Community Housing Initiatives (CHI) Agreement AmendmentCity of Dubuque
ITEM TITLE:
SUMMARY:
SUGGESTED DISPOSITION:
Copyrighted
November 6, 2017
Consent Items # 29.
Community Housing Initiatives (CHI) - Agreement
Amendment
City Manager recommending approval of an Amended
Agreement between Community Housing Initiatives and the
City of Dubuque's Housing and Community Development
Department to move up the funding schedule to the
Community Housing Initiatives.
RESOLUTION Approving the First Amendment to the
Agreement between the City of Dubuque, Iowa and the
Community Housing Initiatives
Suggested Disposition: Receive and File; Adopt
Resolution(s)
ATTACHMENTS:
Description
Community Housing Initiatives Amendment -MVM
Memo
Resolution
2016 Original Agreement
2017 Amendment
Type
City Manager Memo
Staff Memo
Resolutions
Supporting Documentation
Supporting Documentation
THE CITY OF
Masterpiece on the Mississippi
Dubuque
IHw1a p4
rnxirxz�
�111i:
2007.2012
2013.2017
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Agreement between Community Housing Initiatives and the Housing &
Community Development Department
DATE: November 1, 2017
Housing and Community Development Department Director Alvin Nash recommends
City Council approval of an Amended Agreement between Community Housing
Initiatives and the City of Dubuque's Housing and Community Development Department
to provide $150,000 to Community Housing Initiatives (CHI) sooner than originally
anticipated as CHI is moving quicker than in the original contract.
On August 18, 2014, City Council approved the partnership between Community
Housing Initiative (CHI), Dubuque Bank and Trust (DB&T) and the City Housing
Department to restore approximately 40 units in the Washington Neighborhood.
CHI has asked the City to move up the City funding schedule to avoid a disruption of
work because they are ahead of the production plans that coincides with the allocation
of City funding by about six months.
As stated above, CHI has purchased 28 properties, rehabbed 19 and have sold 17.
The assessed value of the properties that have been rehabbed has increased by over
$795,000 (this is the amount that is exempted). They are currently rehabbing 9
additional properties. Of the 28 properties, 19 of them were originally rentals properties,
four were duplexes converted to single family homes.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
17brilva
MicKael C. Van Milligan'
MCVM:jh
Attachment
cc: Crenna Brumwell, City Attorney
Teri Goodmann, Assistant City Manager
Cori Burbach, Assistant City Manager
Alvin Nash, Housing and Community Development Department Director
2
Masterpiece on the Mississippi
To: Mike Van Milligen, City Manager
From: Alvin Nash, Housing and Community Development Director
Dubuque
kiltrill
All -America City
1
2007 • 2012 • 2013
Subject: Agreement between Community Housing Initiatives (CHI), and the Housing &
Community Development Department
Date: November 1, 2017
Introduction
The purpose of this memorandum is to request City Council to authorize an amendment of
the Agreement between Community Housing Initiatives (CHI) and the City of Dubuque's
Housing & Community Development Department.
Background
On August 18, 2014, City Council approved the partnership between Community Housing
Initiative (CHI), Dubuque Bank and Trust (DB&T) and the City Housing Department to
restore approximately 40 units in the Washington Neighborhood. To -date CHI has
purchased 28 properties. The assessed value of the properties that have been rehabbed
has increased by over $795,000 (this is the amount that is exempted).
CHI has been actively working in the Washington Neighborhood by purchasing/ rehabbing
and reselling properties. The City funds were used to assist in the rehabilitation of these
properties. As stated in the Agreement, the City will be contributing up to $25,000 per
property for the acquisition or rehabilitation portion of the project. This partnership is in line
with the Washington: Revitalize! Neighborhood Revitalization Strategy.
CHI has asked the City to move up the City funding schedule to avoid a disruption of work
because they are ahead of the production plans that coincides with the allocation of City
funding by about six months.
