Proposed Downtown Rehabilitation Grant Award for 801 Rhomberg Copyrig hted
December 7, 2020
City of Dubuque Consent Items # 16.
City Council Meeting
ITEM TITLE: Proposed Downtown Rehabilitation GrantAward for801 Rhomberg
Avenue
SUM MARY: City Manager recommending approval of a Downtown Rehabilitation
GrantAward to Kevin Scharpf forthe Fa�ade Grant, Planning & Design
Grant, and Financial Consultant Grant.
RESOLUTION Approving a GrantAgreement between the City of
Dubuque, lowa and Offal Food Group, LLC for the redevelopment of
801 Rhomberg Avenue
SUGGESTED Suggested Disposition: Receive and File;Adopt Resolution(s)
DISPOSITION:
ATTACHMENTS:
Description Type
Grant Agreement for 801 Rhomberg Avenue-MVM City Manager Memo
Memo
Staff Memo Staff Memo
Agreement Supporting Documentation
Resolution Resolutions
Dubuque
THE CITY OF �
ui-Aseria cih
DuB E , . � . ,
� II �
Maste iece on tj2e Mississi i zoo�•zoiz•zois
YP pp zoi�*zoi9
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Proposed Downtown Rehabilitation Grant Award for 801 Rhomberg
Avenue
DATE: December 1, 2020
Economic Development Director Jill Connors recommends City Council approval of a
Downtown Rehabilitation Grant Award to Kevin Scharpf in the amount of$30,000 for the
Fa�ade Grant, Planning & Design Grant, and Financial Consultant Grant. Mr. Scharpf
is planning to rehabilitate the former gas station a 801 Rhomberg Avenue into a chicken
shack restaurant. The project is anticipated to add 15-20 new jobs in the community.
The Good Neighbor inquiry on this owner and property produced no issues.
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
Cori Burbach, Assistant City Manager
Jill M. Connors, Economic Development Director
Dubuque Economic Development
Department
THE CITY OF � 1300 Main Street
All•America Eity Dubuque,lowa 52001-4763
�� � "h�N",`��nz�'��:�:��� Office(563)589-4393
1 I ��� TTY(563)690-6678
http://www.cityofd u bu q ue.org
zoo�=zoiz*zo�3
Masterpiece on the Mississippi �oi�*Zoi9
TO: Michael C. Van Milligen, City Manager
FROM: Jill M. Connors, Economic Development Director
SUBJECT: Proposed Downtown Rehabilitation Grant Award for 801 Rhomberg
Avenue
DATE: December 1, 2020
INTRODUCTION
This memo presents for your concurrence a project selected for a rehabilitation grant
award for FY2021.
BACKGROUND
The Downtown Rehabilitation Loan Program provides several incentives from the
Economic Development Department for the rehabilitation of historic buildings in our
greater downtown.
This program has had a positive impact on the appearance and livability of our
downtown, which leads to a more attractive business and residential environment. The
Economic Development Department also finds these programs to be great tools for
attracting and retaining a quality workforce for our businesses.
DISCUSSION
For this property, staff have perFormed a "Good Neighbor Inquiry" with Building
Services, Engineering, Finance, Health, Housing, Legal, Planning, Police, Public Works,
and Utility Billing for any concerns based on these or other properties owned by the
applicant. The Good Neighbor Inquiry on this owner and property produced no issues.
Application received October 12, 2020 for the Fa�ade Grant, Planning & Design Grant,
and Financial Consultant Grant.
The building owner, Kevin Scharpf, will rehabilitate the former gas station into a unique
chicken shack restaurant aptly named "Birds." The property is located in the heart of the
North End of Dubuque and would add a valuable food option in a current food desert.
The project is anticipated to add 15-20 new jobs in the community. Funding these
farade, Planning & Design, and Financial Consultant Grants would align with the City
Council's goal of Vibrant Community: Healthy and Safe.
Agreement will require compliance with an attached design letter, provided by the
Planning Department.
BUDGETIMPACT
A Developer has repaid early on the balance of a $300,000 downtown rehabilitation loan.
We have requested the Budget Office allocate those funds to CIP 2411942 to partially
fund this grant agreement.
CIP USE CURRENT RECOMMENDED REMAINING
BALANCE PROJECTFUNDING BALANCE
2411942 FA�ADE, ETC. $34,847 $19,087 $15,760
3602436 FA�ADE, ETC. $10,913 $10,913 -
3602438 HOUSING $1,970 - $1,970
3602267 HOUSING - - -
This takes into consideration all encumbrances and previous balances from all the
consolidated CIP budgets.
