Brownfiled_Grayfield Redevelopment Tax_Caradco BuildingDubuque
THE CITY OF
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Mrtsterpiece art the Mississippi
zoos
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Brownfield/Grayfield Redevelopment Tax Credit Application for Caradco
Building LLLP
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 Caradco Building, LLLP for redevelopment of the
former Carr, Adams, and Ryder Company building at 900 Jackson 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.
lJ~~
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
Dubuque
THE CITY QF ~~
DUB E
Masterpiece on the Mississippi
2007
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
SUBJECT: Brownfield/Grayfield Redevelopment Tax Credit Application for Caradco
Building LLLP.
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
Caradco Building, LLLP. 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.
Caradco Building, LLLP, the former Carr, Adams, and Ryder Company building 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 Caradco Building,
LLLP. The resolution authorizes the City to sponsor the application.
Caradco Building, LLLP has estimated a capital investment of $1,350,000 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 Caradco Building, LLLP
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\Econ Dev1CARADCO\Brownfield Tax Credit120090924 CARADCO Brownfield-Gra~eld Council Memo.docx
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 13t" Street, Dubuque IA 52001 563 589-4121
RESOLUTION NO. 381-09
RESOLUTION APPROVING A BROWNFIELD/GRAYFIELD REDEVLEOPMENT TAX
CREDIT APPLICAITON TO THE IOWA DEPARTMENT OF ECONOMIC DEVLEOPMENT,
ON BEHALF OF CARADCO BUILDING, LLP
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 Carr, Adams, and Ryder Company building is considered a
grayfield site; and
Whereas, the Caradco Building 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 Caradco Building,
LLLP.
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 5th day of October, 2009.
Roy D. Buol, Mayor
Attest:
.feanne F. Schneider, City Clerk
F:\USERS\Econ Dev\CARADCO\Brownfield Tax Credit\20091005 Resolution Brownfield-Grayfield CARADCO.docx
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Iz%~ ~ changinge
FY2010
Michael Tramontina, Director
Iowa Department of Economic Development
Brownfield/Grayfield
Redevelopment Tax Credit
Application
Business Development Division
Iowa Department of Economic Development
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: APPLICANTISPONSORSHIPIOWNERSHIP INFORMATION
Applicant: Caradco Building, LLLP, clo Gronen Restoration, GP
Street Address: 1056 Main Street
City: Dubuque State: Iowa Zip Code: 52001
Contact Person: Mary Gronen
Telephone Number: 563-557-7010 Fax Number: 563-690-1610
Email Address: maryg@gronenproperties.com
Signature:
Applicant Sponsor: City of Dubuque, IA
Street Address: 50 W. 13th Street
City: Dubuque State: IA
Contact Person: Mayor Roy Buol
Telephone Number: 563.589.4105 Fax Number:
Email Address: rdbuol@cityofdubuque.org
Zip Code: 52001
563.589.4149
Signatu
Property Owner (if different than applicant):
Street Address:
City: State:
Contact Person:
Telephone Number: Fax Number:
Email Address:
Zip Code:
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):_LLLP Limited Liability Limited Partnership-
ATTENTION:
For the purpose of this application for BrownfieldlGra~eld tax credits an investment shall be deemed to have been
made on the date the gualifying redevelopment project is completed. An investment made after June 30, 2010, shall not
qualify for this tax credit.
2
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 (2611 Chapter 65.2 defines a Brownfield and a Gravfield 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
3
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): $_1,350,000
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
jThis is the MAXIMUM amount of potential tax credit (reserved amount). In the event the actual proiect costs are less
than indicated, or preen 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.
No.
4
PART 5: PROJECT COSTS SECTION
5.1 Use of Funds ~ Financing by Source (Use sources as identified in part 5.2)
Site Investi ation -~ •~
Site Remediation 350,000 x x x x
Monitorin
Site Ac uisition
Rehabilitation 1,000,000 x x x x
Utilities
Other
Infrastructure
Other
Other
Other
Subtotal:
New Construction
Machinery &
E ui
Other
Subtotal:
Total: 1,350,000'x'"'
***See section 6.7 for breakout of costs listed above.
5.2 Terms of Proposed Financing (Attach documentation verifying all sources of funds)
.• ..
