Housing - Star - Raven OaksCITY OF DUBUQUE, IOWA
MEMORANDUM
May 30, 2001
TO:
FROM:
SUBJECT:
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Affordable Housing Tax Credit Program Application from Star
Development
Star Development has removed their request for City financial assistance in the amount
of one percent of their affordable housing project. While this financial assistance is
required by the Iowa Finance Authority to be eligible for the State of Iowa Tax Credit
Program, Star Development has received the local assistance from other sources.
However, they are still requesting that the City provide a Resolution in support of their
project.
I respectfully recommend the Mayor and City Council provide the Resolution of support.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
David Harris, Housing and Community Development Department Director
VIA FAX- 712-262-1192 - Ms. Sam Erickson, Mr. Doug LaBounty, Community
Housing Initiatives, 14 West 21st Street, Suite 3, P.O. Box 473,Spencer,
Iowa 51301
VIA FAX - 815-637-4263 - Mr. Perry G. Harenda, Mr. Brian Brooks, Starr
Development, LLC, 6735 Vistagreen Way, Suite 310, Rockford, IL 61107
CITY OF DUBUQUE, IOWA
MEMORANDUM
30 May 01
To: Michael C. Van Milligen, City Manager
From: David Harris, Housing and Community Development Department
Re: Affordable Housing Tax Credit Program application from Star Development
Introduction
The purpose of this memorandum is to review the request from a private developer for
City support of an application to the Iowa Finance Authority for housing tax credits, for
new affordable and market rate senior citizen apartments to be located on Raven Oaks
Drive.
Background
The Affordable Housing Tax Credit Program provides an equity financing mechanism for
housing projects which in turn must provide rental units for Iow- and moderate-income
tenants, tt implements Section 42 of the Internal Revenue Service Code, returning tax
credits to investors who build or renovate tow income housing. In Iowa it is administered
by the lewa Finance Authority, which annually distributes approximately $4 million in tax
credits State-wide, on a competitive application basis.
In Dubuque, projects previously financed through this program include Heartland
Housing Initiative's Loras Boulevard and Main Street apartments, the Applewood
complex on Pennsylvania Avenue and the Bishop's Block Apartments. The Iowa Inn
project was also awarded tax credits last year and is scheduled to commence
construction this summer.
For this year's tax credit funding competition, the Finance Authority has revised its
administrative rules. Now required of all applicants is commitment from a "public or
pdvate agency" of a "local contributing effort" with a value of not less than one percent of
construction costs of the project. This is a threshold scoring requirement for the tax
credit application.
This funding match may be obtained in a variety of ways. For instance, the local
govemmental entity may contribute in the form of tax abatement or from tax increment
finance distdct proceeds, tax-exempt bond finandmg, a HOME Program loan or donation
of land or infrastructure costs.
Absent public assistance, other means of satisfying the local contributing effort include
private contributions, private loans at favorable terms, utility costs reductions, an equity
contribution by the project sponsor or the value of an in-kind contribution by a tax-
exempt organization.
Note:
Since the Council's previous consideration of Star Development's request for financial
assistance for this project, the developer has been able to obtain the required local
contribution through a private source. No financial assistance is being requested of the
Council for this project; only a resolution of support is needed.
Discussion
Star Development's request is for a resolution of support for the Raven Oaks
Apartmenta, a 62 unit complex for seniors. It is to be located on Raven Oaks Drive, near
JFK Road. For purposes of the application, a resolution of support must be obtained at
this time; the deadline for submission to the Finance Authority is 11 June.
Recommendation
The developer's request is presented to the Council without recommendation.
Action Step
The action requested of the City Council is to consider Star Development's request for
support of a seniors residential complex on Raven Oaks Ddve. Specifically, the request
is for authorization of the Mayor's signature on the attached resolution, supporting the
application for tax credits to the Iowa Finance Authority.
