Old Mill Rd Acquisit & DemolitiMEMORANDUM
September 11,2003
TO:
FROM:
SUBJECT:
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Acquisition and Demolition of 1650 Old Mill Road
Assistant City Engineer Gus Psihoyos is recommending that an amended request be
made to the Iowa Emergency Management Division to acquire a non-residential flood
prone property at 1650 Old Mill Road. There would be no cost to the City as the local
match would be provided by Mr. David Hartig in return for a 99-year lease on the vacant
property where the three previously acquired residential properties and this commercial
property stood. This lease will be subject to a public headng.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Mic/hael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Eindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Gus Psihoyos, Assistant City Engineer
Mike Koch, Public Works Director
MEMORANDUM
September 10, 2003
TO:
FROM:
Michael C. Van Milligen, City Manager
Gus Psihoyos, Assistant City Engineer
SUBJECT: Acquisition and demolition of 1650 Old Mill Road
BACKGROUND
On September 16, 2002, by resolution, the City Council authorized the City Manager to
submit an application for financial assistance from the State of Iowa Emergency
Management Division under the Hazard Mitigation Grant Program (HMGP) to purchase
six (6) properties, five residential and one commercial, on Old Mill Road. Only the
commercial property and three of the residential properties were considered
substantially damaged and thus eligible for assistance.
Due to the state's priority to acquire substantially damaged residential properties, 1650
Old Mill Road, which is commercial, (see figure 1) was considered a Iow priority.
In December of 2003, the City Council endorsed letters to Senator Tom Harkin,
Representative Jim Nussle, and Senator Chuck Grassley requesting $46,000 in FEMA
funds specifically for the acquisition of 1650 Old Mill Road which is situated between
two of the substantially damaged residential properties.
On March 10, 2003, the Iowa Emergency Management Division (IEMD) notified the City
that the FEMA approved $201,596 in federal funding for the City's project application.
As a result, the project budget was established as follows:
Federal Share $201,596
State share (10%) 26,880
City (15% local share) 40,319
TOTAL $268,795
The budget was established based on the cost to purchase and demolish the three
substantially damaged residential properties: 1695 Old Mill Road, 1699 Old Mill Road,
and 1620 Old Mill Road. Again, due to the state's pdodty to acquire substantially
damaged residential properties and the general lack of funds for all project requests,
funding for the substantially damaged commercial property, 1650 Old Mill Road, was
not specifically provided.
Figure 1. 1650 Old Mill ROad on June 4, 2002.
In March of 2003, the City Council approved a Contract for Services with East Central
Intergovemmental Association (ECIA) for the administrative services associated with
the Grant Agreement between the City of Dubuque and IEMD.
DISCUSSION
According to Mr. Mark Schneider of ECIA, the balance of state and federal funds after
the acquisition of the three residential properties is $32,264.67. Mr. Schneider has
suggested that ECIA could draft an amendment request, on behalf of the City and the
property owner of 1650 Old Mill Road, to increase the project scope to include the
acquisition of the 1650 Old Mill Road Property.
Mr. David Hartig has committed, in writing, to the City that he will provide approximately
$16,850 as a local match toward the purchase of the property in return for a long term
(99 year) lease with the City for the commercial property and the three residential
properties already acquired.
BUDGET IMPACT
Following the same guidelines used to establish the purchase price of the residential
properties, the funding required to purchase and demolish 1650 Old Mill Road is as
follows:
Project Costs
Pumhase pdce
Recording fee (estimate)
Closing costs (estimate)
Demolition (contractor's estimate)
Legal Fees for lease agreement with Mr. Hartig
TOTAL
Project Funding
Balance of State & Federal funds previously budgeted
FEMA Public Assistance funds for demolition
Funds provided by Mr. Hartig (includes required 15% local match)
TOTAL
$46,934.13
21.00
160.00
10,000.00
500.00
$57,615.13
$32,264.67
8,500.00
16,850.46
$57,615.13
This is a volunteer program. The City or the property owner of 1650 Old Mill Road can
decide against the HGMP at any time dudng the process.
There is no impact to the City budget.
RECOMMENDATION
I recommend that the City request ECIA to make an amendment request to IEMD, on
behalf of the City and the property owner of 1650 Old Mill Read, to increase the project
scope to include the acquisition of 1650 Old Mill Road.
In addition, I recommend that the City lease the three residential properties, 1620,1695,
and 1699 Old Mill Road and, upon acquisition funding approval from the IEMD, 1650
Old Mill Read, to Mr. Hartig. Mr. Hartig has requested the following terms:
1) The lease would become effective as soon as the structures have been
demolished and cleared from the properties;
2) The length of the lease would be 99 years; and
3) Mr. Hartig would be responsible for maintaining the property as open green
space for the length of the lease.
Due to Mr. Hartig's generous contribution towards the purchase of 1650 Old Mill Road,
the 99-year lease fee would be set at one dollar ($1.00).
ACTION REQUESTED
I respectfully request that the City Council authorize ECIA to make an amendment
request to IEMD to increase the project scope to include the acquisition of 1650 Old Mill
Road.
In addition, I respectfully request that the City Council authorize the City Manager to
negotiate a lease agreement with Mr. Hartig for 1695 Old Mill Road, 1699 Old Mill
Road, 1620 Old Mill Road, and 1650 Old Mill, should IEMD approve funding for
acquisition.
