ARC Urban Revite Plan (2nd Rdg)ORDINANCE NO. 2002
AN ORDINANCE ESTABLISHING THE ARC URBAN REVITALIZATION
AREA AS AN URBAN REVITALIZATION AREA PURSUANT TO
CHAPTER 404 OF THE CODE OF IOWA.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the ARC Urban Revitalization Area as hereinafter described
shall hereafter be designated an urban revitalization area pursuant to Chapter 404 of
the Code of Iowa 2001, to wit:
The northerly 140 feet of Lot One (1) of Lot Five (5) of Herdg's JFK Addition in
the City of Dubuque, Iowa, according to the recorded plat thereof.
Section 2. That the ARC Urban Revitalization Plan as hereto attached is hereby
adopted and approved and the property within said described area shall be subject to
the provisions of said Plan.
Section 3. That said ARC Urban Revitalization Area shall hereafter be on file in
the City Clerk's Office, City Hall, Dubuque, Iowa.
Passed, approved and adopted this 4th day of November 2002.
Attest:
Terrance M. Duggan, Mayor
Jeanne F. Schneider, City Clerk
F:~,Users~AKRAMER~Urban Revite~RC UR~,RC UR Ord.doc
ARC Urban Revitalization Plan
October 2002
1.0 Introduction
The following plan describes certain provisions of the Iowa Urban Revitalization Act and
proposes the creation and designation of an ARC Urban Revitalization District.
The State of Iowa, under Iowa Code Chapter 404, allows cities to designate areas as
urban revitalization districts. Under this Act, improvements to qualified 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 the reduction of tax increases
related to property improvements.
Once an area is deemed to meet the requirements established in Chapter 404, a plan
must be established that identifies the district boundaries, property owners, existing
conditions, proposed plans and the basic abatement provisions for the revitalization area.
Iowa Code Chapter 404.1 lists five reasons for which a city or county may establish urban
revitalization plans. These include: the existence of numerous buildings that are
dilapidated or deteriorated; the need for preservation and restoration of buildings due to
their historic significance; the area is appropriated as an economic development region
as defined in Iowa Code 403.17; the need for public improvements related to housing;
and the encouragement of housing and residential development. The law also states that
at least 75% of a participating property's square footage must be used for residential
purposes in order to qualify for the program. The ARC Urban Revitalization Plan will be
based upon the need for the encouragement of housing and residential development in
the area.
2.0 The District
2.1 Location
Map 1 identifies the location of the Revitalization District. As indicated on the map,
this area is located east of the intersection of Keyway and Keymeer Drive, with
access to the site from Kennedy Circle.
The boundaries of the Distdct are:
The northerly 140 feet of Lot One (1) of Lot Five (5) of Herrig's JFK Addition in the
City of Dubuque, Iowa.v
2.2 Existing and Proposed Zoning
Map 2 shows the existing zoning district. Within the ARC Urban Revitalization District
all the properbj is located in an R--4 Mulfifamily Residential District.
ARC Urban Revitalization Plan
October 2002
Page 2
A conditional use permit will be requested of the Zoning Board of Adjustment to
accommodate a 16-unit project. The current zoning permits 12 units in one building.
2.3 Existing and Proposed Land Use
All the property is currently vacant. The proposed use is for a 16 unit, two-story
apartment building. The proposed project will provide affordable housing with
services to 24 Iow-income individuals with disabilities.
The total acreage of the ARC Urban Revitalization District is 30,472 square feet
2.4 Assessed Valuations and Owners of Records
The property is assessed as commercial. The existing assessed valuation of the real
estate in this Revitalization District is a land value of $66,021. No buildings are
located on the site.
The current owners of record of the real estate within the District is
Area Residential Care Foundation, 1170 Roosevelt Street Ext. Dubuque, Iowa.
Although the current owner is a non-profit organization and does not pay property tax,
the property will be transferred to a limited partnership for purposes of constructing
the housing development. The general partner of the limited partnership will be Area
Residential Care Foundation. The limited partnership entity will pay property tax.
2.5 City Plans and Services
There are no current plans to expand or improve City services to this area. Currently
the area enjoys the same level of City services as the surrounding area.
3.0 Relocation
No persons, families or businesses will be displaced or relocated as a result of the
improvements in the district. The site is currently vacant.
4.0 Qualification of Area
4.1 Proposed Improvements
The proposed improvements will include a new two-story apartment building to meet
the special housing and service needs of persons with disabilities. The building will
have e~ght one-bedroom apartments and eight two-bedroom apartments. All of the
apartments will be income restricted and affordable to households with incomes less
than 60% of the area median income. Additionally, at least 40 % of the units will be
reserved for households with incomes less than 50% of the area median income.