Preparer: Jean Noel Address: 1805 Central Telephone: (563) 589-4239
RESOLUTION NO. 246-01
A RESOLUTION OF SUPPORT FOR THE DEVELOPMENT OF AN
AFFORDABLE HOUSING PROJECT TO BE KNOWN AS RAVEN
OAKS SENIOR APARTMENTS
WHEREAS, the City of Dubuque, Iowa has been informed by Star Development
L.L.C., a Delaware ]Limited Liability Company ("Star") that a low income housing tax
credit application will be filed with the Iowa Finance Authority for the development of a
sixty-two (62) unit senior mixed affordable and market rate rental housing project to be
known as the Raven Oaks Senior Apartments ("Raven Oaks") to be located on
approximately 7.7 acres at Raven Oaks and Crissy Drives, Dubuque, Iowa ("Property");
WItEREAS, the Property is legally described as follows:
Lots 1, 2, 3, 4, 5 and 6 of Block 1; Lots 1, 2, 3, 4, 5 and 6 Block 2; Lots t, 2, 3, 4, 5
and 6 of Block 3; Lots 1, 2, 3, 4, 5 and 6 of Block 4; Lots 1, 2, 3, 4, 5 and 6 of
Block 5; Lots 1, 2, 3, 4, 5 and 6 of Block 6; Lots 1, 2, 3, 4, 5, and 6 of Block 7; all
in "Oak Brook Townhouses" in the City of Dubuque, Iowa, according to the
recorded Plat thereo~ and
Lots 7, 7a, 8, ga, 9, 10, 10a, 11, 12, 13, 14 and Lot 1 of Lot 15 in "Oakbrook
Development" in the City of Dubuque, Iowa, according to the recorded Plat thereof
consisting of approximately 7.7 acres located in Dubuque County, Dubuque, Iowa.
WHEREAS, Raven Oaks will be a three story brick and sided building containing
a combined total of 62 one-bedroom and two-bedroom traits, including a full time
manager's unit;
WHEREAS, Raven Oaks units will be targeted to older adults 55 years of age and
older;
WltEREAS, Raven Oaks will be a new construction project built on a vacant
parcel of land;
WHEREAS, Raven Oaks w/il have the following amenities:
Community Room with Kitchen Facilities
Library/Computer Room
Sitting Area
Underground Parking
Heat Included in Rent
Air Conditioning
Air Conditioning
Appliances Included (Range, Refrigerator, Dishwasher, Disposal)
Additional Storage Space
Laundry Facilities on Every Floor
Patios or Balconies
Fitness Center
Craft Room
Movie Room
Outdoor Patio with Gazebo, Furniture and CnSll(s)
Vegetable Garden Plots
Space Available for a local financial institution
Space Available for a local beauty shop operator
Emergency Call System
24-Hour Security
Wellness Monitoring Clinic
Optional Meal Program
Optional Housekeeping
Planned Social & Recreational Activities
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF DUBUQUE, IOWA:
Section 1. The City supports the application of Raven Oaks Senior Apartments
for Low-Income Housing Tax Credits, subject to necessary public hearings, ordinances
and building permits.
Section 2. This resolution shall remain effective until 1 November 2001. In the
event that any of the above-listed characteristics of Raven Oaks should materially change
prior to the issuance ora building permit, this resolution shall be null and void.
Attest:
Passed, approved and adopted this 4th day of June, 2001.
Terrance M. Duggan, Mayor
Attest:
Jeanne F. Schneider. City Clerk
6735 Vistagree Way. Suite 310
Rockford, IL 61107 :~ Phone 815 637 4246 Fax 815 637 4263
May 30, 2001
Mayor Torrance M. Duggan and Dubuque City Council
50 West 13th Street
Dubuque, IA 52001
RE: Raven Oaks Senior Apartments - Resolution of Support
Honorable Mayor and City Council Members:
As you know, Star Development, LLC has requested that the City of Dubuque
pass two separate resolutions regarding our proposed development of the'Raven Oaks
Senior Apartments. The first resolution is one of general support for our Application to
the Iowa Finance Authority for an Allocation of Low Income Housing Tax Credits to help
finance the Project. Under the second resolution, the City pledges to contribute $42,000
to the Project, which would represent 1% of the construction costs of the Project. This
second resolution was submittsd in order to satisfy the Local Contributing Effort
requirement of the Iowa Finance Authority.
