Loading...
Assistance Pool to Encourage Residential Housing in Downtown756 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 205 Bluff Street B &C Cathedral Development, LLC (St. Raphael School) 24 $224,000 Low - Interest Loan 0 Masterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Assistance Pool to Encourage Residential Housing in Downtown DATE: April 13, 2010 Dubuque kzikrA AI- AmaicaCity hli ll! 2007 In November 2009, Economic Development Director Dave Heiar recommended that a pool of funds in the amount of $2.5 million be created to encourage new residential housing units in downtown Dubuque and that a Request for Proposals be solicited from developers who are interested in renovating existing structure in the downtown. The City Council, on November 19, 2009, approved an assistance pool of funds to encourage creation of new market -rate housing within the Greater Downtown Urban Renewal District. The City received 15 applications for assistance. Of those, 5 projects were approved for assistance. They are: Address Developer Housing Units Assistance After funding the first 5 projects, $2,184,000 is still available in the incentive program to encourage new housing units in the urban renewal district. Attached is an RFP for a second round of applications. Based on the initial experience the requirements and incentives have been amended from the first incentive program. The unchanged requirements are as follows: • The project must assist in the creation of new market -rate downtown rental and owner - occupied residential units within the Greater Downtown Urban Renewal District. • The project must be the rehabilitation of an existing structure. • No more than $10,000 per residential unit in assistance will be considered. • No more than $750,000 will be provided to a single project. • No developer fee will be permitted until all city assistance is paid or satisfied in full. The modified or new requirements are as follows: • The project must be under construction by August 1, 2010, with at least 25% of the project completed by December 31, 2010. • The units created must be completed and ready for occupancy by July 1, 2011. • A minimum of 4 new housing units must be created in the project. • The City will disperse awarded funds for the benefit of the project once the project is completed and a Certificate of Occupancy has been given for the housing units. • Units smaller than 500 square feet will not be eligible for this project. • Each approved project will also be eligible to receive site - specific Tax Increment Financing (TIF) for a 15 year period, depending on the project scope. • No more than 50% of the units of any project can have a restriction of 80% of the median income. • No units can have a restriction of less than 80% of the median income. The assistance available through the fund may take several different forms, including but not limited to: • Low - Interest Loans • Grants Also available to developers is the Downtown Rehabilitation Loan program which has two grants associated with it, Planning & Design and Facade, that are available to assist projects in conjunction with the loan of up to $300,000. A backlog of approved projects waiting for their loans are also waiting for the grants. Several of these projects are completed and have fulfilled the requirements of the grants. Funds are available within their respective CIP budgets to fund the committed grants. For the grants associated with the Downtown Rehabilitation Loan Program, the current policy is to tie these incentive funds to the Downtown Loan Program. Because of this policy, the backlog with the loan program has unnecessarily created a backlog on the grant programs, even though the city has a balance of funds available in the grant programs. Today, $77,964 remains in the grant funding pool with another $50,000 scheduled to be added to this CIP in the FY 2011 budget. Looking at the list of approved grants, all projects completed or planned to be completed this year could all be paid after July 1 and the fund would still have $37,964 remaining. Between existing employers and some new employers arriving in Dubuque, there is going to be a need for about 600 -1,000 new rental unit in the community. Much of that need will be in downtown, with IBM hiring 1,300 people that will be housed in the Roshek Building. There are already thousands of jobs in our downtown. Creating downtown housing supports downtown retail and restaurant development and allows people to walk to work. This supports the Downtown Master Plan and the Historic Millwork Master Plan. I respectfully recommend Mayor and City Council approval of the issuance of the Request for Proposal, and to modify the payout of the Planning and Design and the Facade Grant Programs. Michael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager David J. Heiar, Economic Development Director Vb Masterpiece on the Mississippi TO: Michael Van Milligen, City Manager FROM: David J. Heiar, Economic Development Director i SUBJECT: Assistance Pool to Encourage Residential Housing in Downtown DATE: April 12, 2010 INTRODUCTION This memo is to provide a second round of funding to encourage new residential housing units in downtown Dubuque and to make changes to the Downtown Rehabilitation Loan and Grant program. Dubuque killkid AFA�Ica y I 2007 