Iowa Finance Authority Request for Proposal_Millwork District HousingTHE COF Dubuque
hAd
DtUB E All-America My
Masterpiece on the Mississippi
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Application for Workforce Housing Funding
DATE: June 30, 2010
Economic Development Director Dave Heiar is recommending approval for issuance of
a Request for Proposal for the $4,477,500 low interest loan pool provided to the City by
the Iowa Finance Authority for the creation of Workforce Housing units in the Historic
Millwork District.
The loan would require that at least 50% of the units in the development be for people
at the 120% of the Area Median Income and below. This income level is currently:
Dubuque County FY 2010 -120% Income Limit Category
1 Person
2 Person
3 Person
4 Person
5 Person
6 Person
7 Person
8 Person
$ 52,875
$ 60,375
$ 67,950
$ 75,450
$ 81,525
$ 87,525
$ 93,600
$ 99,600
Other requirements in the RFP are:
• The project must be the rehabilitation of an existing structure.
• The units created must be completed and ready for occupancy by December 31,
2011.
• A minimum of 20 new housing units must be created in a project.
• Units smaller than 500 square feet will not be eligible.
• Agreed upon collateral must be committed for the loan.
• Personal guarantees will be required of the developer /owner of the development.
Personal financial statements must be provided to the City to determine financial
capacity to complete the project.
• A confirmation must be provided by financial institutions which have agreements
with the developer /owner that he /she has not been more than 29 days delinquent
on any obligations.
• The developer /owner must not have any outstanding code enforcement issues or
delinquent financial obligations to the City of Dubuque on any property the
developer /owner owns or has an interest in within the City of Dubuque, unless a
correction plan has been approved by the City.
• Minimum loan terms are as follows:
• Rate: 3%
• Amortization: 30 years
• Term: 20 years
concur with the recommendation and respectfully request Mayor and City Council
approval.
Mic ael C. Van Milligan
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
THE COF Dubuque
DtUB E All-America CRY
Masterpiece on the Mississippi 1
2007
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
SUBJECT: Application for Workforce Housing Funding
DATE: June 28, 2010
INTRODUCTION
This memo outlines the need for City Council to approve the attached Request For
Proposal (RFP) seeking proposals for a $4,477,500 low interest loan pool from the Iowa
Finance Authority (IFA).
BACKGROUND
Over the past several months, City staff and many of our partners have met with
representatives of the IFA and the Iowa Department of Economic Development (IDED)
to stress the City's critical need for rental workforce housing. On a couple of occasions,
IFA and IDED staff have traveled to Dubuque to see, first hand, our housing needs and
potential opportunities, particularly in the Historic Millwork District, to address this
workforce housing need.
Housing has become a significant issue in Dubuque since IBM has decided to locate
their 1,300 employee Global Service Delivery Center. A lack of rental housing has
caused trouble for new residents to find a place to live. In March 2010, the Greater
Dubuque Development Corporation (GDDC) discovered a 1 % vacancy rate within
Dubuque.
A study was conducted for IFA in November 2009 to determine the additional need for
housing within Dubuque. The study showed an additional 556 housing units are
needed in the area, noting the most desirable units being in the downtown core area.
The Millwork District would be a large scale project able to fulfill much of the needed
demand, for rental housing.
Even prior to the IBM announcement, the City had studies that indicated a need for
additional downtown housing. The consultants who prepared the Master Plans for the
Port of Dubuque, the Downtown and the Historic Millwork District emphasized the need
for downtown housing.
A solution is needed soon for this housing shortage because other companies in
Dubuque are also starting to increase their employment numbers. Companies have
started to see challenges in recruiting a qualified workforce because housing is
unavailable in the area. The Millwork District property owners are positioned to act
quickly on their projects, if financing can be secured to fill current proforma gaps. This
loan program from IFA would provide additional funding for these projects.
IFA created a pool of funds to establish a low- interest loan program to assist in the
creation of workforce housing. The city submitted an application and was approved
$4,500,000 out of the loan program. At the June 21, 2010 Council meeting, a loan
agreement was approved for the funding. The loan from IFA is guaranteed by the full
faith and credit of the City of Dubuque.
DISCUSSION
To seek proposals from developers interested in utilizing these funds, an RFP has been
prepared. Several requirements must be met for use of these funds and they are as
follows:
• At least 50% of all. created units must be rented to tenants earning at or less than
120% of AMI. The developer /owner must provide to the City information
confirming this requirement is met to the satisfaction of the IFA annually.
• The project must be the rehabilitation of an existing structure.
• The units created must be completed and ready for occupancy by December 31,
2011.
• A minimum of 20 new housing units must be created in a project.
• Units smaller than 500'square feet will not be eligible.
• Agreed upon collateral must be committed for the loan.
• Personal guarantees will be required of the developer /owner of the development:
Personal financial statements must be provided to the City to determine financial
capacity to complete the project.
• A confirmation must be provided by financial institutions which have agreements
with the developer /owner that he /she has not been more than 29 days delinquent
on any obligations.
• The developer /owner must not have any outstanding code enforcement issues or
delinquent financial obligations to the City of Dubuque on any property the
developer /owner owns or has an interest in within the City of Dubuque, unless a
correction plan has been approved by the City.
• Minimum loan terms are as follows:
• Rate: 3%
• Amortization: 30 years
o Term: 20 years
The following items will be required to be in the proposal to the City:
• Project Description.
• Reason(s) for the requested assistance.
• A ten -year detailed financial proforma which must include project revenues and
expenses by category and a listing of all planned sources of financing to
complete the project.
• A listing of proposed collateral for the loan.
• A listing of all committed equity from the developer and /or owners.
• If commercial uses are proposed within the project, a listing of committed leases
for commercial space.
• A floor plan for all proposed units.
