Habitat for Humanity Memorandum of UnderstandingCopyrighted
March 2, 2020
City of Dubuque Consent Items # 20.
ITEM TITLE: Habitat for Humanity Memorandum of Understanding
SUMMARY: City Manager recommending approval of a Memorandum
of Understanding with Habitat for Humanity ensuring the
property at 389 E. 21 st Street remain an affordable
residential unit upon completion of the project.
SUGGESTED DISPOSITION:
RESOLUTION Approving a Memorandum of
Understanding between the City of Dubuque and Habitat
for Humanity of Dubuque and Jackson County for the
requirements associated with the property located at 389 E.
21 st Street.
Suggested Disposition: Receive and File; Adopt
Resolution(s)
ATTACHMENTS:
Description Type
True North Sale of 389 E. 21st Street to Habitat for City Manager Memo
Humanity-MVM Memo
Staff Memo Staff Memo
Resolution approving MOU Resolutions
MOU Supporting Documentation
Purchase Agreement Resolutions
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: True North Sale of 389 E. 21 st Street to Habitat for Humanity
DATE: February 26, 2020
Dubuque
bitil
All-A.aia City
111111
2007.2012.2013
2017*2019
Housing and Community Development Director Alexis Steger recommends City Council
approval of a Memorandum of Understanding with Habitat for Humanity ensuring the
property at 389 E. 21st Street remain an affordable residential unit upon completion of
the project.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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 & Community Development Director
Masterpiece on the Mississippi
Dubuque
brAll
AII•Aneriea city
2007.2012.2013
2017*2019
EQUAL HOUSING
OPPORTUNITY
City of Dubuque
Housing & Community
Development
350 W. 6th Street, Suite 312
Dubuque, IA 52001
Office (563) 589-4230
TO: Michael C. Van Milligen, City Manager
FROM: Alexis M. Steger, Housing & Community Development Director
DATE: February 25, 2020
RE: True North Sale of 389 E. 21st Street to Habitat for Humanity
BACKGROUND
True North and rehabilitation staff from the City of Dubuque inspected 389 E. 21st Street on February
6th, 2019. Based on the off-street parking, yard space and visual inspection of the structure, the City
approved the purchase of this home for True North. This property appeared to have a lot of potential
to be a high -quality 2 bedrooms, 1.5 baths affordable home when renovation was completed.
Work began on the renovation of this property in the summer of 2019. The first floor was stripped to
the studs, and the asbestos siding was removed.
DISCUSSION
After removal of the asbestos siding, extensive rot was discovered in the walls, siding and flooring
from long-term water damage that was not visible during inspection. Construction was halted in
September, while a new budget was developed for all components that were now visible and in need
of complete replacement. October 2nd, 2019, True North informed the city that the new estimated cost
to rehabilitate the property was $168,000. The end sale price was expected to be $80,000.
True North proactively sought out alternative solutions for rehabilitation of 389 E. 21st Street, and
reached out to Habitat for Humanity of Dubuque and Jackson County to see if they would be
interested in the property. Habitat was interested in deconstructing the current home, since it wasn't
feasible to rehabilitate, and construct an affordable home on the lot with the same income restrictions
for the buyer of the property, that was required of True North.
On October 31st, 2019, True North officially requested the ability to transfer ownership of 389 E. 21st
street to Habitat for Humanity. Based on the budget implications, this is the best option for this
property at this time.
Service People Integrity Responsibility Innovation Teamwork
BUDGET IMPACT
True North was provided $30,000 for the acquisition of 389 E 21st Street per their agreement with the
City of Dubuque. An additional $29,066.07 has been expended to start the rehabilitation of the
property. The City of Dubuque would be required to reimburse True North for the additional
$29,066.77. This reimbursement can be made from the Housing TIF stop -loss reserved for the
agreement with True North.
No additional costs would be incurred by True North or the City of Dubuque, and Habitat for Humanity
would be required to complete the project under the affordable housing requirements set forth by the
Housing TIF funding.
