Brownfiled_Grayfield Redevelopment Tax Credit Appl_40 Main LLCr'
Prepared by: David Heiar, Economic Dev Director, 50 West 13th Street, Dubuque IA 52001 563 589-4393
Return to: Jeanne Schneider, City Clerk, 50 West 13th Street, Dubuque IA 52001 563 589-4121
RESOLUTION NO. 290-09
RESOLUTION APPROVING A BROWNFIELD/GRAYFIELD REDEVELOPMENT TAX
CREDIT APPLICATION TO THE IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT,
ON BEHALF OF 40 MAIN, LLC.
Whereas, the State of Iowa has established aBrownfield/Grayfield Tax Credit
Program to assist in the redevelopment of Iowa. brownfields and grayfields; and
Whereas, the 40 Main building is located on a previous Brownfield site; and
Whereas, the 40 Main project will provide much needed residential development to
the downtown area; and
Whereas, the City Council finds that the proposed application is acceptable and
necessary to the growth and development of the city.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. The City of Dubuque agrees to sponsor the Brownfield/Grayfield
Redevelopment Tax Credit Application on behalf of 40 Main, LLC.
Section 2. That the Mayor is hereby authorized and directed to execute this
Resolutio on behalf of the City of Dubuque and forward the executed
copy to the Iowa Department of Economic Development.
Passed, approved and adopted this 17th day of August, 2009.
-~)
,_ ~~ ~ .mac
oy D. Buol, Mayor
Attest: '
~~ .~~~~ /
eanne F. Schneider, City Clerk
F:\USERS\DHeiar\40 Main\Enterprise Zone\20090817 Resolution Brownfield-Gra~eld 40 Main LLC.doc
Dubuque
THE CITY OF
aia
DUB E
1 1
Masterpiece on the Mississippi
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Brownfield/Grayfield Redevelopment Tax Credit Application for
40 Main, LLC
DATE: August 11, 2009
Economic Development Director Dave Heiar recommends City Council approval for the
City of Dubuque to sponsor aBrownfield/Grayfield Redevelopment Tax Credit
Application to the Iowa Department of Economic Development on behalf of 40 Main,
LLC. There is no commitment for any further assistance from the City of Dubuque.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director '
SUBJECT: Brownfield/Grayfield Redevelopment Tax Credit Application for 40 Main,
LLC
DATE: August 12, 2009
INTRODUCTION
This memorandum presents for City Council approval aBrownfield/Grayfield Redevelopment
Tax Credit Application to the Iowa Department of Economic Development (IDED), on behalf of
40 Main, LLC. The City Council is requested to adopt a resolution approving the application.
BACKGROUND
Recently, the State of Iowa established a new tax credit that is available for redevelopment of
brownfields and/or grayfields. If the project is redeveloped in a "green" fashion, extra tax credits
are available. The percentage of the tax credit can range from 12% to 30% as follows:
Twelve percent (12%) of the taxpayer's qualifying investment in a Grayfield site.
Fifteen percent (15%) if the Grayfield project meets the requirements of green development.
Twenty four percent (24%) of the taxpayer's qualifying investment in a Brownfield site.
Thirty percent (30%) if the Brownfield project meets the requirements of green development.
40 Main, LLC, the former Higley Chemical building on South Main was a Brownfield site. A
developer can qualify for up to $100,000 of tax credits per building.
DISCUSSION
Attached to this memorandum is a resolution that provides for the approval of the application for
a Brownfield/Grayfield Redevelopment Tax Credit Application on behalf of 40 Main, LLC. The
resolution authorizes the City to sponsor the application.
40 Main, LLC has estimated a capital investment of $5,780,824 within the Enterprise Zone
which is also a brownfield area. A copy of the application is attached to the resolution.
RECOMMENDATION
I recommend that the City Council approve the proposed application for 40 Main, LLC by
adopting the attached resolution. This application will provide State of Iowa financial benefits to
a local housing developer making a substantial investment in our downtown. There is no
commitment within this application of any further City assistance.
ACTION STEP
The action step for the Council is to adopt the attached resolution.
