Rehab Loan 378 Main - C. WolffCITY OF DUBUQUE, IOWA
MEMORANDUM
June 13, 2001
TO:
FROM:
SUBJECT:
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Downtown Rehabilitation Loan for 378 Main Street
Acting Economic Development Director Pam Myhre is recommending approval of a
$150,000 Downtown Rehabilitation Loan Program loan to Mr. Clark Wolff, the owner of
the building located at 378 Main Street. Mr. Wolff proposes to renovate this building for
use as a restaurant on the first floor and four apartments on the upper two floors. The
building's upper floors have never been occupied. Employment is estimated at eight full
time and four part time employees. Instead of deferring the principal payments during
the first five years of the loan, Mr. Wolff would like to pay both principal and interest
during the 20-year term.
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
Cindy Steinhauser, Assistant City Manager
Pamela Myhre, Acting Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
TO:
FROM:
SUBJECT:
Michael Van Milligen
Pamela Myhre, Acting Economic Development Director
Downtown Rehabilitation Loan for 378 Main Street
June 11, 2001
INTRODUCTION
This memorandum presents for City Council consideration a resolution approving a
request from Clark Wolff for funding from the City's TIF-funded Downtown
Rehabilitation Loan Program to renovate a building located at 378 Main Street (former
Monte Carlo Restaurant property).
BACKGROUND
On November 3, 1997, the City Council established by Resolution #458-97 revisions to
the existing Downtown Rehabilitation Loan Program to encourage and enhance private
investment and rehabilitation efforts in the Downtown Dubuque Urban Renewal District.
The program, capitalized with funds available through the City's tax increment financing
district, now provides for a maximum of $300,000 in attractive Iow-interest loan monies.
The program is unique in that grants of up to $10,000 are available to offset necessary
predevelopment costs. The program also includes a forgivable loan element whereby
qualifying applicants may have up to the full amount of the loan forgiven as an incentive
for the creation of new employment and housing opportunities in the district.
Mr. Wolff proposes to renovate this building for use as a restaurant on the first floor and
four apartments on the upper two floors. The building's upper floors have never been
occupied. Employment is estimated at 8 FT and 4 PT employees.
DISCUSSION
The owner proposes to borrow $150,000 from the City's loan program to assist this
rehabilitation project. Mr. Wolff has proposed payment terms that are more favorable to
the City than what are offered in the loan program. Instead of deferring the principal
payments during the first five years of the loan, he would like to pay both principal plus
interest during the full term of the loan. That will allow repayments to revolve back into
the loan fund at a quicker pace. If approved, approximately $100,000 will remain
uncommitted in this loan program.
A copy of the application for loan funds is attached. Total project costs are estimated to
be $258,700. The project will commence in June, 2001 and is scheduled for
completion by December 31, 2001.
Additional terms and conditions of the proposed Downtown Rehabilitation Loan are
identified in the attached commitment letter. If the loan is approved by the City Council,
this commitment letter would be executed by both the Mayor and the property owner.
RECOMMENDATION
Staff has reviewed the application and found it to be in keeping with the requirements of
the Downtown Rehabilitation Loan Program. The project appears financially sound.
I recommend that the City Council adopt the attached resolution approving Mr. Wolff's
request for $150,000 and authorizing the preparation and execution of the necessary
loan agreement. The resolution directs the City Manager to prepare and execute the
final documents as per the terms and conditions of the attached commitment letter.
ACTION STEP
The action step for the City Council is to adopt the attached resolution.
attachments
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March 28, 2001
City of Dubuque
Community & Economic Development Depatlment
Attn: Pamela Myhre
50 West 13m Street
Dubuque, IA 52001-4864
RE: Application for Downtown Rehab'ditafion Loan Program
I would like to apply for financial assistance through the Downtown Rehab'flitation Loan
program. Below is the following requested information:
Clark W, Wolff
15 South Main Street, Dubuque, IA 52003
Phone: 563/556-2434 Fax: 563/556-2436
Soc. Sec.
2. Property Address: 378 Main Street, Dubuque, IA
I want to rehabilitate the existing building by putting in a restaurant on the
main floor and adding two apartments each on the second and third floors. By
rehabilitating this building, we hope to keep the residents of Dubuque and the
tourists attracted to downtown Dubuque.
4. I am looking at future employment of eight full-time employees and four part-
time employees. There would be four apartments created for future housing.
5. Enclosed you will find proof of building ownership.
6. Amount requested for loan is $150,000.00
7. The proposed security on the loan will be done by obtaining a second
mortgage.
The preliminary projected budget is $258,700.00. Enclosed are cost estimates from the
contractor.
The preliminary construction schedule is slated to begin June 1, 2001 with a completion
date of December 31, 2001.
P~e2
PROJECTED PERFORMANCE FOR 2002 & 2003
Rental Income
Main Floor - Restaurant
Apartments (4)~$300/Mo.
