Housing Tax Credit ARCMEMORANDUM
October 29, 2002
TO:The Honorable Mayor and City Council Members
FROM:Michael C. Van Milligen, City Manager
SUBJECT:Affordable Housing Tax Credit Application from Area Residential Care
Housing and Community Development Department Director David Harris recommends
City support of the Area Residential Care application to the Iowa Finance Authority for
housing tax credits for their 16-unit apartment facility on Kennedy Circle. This support is
unrelated to the ARC request for Urban Revitalization funds.
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
David Harris, Housing and Development Department Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
28 October 02
To: MikeVan Milligen, City Manager
From: David Harris, Housing and Community Development Department
Re: Affordable Housing Tax Credit Application from Area Residential Care
Introduction
The purpose of this memorandum is to review the request from Area Residential
Care (ARC) for City support of an application to the Iowa Finance Authority for
housing tax credits; and to authorize the Mayor's signature on the attached
resolution of support.
Background
The Affordable Housing Tax Credit Program provides an equity financing
mechanism for housing projects which in turn must provide rental units for Iow-
and moderate-income tenants. It implements Section 42 of the Internal Revenue
Service Code, retuming tax credits to investors who build or renovate Iow income
housing. In Iowa it is administered by the Iowa Finance Authority, which annually
distributes approximately $5 million in tax credits State-wide, on a competitive
application basis.
In Dubuque, projects previously financed through this program include Heartland
Housing Initiative's Loras Boulevard and Main Street apartments, the Applewood
complex on Pennsylvania Avenue, the Bishop's Block Apartments and Henry
Stout Place. The Raven Oaks/Arbor Glen Apartments project is now com-
mencing construction.
For the tax credit application, the Finance Authority utilizes a competitive scoring
system that ranks projects according to a variety of criteria. One of these is the
support of the project by the local government. Accordingly, a "resolution of
support" is submitted as part of all applications. Without this indication of local
acceptance, the proposal is competitively disadvantaged relative to other
developers requesting tax credit financing.
Discussion
ARC proposes to construct a 16 unit apartment facility for 24 individuals with
mental illness and mental retardation. Located off Kennedy Circle, the project is
estimated to cost $2 million. On-site staff will provide 24-hour care to the
residents, creating seven new ARC employment positions. Rents will be
restricted to be affordable to lower-income persons, with tenant incomes not
exceeding 60% of area median for all the units; and 40% of the apartments
reserved for households earning less than 50% of area median income.
Recommendation
It is recommended that the Council indicate support of this project by approving
the attached resolution.
Action Step
The action requested of the City Council is to approve the attached resolution of
support for this project.
RESOLUTION NO. 599-02
A RESOLUTION OF SUPPORT FOR THE DEVELOPMENT OF AN
AFFORDABLE HOUSING PROJECT AT KENNEDY CIRCLE
WHEREAS, the City of Dubuque, Iowa has been informed by the Area
Residential Care Foundation that a Iow income housing tax credit application will
be filed with the Iowa Finance Authority for the development of affordable rental
housing to be located at Kennedy Circle in Dubuque, Iowa with a legal
description as follows:
The north 140 feet of Lot One (1) of Lot Five (5) of Herrig's JFK Addition in
the City of Dubuque, Iowa, according to the recorded plats thereof, subject
to easements of record, together with an access easement 30 feet in width
across and along the south property line of Lot Two (2) of Lot Five (5) of
Herrig's JFK Addition.
WHEREAS, this housing project will contain 16 units;
WHEREAS, the units will be targeted to special needs persons;
WHEREAS, the property will have the following amenities:
24 hour a day, seven day a week supportive services,
On-site management office,
Computer learning center and community space
WHEREAS, the project will be new construction;
WHEREAS, the Sponsor has requested local assistance through a tax
abatement;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section t. The City supports the application of Area Residential Care
Foundation for Affordable Housing Tax Credits, subject to necessary public
hearings and building permits.
Section 2. This resolution shall remain effective until 1 July 2003. In the
event that any of the above-listed characteristics should materially change prior
to the issuance of a building permit, this resolution shall be null and void.
Passed, approved and adopted this 4th day of November, 2002.
Terrance M. Duggan, Mayor
Karen M. Chesterman, Deputy City Clerk