Attachments
F:\USERS\DHeiar440 MainlEnterprise Zone\20090817 40 Main Brownfield-Gra~eld Council Memo.doc
IOWA
'~ changing
FY2010
Michael Tramontina, Director
Iowa Department of Economic Development
Brownfield/Grayfield
Redevelopment Tax Credit
Application
Business Development Division
Iowa Department of Economic Development
;ompleted forms with attachments should be sent to:
.-mail: brownfields@iowalifechanging.com
Mail: Iowa Department of Economic Development
ATTN: Matt Rasmussen
200 East Grand Avenue
Des Moines, Iowa 50309
=ax: 515.725.3010
questions? Need assistance? Contact Matt Rasmussen, Program Manager at 515.725.3126.
PART 1: APPLICANT/SPONSORSHIP/OWNERSH[P INFORMATION
Applicant: 40 Main LLc
Street Address: 40 Main Street
City: Dubuque State:lA
Contact Person: Sherry Freebery
Telephone Number: 302 479 9500 Fax Number.
Email Address: sfreebery@chathambay.com
Zip Code: 52001
302 479 9200
Applicant Sponsor: City of Dubuque, Iowa
Street Address: 50 W.13~ Street
Gity: Dubuque State: Iowa Zip Code: 52001
Contact Person: Mayor Roy D. Buol
Telephone Number: 563.589,4393 Fax Number: 563.589.1733
Email Address: rdbuol@cityofdubuque.org
Signature:,
Property Owner (if different than applicant): 40 Main LLC clo Chatham Bay Group
Street Address:
1415 Foulk RD, Suite 104
City: Wilmington State: DE Zip Code: 19803
Contact Person: Sherry Freebery
Telephone Number. 302 479 9560 Fax Number: 302 479 9200
Email Address: sfreebery@chathambay.com
Applicant is (Please check one}:
^ An individual
^ Partnership
X Limited Liability Company
^ S Corporation
^ Estate
^ Trust electing to have income taxed directly to the individual
^ Other (Specify):
ATTENTION:
For the purpose of this application for Brownfield/Grayfield tax credits, an investment shall be deemed to have been
made on the date the Qualifyina redevelopment project is completed. An investment made after June 30, 2010, shall not
qualify for this tax credit.
2
PART 1:APPLICANT/SPONSORSHIPIOVI~NERSHIP INFORMATION
Applicant: 40 Main LLc
Street Address: 40 Main Street
City: Dubuque State:lA
Contact Person; Sheny Freebery
Telephone Number: 302 479 9500 Fax Number.
Email Address: sfreebery@chathambay.com
Zip Code: 52001
302 479 9200
Applicant Sponsor: City of Dubuque, Iowa
Street Address: 50 W.13w Street
City: Dubuque State: Iowa Zip Code: 52001
Contact Person: Mayor Roy D. Buol
Telephone Number: 563.589.4393 Fax Number. 563.589.1733
Email Address: rdb~ol(a.cityofdubuque.org
Sig
D
Property Owner (if different than applicant): 40 Main LLG clo Chatham Bay Group
Street Address:
1415 Foulk RD, Suite 104
City: Wilmington State: DE Zip Code: 19803
Contact Person: Sherry Freebery
Telephone Number: 302 479 9500 Fax Number. 302 479 9200
Email Address: sfreebery@chathambay.com
Applicant is (Please check one):
^ An individual
^ Partnership
X Limited Liability Company
^ S Corporation
^ Estate
^ Trust electing to have income taxed directly to the individual
^ Other (Specify):
ATTENTION:
qualify for this tax credit.
2
PART 2: TYPE OF APPLICATION
(Please check one)
X Site Owner with Sponsorship of City or County
^ Non-Site Owner with Title Transfer Agreement and Sponsorship of City or County
Nofe: Attach copy of cifykounfy resolution for application and/or sponsorship. If the application is
from anon-site owner, please affach the title transfer agreement.
