Marquette Hall - Petition for Urban Revitalization Designation_Sacred Heart School Copyright 2014
City of Dubuque Action Items # 7.
ITEM TITLE: Marquette Hall- Petition for Urban Revitalization Designation
SUMMARY: City Manager recommending approval of a petition for Urban Revitalization
Area Designation from Cohen-Esrey Affordable Partners for the former
Sacred Heart Elementary School, being called Marquette Hall, at 2222
Queen Street.
RESOLUTION Find that the designation of the Marquette Hall Urban
Revitalization Plan is necessary in the interest of the public health, safety,
and welfare of the residents of the City of Dubuque, Iowa
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt Resolution(s)
ATTACHMENTS:
Description Type
❑ Marquette Hall Petition for Urban Revitalization Designation-MVM Memo City Manager Memo
❑ Staff Memo Supporting Documentation
❑ Petition for Designation Supporting Documentation
❑ Exhibit 5S Staff Memo
❑ Resolution Resolutions
THE CITY OF Dubuque
U E I
erica .i
Masterpiece on the Mississippi 2007-2012-2013
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Petition for Designation of Marquette Hall Urban Revitalization Area
District
Cohen-Esrey Affordable Partners
DATE: November 12, 2015
Housing & Community Development Department Director Alvin Nash recommends
approval of a petition for Urban Revitalization Area Designation from Cohen-Esrey
Affordable Partners for the former Sacred Heart Elementary School, being called
Marquette Hall, at 2222 Queen Street.
Urban Revitalization Chapter 404 of the Iowa Code (Urban Revitalization Act)
authorizes cities to designate areas as urban revitalization areas. Improvements to
qualified real estate within these designated areas may receive a total or partial
exemption from property taxes for a specified number of years. The exemptions are
intended to stimulate private investment by reducing tax increases that usually
accompany property improvements. This additional private investment provides a long-
term increase or stabilization in the area's tax base, enhances the visibility of
revitalization areas and/or supports important city objectives such as historic
preservation, economic development and affordable housing development.
The Developers propose to redevelop the former Sacred Heart Elementary School,
located at 2222 Queen Street, into 28 historic and affordable senior apartments.
Cohen-Esrey Affordable Partners development will preserve and restore the historic
Marquette Hall, built in 1915. The restored structure will provide affordable housing for
seniors in the North End Neighborhood of Dubuque. The project utilizes a number of
funding sources for redevelopment including private funding, State and Federal
Historic Tax Credits, Low Income Housing Tax Credits, and requests support from the
City of Dubuque through the Urban Revitalization Tax Exemption program and by
selling a City-owned alley for one dollar, a discount off market rate.
The area is established under 404.1(3) and is defined as an area in which there is a
predominance of buildings or improvements which by reason of age, history,
architecture or significance should be preserved or restored to productive use. The
basis for an exemption under 404.3(4) permits a one hundred percent exemption from
taxation on the actual value added by improvements for qualified real estate assessed
as residential property or assessed as commercial property, for a period of ten years.
Cohen-Esrey Affordable Partners has agreed to this exemption schedule.
This assistance is very important to the success of the project. The application for
state tax credits is competitive. A developer receives points for City financial
assistance, with maximum points provided for assistance equaling 7% of project costs.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
A4-,�%-
Mic ael C. Van Milligen '
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
Alvin Nash, Housing & Community Development Department Director
2
THE CITY OF Dubuque
AII-Ame1 rica City
DUBgkE r
Masterpiece on the Mississippi 2007.2012.2013
TO: Michael Van Milligen, City Manager
FROM: Alvin Nash, Housing & Community Development Director
DATE: November 12, 2015
RE: Petition for Designation of Marquette Hall Urban Revitalization Area
District
Cohen-Esrey Affordable Partners
Introduction
This memorandum presents for City Council a petition for Urban Revitalization Area
Designation from Cohen-Esrey Affordable Partners (Developers). The memorandum
recommends the City Council review and approve the attached resolution to establish
Marquette Hall as a property that meets the requirements for designation as required by
Chapter 404 of the Iowa Code.