REQUESTED ACTION
I respectfully request the City Council approve the attached Memorandum of Understanding with
Habitat for Humanity ensuring the property at 389 E 21st Street remain an affordable residential unit
upon completion of the project.
Cc: Jenny Larson, Budget and Finance Director
Rick Dickinson, President & CEO Greater Dubuque Development Corporation
Rachel Dillings, Executive Director of Habitat for Humanity
Service People Integrity Responsibility Innovation Teamwork
RESOLUTION NO. 70-20
APPROVING A MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF
DUBUQUE AND HABITAT FOR HUMANITY OF DUBUQUE AND JACKSON
COUNTY FOR THE REQUIREMENTS ASSOCIATED WITH PROPERTY LOCATED
AT 389 E 21ST STREET
WHEREAS, City entered into an agreement with True North Corporation to use
Housing Tax Increment Financing funds to rehabilitate homes; and
WHEREAS, True North Corporation purchase property located at 389 E 21st Street
for rehabilitation; and
WHEREAS, True North identified the structure was not viable and Habitat for
Humanity of Dubuque and Jackson County had capacity to deconstruct the current
structure to erect another affordable residential structure in its place; and,
WHEREAS, the funding used to purchase the property requires the property be used
to provide affordable housing options to those making 80% or Tess of the area median
income; and
WHEREAS, Habitat for Humanity of Dubuque and Jackson County will enter into a
memorandum of understanding that the property will be used as required by the funding
source.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA, AS FOLLOWS THAT:
Section 1. The Memorandum of Understanding is hereby approved.
Section 2. The Mayor is hereby authorized and directed to execute such
Memorandum of Understanding on behalf of the City of Dubuque, Iowa.
Section 3. The City Council grants the authority to the City Manager or the City
Manager's designee to manage the agreement and act in accordance with the terms of
the agreement.
Passed, approved and adopted this 2nd day of March 2020.
Attest:
Kev' S. Firnstahl, City Clerk
69,
Roy D. Buol, Mayor
MEMORANDUM OF UNDERSTANDING
BY AND BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
DUBUQUE AND JACKSON COUNTY HABITAT FOR HUMANITY, INC.
This Memorandum of Understanding ("MOU") is made between the City of
Dubuque, Iowa ("City") and Dubuque and Jackson County Habitat for Humanity, Inc.
("Habitat") as follows:
WHEREAS, City, through its agreement with Dubuque's True North Corporation,
funded the acquisition and initial rehabilitation of certain real estate located 389 East 21st
Street, Dubuque, Iowa 52001, which property is legally described as Lot 3 in Joseph
Geisler Subdivision in the City of Dubuque, Iowa, according to the recorded plat thereof
("Real Estate"); and
WHEREAS, Dubuque's True North Corporation has agreed to donate the Real
Estate to Habitat; and
WHEREAS, Habitat has agreed to accept the Real Estate from Dubuque's True
North Corporation and take ownership of the same pursuant to the terms of that certain
Offer to Buy Real Estate and Acceptance dated November 18, 2019, a copy of which is
attached hereto as Exhibit A and by this reference made a part hereof; and
WHEREAS, True North had certain obligations to the City and by acquiring the
property from Dubuque's True North Corporation, Habitat agrees to be bound by the
same restrictions with respect to the source of the City funding provided for the Dubuque's
True North Corporation acquisition in its development and sale of the Real Estate after
the Real Estate is acquired from Dubuque's True North Corporation; and
WHEREAS, this MOU sets forth the understanding of Habitat and City with respect
to such development and sale of the Real Estate.
THEREFORE, in consideration of the promises, covenants, and agreements of the
parties in this MOU, the parties agree as follows:
1. Acquisition and Development of the Real Estate. In connection with its
acquisition and development of the Real Estate, Habitat agrees as follows:
a. Habitat will take ownership of the Real Estate pursuant to the terms
of the Offer to Buy Real Estate and Acceptance shown on Exhibit A.
b. Following its acquisition of the Real Estate, Habitat will deconstruct
the existing house and foundation on the Real Estate, after applying for a
demolition and deconstruction permit with City's Building Services
Department.
