Bishop Block 90 Main Street-Amendment to Loan Agreement Copyrighted
December 16, 2019
City of Dubuque Consent Items # 16.
ITEM TITLE: Bishop Block90 Main Street-Amendmentto Loan
Agreement
SUMMARY: City Manager recommending approval of a resolution
extending the loan maturity until June 30, 2020, for Mercy
Housing's loan for Bishop Block— 90 Main Street.
RESOLUTION Amending Agreementwith Mercy Housing
to extend maturity date of loan for property at 90 Main
Street
SUGGESTED DISPOSITION: Suggested Disposition: Receiveand File;Adopt
Resolution(s)
ATTACHMENTS:
Description Type
Bishop Block Loan Maturity Date E#ension-MVM City Manager Memo
Memo
Staff Memo Staff Memo
Resolution Resolutions
Letter to Mercy Housing Supporting Documentation
Dubuque
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TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Bishop Block - 90 Main - Loan Maturity Date Extension to June 30, 2020
DATE: December 12, 2019
Housing and Community Development Director Alexis Steger recommends City Council
approval of a resolution extending the loan maturity until June 30, 2020, for Mercy
Housing's loan for Bishop Block— 90 Main. The City is also aware that the lowa
Finance Authority has granted an extension of Mercy Housing's state loan on the
project to 2024 and forgave the additional $240,000 note. Part of the reason to grant an
extension is an effort to coordinate with the lowa Finance Authority to assist Mercy
Housing with a disposition strategy.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
v
Mic ael C. Van Milligen
MCVM:jh
Attachment
cc: Crenna Brumwell, City Attorney
Teri Goodmann, Assistant City Manager
Cori Burbach, Assistant City Manager
Alexis M. Steger, Housing and Community Development Director
Dubuque
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TO: Michael C. Van Milligen, City Manager
FROM: Alexis M. Steger, Housing and Community Development Director
SUBJECT: Bishop Block— 90 Main — Loan Maturity Date Extension to June 30t", 2020
DATE: December 11, 2019
BACKGROUND
In October 1993, Mercy Housing purchase 90 Main Street (Bishop Block) and
completed a complete renovation of the building. To complete the work, Mercy Housing
sought assistance from the City of Dubuque, lowa Finance Authority and the lowa
Economic Development Authority. Additionally, a private loan covered the funding gap,
and Low Income Housing Tax Credits were utilized.
The original balance of the loan from the City of Dubuque was $350,000. As of
December 2019, no payments have been made on that loan and interest has continue
to accrue. Several extensions to the maturity of the loan have been provided by the City
of Dubuque, and Mercy Housing is seeking another extension.
DISCUSSION
Effective December 31, 2019, the City of Dubuque would be granting Mercy Housing an
extension of the maturity date of the loan on the Bishop Block properties to June 30,
2020. The City is also aware that the lowa Finance Authority (IFA) has granted an
extension of Mercy Housings state loan on the project to 2024 and forgave the
additional $240,000 note. Part of the reason to grant an extension is an effort to
coordinate with IFA to assist Mercy Housing with a disposition strategy.
As part of the agreement to extend the loan, Mercy Housing agrees to allow a complete
inspection of the building and all rental units to assess the capital needs. Additionally,
they will cooperate with any additional information that the City needs to evaluate the
financial ability for Mercy Housing to pay on the loan, or develop a disposition strategy.
The options are limited as to who can assist Mercy Housing with the re-syndication of
the building due to the Low Income Housing Tax Credits. Therefore, the Housing &
Community Development Department finds it prudent to allow for additional time to
explore all options. Mercy Housing has shown effort in trying to work on options for this
building, and is working closely with staff to communicate options being pursued.
The interest over the term of the loan is, and will be, as follows:
Date Interest Rate Months Monthl Interest Total
October 1993 -
December 1994 0.0°k 15 $ - $ -
January 1995 -
Se tember 1999 1 .0°k 57 $291 .66 $16,624.62
October 1999 -
Se tember 2001 2.0°k 24 $583.33 $13,999.92
October 2001 —
December 2017 3.0°k 196 $875.00 $171 ,500.00
January 31 , 2018 -
December 31 , 2019 3.0°k 24 $875.00 $21 ,000.00
December 31 , 2019 —
June 30, 2020 3.0°k 6 $875.00 $5,250
Totallnterest $228,374.54
Princi al Balance $350,000.00
Total due 12/31/2019 $578,374.54
The total amount due on June 30, 2020 will be $578,374.54.
