Downtown Housing Incentive AwardsMasterpiece on the Mississippi
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
SUBJECT: First Recommendation for Downtown Housing Incentive Awards
DATE: February 8, 2010
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INTRODUCTION
This memo is to recommend funding for several projects that applied for incentives to
create new residential housing units in downtown Dubuque.
BACKGROUND
Dubuque has been successful in encouraging job creation in the community for several
years. Several great projects have begun or continue this year including:
• IBM is currently hiring new employees to reach 1,300 employees in Dubuque by
the end of 2010. Many new hires are coming from outside the community.
• Hormel Foods will begin operations this winter in their facility on Chavenelle
Court.
• Medline Industries has been growing steadily and has additional capacity in their
new facility. Corporate management is committed to growing the operation in
Dubuque.
In fact, the Greater Dubuque Development Corporation is currently working with 40 local
companies who are recruiting employees (i.e. McGraw Hill, Cottingham & Butler,
Prudential, Medical Associates). The City does not want to reduce the ability of the
existing businesses in Dubuque from expanding or replacing employees because of the
lack of housing.
Due to this influx of new positions created in Dubuque and with the employee
recruitment of other existing businesses, the Greater Dubuque Development
Corporation (GDDC) has hired Shannon Gaherty as the Newcomer Relations
Coordinator. Shannon helps new residents find housing, get information about the
community, and get connected with services and organizations within the community.
GDDC has expressed difficulties in finding quality housing, particularly in the downtown
area. Many of Dubuque's new residents have a strong desire to live near work and
entertainment. Downtown housing options must be created for Dubuque businesses to
attract and retain a quality workforce.
In November 2009, the City Council approved the creation of a $2.5 million incentive
pool to encourage new residential units within the Greater Downtown Urban Renewal
District. The pool of funds was generated by delaying approved CIP projects and use of
the funding to provide approximately $2.5 million for this program. The following is a list
of CIP projects reduced or delayed to facilitate the borrowing:
• Port of Dubuque Improvements
• Millwork District Street Reconstruction
• Millwork District Streetscape Improvements
• Millwork District Fiber Optics
• $100,000 not needed for demolition of a portion of the old Tri -State building being
purchased from the Iowa DOT
• Approximately $45,000 savings per year in the Greater Downtown Urban
Renewal District from the refinancing of America's River bonds
Based on the guidelines of this new program, up to $10,000 of financial assistance
would be available for each new unit of market rate residential housing created in the
downtown area.
DISCUSSION
The deadline for submitting applications was December 21, 2009 and 15 applications
were received requesting over $4 million in incentives. A selection committee has
reviewed the applications. The committee included:
• Dave Heiar, Economic Development Director
• Rick Dickinson, Greater Dubuque Development
• Barry Lindahl, City Attorney
• Guy Hemenway, Assistant Planner
• Steve Brown, Engineering Project Manager
• Aaron DeJong, Asst. Economic Development Director
Proposals were evaluated on several criteria. The criteria included:
• Timeliness /Readiness
• Cost/Benefit
• Impact
• Additional benefits of proposed project (i.e. exterior rehab, historic preservation,
LEED, Commercial Development)
• Magnitude of other City financial assistance being requested
The committee had concerns with the quality of some of the applications. Several of the
larger projects had many financial contingencies which would be detrimental to meeting
the timeframe specified in the RFP (December 2010). However, several of the projects
have shown the capacity to complete the units before the end of 2010 and have
financing committed to the project. The committee is still doing due diligence and
negotiating with some of the developers to determine if they can meet the timeframes
and merit a commitment of city assistance.
756 N. Main Street
Hippocrene Enterprises, LLC
(Walker Shoe Store)
4
$40,000
Grant
129 Main Street
K & E Partnership LLP
(Knippels Religious Gifts)
2
$12,000
Grant
163 Main Street
D & J Realty
3
$30,000
Grant
392 -394 Bluff Street
RMF Associates, LLC
2
$10,000
Grant
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: First Recommendation for Downtown Housing Incentive Awards
DATE: February 10, 2010
In November 2009, the City Council approved the creation of a $2.5 million incentive
pool to encourage new residential units within the Greater Downtown Urban Renewal
District.