• A letter from a financial institution committing to the conventional financing
associated with the project.
RECOMMENDATION /ACTION STEP
To request that the City Council approve the attached resolution authorizing the release
of the attached RFP to seek proposals for $4,477,500 in the Workforce Housing
Revolving Loan Fund.
FAUSERS\Econ Dev \IFA Workforce Housing\20100630 IFA loan to developers RFP Memo.doc
CITY OF DUBUQUE, IOWA
July 6, 2010
REQUEST FOR PROPOSALS — REVOLVING LOAN FUND
Low - Interest Loans available to Encourage Workforce Housing Units within the
Historic Millwork District - $4,477,500 available.
INTRODUCTION
The City of Dubuque, Iowa is soliciting proposals from developers within the Historic
Millwork District to encourage the development of Workforce Housing.
HISTORY /BACKGROUND
Recent job creation projects within the City of Dubuque have caused a significant demand
for downtown living options from people preferring to live near work and entertainment
opportunities. Recent economic studies of housing in the City of Dubuque have shown an
unmet demand for such housing.
The City of Dubuque has recently gained access to $4,477,500 in low- interest loan funds
from the Iowa Finance Authority (IFA) which will be loaned to projects that have the ability
to create workforce housing units in a timely manner. Workforce housing is defined for this
program as units being affordable to a person earning 120% of the Area Median Income
(AMI). The chart below specifies the 120% AMI levels for the number of people in the
household for FY 2010:
Dubuque County FY 2010 -120% Income Limit Category
1 Person
2 Person
3 Person
4 Person
5 Person
6 Person
7 Person
8 Person
$ 52,875
$ 60,375
$ 67,950
$ 75,450
$ 81,525
$ 87,525
$ 93,600
$ 99,600
The loans would be guaranteed to IFA by the full faith and credit of the City of Dubuque.
PROJECT REQUIREMENTS
Projects eligible to receive assistance from this newly established pool of funds must meet
the following requirements:
• At least 50% of all created units must be rented to tenants earning at or less than
120% of AMI. The developer /owner must provide information to the City confirming
this requirement is met to the satisfaction of the IFA annually.
• The project must be the rehabilitation of an existing structure.
• The units created must be completed and ready for occupancy by December 31,
2011.
• A minimum of 20 new housing units must be created in a project.
Page 2
• Units smaller than 500 square feet will not be eligible.
• Agreed upon collateral must be committed for the loan.
• Personal guarantees will be required of the developer /owner of the development.
Personal financial statements must be provided to the City to determine financial
capacity to complete the project.
• A confirmation must be provided by financial institutions which have agreements
with the developer /owner that he /she has not been more than 29 days delinquent on
any obligations.
• The developer /owner must not have any outstanding code enforcement issues or
delinquent financial obligations to the City of Dubuque on any property the
developer /owner owns or has an interest in within the City of Dubuque, unless a
correction plan has been approved by the City.
• Minimum loan terms are as follows:
• Rate: 3%
• Amortization: 30 years
• Term: 20 years
SELECTION CRITERIA
City staff selected by the City Manager will be charged with evaluating the proposals with
the ultimate task to select a project which creates new workforce housing rental units in the
Historic Millwork District. Eligible projects will be evaluated based upon the perceived risk
of the loan and the leveraging of public assistance to create workforce housing.
PROPOSAL REQUIREMENTS
Applicants must submit a written proposal for this funding. The proposal must describe the
project and must include the following information:
• Project Description.
• Reason(s) for the requested assistance.
• A ten -year detailed financial proforma which must include project revenues and
expenses by category and a listing of all planned sources of financing to complete
the project.
• A listing of proposed collateral for the loan.
• A listing of all committed equity from the developer and /or owners.
• If commercial uses are proposed within the project, a listing of committed leases for
commercial space.
• A floor plan for all proposed units.
• A letter from a financial institution committing to the conventional financing
associated with the project.
SUBMISSION REQUIREMENTS
A fully completed proposal with attachments and exhibits must be received in the office of
the City of Dubuque Economic Development Department, 50 W. 13 Street, Dubuque,
Iowa 52001 by 12:00 p.m. CDT Monday, July 26, 2010.
Page 3
Proposals should be addressed to David Heiar, Economic Development Director, at the
above address. Questions can be directed to David Heiar or Aaron DeJong bytelephone at
(563) 589 -4393, by fax at (563) 589 -1733, or by email at dheiar `yofdubugue.org or
adeiong(a).cityofdubugue.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. 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 projects in greater detail.
RESOLUTION NO 252-10
A RESOLUTION APPROVING A REQUEST FOR PROPOSALS FOR THE LOCAL
REVOLVING LOAN FUND FOR WORKFORCE AND MARKET RATE HOUSING IN THE
HISTORIC MILLWORK DISTRICT.
Whereas, the City has approved a loan agreement with the Iowa Finance
Authority to create a state pool of funding to address the shortage of workforce housing;
and
Whereas, the Iowa Finance Authority has established a pool of funds to
establish a low interest loan program to assist in the creation of workforce housing; and
Whereas, the low interest loan program would provide funds to assist Millwork
District projects in creating workforce (120% of area median income and below) and
market rate housing; and
Whereas, the City of Dubuque, Iowa is seeking proposals from developers to use
the funding to encourage workforce and market -rate housing in the Historic Millwork
District.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the attached RFP is hereby approved.
Section 2. That the City Manager is hereby authorized to release the attached RFP
to seek proposals from interested developers. •
Attest:
Passed, approved, and adopted this 6 day of July,
eanne Schneider, City Clerk
F: \USERS \Econ Dev \IFA Workforce Housing\20100706 Resolution RFP for IFA funding Reso.doc
%LL
Roy D. Buol, Mayor