I recommend funding the grants at $19,087 maximum from CIP 2411942 and $10,913
maximum from CIP 3602436, for a total of$30,000.
RECOMMENDATION/ ACTION STEP
I recommend approval of the proposed grant award in the amount detailed above.
2
GRANT AGREEMENT
FOR THE DOWNTOWN REHABILITATION GRANT PROGRAM
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
OFFAL FOOD GROUP, LLC
THIS GRANT AGREEMENT (the "Agreement"), dated for reference purposes the
7th day of December, 2020, by and between the City of Dubuque, Iowa a municipality
established pursuant to the Code of Iowa ("City") and acting under the authorization of
Chapter 403 of the Code of Iowa (the "Urban Renewal Act") and Offal Food Group, LLC
("Grant Recipient").
WHEREAS, in furtherance of the objectives of the Urban Renewal Act, City has
undertaken a program for the development and redevelopment of an area in the city
known as the Greater Downtown Urban Renewal District (the "District"), an urban renewal
area established pursuant to the Urban Renewal Act, and in connection therewith has
established the Downtown Rehabilitation Grant Program (the "Program"); and
WHEREAS, Grant Recipient intends to complete the renovation and rehabilitation
of a building located on property within the District locally known as 801 Rhomberg
Avenue, Dubuque, Iowa (the "Development Property"), legally described as:
Lot 1 of the Subdivision of Lot 42 in Cook's Addition to the City of
Dubuque, Iowa, according to the recorded Plat thereof;
Lot 2 of the Subdivision of Lot 42 in Cook's Addition to the City of
Dubuque, Iowa, according to the recorded Plat thereof;
The Southeasterly 95.53 feet of Lot 17 and the Southeasterly 95.53 feet
of Lot 3 of the Subdivision of Lot 18, both in "Dreibelbis Addition, Dubuque"
in the City of Dubuque, Iowa, according to the recorded Plat thereof;
Lot 5 of the Subdivision of Lots 1 and 11, and Lot 1 of the Subdivision of
Lot 1-A, in Lorimier's Subdivision of Out Lots 654 and 688 in the City of
Dubuque, Iowa, according to the recorded Plat thereof;
which will include various improvements to the building, as more specifically detailed in
Grant Recipient's application to the Program (the "Project"); and
WHEREAS, Grant Recipient has applied for a Fagade Grant, Planning & Design
Grant, and a Financial Consultant Grant for the Project from City under the Program in
amounts collectively up to Thirty Thousand Dollars ($30,000) (the "Grant"), the terms of
which are set forth in this Agreement; and
120120bal
WHEREAS, the City Council believes that the development of the Development
Property pursuant to this Agreement and the fulfillment generally of this Agreement, are
in the vital and best interests of City and in accord with the public purposes and provisions
of the applicable state and local laws and requirements under which the Project has been
undertaken and is being assisted.
NOW THEREFORE, in consideration of the promises and obligations of the parties
hereto, each of them does hereby covenant and agree with the other as follows:
SECTION 1. MINIMUM IMPROVEMENTS.
1.1. Required Minimum Improvements. Grant Recipient shall improve the Development
Property as follows:
Exterior masonry walls will be repointed and reconstructed as needed,
especially where steel lintels are falling over the former service bay doors
and large storefront openings. Stucco on non-primary facades will be
removed and underlying brick masonry will be repaired and repointed as
necessary. New aluminum storefront entrances and windows will be
installed to replace existing. Wood and siding infill at former service bay
openings will be removed and replaced with large aluminum and glass
overhead doors will be installed. The decorative mansard roofs will be
cleaned and repainted.
(the "Minimum Improvements"). The Minimum Improvements shall be completed in
substantial conformity with the scope and scale described in Grant Recipient's Application
to the Program attached hereto as Exhibit B.
1.2. Timinq of Minimum Improvements. Grant Recipient shall begin construction of the
Minimum Improvements by December 1, 2020 and complete construction of the Minimum
Improvements by April 15, 2021. City shall determine in its sole discretion, following an
inspection by City's Building Services Department and/or Planning Department, when the
Minimum Improvements have been completed. In order to be considered completed, the
Minimum Improvements must be constructed in accordance with the terms of this
Agreement, in compliance with the regulations of the Program, and in substantial
conformity with Grant Recipient's Application Design Letter attached hereto as Exhibit A.
