Portland Development Corporation

Regular Meeting

Portland, ME · October 16, 2025

Minutes

FINAL 10-16-2025 PDC Meeting Minutes Approved 11-19-2025 Minutes Portland Development Corporation Remote Zoom Meeting Held on October 16, 2025 A remote meeting, via Zoom, of the Portland Development Corporation (PDC) Board of Directors was held at 4:00 p.m. on Thursday, October 16, 2025. Present from the Board of Directors were Board President Kierston Van Soest and Directors Jon Berg, Sam Dargan, Eamonn Dundon, Nathan Henry, Assistant City Manager Dena Libner, Scott Kleiman, and Beverly Werber. Board Directors Matthew Buonopane, Councilor Ben Grant, and Nikki Yanok could not be present. Present from City staff were Associate Corporation Counsel Avery Dandreta, Business Programs Manager Nancy Martin, Principal Administrative Officer Lori Paulette, and Housing and Economic Development Director Greg Watson. Item #1: President’s comments. Board President Van Soest opened the meeting at approximately 4:00 p.m. and offered congratulations to Director Nathan Henry on being named one of MaineBiz’s 40 Under 40 honorees. Item #2: Review and vote on a Brownfield Subgrant Request from Portland Housing Authority for 70 E Oxford Street - COMB Block. Ms. Martin introduced Sarah Tatarczuk, a Development Officer, who presented the request from the Portland Housing Authority (PHA) for a $450,000 subgrant from the City's Brownfield funds for their COMB Block project. This project involves the demolition of four existing public housing buildings and the construction of 173 new affordable housing units across three phases. The cleanup primarily involves removing urban fill (up to 7 feet deep) contaminated with lead, arsenic, and PAHs (polycyclic aromatic hydrocarbons), and implementing a cover system across the site. PHA has already received funding from GPCOG DRAFT and an EPA grant, but additional funding is needed due to the unexpectedly high cost of soil removal. On a motion made by Mr. Dundon and seconded by Mr. Berg, the Board voted 8-0 to approve the $450,000 Brownfield subgrant to Portland Housing Authority. Item #3: Review and vote on loan request for $125,000 for Health Resonates, LLC, 773 Congress Street. Ms. Martin introduced a loan request for $125,000 from Health Resonates LLC, a health and wellness spa in Portland. Anna Flaherty, the owner, explained that the loan is crucial to buy out her business partner. Ms. Flaherty plans to expand staff (hire 5 more team members) and further develop training programs. There are currently 11 employees. The current lease is ending, and a new 3-year lease is being drafted to start in December, with an option to renew. Ms. Flaherty is also looking at a potential expansion into a City Center location in the future. On a motion made by Mr. Kleiman and seconded by Mr. Dargan, the Board voted 8-0 to enter into executive session pursuant to 1 M.R.S.A. 405(6)(F) and 5 M.R.S.A. 13119-A, to review proprietary confidential information associated with this loan application, and to discuss the Loan Delinquency Report, at approximately 4:28 p.m. The Board returned to public session at approximately 4:53 p.m. On a motion by Ms. Werber and seconded by Mr. Henry, the Board voted 8-0 to approve the loan of $125,000 to Health Resonates LLC for a 5-year term at a 7.75% interest rate. (Directors Dundon and Libner left the meeting at this time.) Item #4: Treasurer’s Report- September 2025. The delinquency report was discussed in executive session. DRAFT Item #5: Other Items to be discussed/brought up by Board Directors. Ms. Werber inquired about the no-interest loan offered to businesses in the Arts District. Ms. Martin stated there have been no new takers since Another Round. Mr. Watson added that while there's continued interest, applicants often struggle with the paperwork, and he believes the opportunity needs more forceful marketing. Mr. Dundon suggested reaching out to a commercial real estate broker to promote the PDC loan programs for tenants looking to move downtown. Item #6: Next regular meeting date: December 18, 2025 (Business Award Event on November 20, 2025). There being no further business, on a motion made by Mr. Dargan and seconded by Mr. Berg, the Board voted 8-0 to adjourn at approximately 5:05 p.m. Respectfully, Kaela Gonzalez

