Brownfield_Grayfield Redevelopment Tax_Sustainable Neighborhood Buildersrx~ ~i~Y of Dubuque
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Masterpiece ~~ tie 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
Sustainable Neighborhood Builders, Inc.
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 Sustainable Neighborhood Builders, Inc. for
redevelopment of the historic millwork building located at 1079 Elm 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
THE CITY ~F ~^
DLTB E
Masterpiece an the Mississippi
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
~~~
Dubuque
~~
2007
SUBJECT: Brownfield/Grayfield Redevelopment Tax Credit Application for Sustainable
Neighborhood Builders, Inc.
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
Sustainable Neighborhood Builders, Inc. 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.
Sustainable Neighborhood Builders, Inc., the historic millwork building located at 1079 Elm
Street is a Brownfield site with green redevelopment. 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 Sustainable
Neighborhood Builders, Inc. The resolution authorizes the City to sponsor the application.
Sustainable Neighborhood Builders, Inc. has estimated a capital investment of $420,530 within
the Enterprise Zone for pre development associated with a sales office and model units. A copy
of the application is attached to the resolution.
RECOMMENDATION
I recommend that the City Council approve the proposed application for Sustainable
Neighborhood Builders, Inc. 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 Dev\1079 Elm Street\Gra~eld Tax Credit\20090924 1079 Elm Brownfield-Grayfield 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. 382-09
RESOLUTION APPROVING A BROWNFIELD/GRAYFIELD REDEVELOPMENT TAX
CREDIT APPLICATION TO THE IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT,
OH BEHALF OF SUSTAINABLE NEIGHBROHOOD BUILDERS, INC.
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 Novelty Iron Works building is considered a brownfield site;
and
Whereas, the Novelty Iron Works redevelopment 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 Sustainable
Neighborhood Builders, Inc.
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
Roy D. Buol, Mayor
Attest:
/'
eanne F. Schneider, City Clerk
F:\USERS\Econ Dev\1079 Elm Street\Grayfield Tax Credit\20091005 Resolution Brownfield-Grayfield 1079 Elm.docx
IC~WA
life ~ changing•
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: APPLICANT/SPONSORSHIP/OWNERSHIP INFORMATION
Applicant: Sustainable Neighborhood Builders, Inc.
Street Address: 1079 Elm Street
City: Dubuque State: IA Zip Code: 52001
Contact Person: Bob Johnson
Telephone Number: 815-990-3646 Fax Number:
Email Address: bob@warehousetrust.com
Signatu
Applicant Sponsor: City of Dubuque, Iowa
Street Address: 50 W. 13th Street
City: Dubuque State:
Contact Person: Mayor Roy D. Buol
Telephone Number: 563-589-4393
Email Address: rdbuol@cityofdubuque.org
IA Zip Code: 52001
Fax Number: 563-589-1733
Property Owner (if different than applicant): Warehouse Trust, LLC.
Street Address: 1079 Elm Street
City: Dubuque State: IA Zip Code: 52001
Contact Person: Bob Johnson
Telephone Number: 815-990-3646 Fax Number:
Email Address: bob@warehousetrust.com
Signature:
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):
ATTENTION:
For the purpose of this application for Brownfield/Gra~eld tax credits an investment shall be deemed to have been
made on the date the aualifvmg 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 Administra#ive Code (261) Chanter 65 2 defines a Brownfield and a Gravfield site
A Brownfield site is an abandoned, idled, or underutilzed industrial or commercial facility where expansion or
redevelopment is complicated by real or perceived environmental contamina~on. 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 si#e abandoned? ^Yes ®No
