Brownfield_Grayfield Redevelopment Tax_B&C CathederalTO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Brownfield/Grayfield Redevelopment Tax Credit Application for B&C
Cathedral Development, LLC
DATE: September 29, 2009
Economic Development Director Dave Heiar recommends City Council approval of a
Brownfield/Grayfield Redevelopment Tax Credit Application to the Iowa Department of
Economic Development on behalf of B&C Cathedral Development, LLC for
redevelopment of the former St. Raphael's School on Bluff Street. There is no
commitment within this application for any further City assistance.
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 Milligan, City Manager
~~
FROM: David J. Heiar, Economic Development Director ~~ ~ ~;
SUBJECT: Brownfield/Grayfield Redevelopment Tax Credit Application for B&C
Cathedral Development, LLC
DATE: September 24, 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
B&C Cathedral Development, 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.
B&C Cathedral Development, LLC, the former St. Raphael's School on Bluff Street is a
Grayfield 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 B&C Cathedral
Development, LLC. The resolution authorizes the City to sponsor the application.
B&C Cathedral Development, LLC has estimated a capital investment of $4,012,500 within the
Enterprise Zone. A copy of the application is attached to the resolution.
RECOMMENDATION
I recommend that the City Council approve the proposed application for B&C Cathedral
Development, 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.
The action step for the Council is to adopt the attached resolution.
Attachments
F:\USERS\DHeiar\40 Main\Enterprise Zone\20090817 40 Main Brownfield-Grayfield Council Memo.doc
Prepared by: David Heiar, Economic Dev Director, 50 West 13t" Street, Dubuque IA 52001 563 589-4393
Return to: Jeanne Schneider, City Clerk, 50 West 13'" Street, Dubuque IA 52001 563 589-4121
RESOLUTION NO. 380-09
RESOLUTION APPROVING A BROWNFIELD/GRAYFIELD REDEVELOPMENT TAX
CREDIT APPLICAITON TO THE IOWA DEPARTMENT OF ECONMIC DEVELOPMENT,
ON BEHALF OF B&C cATHEDRAL DEVELOPMENT, 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 former St. Raphael School building is considered a grayfield site; and
Whereas, the Lofts at Cathedral Square 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 B&C Cathedral
Development, LLC.
Section 2. That the Mayor is hereby authorized and directed to execute this
Resolution on behalf of the City of Dubuque and forward the executed
copy to the Iowa Department of Economic Development.
Passed, approved and adopted this 5t" day of October, 2009.
~` ~~ ,~ ~
oy D. Buol, Mayor
Att t: .~
Jeanne F. Schneider, City Clerk
F:\USERS\Econ Dev\Lofts at Cathedral Square\20091005 Resolution Brownfield-Grayfield Lofts Cath Sq.docx
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FY2010
Michael Tramontina, Director
Iowa Department of Economic Development
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C<:f~?~v~~opment Tax Credit
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Completed forms with attachments should be sent to:
E-mail: brownfields@iowalifechanging.com
Mail: Iowa Department of Economic Development
ATTN: Matt Rasmussen
200 East Grand Avenue
Des Moines, Iowa 50309
Fax: 515.725.3010
Questions? Need assistance? Contact Matt Rasmussen, Program Manager at 515.725.3126.
PART 1:APPLICANT/SPONSORShlIP10WNERSHIP INFORMATION
Applicant: B&C Cathedral Development, LLC
Street Address: 600 Star Brewery Drive
City: Dubuque State: IA
Contact Person: Chad Walsh
Telephone Number: 563,583.2169
Email Address: cwalsh@epicgc.com
Signature: ~ -~ .>
Zip Code: 52001
Fax Number: 563.583.2412
Applicant Sponsor: City of Dubuque, IA
Street Address: 50 W. 13th Street
City: Dubuque State: IA Zip Code: 52001
Contact Person: Mayor Roy Buol
Telephone Number: 563.589.4105 Fax Number: 563.589.4149
Email Address: rdbuol@cityofdubuque.org
Signature:
Property Owner (if different than applicant): Same as applicant
Street Address:
City: State: Zip Code:
Contact Person:
Telephone Number: Fax Number:
Email Address:
Signatu
Applicant is (Please check one):
^ An individual
^ Partnership
® Limited Liability Company
^ S Corporation
^ Estate
^ Trust electing to have income taxed directly to the individual
^ Other (Specify):
ATTNTI®N:
For the purpose of this application for BrownfieldlGrayfield tax credits, an investment shall be deemed to have been
made on the date the qualifying redevelopment project is completed. An investment made after June 30, 2010, shall not
qualify for this tax credit.
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PART 2: TYPE OF APPLICATION
(Please check one)
^ Site Owner with Sponsorship of City or County
® Non-Site Owner with Title Transfer Agreement and Sponsorship of City or County
Note: Attach copy ofcity/county resolution for application and/or sponsorship. If the application is
from anon-site owner, please attach the title transfer agreement.
PART 3: ELIGIBILITY
Iowa Administrative Code (261) Chapter 65.2 defines a Brownfield and a Grayfield site.
A Brownfield site is an abandoned, idled, or underutilized industrial or commercial facility where expansion or
redevelopment is complicated by real or perceived environmental 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?
® Yes ^ No
3.2 Is the proposed site abandoned? ^Yes ®No
3.3 Is the proposed site underutilized? ®Yes ^ No
3.4 Are site improvements and/or infrastructure at least twenty-five years old? ®Yes ^ No
3.5 Regarding subject project site (Please check all that apply):
® 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.
^ Past improvements on the property no longer exist.