Agenda

Packet

PORTLAND DEVELOPMENT CORPORATION Board Meeting DATE: Thursday, October 16, 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 Review and vote on a Brownfield Subgrant Request from Portland Housing 2. Authority for 70 E Oxford Street - COMB Block a. See attached Memorandum and backup. Review and vote on loan request for $125,000 for Health Resonates, LLC, 3. 773 Congress 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 review proprietary confidential information associated with this loan application. Page 1 4. Treasurer's Report - September 2025 a. Monthly Administrative Budget Report b. Cash Management Report c. Schedule of Loans Receivable d. Confidential - Loan Delinquency Report 5. Other Items to be discussed/brought up by Board Directors Next Regular Meeting Date: December 18, 2025 (Business Award Event on 6. November 20, 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 2 City of Portland | Housing and Economic Development Department Gregory P. Watson, Director MEMORANDUM TO: President Kierston Van Soest and PDC Board Members FROM Nancy L. Martin, Business Programs Manager CC: Greg Watson, Director, Housing and Economic Development Department DATE: October 16, 2025 RE: Brownfields Subgrant Request of $450,000 from Portland Housing Authority PROJECT OVERVIEW: The Portland Development Corporation is being presented with a $450,000 Brownfields subgrant request from the Portland Housing Authority (PHA) to fund remediation of contamination at the 70 E. Oxford Street housing development, part of the PHA’s COMB Block redevelopment project. BUDGET AND BACKGROUND: This funding request is to support environmental cleanup of the first and second phases of the three-phase COMB Block redevelopment project, part of a broader plan to deliver 173 affordable housing units. The first and second phases of the project will add 55 new homes and remove blighted structures on a deteriorated site in East Bayside. The redevelopment addresses severe housing shortages with most units reserved for low- and very-low-income households. The project also advances Portland’s Reimagining Franklin Street initiative, creating a more walkable and connected neighborhood. The existing structures contain hazardous building materials, and residents have already been relocated in anticipation of the project. The existing buildings will be abated using funds from the Maine Department of Economic and Community Development (DECD) Brownfields program and subsequently demolished. Cleanup activities funded by the City will include excavation and off-site disposal of contaminated soil generated during construction, construction of a protective cap and cover system to prevent residents from being exposed to remaining contaminated soil, design and installation of vapor mitigation systems in the new buildings, and other activities necessary for cleanup. Construction will create 25 skilled labor jobs during remediation and involve 175 construction professionals. Cleanup is scheduled to begin in March of 2026 and continue through 2027. The total cleanup cost for the entire project is approximately $4.6 million, and the majority of the cleanup costs will be incurred in the first two phases. The PHA received a direct cleanup grant from the EPA of $3.3 million. GPCOG is providing $500,000 in Brownfields cleanup funding. The PHA’s total cleanup request to the City is $802,977.57, which they have split across two years. The initial request