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First Amendment to Grant Agreement with Nia Neighborhoods Opportunity Zone Fund, LLC Copyrighted October 16, 2023 City of Dubuque Public Hearings # 04. City Council Meeting ITEM TITLE: FirstAmendmentto GrantAgreementwith Nia Neighborhoods Opportunity Zone Fund, LLC SUMMARY: Proof of Publication on notice of public hearing to considerthe First Amendment to Grant Agreement with Nia Neighborhoods Opportunity Zone Fund, LLC. and City Manager recommending approval. RESOLUTION Approving a First Amendment to Grant Agreement by and Between the City of Dubuque, lowa, and Nia Neighborhoods Opportunity Zone Fund, LLC I ncluding the Issuance of Urban Tax I ncrement Revenue Obligations SUGGESTED Suggested Disposition: Receive and File;Adopt Resolution(s) DISPOSITION: ATTACHMENTS: Description Type MVM Memo City Manager Memo Staff Memo Staff Memo Resolution Resolutions First Amendment Supporting Documentation Dubuque THE CITY QF � All-Meriea Ciry DLT B E ; . � . � �� � � MaSt� Z�C� aYd t�Q Mt55ZSSZ Z zoa�•zoiz•�ai3 YP pp za��*zai� TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: First Amendment to Grant Agreement with Nia Neighborhoods Opportunity Zone Fund, LLC DATE: October 9, 2023 Economic Development Director Jill Connors is recommending City Council approve the First Amendment to Grant Agreement with Nia Neighborhoods Opportunity Zone Fund, LLC. The City of Dubuque previously entered into a Grant Agreement, dated August 7, 2023 by Resolution No. 239-23 for the rehabilitation of 1398 White Street. The mixed-use property will have two updated, affordable apartments upstairs and a commercial space on the first floor. The current and planned use for the commercial space is an African American barber, catering to the African American community and communities of color which brings a steady stream of customers to this neighborhood. This barbershop began operating in the unimproved space several months ago. Since opening, the barber has added two additional barbers, and attracted two hair stylists who specialize in African American clients. The clientele is diverse, and travels from across the region, from surrounding rural communities and from the five local colleges and universities. The rehabilitation of 1398 White Street and the creation of two new affordable rental units is ongoing. Since this Grant Agreement was executed, the City Council has given additional support to the creation of housing in the Greater powntown Urban Renewal Area. Multifamily housing creation projects are now eligible for either 10-years of tax abatement followed by 5-years of tax increment financing or 15-years of tax increment financing. The proposed First Amendment to Grant Agreement includes 15-years of tax increment financing for the project. I concur with the recommendation and respectfully request Mayor and City Council approval. � Mic ael C. Van Milligen MCVM:sv Attachment cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Jill Connors, Economic Development Director 1 Dubuque Economic Development Department THE CITY OF ' ' 1300 Main Street All-America City Dubuque,lowa 52001-4763 U� � n'�N",`�""""�� Office(563)589-4393 � � TTY(563)690-6678 � http://www.cityofdubuque.org 2007*2012�2013 Masterpiece on the Mississippi zoi�*zoi9 TO: Michael C. Van Milligen, City Manager FROM: Jill M. Connors, Economic Development Director SUBJECT: First Amendment to Grant Agreement with Nia Neighborhoods Opportunity Zone Fund, LLC DATE: September 26, 2023 INTRODUCTION This memorandum requests City Council review and approval of a First Amendment to Grant Agreement with Nia Neighborhoods Opportunity Zone Fund, LLC. BACKGROUND The City of Dubuque previously entered into a Grant Agreement, dated August 7, 2023 by Resolution No. 239-23 for the rehabilitation of 1398 White Street. The mixed-use property will have two updated, affordable apartments upstairs and a commercial space on the first floor. The current and planned use for the commercial space is an African American barber, catering to the African American community and communities of color which brings a steady stream of customers to this neighborhood. This barbershop began operating in the unimproved space several months ago. Since opening, the barber has added two additional barbers, and attracted two hair stylists who specialize in African American clients. The clientele is diverse, and travels from across the region, from surrounding rural communities and from the five local colleges and universities. DISCUSSION The rehabilitation of 1398 White Street and the creation of two new affordable rental units is ongoing. Since this Grant Agreement was executed, the City Council has given additional support to the creation of housing in the Greater powntown Urban Renewal Area. Multifamily housing creation projects are now eligible for either 10-years of tax abatement followed by 5-years of tax increment financing or 15-years of tax increment financing. The proposed First Amendment to Grant Agreement includes 15-years of tax increment financing for the project. RECOMMENDATION/ ACTION STEP Based on this project's alignment with the City Council's goal of having a Robust Local Economy and Livable Neighborhoods and Housing, I recommend following the public hearing the City Council adopt the attached resolution approving a First Amendment to Grant Agreement. 