Performance to date:
As stated above, CHI has purchased 28 properties, rehabbed 19 and have sold 17. They
are currently rehabbing 9 additional properties. Of the 28 properties, 19 of them were
originally rentals properties, four were duplexes converted to single family homes.
Budget Impact:
In order to fund the projects, each partner agrees to commit an amount of funds to address
the impact we want to make in the neighborhood. The breakdown of these funds are as
follows:
CHI agrees to provide a minimum of $1,548,000 of its resources and/or from a construction
loan line of credit.
City agrees to invest $750,000 for the purpose of the Project. As stated above, the City will
provide $25,000 per unit for acquisition or rehabilitation costs. No more than $150,000 will
be paid out to CHI in the fiscal year with the exception of this fiscal year. This will allow CHI
to purchase and/or rehabilitate additional properties in the Washington Neighborhood.
Proposed funding source from the City for this partnership is Downtown TIF funds
(3602573) and purchase/rehab and sale program (3601595) will be as follows:
Fiscal Year
FY16-17
FY17-18
FY17-18
Amount of Fund
$225,000
$125,000
$150,000
Account
3602573
3602573
3601595
FY18-19 $125,000 3602573
FY19-20 $125,000 3602573
Action Step
The action requested is for City Council to approve the attached Amended Agreement
between Community Housing Initiatives and the City of Dubuque's Housing & Community
Development Department. This request will provide $150,000 to CHI sooner than previously
budgeted using a source that has funds available in a quicker schedule.
Attach.
cc: Jenny Larson, Budget Director
Kris Neyen, Rehabilitation Programs Supervisor
Erica Haugen, Community Development Specialist
Jean Nachtman, Finance Director
Prepared by Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113
RESOLUTION NO. 357-17
APPROVING THE FIRST AMENDMENT TO THE AGREEMENT BETWEEN THE CITY
OF DUBUQUE, IOWA AND COMMUNITY HOUSING INITIATIVES
WHEREAS, the City of Dubuque, Iowa (City)and Community Housing Initiatives
(CHI) entered into an Agreement dated for reference purposes the 1St day of July, 2016;
and
WHEREAS, City and CHI desire to amend the Agreement as set forth in the
attached First Amendment to the Agreement; and
WHEREAS, the City Council believes it is in the best interests of the City of
Dubuque to approve the First Amendment to the Agreement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
DUBUQUE, IOWA AS FOLLOWS:
Section 1. The City of Dubuque hereby approves the First Amendment to the
Agreement between the City of Dubuque and Community Housing Initiatives, a copy of
which is attached hereto.
Section 2 The Mayor is authorized and directed to sign the First Amendment to
the Agreement on behalf of the City of Dubuque.
Passed, approved and adopted this 6th day of Noveer, 2017.
a
L./
Roy D. Bygl; Mayor
Attest:
KetGin"S irnstahl, City Clerk
F:\US ERS\tsteckl e\Lindahl\Resolutions\Resol uti onApprovi ng Fi rstAmend mentToLeaseAg reement-DubCo H i storicalSocityHam H o use_041817.doc
FIRST AMENDMENT TO THE
AGREEMENT BETWEEN
THE CITY OF DUBUQUE
AND
COMMUNITY HOUSING INITIATIVES, INC. -
WASHINGTON NEIGHBORHOOD HOUSING PARTNERSHIP
THIS FIRST AMENDMENT TO THE. AGREEMENT (this "First Amendment") is
made and entered into effective as of the bi4 day ofjej ' s � , 2017, by
and between THE CITY OF DUBUQUE, IOWA ("City") and Community Housing
Initiatives, Inc., an Iowa non-profit organization ("CHI"). City and CHI sometimes referred
to herein as the "Parties".
RECITALS
A. City and CHI have entered into a certain Agreement with an effective date of July
1, 2016, a copy of which is attached hereto as Exhibit A (the "Agreement").