Background
Urban Revitalization Chapter 404 of the Iowa Code (Urban Revitalization Act)
authorizes cities to designate areas as urban revitalization areas. Improvements to
qualified real estate within these designated areas may receive a total or partial
exemption from property taxes for a specified number of years. The exemptions are
intended to stimulate private investment by reducing tax increases that usually
accompany property improvements. This additional private investment provides a
long-term increase or stabilization in the area's tax base, enhances the visibility of
revitalization areas and/or supports important city objectives such as historic
preservation, economic development and affordable housing development.
In order to implement the provisions of Chapter 404, the City determine the area is
eligible for exemption, prepare a revitalization plan for each designated area, and hold
at least one public hearing after proper notice. The law mandates specific criteria and
procedures must be followed.
Discussion
The Developers propose to redevelop the former Sacred Heart Elementary School,
located at 2222 Queen Street, into 28 historic and affordable senior apartments.
Cohen-Esrey Affordable Partners development will preserve and restore the historic
Marquette Hall, built in 1915. The restored structure will provide affordable housing for
seniors in the North End Neighborhood of Dubuque. The project utilizes a number of
funding sources for redevelopment including private funding, State and Federal
Historic Tax Credits, Low Income Housing Tax Credits, and requests support from the
City of Dubuque through the Urban Revitalization Tax Exemption and by selling a city
owned alley for $1 .00, a discount off market rate.
The area is established under 404.1 (3) and is defined as an area in which there is a
predominance of buildings or improvements which by reason of age, history,
architecture or significance should be preserved or restored to productive use. The
basis for an exemption under 404.3(4) permits a one hundred percent exemption from
taxation on the actual value added by improvements for qualified real estate assessed
as residential property or assessed as commercial property, for a period of ten years.
Cohen-Esrey Affordable Partners has agreed to this exemption schedule.
This assistance is very important to the success of the project. The application for
state tax credits is competitive. A developer receives points for city financial
assistance, with maximum points provided for assistance equaling 7% of project costs.
Budgetary Impact
The property value, based upon 2015 Beacon data, is $39,560 for land and $892,380
for dwelling for a total taxable value of$931 ,940. Dubuque City Assessor Rick
Engelken estimates after improvements the assessed value for taxation will be
$624,414 and the yearly taxes will be $17,983. The abatement of$17,983 will be in
effect for 10 years for a total of$179,830. After the abatement period expires the
property will be taxed based on the assessed value for taxation as determined by the
assessor.
Recommendation
I recommend that the City Council approve the attached resolution supporting the
designation of the Marquette Hall Urban Revitalization District and authorizing staff to
work with the City Assessor to complete Exhibit form 5S.
Action Requested
The Action Step is for the City Council to adopt the attached resolution and authorize
staff to work the City Assessor to complete Exhibit 5S prior to show local support for the
development.
Prepared by: Erica Haugen, Community Development Specialist
F:\USERS\CDBG\Urban Revite\Applewood 4\Memo to Council.doc
2
Petition to the City of Dubuque
for Designation of 2222 Queen Street
to become an
URBAN REVITALIZATION AREA
Petition submitted by:Brian Sweeney
Cohen-Esrey Affordable Partners
November 10, 2015
Overview
Cohen-Esrey Affordable Partners (developers) has proposed to redevelop the former Sacred Heart
Elementary School, 2222 Queen Street, into 28 historic and affordable apartments. The housing
will be called Marquette Hall Residences. This process will include getting the property designated
on the National Registry of Historic Places.
Several funding sources will be utilized to finance the project including private funding, State and
Federal Historic Tax Credits, Low Income Housing Tax Credits (9%), as well as support from the
City of Dubuque through its willingness to utilize the state tool called the Urban Revitalization Tax
Exemption (URTE) for a ten year period. The developers have worked closely with the Sacred
Heart Parish as well as the North End community to ensure a quality housing product for the
residences of the North End Neighborhood.