Based on the guidelines of this new program, up to $10,000 of financial assistance
would be available for each new unit of market rate residential housing created in the
downtown area.
Economic Development Director Dave Heiar recommends the following projects be
approved to receive certain incentives to create new housing units within the Greater
Downtown Urban Renewal District:
Address
Developer
Dubuque
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Housin Units Assi
Dave Heiar further recommends authorization to negotiate specific contracts for awards
to the above projects and allow the City Manager to execute agreements with the
property owners to commit to the market rate housing unit creations.
756 N. Main Street
Hippocrene Enterprises, LLC
(Walker Shoe Store)
4
$40,000
Grant
129 Main Street
K & E Partnership LLP
(Knippels Religious Gifts)
2
$12,000
Grant
163 Main Street
D & J Realty
3
$30,000
Grant
392 -394 Bluff Street
RMF Associates, LLC
2
$10,000
Grant
RECOMMENDATION
The committee is recommending the following projects be approved to receive certain
incentives to create new housing units within the Greater Downtown Urban Renewal
District:
Address Develoaer
Housing Units Assistance
The committee is recommending that $92,000 of the available funds be set aside for the
projects listed above. A second round of recommendations is anticipated soon. The
committee will also be recommending that any remaining funds in the incentive pool be
placed back into the Millwork Street Infrastructure CIPs to facilitate that district's
redevelopment.
ACTION STEP
The action step is to approve the attached resolution authorizing staff to negotiate
specific contracts for awards to the above projects and allow the City Manager to
execute agreements with the property owners to commit to the market rate housing unit
creations. A sample of the proposed agreement format is attached.
F: \USERS \Econ Dev \Downtown Housing\20100208 Housing Incentive Recommendation #1.doc
There could be further recommendations in the future since all applications are not
currently being recommended for funding. There will be a recommendation to return
some of the funds to the street reconstruction in the Historic Millwork District.
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
Prepared by: David Heiar, Economic Dev Director, 50 West 13 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. 56 -10
APPROVING CERTAIN AWARDS FROM THE DOWNTOWN HOUSING INCENTIVE
POOL TO CREATE NEW MARKET -RATE HOUSING UNITS WITHIN THE GREATER
DOWNTOWN URBAN RENEWAL DISTRICT
Whereas, the City of Dubuque has been successful in encouraging job creation and
retention in the community for several years; and
Whereas, many of the City of Dubuque's new residents have a strong desire to live
near work and entertainment; and
Whereas, a significant shortage of quality market -rate rental and owner - occupied
residential units exists and efforts are needed to encourage new development of such
units; and
Whereas, several downtown residential development projects need financial
assistance to secure funding for such project; and
Whereas, the City received several applications for assistance from a Request for
Proposals due December 21, 2009; and
Whereas, such proposals have been reviewed by a recommendation committee.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. The City Council approves the following projects to receive financial
assistance for the creation of market -rate housing units within the Greater Downtown
Urban Renewal District:
756 N. Main Street
Hippocrene Enterprises, LLC
(Walker Shoe Store)
4
$40,000 Grant
129 Main Street
K & E Partnership LLP
(Knippels Religious Gifts)
2
$12,000 Grant
163 Main Street
D & J Realty
3
$30,000 Grant
392 -394 Bluff Street
RMF Associates, LLC
2
$10,000 Grant
Attest:
Address
eanne F. Schneider, City Clerk
Developer
F: \USERS\Econ Dev \Downtown Housing\20100215 Resolution Downtown Award #1.doc
Housing Units
Assistance
Section 2. That the City Manager is hereby authorized and directed to execute
Incentive Agreements for the approved projects.
Passed, approved and adopted this 15 day of February, 2010.
/�•�y D. Buol, Mayor
This Agreement, dated for reference purposes the day of , 20_, is
made and entered into by and between the City of Dubuque, Iowa (City), a municipal
corporation organized and existing under the laws of the State of Iowa and
(Owner).
Whereas, the Owner's property at (the Building) is located
within the boundaries of the Greater Downtown Urban Renewal District (the District); and
Whereas, the goals and objectives of the Greater Downtown Urban Renewal Plan
(the Plan) provide for the creation of the financial incentives creating housing opportunities
within the District; and
Whereas, City desires to assist Owner in its efforts to create housing opportunities
within the District through the Downtown Housing Incentive Program (the Incentive
Program).