Source A: Qualifying Applicant
270,000 .-
Equity
n/a
nla
Source B: 472,500 1~ Mortgage 7% 15 years
Source C: 337,000 Equity nla n/a
Source D: 270,000 Equity n/a nla
Source E:
Source F:
Total: 1,350,000
PART 6: PROJECT DESCRIPTION
6.1 Provide Street address and Legal Description of the property:
900 Jackson St., Dubuque, Iowa 52001
CITY LOTS 394 THRU 398, 420 THRU 424, & S'/:-W BAL OF CITY LOT 505A 8~ CITY LOT 394A
6.2 Provide site description* (size, location, current and past activity on site, etc.)
The Caradco Building-Main Plant, at 900 Jackson Street, Dubuque, Iowa, is a former millwork
manufacturing plant and warehouse. Centrally-located in Dubuque's Historic Millwork District, the
building's footprint covers an entire city block. Total building square footage is approximately
150,000 SF over three floors, including a lower level. Current usage includes a local millwork (sash &
door) company and two small antiquelhome decor shops, although most of the building stands
empty.
*Please 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
® Other: Lead paint, asbestos, pigeon waste
6.4 Does contamination exist throughout the site or in specific areas on the site?
Specific areas on the site.
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)_Expected lead paint on floor of painting room (3~ floor, east),
and dipping tank (3~ floor, southwest) could be contaminated -will need testing and potential remediation._
^ 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: Fully describe the project including acquisition, environmental remediation activities,
brownfield/grayfield redevelopment and a project implementation schedule. (exhibits may be included but not
substituted for this narrative which is limited to two pages)
• Environmental remediation, including lead paint, asbestos, pigeon waste and general
disinfection. ($350,000)
• Soda blasting of interior wood. ($450,000)
• Exterior masonry restoration -1~ phase. ($250,000)
• Stair tower and structural improvements. ($300,000)
6.8 Project Implementation Schedule: Identify significant project milestone dates. (Start date, midpoint
progress check, and project completion date, etc.)
• Design -schematic, Oct. 1, 2009
• Design -development, Nov. 1, 2009
• Design -construction drawings, Jan. 1, 2010
• Demolition &remediation work begins -Jan. 1, 2010
• Construction Bids -month of Jan. 2010
• General construction work begins -Feb. 1, 2010
• Above project completed -June 30, 2010
PART 7: ESTIMATED COMMUNITY IMPROVEMENT IMPACTS
7.1. Current assessed value of the brownfield/grayfield site: $69,700 (land), and $270,800 (building)
7.2. Estimated assessed value of the brownfield/grayfield site after project completion: $6,000,000 (after entire
rehabilitation project, described in Section 7.5 below)
7.3. As applicable, describe the private investment on the site as a result of the remediation: An additional
$22,000,000 investment possible after completion of this remediation project, in order to completely rehab the
building, as described below in Section 7.5.
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: City has committed funds for adjacent infrastructure repair and replacement -
water, sewer, and streets.
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)
This project jump-starts the complete rehabilitation of the Caradco Building, which will be a
$24,000,000 project. The completed building is only one part of a planned, three-phase $200,000,000 Millwork
District redevelopment initiative, as designated and prioritized by Dubuque's City Council. The completed
buildings will provide mixed-use space, adding hundreds of desperately-needed urban residential units for
Dubuque's current and incoming workforce (including 1,300 employees due to IBM's new operations center in
Dubuque's downtown, located just blocks from the District), as well as 1~ floor commercial/retail space
intended to serve the wants and needs of the district's residents.
7.6. Is the project located in an economic development enterprise zone? ®Yes ^ No
7