1. Eligibility of the Proposed Designation: The Marquette Hall Residences development,
at 2222 Queen Street, qualifies for an Urban Revitalization Area for the following reasons
(language is quoted from Section 404.1 of the Iowa Code): It is in
• "3. An area in which there is a predominance of buildings or improvements which by
reason of age, history, architecture or significance should be preserved or restored to
productive use. "
• "5. An area designated as appropriate forpublic improvements related to housing and
residential development, or construction of housing and residential development,
including single or multifamily housing"
2. Legal Description: The old elementary school property is in the City of Dubuque: Lot#'s
31, 32, 33, 34 Sanford Sub.
3. Valuation of Property: Currently the property is owned by Holy Spirit Parish. As a non-
profit organization, it is tax exempt. The assessed value for 2015 is $39,560 for the land
and$892,380 for the building, for a total of$931,940. Dubuque City Assessor, Rick
Engelken, has done an analysis of the property after reviewing the development plans as
well as the future pro-forma of the Section 42 property. His analysis (see attached) states
that the property will be assessed at$624,414.00 and that yearly taxes will be $17,983.00.
4. Property Ownership: Holy Spirit Parish, 2115 Windsor Avenue, Dubuque, IA. 52001 is
the current owner of the property. Holy Spirit Parish has entered into a Purchase Offer with
Cohen-Esrey Affordable Partners for the sale of the property pending the approval of the
state tax credits.
5. Zoning Classification: The property is currently zoned R-2A, however, Holy Spirit Parish,
along with Cohen-Esrey Affordable Partners, have submitted a request to rezone the
property to OR/Office and Residential in order to facilitate the building of the new senior
apartments. The rezoning will be in front of the Zoning Advisory Commission on December
2, 2015 and is anticipated to go in front the Dubuque City Council on December 21, 2015.
6. Applicability of Proposed Designation: This petition to designate 2222 Queen Street as
an Urban Revitalization Area applies to the entire building, which is 33,390 square feet and
the adjacent parking lot. They include City of Dubuque Lot#'s 31, 32, 33, 34 Sanford Sub.
(An October 22, 2013 plotted zoning map with aerial is attached). The building is currently
vacant and will undergo an adaptive reuse rehabilitation into apartments.
7. Relocation: There are currently no residents or offices that occupy 2222 Queen Street
and no relocation will be required.
8. Proposed Improvements: Preliminary site plans, which include the layout of the
individual senior apartments, are attached.
9. Anticipated Impact of Improvements: In addition to preserving and restoring an historic
gem, Marquette Hall (the original name), which was built in 1915, we believe this project
will help revitalize the North End Neighborhood as seniors move from their single-family
homes to Marquette Hall Residences and the new owners of the single-family homes
purchase and rehab those existing homes.
10. Funding Sources: Funding sources for the redevelopment will include private funding,
State and Federal Historic Tax Credits, Low Income Housing Tax Credits (9%), as well as
support from the City of Dubuque through its willingness to utilize the Urban Revitalization
Tax Exemption (URTE) for a ten-year period.
11. Economic Justification: The historic rehab of old buildings into quality affordable senior
housing is a very challenging and a very expensive endeavor. The City of Dubuque
support of this petition is absolutely critical in receiving state tax credits from Iowa Finance
Authority. The "Local Government Contribution" section provides much needed points for
the developer's application to receive the tax credit awards, which is the majority of the
funding for this project. In fact, without this 'Local Government Contribution', the project will
most likely not receive the needed points to receive the tax credits. In addition, given the
very small margins for a project like this, the ten-year tax exemption is critical in helping
make the project work financially.
Summary Statement: As mentioned above, we believe restoring this great historic
building for affordable senior housing will help be a part of the revitalization of the North
End Neighborhood. hi addition, given the many other older schools and old historic
buildings in Duluth that are currently in disrepair, the redevelopment of The Marquette
Hall Residences can be an example of the type of redevelopment that can occur
throughout Dubuque in the future.