Supportive services provided by Area Residential Care, Inc. will be available 24 hours
a day seven days a week on-site.
ARC Urban Revitalization Plan
October 2002
Page 3
4.2 Proposed Impact
The proposed project will leverage over $2 million in federal and state funding and will
include both a private mortgage and capital contributions by an investor, The tax
abatement generated by the project will enable the project to rent one-bedroom
apartments for $309 per month and two bedroom apartments for $392 per month.
The project will provide an affordable housing alternative for persons with mental
illness and mental retardation. The proposed project will provide 24 hour 7 day a
week on-site supportive services to assist Iow income tenants with their successful
and productive integration into the community.
5.0 Revitalization Program
5.1 Tax Exemption
- a) All residential property, assessed either as residential or commercial, in the
Revitalization District shall be eligible for tax abatement,
b)
"Qualified real estate" means land upon which no structure existed at the start of
new construction, which is located in a designated Revitalization District and upon
which new construction has been added dudng the time the area was so
designated.
c) Property tax exemption shall be available only for new construction on the vacant
land in the Revitalization District.
d) "Actual value added by improvements" means the actual value added as of the
first year for which the exemption was received.
e)
Any improvements that were assessed before the Revitalization District was
officially designated will not be eligible for exemption. Improvements begun one
year prior to the area becoming designated will not be eligible for exemption.
f)
The actual value of the improvements must result in an increase in assessed value
by at least fifteen percent or ten percent in the case of real property assessed as
residential property before a tax exemption may be applied. Each year that an
application is made for tax exemption, the assessed value must have increased in
that year by at least fifteen percent or ten percent in the case of real property
assessed as residential property.
i)
The tax abatement schedule shall offer the same exemption opportunity as is
available in other Urban Revitalization Districts so designated in the City of
Dubuque, Therefore, a ten-year 100% exemption on the actual value added by
the improvements as provided in Iowa Code Section 404.3 (4) shall be established
as part of this Plan.
j) The designation of the ARC Urban Revitalization Area will remain in effect only
ARC Urban Revitalization Plan
O~tober 2002
Page 4
until the area is fully reflevelopefl or for three years, whichever occurs first. Upon
repeal or expiration of the ordinance establishing the revitalization area, all existing
exemptions would continue until their previously established expiration date.
The pement increase in value shall also reflect the standard used in other Urban
Revitalization districts in the city. The actual value of the improvements must
increase the assessed value by at least fifteen percent (15%) before abatement is
applied. Each year that an application is made for tax abatement, the assessed
value must have increased in that year by at least fifteen percent (15%).
I) The proposed area shall remain as a revitalization area commencing upon the
adoption of the ordinance approving this Revitalization District by the City Council.
$.2 Eligibility
For qualified improvements to be eligible for tax exemption, a building permit must be
obtained in accordance with the City of Dubuque's Code of Ordinances. Also for
property accessed as commercial 75% or greater of the total square footage must be
used for residential purposes in order to qualify for the program
5.3 Availability of funding
There are at present many active programs, which may provide a soume of funding
for residential improvements to the Revitalization District. These include: Federal Low
Income Housing Tax Credits, HOME Loan from the Iowa Department of Economic
Development, Federal Home Loan Bank Funds, private mortgage, private
construction loan and private equity.
The amount of funding from each source is pending. The project applied for Federal
Home Loan Bank funding on September 6, 2002 and the anticipated award date is
mid to late November 2002. The project will apply for Low Income Housing Tax
Credits November 25, 2002. Once an award is made for the tax credits the amount of
funds to be committed by the other sources will be determined.
6.0 Conclusion
The ARC Urban Revitalization District will assist the development efforts of vacant
properties by providing needed housing units for the cilJzens of Dubuque and the
surrounding area. After the ten-year abatement period lapses on these projects, the full
assessed value of the rehabilitation property will go on the tax rolls to the benefit of the
entire community.
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ARC Urban Revitalization Plan: Zoning 2002
MEMORANDUM
October 14, 2002
TO:The Honorable Mayor and City Council Members
FROM:Michael C. Van Milligen, City Manager
SUBJECT:Request for Urban Revitalization Status for New Residential Construction
Area Residential Care has advised the City that they intend to build a 16-unit apartment
building on Kennedy Circle. As this will be for Iow and moderate income disabled
individuals, they plan to apply to the Iowa Finance Authority for housing tax credits.
They are requesting that the City provide urban revitalization status for the project in
order to create $33,000 in City assistance to meet the 1% local assistance threshold of
,$20,000 required by the IFA and a perceived funding gap of $13,000.