1
c. Habitat will comply with all City procedures and regulations in
connection with the demolition and deconstruction of the house and
foundation on the Real Estate.
d. Following demolition and deconstruction as described above, Habitat
will construct a new house on the Real Estate in accordance with City's
building code.
e. Construction of the house on the Real Estate by Habitat will be
completed no later than December 31, 2021.
f. Habitat agrees to maintain the Real Estate, at its expense, at all
times during which it is the owner of the Real Estate. By way of illustration
and not limitation, such maintenance shall include lawn care, snow removal,
general maintenance, and making sure the property remains free and clear
of excessive debris during the demolition project and subsequent
construction project described above.
g. Upon conveyance of title of the Real Estate to Habitat, and at all
times thereafter until the Real Estate is sold, Habitat will maintain liability
insurance on the Real Estate under the terms of a commercial general
liability insurance policy with coverage limits not less than the following:
(i). General aggregate limit $2,000,000.00;
(ii). Products -completed operations aggregate limit
$1,000,000.00;
(iii). Personal and advertising injury limit $1,000,000.00;
(iv). Each occurrence $1,000,000.00;
(v) Fire damage limit (any one occurrence) $50,000.00.
h. In addition to the insurance described in the preceding paragraph,
Habitat must also provide and cause to be maintained on the Real Estate,
at its sole cost and expense, builder's risk insurance, written on a completed
value form, in an amount equal to 100% of the building's replacement value,
including improvements, when construction is completed.
2. Sale of the Real Estate. In connection with the subsequent sale of the Real
Estate following construction of a new residence thereon, Habitat agrees as
follows:
a. The Real Estate may be sold only to a buyer who meets the income
threshold levels set annually by the Department of Housing and Urban
Development and approved by City. Such buyer must have a household
income at 80% of the area median income or below, based on household
size, at the time of the purchase of the Real Estate from Habitat.
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b. Habitat shall require any buyer of the Real Estate, in connection with
their qualification for purchase from Habitat, to occupy the Real Estate at all
times as such buyer's principal residence.
c. Habitat acknowledges that it shall not permit any buyer through its
program to use the Real Estate as rental property, and acknowledges that
the Real Estate will not be eligible for a rental license from City. Habitat
further agrees to record a 21-year covenant on the Real Estate at the time
of sale to its buyer concerning such ineligibility for rental license or use as
rental property.
d. Habitat acknowledges that the Real Estate may only be used by it or
any of its prospective buyers for single family residential purposes.
3. Amendments. This MOU may not be amended or modified without the
consent of City and Habitat. Such consent must be evidenced by a written
instrument signed by both parties.
4. Assignment. This MOU may not be assigned without the written consent of
the non -assigning party.
5. Captions. The captions in this MOU are included for convenience of
reference and do not define, delimit, or otherwise affect the construction or effect
of the provisions contained herein.
6. Force Majeure. If either party is delayed, hindered, or prevented from the
performance of any obligation required under this MOU by reason of strikes,
lockouts, labor troubles, inability to procure materials, failure of power, riots, civil
disturbances, picketing demonstrations, war, or other similar reasons, or an act of
God not the fault of the delayed party, then performance of such act will be
extended for a period equivalent to the period of such delay.
7. Severability. If any provision of this MOU is held invalid, such invalidity will
not affect any other provision of this MOU that can be given effect without the
invalid provision. The provisions contained in this MOU are severable.
8. Binding Effect. This MOU binds and inures to the benefit of City and Habitat
and their respective heirs, successors and permitted assigns.
9. Notices. Notices or consents of any kind under this MOU must be in writing
and will be deemed received if delivered in person or if mailed by certified mail to
the appropriate party as follows:
If to City: Mike Van Milligen, City Manager
50 West 1 3th Street
3
Dubuque, IA 52001
If to Habitat: Rachel Dilling, Executive Director
Dubuque and Jackson County Habitat for Humanity, Inc.