3.6 Is there evidence of contamination on the proposed site? ^Yes ®No
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3.7 Is the site proposed to be included on the federal Comprehensive Environmental Response, Compensation, and Liability
Act (CERCLA) program list? ^ Yes ®No
3.8 Does the site have contaminants that can be addressed under the state's Leaking Underground Storage Tank (LUST)
program? ^ Yes ®No
3.9 Does the site have other non-LUST contaminants that may be involved within the scope of the project?
^ Yes ®No
PART 4: TYPE AND AMOUNT OF TAX CREDIT REQUESTED
® Grayfield (as defined under Iowa Administrative Code (261) Chapter 65.2)
^ 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 pursuant to Iowa Code section 103A.8B.
4.1 Is the project working toward designation as a Green Development? ^ Yes No
(If Yes, approval from Iowa State Building Code Commissioner will be required prior to issuance of tax credit. If 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): $ 4 012 500
4.3 Tax Credit Percentage (as defined under Iowa Administrative Code (261) Chapter 65.2):
® 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.
4.4 Amount of Tax Credit Requested (Total Project Cost times Tax Credit Percentage): $ _100,000
(This is the MAXIMUM amount of potential tax credit, (reserved amount). In the event the actual project costs are less
than indicated, or green development is not approved, actual tax credit amount on certificate will be recalculated.)
***NO TAX CREDIT SHALL BE ISSUED FOR AN AMOUNT GREATER THAN $100,000***
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
State Historic Tax Credits
Housing Enterprise Zone Benefits
Incentive Rebate ®IA Sales Tax Rebates on Construction Costs
4
PART 5: PR®JECT COSTS SECTI®N
5.1 Use of Funds Financing by Source (Use sources as identified in part 5.2)
l;~~iil.~Al~r ~~~a1~4 _: lelo}~t~~,'~ _;``i!~~~A~~i=~ ~~'h~d~~~z ~~~~~~fA~~~-~~~ i~~°~~~I~~-~~ ~"T,a~i~~~~r -.~
Site Investigation
Site Remediation
Monitoring
Site Acquisition 465,000 x x
Rehabilitation 3,527,500 x x x x x
Utilities
Other
Infrastructure
A/E Fees 120,000 x
Other
Other
Subtotal 4,012,500
New
Construction
Machinery &
E ui
Other
Subtotal
Total: 4,012,500
5.2 Terms of Proposed Financing
(Attach documentation verifying all sources of funds)
Source A: Qualifying Applicant 50,000 Equity nla nla
Source B: Construction Loan 1,981,799 15t Mortgage 6.00% 5 years
Source C: Enterprise Zone Tax Credit 250,000 Equity nla nla
Source D: Federal Historic Tax Credit 793,346 Equity nla nla
Source E: State Historic Tax Credit 899,855 Equity nla n/a
Source F: Incentive Sales Tax Rebate 37,500 Equity nla nla
Total 4,012,500
5
PART 6: PR®JECT DESCRIPTI®N
6.1 Provide Street address and Legal Description of the property:
205 Bluff Street, Dubuque, IA 52001
Apartment 2 and Apartment 3 of the Cathedral Square Association as established in the declaration of establishment
of a horizontal property regime, of Lot 2 and Lot 3 of Lot 1 of "Cathedral Center" in the City of Dubuque, Dubuque
County, IA
6.2 Provide site description* (size, location, current and past activity on site, etc.)
*Please attach map and pictures of the site and surrounding area.
Currently: 2-Story,16,125 SF building
Former St. Raphael's School
6.3 List the potential known or suspected contamination present on the project site: None
^ Soil
^ Groundwater
^ Surface Water
^ Air
^ Other:
6.4 Does contamination exist throughout the site or in specific areas on the site?
No
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:
® Phase I Environmental Assessment (describe)_asbestos and lead based paint
^ Phase II Environmental Assessment (describe)
^ LUST Investigation Assessment Tier I/and 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,
brownfieldigrayfield redevelopment and a project implementation schedule. (exhibits may be included but not
substituted for this narrative which is limited to two pages)
The Lofts at Cathedral Square will be located in the former St. Raphael's School House. It neighbors St. Raphael's
Cathedral on the second block of Bluff Street in downtown Dubuque. The property is within walking distance of
downtown business and entertainment and also has 50 off-street parking stalls.
6
The current structure is in great shape with very minor exterior brick restoration required. All windows will be
replaced with insulated wood framed windows. The interior non-structural walls will be demolished to allow for the
new construction. The current attic space will be converted to the 3~d of 3 levels of loft style apartments.
The development will consist of 25 loft style apartments ranging in size from 820 SF to 1,145 SF. There are 3 types of
apartment arrangements. Type 1 ®1 bedroom with 1 bath. Type 2 ®1 bedroom with 1.5 baths. Type 3 ®2 bedrooms
with 1.75 baths.
We believe this is a great adaptive reuse of a vacant property, which will produce 3 floors of high quality loft apartment
living totaling 23,516 SF.
6.8 Project Implementation Schedule: Identify significant project milestone dates. (Start date, midpoint
progress check, and project completion date, etc.)
Start Date: 10.19.09
Completion Date: 7-1-2010
PART 7: ESTIMATED COMMUNITY IMPROVEMENT IMPACTS
7.1. Current assessed value of the brownfield/grayfield site: $465,000
7.2. Estimated assessed value of the brownfield/grayfield site after project completion: $2,800,000
7.3. As applicable, describe the private investment on the site as a result of the remediation:
No remediation required.
7.4. As Applicable, describe any anticipated ancillary (offsite) private and/or public investment that will occur as a
result of remediation of the site:
No remediation required.
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 City of Dubuque is in great need of downtown housing and this adaptive reuse of a historic building fits in
with what the downtown requires. Residents of this facility will be able to live, work and play without having to get in
their car to go.
7.6. Is the project located in an economic development enterprise zone? ®Yes ^ No
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