to assist with business expenses. On a motion made by Mr. Buonopane and seconded by Mr. Berg, the Board voted 6-0 to approve a $5,000 ARPA Microenterprise Grant to Babb’s Ceramics. Item #6: Treasurer’s Report. Mr. Dundon inquired about the beautification program's reserve, which Mr. Watson clarified as funds designated for visual and placemaking contributions, with further discussion planned for next year's budget. Item #7: Staff verbal update. Ms. Martin updated the Board on inquiries she had received regarding the interest-free loan product, which had been approved by both the Board and the City Council. Additionally, Ms. Martin noted that the vacancy ordinance, recommended by the Housing and Economic Development Committee, is scheduled for the Planning Board on July 8, 2025. Item #8: Other Items to be discussed/brought up by Board Directors. Ms. Werber inquired about revisiting the previously held discussion regarding interest rates. Item #9: Next regular meeting date: July 17, 2025. Page 8  DRAFT ​ There being no further business, on a motion made by Ms. Werber and seconded by Mr. Berg the Board voted ​6-0 to adjourn at approximately 1:11 p.m. ​ ​ Respectfully, Kaela Gonzalez Page 9 City of Portland | Housing and Economic Development Department Gregory P. Watson, Director ​ PUBLIC MEMORANDUM TO:​ ​ President Kierston Van Soest and PDC Board Members FROM:​ Nancy Martin, Business Programs Manager CC:​ ​ Gregory Watson, Director, HEDD; Amy McNally, Associate Corporation Counsel DATE:​​ July 17, 2025 RE:​ ​ 89 Elm Street Brownfields Loan Modification Request Overview: At the July 18, 2024, meeting of the Portland Development Corporation, the Board approved a $500,000 Brownfields subgrant to Avesta Housing Development Corporation and a $2,136,424 Brownfields loan to 89 Elm Street Apartments LLC, for a total of $2,636,424 of financing in support of a 201-unit affordable housing development at 89 Elm Street. The sub-grant agreement was fully executed on November 20, 2024 and has been fully expended. The property transfer and loan closing occurred on July 8, 2025. Draft loan documents have been circulating among the various lending parties, including MaineHousing and the City of Portland, since January 2025. On June 28th, Avesta’s LIHTC investor proposed edits to the City of Portland’s Brownfield loan promissory note to make the City’s loan a non recourse obligation secured solely by the property at 89 Elm Street (meaning the PDC could not pursue 89 Elm Street Apartments LLC for the debt beyond the property if they defaulted). After internal consultation, staff decided that PDC Board approval would be necessary to approve this change. City Council approval is not needed because the Council has designated the Portland Development Corporation as the City’s lending and granting board. Without this non recourse clause, Avesta’s LIHTC investor will not make their capital contributions which are necessary for financial feasibility; the capital contributions total approximately $35 million. The non-recourse request is typical in LIHTC transactions; permanent loans must be non-recourse for tax purposes. The other permanent financing for this project, including MaineHousing financing, are all non-recourse. Recommendation: As the City of Portland’s lending board, staff (Nancy Martin) and consulting underwriter (David McLaughlin) recommend that the Portland Development Corporation vote to approve Avesta’s non recourse request for the Brownfields loan, and authorize its Assistant Secretary to sign all necessary documents to that effect. Attachment: Request letter from Avesta 389 Congress Street, Portland, ME 04101 – www.portlandmaine.gov – (207) 874-8683 1 Page 10 June 30, 2025 Nancy Martin Business Programs Manager Housing and Economic Development City of Portland 389 Congress Street Portland, ME 04101 RE: Nonrecourse Loan Request Dear Nancy, On June 30, 2025, the City of Portland’s corporation counsel indicated to our