Star Brewery Bldg Hist, Tax CreMEMORANDUM
TO:
FROM:
SUBJECT:
September 29, 2003
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Historic Certification and Tax Credit Applications
Star Brewery Building/The Alexander Company
In November 2002, the City Council authorized staff to begin negotiations with The
Alexander Company on the redevelopment of the Star Brewery building. City staff has
continued to work with the company to finalize the details of a development agreement,
minimum assessment agreement, lease and project financing. Historic tax credits are a
cdtica[ component of the financing package, and the structure must first be placed on
the National Register to be eligible for those credits.
Economic Development Director Bill Baum recommends City Council authorization to
endorse The Alexander Company's applications for National Register certification and
federal and state historic tax credits for the rehabilitation of the Star Brewery. The City's
endorsement of the applications only attests that the City owns the property and in no
way obligates the City to undertake the proposed rehabilitation. Neither does the
endorsement tie the City to Alexander in any way should negotiations for the lease and
development of the property fail to be completed.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
William Baum, Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
TO:
FROM:
SUBJECT:
September 23, 2003
Michael Van Milligen, City Manager
William Baum, Economic Development Director
Historic Certification and Tax Credit Applications~
Star Brewery Building/The Alexander Company
INTRODUCTION
Since the City is the owner of the Star Brewery building, this memorandum requests
City Council endorsement of The Alexander Company's applications for National
Register certification for the Star Brewery building and federal and state historic tax
credits on the proposed rehabilitation.
DISCUSSION
In November 2002, the City Council authorized staff to begin negotiations with The
Alexander Company on the redevelopment of the Star Brewery building. City staff has
continued to work with the company to finalize the details of a development agreement,
minimum assessment agreement, lease and project financing. Historic tax credits ara a
critical component of the financing package, and a structure must first be placed on the
National Register to be eligible for those credits.
Project financing is dependent on the developer receiving historic tax credits from both
the federal and state governments. The federal tax credits - based on an estimated
eligible rehabilitation expense of $6,058,339 -- amount to $1,211,668 earned in 2004 to
assist project funding. The state tax credits are not available until 2012 but would
amount to $1,514,585.
The Alexander Company, in association with The Durrant Group, has done preliminary
background research and documentation of the Star Brewery building to seek National
Register listing and both the U.S. Department of the Interior's and the Iowa Department
of Cultural Affair's determinations that the project would be eligible for historic tax
credits. The applications require the owner of the property-the City- to sign the
application. The City's endorsement of the applications only attests that the City owns
the property and in no way obligates the City to undertake the proposed rehabilitation.
Neither does the endorsement tie the City to Alexander in any way should negotiations
for the lease and development of the property fail to be completed.
RECOMMENDATION
I would recommend the City authorize the City Manager to endorse, on behalf of the
City Council, The Alexander Company's applications for National Register certification
and federal and state historic tax credits for the rehabilitation of the Star Brewery
building. Approval of the applications will give Alexander a green light in terms of one
of the critical components of project financing.
Should the City fail to reach agreement with Alexander, the applications will have begun
an approval process that could assist another developer who most likely would want to
utilize the benefits of the historic tax credit program.
ACTION STEP
The action step for the City Council is to authorize the City Manager to endorse the
applications as owner of the property.
F:\USERS\Pm~h re\WPDOCS\LOAN DOC~Alexander\taxcredit.memo.doc