B. City and CHI now desire to amend certain of the terms of the Agreement.
NOW, THEREFORE, for good and valuable consideration, the sufficiency of which
is hereby acknowledged, the Parties agree as follows:
1. Section 1 of the Agreement is amended as follows:
Section 1. Funding.
CHI agrees to provide a minimum of $800,000 and secure a construction loan from
Dubuque Bank and Trust ("DBT") in the amount of $500,000.
The City agrees to invest with CHI $750,000 for the purpose of the Project in
Dubuque's Washington Neighborhood as part of a comprehensive neighborhood
revitalization initiative. The City funding shall be in the form of payments toward
the rehabilitation costs of each unit up to, but not more than $25,000, and in no
event to exceed the total rehabilitation cost per unit.
CHI may begin accessing City funding upon completion of at least 25% of the work
per unit as outlined in Section 2. The remaining funds may be requested upon
50% completion, 75% completion and upon final completion of each unit. Funding
requests to the City shall be in writing and include supporting documentation of
work completed.
Upon the sale of all residential units completed for the Project under this
Agreement, the aggregate sales proceeds received will be distributed in the
following order:
1) Dubuque Bank & Trust Loan
2) CHI Developer Fee and expenditures as outlined in Section 2
3) Any remaining funds (profit) must be used for the purchase,
rehabilitation, and resale of additional residential units, or such other use
that is approved by the City in writing.
2. Section 2 of the Agreement is amended as follows:
Section 2. Scope of Work
CHI Obligations:
• CHI agrees to acquire, rehabilitate and resell a minimum of twenty (20)
residential units during the term of this Agreement (hereinafter the
"Minimum Improvements"). A residential unit can be a single-family
structure or multi -unit structure as long as the intent is for the resale of the
housing unit(s). Each unit within a multi -unit structure, such as a duplex,
shall constitute a residential unit.
• Acquisition of at least twenty-four (24) residential units shall be completed
by the end date of this Agreement. The Minimum Improvements will be
completed in accordance with all federal, state, and local laws and be
finished within six (6) months after the expiration of this Agreement.
• Exhibit A outlines the estimated budget for completion of the Minimum
Improvements through a detailed Scope of Work.
• CHI agrees to maintain the properties during the course of the Project
including, but not limited to lawn care, snow removal, and maintenance.
• CHI will maintain insurance in accordance with the provisions of this
Agreement and as outlined in Section 5.
• CH agrees to maintain accurate records that include detailed costs
associated with the Project and Minimum Improvements as well as
proceeds received from the sale of each residential unit. Costs can include
any reasonably allocable cost, including, but not limited to purchase cost,
rehabilitation, interim maintenance costs such as grounds maintenance,
property taxes, relocation, insurance, legal, real estate commissions and
marketing. CHI staff time cannot be allocated to residential units' costs.
However CHI may retain a developer fee of $2,500 per residential unit. CHI
agrees to provide the City access to its records upon request. In addition,
all cost and sales records will accompany all requests to draw from City
funds.
• CHI will determine the selling price of residential units. Factors determining
the selling price may include costs incurred and the appraised value of the
rehabilitated residential units.
• Follow all CDBG requirements (ex: environmental reviews; SHPO approval
and rehabilitation according to City of Dubuque Rehab Program Standards.
• Make sure all permits are taken out prior to work beginning and have
finalized when that particular work is completed. (Ex. new furnace, roof,
etc.)
• There will be no income restrictions with respect to buyers purchasing
residential units rehabilitated through this Agreement, however the main
focus of homebuyers will be first-time low/moderate income buyers below
80% of median income guidelines.
City Obligations:
• Assist CHI with initial inspection of residential units to be purchased by CHI
as part of the Project.
• Develop Minimum Improvements documents for rehabilitation including
scope of work, drawings/specifications and bid packages for CHI to
distribute to contractors, after reviewed by Rehabilitation Supervisor. City
will also prepare contacts for all contractors once signed to CHI.