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 began 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. The City does not want to reduce the ability of our existing businesses in Dubuque from expanding or replacing employees because of the lack of housing. In seeing this influx of new positions coming to 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. Her job is to help 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. This desire needs to be met for Dubuque businesses to attract and retain a quality workforce. A pool of housing incentive funds was generated by delaying approved CIP projects and the funding was used to borrow 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 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 205 Bluff Street B &C Cathedral Development, LLC (St. Raphael School) 24 $224,000 Low - Interest Loan • 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 The City Council, on November 19, 2009, approved an assistance pool of funds to encourage creation of new market -rate housing within the Greater Downtown Urban Renewal District. The City received 15 applications for assistance. Of those, 5 projects were approved for assistance. They are: Address Developer Housing Units Assistance Downtown Loan /Grant Program The Downtown Rehabilitation Loan program has two grants associated with it, Planning & Design and Facade, that are available to assist projects in conjunction with the loan of up to $300,000. A backlog of approved projects waiting for their loans are also waiting for the grants. Several of these projects are completed and have fulfilled the requirements of the grants. Funds are available within their respective CIP budgets to fund the committed grants. DISCUSSION After funding the first 5 projects, $2,184,000 is still available in the incentive program to encourage new housing units in the urban renewal district. Attached is an RFP for a second round of applications. Based on our initial experience the requirements and incentives have been amended from the first incentive program. The unchanged requirements are as follows: • The project must assist in the creation of new market -rate downtown rental and owner - occupied residential units within the Greater Downtown Urban Renewal District. • The project must be the rehabilitation of an existing structure. • No more than $10,000 per residential unit in assistance will be considered. • No more than $750,000 will be provided to a single project. • No developer fee will be permitted until all city assistance is paid or satisfied in full. The modified or new requirements are as follows: • The project must be under construction by August 1, 2010, with at least 25% of the project completed by December 31, 2010. • The units created must be completed and ready for occupancy by July 1, 2011. • A minimum of 4 new housing units must be created in the project. • The City will disperse awarded funds for the benefit of the project once the project is completed and a Certificate of Occupancy has been given for the housing units. • Units smaller than 500 square feet will not be eligible for this project. • Each approved project will also be eligible to receive site - specific Tax Increment Financing (TIF) for a 15 year period, depending on the project scope. • No more than 50% of the units of any project can have a restriction of 80% of the median income. • No units can have a restriction of less than 80% of the median income. The assistance available through the fund may take several different forms, including but not limited to: • Low - Interest Loans • Grants City staff selected by the City Manager will be charged with evaluating the proposals with the ultimate task to select projects which create new market -rate rental and owner - occupied residential units in the Greater Downtown Urban Renewal District at the lowest per unit cost to the fund. Per unit cost to the fund will be calculated based upon the structure of the assistance required for the project. One of the City's goals is to leverage the most private investment with the least public assistance. The City Manager will make a recommendation to the City Council and the City Council will make the final awards. The terms of the award and the City's obligation to provide financial assistance to a project will be set forth in a development or loan agreement between the City and successful applicant. Some of the proposed funding for this incentive program has been committed as local match for grant applications. If any of these federal grants are approved, the pool of funds available for this incentive program will be reduced accordingly. Eligible projects to use this new financing pool need not be directly used for housing unit creation. The identified project must be a required component related to housing unit creation (i.e. parking). An RFP requesting proposals from developers or property owners will need to be immediately available. In order to expedite the creation of housing units, proposals should be delivered to the Economic Development Department no later than Noon on May 24, 2010. Staff will review the proposals and discuss them with the City Manager. The City reserves the right to reject any and all proposals and to negotiate changes with any applicant. The City Manager will then provide a recommendation to the City Council. Downtown