3.3 Is the proposed site underutilized? ®Yes ^ No
3.4 Are site improvements andlor 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 snore.
^ 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
3.7 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 ]owa 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.88,
4.1 Is the project working toward designation as a Green Development? ®Yes No ^
(If Yes, approval from fovea State Building Code Commissioner will be required prior to issuance of tax credit, if not approved
by Buiiding 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): $ 420,530.00
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°k) 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): $100,000.00
(This is the MAXIMUM amount of potential tax credit {reserved amount) In the event the actual project costs are less
than indrea#ed, 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 appiied 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
State Enterprise Zone Credits -approved
New Market Tax Credits -pending/not applicable for this project piece
PART 5: PROJECT COSTS SECTION
5.1 Use of Funds ~ Financing by Source {Use sources as identified in part 5.2)
5.2 Terms of Proposed Fnancing
{Attach documentation verifying all sources of funds)
.-
Source A: Qualifying Applicant •
$ 40,500.00
Equity
nla
nla
Source B: Federal Historic Tax Credit $ 75,695.40 Equity nla nla
Source C: State Historic Tax Credif $ 63,079.50 Equity nla Nla
Source D: State Enterprise Zone Credit $ 28,000.00 Equity nla nla
Source E: New Market Tax Credit None nla nla nla
Source F: Senior Lender $ 213,255.10
Total: ' $4~p,530;00 ~. ' _~ ~:
5
PART 6: PROJECT DESCRIPTION
6,1 Provide Street address and Legal Description of the property:
1079 Elm Street, Dubuque, IA 52001
Lot 1 of Center City Pface, in Dubuque, Iowa according to the recorded Plat thereof.
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.
2^~ Floor model unit (one bedroom) # 226, 2^~ Floor corporatelsales office (converted three bedroom) #225; 15~ & 3ro
Floor pilot windows; ail part of entire project that incorporates 3,4 & 5 story brick buildings that will house 126 residential units
plus 40,000 square feet of retail space.
6.3 List the potential known or suspected contamination present on the project site:
^ Soil
^ Groundwater
^ Surface Water
^ Air
® Other:
Chemical resins (interior all floors}, lead based paint, asbestos
6.4 Does contamination exist throughout the site or in specific areas on the site?
Specific areas
6.5 Does Contamination extend beyond the property boundaries?
PJo
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 descripfion)
Have any of the following been conducted:
® Phase {Environmental Assessment (describe Unidentified resins, lead based paint and asbestos present
^ Phase II Environmental Assessment (describe}
^ LUST Investigation Assessment Pier I/and or II (attach copy}
^ Risk Based Corrective Action Pian (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 maybe included but not
substituted for this narrative which is limited to two pages)
Novelty Iron Works
Novelty Iron Works is a development planned for the former factory complex of Eagle Window & Door (before that
Caradco, before then Carr, Ryder & Adams, before that Carr, Adams & Collier, originally Novelty Iron Works},
located at 1079 Elm Street. The block of buildings is located in Phase One of the Historic Millwork District, which is
planned to present alive-work-play environment that is ideal for those desiring life in a downtown urban
environment. The property sits adjacent fo Highway 151/61, and is located inclose proximity to the Part of
Dubuque, the Mississippi River and the Dubuque's Main Stn3et District. Plans for Phase One of the Millwork Districf
indude a plaza area (idea for farmers markets, ou#door concerts and craft fairs) direc#ly to the south of our building,
a parking ramp directly to the south of that plaza area, a park area directly fo the east of our building, and complete
redesign and reconstruction of the streets and infrastructure to the south of our development during the first and
second quarters of 2D1U.
Redevelopment Plan: A Live/WorklPlay Environment
The team behind Novelty Iron Works plans market-rate one-bedroom, iwo-bedroom and #hree-bedroom apartments
on the upper floors of our building, with retail uses located on the first floor_ Parking for our residents will be offered
in both ground-level exterior spaces and in basement interior levels tiff our development, fhe latter of which will be
accessed by a ramp on the western comer of our south fagade. Potential retail tenants in our building indude a
fitness center (currently existing), a home interiors business (currently existing) a restaurant, a coffee shop, a bike
rental business, a convenience store and a retail winery.
Tall ceilings, views of the Mississippi River and bluffs firm the upstairs apartments, and exposed wood beams are
a few of the unique attributes tha# will draw residents to our rec#evelopment, as well as the fact our building is
located blocks away from the Roshek Building, where !BM is adding jobs and employees who desire residences in
an urban setting. A courtyard area in the middle of our set of buildings wilt feature a pool beginning in 2011.
Sestalnability
We are working with the Nations} Trust for Historic Places to indude our redevelopment project in their Dubuque-
based Green Lab, which will showcase historic preservation that is performed with sustainahility in mind.