RESOLUTION NO. 401-15
RESOLUTION FINDING THAT THE DESIGNATION OF THE MARQUETTE HALL
URBAN REVITALIZATION PLAN IS NECESSARY IN THE INTEREST OF PUBLIC
HEALTH, SAFETY, AND WELFARE OF THE RESIDENTS OF THE CITY OF
DUBUQUE, IOWA
Whereas, the City Council of the City of Dubuque finds that the property at 2222
Queen Street, (Property) is currently vacant and underutilized, and Cohen -Esrey
Affordable Partners (Cohen -Esrey) has proposed to develop the Property by
rehabilitating the former Sacred Heart Elementary School into 28 historic and affordable
senior apartments; and
Whereas, the City supports the development and construction of housing and
residential properties which provide quality, affordable housing; and
Whereas, the Property is located in an area eligible for the Urban Revitalization Tax
Exemption program; and
Whereas, in the area proposed for designation under the Urban Revitalization Act is
an area in which there is a predominance of buildings or improvements which by reason
of age, history, architecture or significance should be preserved or restored to projective
use Section 404.1(3) of the Iowa Code; and
Whereas, through the Urban Revitalization Program, the Property is eligible to
receive a one hundred percent exemption from taxation on the actual value added by
the improvements for a period of ten years so long as it is assessed as residential
property or assessed as commercial property, if the commercial property consists of
three or more separate living quarters with at least seventy-five percent of the space
used for residential purposes.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. The new construction housing development at the Property legally
described as
Lot #'s 31,32,33,34 Sanford Sub., according to the recorded plat thereof
is deemed necessary and in the interest of the residents of the City.
Section 2. That the City Council supports the Cohen-Esrey's Petition asking the
Property be designated an Urban Revitalization Area and supports Cohen-Esrey's
efforts to receive a tax credit award from the Iowa Finance Authority for this
Development.
Section 3. The City Council approves supporting the project and authorizes staff to
work with the City Assessor to complete the form 5S for the Developer's submission to
the Iowa Finance Authority prior to the December 7, 2015 deadline for consideration.
Section 4. The proposed Development is consistent with the City of Dubuque's
affordable housing strategies and goal to implement the City's comprehensive plan.
Passed, approved and adopted this 16th day of Novemb-`r, 2015.
Roy D. B r Mayor
Attest:
EXHIBIT 5S
IOWA FINANCE
LOCAL GOVERNMENT CONTRIBUTION
Form(s) shall be completed by the qualified Government Entity or Political Subdivision along with any
additional supporting documents as required in QAP Section 6.2.3.
RE: Project Name Marquette Hall Residences
Project Address 2222 Queen Street, Dubuque, IA 52001
Ownership Entity Name Holy Spirit Parish, Purchas offer by Cohen -Esrey Affordable Partners
Iowa Finance Authority (IFA) encourages developers to coordinate with Iowa communities regarding
community revitalization plans, where applicable. A Local Government Contribution creates a presumption
that the project is not in conflict with the local government's community revitalization plan, if any.
This form will verify the Local Government Contribution effort referenced in the Qualified Allocation Plan
(QAP). A Local Government Contribution can be provided by a qualified Government Entity or Political
Subdivision. QAP Section 6.2.3 states the following items will constitute a Local Government Contribution:
Form of Contribution
Additional Supporting Documents
Cash Contribution
Commitment letter
Gift of Land or Building
Third party MAI certified appraisal
Tax Abatement (not tax exemption)
Scoring exhibit only
Tax Increment Financing
Project specific resolution of the city council
Urban Revitalization Tax Exemption (URTE)
Project specific resolution of the city council
Workforce Housing Tax Credits
Commitment letter from Iowa Economic
Development Authority (IEDA)
Enterprise Zone Credits
Scoring exhibit only
Enterprise Zone Sales Tax Rebates
Scoring exhibit only
Waiver of Fees
Scoring exhibit only
City HOME
Scoring exhibit only
Below Market Interest Rate Loan
Calculation showing value of imputed savings using
a market rate of seven percent (7%)
QAP Section 6.2.3 states the agency making the Local Government Contribution shall indicate the value of
its contribution. The value of the Local Government Contribution is the value of the contribution made by
the qualified Government Entity or Political Subdivision minus the value of any consideration or
accommodation received by the qualified Government Entity or Political Subdivision in return for the
contribution.
The Governmental Entity or Political Subdivision completing this form understands that IFA will rely on
these valuations to determine whether the Applicant has met the requirements of the QAP to receive points
for Local Government Contribution.