RECOMMENDATION
I respectfully request City Council approval of the attached resolution for a loan maturity
extension for Mercy Housing until June 30�h, 2020.
Cc: Jenny Larson, Budget and Finance Director
Jill Connors, Economic Development Director
2
Prepared by Alexis Steger, Housing & Community Devel., 350 W. 6th St., Suite 312, Telephone: 563-690-6072
Return to: Kevin Firnstahl, City Clerk Address: City Hall- 50 W. 13th St Telephone: (563) 589-4100
RESOLUTION NO. 431-19
AMENDING AGREEMENT WITH MERCY HOUSING TO EXTEND MATURITY DATE
OF LOAN FOR PROPERTY AT 90 MAIN STREET
WHEREAS, the city entered into an agreement with Mercy Housing in October 1993 to
provide funding for the renovation of property at 90 Main Street Dubuque, IA;and
WHEREAS, Mercy Housing has requested an extension of the maturity date of the
loan; and
WHEREAS, the City Council finds that it is in the best interest of the City to approve an
extension of the maturity date of the loan to explore additional options for this location; and
WHEREAS, the Mercy Housing will additionally allow the City of Dubuque access to the
property to access the capital needs of the property.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA THAT:
Section 1. The City of Dubuque hereby approves the extension of the agreement with
Mercy Housing to reflect a new maturity date of June 30, 2020.
Passed, Approved and Adopted this 12th day of December 2019.
tf„9,
oy D. Buol, Mayor
Attest:
�ubuque Housing and Community
THE CITY OF Development Department
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December 11, 2019
Bruce Saab
Director of Transactions
Mercy Housing
1600 Broadway, Suite 2000
Denver, CO 80202
RE: Bishop Block Housing — Dubuque, lowa Loan Extension
Dear Mr. Saab:
After review of your letter dated September 17, 2019, in which you request the City of
Dubuque to extend the maturity date of the loan between Mercy Housing and the City
of Dubuque on the Bishop Block properties, the Departments of Housing and
Community Development, Finance, and Legal recommended to the City Manager that
Mercy Housing receive an extension of the loan modification which changes the
maturity date on the Multifamily Loan on Bishop's Block from December 31, 2019, to
June 30, 2020.
Effective December 31 , 2019, the City of Dubuque is granting Mercy Housing an
extension of the maturity date of the loan on the Bishop Block properties to June 30,
2020. The City is also aware that the lowa Finance Authority (IFA) has granted an
e�ension of your state loan on the project to 2024 and forgave the additional $240,000
note; part of the City's decision to grant you an extension was an effort to coordinate
with IFA to assist you with a disposition strategy.
The City would like to be clear this is not a deferment of payments; the City expects
Mercy Housing will make appropriate repayments to the City as required and when
feasible between the date of this extension letter and June 30, 2020.
The original balance was of your loan with the City was $350,000. The interest over the
term of the loan is, and will be, as follows:
Date Interest Rate Months Monthl Interest Total
October 1993 -
December 1994 0.0% 15 $ - $ -
January 1995 -
Se tember 1999 1 .0% 57 $291.66 $16,624.62
October 1999 - 2.0% 24 $583.33 $13,999.92
September 2001
October 2001 —
December 2017 3.0°k 196 $875.00 $171 ,500.00
January 31 , 2018 -
December 31 , 2019 3.0°k 24 $875.00 $21 ,000.00
December 31 , 2019 —
June 30, 2020 3.0°k 6 $875.00 $5,250
Totallnterest $228,374.54
Princi al Balance $350,000.00
Total due 12/31/2019 $578,374.54
The total amount due on June 30, 2020 will be $578,374.54.
Additionally, as part of the extension, you must grant the City access to a full
inspection of each unit and the building to assess the capital needs of the facility.
Standard inspection fees will apply. Additionally, it will be a time to review the capital
needs of the facility. Additionally, Mercy Housing will cooperate with any additional
investigation into the financial state of this property, in an attempt to work on a
disposition strategy should you be unable to raise the capital to retire this debt.
If you have any questions or concerns please feel free to contact Alexis Steger,
Director of Housing and Community Development; office number (563) 690-6072 and
email address asteqer(c�citvofdubuque.orq.
Sincerely,
Michael Van Milligen, City Manager
cc: Alexis Steger, Director Housing and Community Development
Crenna Brumwell, City Attorney
Jennifer Larson, Budget and Finance Director