900 Jackson Street, Suite LL5-2E
Dubuque, IA 52001
10. Applicable Law. This MOU is governed by and shall be construed in
accordance with the laws of the State of Iowa.
11. Counterparts. This MOU may be executed in any number of counterparts.
All counterparts taken together will constitute one and the same MOU.
12. Effective Date and Signature. Execution of this MOU formally evidences
that the parties have reviewed and accept this MOU. Execution of this MOU by the
City is subject to City Council approval.
Dated this day of
CITY OF DUBUQUE, IOWA
By:
Roy D. Buol, J ayor
Attest:
Kev(n S. Firnstahl, City
, 2020.
DUBUQUE AND JACKSON COUNTY
HABITAT FOR HUMANITY, INC.
By:
Rachel Dilling, Executive Director
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OFFER TO BUY REAL ESTATE AND ACCEPTANCE
TO: DUBUQUE'S TRUE NORTH CORPORATION, "Seller"
The undersigned Buyer (or its assignee) hereby offers to purchase certain real estate located
in Dubuque County, Iowa locally known as 389 E 21 s` Street, Dubuque, IA 52001 from the Seller,
upon the following terms and conditions:
1. Real Estate Description. Buyer offers to buy real estate in Dubuque County, Iowa,
described as follows:
Lot 3 in Joseph Geisler Subdivision in the City of Dubuque, Iowa, according to the
recorded plat thereof,
hereafter designated the "Real Estate"; provided Buyer, on possession, is permitted to make the
following use of the Real Estate: Residential or any other lawful use.
2. Price. The purchase price shall be $0.00. The parties acknowledge that the Real Estate
is being donated by Seller to Buyer for no monetary consideration, subject to the fulfillment of the
conditions and contingencies described in this Offer to Buy Real Estate and Acceptance. Buyer
agrees to cooperate with Seller in verifying the donation of the Real Estate in for tax purposes.
3. Real Estate Taxes. Seller shall pay real estate taxes prorated to the date of possession
and any unpaid real estate taxes payable for prior years. Buyer shall pay all subsequent real estate
taxes. Any proration of real estate taxes on the Real Estate shall be based upon such taxes for the
year currently payable.
4. Special Assessments. Seller shall pay all special assessments which are a lien on the
Real Estate as of the closing date. All subsequent special assessments shall be paid by Buyer.
5. Risk of Loss and Insurance. Prior to Seller's delivery of possession of the Real Estate
to Buyer, all risk of loss shall remain with Seller until possession of the Real Estate shall be
delivered to Buyer.
6. Care and Maintenance. The Real Estate shall be preserved in its present condition and
delivered intact at the time possession is delivered to Buyer.
7. Possession. If Buyer timely performs all obligations hereunder, possession of the Real
Estate shall be delivered to Buyer on or before the day of , 20 (herein
sometimes referred to as the "Closing Date"), with any adjustments of rent, insurance and interest
to be made as of the date of transfer of possession.
8. Improvements. All improvements that integrally belong to or are part of the Real Estate
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shall be considered a part of the Real Estate and included in this sale.
9. Use of the Purchase Price. At time of settlement, funds of the purchase price may be
used to pay taxes and other liens and to acquire outstanding interests, if any, of others.
10. Abstract of Title. Seller shall promptly obtain an abstract of title for the Real Estate
continued through a date within thirty (30) days of the closing date and deliver it to Buyer for
examination. It shall show merchantable title in Seller in conformity with this agreement, Iowa
Law & Title Standards of the Iowa State Bar Association. The abstract shall become the property
of the Buyer at settlement. Seller shall pay the cost of updating the abstract through the date within
30 days of the closing date. Seller shall additionally pay the cost of any additional abstracting and
title work due to any act or omission of Seller.
11. Deed. Upon payment of the purchase price, Seller shall convey the Real Estate to
Buyer or Buyer's assignee by Warranty Deed free and clear of all liens, restrictions and
encumbrances. Any general warranties of title shall extend only to the time of acceptance of this
Offer, with special warranties as to acts of Seller continuing up to time of delivery of the Deed.