The Council has granted site-specific urban revitalization designation to a number of
housing projects over the years, including Windsor Park (Xavier Hospital), Cathedral
Gardens (St. Raphaels Convent), Martha's Haus (Sacred Heart Convent) and Henry
Stout Place (the Iowa Inn). All these projects developed housing through extensive
rehabilitation of an existing structure. All but Windsor Park provided this as housing
affordable to lower-income households.
In addition, in the past two years the Council has approved urban revitalization for two
new construction projects on Garfield Avenue. Both were developed as single room
occupancy (SRO) faci!ities for Iow-moderate income men, the first being the Davis
Place, completed last year. The second is currently under construction.
Although the City's policy has been to grant urban revitalization only for projects
including rehabilitation of an existing structure, an exception was made for the Davis
Place project last year. In this case, the Housing Department had secured a $200,000
grant from the Iowa Department of Economic Development to assist in the conversion of
the dilapidated building on the site into single rooming units. However, subsequent to
this award, the developer determined that it was economically infeasible to adaptively
reuse the building, resulting in a decision to demolish. We then were able to obtain
approval from IDED for use of the $200,000 grant for construction of a new facility.
We had applied to IDED for the $200,000 grant as part of our commitment to provide
additional SRO-type housing as a result of the closing of the Iowa Inn. We had ordered
the vacation of the Iowa Inn the previous year, resulting in the displacement of a
number of lower-income men. Construction of the Davis Place was part of a plan to
replace the lost rooming units.
The Council accordingly approved a site-specific urban revitalization district for the
property, for new construction, to provide needed financial assistance due to the Iow
($250 per month) rents required as a result of the State grant. The second SRO project
was approved for urban revitalization designation this year.
I respectfully recommend rejection of this request to create a new Urban Revitalization
District. ARC should build this worthwhile project meeting one or both of the following
cdteria to get City financial support:
1. This should be done in an area of the City that has already been designated
by the City Council as an area in heed of assistance, as you have done by
creating Urban Revitalization and Urban Renewal Districts downtown or
elsewhere;
AND/OR
2. This should be done as a remodeling project and not new construction, to be
more consistent with past practice of the City Council. There are many
buildings in need of work.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
David Hards, Housing and Community Development Director
Prepared by: Barry A. Lindah1300 Main Street Suite 330 Dubuque IA 52001 563 583-4113
AGREEMENT
BY AND BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
KENNEDY POINT LIMITED PARTNERSHIP
This Agreement is made and entered into this __ day of
2002, by and between the City of Dubuque, Iowa (City) and Kennedy Point
Limited Partnership (Kennedy), an Iowa limited partnership.
WHEREAS, Iowa Code Chapter 404 authorizes City by ordinance to
designate an area of the city as a revitalization area if the area is appropriate for
construction of housing and residential development, including multifamily
housing; and
WHEREAS the City Council has designated such an area as the ARC
Urban Revitalization Area (the Area); and
WHEREAS, Kennedy desires to construct the following housing and
residential development, including multifamily housing in the Area: 16 unit two-
story apartment building to provide affordable housing with services for up to 24
Iow-income individuals with disabilities (the Improvements) on the following
described property (the Property):
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) in Herrig's JFK Addition.
And
WHEREAS, under Iowa Code Chapter 404, the Improvements on the
Property may be eligible to receive an exemption from taxation based on the
actual value added by Improvements on the Property and such exemption is for a
period of ten years (the Exemption Period); and
WHEREAS, the Improvements on the Property may be eligible for an
exemption from taxation and Kennedy has requested an exemption from taxation
for the total amount of $33,000.00 of abated taxes on the Property during the
Exemption Period.
NOW, THEREFORE, IT IS AGREED BY AND BETWEEN THE PARTIES
AS FOLLOWS:
1. Kennedy shall comply with the requirements of Iowa Code Chapter 404
and the City Ordinance establishing the ARC Urban Revitalization Area.
2. Upon compliance with Iowa Code Chapter 404 and the City Ordinance
establishing the ARC Urban Revitalization Area and subject to the City
Assessor's determination that the Improvements qualify under Iowa Code
Chapter 404 for exemption from taxation, and in consideration for City's
designation of the Area, Kennedy agrees that it shall be entitled to an exemption
from taxation dudng the Exemption Period but only until the total amount of
$33,000.00 in taxes on the Improvements to the Property have been abated.