2 Prepared by: Jill Connors, Economic Development, 1300 Main Street, Dubuque IA 52001, 563 589-4393 Return to: Jill Connors, Economic Development, 1300 Main Street, Dubuque IA 52001, 563 589-4393 RESOLUTION NO. 347-23 APPROVING A FIRST AMENDMENT TO GRANT AGREEMENT BY AND BETWEEN THE CITY OF DUBUQUE, IOWA, AND NIA NEIGHBORHOODS OPPORTUNITY ZONE FUND, LLC INCLUDING THE ISSUANCE OF URBAN TAX INCREMENT REVENUE OBLIGATIONS WHEREAS, the City of Dubuque and Nia Neighborhoods Opportunity Zone Fund, LLC, entered into a Grant Agreement dated August 7, 2023; and WHEREAS, the City Council, by Resolution No. 328-23, dated October 2, 2023, declared its intent to approve a First Amendment to Grant Agreement by and between the City of Dubuque, Iowa, and Nia Neighborhoods Opportunity Zone Fund, LLC, including the issuance of Urban Renewal Tax Increment Revenue Obligations; and WHEREAS, pursuant to published notice, a public hearing was held on the proposed First Amendment to Grant Agreement on October 16, 2023 at 6:30 p.m.; and WHEREAS, it is the determination of the City Council that approval of the First Amendment to Grant Agreement for redevelopment of the Property by Nia Neighborhoods Opportunity Zone Fund, LLC, according to the terms and conditions set out in the Grant Agreement, is in the public interest of the City of Dubuque. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA; Section 1 . That the First Amendment to Grant Agreement by and between the City of Dubuque, Iowa, and Nia Neighborhoods Opportunity Zone Fund, LLC, a copy of which is attached hereto, including the issuance of Urban Renewal Tax Increment Revenue Obligations, is hereby approved. Section 2. That the Mayor is hereby authorized and directed to execute the First Amendment to Grant Agreement on behalf of the City of Dubuque and the City Clerk is authorized and directed to attest to his signature. Section 3. That the City Manager is authorized to take such actions as are necessary to comply with the terms of the First Amendment to Agreement as herein approved. Passed, approved and adopted this 16th day of October, 2023. Brad M. Cavan gh, yor Attest: Adrienne N. Breitfelder, City Clerk 2 FIRST AMENDMENT TO GRANT AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND NIA NEIGHBORHOODS OPPORTUNITY ZONE FUND, LLC This First Amendment to Grant Agreement, dated for reference purposes the day of , 2023, is made and entered into by the City of Dubuque, lowa, a municipality (City), established pursuant to the lowa Code and acting under authorization of lowa Code Chapter 403, as amended (the Urban Renewal Act), and Nia Neighborhoods Opportunity Zone Fund, LLC (Grant Recipient). WHEREAS, City and Grant Recipient entered into a Grant Agreement dated August 7, 2023 (the Grant Agreement); and WHEREAS, City and Grant Recipient desire to amend the Grant Agreement as set forth herein. NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL TERMS AND COVENANTS CONTAINED HEREIN, CITY AND GRANT RECIPIENT AGREE AS FOLLOWS: Section 1. Section 3 of the Grant Agreement is hereby amended by adding the following: 3.6. Economic Development Grants to Developer. For and in consideration of Grant Recipient's obligations hereunder, and in furtherance of the goals and objectives of the urban renewal plan for the Project Area and the Urban Renewal Law, City agrees, subject to Grant Recipient being and remaining in compliance with the terms of this Agreement, to make thirty (30) consecutive semi-annual payments (such payments being referred to collectively as the Economic Development Grants) to Developer: November 1, 2027 May 1, 2028 November 1, 2028 May 1, 2029 November 1, 2029 May 1, 2030 November 1, 2030 May 1, 2031 November 1, 2031 May 1, 2032 November 1, 2032 May 1, 2033 November 1, 2033 May 1, 2034 November 1, 2034 May 1, 2035 November 1, 2035 May 1, 2036 November 1, 2036 May 1, 2037 November 1, 2037 May 1, 2038 November 1, 2038 May 1, 2039 November 1, 2039 May 1, 2040 November 1, 2040 May 1, 2041 November 1, 2041 May 1, 2042 pursuant to lowa Code Section 403.9 of the Urban Renewal Law, in amounts equal to a portion of the tax increment revenues collected by City under lowa Code Section 403.19 (without regard to any averaging that may otherwise be utilized under lowa Code Section 403.19 and excluding any interest that may accrue thereon priorto payment to Developer) during the preceding six-month period in respect of the Minimum Improvements constructed by Grant Recipient (the Grant recipient Tax Increments). For purposes of calculating the amount of the Economic Development Grants provided in this Section, the Grant Recipient Tax Increments shall be only those tax increment revenues collected by City in respect of the increase in the assessed value of the Property above the assessed value on January 1, 2023 ($120,300). The Grant Recipient Tax Increments shall not include (i) any property taxes collected for the payment of bonds and interest of each taxing district, (ii) any taxes for the regular and voter-approved physical plant and equipment levy, (iii) the remaining actual amount of tax increment revenues collected by City in respect of the valuations of the Property prior to January 1, 2023 and (iv) any other portion required to be excluded by lowa law, and thus such incremental taxes will not include all amounts paid by Developer as regular property taxes. 