is for $450,000. The City expects to receive an application for approximately $350,000 in cleanup funding from PHA next year once the City has requested, and hopefully received, additional supplemental cleanup funds from the EPA. 389 Congress Street, Portland, ME 04101 – www.portlandmaine.gov – (207) 874-8683 1 of 5 Page 3 RECOMMENDATION: PDC staff (Nancy Martin) and underwriter David McLaughlin) propose approving a Brownfields subgrant of $450,000 to the Portland Housing Authority for the first and second phases of environmental cleanup of the COMB Block development. ATTACHMENT: PDC Underwriting analysis 389 Congress Street, Portland, ME 04101 – www.portlandmaine.gov – (207) 874-8683 2 of 5 Page 4 PORTLAND DEVELOPMENT CORPORATION BROWNFIELDS GRANT REQUEST DAVID MCLAUGHLIN, UNDERWRITER October 16, 2025 Note: This underwriting analysis was originally done in August for PHA’s Brownfields loan request to GPCOG. The proposed Portland Development Corporation financing for this project is a subgrant. APPLICANT/BORROWER: Portland Housing Authority APPLICANT’S ADDRESS: 970 Baxter Ave, Portland, Maine PROJECT LOCATION: 70 E. Oxford St., Portland, Maine GRANT REQUEST: $450,000 INTEREST RATE: N/A TERM: N/A PURPOSE: Funding the remediation costs of contamination at 70 East Oxford St., Portland. Estimated cost of cleanup is $4,602,977.57. The remediation costs are to be funded by: EPA Grant - $3,300,000 GPCOG Grant - $250,000 GPCOG Loan - $250,000 City of Portland/PDC Grant- $450,000 *Future PDC request - $352,977.57 TOTAL $4,602,977.57 *PHA expects to apply to the City for additional funding next year, once the City has requested and received supplemental funding to EPA, in order to make up the shortfall of $352,977.57 OVERVIEW: The Portland Housing Development Authority has been in operation since 1943. It provides long term rental housing and assistance to more than 3,000 low income families, seniors and disabled individuals. It houses close to 10% of the City of Portland population. Management is experienced and has demonstrated long term success. They are the developer for this project and management of the planned three phase 173 residential units. The first and second phases of the project will add 55 new homes and remove blighted structures on a deteriorated site in East Bayside.. The Source and Use of Funds for the permanent financing of the project is as follows. MSHA will provide construction financing for the total project. SOURCES USES Maine State Housing mtg. $11,228,000 Construction Costs $18,737,000 Maine State Housing subsidy 650,000 Contingency 10% 1,859,000 City of Portland 650,000 Shared Construct 1,117,500 3 of 5 Page 5 AHP Loan 1,600,000 Contingency (5%) 708,531 AHP Subsidy 2,000,000 Soft costs 5,680,000 Deferred Developer Fee 500,000 Net Syndication of tax credit 11,249,000 TOTAL $26,276,000 $26,276,000 The AHP Loan and City of Portland Trust Fund (loan) both have terms of 30 years with no interest. They are in process of securing the financing. Applications are being completed for submission to Maine State Housing for construction and permanent financing, a grant and the Low Income Housing Tax Credit, and to the Federal Home Loan Bank for AHP financing and a grant. MSHA has issued a Notice of Intent and has allocated the funds. The construction cost was estimated by DEW Construction. This cost estimate was noted is subject to change, but noted that it anticipated increased costs until the commencement of construction. Phase I and Phase ll environmental site assessments have been done by Sevee and Maher Engineers. The Phase ll found evidence of environmental hazards. The study did suggest several voluntary steps that could be taken to further reduce environmental risk. These recommendations are incorporated into the project costs. Maine State Housing Authority has reportedly indicated this cleanup will be a condition of approval. FINANCIAL OVERVIEW: CPA audited statements of the Portland Housing Authority were provided for fiscal 2021 -2024 and reviewed. The major pertinent findings are as follows: Portland Housing Authority (000) 2021 2022 2023 2024 Current Ratio 17.3 12.0 12.0 11.5 Working Capital 30,998 30,979 30,725 30,423 Net Assets 16,573 22,315 25,824 45,085 Total Debt 38,819 35,655 37,697 41,820 Debt Worth Ratio 2.3 1.6 1.5 .93 Revenues. 