1.3 Certificate of Completion. Promptly following the request of Grant Recipient and
upon determination by the City Manager that the Minimum Improvements have been
completed as required by this Agreement, the City Manager shall furnish Grant Recipient
with a Certificate of Completion in recordable form which shall be a conclusive
determination of the satisfaction and termination of the agreements and covenants in this
Agreement.
1.4. Construction of Minimum Improvements. Grant Recipient shall complete all work
with respect to construction of the Minimum Improvements in conformance with all
2
requirements of the Program, this Agreement, and all federal, state, and local laws,
ordinances, and regulations.
1.5. Insurance.
(1) Grant Recipient shall provide and maintain or cause to be maintained at all
times during the process of constructing the Minimum Improvements and at its sole
cost and expense builder's risk insurance, written on a Completed Value Form in
an amount equal to one hundred percent (100%) of the building (including
Minimum Improvements) replacement value when construction is completed.
Coverage shall include the "special perils" form and Grant Recipient shall furnish
City with proof of insurance in the form of a certificate of insurance.
(2) Upon completion of construction of the Minimum Improvements and up to
the Termination Date, Developer shall maintain, or cause to be maintained, at its
cost and expense property insurance against loss and/or damage to the building
(including the Minimum Improvements) under an insurance policy written with the
"special perils" form and in an amount not less than the full insurable replacement
value of the building (including the Minimum Improvements), naming City as loss
payee. Developer shall furnish to City proof of insurance in the form of a certificate
of insurance.
(3) The term "replacement value" shall mean the actual replacement cost of the
building with Minimum Improvements (excluding foundation and excavation costs
and costs of underground flues, pipes, drains and other uninsurable items) and
equipment, and shall be reasonably determined from time to time at the request of
City, but not more frequently than once every three (3) years.
(4) Grant Recipient shall notify City immediately in the case of damage
exceeding $50,000.00 in amount to, or destruction of, the Development Property
or any portion thereof resulting from fire or other casualty. Net proceeds of any
such insurance (Net Proceeds), shall be paid directly to Grant Recipient as its
interests may appear, and Grant Recipient shall forthwith repair, reconstruct and
restore the Development Property to substantially the same or an improved
condition or value as it existed prior to the event causing such damage and, to the
extent necessary to accomplish such repair, reconstruction and restoration, Grant
Recipient shall apply the Net Proceeds of any insurance relating to such damage
received by Grant Recipient to the payment or reimbursement of the costs thereof,
subject, however, to the terms of any mortgage encumbering title to the Property,
as its interests may appear. Grant Recipient shall complete the repair,
reconstruction and restoration of the Development Property whether or not the Net
Proceeds of insurance received by Grant Recipient for such purposes are
sufficient.
SECTION 2. FURTHER COVENANTS OF GRANT RECIPIENT.
3
2.1. Operation of Development Property; Housinq Vouchers. For and in consideration
of the Grant offered under this Agreement, during the operation of the Development
Property as a rental residential property, Grant Recipient shall accept, or cause to be
accepted, applications from prospective tenants with housing vouchers issued under the
U.S. HUD's Section 8 voucher program or a similar program who are otherwise qualified
prospective tenants. Grant Recipient shall not deny any tenant a lease based on a public
assistance source of income. A public assistance source of income means income and
support derived from any tax supported federal, state or local funds, including, but not
limited to, social security, supplemental security income, temporary assistance for needy
families, family investment program, general relief, food stamps, and unemployment
compensation, housing choice voucher subsidies and similar rent subsidy programs. This
Section 4.2 shall survive the termination of this Agreement. If Grant Recipient, or Grant
Recipient's successors or assigns violates the requirements of this Section 2.1 as
determined by the City Manager in the City Manager's sole discretion after the termination
of this Agreement, Grant Recipient or Grant Recipient's successors or assigns shall not
be eligible for any City financial assistance programs.
2.2. Real Propertv Taxes. Grant Recipient shall pay or cause to be paid, when due, all
real property taxes and assessments payable with respect to all and any parts of the
Development Property.
2.3. No Other Exemptions. Until the Termination Date, Grant Recipient agrees not to
apply for any state or local property tax exemptions, except for an application for urban
revitalization tax abatement under lowa Code Chapter 404 and 427, which are available
with respect to the Development Property or the Minimum Improvements located thereon
that may now be, or hereafter become, available under state law or city ordinance during
the term of this Agreement.