3.7 Non-appropriation/Limited Source of Fundinq. Notwithstanding anything in this Agreement to the contrary, the obligation of City to pay any installment of the Economic Development Grant shall be an obligation limited to currently budgeted funds, and not a general obligation or other indebtedness of City or a pledge of its full faith and credit under the meaning of any constitutional or statutory debt limitation, and shall be subject in all respects to the right of non-appropriation by the City Council as provided in this Section 3.7. City may exercise its right of non-appropriation as to the amount of the installments to be paid during any fiscal year during the term of this Agreement without causing a termination of this Agreement. The right of non-appropriation shall be exercised only by resolution affirmatively declaring City's election to non-appropriate funds otherwise required to be paid to Developer in the next fiscal year under this Agreement. (1) In the event the City Council elects to not appropriate sufficient funds in the budget for any future fiscal year for the payment in full of the installments on the Economic Development Grant due and payable in that fiscal year, then: (i) City shall have no further obligation to Developer for the payment of all installments due in the next fiscal year which cannot be paid with the funds then appropriated for that purpose; and, (ii) Developer shall be released from all further obligations under this Agreement during that same fiscal year. (2) Each installment of the Economic Development Grant shall be paid by City solely from funds appropriated for that purpose by the City Council from taxes levied on the Property that are allocated to the special fund pursuant to lowa Code (2013) § 403.19(2). 2 (3) The right of non appropriation reserved to City in this Section 3.7 is intended by the parties, and shall be construed at all times, so as to ensure that City's obligation to pay future installments on the Economic Development Grants shall not constitute a legal indebtedness of City within the meaning of any applicable constitutional or statutory debt limitation prior to the adoption of a budget which appropriates funds for the payment of that installment or amount. In the event that any of the provisions of this Agreement are determined by a court of competent jurisdiction to create, or result in the creation of, such a legal indebtedness of City, the enforcement of the said provision shall be suspended, and the Agreement shall at all times be construed and applied in such a manner as will preserve the foregoing intent of the parties, and no event of default shall be deemed to have occurred as a result thereof. If any provision of this Agreement or the application thereof to any circumstance is so suspended, the suspension shall not affect other provisions of this Agreement which can be given effect without the suspended provision. To this end the provisions of this Agreement are severable. Section 3. Except as modified herein, the Grant Agreement shall remain in full force and effect. CITY OF DUBUQUE, IOWA NIA NEIGHBORHOODS OPPORTUNITY ZONE FUND, LLC I o Brad M. Cavaji h, Mayor r dra T. ❑ixo , Organizer Attest: Adrionnc-d. Broitieldcr, -Gar Gleffe- T0:sV, 3 STATE OF IOWA SS: DUBUQUE COUNTY CERTIFICATE OF PUBLICATION I, Kathy Goetzinger, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher of the Telegraph Herald, a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper on the following dates: 10/06/2023 and for which the charge is 104.33 Subscribed to before me, a Notary Publicd for Dubuque County, Iowa, this 6th day of October, 2023 Notary/I'ubljc in and for Dubuque County, Iowa. ¢ nc JANET K. PAPE 7 Commission Number 199659 My Commission Expires /o W , 12/11 /2025 Ad text : CITY OF DUBUQUE, IOWA OFFICIAL NOTICE PUBLIC NOTICE is hereby given that the Dubuque City Council will conduct a public hearing on the 16th day of October, 2023, at 6:30 p.m., in the Historic Federal Building, 350 W. 6th Street, 2nd floor, Dubuque, Iowa, at which meeting the City Council proposes to take action to approve a First Amendment to Grant Agreement between the City of Dubuque, Iowa and Nia Neighborhoods Opportunity Zone Fund, LLC, a copy of which is now on file at the Office of the City Clerk, City Hall, 50 W 13th Street, Dubuque, Iowa, providing for the issuance of economic development grants (Urban Renewal Tax Increment Revenue Grant Obligations) described therein