NOW THEREFORE, in consideration of the premises and respective covenants,
agreements and representations hereinafter set forth, the parties agree as follows:
SECTION 1. HOUSING UNIT CREATION. The Owner commits to creating new market -
rate rental units as described in Section 25(2) (the Project) within the Building.
SECTION 2. SOURCE OF FUNDS. City has allocated funds sufficient to carry out its
obligations under this Agreement.
SECTION 3. HOUSING GRANT.
DOWNTOWN HOUSING PROGRAM
INCENTIVE AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
3.1 City agrees to provide to Owner on the terms and conditions set forth herein a grant
the amount of ($ ) (the Grant) that shall consist
of Incentive Program funds.
3.2 Grant funds shall be disbursed to Owner by City for Qualifying Project Expenses,
defined in Section 25(3), for amounts not in excess of the total sum in Section 3.1. It is
expressly understood that all funds advanced under this Agreement shall be used by Owner
only for the purpose of paying the Qualifying Project Expenses set forth in such written
requests.
3.3 Grant funds will be disbursed to the Owner after City issuance of a Certificate of
Occupancy for the Project. Prior to the disbursement of any funds, Owner shall provide
F: \USERS \Eton Dev\Downtown Housing\20100209Downtown Housing IncentiveAgreement_Grants.doc
evidence satisfactory to City that the improvements have been completed in accordance
with the plans and other documentation submitted to City with the application.
SECTION 4. FINANCIAL CONDITION OF OWNER. Owner has delivered to City
evidence of Owner's ability to complete the Project as of the date of application for financial
assistance which fairly represents the financial condition of Owner as of the date stated, all
in accordance with generally accepted accounting principles consistently applied, and that
the statements still correctly reflect the financial condition and status of its operations as of
the date of this Agreement.
SECTION 5. TITLE OF OWNER. Subject to the liabilities reflected on Owner's financial
statement as well as those incurred in relation to this Project, Owner represents that it has
good and marketable title, free and clear of any mortgage, pledge, lien, security interest,
encumbrance, or charge to all those assets reflected on the financial statement and to
assets since acquired. Taxes not due or payable or otherwise delinquent are excepted.
SECTION 6. HISTORIC CHARACTER. All exterior work shall coincide with the historic
character of the building.
SECTION 7. DEFAULT. Owner shall be in default upon the occurrence of any of the
following events:
(1) Owner becomes insolvent or admits in writing its inability to pay its debts as
they mature; or applies for, consents to or acquiesces in the appointment of a trustee
or receiver for any of its property; or in the absence of an application for consent or
acquiescence, a trustee or receiver is appointed for it or a substantial part of its
property and is not discharged within ten (10) days; or it otherwise commits an act of
bankruptcy; or any bankruptcy, reorganization, debt arrangement or other proceeding
under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding
is instituted by or against it and if instituted is consented to or acquiesced in by it or
remains for ten days undismissed;
(2) Owner fails in the performance of any of the terms and conditions of this
Agreement and such non - performance continues for ten (10) days after written notice
thereof from City or from the holder of a note;
(3) Any warranty made by Owner is untrue in any material respect, or any
schedule, statement, report, notice or writing furnished by Owner to City is untrue in
any material respect on the date as of which the facts set forth are stated or certified,
provided any such error is not the result of unintentional errors which are capable of
correction without prejudice to the City;
(4) Any government board, agency, department, commission or public or private
lender takes possession or control of any substantial part of any property of Owner.
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SECTION 8. ADDRESS. Owner's principal business address is:
Name
Company
Address
City, State ZIP
Owner shall promptly give City written notice of any further change in its principal
office address.
City's address is:
City Manager
City Hall
50 West 13th Street
Dubuque, Iowa 52001
SECTION 9. LIMITATION OF CITY'S LIABILITY FOR PROJECT ACTIVITIES. City shall
not be liable to Owner, or to any party, for the completion of, or the failure to complete, any
activities which are part of the Project, except as may be specifically provided in this
Agreement or other written agreements between City and Owner or any of Owner's affiliates
or subsidiaries. Owner agrees to indemnify, hold harmless and defend City from any such
claims.