Total Rental Income
Amount Per Month
$12oo.oo
$1,200.00
Amount Per Year
$1~400.00
$14,400.00
$28,800.00
Expenses
Insurance
Property Taxes
Utilities responsibility of tenants
~otal~Expenses
AmountPerMonth
$ 800.00annually
$1,546.00annually
Amount Per Year
$ 800.00
$ 1,546.00
$ 2,346.00
Debt Service
Bank-Loan Value $50,000.00
City- Loan Value $150,000.00
Total Debt Services
Amount Per Month
$ 400.00
$ 831.90
Amount Per Year
$ 4,800.00
$ 9,982.80
$14,782.80
Net Income
Rental Income
Less Expenses
Less Debt Services
Total Net Income
$28,800.00
2,346.00
-1&782.80
$11,671.20
Office of the Mayor
and City Council
City Hall, 50 West 13th S~eet
Dubuque, Iowa 52001-4864
Clark W. Wolff
15 South Main Street
Dubuque, Iowa 52003
June 18, 2001
RE: Letter of Commitment/Downtown Rehabilitation Loan Program
378 Main Street
Dear Mr. Wolff:
I am please to inform you that your application for financial assistance for the rehabilitation of
378 Main Street has been accepted and approved bythe Dubuque City Council.
The following offer is made:
Source of Funds:
Amount of Commitment:
Interest Rate:
Term of Loan:
Payment Schedule:
Form of Security:
Downtown Rehabilitation Loan Program
$150,000
Three perccmt (3%) per annum
Twenty (20) years
Monthly principal plus interest for the full term of the loan.
You may prepay this loan in whole or in part ar any time without
penalty.
The loan shall be secured by a second mortgage lien on the
property plus a personal guarantee to satisfy the outstanding
balance associated with this loan.
Service People Integrity Responsibility Innovation reamwork
Commitment Letter
378 Main Street
Page 2
Purpose of the Loan:
Rehabilitation of the exterior and interior of this building for use as
a restaurant and two apartments each on the second and third
floors.
Conditions of this Commitment:
(a) An "after rehab" appraisal must be submitted to the Economic Development Department
prior to the scheduled loan closing. The cost of said appraisal shall be incurred by the
property owner.
A title opinion must be completed at the expense of the property owner. A copy of said
document must be provided prior to the scheduled loan closing.
(c)
All exterior work must be reviewed and approved by the Citfs Historic Preservation
Commission.
(d) A loan agreement must be signed no later than August 30, 2001.
(e)
The project is to be completed in accordance with the regulations set forth for the City of
Dubuque's Downtown Rehabilitation Loan Program.
Additional Commitments:
(a) A grant not to exceed ten thousand dollars ($10,000) will be available to offset
documented predevelopment costs, architectural and engineering fees and other
miscellaneous soft costs. A determination must be made by the City that the project is
substantially complete and satisfies the conditions of the loan prior to the release of any
grant monies.
(b)
A rebate equal to two thousand dollars ($2,000) may be forgiven for each new full-time
job or full-time equivalent created witlfin two years of the execution of the loan
documents and maintained by the applicant or his/her tenant for a period of not less than
three years and/or for each new housing unit created. The amount of the loan to be
forgiven shall be determined by the City on the fifth anniversary of the loan based on
documented evidence of job creation or new housing unit created.
This commitment is valid for twenty-one (21) days from the date of this letter. If you wish to
accept the offer, you must return the acknowledgment. Failure to return written acknowledgment
will be cause for the commitment to lapse. This commitment Offer shall lapse if construction on
the proposed project does not start within ninety (90) days of the loan closing.
Commitment Letter
378 Main Street
Page 3
If the terms offered do not meet your approval, or if you have any questions regarding the
conditions of this commitment, please contact Pamela Myhre, Economic Development
Department, at 319/589-4393.
Sincerely,
Terrance M. Duggan
Mayor
We have reviewed the above offer and accept the Downtown Rehabilitation Loan and all of the
terms of this commitment letter.
Clark W. Wolff, Property Owner
Date
RESOLUTION NO. 276-01
A RESOLUTION AUTHORIZING A LETTER OF COMMITMENT AND
ADDITIONAL ACTIONS CONCERNING A DOWNTOWN REHABILITATION
LOAN TO CLARK WOLFF FOR PROPERTY AT 378 MAIN STREET.
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 activities; and
Whereas, the loan application from Clarke Wolff for property at 378 Main Street
meets the requirements of this program; and
Whereas, a Commitment Letter, hereto attached and by this reference made a
part hereof, sets forth the terms and conditions of Clark Wolff=s participation in the
Downtown Rehabilitation Loan Program.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the application of Clark Wolff for participation in the Downtown
Rehabilitation Loan Program is hereby accepted and approved.
Section 2. That the Mayor is hereby authorized to execute, on behalf of the
City Council of the City of Dubuque, Iowa, the attached Commitment Letter and to
forward said letter to Clark Wolff for review and approval.
Section 3. That the City Manager beand he is hereby directed to prepare,
upon execution and receipt of the attached Commitment Letter by the applicant, the
necessary loan documents in accordance with the terms and conditions set forth in said
Commitment Letter.
Section 4. 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 funds from the Downtown Rehabilitation Loan
Program, in accordance with the terms and conditions of the executed agreement.
Passed, approved and adopted this 18th day of June, 2001.
Terrance M. Duggan, Mayor
Attest:
Jeanne F. Schneider, City Clerk
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