Approving a First Amendment to Development Agreement with CARich Properties, LLC to Redevelop Property at 1706 Central AvenueCity of Dubuque
City Council Meeting
ITEM TITLE:
SUMMARY:
Copyrighted
September 3, 2024
Public Hearings # 03.
Approving a First Amendment to Development Agreement by and
between the City of Dubuque, Iowa and CARich Properties, LLC to
Redevelop Property at 1706 Central Avenue
Proof of publication on notice of public hearing to consider City Council
adopt the attached resolution approving the First Amendment to
Development Agreement by and between the City of Dubuque and
CARich Properties, LLC for the redevelopment of 1706 Central Avenue,
and City Manager recommending approval.
RESOLUTION Approving a First Amendment to Development
Agreement by and between the City of Dubuque, Iowa and CARich
Properties, LLC, including the proposed issuance of urban renewal tax
increment revenue obligations relating thereto
SUGGESTED Suggested Disposition: Receive and File; Adopt Resolution(s)
DISPOSITION:
ATTACHMENTS:
Description Type
MVM Memo City Manager Memo
Staff Memo Staff Memo
First Amendment Supporting Documentation
Resolution Resolutions
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
Dubuque
All -America City
1IIr
II
2007.2012.2013
2017*2019
SUBJECT: Approving a First Amendment to Development Agreement by and
between the City of Dubuque, Iowa and CARich Properties, LLC to
Redevelop Property at 1706 Central Avenue
DATE: August 28, 2024
Economic Development Director Jill Connors is recommending City Council adopt the
attached resolution approving the First Amendment to Development Agreement by and
between the City of Dubuque and CARich Properties, LLC for the redevelopment of
1706 Central Avenue.
The First Amendment to Development Agreement provides for the following incentives:
1. The City commits to a Housing Creation Grant of $110,000 (11 units x $10,000
per unit) through the Downtown Housing Creation Program for apartments that
meet the City of Dubuque's Housing Rehabilitation Standards and that receive a
certificate of occupancy.
2. The City commits to a Housing TIF Affordable Unit Creation Grant of $110,000
(11 units x $10,000 per unit) through the LMI Housing Assistance Program for
each rental unit that qualifies for LMI housing creation and receives a Certificate
of Completion up to a maximum of eleven (11) apartments. To qualify, the
housing units must meet the definitions outlined by Iowa Code Section
403.17(12) and 403.17(14).
3. The City commits to 15 years of Tax Increment Financing rebates estimated to
not exceed $106,000.
Previously committed Facade, Design & Planning, and Financial Consultant grants
totaling up to a maximum of $35,000 continue to remain committed to the project.
Additionally, the Developer must accept applications from prospective tenants with
housing choice vouches that are otherwise qualified prospective tenants.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM:sv
Attachment
cc: Crenna Brumwell, City Attorney
Cori Burbach, Assistant City Manager
Jill Connors, Economic Development Director
Masterpiece on the Mississippi
Dubuque
ketri
All -America Cily
11111.1
2007*2012*2013
2017*2019
TO: Michael C. Van Milligen, City Manager
FROM: Jill M. Connors, Economic Development Director
Economic Development
Department
50 West 13th Street
Dubuque, Iowa 52001-4864
Office (563) 589-4393
TTY (563) 690-6678
http://www.cityofdubuque.org
SUBJECT: Approving a First Amendment to Development Agreement by and
between the City of Dubuque, Iowa and CARich Properties, LLC to
Redevelop Property at 1706 Central Avenue
DATE: August 26, 2024
INTRODUCTION
This memorandum presents for City Council consideration and action the attached
Resolution approving a First Amendment to Development Agreement between the City
of Dubuque and CARich Properties, LLC.
BACKGROUND
City Council previously approved a Development Agreement with CARich Properties,
LLC, dated for reference August 3, 2020, by Resolution No. 241-20. The Agreement
includes a $100,000 Housing Creation Grant as well as a Fagade Grant package up to
$35,000 ($10,000 Fagade Grant, $10,000 Planning & Design Grant, and $15,000
Financial Consultant Grant) to redevelop a vacant, mixed -use building at 1706 Central
Avenue.
DISCUSSION
The rehabilitation of 1706 Central has been a large undertaking requiring further
assistance and changes in design to the project in order to qualify for additional funding.
The Developer has determined the project has the capacity for an additional housing
unit and has committed to making all 11 housing units affordable rentals. Additionally,
since the Development Agreement was executed, the City Council has given additional
support to the creation of housing in the Greater Downtown 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 Development Agreement includes 15
years of tax increment financing for the project.
