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3000 Jackson/Brewing & Malting -First Amendment to Development Agrement_Initiate Copyrighted J une 3, 2019 City of Dubuque Items to be set for Public Hearing # 1. ITEM TITLE: 3000 Jackson/Brewing & Malting - FirstAmendmentto Development Agreement SUMMARY: City Manager recommending that recommends the City Council set a public hearing for June 17 on the First Amendment to Development Agreement between the City of Dubuque and 3000 Jackson, LC. for a capital investment at 3000-3040 Jackson Street, including the issuance of tax increment revenue obligations. RESOLUTION Fixing the date for a public hearing of the City Council of the City of Dubuque, lowa on the approval of a 1 st Amendment to Development Agreement between the City of Dubuque and 3000 Jackson, LC, including the issuance of Urban Renewal Tax Increment Revenue Obligations, and providing for the publication of notice thereof SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt Resolution(s), Set Public Hearing for June 17, 2019 ATTACHMENTS: Description Type 3000-3040 Jackson FirstAmendmentto Development City Manager Memo Agreement-MVM Memo Staff Memo Staff Memo 1stAmendmentto DA Supporting Documentation Notice of Hearing Supporting Documentation Resolution Setting Hearing - REVISED I I Resolutions THE CITY OF Dubuque � AIFA�erlwGh UB E '�� III► Masterpiece on the Mississippi Z°°'�w'2 7A13 2017 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: 3000-3040 Jackson — First Amendment to Development Agreement DATE: May 30, 2019 Economic Development Director Jill Connors recommends the City Council set a public hearing for June 17 on the First Amendment to Development Agreement between the City of Dubuque and 3000 Jackson, LC. for the $30 million capital investment at 3000- 3040 Jackson Street, including the issuance of tax increment revenue obligations. I concur with the recommendation and respectfully request Mayor and City Council approval. �� W�, �1tti� Mic ael C. Van Milligen �� MCVM:jh Attachment cc: Crenna Brumwell, City Attorney Teri Goodmann, Assistant City Manager Cori Burbach, Assistant City Manager Jill M. Connors, Economic Development Director Dubuque Economic Development Department THE CITY OF .� 5o West 13�^Street AIFMersality Dubuque,lowa 52001-4864 D� L E � � �� Office(563)589-4393 TTY(563)690-6678 http://www.cityofd u buq ue.org 2007•2012 Masterpiece on the Mississippi �,3.Zo„ TO: Michael C. Van Milligen, City Manager FROM: Jill M. Connors, Economic Development Director SUBJECT: 3000-3040 Jackson — First Amendment to Development Agreement DATE: May 30, 2019 INTRODUCTION This memorandum presents for City Council consideration and action the attached resolution setting a public hearing on the First Amendment to Development Agreement between the City of Dubuque and 3000 Jackson, LC. BACKGROUND Upon the recommendation of the Historic Preservation Commission, the City Council established a Conservation District for the H&W property at 30th and Jackson Streets on November 21 , 2005 by Ordinance 63-05 in order to prevent the demolition of the historic buildings on the property. A Conservation District is an area of the city composed of structures that have historical or architectural value. In a Conservation District, the City Building Official cannot issue demolition permits without the approval of the City Council. Several buildings on this former Brewing & Malting Company campus in the 3000 Block of Jackson Street have continued to fall into disrepair and have sat mostly vacant for a number of years. In 2016, discussions began between Steve Emerson of 3000 Jackson, LC and City Economic Development staff. A Letter of Intent (LOI) was signed November 30, 2016 which contemplated $35,000 in Downtown Rehabilitation Grants, up to $500,000 in assistance for 50°k of deconstruction costs, and 10 years of Tax Increment Financing Rebates from the City. The developer returned an executed copy of the LOI December 9, 2016, indicating the desire to proceed with the negotiation of a Development Agreement. In mid-2017, the Mr. Emerson (Developer) purchased the properties at 3000 and 3040 Jackson Street with the intention to create a mixed-use development. The Developer has worked with multiple City departments to ensure the plans are in compliance with all zoning and