2.4. Non-Discrimination. In carrying out the Project, Grant Recipient shall not
discriminate against any employee or applicant for employment or tenant because of
race, religion, color, sex, sexual orientation, gender identity, national origin, age, or
disability.
SECTION 3. DOWNTOWN REHABILITATION GRANT PROGRAM.
3.1. Facade Grant. City agrees to provide a matching (1:1) grant not to exceed Ten
Thousand Dollars ($10,000) to reimburse Grant Recipient for documented costs that
improve the overall appearance of the Development Property, provided the Project as
completed meets the criteria of the Farade Grant Program.
3.2 Planninq and Desiqn Grant. City agrees to provide a matching (1:1) grant not to
exceed Nine Thousand Dollars ($10,000) to reimburse Grant Recipient for documented
predevelopment costs, architectural and engineering fees and other authorized soft costs
associated with the rehabilitation of the Property on the terms and conditions set forth in
the attached Design Letter.
4
3.3 Financial Consultant Grant. City agrees to provide a matching (1:1) grant not to
exceed Ten Thousand Dollars ($10,000) to reimburse Grant Recipient for documented
costs related to hiring a financial consultant to evaluate the Project's feasibility on the
terms and conditions set forth in the Financial Consultant Grant Program.
3.4. Pavment of the Grant. The Grant shall be payable as follows:
(1) Any and all portions of the Grant shall be funded solely and only from
available Program funds;
(2) Prior to the release of any grant funds, (i) Grant Recipient shall have
submitted documentation of its eligible expenses under the corresponding grant
program, and (ii) City shall have issued a Certificate of Completion; and
(3) The Grant funds shall be disbursed directly to Grant Recipient.
SECTION 4. EVENTS OF DEFAULT; REMEDIES.
4.1. Events of Default Defined. Failure by Grant Recipient to substantially observe or
perform any covenant, condition, obligation, or agreement on its part to be observed or
perFormed under this Agreement shall be an "Event of Default."
4.2. Remedies on Default by Grant Recipient. Whenever any Event of Default occurs
and is continuing, City, as specified below, may take any one or more of the following
actions after the giving of written notice by City to Grant Recipient of the Event of Default,
but only if the Event of Default has not been cured within thirty (30) days following such
notice, or if the Event of Default cannot be cured within thirty (30) days and Grant
Recipient does not provide assurances to City that the Event of Default will be cured as
soon as reasonably possible thereafter:
(1) City may suspend its perFormance under this Agreement, including
suspension of the payment of any installment of the Grant to Grant Recipient, until
it receives assurances from Grant Recipient deemed adequate by City, that Grant
Recipient will cure its default and continue its performance under this Agreement;
(2) City may terminate this Agreement; or
(3) City may take any action, including legal, equitable, or administrative action,
which may appear necessary or desirable to enforce perFormance and observance
of any obligation, agreement, or covenant under this Agreement.
4.3. No Remed,v Exclusive. No remedy herein conferred upon or reserved to City is
intended to be exclusive of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy given
under this Agreement or now or hereafter existing at law or in equity or by statute. No
delay or omission to exercise any right or power accruing upon any default shall impair
5
any such right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed expedient.
4.4. No Implied Waiver. In the event any agreement contained in this Agreement should
be breached by any party and thereafter waived by any other party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any other
concurrent, previous or subsequent breach hereunder.
SECTION 5. MISCELLANEOUS.
5.1. Conflict of Interest. Grant Recipient represents and warrants that, to its best
knowledge and belief after due inquiry, no 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 insider information with regard to the Project, has had
or shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds
thereof, for work or services to be performed in connection with the Project, or in any
activity, or benefit therefrom, which is part of the Project at any time during or after such
person's tenure.
5.2. Grants, Notices, and Demands. A grant payment, notice, demand, or other
communication under this Agreement by any party to the other shall be sufficiently given
or delivered if it is dispatched by registered or certified mail, postage prepaid, return
receipt requested, or delivered personally, and
(1) In the case of Grant Recipient, is addressed and delivered personally to
Offal Food Group, LLC, 955 Washington, Suite 101, Dubuque, IA 52001; Attn:
Kevin Scharpf; and
(2) In the case of City, is addressed and delivered personally to the City of
Dubuque at City Hall, 50 W. 13th Street, Dubuque, IA 52001; Attn: City Manager
and City Attorney.
or to such other designated individual or officer or to such other address as any party
shall have furnished to the other in writing in accordance herewith.