PART 3: ELIGIBILITY
A Brownfield site is an abandoned, idled, or underutilized industrial or commercial facility where expansion or
redevelopment is complicated by teal or perceived erivirbnmental contamination. A Brownfield site includes property contiguous
with the property on which the individual, or commercial facility is located. A Brownfield site shall not include property which has
been placed, or is proposed for placement, on the national priorities list established pursuant to the federal Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601 et seq.
A Grayfield site is an industrial or commercial property meeting both (A and B) of the following requirements:
A. Infrastructure on the property is outdated or prevents an efficient use of the property, including vacant, blighted, obsolete,
or otherwise underutilized property.
B. Property improvements and infrastructure are at least 25 years old and one or more of the following conditions exist:
• Thirty percent or more of a building located on the property is available for occupancy and has been vacated or
unoccupied for at least 12 months;
• Assessed value of improvements on the property has decreased by 25 percent or more;
• The property is used as a parking lot;
• Improvements on the property no longer exist.
3.1 Is the project a Brownfield or grayfield site as defined under Iowa Administrative Code (261) Chapter 65.2?
X Yes ^ No
3.2 Is the proposed site abandoned? ^ Yes X No
3.3 Is the proposed site underutilized? X Yes ^ No
3.4 Are site improvements and/or infrasfructure at least twenty-five years old? X Yes ^ No
3.5 Regarding subject project site (Please check all that apply):
X Thirty percent or more of a building located an the property is available for occupancy and has
been vacated or unoccupied for at least 12 months.
^ Assessed value of improvements on the property has decreased by 25 percent or more.
^ The property is used as a parking lot.
^ Past improvements on the property no longer exist.
3.6 Is there evidence of contamination on the proposed site? X Yes ^ No
3
3.7 Is the site proposed to be included on the federal Comprehensive Environmental Response, Compensation, and Liability
Act (CERCLA) program list? ^ Yes X No
3.8 Does the site have contaminants that can be addressed under the state's Leaking Underground Storage Tank (LUST)
program? ^ Yes X No
3.9 Does the site have other non-LUST contaminants that may be involved within the scope of the project?
X Yes ^ No
PART 4: TYPE AND AMOUNT OF TAX CREDfT REQUESTED
Grayfield (as defined under Iowa Administrative Code (261) Chapter 65.2)
X Brownfield (as defined under Iowa Administrative Code (261) Chapter 65.2)
Iowa Administrative Code (261) Chapter 65.2 defines a Green Development as one which meets or exceeds the sustainable
design standards as established by the state building code commissioner pursuarit to Iowa Code section 103A.8B.
4.1 Is the project, working toward designation, as a Green. Development? X Yes No ^
(If Yes, approval from Iowa State Buiiling Code Commissioner will 6e required prior to issuance of tax credit. !f not approved
,..
by Building Code Commissioner, tax credit shall only be issued as regular Brownfield or Grayfield project:)
4.2 Total Project Cost (includes purchase price, cleanup cost, and redevelopment cost
directly related to a qualifying redevelopment project): $ 5,800,000
4.3 Tax Credit Percentage (as defined under Iowa Administrative Code (261) Chapter 65.2):
^ Twelve percent (12%) of the taxpayers qualifying investment in a Grayfield site.
^ Fifteen percent (15%) if the Grayfield project meets the requirements of green development.
^ Twenty four percent (24%) of the taxpayers qualifying investment in a Brownfield site.
X Thirty percent (30%) if the Brownfield project meets the requirements of green development.
4.5 Has the Applicant applied for or received funds from any other federal, state, county or city governmental entities? List
sources and provided funding status.
Federal Historic Tax Credits - pending
State Historic Tax Credits - pending
City of Dubuque financing - received
State Enterprise Zone Credits - approved
4
4.4 Amount of Tax Credit Requested (Total Project Cost times Tax Credit Percentage): $100,000
~~ PART 5: PROJECT COSTS SECTION
5.1 Use of Funds 'Financing by Source (Use sources as identified in part 5.2)
Sife Indesti ation ., -. f
Site Remediation
Monitorin
Site A uisition $450,000 x
Rehabil'rtatibn $S,DOQ000 x x x x x x
Utilities $150,000 x x x
Other
Infrastructure ~ $200,000 x x x
Other
Other
Other
Subtotal: $5,800,000
New
Construction
Machinery &
E ui
Other
Subtotal:
Total: $5,800,000
6.2 Terms of Proposed Financing
(Attach documentation verifying all sources of funds)
.- ..