other regulations. The Developer also began needed deconstruction work on a part of the building that had collapsed due to the buildings' poor condition. DISCUSSION On June 4, 2018, the City Council signed Resolution 175-18 approving a development agreement with the Developer to create at least 110 apartments between the two buildings by August 2020. The development would also include retail/commercial space that would serve both the buildings' tenants and the neighborhood. Due to the complex nature of the project, the Developer is working to fill a financial gap in project funding. This has caused a delay in project commencement. Additional sources of funds being investigated include Low Income Housing Tax Credits (LIHTC), New Markets Tax Credits, and Opportunity Zone investment. The Developer has also requested, and I recommend, increasing the number of tax increment financing rebates to the project from 10 years to 15 years. In addition, in response to comments from the City Council, the development team has revisited the interior design of the building. The Developer is now proposing reducing the number of efficiency units and adding more 2-bedroom units. Use of the LIHTC program would also require larger unit footprints. The Developer anticipates still having a minimum of 75 residential units on the property. The proposed First Amendment would decrease the amount of required parking in function with the reduced number of residential units, which would have the benefit of allowing for more landscaping. RECOMMENDATION/ ACTION STEP Based on the City's goal to assist in redeveloping the downtown and North End areas I recommend the City Council adopt the attached resolution to set a public hearing on the First Amendment to Development Agreement for the $30 million capital investment at 3000-3040 Jackson Street, including the issuance of tax increment revenue obligations by adopting the attached Resolution. Prepared by: Jill Connors, Economic Development, 50 W. 13th Street, Dubuque IA 52001, 563 589-4393 Return to: Jill Connors, Economic Development, 50 W. 13th Street, Dubuque IA 52001, 563 589-4393 RESOLUTION NO. 208-19 FIXING THE DATE FOR A PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA ON THE APPROVAL OF A FIRST AMENDMENT TO DEVELOPMENT AGREEMENT BETWEEN THE CITY OF DUBUQUE AND 3000 JACKSON, LC, INCLUDING THE ISSUANCE OF URBAN RENEWAL TAX INCREMENT REVENUE OBLIGATIONS, AND PROVIDING FOR THE PUBLICATION OF NOTICE THEREOF WHEREAS, the City Council, by Resolution No. 175-18, dated June 4, 2018, entered into a Development Agreement with 3000 Jackson, LC for the redevelopment of 3000-3040 Jackson Street in the City of Dubuque, Iowa (the Property); and WHEREAS, the City and 3000 Jackson, LC have entered into a First Amendment to the Development Agreement, subject to the approval of the City Council, for the rehabilitation of property located at 3000-3040 Jackson Street, a copy of which Development Agreement is now on file at the Office of the City Clerk, City Hall, 50 W. 13th Street, Dubuque, Iowa; and WHEREAS, the City Council has tentatively determined that it would be in the best interests of the City to approve the First Amendment with 3000 Jackson, LC; and WHEREAS, the Development Agreement and First Amendment provide for the issuance of Urban Renewal Tax Increment Revenue Obligations, as provided by Iowa Code Chapter 403; WHEREAS, before said Obligations may be approved, Iowa Code Chapter 403 requires that the City Clerk publish a notice of the proposal and of the time and place of the meeting at which the City Council proposes to take action thereon and at which meeting the City Council shall receive oral and/or written objections from any resident or property owner of said City to such proposed action. 