12. Time is of the Essence. Time is of the essence in this contract.
13. Remedies of the Parties
(a) If Buyer fails to timely perform this contract, Seller may forfeit it as provided by Iowa
Code Chapter 656 (2013) and all payments made shall be forfeited or, at Seller's option, upon
thirty (30) days written notice of intention to accelerate the payment of the entire balance because
of such failure (during which thirty (30) days such failure is not corrected) Seller may declare the
entire balance immediately due and payable. Thereafter this contract may be foreclosed in equity
and the Court may appoint a receiver.
(b) If Seller fails to timely perform this contract, or if any of Buyer's conditions herein are
not satisfied at or prior to closing (or such other date or time as indicated in writing herein), Buyer
shall not be required to close hereunder and Buyer has the right to all payments made returned to
Buyer. (See Section 2(a) above).
(c) Buyer and Seller also are entitled to utilize any and all other remedies or actions at law
or in equity available to them and shall be entitled to obtain judgment for costs and attorney's fees
as permitted by law.
14. Contract Binding on Successors in Interest. This contract shall apply to and bind the
successors in interest of the parties.
15. Construction. Words and phrases shall be construed as in the singular or plural number
and as masculine, feminine or neuter gender, according to the context.
Page 2 of 4
16. Time for Acceptance. If this Offer is not accepted by Seller on or before the day
of , 2019 at 5:00 p.m., it shall become void and all payments shall be
repaid to Buyer.
17. Intentionally left blank.
18. Legal Description. Sellers shall provide Buyer with an accurate legal description
within fourteen (14) days of the acceptance hereof.
19. Groundwater Hazards. Seller represents and warrants to Buyer that, to the best of
Seller's knowledge, it has no knowledge of the presence in or beneath the Real Estate of solid
waste, radioactive waste, hazardous waste, hazardous substances, underground storage tanks,
wells or other conditions which may lead to groundwater contamination, including those
substances defined to be hazardous in 42 U.S. Code Section 9601, et seq. and Iowa Code Chapter
455B (2019) or any other federal or state or local law with respect to groundwater hazards.
20. Exclusive Dealing. Seller agrees to not continue to offer the Real Estate for sale or to
negotiate with any other party other than the Buyer or Buyer's assignee herein with respect to the
sale and purchase of the Real Estate from the date of the acceptance of this Offer to Buy Real
Estate and Acceptance through and including the closing date set out in Section 7 hereof.
21. Miscellaneous. The parties agree that all understandings and agreements, if any,
previously made between the parties hereto are merged in this Agreement, which alone fully and
completely expresses their understanding with respect to the purchase and sale of the Real Estate.
This agreement may not be changed or terminated orally, but only by an instrument in writing
executed by all of the parties hereto. This agreement shall not be transferred or assigned without
the prior written consent of the other party hereto, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing, Seller shall allow Buyer to assign this agreement to
purchase the Real Estate to another entity (corporation, limited partnership or a limited liability
company, or other business entity) designated by Buyer at or prior to the time of closing. This
agreement shall be governed by and construed in accordance with the laws of the State of Iowa.
22. As of and after the Closing, Buyer accepts the Property in "as is" condition. Buyer is
not relying upon any representations or warranties of Seller not set out in full and writing herein.
23. The parties agree that no real estate agent or broker or other person is owed a
commission or other compensation in connection with this purchase and sale.
24. Seller shall be responsible for ensuring that any Tenants occupying the Real Estate
have vacated prior to the Closing Date.
DATED Ili 1 t 1
, 2019
Page 3 of 4
Dubuque and Jackson County Habitat for
Hu} pity, Inc., B-iyer
c.
%,c
B : Rachel D111ig, Its Execu D ector
THIS OFFER IS ACCEPTED /f —, /7 , 2019
Dubugue,sihiCorporation, Seller
By: �/< � ' AUi ,
Its authorized representative
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