Kennedy shall pay to City an amount equal to any further abatement on the
Improvements to the Property during the Exemption Period in excess of
$33,000.00 in abated taxes within thirty days after the effective date of any such
additional tax abatement and upon receipt of such payments, City shall pay such
amounts to the Dubuque County Treasurer to be apportioned among the
respective taxing bodies in the same manner as if Kennedy had paid such
amount to the Dubuque County Treasurer as a property tax payment on the
Improvements on the Property. The effective date of such tax abatements shall
be the date when the abated taxes on the Improvements on the Property would
have been due and payable to the Dubuque County Treasurer.
3. Kennedy shall not later than September 1 of each year during the
Exemption Period obtain from the Dubuque City Assessor and provide to City's
Housing and Community Development Department a calculation of the amount of
taxes Kennedy would have paid on the Improvements on the Property had such
taxes not been abated.
CITY OF DUBUQUE, IOWA
By
Terrance M. Duggan, Mayor
Attest:
Jeanne F. Schneider, City Clerk
KENNEDY POINt LIMITED PARTNERSHIP
By
Mary Hickey
President, Area Residential Care Foundation,
A General Partner
STATE OF IOWA )
) SS:
COUNTY OF DUBUQUE )
On this day of ,20 __, before me, a
Notary Public in and for said county and state, personally appeared Mary Hickey,
to me known to be the identical person who subscribed the name of Mary Hickey
to the foregoing instrument as President, Area Residential Care Foundation, a
general partner of Kennedy Point Limited Partnership, and acknowledged the
execution thereof to be her voluntary act and deed and the voluntary act and
deed of said partnership.
Witness my hand and notarial seal the day and year last above written.
NOTARY PUBLIC
STATE OF IOWA )
) SS:
COUNTYOF DUBUQUE )
On this __ day of ,20 , before me, the undersigned, a
Notary Public in and for the State of Iowa, personally appeared Terrance M.
Duggan and Jeanne F. Schneider, to me personally known, who, being by me duly
sworn, did say that they are the Mayor and City Clerk, respectively, of the City of
Dubuque, Iowa; a municipal corporation; that the seal affixed to the foregoing
instrument is the corporate seal of the corporation, and that the instrument was
signed and sealed on behalf of the corporation, by authority of its City Council, as
contained in Resolution No. passed by the City Council on the
; and Terrance M. Duggan and Jeanne F. Schneider acknowledged
the execution of the instrument to be their voluntary act and deed and the
voluntary act and deed of the corporation, by it voluntarily executed.
NOTARY PUBLIC
the execution of the instrument to be their voluntary act and deed and the
voluntary act and deed of the corporation, by it voluntarily executed.
NOTARY PUBLIC
URBAN RENEWAL
DISTRICTS
Dubuque Industrial Center Economic Development District
East 7th Street Economic Development District
Ice Harbor Urban Renewal District
Dubuque Industrial Center/South Economic Development District
Kerper Boulevard Industrial Park Economic Develpment District
Downtown Urban Renewal District
Swiss Valley Urban Renewal District
Quebecor Economic Development District
N
CITY OF DUBUQUE, IOWA
MEMORANDUM
October 8 2002
TO: Michael C. Van Milligen, City Manager
FROM: David Harris, Housing and Community Development Department
SUBJECT: ARC Urban Revitalization Plan
Introduction
This memorandum recommends that the City Council set a public hearing to consider
designating the ARC Urban Revitalization District.
Background
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 abating 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 viability 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 must 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 that must be followed.
The City's Urban Revitalization Program offers a ten-year property tax abatement for
eligible improvements to residential properties in designated revitalization districts.
Discussion
The project under consideration at this time will include construction of a 16-unit apartment
building, for residents from the Area Residential Care program. The ARC Foundation has
purchased a site west of Kennedy Circle and east of Keyway Drive for this purpose and
had it rezoned for residential use.
The project will provide assisted housing to 24 individuals with mental illness and mental
retardation. ARC will provide 24-hour on-site supportive services to the residents. Jobs
for seven staff will be created as a result of this project. Rents are projected at $309 for
one-bedroom units and $392 for two-bedrooms. (This compares with our current Section 8
Program HUD "fair market rents' of $418 and $537, respectively).
The primary financing source for this project, estimated to cost $2 million, will be federal
Iow-income housing tax credits, administered through the Iowa Finance Authority (IFA). In
order to qualify for this funding, the project will provide that all units will be income-
restricted and all households have incomes less than 60% of area median. Additionally, at
least 40% of the units will be reserved for households earning less than 50% of area
median income.
In order to qualify for the competitively awarded housing tax credits, projects must score
points according to a ranking system used by the Finance Authority. One criterion - that
the project is located within either an urban renewal or an urban revitalization district -
rates ten points, a significant amount toward the total score.