For scoring purposes under this category, a Government Entity or Political Subdivision contribution to a
Project provided through a certified Local Housing Trust Fund (LHTF) will be considered a qualified Local
Government Contribution only if the Applicant provides documentation from the LHTF showing the
Government Entity or Political Subdivision has made contributions to the LHTF during the current fiscal
year totaling at least the amount of the proposed Local Government Contribution to the Project.
Qualified Governmental Entity or Political Subdivision Contribution(s) (21 points maximum)
2015 Round — 2014.10.08
EXHIBIT 5S
O CASH CONTRIBUTION — Commitment letter attached
IOWA FINANCE
Amount
Source of Cash
Name of Entity Making Contribution
® GIFT OF LAND — Third party MAI certified appraisal attached
Appraised
Amount/Value
Name of Entity Making Contribution
$11,000.00
City of Dubuque •
Location/Address of property:
Is land held free and clear of encumbrances? ❑ YES 0 NO
If NO, disclose all known liens and encumbrances and explain how and when these will be satisfied.
O GIFT OF BUILDING — Third party MAI certified appraisal attached
Appraised
Amount/Value
Name of Entity Making Contribution
Address of building(s):
Is land held free and clear of encumbrances? 0 YES 0 NO
If NO, disclose all known liens and encumbrances and explain how and when these will be satisfied.
O TAX ABATEMENT (not exemption) — No attachment required
Amount/Value
Term of
Abatement
Describe How Amount Was
Determined
Name of Entity Making
Contribution
$179,830
10 years
Income calculation
verified by City of
Dubuque Assessor.
City of Dubuque
O TAX INCREMENT FINANCING — Project specific resolution from the City Council attached
Amount/Value
Name of Entity Making Contribution
URBAN REVITALIZATION TAX EXEMPTION — Project specific res
Amount/Value
Term of Exemption
Describe How Amount Was
Determined
Name of Entity Making
Contribution
$179,830
10 years
Income calculation
verified by City of
Dubuque Assessor.
City of Dubuque
❑ WORKFORCE HOUSING TAX CREDIT (equity value) — Commitment letter from Iowa Economic Development
Authority attached
Amount/Value
Name of Entity Making Contribution
O ENTERPRISE ZONE CREDIT (equity value) — No attachment required
Amount/Value
Name of Entity Making Contribution
O ENTERPRISE ZONE SALES TAX REBATE — No attachment required.
Amount/Value
Name of Entity Making Contribution
2015 Round — 2014.10.08
EXHIBIT 5S
❑ WAIVER OF FEES — No attachment required
IOWA FINANCE
A,.,TI t 7v
Amount/Value
Type of Fees
Describe How Amount Was
Determined
Name of Entity Making Contribution
Name of Entity Making
Contribution
%%
❑ CITY HOME LOAN — No attachment required
Amount/Value
Name of Entity Making Contribution
❑ BELOW-MARKET INTEREST RATE LOAN - Calculation showing value of imputed savings using a market rate
of seven percent (7%) attached
Amount/Value
Market
Interest
Rate
Below-
Market
Interest
Rate
Describe How Calculated
Savings Was Determined
Name of Entity Making
Contribution
%%
City of
Dubuque
Agency Name (Typed)
Roy D. Buol
Name of Agency Representative (Typed)
Mayor
Title of Agen y Representative (Typed)
Signature oJ• Agency Representative
2015 Round — 2014.10.08
11/25/2015
Date
Budget Pro Forma
Gross Rental Income
Vacancy
Effective Rental Income:
Other Income:
Vacancy:
Effective Income
Expenses:
Controllable:
Utilities:
Taxes:
Insurance:
Management Fee:
Replacement Reserves:
Total Expenses:
Annual Per Unit
7% $
7% $
7% $
:209,916
14,694
195,222
3,360
235
• 198,347
67,175 $
16,800 $
2.8090 $ f Ei 0
11,200 $
13,440 $
12,600 $
149,215 $
7,497
525
6,972
120
8
7,084
2,399
600
1,000
400
480
450
5,329
NOI: $ 49432- $ 1,755
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