Plastic Center Development Agreement - Second AmendmentMasterpiece on the Mississippi
Dubuque
bierd
All-America City
1
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Second Amendment to Development Agreement with Plastic Center, Inc.
DATE: May 2, 2012
Economic Development Director Dave Heiar recommends City Council approval of the
Second Amendment to the Development Agreement with Plastic Center Inc. to
redevelop properties located at 426 W. 5th Street and 951, 955 and 957 Main Street.
The key elements of the Development Agreement are:
1) The project will receive up to $110,000 ($10,000 per residential unit) in incentives
through the Downtown Housing Incentive Program. The City Council previously
authorized this funding on July 19, 2010.
2) Plastic Center, Inc. will receive a 15 year TIF rebate in the form of a yearly tax
rebates on the increased value of the assessable improvements.
3) A Downtown Rehabilitation Loan Program loan of $300,000 for the Main Street
buildings. The expected year of funding this is FY2012, and was approved by
the City Council on January 7, 2008.
4) Fagade and Planning and Design grants will also be made to the Main Street
buildings. The expected year of funding these grants is FY2012, which was
approved by the City Council on January 7, 2008.
5) Developer will spend at least $2 million to create 11 market -rate residential units
on West 5th and Main Street. This renovation will include commercial space on
the main floors of 951, 955 and 957 Main Street.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
2
Masterpiece on the Mississippi
Dubuque
bitil
All-America City
hill!
2007
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Department
SUBJECT: Second Amendment to Development Agreement with Plastic Center, Inc.
DATE: May 1, 2012
INTRODUCTION
This memorandum presents for City Council consideration a Resolution approving a
Second Amendment to the Development Agreement on the properties located at 426
W. 5t" Street and 951, 955 and 957 Main Street in downtown Dubuque.
BACKGROUND
City staff has worked with Plastic Center, Inc. to formulate a funding package to
redevelop the properties located at 426 W. 5th Street and 951, 955 and 957 Main Street.
Plastic Center, Inc. plans to invest $2,000,000 in redeveloping 951 -957 Main Street to
include creating seven apartments for market -rate rental and maintaining the first floor as
commercial space and creating four apartments in the building located at 426 W. 5th Street.
The original Development Agreement was approved on February 7, 2011. The
Development Agreement provides for several incentives to encourage redevelopment of
the properties.
The key elements of the Development Agreement include the following:
1) The project will receive up to $110,000 ($10,000 per residential unit) in incentives
through the Downtown Housing Incentive Program. The City Council previously
authorized this funding on July 19, 2010.
2) Plastic Center, Inc. will receive a 15 year TIF rebate in the form of a yearly tax
rebates on the increased value of the assessable improvements.
3) A Downtown Rehabilitation Loan Program loan of $300,000 for the Main Street
buildings. The expected year of funding this is FY2012, and was approved by
the City Council on January 7, 2008.
4) Fagade and Planning and Design grants will also be made to the Main Street
buildings. The expected year of funding these grants is FY2012, which was
approved by the City Council on January 7, 2008.
5) Developer will spend at least $2 million to create 11 market -rate residential units
on West 5th and Main Street. This renovation will include commercial space on
the main floors of 951, 955 and 957 Main Street.
DISCUSSION
The Developer requested and the City Council approved on October 3, 2011 a First
Amendment to the Development Agreement to extend the completion date of the project
from October 31, 2011 to April 30, 2012.
The proposed Second Amendment to the Development Agreement provides for an
additional extension of time to complete the Project.
The three buildings at 951, 955 and 957 Main Street are within a week or two of
completion. In the request for the extension, the Developer gave the following reasons
for needing the extension, which mainly pertains to the market -rate residential units on
West 5th; "As we began tearing into that building we realized that there were some
unanticipated structural issues that needed to be addressed. As a result, it made sense
to do a more significant rehab of the building than we had initially planned. In the
drawings we initially submitted to you, we were going to try to keep as much of the
existing layout as possible. However, we have now essentially gutted this building and
are creating 4 duplex apartments. This requires all new kitchens and bathrooms, etc.
We have also decided to strip all the exterior paint off the building in order to restore it to
the original brick look." Redevelopment projects are more complicated and sometimes
do require additional unanticipated work.
The Developer has requested the construction completion date of April 30, 2012 be
extended to July 31, 2012. This will extend the completion date for both the West 5th
and Main Street renovations.
RECOMMENDATION
I recommend that the City Council approve the attached Resolution approving the
Second Amendment to the Development Agreement.
ACTION STEP
The action step for the City Council is to adopt the attached Resolution.