Loan /Grant Program For the grants associated with the Downtown Rehabilitation Loan Program, the current policy is to tie these incentive funds to the Downtown Loan program. Because of this policy, the backlog with the loan program has unnecessarily also created a backlog on the grant programs, even though the city has a balance of funds available in the grant programs. Today, $77,964 remains in the grant funding pool with another $50,000 scheduled to be added to this CIP in the FY2011 budget. Looking at the list of approved grants, all projects completed or planned to be completed this year could all be paid after July 1 and the fund would still have $37,964 remaining. RECOMMENDATION I recommend that the City Council approve the attached resolution approving the RFP for a second round of applications to the Downtown Housing Incentive Program. I also recommend that the City modify its policy to allow payment of grants associated with the Downtown Rehabilitation Loan Program to projects as they are completed and as soon as funds are available. ACTION STEP The action step is to approve the attached resolution authorizing these changes. F: \USERS\Econ Dev \Downtown Housing\20100412 Housing RFP #2 Memo.doc CITY OF DUBUQUE, IOWA April 19, 2010 SECOND REQUEST FOR PROPOSALS Assistance to Encourage Market -Rate Downtown Rental and Owner - Occupied Residential Units - $2,184,000 estimated to be available. INTRODUCTION The City of Dubuque, Iowa is soliciting proposals from developers and property owners to expand the availability of market -rate downtown rental and owner - occupied residential units. HISTORY /BACKGROUND Recent job creation projects within the City of Dubuque have caused a significant demand for downtown living options from new residents preferring to live near work and entertainment opportunities. Recent economic study of housing in the City of Dubuque has shown unmet demand for this housing type. The City of Dubuque previously established a pool of funds to be made available to complete financing packages for the immediate creation of market -rate downtown rental and owner - occupied residential units within the Greater Downtown Urban Renewal District. (See attached map for boundaries) Market -rate residential units include rental units which are not income restricted or rental units that are restricted to 80% of median income and less for no more than five years (units must not be restricted to 60% of median income or less, or any other restriction under 80 %) and owner occupied units. Eighty percent of median income level as determined by the Department of Housing and Urban Development (HUD), is currently at $35,000 for a single person, $40,000 for two and $45,000 for three. Through the first round of the program, the City committed $316,000 in grants and loans to assist 5 projects. These projects will create 35 downtown market rate residential units. PROJECT REQUIREMENTS Projects eligible to receive assistance from this newly established pool of funds must meet the following requirements: • The project must assist in the creation of new market -rate downtown rental and owner - occupied residential units within the Greater Downtown Urban Renewal District. • The project must be the rehabilitation of an existing structure. • The project must be under construction by August 1, 2010, with at least 25% of the project completed by December 31, 2010. • The units created must be completed and ready for occupancy by July 1, 2011. • No more than $10,000 per residential unit in assistance will be considered. • No more than $750,000 will be provided to a single project. Second Round - Public Assistance to Encourage Downtown Rental Housing Page 2 • No more than 50% of the project units may have the 80% of median income or below restriction. • A minimum of 4 new housing units must be created in the project. • Assisted project units may not have a restriction of 60% of median income and below. • The City will disperse awarded funds for the benefit of the project once the project is completed and a Certificate of Occupancy has been given for the housing units. • No developer fee will be permitted until all city assistance is paid or satisfied in full. • Units smaller than 500 square feet will not be eligible for this project. The assistance requested need not be directly used for housing unit creation. However, the project must be a required component related to housing unit creation (i.e. parking). STRUCTURE OF ASSISTANCE The assistance available through the fund may take several different forms, including but not limited to: • Low - Interest Loans • Grants Each approved project will also be eligible to receive site - specific Tax Increment Financing (TIF) for a 15 year period, depending on the project scope. SELECTION CRITERIA City staff selected by the City Manager will be charged with evaluating the proposals with the ultimate task to select projects which create new market -rate rental and owner - occupied residential units in the Greater Downtown Urban Renewal District at the lowest per unit cost to the fund. Per unit cost to the fund will be calculated based upon the structure of the assistance required for the project. One of the City's goals is to leverage the most private investment with the least public assistance. The City Manager will make a recommendation