The First Amendment to Development Agreement provides for the following incentives:
1. The City commits to a Housing Creation Grant of $110,000 (11 units x $10,000
per unit) through the Downtown Housing Creation Program for apartments that
meet the City of Dubuque's Housing Rehabilitation Standards and that receive a
certificate of occupancy.
2. The City commits to a Housing TIF Affordable Unit Creation Grant of $110,000
(11 units x $10,000 per unit) through the LMI Housing Assistance Program for
each rental unit that qualifies for LMI housing creation and receives a Certificate
of Completion up to a maximum of eleven (11) apartments. To qualify, the
housing units must meet the definitions outlined by Iowa Code Section
403.17(12) and 403.17(14).
3. The City commits to 15 years of Tax Increment Financing rebates estimated to
not exceed $106,000.
Previously committed Fagade, Design & Planning, and Financial Consultant grants
totaling up to a maximum of $35,000 continue to remain committed to the project.
Additionally, the Developer must accept applications from prospective tenants with
housing choice vouchers (issued under the U.S. HUD's Section 8 voucher program or a
similar program) that are otherwise qualified prospective tenants.
This project aligns with the City Council goal of Livable Neighborhoods and Housing:
Great Place to Live.
RECOMMENDATION/ ACTION STEP
I recommend the City Council adopt the attached resolution approving the First
Amendment to Development Agreement between the City of Dubuque and CARich
Properties, LLC for the redevelopment of 1706 Central Avenue.
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FIRST AMENDMENT
TO
DEVELOPMENT AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
CARICH PROPERTIES, LLC
This First Amendment to Development Agreement, dated for reference purposes
the day of jep fe ( her , 2024, is made and entered into by the City of Dubuque,
Iowa, a municipality ("City"), and CARich Properties, LLC, an Iowa limited liability
company ("Developer"). City and Developer are hereinafter sometimes collectively
referred to as the Parties.
Whereas, City and Developer previously entered into that certain Development
Agreement dated August 3, 2020 (the "Agreement") with respect to the matters specified
therein; and
Whereas, City and Developer desire to modify the Agreement as set forth herein.
NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL TERMS AND
COVENANTS CONTAINED HEREIN, THE RECEIPT AND SUFFICIENCY OF WHICH
ARE ACKNOWLEDGED BY THE PARTIES, THE PARTIES AGREE AS FOLLOWS:
Section 1. Section 1.3 of the Development Agreement is hereby amended to
read as follows:
1.3 Closing. The closing shall take place on the Closing Date which shall
be the 2nd day of September, 2024, or other such date as the parties shall
agree in writing but in no event, shall the Closing Date be later than the 1st
day of November, 2024 without written consent of City in its sole discretion.
Consummation of the Closing shall be deemed an agreement of the parties
to this Agreement that the conditions of Closing shall have been satisfied or
waived.
Section 2. Section 2 of the Development Agreement is hereby amended to read
as follows:
2.1 Required Minimum Improvements. Developer will make a capital
investment of approximately One Million Five Hundred Thousand Dollars
($1,500,000) to improve the Property (the Minimum Improvements). The
Minimum Improvements shall consist of the creation of eleven (11)
apartments.
2.4 Timing of Improvements. Developer hereby agrees that construction
of the Minimum Improvements on the Property shall be commenced within
07152024
thirty (30) days after the Closing Date, and shall be substantially completed
by December 31, 2025. The time frames for performing these obligations
shall be suspended due to unavoidable delays meaning delays, outside the
control of the party claiming its occurrence in good faith, which are the direct
result of strikes, other labor troubles, unusual shortages of materials or
labor, unusually severe or prolonged bad weather, acts of God, fire or other
casualty to the Minimum Improvements, litigation commenced by third
parties which, by injunction or other similar judicial action or by the exercise
of reasonable discretion directly results in delays, or acts of any federal,
state or local government which directly result in extraordinary delays. The
time for performance of such obligations shall be extended only for the
period of such delay.
2.6 Security Cameras. Developer shall install security cameras on the exterior of all
newly constructed buildings on the Property and register said cameras with the "Secure
Dubuque Personal Surveillance System" described at
https://cityofdubuque.org/2980/Secure-Dubuque.
Section 3. Section 3.1 of the Development Agreement is hereby amended to
read as follows:
3.1 Downtown Housing Incentive Grant.
(1) City agrees to provide to Developer, on the terms and conditions set forth
herein, a grant in the amount of One Hundred Ten Thousand Dollars
($110,000.00).
(2) The grant funds shall be paid in Ten Thousand Dollar ($10,000.00)
payments for each market -rate apartment that receives a Certificate of
Completion up to a maximum of eleven (11) market rate apartments.
