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Cooper Bldg, 299 Main, LoanMEMORANDUM November 14, 2001 TO: FROM: SUBJECT: The Honorable Mayor and City Council Members Michael C. Van Milligen, City Manager Commercial/Industrial Building Rehabilitation Loan 299 Main Street Economic Development Director Bill Baum is recommending approval of a Commercial/Industrial Building Rehabilitation Loan not to exceed $100,000 for work to be done at the Cooper Wagon Works project. This is in response to some unexpected expenses incurred in the project, including rebuilding retaining walls under the curb and sidewalk area, waterproofing the ceiling of the vault area under the sidewalks, and . installing new sidewalks, including an ADA ramp for the main entrance. I concur with the recommendation and respectfully request Mayor and City Council approval. Michael C. Van Milligen MCVM/jjh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager William Baum, Economic Development Director CITY OF DUBUQUE, IOWA MEMORANDUM TO: FROM: SUBJECT: November 13, 2001 Michael Van Milligen, City Manager William Baum, Economic Development Director Commercial/Industrial Building Rehabilitation Loan 299 Main Street INTRODUCTION This memorandum presents for City Council consideration a resolution approving a loan request from Cooper Development Company, LLC for funding through the City's Community Development Block Grant (CDBG) Commercial/Industrial Building Rehabilitation Loan Program for the exterior repairs and reconstruction of 299 Main Street. The letter of application is attached. BACKGROUND The Commercial/Industrial Building Rehabilitation Loan Program provides Iow interest loan monies to property owners in the City's Iow and moderate income areas to rehabilitate the exterior of their commercial or industrial buildings and to complete code- compliance activities. This program was first authorized in FY 1995 and currently has a budget of $600,000 in CDBG funds. DISCUSSION Cooper Development Company is undergoing the complete renovation of the former Cooper Wagon Works building at 299 Main Street. The project is well underway and had been partially financed with a $300,000 City Downtown Rehabilitation Loan. During construction, problems related to the adjacent 3rd Street pavement, curbs and sidewalk have been encountered. While the City remains responsible for street improvements, the property owners have the responsibility to repair sidewalks and the underground vault area (under the sidewalk) that is part of the useable space in their lower level nightclub and bar. The unexpected expenses include rebuilding retaining walls under the curb/sidewalk, waterproofing the ceiling of the vault area under the sidewalks, and installing new sidewalks, including an ADA ramp for the main entrance. The City has requested that the new sidewalks be similar in design to the public parking lot across 3rd Street. Bids for this work indicate that the project will cost approximately $100,000. The owners have requested that the City provide a favorable loan to cover these unexpected expenses and have made application for up to $100,000 from the Commercial/Industrial Building Rehabilitation Loan Program to assist in the exterior work. Flexible loan terms are being proposed to assist the cash flow of this new start-up project. If the loan is approved by the City Council, a commitment letter will be executed by the Mayor and the owners. The commitment letter is attached with details of the financing terms. The property owners are prepared to begin work within thirty days of loan closing with construction to be completed shortly thereafter. RECOMMENDATION Staff has reviewed the loan request and finds it to be in keeping with the requirements of the Commercial/Industrial Building Rehabilitation Loan Program. It is my recommendation that the City Council adopt the attached resolution approving this loan request for up to $100,000 and authorizing the preparation and execution of all necessary loan documents by the City Manager. ACTION STEP The action step for the City Council is to adopt the attached resolution. attachments Prepared by: Pamela Myhre Economic Development Planner F:\USERS\Pmyh re\WPDOCS~.OANDOC\COOPER\comindloan.mem.doc RESOLUTION NO. 498-01 A RESOLUTION APPROVING A COMMUNITY DEVELOPMENT BLOCK GRANT COMMERCIAL/INDUSTRIAL BUILDING REHABILITATION LOAN OF UP TO ONE HUNDRED THOUSAND DOLLARS ($t00,000) FOR PROPERTY LOCATED AT 299 MAIN STREET AND AUTHORIZING A LETTER