Prepared by Deron Muehdng, City of Dubuque Engineering
CC:
Michael Koch, Public Works Director
Cindy Steinhauser, Assistant City Manager
Ken TeKippe, Finance Director
Deron Muehdng, Civil Engineer II
Mark Schnieder, ECIA
David Hartig
EAST CENTRAL INTERGOVERNMENTAL ASSOCIATION
A Eegi n l Response to eeds
July 9, 2003
Suite 200
3999 Pennsylvania Avenue
Dubuque, iA 52002
City of Dubuque
Attn.: Mike Van Milligen, City Manager
50 West 13th St.
Dubuque, IA 52001
Dear Mike:
This letter is a follow up to our past discussions regarding the City's acquisition of the Pancratz
property located at 1650 Old Mill Road. Based on our last conversation I have completed the
following.
I obtained a quote for the demolition of the 1650 Old Mill Rd. structures including the buildings,
parking lots, and the capping of all utilities with the exception of the abandoned well. In addition
to the quote and well abandonment, we must complete an asbestos inspection prior to demolition.
Bpsed on that quote, I am confident that the $10,000 figure for demolition that I used for budget
purposes should be very accurate.
I then discussed the project budget and the City's position with Mr. David Harfig. Mr. Hartig
understands that the City will not provide any fimds on this project. Mr. Harfig understands the
position as evidenced in his commitment letter fi:om him to provide the City's match for this
project. (See enclosed letter.) You will note that he desires a long term, 99-year lease for all four
of the Old Mill Road properties and will maintain them for the length of the lease as open green
space.
If all of these items meet with your approval, I will prepare an amendmcmt request to the Iowa
Emergency Management Division to increase the project scope to include the acquisition of the
1650 Old Mill Road property.
PHONE (563) 556-4166 IOWA ONLY (800) 942-4648 FAX (563) 556-0348 E-I'~AIL eda@ecia.org WEB SiTE www.ecia.org
· Dubuque Metropolitan Rrea Transportation Stuchj ~ Eastern Iowa Regional Housing Authori~ o Region I Employment and Training
· EClR Regional Planning Affiliation · ECIR Business Growth, Ink ·
July 9, 2003
Mr. MLke Van Milligen
Page 2
Thank you for the opportunity to pursue this project and your review oftkis material. Please feel
free to contact me if there is any question and/or to authorize ECIA to prepare the amendment
request.
Sincerely,
Mark Schneider
Commurdty Development Director
cc: David Harfig
Tim Pancmtz
Encl.
July 9, 2003
DAVID S. HARTIG, JR.
P.O. Box 604
Dubuque, IA 52004-0604
(563) 583-0408
City of Dubuque
Attn.: IV~e Van Milligen, City Manager
50 West 13t~ St.
Dubuque, IA 52001
RE: Old Mill Road properties
This letter is to confirm my intention to pay the City's required match in the Hazard Mitigation
Grant Program (HMGP) to acquire the Pancratz Construction property located at 1650 Old Mill
Road. I spoke with Mark Schneider of ECIA who provided me with the project budget status and
estimated additional costs. My understanding is that the estimated match is $16,850.46 based on
the following information.
The purchase price to Mr. Pancratzwill be $46,934.13. In addition to the purchase price, recording
fees and closing costs are estimated at $181.00 and additional legal work related to a long term
lease is estimated at $500.00. Further the demolition work is estimated at $10,000.00.
I further understand that the City has $32,264.67 available in state and federal funds in the HMGP
program and that FEMA Public Assistance program will reimburse the City for 85% of the
demolition costs.
Therefore, the estimated costs for the acquisition will be $47,615.13 including the purchase price
and dosing and all legal fees and the available HMGP funds of $32,264.67 will be used toward the
purchase. In addition, the demolition is estimated at $10,000.00 and that FEMA Public Assistance
will provide $8,500.00 (85%) toward this expense. The estimated sum total required match for the
acquisition and demolition is $16,850.46.
I am committing to provide the City's estimated $16,850.46 match toward this project. I further
understand that this is an estimate and the actual match may be something slightly more or less
than this estimate and commit to provide the final required match funds above or below this
amount based on the actual costs upon project completion. I understand that the acquisition and
demolition of this property must not result in the City of Dubuque incurring any expense
whatsoever.
In return for this commitment I desire to obtain a long term (99 years) lease fi:om the City for this
property (1650 Old Mill Road) and the 1620, 1695 and 1699 Old Mill Road properties that the City
July 9, 2003
Mr. Mike Van Milligen
Page 2
has already purchased through the HMGP program. I do understand that the City will record deed
restrictions on the property that it must be maintained as open green space forever.
The proposed budget includes $500.00 for the lease preparatior~ The lease would become
effective as soon as the structures have been demolished and cleared from the properties, including
the removal of all utilities including the abandoned wells. The ground is to be bare ground at the
time of lease signing. I agree to assume responsibility for seeding or sodding of all properties, the
placement of trees as I deem appropriate and the general maintenance of the property for the term
of the lease.
Thank you for your consideration of my offer and the opportunity to assist the City with this
project and furore maintenance of these properties. Please feel free to contact me if there is any
question regarding my offer.
cerely,
David Hartig
Mark Schneider, ECIA
~rim Pancratz