Section 3 of the Development Agreement is hereby amended by adding the following
Sections 3.6, 3.7, 3.8, 3.9, and 3.10:
3.6 Housing TIF Affordable Unit Creation Grant.
(1) City agrees to provide to Developer, on the terms and conditions set forth
herein, a grant in the amount of One Hundred Ten Thousand Dollars
($110,000.00).
(2) The grant shall be paid in Ten Thousand Dollar ($10,000.00) payments for
each rental unit that qualifies for LMI housing creation and receives a Certificate
of Completion up to a maximum of eleven (11) apartments. To qualify, the
housing units must meet the definitions outlined by Iowa Code Section
403.17(12) and 403.17(14).
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3,7 Economic Development Grants to Developer. For and in consideration of
Developer'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 Developer 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
November 1, 2028
November 1, 2029
November 1, 2030
November 1, 2031
November 1, 2032
November 1, 2033
November 1, 2034
November 1, 2035
November 1, 2036
November 1, 2037
November 1, 2038
November 1, 2039
November 1, 2040
November 1, 2041
May 1, 2028
May 1, 2029
May 1, 2030
May 1, 2031
May 1, 2032
May 1, 2033
May 1, 2034
May 1, 2035
May 1, 2036
May 1, 2037
May 1, 2038
May 1, 2039
May 1, 2040
May 1,2041
May 1, 2042
pursuant to Iowa Code Section 403.9 of the Urban Renewal Law, in amounts equal to
a portion of the tax increment revenues collected by City under Iowa Code Section
403.19 (without regard to any averaging that may otherwise be utilized under Iowa
Code Section 403.19 and excluding any interest that may accrue thereon prior to
payment to Developer) during the preceding six-month period in respect of the
Minimum Improvements constructed by Developer (the Developer Tax Increments).
For purposes of calculating the amount of the Economic Development Grants provided
in this Section, the Developer 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, 2021 ($136,230). The Developer
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, 2021 and (iv) any other portion required to be excluded by Iowa law, and
thus such incremental taxes will not include all amounts paid by Developer as regular
property taxes.
3.8 To fund the Economic Development Grants, City shall certify to the County prior to
December 1, 2026, its request for the available Developer Tax Increments resulting from
the assessments imposed by the County as of January 1 of that year and each year
thereafter until and including January 1, 2042, to be collected by City as taxes are paid
during the following fiscal year and which shall thereafter be disbursed to the Developer
3
on November 1 and May 1 of that fiscal year. (Example: if City so certifies in December,
2026, the Economic Development Grants in respect thereof would be paid to the
Developer on November 1, 2027, and May 1, 2028.)
3.9 The Economic Development Grants shall be payable from and secured solely and
only by the Developer Tax Increments paid to City that, upon receipt, shall be deposited
and held in a special account created for such purpose and designated as the 1706
Central TIF Account of City. City hereby covenants and agrees to maintain its TIF
ordinance in force during the term hereof and to apply the incremental taxes collected in
respect of the Minimum Improvements and allocated to the 1706 Central TIF Account to
pay the Economic Development Grants, as and to the extent set forth in Section 3.2
hereof. The Economic Development Grants shall not be payable in any manner by other
tax increments revenues, or by general taxation or from any other City funds. City makes
no representation with respect to the amounts that may be paid to Developer as the
Economic Development Grants in any one year and under no circumstances shall City in
any manner be liable to Developer so long as City timely applies the Developer Tax
Increments actually collected and held in the 1706 Central TIF Account (regardless of the
amounts thereof) to the payment of the Economic Development Grants to Developer as
and to the extent described in this Section.
3.10 City shall be free to use any and all tax increment revenues collected in respect of
other properties within the Project Area and the remaining actual amount of the property
taxes paid by Developer to City, or any available Developer Tax Increments resulting from
the termination of the annual Economic Development Grants under Section 3.7 hereof,
for any purpose for which such tax increment revenues may lawfully be used pursuant to
the provisions of the Urban Renewal Law, and City shall have no obligations to Developer
with respect to the use thereof.
(1) Non-appropriation/Limited Source of Funding. 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 3.10(1). 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. Such
resolution shall be considered for adoption by the City Council at a public hearing
held on or before December 1st of any year and notice of such hearing shall be
given to Developer at least 30 days prior to the hearing. The resolution shall be
approved by not less than a majority of the total number of members to which the
City Council is entitled. Developer and all other persons having an interest in the
matter shall be given an opportunity to be heard at such hearing and prior to the
adoption of such resolution.
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(a) 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.
(b) 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 Iowa Code §403.19(2).
(c) The right of non -appropriation reserved to City in this Section 3.10(1)
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 4. Section 4.2 of the Development Agreement is hereby amended to
read as follows:
4.2 Operation of Development Property; Public Assistance Source of
Income; Housing Vouchers. For and in consideration of the grant offered
under this Agreement, during the operation of the Property as a rental
residential property, Developer shall accept, or cause to be accepted,
applications from prospective tenants with a public assistance source of
income including but not limited to housing vouchers issued under the U.S.