• Will perform Environmental Reviews and prepare paperwork for SHPO
approval.
• Assist CHI with making certain Contractors keep property cleaned up
through construction.
• Rehabilitation Inspector and Supervisor will perform final inspections with
CHI to assure satisfactory work completed by the Contractor(s).
Section 3. Effect of First Amendment. Except as specifically amended herein, all of
the terms and provisions of the Agreement of June 1, 2016 are hereby ratified and
affirmed to be in full force and effect as of the date hereof. To the extent of any conflict
between the Agreement and this First Amendment, the terms and provisions of this Firs
Amendment shall govern and control.
Section 4. Counterparts. This First Amendment may be executed in one or more
counterparts, each of which shall be an original, but all of which when taken together shall
constitute one in the same instrument binding on all parties. Delivery of a signed
counterpart by facsimile transmission shall be effective as delivery of a manually signed
counterpart of this First Amendment.
IN WITNESS WHEREOF, the parties have executed these presents the day and year
first above written.
City of De, Iowa
i
By:
Name:
Title: Mayor
11/6/2017
Buol
Community Housing Initiatives, Inc.
By:
Name:
Title:
I
AGREEMENT BETWEEN
THE CITY OF DUBUQUE
AND
COMMUNITY HOUSING INITIATIVES, INC. -
WASHINGTON NEIGHBORHOOD HOUSING PARTNERSHIP
Effective Date: July 1, 2016
This Agreement is made by and between the City of Dubuque, Iowa ("City") and Community
Housing Initiatives, Inc. ("CHI") and shall be effective beginning on the above effective date and
remain in effect until June 30, 2020, or for a period of four (4) full years from the effective date
above, whichever is later.
This Agreement outlines the terms and conditions under which the City shall invest funding with
CHI to assist with the acquisition, rehabilitation and resale of residential units located in the
Washington Neighborhood (hereinafter the "Project").
For purposes of this Agreement the Washington Neighborhood is defined to include:
Central Avenue starting at East 22nd Street South down to East 11th Street, then East ll" Street
East to Elm Street, Elm Street North until East 20th Street & Rhomberg Avenue, Rhomberg
Avenue East to Kniest Street, Kniest Street North to East 22nd Street and back to Central Avenue
In consideration of the mutual representations and obligations hereunder, the City and CHI agree
as follows:
Section 1. Funding
CHI agrees to provide a minimum of $2,472,000 of its resources and/or from a construction loan
line of credit.
The City agrees to invest with CHI $600,000 for the purpose of the Project in Dubuque's
Washington Neighborhood as part of a comprehensive neighborhood revitalization initiative. The
City funding shall be in the form of payments toward the acquisition and/or rehabilitation costs of
each unit up to, but not more than $25,000, and in no event to exceed the total rehabilitation cost
per unit. The City funding will be provided to CHI over four years, in an annual amount not to
exceed $225,000 in year one and $125,000 plus unused funds from year one in years two
through four and is subject to inclusion in the adopted City budget over the term of the
Agreement.
CHI may begin accessing City funding upon completion of at least 25% of the work per unit as
outlined in Section 2. The remaining funds may be requested upon 50% completion, 75%
completion and upon final completion of each unit. Funding requests to the City shall be in
writing and include supporting documentation of work completed.
Upon the sale of all residential units completed for the Project under this Agreement, the
aggregate sales proceeds received will be distributed in the following order:
1) Dubuque Bank & Trust Loan
2) CHI Developer Fee and expenditures as outlined in Section 2
3) Any remaining funds (profit) must be used for the purchase, rehabilitation, and resale of
additional residential units, or such other use that is approved by the City in writing.
Section 2. Scope of Work
CHI Obligations:
• CHI agrees to acquire, rehabilitate and resell a minimum of twenty-four (24) total
residential units during the term of this Agreement (hereinafter the "Minimum
Improvements"). A residential unit can be a single-family structure or multi -unit structure
as long as the intent is for the resale of the housing unit(s). Each unit within a multi -unit
structure, such as a duplex, shall constitute a residential unit. Homes purchased by CHI
before the effective date of the Agreement are considered part of the Project and therefore
are included toward the 24 residential unit requirement under the Agreement.