SECTION 10. CONFLICT OF INTEREST. Owner certifies that to its knowledge no
member, officer or employee of City, or its designees or agents, nor any consultant or
member of the governing body of City, and no other public official of City who exercises or
has exercised any functions or responsibilities with respect to the Project during his or her
tenure, or who is in a position to participate in a decision making process or gain inside
information with regard to the Project, has nor shall have any interest, direct or indirect, in
any contract or subcontract, or in any activity, or benefit therefrom, which is part of this
Project at any time during or for one year after such person's tenure.
SECTION 11. NONDISCRIMINATION. In carrying out the Project, Owner shall not
discriminate against any employee or applicant for employment or tenancy because of race,
religion, color, sex, sexual orientation, national origin, age or disability. Owner shall post in a
conspicuous place, available to employees and applicants for employment, notices to be
provided by City setting forth the provisions of this nondiscrimination clause. Owner shall
state that all qualified applicants will receive consideration for employment without regard to
race, religion, color, sex, sexual orientation, national origin, age or disability.
SECTION 12. DISCLAIMER OF RELATIONSHIPS. Nothing contained in this Agreement
between the parties, nor any act of City or Owner, shall be deemed or construed by any of
the parties, or by any third persons, to create any relationship of third party beneficiary,
principal or agent, limited or general partnership, or joint venture.
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SECTION 13. NOTICE. Any notice, if mailed by United States certified mail, shall be
deemed given when mailed, postage prepaid, addressed to the other party at its address
shown above, or at any other address subsequently designated by either party to the other.
SECTION 14. SUCCESSORS AND ASSIGNS. All covenants, representations, warranties
and agreements herein set forth shall be binding upon Owner, and its legal representatives,
successors and assigns. This Agreement may not be assigned by City or Owner, without
the express written consent of the other party.
SECTION 15. LEGALITY. If any provision of this Agreement shall, for any reason, be
held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any
other provision hereof, but this Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.
SECTION 16. GOVERNING LAW. This Agreement and all rights and duties hereunder,
including but not limited to all matters of construction, validity and performance shall be
governed by the laws of the State of Iowa.
SECTION 17. SURVIVAL OF REPRESENTATIONS. All representations or warranties of
Owner shall survive the execution and delivery of this Agreement and any note executed
and delivered under it, and no investigation by City, nor any closing shall affect the
representations or warranties or the right of City to rely on and enforce them.
SECTION 18. DELAY. No delay on the part of City or the holder of any note in the
exercise of any right shall operate as a waiver, nor shall any single or partial exercise of any
right preclude other or additional exercise of any right.
SECTION 19. DEFINITIONS.
(1) "Closing Date" shall mean the date on which this Agreement is executed by
the parties.
(2) "Project" shall mean the rehabilitation project of Owner's property at
, identified in Owner's application for financial assistance. Said
application is on file in the office of the Economic Development Department, 50 West
13th Street, Dubuque, Iowa 52001. The Project shall include the creation of
new market rate residential housing units at a cost of not less than $
(3) "Qualifying Project Expenses" shall mean those expenditures or expenses
incurred by Owner during and for the Project and identified in the Owner's application
for financial assistance, whether paid to third parties or incurred as wage expense,
fringe benefit expense or other costs of Owner's employees, agents and contractors.
(4) "New rental housing unit" shall mean either a rental housing unit created
where one did not previously exist, or an existing rental housing unit which has been
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unlicensed and unoccupied for a period of not less than five years prior to the date
of this Agreement.
SECTION 20. CERTIFICATION OF COMPLIANCE WITH CITY CODES. By signing this
Agreement, Owner certifies that all property in the City of Dubuque owned by Owner or in
which Owner has any interest, other that the Project property, complies with all applicable
City of Dubuque ordinances and regulations, including, but not limited to, housing, building,
zoning, fire, health, and vacant and abandoned building regulations.
CITY OF DUBUQUE, IOWA OWNER
Michael C. Van Milligen, City Manager (Signature)
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(Printed Name)
Its