For the ARC project, the developer is requesting the City to grant urban revitalization
designation, in order to assist with the application scoring, and resulting tax abatement in
an amount up to $33 000. The total package of financing for the project, including IFA tax
credits, investor equity to be provided through Alliant/Heartland Properties, private
mortgage and City tax abatement, will enable the project to provide housing at below-
market rents for 24 mentally disadvantaged individuals.
The Council's policy in approving project-specific urban revitalization districts has been to
grant 10-year tax abatement, which also is required by state code for the ARC district.
However, in this case, the developer has requested tax abatement only in the amount of
$33 000. This will require approximately only a five-year tax abatement from date of
completion of construction. This is based on an approximate $6500 annual tax
contribution on the completed project, based on a recent revision to the Section 42 (federal
housing tax credit program) Code that now assesses a tax credit property only on its
income potential. To compensate the City for the tax abatement over $33 000, the
attached security agreement should be adopted at the public hearing to guarantee
reimbursement.
While the ARC Foundation is a non-profit and pays no real estate taxes, the proposed
project will be financed in part through the equity contribution of the limited partner
(Heartiand/Ailiant), through purchase of the tax credits. This will be transacted at
completion of construction. At that time, the ownership will become a for-profit entity and
will pay property tax.
Chapter 404 provides for a 30-day public comment period prior to the adoption of an urban
revitalization plan. However this requirement can be waived for good cause. Since Area
Residential Care Foundation is the only property owner, the Council is requested to waive
the 30-day notification.
Additionally the City's Code of ordinances requires comment by the Long Range Planning
Commission on any urban revitalization plan, which will occur on October 16, 2002.
In summary, the Council will be requested to consider approval of an urban revitalization
district for the ARC project at its 21 October meeting. At that time, it will be requested to
set a public headng for designation of the district, to be held on 4 November. At the
November meeting, the Council will be additionally requested to approve the security
agreement for tax abatement reimbursement and approve the required IFA resolutions of
support and local contributing effort. The requested local financial assistance will be tax
abatement in the amount of $33 000.
Recommendation
I recommend that the City Council approve the attached resolution setting the public
hearing for November 4, 2002 to consider designating the ARC Urban Revitalization
district. At the public hearing the Council can adopt the proposed plan by ordinance.
Action Requested
The Action Step is for the City Council to adopt the attached resolution.
Prepared by: Aggie Kramer, Community Development Specialist
RESOLUTION NO. -02
RESOLUTION FINDING THAT THE DESIGNATION OF THE ARC URBAN
REVITALIZATION PLAN IS NECESSARY IN THE INTEREST OF THE PUBLIC
HEALTH, SAFETY AND WELFARE OF THE RESIDENTS OF THE CITY OF
DUBUQUE, IOWA AND PROVIDING FOR A PUBLIC HEARING THEREON.
Whereas, the City Council of the City of Dubuque finds that property in the ARC
Urban Revitalization district is appropriate for construction of housing and residential
development; and
Whereas, the City's Long Range Planning Advisory Commission has reviewed the
proposed plan and found the plan provides incentives for utilizing vacant parcels for
affordable housing; and
Whereas, Chapter 404 of the Code of Iowa provides for the establishment of an urban
revitalization area for such properties following a public hearing.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the development of the areas described in the attached ARC Urban
Revitalization Plan is found to be necessary in the interest of the public health, safety and
welfare of the residents of the City, to wit:
Section 2. That the ARC Urban Revitalization Plan as proposed meets the eligibility
cdteria of Chapter 404.1 of the Code of Iowa, 2001.
Section 3. That the City Council has found good cause to waive the 30-day
notification period.
Section 4. That the City Clerk is directed to publish notice of a public hearing on the
aforementioned Urban Revitalization Area Plans to be held on November 4, 2002 at 6:30
p.m. in the Carnegie Stout Library Auditorium, 360 West 11th Street, Dubuque, Iowa
52001; and
Section 5. That the ARC Urban Revitalization Plan shall be a matter of record and
shall be available for pubic inspection in the office of the City Clerk at City Hall, 50 West
13~ Street, Dubuque, Iowa
Passed, approved and adopted this day of October 2002.
Attest:
Terrance M. Duggan, Mayor
Jeanne F. Schneider, City Clerk F:\Users~AKRAMER\Urban Revite~ARC UR~ARC UR Res.doc
ARC Urban Revitalization Plan
October 2002
1.0 Introduction
The following plan describes certain provisions of the Iowa Urban Revitalization Act and
proposes the creation and designation of an ARC Urban Revitalization District.