financing partners that the previous approvals of the PDC’s loan of $2,136,424 required recourse against the ownership entity. Investor counsel pointed out that a recourse obligation would undermine their underwriting and tax credit investment. We are requesting that the PDC allow for the BRLF loan to be non-recourse and secured by a mortgage on the property subject to the intercreditor agreement between MaineHousing, the City of Portland, and Avesta Housing. Loans made for LITHC developments are always non-recourse, limiting security to the financed building and underlying assets. The City of Portland typically provides non-recourse loans for its other sources of financing, FedHOME and Housing Trust Fund, with the understanding that it’s the underlying value of the asset, not guarantees from the ownership entity, that ultimately secure the City’s financing. LIHTC investors will not accept the liability from a guarantee against the ownership entity and investor underwriting assumes non-recourse debt due to the differential tax treatment of recourse and non-recourse obligations. In the simplest terms, having a recourse obligation undermines the “limited liability” of an investor in an ownership structure and can result in tax implications that undermine the ownership percentages and the entire deal structure. We are happy to provide more details and/or arrange a call between the PDC staff, corporation counsel, and our counsel to discuss. Page 11 Sincerely, Nate Howes Senior Development Officer Avesta Housing Page 12  Portland Development Corporation Preliminary Draft Operating Report FY2025 For Month Ending 6/30/2025 Operating transfer from EDF 40,122 ------------ Total Funds Available 40,122 Current Year to Percent FY2025 Expenditures Budget Month Date of Budget Balance Administrative Services 11,175 $0 11,233 100.5% (58) Postage 300 $0 128 42.7% 172 Travel, Training, Meetings 9,000 $0 8,790 97.7% 210 Contractual Services 6,000 $975 6,805 113.4% (805) Operating Transfer to Fin. 9,647 $9,647 9,647 100.0% 0 Advertising 2,500 $0 364 14.6% 2,136 Auto Expense Reimb. 100 $0 0 0.0% 100 Printing & Binding 650 $0 436 67.1% 214 Office Supplies 750 $0 330 44.0% 420 Total FY2025 Expenditures 40,122 $10,622 37,733 94.0% 2,389 Page 13  FY2025 PDC CASH MANAGEMENT REPORT/Non-Brownfield Program (Preliminary and Subject to Change) UDAG CIP CIP FAME FAME SSBCI TOTAL Period Ending: 06/30/2025 271 272 274 277 279 Unrestricted Loans/Grants Restricted Unrestricted REDLP Beginning Balance 311,910 357,909 161,201 402,951 474,190 1,708,162 Additions th Date No Updated MTD YTD MTD YTD MTD YTD MTD YTD MTD YTD Principal payments received 6,632 54,243 3,308 34,301 7,381 26,118 5,607 115,983 2,395 37,146 Interest payments received from loans 3,045 40,057 95 1,022 1,440 5,332 7,504 51,923 3,943 45,256 Interest Income 778 7,418 922 10,060 414 5,562 1,011 18,551 1,210 14,322 Other Income/Adjustments - - - - - Pass Through From FAME/SSCBI - - - - - Deductions FAME Annual Admin. Fee; Invoices Disbursements - Expenses (410) (1,446) (3,010) (1,539) Disbursements - Loans/Grants Ending Cash Balance (Munis) 322,365 361,825 168,990 414,064 480,199 1,747,442 Less Reserves for: Loans Beautification Program (EC0301) (72,000) Transfers not yet recorded (UDAG Int) (40,057) Adjusted Ending Cash Balance 210,308 361,825 168,990 414,064 480,199 1,635,385 Page 14  FY2025 PDC CASH MANAGEMENT REPORT - BROWNFIELD PROGRAM (Preliminary and Subject to Change) Brownfield 1 Brownfield 2 (2016) Brownfield 3 Brownfield 10/1/2022 TOTAL Period Ending: 6/30/2025 278 280 281 280 RLF Unrestricted Loans/Grants Restricted/Cleanup Restricted/Assessments Restricted/Cleanup Beginning Balance 486,236 118,712 104,106 2,410,129 3,119,183 Additions MTD YTD MTD YTD MTD YTD MTD YTD Principal payments received - 15,613 4,055 24,954 - - Interest payments received from loans - 200 1,291 15,307 - - Interest Income 1,265 12,364 374 3,091 - - Other Income/Adjustments - 11,332 - - Pass