Acquisition of at least twenty-four (24) total residential units shall be completed by the end
date of this Agreement. The Minimum Improvements will be completed in accordance with
all federal, state, and local laws and be finished within six (6) months after the expiration of
this Agreement.
• Exhibit A outlines the estimated budget for completion of the Minimum Improvements
through a detailed Scope of Work.
• CHI agrees to maintain the properties during the course of the Project including, but not
limited to lawn care, snow removal, maintenance and making sure property remains clean
during construction.
• CHI will maintain insurance in accordance with the provisions of this Agreement and as
outlined in Section 5.
• CI -II agrees to maintain accurate records that include detailed costs associated with the
Project and Minimum Improvements as well as proceeds received from the sale of each
residential unit. In addition, all cost and sales records will accompany all requests to draw
from City funds.
• CHI will determine the selling price of residential units. Factors determining the selling
price may include costs incurred and the appraised value of the rehabilitated residential
units.
• There will be no income restrictions with respect to buyers purchasing residential units
rehabilitated through this Agreement.
City Obligations:
• Assist CHI with initial inspection of residential units to be purchased by CHI as part of the
Project.
Develop minimum improvements documents for rehabilitation including scope of work,
drawings/specifications and bid packages for CHI to distribute to contractors. City will also
prepare contracts for all contractors and send once signed to CHI.
- Assist CHI with making certain Contractors keep property cleaned up through construction.
• Rehabilitation Inspector and Supervisor will perform final inspections with CHI to assure
satisfactory work completed by the Contractor(s).
Section 3. Project Budget
Exhibit A hereto represents a Scope of Work budget estimate for the Minimum Improvements
required for completion of the Project.
Section 4. Indemnification
CHI shall indemnify, defend and hold harmless the City, its governing body, departments,
officials, employees and agents from and against all liability, claims, actions, damages, losses
and expenses arising out of the City's work in performing its obligations under this Agreement.
Section S. Insurance
1. Property Insurance.
a. CHI must provide and maintain or cause to be maintained at all times during
the Project at its sole cost and expense builder's risk insurance, written on a
Completed Value Form in an amount equal to one hundred percent (100%)
of the buildings replacement values, including improvements, when
construction is completed. Coverage shall include the "special perils" form
and CHI shall furnish City with proof of insurance in the form of a certificate
of insurance.
b. Upon completion of the Project and up to the Termination Date, CHI shall
maintain, or cause to be maintained, at its cost and expense property
insurance against loss and/or damage to the buildings (including the
Minimum Improvements) under an insurance policy written with the "special
perils" form and in an amount not less than the full insurable replacement
value of the buildings (including the Minimum Improvements). CHI shall
furnish to City proof of insurance in the form of a certificate of insurance.
c. The term "replacement value" shall mean the actual replacement cost of the
building with Minimum Improvements (excluding foundation and excavation
costs and costs of underground flues, pipes, drains and other uninsurable
items) and equipment, and shall be reasonably determined from time to time
at the request of City, but not more frequently than once every three (3)
years.
d. CHI shall notify City immediately in the case of damage exceeding $50,000
in amount to, or destruction of, the Minimum Improvements or any portion
thereof resulting from fire or other casualty. Net proceeds of any such
insurance (Net Proceeds), shall be paid directly to CHI as its interests may
appear, and CHI shall forthwith repair, reconstruct and restore the Minimum
Improvements to substantially the same or an improved condition or value as
they existed prior to the event causing such damage and, to the extent
necessary to accomplish such repair, reconstruction and restoration, CHI
shall apply the Net Proceeds of any insurance relating to such damage
received by CHI to the payment or reimbursement of the costs thereof,
subject, however, to the terms of any mortgage encumbering title to the
Property (as its interests may appear). CHI shall complete the repair,
reconstruction and restoration of Minimum Improvements whether or not the
Net Proceeds of insurance received by CHI for such purposes are sufficient.