5.3. Titles of Sections. Any titles of the several parts and Sections of this Agreement
are inserted for convenience of reference only and shall be disregarded in construing or
interpreting any of its provisions.
5.4. Definitions. All capitalized terms used herein shall have the meaning defined
herein, unless a different meaning clearly appears from the context.
5.5. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall constitute one and the same instrument.
6
5.6. Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the State of Iowa.
5.7. Amendment. This Agreement may not be amended except by a subsequent
writing signed by the parties hereto.
5.8. Successors and Assigns. This Agreement is intended to and shall inure to the
benefit of and be binding upon the parties hereto and their respective successors and
assigns.
5.9. Termination Date. This Agreement shall terminate and be of no further force or
effect May 1, 2026, unless the Agreement is terminated earlier by the other terms of this
Agreement.
5.10. No Third -Party Beneficiaries. No rights or privileges of either party hereto shall
inure to the benefit of any landowner, tenant, contractor, subcontractor, material supplier,
or any other person or entity, and no such landowner, tenant, contractor, subcontractor,
material supplier, or any other person or entity shall be deemed to be a third -party
beneficiary of any of the provisions contained in this Agreement.
5.11. Indemnification. Grant Recipient hereby agrees to defend, indemnify, and hold
harmless City, its officer and employees, against any and all claims of any kind made by
Grant Recipient or any third party relating to or arising out of this Agreement, including
costs, expenses, or attorneys' fees.
5.12. No Assignment; Non -Transferability. Following the execution of this Agreement
and until the Termination Date:
(1) Grant Recipient represents and agrees that it will not transfer, convey or
make any assignment of any of its rights or interests in the Development Property,
Minimum Improvements, or this Agreement to any other party unless: (i) the
transferee partnership, corporation, or individual assumes in writing all of the
obligations of Grant Recipient under this Agreement, and (ii) City consents thereto
in writing in advance thereof; and
(2) Grant Recipient represents and agrees that it will not assign its rights or
interests in this Agreement, including the Grant, to any other party unless City
consents thereto in writing in advance thereof.
CITY OF DUBUQUE, IOWA
By: 'o.k'z
Roy D. pfuiol, Mayor
OFFAL FOOD GROUP, LLC
Kevin Scharpf, Owner
7
ATTEST:
/�, 1,6�4,94
Adrienne N. Breitfelder, City Clerk
Prepared by: Jill Connors, Economic Development, 1300 Main Street, Dubuque IA 52001, 563 589-4393
Return to: Jill Connors, Economic Development, 1300 Main Street, Dubuque IA 52001, 563 589-4393
RESOLUTION NO. 352-20
APPROVING A GRANT AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA
AND OFFAL FOOD GROUP, LLC FOR THE REDEVELOPMENT OF 801 RHOMBERG
AVENUE
Whereas, Offal Food Group, LLC is the owner of the building at 801 Rhomberg Avenue
in the City of Dubuque, Iowa (the "Development Property"); and
Whereas, Offal -Food Group,, LLC---has- applied --to the -City- of- Dubuque --Economic
Development Department (the "City") for a Fagade Grant, Planning & Design Grant, and
a Financial Consultant Grant (the "Grants") for the rehabilitation of the Development
Property (the "Project"); and
Whereas, the Project is eligible for the Grants; and
Whereas, City and Offal Food Group, LLC have tentatively entered into a Grant
Agreement for the Development Property (the "Grant Agreement"), a copy of which is
attached hereto; and
Whereas, it is the determination of the City Council that approval of the Grant
Agreement for redevelopment of the Development Property by Offal Food Group, LLC,
according to the terms and conditions set out in the Grant Agreement, is in the public
interest of the City of Dubuque.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the Grant Agreement between the City of Dubuque and Offal Food
Group, LLC is hereby approved.
Section 2. That the Mayor is hereby authorized and directed to execute the Grant
Agreement on behalf of the City of Dubuque and the City Clerk is authorized and directed
to attest to his signature.
Section 3. That the City Manager is authorized to take such actions as are necessary
to comply with the terms of the Grant Agreement as herein approved.
Passed, approved, and adopted this 71" day of December 2020.
"4- � 4-1
Roy D. ptuol, Mayor
Attest:
a" ✓/r &*ue'?
Adrienne N. Breitfelder, City Clerk