The State of Iowa, under Iowa Code Chapter 404, allows cities to designate areas as
urban revitalization districts. Under this Act, improvements to qualified areas may receive
a total or partial exemption from property taxes for a specified number of years. The
exemptions are intended to stimulate pdvate investment by the reduction of tax increases
related to property improvements.
Once an area is deemed to meet the requirements established in Chapter 404, a plan
must be established that identifies the district boundaries, property owners, existing
conditions, proposed plans and the basic abatement provisions for the revitalization area.
Iowa Code Chapter 404.1 lists-five reasons for which a city or county may establish urban
revitalization plans. These include: the existence of numerous buildings that are
dilapidated or deteriorated; the need for preservation and restoration of buildings due to
their historic significance; the area is appropriated as an economic development region
as defined in Iowa Code 403.17; the need for public improvements related to housing;
and the encouragement of housing and residential development. The law also states that
at least 75% of a participating property's square footage must be used for residential
purposes in order to qualify for the program. The ARC Urban Revitalization Plan will be
based upon the need for the encouragement of housing and residential development in
the area.
2.0 The District
2.1 Location
Map 1 identifies the location of the Revitalization District. As indicated on the map,
this area is located east of the intersection of Keyway and Keymeer Drive, with
access to the site from Kennedy Circle.
The boundaries of the Distdct are:
The northerly 140 feet of Lot One (1) of Lot Five (5) of Herrig's JFK Addition in the
City of Dubuque, Iowa.
2.2 Existing and Proposed Zoning
Map 2 shows the existing zoning district. Within the ARC Urban Revitalization District
all the property is located in an R-4 Multifamily Residential District.
ARC Urban Revitalization Plan
October 2002
Page 2
A conditional use permit will be requested of the Zoning Board of Adjustment to
accommodate a 16-unit project. The current zoning permits 12 units in one building.
2.3 Existing and Proposed Land Use
Ail the property is currently vacant. The proposed use is for a 16 unit, two-story
apartment building. The proposed project will provide affordable housing with
services to 24 Iow-income individuals with disabilities.
The total acreage of the ARC Urban Revitalization District is 30,472 square feet
2.4 Assessed Valuations and Owners of Records
The property is assessed as commercial. The existing assessed valuation of the real
estate in this Revitalization Distdct is a land value of $66,021. No buildings are
located on the site.
The current owners of record of the real estate within the Distdct is
Area Residential Care Foundation, 1170 Roosevelt Street Ext. Dubuque, Iowa.
Although the current owner is a non-profit organization and does not pay property tax,
the property will be transferred to a limited partnership for purposes of constructing
the housing development. The general partner of the limited partnership will be Area
Residential Care Foundation. The limited partnership entity will pay property tax.
2.5 City Plans and Services
There are no current plans to expand or improve City services to this area. Currently
the area enjoys the same level of City services as the surrounding area.
3.0 Relocation
No persons, families or businesses will be displaced or relocated as a result of the
improvements in the district. The site is currently vacant.
4.0 Qualification of Area
4.1 Proposed Improvements
The proposed improvements will include a new two-story apartment building to meet
the special housing and service needs of persons with disabilities. The building will
have eight one-bedroom apartments and eight two-bedroom apartments. All of the
apartments will be income restricted and affordable to households with incomes less
than 60% of the area median income. Additionally, at least 40 % of the units will be
reserved for households with incomes less than 50% of the area median income.
Supportive services provided by Area Residential Care, Inc. will be available 24 hours
a day seven days a week on-site.
ARC Urban Revitalization Plan
October 2002
Page 3
4.2 Proposed Impact
The proposed project will leverage over $2 million in federal and state funding and will
include both a pdvate mortgage and capital contributions by an investor. The tax
abatement generated by the project will enable the project to rent one-bedroom
apartments for $309 per month and two bedroom apartments for $392 per month.
The project will provide an affordable housing alternative for persons with mental
illness and mental retardation. The proposed project will provide 24 hour 7 day a
week on-site supportive services to assist Iow income tenants with their successful
and productive integration into the community.