Source A: Qualifying Applicant
$465,000 ,.
Equity
n/a
nla
Source B: Senior Lender $2,800,000 1~
Mort a e 6.5% 6 years
Source C: Federal Historic Tax Credits $1,035,000 Equity nla nla
Source D: State Historic Tax Credit§ $300,000 Equity n/a n/a
Source E: City of bubuque $900,000 Tiff & Loan ~
Grant
Source F: State Enterprise Zone Credits $300,000 Equity n/a n!a
Total: $5,800,000
PART 6: PROJECT DESCRIPTION
6.1 Provide Street address and Legal iescription of the property:
40 Main Street ,Dubuque IA, 52001
Lots 16 and 17 in Subdivision of the West Half of Block 1 in Dubuque Harbor Company's addition, in
the City of Dubuque, Dubuque County, Iowa
6.2 Provide site description* (size, location, current and past activity on site, etc.)
3-story, 29,000 square foot building, on .246 acres
*P/ease attach map and pictures of the site and surrounding area.
6.3 List the potential known or suspected contamination present on the project site:
^ Soil
Groundwater
^ Surface Water
^ Air
X Other. Ghemical resins (interior 2^~ & 3~ floors}, lead. based paint, asbestos
6.4 Does contamination exist throughout the site or in specific areas on the site?
Specifc areas
6.5 Does Contamination extend beyond the property boundaries?
No
6.6 To what degree have the site contaminates and remediation activities been identified by the applicant? (Check all
that apply and provide a brief description)
Have any of the following been conducted:
X Phase I Environmental Assessment (describe) Unidentified resins, lead based paint, and asbestos present
X Phase II Environmental Assessment (describe) Unidentified resins identified as petroleum based wax
substance
^ LUST Investigation Assessment Tier hand or II (attach copy}
^ Risk Based Corrective Action Plan (attach copy)
^ Other:
6.7 Project Implementation: Fu11y describe the project including acquisition, environmental remediation activities,
brownfield/grayfiefd redevelopment and a project implementation schedule. (exhibits may be included but not
substituted for this narrative which is limited to two pages)
7
40 Main Street
40 Main Street is one of the most highly visible buildings in the city of Dubuque.
The 29,000 square foot warehouse overlooks the Port of Dubuque and the Mississippi River. Formerly the Higley
Paint Factory, the property sits on both Main Street and route 52/151, directly opposite the Dubuque Ice Harbor
(home to Diamond Jo's Riverboat Casino and the National Mississippi River Museum}. The property is also
adjacent to the oldest park in Dubuque, Flat Iron Park.
Redevelopment Plan: Vacant warehouse to Boutique urban mixed-use
The management team will leverage their collective redevelopment experience and the intrinsic attributes of the 40
Main such as location, visibility, dedicated parking, ceiling height, wide column spacing, and floor-to-ceiling views of
the Mississippi River to create. River Works.
River Works will. be a boutique, historic, first class mixed-use project that will appeal to upscale local, regional, and
national retailers and professiorials seeking luxury housing in the downtown area.
The property's proximity to the center of downtown is of paramount importance to the development plan; 40 Main is
a five minute walk away from the heart of downtown Dubuque while offering access, visibility, and free on site
parking that is excepfional even by suburban development standards.
The property is absolutely vita{ to the redevelopment and gentrification of downtown Dubuque. As the attached letter
from the Director of Economic Development for Dubuque verifies, the city desperately wants the building converted
into some beneficial use.
Our redevelopment plan calls for a complete gut renovation of the interior warehouse space, a complete historic
rehab of the building exterior, full remediation of the environmental byproducts of a quarter century of paint
manufacturing, including asbestos and lead based paint removal, removal of 10,000 gallons of old paint and solvent
products, heavy scraping and testing of all interior floorboards, joists, and beams, and exterior soil testing and
remediation, and adaptive reuse into new retail and commercial space.
