BANGOR, Maine — Bangor Savings Bank will purchase three parcels of land in a business park from the city as the 164-year-old financial institution considers an expansion.
Bangor’s city councilors approved the deal in a unanimous vote Monday night.
The bank has four leases attached to three city-owned pieces of land in the Maine Business Enterprise Park at 19 and 203 Maine Ave., as well as a portion of a vacant lot behind 19 Maine Ave.
Bangor Savings owns the buildings at 19 Maine Ave., also known as the Malcolm E. Jones Technology Center, and 203 Maine Ave., or the Clifton Eames Learning Center, but not the land they sit on. The leases on those properties expire in 2032 and 2027, respectively.
“We’re getting closer to the end of the lease term,” said Bruce Nickerson, Bangor Savings’ executive vice president and chief financial officer. “We’ve made some pretty significant investments in both buildings over the years, and would prefer to own [the land] if we’re going to continue to invest.”
The purchase has been in the works since early 2013, when the bank sought a three-year option to purchase the properties from the city. With that option about to expire, the city and bank brought a proposal to the City Council.
Under the terms of the agreement, Bangor Savings will purchase the lots at 19 and 203 Maine Ave. for the appraised value — a total of $693,000 in 2013, according to previous reports — plus a 30-foot long portion of the adjacent lot. The bank has the option of purchasing the rest of the vacant lot in the future.
Bangor Savings also agreed to expand its existing facilities to increase its taxable value in order to make up for the revenue the city will lose by ending the four leases. The bank will have to increase the tax value of its properties by $2.5 million, which will give the city about $86,000 in tax revenue — or enough to make up for the lost lease revenue.
Even if the bank doesn’t expand or build new property, or adds less than $2.5 million in taxable value, it will still pay taxes as if it had.
Bank officials say they are looking at how their current space is used to determine whether they’ll need to expand existing sites or build a new building.
“We’re facing a likely need for space because of growth we’ve experienced,” Nickerson said.
About 225 employees work in the technology center, which houses IT, a call center, accounting, loan services and payroll, among other functions. A smaller group of about 25 work in the learning center, which houses human resources, facilities management and an 80-seat auditorium for training new employees.
Follow Nick McCrea on Twitter at @nmmccrea213.