5.0 Revitalization Program
5.1 Tax Exemption
a) All residential property, assessed either as residential or commercial, in the
Revitalization District shall be eligible for tax abatement.
b)
"Qualified real estate" means land upon which no structure existed at the start of
new construction, which is located in a designated Revitalization District and upon
which new construction has been added during the time the area was so
designated.
c) Property tax exemption shall be available only for new construction on the vacant
land in the Revitalization District.
d) "Actual value added by improvements" means the actual value added as of the
first year for which the exemption was received.
e)
Any improvements that were assessed before the Revitalization District was
officially designated will not be eligible for exemption. Improvements begun one
year prior to the area becoming designated will not be eligible for exemption.
f)
The actual value of the improvements must result in an increase in assessed value
by at least fifteen percent or ten pement in the case of real property assessed as
residential property before a tax exemption may be applied. Each year that an
application is made for tax exemption, the assessed value must have increased in
that year by at least fifteen percent or ten percent in the case of real property
assessed as residential property.
i)
The tax abatement schedule shall offer the same exemption opportunity as is
available in other Urban Revitalization Districts so designated in the City of
Dubuque. Therefore, a ten-year 100% exemption on the actual value added by
the improvements as provided in Iowa Code SeCtion 404.3 (4) shall be established
as part of this Plan.
j) The designation of the ARC Urban Revitalization Area will remain in effect only
ARC Urban Revitalization Plan
October 2002
Page 4
until the area is fully redeveloped or for three years, whichever occurs first. Upon
repeal or expiration of the ordinance establishing the revitalization area, all existing
exemptions would continue until their previously established expiration date.
The percent increase in value shall also reflect the standard used in other Urban
Revitalization districts in the city. The actual value of the improvements must
increase the assessed value by at least fifteen pement (15%) before abatement is
applied. Each year that an application is made for tax abatement, the assessed
value must have increased in that year by at least fifteen percent (15%).
I) The proposed area shall remain as a revitalization area commencing upon the
adoption of the ordinance approving this Revitalization Distdct by the City Council.
5.2 Eligibility
For qualified improvements to be eligible for tax exemption, a building permit must be
obtained in accordance with the City of Dubuque's Code of Ordinances. Also for
property accessed as commercial, 75% or greater of the total square footage must be
used for residential purposes in order to qualify for the program.
5.3 Availability of funding
There are at present many active programs, which may provide a source of funding
for residential improvements to the Revitalization District. These include: Federal Low
Income Housing Tax Credits, HOME Loan from the Iowa Department of Economic
Development, Federal Home Loan Bank Funds, private mortgage, private
construction loan and pdvate equity.
The amount of funding from each source is pending. The project applied for Federal
Home Loan Bank funding on September 6, 2002 and the anticipated award date is
mid to late November 2002. The project will apply for Low Income Housing Tax
Credits November 25, 2002. Once an award is made for the tax credits the amount of
funds to be committed by the other sources will be determined.
6.0 Conclusion
The ARC Urban Revitalization District will assist the development efforts of vacant
properties by providing needed housing units for the citizens of Dubuque and the
surrounding area. After the ten-year abatement pedod lapses on these projects, the full
assessed value of the rehabilitation property will go on the tax rolls to the benefit of the
entire community.
F:\Users\AKRAMER',Urban Revite'~RC UR~ARC Revitalization Plan.doc
ARC Urban Revitalization Plan: Land Use 2002
ARC Urban Revitalization Plan: Zoning 2002
MEMORANDUM
October 29, 2002
TO:The Honorable Mayor and City Council Members
FROM:Michael C. Van Milligen, City Manager
SUBJECT:ARC Urban Revitalization Plan
Area Residential Care has advised the City that they intend to build a 16-unit apartment
building on Kennedy Circle. As this will be for Iow and moderate income disabled
individuals, they plan to apply to the Iowa Finance Authority for housing tax credits.
They are requesting that the City provide urban revitalization status for the project in
order to create $33,000 in City assistance to meet the 1% local assistance threshold of
$20,000 required by the IFA and a perceived funding gap of $13,000.
The Council has granted site-specific urban revitalization designation to a number of
housing projects over the years, including Windsor Park (Xavier Hospital), Cathedral
Gardens (St. Raphaels Convent), Martha's Haus (Sacred Heart Convent) and Henry
Stout Place (the Iowa Inn). All these projects developed housing through extensive
rehabilitation of an existing structure. All but Windsor Park provided this as housing
affordable to lower-income households.
In addition, in the past two years the Council has approved urban revitalization for two
new construction projects on Garfield Avenue. Both were developed as single room
occupancy (SRO) facilities for Iow-moderate income men, the first being the Davis
Place, completed last year. The second is currently under construction.
Although the City's policy has been to grant urban revitalization only for projects
including rehabilitation of an existing structure, an exception was made for the Davis
Place project last year. In this case, the Housing Department had secured a $200,000
grant from the Iowa Department of Economic Development to assist in the conversion of
the dilapidated building on the site into single rooming units. However, subsequent to
this award, the developer determined that it was economically infeasible to adaptively
reuse the building, resulting in a decision to demolish. We then were able to obtain
approval from IDED for use of the $200,000 grant for construction of a new facility.