060319 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The City Clerk is hereby authorized and directed to cause a notice to be published as prescribed by Iowa Code Section 403.9 of a public hearing on the City's intent to approve the First Amendment to Development Agreement and the issuance of Urban Renewal Tax Increment Revenue Obligations, to be held on the 17th day of June, 2019, at 6:00 o'clock p.m. in the City Council Chambers at the Historic Federal Building, 350 W. 6th St., Dubuque, Iowa. It is expected that the aggregate amount of the Tax Increment Revenue obligations to be issued will be approximately $2,575,037. Section 2. The Clerk is hereby directed to cause at least one publication to be made of a notice of said meeting, in a newspaper, printed wholly in the English language, published at least once weekly, and having general circulation in said City, said publication to be not less than four days nor more than twenty days before the date of said meeting on the issuance of said obligations. The notice of the proposed action to issue said obligations shall be in substantially the form attached hereto. Passed, approved and adopted this 3rd day of June, 2019. Attest: Kevin . irnstahl, Cit Jerk 2 Roy D. uol, Mayor FIRST AMENDMENT TO DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF DUBUQUE, IOWA AND 3000 JACKSON, LC This First Amendment to Development Agreement (Agreement) dated for reference purposes the day of , 2019, is made and entered into by and between the City of Dubuque, lowa (City) and 3000 Jackson, LC (Developer). WHEREAS, City and Developer entered into an Agreement dated June 4, 2018; and WHEREAS City and Developer desire to amend the Agreement. NOW, THEREFORE, IT IS AGREED BY AND BETWEEN CITY AND DEVELOPER AS FOLLOWS: 1 . Section 2.1 of the Agreement is hereby amended to read as follows: 2.1 Required Minimum Improvements. (1) Phase I Residential Units. Developer shall improve the Property by creating not fewer than Fifty (50) apartments during Phase I of the Project, as shown on attached Exhibit I. (2) Phase II Residential Units. Developer shall improve the Property by creating not fewer than Fifteen (15) apartments, as shown on attached Exhibit I. (3) Phase I Parking. Developer shall improve the Property by creating not fewer than One Hundred (100) off-street parking spaces for tenants of the building. (4) Phase II Parking. Developer shall improve the Property by creating not fewer than Twenty-Three (23) off-street parking spaces for tenants of the building. (5) Phase II Retail Space. Developer shall create not less than Seventeen Thousand Five Hundred (17,500) square feet of retail space. (6) The Residential Units, Parking, and the Retail Space are referred to collectively herein as the Minimum Improvements and shall be a capital investment of approximately Thirty Million Dollars ($30,000,000.00). 2. Section 2.3(1) and 2.3(2) of the Agreement are hereby amended to read as follows: 2.3 Timinq of Minimum Improvements. (1) Developer hereby agrees that construction of the Phase I Minimum Improvements on the Property as described in Sections 2.1(1) and 2.1 (3) shall commence by August 1 , 2020, and shall be substantially completed by August 1 , 2022. (2) Developer hereby agrees that construction of the Phase II Minimum Improvements on the Property as described in Sections 2.1(2), 2.1 (4), and 2.1 (5) shall commence by March 1 , 2021 , and shall be substantially completed by August 1 , 2022. 3. Section 3.4 of the Agreement is hereby amended to read as follows: 3.4. Semi-annual Economic Development Grants. For, and in consideration of Developer's obligations hereunder, and in furtherance of the goals and objectives of the urban renewal plan for the District and the Urban Renewal Law, City agrees, subject to Developer being and remaining in compliance with the terms of this Agreement, to make up to thirty (30) consecutive semi-annual payments to the Developer over a period of fifteen (15) years, beginning in the first fiscal year in which Developer Tax Increment is received by the City, which payments shall be funded solely through Developer Tax Increment (such payments being referred to collectively as the Economic Development Grants), under the following terms and conditions. (1) The Economic Development Grants shall be paid on each November 1 or May 1 during the fifteen (15) year period of Economic Development Grants, provided the Developer remains in compliance with this Agreement and remains otherwise eligible at the time of payment of each Economic Development Grant. (2) Each Economic Development Grant shall be in an amount equal to 100°k of the Developer Tax Increment actually collected by the City during the preceding six-month period. (3) Developer and City agree that the first Economic Development Grants paid to Developer shall be reduced by an amount equal to the actual sum of the Deconstruction Grant and Letter of Credit Release Grant, up to $540,000, and that the City shall receive the Developer Tax Increment that would otherwise fund the first Economic Development Grants until the City has received an amount equal to the Deconstruction Grant and the Letter of Credit Release Grant. 