Downtown Rehab _ Iowa Inn LoanCITY OF DUBUQUE, IOWA
MEMORANDUM
May 1, 2001
TO:
FROM:
SUBJECT:
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Downtown Rehabilitation Loan Terms for the Iowa Inn Project
Acting Economic Development Director Pam Myhre is recommending a change in the
repayment terms of the City's TIF-funded Downtown Rehabilitation Loan approved for
the Iowa Inn project.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Pamela Myhre, Acting Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
TO:
FROM:
SUBJECT:
May 1, 2001
Michael Van Milligen, City Manager_
Pamela Myhre~e*nt Di;ector
Downtown Rehabilitation Loan Terms for the Iowa Inn Project
INTRODUCTION
This memorandum presents for City Council consideration a resolution approving a change in the
repayment terms of the City's TIF-funded Downtown Rehabilitation Loan approved for the Iowa
Inn project.
DISCUSSION
The City has previously approved a Downtown Rehab Loan to MetroPlains Development, LLC
to assist the rehabilitation of the Iowa Inn property. Those terms include a $220,000 loan at 3%
interest for 20 years. The repayment terms of that loan are very lenient, with interest only
payments for the first five years of the loan and interest plus principal amortized over the next
fifteen years. Due to MetroPlains' financial structuring of this project, they would prefer to
amortize the loan over a ten year period, paying both principal and interest during that entire
term. This allows them to pay offthe loan during the time period that they are also receiving tax
abatement and thus have sufficient cash flow to make the loan payments.
RECOMMENDATION
I recommend that the City Council adopt the attached resolution approving MetroPlains'
requested change in loan terms. The terms are more favorable to the City and will allow these
revolving loan funds to "revolve" back to the City much faster than would be typical of the
program. The resolution directs the City Manager to prepare and execute the fmal documents as
per the new terms.
ACTION STEP
The action step for the City Council is to adopt the attached resolution.
attachment
RESOLUTION NO. 170-01
A RESOLUTION AUTHORIZING A CHANGE IN THE TERMS OF THE
DOWNTOWN REHABILITATION LOAN TO METROPLAINS
DEVELOPMENT, LLC
Whereas, the City of Dubuque, Iowa, has created a Downtown Rehabilitation Loan
Program for the purpose of stimulating reinvestment in the Downtown Dubuque Urban Renewal
District; and
Whereas, the City of Dubuque~ Iowa, is encouraging the use of this loan program to
finance code compliance activities and to spur job creation and upper story housing unit
development; and
Whereas, the loan application from MetroPla'ms Development, LLC (MDI Limited
Partnership #47) meets the requirements of this program.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the revised terms of the Downtown Rehabilitation Loan to allo~v ~ t~-
year repayment of monthly principal plus interest are hereby accepted and approved.
Section 2. That the City Manager be and he is hereby directed to prepare the
necessary loan documents in accordance with the approved terms.
Section 3. That the City Manager is hereby authorized to execute, on behalf of the
City Council of the City of Dubuque, Iowa, all necessary loan documents and is further
authorized to disburse loan fimds from the Downtown Rehabilitation Loan Program, in
accordance with the te~rms and conditions of the executed agreement.
Passed, approved and adopted this 7t~ day of May, 2001.
Terrance M. Duggan, Mayor
Attest:
Jeanne F. Schneider, City Clerk