in order to carry out the purposes and objectives of the Urban Renewal Plan for the Greater Downtown Urban Renewal Area Economic Development District, consisting of the funding of economic development grants for Nia Neighborhoods Opportunity Zone Fund, LLC , under the terms and conditions of the Urban Renewal Plan for the Greater Downtown Urban Renewal Area Economic Development District. The aggregate amount of the Urban Renewal Tax Increment Revenue Grant Obligations cannot be determined at the present time but is not expected to exceed $30,226. Written comments regarding the above public hearing should be submitted to the City Clerk's Office, 50 W. 13th St., Dubuque, IA 52001, ctyclerk@cityofdubuque.org, on or before said time of public hearing. At said time and place of public hearings all interested citizens and parties will be given an opportunity to be heard for or against said proposal. Agendas can be accessed at https://www.cityofdubuque.org/Agendas. Copies of supporting documents for the public hearing are on file in the City Clerk's Office, City Hall, 50 W. 13th St., Dubuque, Iowa, and may be viewed during normal working hours. Individuals with limited English proficiency, vision, hearing or speech impairments or requiring special assistance should contact the City Clerk's Office at (563) 589-4100, ctyclerk@cityofdubuque.org as soon as feasible. Deaf or hard -of -hearing individuals can use Relay Iowa by dialing 711 or (800) 735-2942. Published by order of the City Council given on the 2nd day of October 2023. Trish L. Gleason, Assistant City Clerk RESOLUTION NO. 328-23 FIXING THE DATE FOR A PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA ON A FIRST AMENDMENT TO GRANT AGREEMENT BY AND BETWEEN THE CITY OF DUBUQUE, IOWA AND NIA NEIGHBORHOODS OPPORTUNITY ZONE FUND, LLC, INCLUDING THE PROPOSED ISSUANCE OF URBAN RENEWAL TAX INCREMENT REVENUE OBLIGATIONS RELATING THERETO, AND PROVIDING FOR THE PUBLICATION OF NOTICE THEREOF Whereas, City and Nia Neighborhoods Opportunity Zone Fund, LLC entered into a Grant Agreement, dated the 7th day of August 2023, providing for a Fa*ade Grant, a Planning & Design Grant, a Financial Consultant Grant, and a Housing Creation Grant; and Whereas, the City Council has tentatively determined that it would be in the best interests of the City to approve the First Amendment to Grant Agreement with Nia Neighborhoods Opportunity Zone Fund, LLC; and Whereas, it is deemed necessary and advisable that City should authorize Urban Renewal Tax Increment Revenue obligations, as provided by Iowa Code Chapter 403, pursuant to the First Amendment to Grant Agreement; and Whereas, before said obligations may be approved, Iowa Code Chapter 403 requires that the City Clerk publish a notice of the proposal and of the time and place of the meeting at which the City Council proposes to take action thereon and at which meeting the City Council shall receive oral and/or written objections from any resident or property owner of said City to such proposed action. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The City Clerk is hereby authorized and directed to cause a notice to be published as prescribed by Iowa Code Section 403.9 of a public hearing on the City's intent to authorize Urban Renewal Tax Increment Revenue obligations, to be held on the 16th day of October, 2023, at 6:30 o'clock p.m. The official agenda will be posted on Friday, October 13, 2023 and will contain listening, viewing, and public input options. The City Council agenda may be accessed at https://cityofdubuque.novusagenda.com/AgendaPublic/ or by contacting the City Clerk's Office at 563-589-4100, ctyclerk@cityofdubuque.org. Section 2. The City Council will meet at said time and place for the purpose of taking action on the matter of authorizing Urban Renewal Tax Increment Revenue obligations and the execution of the First Amendment to Grant Agreement relating thereto with Nia Neighborhoods Opportunity Zone Fund, LLC , the proceeds of which obligations will be used to carry out certain of the special financing activities described in the Urban Renewal Plan for the Greater Downtown Urban Renewal District, consisting of the funding of economic developments grants to Nia Neighborhoods Opportunity Zone Fund, LLC pursuant to the Grant Agreement. It is expected that the aggregate amount of the Tax Increment Revenue obligations to be issued will be approximately $30,226. Section 3. The Clerk is hereby directed to cause at least one publication to be made of a notice of said meeting, in a newspaper, printed wholly in the English language, published at least once weekly, and having general circulation in said City, said publication to be not less than four days nor more than twenty days before the date of said meeting on the issuance of said obligations. Section 4. That the notice of the proposed action to issue said obligations shall be in substantially the form attached hereto. Passed, approved, and adopted this 2nd day of October, 2023. Brad M. Cavanagh, Mayor Attest:/s/Trish L. Gleason, Assistant City Clerk It 10/6