• We are working with a company that produces raised flooring that is both modular and energy efficient, allowing
us #o keep heating, electrical, cooling and fiber optic accessible and under the floors.
• We are working with multiple vendors that are focused on using recyded +materials_
• We will be replacing all the windows in our development with energy-efficient replacements that fit the strict
requirements for historic preservation.
Scope of Work
Project Specs:
• Build-out of Unit 225, a 3-bedroom apartment (1,755 SF)
• Build-out of Unit 226, a 1-bedroom apartment (973 SF)
• Complete tuck painting of the south side of our southernmost building, in which this project is located
• 14 new windows for the southeast comer of our building, in which this project is located
- one window on the first floor
- ten windows on the second floor
- three windows on the third fbor
We are commencing build-out ofi the development in the southeast comer of our southernmost three-story building,
with two apartment units located an the second floor of this space. Our model apartments will show poterrtial
residents examples of the 126 residential units we wiN be developing within our buildings over the next three years.
By completing tuck pointing and brick repair on the south side of this building, as welt as replacing first- and third-
floorwindows on the immediate southeast comer, we will be able #o present a completed project to show the public
a visual perspective #o spur interest in our development and further build excitement in the Historic Millwork District.
Since our bui{ding dates back to the late 9800s, our historic renovation project will conform to the Secretary of
Interior's Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings. Our set of five connected
buildings has already been placed on the National Register of Historic Places. Our development will be ADA-
complaint.
Construction Details
• All exterior brick will be tuck pointed and replaced where needed, with historic windows and door openings that
were formerly blocked in reopened to reveal spectacular views of the downtown and surrounding bluffs in Iowa,
Wisconsin and Illinois.
• Our building will meet and exceed LEED certification standards.
• All windows wilt be replaced, and purchased from the local Dubuque window & door manufacturing company that
was formerly located in our building.
• Wood ceilings, brick walls, wood beams and pillars will be exposed, wherever possible, to retain the historic
industrial feel of the development.
• Fre protection upgraded as per the requirements set by the Dubuque Fire Department.
Parking
The developer is planning parking for residen#ial and retail tenanfs in the basement of his building. Surface parking
will also be available along the edges of the building, as well as in a parking ramp the city is planning #o construct to
the south of the plaza space to the south.
6.8 Project Mplementation Schedule; identify significant project milestone dates. (Start date, midpoint
progress check, and project completion date, etc.)
Projected Start Date -10/15/2009
Projected Completion Date - 3/3112010
PART 7: ESTINiATfD COMMUNITY IMPROVEMENT IMPACTS
7.1. Current assessed value of the browntieldlgrayfield site: $34,000.00
7.2. Estimated assessed value of the Brownfield/grayfield site after project completion: $ 420,530.00
7.3. As applicable, describe the private investment on the site as a nesuit of the remediatlon:
t3rfvate inveslment totals $420,530.00 #otlowing remediation
7.4. As Applicable, describe any anticipated ancillary (offsite) private and/or public investment that will occur as a
result of remediation of the site:
None
8
7.5. Describe the potential for the project to promote viable community reuse and/or economic development in the
area of the site: (use a five year timeframe}
The goal of Sustainable Neighborhood Builders is to create a national model of a multause development that is an eco-
friendly, sustainable, microcosm of a Smart City. This is an urban setting that will provide 126 residential rental units upon
compfetian of adl phases ($Q% market-rate housing, 2096 a#Eordabte housing in acx~ordance with the New Market tax credit
definition of affordable housing), and commercial units on the ground floor. It is our inten# to support the overarching agenda
pursuant to Dubuque being designated by the National Trust as a Green Lab City by the use of products and procedures that
meet or exceed the Green Lab inifiative In the development process and ongoing operation of our development; and further
supporting the effort of Dubuque becoming r~ognized on a nationaifintemafional level as a Smart City. Our redevelopment
project provides for much-Deeded market rate housing iin the downtown area of Dubuque. Market rate rontal housing is
absolutely esser~Ciat to urban r~evitatizatiort
7.6. Is the project located in an ecoramic development enterpr~e zone? ®Yes ^ No