We intend to utilize the intrinsic attributes of the building such as the ceiling height, wide column spacing, and floor-
to-ceiling views of the Mississippi River to create a first class urban mixed use project that fills a need for new
commercial space in Dubuque and is directly in line with the city's vision for this part of Main Street.
Scope ofi Work
Building Soecs
- Three Stories
- 9,522 SF/ Floor
- 28,566 Total SF
- The project consists of an adaptive reuse of a building that is over 100 years old. This is a historical
renovation that will conform to the Secretary of Interior's Standards for Rehabilitation and
8
Guidelines for rehabilitating Historical Buildings. After completion, the building will be placed on the
National Register of Historic Places.
- Building will be ADA compliant.
Construction Details
- All exterior brick will be tuck pointed and replaced where needed
- Building will be LEED certified (green)
- new wood windows will be installed
- storefronts will be removed and replaced with glass
- roof will be replaced
- elevator will be installed with access to all three floors and the roof
- roof deck will be constructed as a building amenity
- two interior stairwells will be added
- there will be five possible entrance points on the first floor
- all interior surfaces will be cleaned by a method called soda-blasting to preserve historical integrity
- all ceilings will be left exposed
insulation and. fire protection will be added to the floors
- all interior wood. columns and brick will be left exposed were possible
Parkins
- Developer is currently vvorki.ig on a parking plan with the city of Dubuque. Currently there is non-
meteredparking on Main Street & Jones Street Diagonal parking will be provided on the East side of
the building (as shown on rendering).
Work and Impact on Feature:
In response to the NPS condition, masonry cleaning on both 40-42 Main Street and 44-48 Main Street will be
accomplished in accordance with Preservation Brief 1, Assessing Cleaning and Water-Repellent Treatments for
Historic Masonry Buildings.
40-42 Main Street
Subsequent to Part 2 conditional approval, the facade conditions have been more fully evaluated and it is apparent
that the scope of brick replacement will need to be expanded. Following the masonry inspection, it has become
apparent that a significant amount of deterioration has occurred to the existing masonry and mortar joints.
Conditions of de#erioration noted in the Exterior Masonry Report (see attached) include: water damage due to open
joints, shifting of the structure, broken brick and poorly executed previous repairs. It has been determined that all
mortar joints must be repaired and spot pointed, and that sections of the masonry must be reconstructed to remedy
structural issues. Spot pointing will be completed in accordance with Preservation Brief 2, Repointing Mortar Joints
in Historic Masonry Buildings as described on the attached masonry report. The spot pointing will closely match
the historic mortar joint in profile, texture, color and material.
In addition, it has been determined that localized areas of brick have previously undergone unsympathetic repairs
and alterations. Conditions in these areas range from "poorly reconstructed parapet walls to small areas repaired
with modern brick to alterations to original openings using modern brick and mortar." In these limited areas which
are illustrated on the attached Marked Elevation Drawings, reconstruction is necessary. These areas will be
reconstructed utilizing salvaged brick and new brick where necessary. The new brick will closely match the color,
texture, shape and size of the historic brick. The areas of reconstruction will be pointed to closely match the
historic mortar material, color, texture and joint profile.
6.8 Project Implementation Schedule: Identify significant project milestone dates. (Start date, midpoint
7 progress check, and project completion date, etc.) Projected Start Date - 9/1/2009 Projected
Completion Date - 5/1/10
PART 7: ESTIMATED COMMUNITY IMPROVEMENT IMPACTS
7.1. Current assessed value of the brownfieldlgrayfield site: $450,000
7.2. Estimated assessed value of the brownfieldlgrayfield site after project completion: $3,800,000
7.3. As applicable, describe the private investment on the site as a result of the remediation: private
investment totals $4,900,000 following remediation
7.4. As Applicable, describe any anticipated ancillary (offsite) private and/or public investment that will occur as a
result of remediation of f he life: public investment totals $9D0,000 following remediation
7.5. Describe the potential for the project to promote viable community reuse and/or economic development in the
area of the site: (use a five year timeframe) The project provides for much needed market-rate housing in the
downtown area of Dubuque. Market rate rental housing is absolutely essential to urban revitalization.