Through From FAME/SSCBI/EPA - - - - Deductions FAME Annual Admin. Fee; Invoices Disbursements -Other (18,339) (2,817) (6,553) Ending Cash Balance (Munis) 469,161 124,431 101,289 2,403,576 3,098,458 Less Reserves for: Reserve For Commitments (12,054) 0 (2,136,424) Fund 280 Reserve for Administration Adjusted Ending Cash Balance 457,107 124,431 101,289 267,152 949,980 Page 15  Portland Development Corporation Schedule of Loans Receivable For Month Ending June 30, 2025 ----Committed/Disbursed Funds----- Date Maturity Original Not Yet Total Outstanding Case ID Account No. & Name of Loan Date Loan Disb. Disb . Princ. Bal. --------------------------- ---------- ---------- ----------- ------- -------- ------------ Portland Business Fund 271 (UDAG/Unrestricted): 30124 Rosemont Market, Inc. 8/8/2019 9/1/2029 $150,000 0 $150,000 $59,113 30179 Forefront Brick South, LLC 11/18/2016 12/1/2026 $100,000 $0 $100,000 $24,045 30400 Friends and Family 3/10/2023 4/1/2027 $50,000 $0 $50,000 $26,185 30423 Longfellow Property, LLC 6/26/2023 7/1/2030 $200,000 $0 $200,000 $196,079 30514 Longfellow Property, LLC 5/6/2024 7/1/2031 $182,688 $0 $182,688 $177,240 Sub-Total PBF (UDAG) $482,662 Portland Business Fund 272 (Restricted - CIP): 30568 Cultivating Community 10/17/2024 11/1/2026 $80,000 $0 $80,000 $50,379 Sub-Total PBF (Bonds/CIP Restricted) Portland Micro Capital Fund 271 (UDAG/Unrestricted): 30250 Portland Trading Co. LLC 4/26/2013 8/1/2018 $15,000 $0 $15,000 $3,829 $3,829 Sub-Total Micro Capital Fund Portland Business Fund Fund 274 (CIP/Unrestricted): 30062 On Time Transportation 3/26/2018 4/1/2023 $10,000 $0 $10,000 $916 30070 Emerson, James (C19RR[Brick Trust]) 5/21/2021 6/1/2023 $10,000 $0 $10,000 $10,000 30075 Dos Naciones LLC 3/3/2021 3/1/2023 $5,000 $0 $5,000 $5,000 30316 Rankin WA, LLC 2/28/2022 2/1/2024 $5,000 $0 $5,000 $2,161 30119 Quattrucci & Rouda, LLC 3/19/2019 4/1/2029 $100,000 $0 $100,000 $15,170 30400 AAA Rue Marchie, d/b/a Timber 3/28/2023 4/1/2028 $40,000 $0 $40,000 $33,085 30606 Luna, LLC 3/19/2025 11/1/2032 $69,000 $0 $69,000 $69,000 Sub-Total PBF (Bonds/CIP Unrestricted) $135,333 FAME Fund 277: 30198 Auto-Care, LLC 2/5/2016 3/1/2021 $32,500 $0 $32,500 $18,567 30061 Forefront Brick South, LLC 11/18/2016 12/1/2026 $250,000 $0 $250,000 $61,647 30127 Gallery Acquisition Co. Inc. 5/16/2019 6/1/2026 $75,000 $0 $75,000 $16,664 30125 Zootility Co. 8/7/2019 9/1/2024 $150,000 $0 $150,000 $122,197 30378 Gulf of Sashimi 10/19/2022 11/1/2027 $65,000 $0 $65,000 $23,260 30416 Forefront Partners I, LP 5/31/2023 5/31/2033 $200,000 $0 $200,000 $175,543 30530 Biodiversity Research Institute 8/22/2024 10/1/3031 $250,000 $0 $250,000 $246,284 30536 Blackbird Baking, d/b/a Two Fat Cats 10/1/2024 11/1/2031 $40,000 $0 $40,000 $37,809 30591 Salud Studios 11/19/2024 12/1/2030 $137,500 $0 $137,500 $134,594 30605 Lebel Holdings, LLC 3/20/2025 5/1/2035 $200,000 $0 $200,000 $199,036 Sub-Total FAME Fund $1,035,601 FAME SSBCI 279: 30107 Biodiversity Research Institute 3/26/2021 4/1/2026 $200,000 $0 $200,000 $170,792 30086 Driscoll Child Dev. Center 5/5/2021 6/1/2026 $60,000 $0 $60,000 $29,728 30085 Flores Restaurant LLC 6/9/2021 7/1/2026 $38,000 $0 $38,000 $14,733 30071 Wynsum, LLC 11/5/2021 12/1/2026 $131,250 $0 $131,250 $120,677 30068 688 Forest Ave., LLC 12/21/2021 1/1/2027 $168,000 $0 $168,000 $152,336 30527 Another Round 6/5/2024 8/1/2029 $225,000 $0 $225,000 $223,243 30592 Yardie Ting 11/14/2024 12/1/2029 $45,000 $0 $45,000 $41,645 30624 Kehben Grier 5/1/2025 1/1/2033 $80,000 $0 $80,000 $79,362 Sub-Total FAME SSBCI $832,516 Brownfields Loan Fund 278 and 280 30515 Forefront Partners I, LP/Fund 280 5/31/2023 4/30/2033 $200,000 $0 $200,000 $188,192 30072 Forefront Partners I, LP/Fund 280 4/12/2018 1/1/2032 $350,000 $0 $350,000 $303,811 Sub-Total Brownfields $492,003 Grand Total Loans $3,913,938 $0 $3,913,938 $3,032,323 Allowance for uncollectable loans at 15% $454,848 Total with Allowance for uncollectable loans: $2,577,475 Page 16