to the City Council and the City Council will make the final awards. The terms of the award and the City's obligation to provide financial assistance to a project will be set forth in a development or loan agreement between the City and successful applicant. PROPOSAL REQUIREMENTS Applicants must complete the attached application. A ten -year detailed financial proforma is required to accompany the application. The proforma should include project revenues and expenses by category and a listing of all planned sources of financing to complete the project. A floor plan for all proposed units must be included with the application. SUBMISSION REQUIREMENTS A fully completed application with attachments and exhibits must be received in the office of the City of Dubuque Economic Development Department, 50 W. 1 3 Street, Dubuque, Second Round - Public Assistance to Encourage Downtown Rental Housing Page 3 Iowa 52001 by 12:00 p.m. CDT Monday, May 24, 2010. Proposals should be addressed to David Heiar, Economic Development Director, at the above address. Questions can be directed to David Heiar or Aaron DeJong by telephone at (563) 589 -4393, by fax at (563) 589 -1733, or by email at dheiaraAcitvofdubuque.orq or adeiongc citvofdubuque.org. Each applicant assumes full responsibility for delivery and deposit of the completed proposal package on or before the deadline. The City of Dubuque is not responsible for any loss or delay with respect to delivery of the proposals. Some of the proposed funding for this incentive program has been committed as local match for federal grant applications. If any of these federal grants are approved, the pool of funds available for this incentive program will be reduced accordingly. The City of Dubuque reserves the right to reject any and all proposals and to negotiate changes with any applicant. The City of Dubuque is not liable for any cost incurred by any applicant prior to the execution of an agreement or contract. Nor shall the City of Dubuque be liable for any costs incurred by the applicant that are not specified in any contract. The City of Dubuque is an Equal Employment Opportunity Employer. Applicants may be invited to an interview to discuss their project in greater detail. F: \USERS \Econ Dev \Downtown Housing \RFP\20100419 Downtown Housing RFP2.doc 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. 120 -10 APPROVING AUTHORIZING THE CITY MANAGER TO SOLICIT PROPOSALS FOR PROJECTS TO ENCOURAGE MARKET -RATE DOWNTOWN RENTAL AND OWNER - OCCUPIED RESIDENTIAL UNITS IN THE GREATER DOWNTOWN URBAN RENEWAL DISTRICT AND APPROVE CHANGES TO THE DOWNTOWN REHABILITATION LOAN PROGRAM 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, changes to the Downtown Rehabilitation Loan Program are necessary to make the program more effective. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The City Council approves the Request For Proposal for projects that are in need of assistance to encourage new market -rate downtown rental and owner - occupied residential housing units in the Greater Downtown Urban Renewal District. Section 2. That the City Manager is hereby authorized and directed to distribute the Request for Proposal to interested parties. Section 3. That grants associated with projects utilizing the Downtown Rehabilitation Loan Program may be funded once the project is completed, costs have been verified, and funds are available within the loan /grant program. Attest: Passed, approved and adopted this 19 day of April, 2010. eanne F. Schneider, City Clerk F: \USERS \Econ Dev \Downtown Housing \RFP Resolutions\20100419 Resolution Downtown Housing RFP2.doc Roy D. Buol, Mayor DOWNTOWN HOUSING APPLICATION FOR PUBLIC ASSISTANCE Name of Project: Address of Project: CONTACT INFORMATION Name: Address: Company: Telephone: Fax: E -mail: Number of housing units created that are greater than 500 Square Feet: Amount of assistance needed: $ Structure of assistance: ❑ Loan ❑ Grant ❑ Other Are there additional benefits to the city greater than the creation of new housing given the structure of assistance? Project Description: (Please attach description as Attachment A) Page 1 of 2 Estimated Start Date: Estimated 25% Completion Date: Estimated Completion Date: Is the project located within the Greater Downtown Urban Yes ❑ No ❑ Renewal District? Is the project rehabilitation of an existing structure? Yes El No ❑ Is a 10 year pro forma attached (as Attachment B)? Yes ❑ No ❑ Is a Floor plan for all units attached (as Attachment C)? Yes ❑ No ❑ Does the pro forma show a developer's fee? Yes ❑ No ❑ If yes, over what period of time will this fee be paid? Does the project have bank financing? Yes ❑ No ❑ If yes, what financial institution? Signature Date A fully completed application with attachments and exhibits must be received in the office of the City of Dubuque's Economic Development Department, 50 W. 13th Street, Dubuque, Iowa 52001 by 12:00 p.m. CDT on Monday, May 24, 2010. Page 2of2 F: \USERS\Econ Dev \Downtown Housing \RFP Application\20100412_Downtown Housing Application.doc Greater Downtown Urban Renewal District Version 2009.1 MT L 'RETTA Attachment A District Subareas Cable Car Subarea Ice Harbor Subarea A Ice Harbor Subarea B Ice Harbor Subarea C Old Main Subarea South Main Subarea South Port Subarea Town Clock Subarea Upper Main Subarea Warehouse Subarea