Following the May 21st City Council Meeting, we have been able to obtain a
commitment for that 1% local contribution from other sources. These include a local
bank, charitable organization and utility. Therefore, we request to withdraw 'imm
Consideration the second resolution regarding the 1% local contribution by the City. This
second resolution may be removed from the agenda for the June 4, 2001 City Council
Meeting.
Although we are no longer asking the City to help satisfy the 1% Local
Contributing Effort requirement, we still request that the City pass the resolution
suppoding our Application to the Iowa Finance Authority for this Project. At least g0% of
the 62 units for this Project will be reserved for seniors whose incomes are 60% or less
of the county median income. The Project contains numerous amenities for seniors and
will be an attractive, well-maintained development. Raven Oaks Senior Apartments will
be a wonderful addition to the City of Dubuque.
Thank you very much for your consideration of this matter, I will be at the June
4th City Council Meeting if you shouJd have any questions,
Sincerely,
Brian D. Brooks
Project Manager/Attorney
Star Development LLC
BDB/jh
CC: Mike Moore
Jim Teeler
Perry Harenda by faxcisilme (414/525-0725)
Sincerely,
Project Manager/Attorney u --
Star Development, LLC c .~.~!
Mike Moore
Jim Teeter
Perry Herenda by faCSimile (414/525-0725)
Sent By: ; 9495521565; May-30-01 6:58AM; Page 1/1
Thomas J. Muelter
Gallery Properties
6 Cape Cod
Irvine, CA 92620
May29,2001
The Honorable Mayor and City Council Members
% City Clerk, Dubuque City Hall
50 West 13th St.
Dubuque, IA 520014864
REF: City. Financial Assistance for New Construction of Affordable Housing
Star Development and Community Housing Initiative Projects
The Honorable Mayor and City Council Members:
As a residential rental property, owner in the City of l)ubuqne, I am strongly opposed to the City
providing financing to the referenced two projects. Vacancy rates throughout thc City have been
running between 8% and 12% for almost a decade now over the entire price range of apartmant units.
With regard to affordable housing, vacancies are actually higher at the lower price range than at the
higher range. While we, the Housing Providers, are enduring these high vacancy rates; we continue to
pa3' full property tax. We receive no property tax credits, abatements, or tax increment financing
during these periods Of high vacancies. We also spend substantial portions of our operating budget in
the commtmit7 on management, labor, materials aad financing.
The Section 8 Housing Programs have not experienced a shortage o~'participating owners of units to
date according to the Housing Office. Therefbre those people in need of ~fordable housing are
presently receiving assistance from the program and are living in existing housing. Those people
whom these new developments are intended are not presently homeless or without financially assisted
housing. Any new housing will only displace some of our present tenants to the newly constructed
units and further dilute the rental housing market.
The Section 8 Housing Voucher program was created by HUD to disperse assisted persons throughout
the community and to avoid undue concentration of low-income persons. These two proposed large
developments directly oppose HUD thinking in this regard. The City already has several newer
assisted living and senior citizen housing projects. It is difficult to believe that the varied choices and
price range of the existing housing does not meet the needs of the community unless thc effort is to just
replace all the older housing ~Sth new housing. A cursor).' call to any one of these existing projects
does not substantiate the claim that there is a year and half waiting list to get in.
The questions need to be asked} "Where are the 90 tenants going to come from that will occupy tl~e
projects and are these people not already receiving assistance with adequate housing?" Ple.~ give-flae
above concerns serious consideration before changing the present City policy of not prig
assistance for new construction of affordable housing projects. U5- CD
Best regards,
/s/ Thomas J. Mueller