We had applied to IDED for the $200,000 grant as part of our commitment to provide
additional SRO-type housing as a result of the closing of the Iowa Inn. We had ordered
the vacation of the Iowa Inn the previous year, resulting in the displacement of a
number of lower-income men. Construction of the Davis Place was part of a plan to
replace the lost rooming units.
The Council accordingly approved a site-specific urban revitalization district for the
property, for new construction, to provide needed financial assistance due to the Iow
($250 per month) rents required as a result of the State grant. The second SRO project
was approved for urban revitalization designation this year.
I respectfully recommend rejection of this request to create a new Urban Revitalization
District. ARC should build this worthwhile project meeting one or both of the following
criteria to get City financial support:
1. This should be done in an area of the City that has already been designated
by the City Council as an area in need of assistance, as you have done by
creating Urban Revitalization and Urban Renewal Districts downtown or
elsewhere;
AND/OR
2. This should be done as a remodeling project and not new construction, to be
more consistent with past practice of the City Council. There are many
buildings in need of work.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
David Harris, Housing and Community Development Department
CITY OF DUBUQUE, IOWA
MEMORANDUM
October 24, 2002
TO: Michael C. Van Milligen, City Manager
FROM: Davis Flards, Housing and Community Development Department
SUBJECT: ARC Urban Revitalization Plan
Introduction
The purpose of this memorandum is to request the City Council to adopt the attached
ordinance establishing the ARC Urban Revitalization Area; and to approve the attached
agreement stating the terms of the tax abatement schedule.
Background
On October 21, the City Council adopted a resolution setting a public hearing for
November 4 2002 on the ARC Urban Revitalization Plan. The plan provides for the
establishment of the Urban Revitalization Program for property located west of Kennedy
Circle and east of Keyway Drive. The project under consideration at this time will include
construction of a 16-unit apartment building, for residents from the Area Residential Care
program.
The project will provide assisted housing to 24 individuals with mental illness and mental
retardation. ARC will provide 24-hour on-site supportive services to the residents. Jobs
for seven staff will be created as a result of this project. Rents are projected at $309 for
one-bedroom units and $392 for two-bedrooms. (This compares with our current Section 8
Program HUD "fair market rents" of $418 and $537, respectively).
Discussion
The primary financing source for this project, estimated to cost $2 million, will be federal
Iow-income housing tax credits, administered through the Iowa Finance Authority (IFA). In
order to qualify for this funding, the project will provide that all units will be income-
restricted and all households have incomes less than 60% of area median. Additionally, at
least 40% of the units will be reserved for households earning less than 50% of area
median income.
In order to qualify for the competitively awarded housing tax credits, projects must score
points according to a ranking system used by the Finance Authority. One criterion - that
the project is located within either an urban renewal or an urban revitalization district -
rates ten points, a significant amount toward the total score.
For the ARC project, the developer is requesting the City to grant urban revitalization
designation, in order to assist with the application scoring, and resulting tax abatement in
an amount up to $33 000. The total package of financing for the project, including IFA tax
credits, investor equity to be provided through Alliant/Heartland Properties, private
mortgage and City tax abatement, will enable the project to provide housing at below-
market rents for 24 mentally disadvantaged individuals.
The Council's Policy in approving project-specific urban revitalization districts has been to
grant 10-year tax abatement, which also is required by state code for the ARC district.
However, in this case, the developer has requested tax abatement only in the amount of
$33 000. This will require approximately only a five-year tax abatement from date of
completion of construction. This is based on an approximate $6500 annual tax
contribution on the completed project, based on a recent revision to the Section 42 Code
(federal housing tax credit program) that now assesses a tax credit property only on its
income potential. To compensate the City for the tax abatement over $33 000, the
attached security agreement should be adopted at this time to guarantee reimbursement.
While the ARC Foundation is a non-profit and pays no real estate taxes, the proposed
project will be financed in part through the equity contribution of the limited partner
(Heartland/Alliant), through purchase of the tax credits. This will be transacted at
completion of construction. At that time, the ownership will become a for-profit entity and
will pay property tax.
Recommendation
I recommend that the City Council approve the ordinance authorizing adoption of the ARC
Urban Revitalization Plan and approve the security agreement for tax abatement
reimbursement.
Action Requested
The Action Step is for the City Council to adopt the attached ordinance and security
agreement.
Prepared by: Aggie Kramer, Community Development Specialist
F:~Usem~AKRAMER~UFoan Revite',PlanningUR',Hist Dist UR ord mere.doc
State of Iowa
Dubuque County
Certificate of Publication
Urban renewal Districts