7.6. Is the project located in an economic development enterprise zone? X Yes ^ No
10
Tom Howe
Kane-Howe Appraisals
14858 W: Ridge Lane, Suite 8
Dubuque, IA 52003-9639
Dear Mr. Howe:
February 25, 2009
I write to you regarding the proposed project located at 40 Main Street. It is my
understanding that this project is in your hands for appraisal. Please allow me to
express the importance of the 40 Main Street project to the future of our City.
The City recen#ly hired a consultant, Economic Research Associates (ERA) of Chicago,
to analyze the fiinancial feasibility of redeveloping the Millwork (Warehouse) District.
One of the first comments from the consultant was that the City is missing a major
housing element that he referred to as "Urban Living". Specifcally; he mentioned market
rate, downtown apartments, lofts and/or condos. The results of his study indicate a need
for 250-500 of these units.
It is important to note that this recommendation was made prior to the IBM
announcement. In my opinion, the need for this type of housing has greatly intensified.
In our many meetings with IBM officials prior to the announcement, the company
expressed great interest in the Millwork District. They wanted time frames for when the
work would be completed. When we provided examples of the current Dubuque housing
stock, their reaction can be summarized by the following question, "These are nice
homes at very reasonable prices, but where will our employees live?n The need to
create urban housing is critical to enticing and retaining young professionals to our
community.
In fact, the need to find adequate housing for IBM employees is considered critical to
the success of the company's plan to locate and hopefully expand in the Dubuque
market. The City has heaped fund an extra employee at Greater Dubuque Development
Corporation, as the ``Newcomer Relations Coordinator". Shannon Gaherty was hired in
part to help the influx of new comers find suitable housing.
The 40 Main Street project is one that the City of Dubuque whole-heartedly supports; so
much so, that the City Council has committed up to $900,000 over the life of the project
to help insure its success. We need this type of housing in Dubuque. We need to have
what other cities offer their professionals who want to live and work in their city, their
citizens who desire to downsize yet live well, and their taxpayers who seek a vibrant city
O N
~O ~
C uj N
N O m
+' C
(ff fZ ~ ..~+ 00 N `?
-a
~ ~
C .O
N U p
~ ~ U ~
~ U
U .~ U
N N ~
Rf N
~
0 0 •-.
L ~ ~
.,.., a~
.o ~ o ~ ~ ~ ~
~ ~ ~ U .O ~ O 'U N 07
~-. ~ ? ~ C = U Q O
N ` N
L
C .O O V ~ ~ >, U
;o
• L
o N
~ ~
.`~~o
° ~~-o Yam
o•~
~
O 's. =
N lA '~ O N E a t
N Q.
, {,. to
'~ N ~ 'p
~ ~ .C
~ +
U
N U ~ ~
~ a-+
c ~ ~
~ ~ ~ E m t~.
E N
U ,
N
~ ~
i
O
Rf
.~
O t6 N _
O ~ ~
C
a t> >. ~ ~ ~~~, > ~ ,`~
o + o
N
U
a~i c ~
~~~ ~a~i
~ ~
~
~
o
Q- ~, o ~~ '~
~ ~ i
.
c
c = 'o a~
-0~+ ~ ~ ~ ~ •
O L
U N ~ (A
~ O
'
4 ~
~ L
N~~ p
L
~ a
N
Q.,
.~
i-+
~ ~
it ~ ~ (~ .Q ~ Q.. g. •U Q~ b'
~~ ~ ~ c~a~i~~~ o~~ o
~ ~ o F- c~ I- ~ F- 1= ~= ~ e ~
N ~ ~
~
•
. . • . c~vi
ca ov ~c
~
c~
CC
~ ~ .Q c v
. G •/~~
VJ
U
O
C1
O
2
f~
.~
(/S
N
L
0
..,.,
LL