OF COMMITMENT. Whereas, the City of Dubuque, Iowa, has created a Commercial/Industrial Building Rehabilitation Loan Program for the purpose of stimulating reinvestment in the City's Iow and moderate income areas; and Whereas, the City of Dubuque, Iowa, encourages the use of this loan program to ~inance exterior rehabilitation and code compliance activities; and Whereas, Cooper Development Company, LLC, owners of property at 299 Main Street, have presented a loan application for the exterior rehabilitation of said property which meets the requirements ofthis program; and Whereas, a Commitment Letter, hereto attached and bythis reference made a part hereof, sets forth the terms and conditions of the owners' participation in the Commercial /Industrial Building Rehabilitation Loan Program. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the application of Cooper Development Company, LLC for participation in the Commercial/Industrial Building 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 brward said letter to the owners. Section 3. That the City Manager is hereby directed to prepare, upon receipt oran executed Commitment Letter from the owners, 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 Commercial/Industrial Building Rehabilitation Loan Program, in accordance with the terms and conditions ofthe executed agreement. Passed, approved and adopted this'19th day of November, 2001. /s/ Terrance M. Duggan, Mayor Attest: /s/ Jeanne F. Schneider, City Clerk F:\US ERS\Pm~hre\WPDOCS~_OAN DOC\COOPER~comindloan.res.doc The Cooper Development Company L.L.C. November 13, 2001 CommercialJlndustrial Building Rehabilitation Loan We at the Cooper Development Company, LLC of 299 Main street in Dubuque wish to apply for the Commercial/Industrial Building Rehabilitation Loan program. We Cooper Development Company, LLC 475 Valeria Street · Dubuque, Iowa 52001 · 563-556-4577 / 800-322-8397 · 563-556.4767 Fax Office of the Mayor and City Council City Hall 50 West 13th Street Dubuque, Iowa 52001-4864 November 19, 2001 Cooper Development Company, LLC 475 Valeria Dubuque, Iowa 52001 RE: Letter of Commitment Dear Sirs: I am pleased to inform you that your application for financial assistance for the rehabilitation of your building at 299 Main Street has been accepted and approved by the Dubuque City Council. The following offer is made: Commercial/Industrial Building Rehabilitation Loan Program up to $100,000 Three percent (3%) per annum Ten (10) years Monthly interest-only payments for three (3) years with monthly principal and interest payments years four (4) through ten (10). You may prepay this loan in whole or in part at any time without penalty. Form of Security: The loan shall be secured by a third mortgage lien on the land building and improvements. Purpose of the Loan: The rehabilitation of exterior under-curb retaining wall, under sidewalk vault and ceiling and sidewalks. Conditions of this Commitment: (a) The project is to be completed in accordance with the regulations set forth for the City of Dubuque's Commercial/Industrial Building Rehabilitation Loan Program, including Davis-Bacon prevailing wage rate requirements. Source of Funds: Amount of Commitment: Interest Rate: Term of Loan: Payment Schedule: Service People Integrity Responsibility Innovation Teamwork (b) The City's Historic Preservation Commission must review and approve all exterior changes to this property. (c) The sidewalk shall reflect similar design pattern and colors as constructed on the City's publi© parking lot at 3rd and Main Street but will be stamped concrete. (d) Cooper Development Company, LLC shall execute, at loan closing, a release to the City releasing the City from any claims for damage to borrower's property alleged to have been caused by the City. 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 acknowledgement. Failure to return written acknowledgement 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. If you have any questions regarding the conditions of this commitment, please contact Pamela Myhre, Economic Development Department, at 589-4393. Sincerely, Terrance M. Duggan Mayor ACKNOWLEDGEMENT I have reviewed the above offer and accept the Commercial/Industrial Building Rehabilitation Loan and all of the terms of this commitment letter. Scott A. Neuwoehner, Managing Member Cooper Development Company, LLC Date Greg A. Prehm, Member Cooper Development Company, LLC Date F:\USERS\Pm~hre\WPDOCS\LOAN DOC\COOPER\comindloan.lt r.doc