F \USERS \Econ Dev \Betty Jane Block\20120501 Plastic Center Approve DA 2nd Amend Memo doc
Prepared /Return to: David Heiar, Economic Development, 50 W. 13th Street, Dubuque, IA 52001 (563) 589 -4393
RESOLUTION NO 106 -12
RESOLUTION APPROVING THE SECOND AMENDMENT TO THE PLASTIC
CENTER, INC. DEVELOPMENT AGREEMENT
Whereas, a Development Agreement (the Agreement), dated February 7, 2011,
was entered into by and between the City of Dubuque, a municipal corporation of the
State of Iowa (City), and Plastic Center, Inc. (Developer); and
Whereas, City and Plastic Center, Inc. now desire to amend the Development
Agreement as set forth attached Second Amendment.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the Second Amendment of the Plastic Center, Inc.
Development Agreement is hereby approved.
Section 2. That the Mayor is hereby authorized and directed to execute said
Second Amendment 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 implement the terms of the Second Amendment as herein approved.
Passed, approved and adopted this 7th day of May, 2012.
Roy D. Buol, Mayor
Attest:
/ Y r����
Kevin$. irnstahl, C ty Clerk
F: \USERS \Econ Dev \Betty Jane Block\20120501 Plastic Center Reso Second DA amend.doc
SECOND AMENDMENT
TO
DEVELOPMENT AGREEMENT
BETWEEN
THE CITY OF DUBUQUE
AND PLASTIC CENTER, INC.
The Second Amendment to the Development Agreement, dated for reference
purposes the 7th day of May , 2012, is made and entered into by and
between the City of Dubuque, Iowa (City) and Plastic Center, Inc. (Developer).
Whereas City and Developer previously entered into a Development Agreement
dated the 7th of February, 2011 (the Development Agreement); and
Whereas City and Developer agreed to and the City Council approved a First
Amendment to the Development Agreement on October 3, 2011; and
Whereas the First Amendment to the Development Agreement provides in
Section 2.4 that the Minimum Improvements shall be complete by April 30, 2012; and
Whereas the scope of the rehabilitation project has been increased to do more
work than initially anticipated; and
Whereas City and Developer have agreed to amend the Development
Agreement to revise the completion date for the Project; and
Whereas the parties desire to amend the Development Agreement to set forth
such amendment in writing.
THEREFORE, in consideration of the mutual terms and covenants contained
herein, the parties agree as follows:
1. Section 2.4. Section 2.4 is hereby amended by striking such provision and in
lieu thereof placing the following:
Timing of Improvements. Developer hereby agrees that construction of the
Minimum Improvements on the Property shall be commenced within thirty (30)
days after the Closing Date, and shall be substantially completed by July 31,
2012. The time frames for the performance of 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. Except as modified herein, the Development Agreement shall remain in full
force and effect.
CITY OF DUBUQUE, IOWA
By
Roy I. Bu
Mayor
Attest:
Kevin irnstahl
City Clerk
PLASTIC CENTER, INC.
��2
Tony Pfohl, anager
F:\USERS \Econ Dev \Betty Jane Block\20120426_2nd Amendment Plastic Center to DA.doc
Page 1 of 1
David Heiar - 900 Block and 426 -428 West 5th Project
From: Tony Pfohl <tpfohl@fischercos.com>
To: David Heiar' <Dheiar @cityofdubuque.org>
Date: 4/23/2012 1:55 PM
Subject: 900 Block and 426 -428 West 5th Project
Dave,
As mentioned on Friday, we are still not quite finished with our buildings. The 3 buildings on Main Street are just
about complete on the upper floors. We are still finishing up a few odds and ends like painting and installing
windows but all the apartments are within a week or 2 of completion. In fact we signed a lease for the apartment
above the old Betty Jane's space last week. The tenant will be moving in towards the end of next month. We also
have a few showings lined up for this week.
We have not yet found any tenants for the commercial space in those buildings. We continue to talk to a couple of
potential tenants but I'm not sure if or when we will have any signed leases. Our plan is to leave those spaces
pretty raw so we can build out the space to suit the Tenant. We are planning to start marketing those spaces more
aggressively with new signage, etc. in the next week or so.
Certainly I would say that the apartments on Main Street are or will be substantially complete by the end of this
week. However, we still need some time to finish the building at 426 -428 W. 5th street. As we began tearing into
that building we realized that there were some unanticipated structural issues that needed to be addressed. As a
result, it made sense to do a more significant rehab of the building than we had initially planned. In the drawings
we initially submitted to you, we were going to try to keep as much of the existing layout as possible. However, we
have now essentially gutted this building and are creating 4 duplex apartments. This requires all new kitchens and
bathrooms, etc. We have also decided to strip all the exterior paint off the building in order to restore it to the
original brick look. In addition to more money, this is obviously also taking more time than we had
initially expected. It will likely be about 6 -8 weeks before we will be ready to lease out those 4 apartments.
Please let me know what you need from me at this point. We do apologize for the delay but I think the finished
product will be well worth it.
Thanks,
Tony Pfohl
The Fischer Companies
290 Main St.
Dubuque, IA 52001
Ph: (563) 583 -3526 Ext. 17
Fax: (563) 582 -6428
tpfohl @fischercos.com
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