As a result of renovations to City Council chambers, Monday night’s meeting of the legislative body will take place in the auditorium of Geraldine Johnson School, 475 Lexington Avenue. The City Council is scheduled to act on a “Memorandum of Understanding (MOU) with Exact Capital Group, LLC regarding the Redevelopment of the Poli-Majestic Theatres and the Savoy Hotel.” This is a precursor to the council considering a more detailed Land Development Agreement for the project and scheduling of a public hearing. The proposed resolution authorizing an LDA will be referred to the Contracts Committee. Full council agenda here.
City officials had hoped council approval of the MOU would fast track the redevelopment of the vacant theaters. After pushback from the council Mayor Joe Ganim has acquiesced to members approving the LDA under negotiation between Exact Capital and the city’s development office.
Ganim has described the $400 million development proposal as the most significant in his two tenures as mayor that includes a performing arts center and a major housing component covering multiple Downtown parcels. It will be a centerpiece of Ganim’s campaign stump speech, be it his current gubernatorial ambition for 2018 or 2019 mayoral reelection.
Exact Capital officials say they hope for a groundbreaking next summer, assuming financing is in place.
So Ganim and the City Attorney should have no problem asking for and receiving a $400 million dollar Proformance Bond from Exact Capital.
I’m in total agreement, where’s the $400 million dollar Performance Bond from Exact Capital?
No Bond! No MOU!
Performance Bond guarantee for the satisfactory completion of a project. This will require having a collateral property or investment to back up the requirements of the surety agency. A performance bond is usually issued by a bank or an insurance company, both of which act as a “surety.”
Performance Bond: How They Work?
The Government and private sector require performance bonds and payment bonds for projects to protect the tax payer’s investment.
Common performance and payments bonds for government projects consist of building bridges and roads, although it can comprehend much more than only those two categories. If the contractor does not complete the project specified in the contract the surety bonding company will either pay for the completion of the project or hire a contracting firm to complete the project.
The method used by many surety companies is the percentage of completion method, normally recommended for projects larger than $350K. Some contractors will prefer the cash method, but this one will not assess your true financial status. For small contractors, the completed contract method is the one recommended as it will keep track of the revenue and expenses related to a particular project during the year in which the project is being executed.
Surety and financial institutions have different requirements depending on the capacity of the contractor, the volume of the project been ensured and the project degree of difficulty.Usually, insurance companies will ask for the following information:
. At least two years of CPA-prepared financial statements.
. A copy of the contract that is being awarded.
I have never heard of a bond to complete a development project.
So they bond company would insure the city against failure to develop two or three high risers? Or the bond company would insure the city against lost property taxes for failure to develop?
I think you are a little off base.
The Government and private sector require performance bonds and payment bonds for projects to protect the tax payer’s investment.
Common performance and payments bonds for government projects consist of building bridges and roads, although it can comprehend much more than only those two categories. If the contractor does not complete the project.
Now I see why they kick your fat ass off the City Council!
What protection does the city have if the developer walks.
Performance bonds are for construction work. Roads, damns, etc. They make sure the work is done and done to specifications. They are not for pipe dreams.
They insure the quality and timeliness of construction.
They are not for development projects.
You find me an insurance company who will insure the timely completion of a project like this and that company will not be in business for long.
And to set the record straight I was NEVER voted out of office. I chose not to run again. The people loved me and I’d still be serving today if I wanted to.
I implore the council to slow this down a bit,please do your due diligence and examine EVERY aspect of this.As we all know Joe wants this rushed through to be able to tout it on his pipe dream campaign for governor.Screw him,don’t let him bully you..
Harvey, you are absolutely correct, but the city council works for the best interest of the Mayor and the DTC not the residents that elected them.
Due Diligence? This group of people do not know what due diligence is or where to begin.
Hint. Look in the purchasing ordinance.
But then, I’m not sure they know what an ordinance is.
All in favor? Aye! Motion to adjourn.
Everyone have their council stipend debit cards ready for dinner?
Tom White is at least partially right.
The council can insist that they play a role. At least until the primaries are over and then it is back to business as usual.
There will be talk of a performance band but the city attorney will say that the developer will insist on one from the city and we don’t want that because the city can not act quick enough and we don’t want the city to have to pay $400 million to the developers.
So much for a new day in the city of B-port.
This is a strictly political suggestion, with so many primaries looming, it would be prudent for the sitting members to proceed with extreme caution, the eyes of the voters are on them.
It is interesting, but not surprising, that this administration is suddenly rushing to push through a number of large and potentially profitable (for the developer) development deals right before an election.