42,672 44,377 48,850 73,277 Net Income. 2,294 5,742 3,509 19,261 Debt Service Coverage 3.1 4.9 3.4 11.1 Excess Cash Flow. 3,838 7,117 4,875 22,381 - The net working capital position is strong at $30,243k with an 11.5 current ratio as of 6/30/24. This is significantly stronger than the industry average and evidences the ability to fund any needed project equity. - The balance sheet is well capitalized with $45,005k in net assets and a .93 debt/worth ratio. - The debt service coverage ratio was strong in 2024 at 11.1 with excess cash flow of $22,338k. - Revenues increased by 50.0% in 2024 - There is a significant increase in Net Assets in 2024 that was noted as the result of increases in HUD funding 4 of 5 Page 6 - Growth appears consistent and well managed with improved profitability - PHA is in a strong financial position and is well positioned to support this project on a contingency basis if needed. Project Operating Budget: This current request is to clean up environmental contamination on 1.53 acres located in East Bayside Portland. This clean will be followed by Phase 1 of a three phase development of 173 units of affordable housing. The current $26,276,000 Phase1 and 2 includes the construction of 55 residential units. Seventeen of the units will be below 60% Area Medium Income and thirty-three units will be below 50% Area Medium Income. The remaining five units its will be market rent. This will replace 40 units in three buildings that are in need of significant repairs and maintenance, and will be demolished. The total three phase project has an estimated cost of 72,000k. Construction is projected to start spring 2026. RECOMMENDATION : I recommend approval. 5 of 5 Page 7 Portland Development Corporation Preliminary Draft Operating Report FY2026 For Month Ending 9/30/2025 Operating transfer from EDF 42,352 ------------ Total Funds Available 42,352 Current Year to Percent FY2026 Expenditures Budget Month Date of Budget Balance Administrative Services $11,505 $0 10,320 89.7% 1,185 Postage $200 $0 0 0.0% 200 Travel, Training, Meetings $9,000 $0 0 0.0% 9,000 Contractual Services $8,000 $2,178 2,178 27.2% 5,823 Operating Transfer to Fin. $9,647 $0 0 0.0% 9,647 Advertising $2,500 $0 0 0.0% 2,500 Auto Expense Reimb. $100 $0 0 0.0% 100 Printing & Binding $650 $35 125 19.2% 525 Office Supplies $750 $0 0 0.0% 750 Total FY2026 Expenditures $42,352 $2,213 12,623 29.8% 29,730 Page 8 FY2026 PDC CASH MANAGEMENT REPORT/Non-Brownfield Program (Preliminary and Subject to Change) UDAG CIP CIP FAME FAME SSBCI TOTAL Period Ending: 08/31/2025 271 272 274 277 279 Unrestricted Loans/Grants Restricted Unrestricted REDLP Beginning Balance 290,049 366,031 175,015 430,793 489,658 1,751,545 Additions th Date No Updated MTD YTD MTD YTD MTD YTD MTD YTD MTD YTD Principal payments received 5,450 5,450 6,722 6,722 4,949 4,949 11,302 11,302 7,986 7,986 Interest payments received from loans 3,565 3,565 84 84 51 51 5,590 5,590 4,858 4,858 Interest Income 0 - (4) (4) -5 (5) (17) (17) (9) (9) Other Income/Adjustments - - - - - Pass Through From FAME/SSCBI - - - - - Deductions FAME Annual Admin. Fee; Invoices Disbursements - Expenses Disbursements - Loans/Grants Ending Cash Balance (Munis) 299,064 372,833 180,010 447,668 502,492 1,802,067 Less Reserves for: Loans Beautification Program (EC0301) (72,000) Transfers not yet recorded (UDAG Int) (3,565) Adjusted Ending Cash Balance 223,499 372,833 180,010 447,668 502,492 1,726,502 Page 9 FY2025 