2. Liability Insurance. CHI must maintain a commercial general liability insurance
policy with coverage and limits not less than the following:
General Aggregate Limit
Products -Completed Operations Aggregate Limit
Personal and Advertising Injury Limit
Each Occurrence
Fire Damage Limit (any one occurrence)
Medical Payments
Section 6. Amendments
$2,000,000
$1,000,000
$1,000,000
$1,000,000
$50,000
$5,000
This Agreement may be modified or amended only in writing by a duly authorized representative
and executed by both CHI and City. It may not be amended or modified by oral agreement or
understanding between the parties unless the same shall be in writing, duly approved, and
executed by both parties.
Section 7. Parties Bound
The covenants and conditions herein contained shall apply to and bind the legal representatives,
successors, and assigns of all of the parties hereto, and all of the parties hereto shall be jointly
and severally liable hereunder.
Section 8. Notices
All notices or demands to be given, made, or sent, or which may be given, made, or sent by one
party to the other pursuant to this Agreement shall be deemed to have been given, made, or sent
when made in writing, and deposited in the U.S. mail, certified and postage prepaid, addressed
as follows:
a. To City:
City of Dubuque
Housing & Community Development
Attn: Alvin Nash, Housing Director
350 West 6th Street, Suite 312
Dubuque, IA 52003
b. To CHI: CHI
Doug LaBounty
300 East Court Avenue
Des Moines, IA 50309
The address to which any notice, demand, or other writing may be given, made, or sent by any
party as above provided may be changed by written notice given by such party as above
provided.
Section 9. Termination
Either party may terminate the Agreement for any reason by providing sixty (60) days written
notice. However, termination does not preclude CHI's obligation to repay the City for its
investment up to the date of termination for homes not completed under the Agreement, nor the
City's obligation to reimburse CHI for work completed through the date of termination by the City.
Additionally, termination does not preclude the parties from meeting any other obligations under
the Agreement for work started prior to the date of termination which must be completed.
Section 10. Governing Law
This Agreement will be governed by and construed in accordance with the laws of the State of
Iowa.
Section 11. Severability
If any term, covenant, or condition of this Agreement is held by a court of competent jurisdiction to
be invalid, or unenforceable, the rest of the Agreement will remain in full force and effect and will
in no way be affected, impaired, or invalidated, unless such enforcement will frustrate the purpose
of this Agreement.
Section 12. Force Majeure
In the event that either party hereto will be delayed or hindered in or prevented from the
performance of any act required hereunder by reason of strikes, lockouts, labor troubles,
unavailability or excessive price of fuel, power failure, riots, insurrection, war, terrorist activities,
chemical explosions, hazardous conditions, fire, weather or acts of God, or by reason of any
other cause beyond the exclusive and reasonable control of the party delayed in performing work
or doing acts required under the terms of this Agreement, then performance of such act will be
excused for the period of the delay and the period for the performance of any such act will be
extended for a period equivalent to the period of such delay.
Section 13. Paragraph Headings
The titles to the paragraphs of this Agreement are solely for the convenience of the parties and
will not be used to explain, modify, simplify, or aid in the interpretation of the provisions of this
Agreement.
Section 14. Entire Agreement
This Agreement constitutes the entire agreement between the parties, and any prior
understanding or representation of any kind preceding 'the date of this Agreement shall not be
binding on either party except to the extent incorporated in this Agreement.
IN WITNESS WHEREOF, the parties have executed these presents the day and year first above
written.
City of Dubuque /(Owa
By:
Name: Roy
Title: Mayor
8/15/16
Buol
Community H
By:
• iatives, Inc.
Name: Dou LaBountv
Title: President