HUD's Section 8 voucher program or a similar program who are otherwise
qualified prospective tenants. Developer shall not deny any tenant a lease
based on a public assistance source of income. A public assistance source
of income means income and support derived from any tax supported
5
federal, state or local funds, including, but not limited to, social security,
supplemental security income, temporary assistance for needy families,
family investment program, general relief, food stamps, and unemployment
compensation, housing choice voucher subsidies and similar rent subsidy
programs. This Section 4.2 shall survive the termination of this Agreement.
If Developer, or Developer's successors or assigns violate the requirements
of this Section 4.2 as determined by the City Manager in the City Manager's
sole discretion after the termination of this Agreement, Developer or
Developer's successors or assigns shall not be eligible for any City financial
assistance programs.
Section 4. All other terms of the Development Agreement, as amended, shall
remain in full force and effect.
CITY OF DUBUQUE, IOWA
ATTEST:
Adrienne N. Breitfelder, City Clerk
6
CARICH PROPERTIES, LLC
2 /i
ris Ric ard, M
aging member
Prepared by: Ian C. Hatch, Economic Development. 1300 Main Street Dubuque IA 52001, 563 589-4393
Return to Adrienne N. Breitfelder, City Clerk, 50 W. 13th St., Dubuque, IA 52001, (563) 589-4100
RESOLUTION NO. 279-24
APPROVING A FIRST AMENDMENT TO DEVELOPMENT AGREEMENT BY AND
BETWEEN THE CITY OF DUBUQUE, IOWA AND CARICH PROPERTIES, LLC,
INCLUDING THE PROPOSED ISSUANCE OF URBAN RENEWAL TAX INCREMENT
REVENUE OBLIGATIONS RELATING THERETO
WHEREAS, City and CARich Properties, LLC entered into a Development
Agreement, dated the 3rd day of August 2020, providing for a Facade Grant, a Planning &
Design Grant, a Financial Consultant Grant, and a Housing Creation Grant; and
WHEREAS, the City Council, by Resolution No. 257-24, dated August 19, 2024,
declared its intent to approve a First Amendment to Grant Agreement by and between the
City of Dubuque, Iowa, and CARich Properties, LLC; and
WHEREAS, pursuant to published notice, a public hearing was held on the
proposed First Amendment to Grant Agreement on September 3, 2024 at 6:30 p.m.; and
WHEREAS, it is the determination of the City Council that approval of the First
Amendment to Development Agreement for redevelopment of the Property by CARich
Properties, LLC, according to the terms and conditions set out in the Development
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 Development Agreement by and between
the City of Dubuque, Iowa, and CARich Properties, 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 Development 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 3rd day of September, 2024.
Attest:
Adrienne N. Breitfelder, City Clerk
Bracd C(Mayor
2
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:
08/23/2024
and for which the charge is 47.31
Su scribed to before me, a Notary ''.. is in and for
Dubuque County, Iowa,
this 23rd day of August, 2024
— Notary in and for DubuqueCounty, Iowa.
JANET K. PAPE
Commission Number 199659
My Commission Expires
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 3rd day of September,
2024, 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 Development Agreement between the City of
Dubuque, Iowa and CARich Properties, 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
Area, consisting of the funding of economic development grants
for CARich Properties, LLC , under the terms and conditions of
the Urban Renewal Plan for the Greater Downtown Urban Renewal
Area Economic Development Area. 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 $106,000.
At the meeting, the City Council will receive oral and
written comments from any resident or property owner of said
City to the above action. The official agenda will be posted
the Friday before the meeting and will contain public input
options. The City Council agenda can be accessed at
https://cityofdubuque.novusagenda.com/AgendaPublic/ or by
contacting the City Clerks Office at 563-589-4100,
ctyclerk@cityofdubuque.org.
Written comments regarding the above public hearings may be
submitted to the City Clerks Office via email at
ctyclerk@cityofdubuque.org or by mail to City Clerk's Office,
City Hall, 50 W. 13th St., Dubuque, IA 52001, before said
time of public hearing. At said time and place of public
hearings the City Council will receive any written comments.
Copies of supporting documents for the public hearings are
on file in the City Clerk's Office and may be viewed Monday
through Friday between 8:00 a.m. and 5:00 p.m.
Individuals with limited English proficiency, vision,
hearing, or speech impairments requiring special assistance
should contact the City Clerk's Office at (563) 589-4100, TDD
(563) 690-6678, 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 19th day
of August 2024.
Adrienne N. Breitfelder,
City Clerk
it 8/23