PDC CASH MANAGEMENT REPORT - BROWNFIELD PROGRAM (Preliminary and Subject to Change) Brownfield 1 Brownfield 3 Brownfield 10/1/2022 TOTAL Period Ending: 08/31/2025 278 281 280 RLF Unrestricted Loans/Grants Restricted/Assessments Restricted/Cleanup Beginning Balance 472,251 85,672 2,402,468 2,960,391 Additions MTD YTD MTD YTD MTD YTD Principal payments received 1,803 18,557 - - Interest payments received from loans 2,149 - - Interest Income 12,364 - - Other Income/Adjustments - - - Pass Through From FAME/SSCBI/EPA - - 2,000,000 2,000,000 Deductions FAME Annual Admin. Fee; Invoices Disbursements -Other (12,767) (37,265) $ (9,971) Ending Cash Balance (Munis) 461,288 48,407 4,392,497 4,902,192 Less Reserves for: Reserve For Commitments (19,941) (2,886,424) Fund 280 Reserve for Administration Adjusted Ending Cash Balance 441,347 48,407 1,506,073 1,995,827 Page 10 Portland Development Corporation Schedule of Loans Receivable For Month Ending September 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 $56,652 30179 Forefront Brick South, LLC 11/18/2016 12/1/2026 $100,000 $0 $100,000 $21,171 30400 Friends and Family 3/10/2023 4/1/2027 $50,000 $0 $50,000 $23,017 30423 Longfellow Property, LLC 6/26/2023 7/1/2030 $200,000 $0 $200,000 $193,273 30514 Longfellow Property, LLC 5/6/2024 7/1/2031 $182,688 $0 $182,688 $176,312 Sub-Total PBF (UDAG) $470,426 Portland Business Fund 272 (Restricted - CIP): 30568 Cultivating Community 10/17/2024 11/1/2026 $80,000 $0 $80,000 $40,399 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 $3,203 $3,203 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 $762 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 $1,884 30119 Quattrucci & Rouda, LLC 3/19/2019 4/1/2029 $100,000 $0 $100,000 -$11 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) $119,720 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 $51,704 30127 Gallery Acquisition Co. Inc. 5/16/2019 6/1/2026 $75,000 $0 $75,000 $12,636 30125 Zootility Co. 8/7/2019 9/1/2024 $150,000 $0 $150,000 $122,197 30416 Forefront Partners I, LP 5/31/2023 5/31/2033 $200,000 $0 $200,000 $167,568 30530 Biodiversity Research Institute 8/22/2024 10/1/3031 $250,000 $0 $250,000 $245,893 30536 Blackbird Baking, d/b/a Two Fat Cats 10/1/2024 11/1/2031 $40,000 $0 $40,000 $37,092 30591 Salud Studios 11/19/2024 12/1/2030 $137,500 $0 $137,500 $127,037 30605 Lebel Holdings, LLC 3/20/2025 5/1/2035 $200,000 $0 $200,000 $198,052 30107 Biodiversity Research Institute 3/26/2021 4/1/2026 $200,000 $0 $200,000 $169,574 30086 Driscoll Child Dev. Center 5/5/2021 6/1/2026 $60,000 $0 $60,000 $27,499 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 $119,582 30068 688 Forest Ave., LLC 12/21/2021 1/1/2027 $168,000 $0 $168,000 $150,957 30527 Another Round 6/5/2024 8/1/2029 $225,000 $0 $225,000 $222,246 30592 Yardie Ting 11/14/2024 12/1/2029 $45,000 $0 $45,000 $39,238 30624 Kehben Grier 5/1/2025 1/1/2033 $80,000 $0 $80,000 $77,419 Reo Miyake LLC 9/18/2025 11/1/2030 $100,000 $0 $100,000 $100,000 Coco Miyake LLC 9/18/2025 11/1/2030 $100,000 $0 $100,000 $100,000 Eduardos Brazillian Grill One 9/25/2025 11/1/2030 $22,500 $0 $22,500 $22,500 Maine Foot and Ankle 9/25/2025 11/1/2035 $50,000 $0 $50,000 $50,000 Sub-Total FAME $0 $2,074,494 FAME GROW ME SSBCI 279 Eduardos Brazilian Grill One 9/25/2025 11/1/2030 $22,500 $22,500 $22,500 Maine Foot and Ankle 9/25/2025 11/1/2035 $50,000 $50,000 $50,000 $72,500 DOWNTOWN FUND 263: 30636 Another Round 8/22/2025 10/1/3030 $8,000 $0 $8,000 $8,000 Brownfields Loan Fund 278 and 280 30515 Forefront Partners I, LP/Fund 280 5/31/2023 4/30/2033 $200,000 $0 $200,000 $190,054 30072 Forefront Partners I, LP/Fund 280 4/12/2018 1/1/2032 $350,000 $0 $350,000 $300,370 Sub-Total Brownfields $490,424 Grand Total Loans $4,201,938 $0 $4,201,938 $3,279,166 Allowance for uncollectable loans at 15% $491,875 Total with Allowance for uncollectable loans: $2,787,291 Page 11