4. Section 6.3 of the Agreement is hereby amended to read as follows: 2 6.3 Termination Date. This Agreement and the rights and obligations of the parties hereunder shall terminate on (i) June 1 , 2039 or (ii) upon the full payment of the Transition and Stabilization Grant described in Section 3.8, whichever last occurs (the Termination Date). 5. All other terms of the Lease Agreement, as amended, shall remain in full force and effect. CITY OF DUBUQUE, IOWA 3000 JACKSON, LC By By Roy D. Buol, Mayor Stephen Emerson, Member Attest: Kevin S. Firnstahl City Clerk 3 EXHIBIT I SITE PLAN 4 �, �' � �� '�� 3 fi �� -� � � g � � � �� . � � � n � ; � p W d J .:r...� �:�� . . Q � $ iT� � R in c � r ... .. �y.... ..,�. �. ..,... ........... ... �q .. � ^2iF �.`.. 55 � �,� �} i C� i �..n .:�. �� {� 5 � �� r. �m � �� :a� :�� C 'r �". � , ,,�a...:.�: � � � �5 g � :�$tl �� e�� a 5� M�� !.� 'z� iSp Z q4� a t�� e :�a�, °�� :�� , � ,�� rµ a�� :$�C:� r R�� O 2� t" �i�y a o�� `�� 6 � �� ^�� s xW � :a� g � 'S :�$tl �$ �... e�� . .i�: �� .. ta� a�� i�� ,�� . :�� R�� : �� , a�� A M�aq 7 % �� } a'J$�.±. . 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'�,�w,..... s'd 18 � �� UNFINISNED> �� 5 19 CITY OF DUBUQUE, IOWA OFFICIAL NOTICE NOTICE OF A PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA, ON THE APPROVAL OF THE FIRST AMENDEMENT TO DEVELOPMENT AGREEMENT BETWEEN THE CITY OF DUBUQUE AND 3000 JACKSON, LC INCLUDING THE PROPOSED AUTHORIZATION OF URBAN RENEWAL TAX INCREMENT REVENUE OBLIGATIONS PUBLIC NOTICE is hereby given that the City Council of the City of Dubuque, Iowa, will th hold a public hearing on the 17 day of June, 2019, at 6:00 p.m. in the City Council Chambers at the Historic Federal Building, 350 W. 6th St., Dubuque, Iowa, at which meeting the City Council proposes to take action on the authorization and execution of the First Amendment to Development Agreement, and on the issuance of additional economic development grants (Urban Renewal Tax Increment Revenue Grant Obligations) described therein in order to carry out the purposes and objectives of the Urban Renewal Plan for the Greater Downtown Urban Renewal District, consisting of the funding of economic development grants to 3000 Jackson, LC, under the terms and conditions of said Development Agreement, as amended, and the Urban Renewal Plan for the Greater Downtown Urban Renewal District. The aggregate amount of the Urban Renewal Tax Increment Revenue Grant Obligations cannot be determined at the present time but is not expected to exceed $2,575,037. At the meeting, the City Council will receive oral and written objections from any resident or property owner of said City to the above action. After all objections have been received and considered, the City Council may at this meeting or at any adjournment thereof, approve the First Amendment to Development Agreement, and authorize such Tax Increment Revenue Grant Obligations, or abandon the proposal. By order of the City Council said hearing and appeals therefrom shall be held in accordance with and governed by the provisions of Section 403.9 of the Code of Iowa. Copies of supporting documents for the public hearings are on file in the City Clerk’s th Office, City Hall, 50 W. 13 St., Dubuque, Iowa, and may be viewed during normal working hours. Written comments regarding the above public hearings may be submitted to the City th Clerk’s Office, 50 W. 13 St., Dubuque, IA 52001, on or before said time of public hearing. At said time and place of public hearings all interested citizens and parties will be given an opportunity to be heard for or against said proposal. Individuals with limited English proficiency, vision, hearing or speech impairments requiring special assistance should contact the City Clerk’s Office at (563) 589-4100 or TDD (563) 690-6678 as soon as feasible. This notice is given by order of the City Council of the City of Dubuque, Iowa, as provided by Chapter 403 of the Code of Iowa. Dated this 7th day of June 2019. Kevin S. Firnstahl City Clerk of Dubuque, Iowa 1t 6/7