Gronen Prop Housing Tax Cred ApTO:
FROM:
SUBJECT:
MEMORANDUM
November 10, 2003
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Affordable Housing Tax Credit Program Application from Gronen
Properties
Gronen Properties has made application for affordable housing tax credits for a 30-unit
project located in four buildings in the Upper Main area. The majority of these units have
remained vacant for ten or more years. In addition, the planned historic rehabilitation will
restore 13 storefronts on the street level of these buildings. Total project cost is
projected at approximately $5 million.
Housing and Community Development Department Director David Harris is
recommending execution of two resolutions, both required by the Iowa Finance
Authority as part of the application for Affordable Housing Tax Credits. The first is a
"Resolution of Support, which simply states the City's support for the developer's
application to the Finance Authority.
The second is a "Resolution of Local Contributing Effort," which signifies the City's
support of the developer's applications for the public funding assistance. These include
applications for Urban Revitalization Program tax abatement, Enterprise Zone tax
credits and sales tax rebates, a Downtown Rehabilitation Program loan for $300,000
and a loan from the City's Lead Paint Hazard Reduction Program, in the amount of
$120,000. The Urban Revitalization Program and the Downtown Rehabilitation
Program are subject to future City Council approvl.
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
David Harris, Housing and Community Development Department Director
MEMORANDUM
12 November 03
To: Mike Van~M~ligen, City Manager
From: David Ha~s, Housing and Community Development Department
Re: Affordable Housing Tax Credit Program Application from Gronen Properties
Introduction
The purpose of this memorandum is to request the City Council's approval of the two
attached resolutions in support of Gronen Properties' application to the Iowa Finance
Authority for affordable housing tax credits.
Background
The Affordable Housing Tax Credit Program provides an equity financing mechanism
for housing projects which in turn provide rental housing for Iow- and moderate-income
tenants. It implements Section 42 of the Internal Revenue Service code, returning tax
credits to investors who build or renovate Iow income housing. In Iowa it is administered
by the Iowa Finance ^uthodty, which annually dis~butes approximately $5 mitlion in tax
credits, on a competitive application basis.
In Dubuque, projects previously financed through this program include Mercy
Housing's Loras Boulevard and Main Street apartments, the Applewood complex
on Pennsylvania Avenue, the Bishop's Block Apartments, the Iowa Inn/Henry
Stout Place and the Arbor Glen apartments now renting on Raven Oaks Drive.
Additionally, Area Residential Care's new facility, to be located on Kennedy Circle,
was approved by IFA last year and is expected to commence construction in the
coming months.
Discussion
In the current funding cycle, Gronen Properties has made application for tax credits, for
a 30-unit project located in four buildings in the Upper Main area. The majority of these
units have remained vacant for ten or more years. In addition, the planned historic
rehabilitation will restore 13 storefronts on the street level of these buildings. Total
project cost is projected at approximately $5 million.
To assist with the financial feasibility of this complex project, the developer has
asked for a package of local public assistance, provided through four funding
sources. The first is tax abatement, through the City's Urban Revitalization
Program. As the project is located within an existing Revitalization District, it is
eligible for this assistance, in the approximate amount of $135 843, pending
Council approval.
Second, Gronen intends to apply for a Downtown Rehabilitation Loan. As the
project is located within the existing Downtown Urban Renewal District, it is
eligible for this assistance. Economic Development staff have indicated to
Gronen that current funds are unavailable; a "forward commitmenf' of a $300 000
loan has been made, pending sufficient funds and Council approval.
The developer also intends to apply to the Housing Department for Lead Paint
Hazard Reduction Program funds. 20 of the apartments in his buildings are
eligible for assistance from this program, at $6000/unit, for a total loan of
$120 000.
Last, the project also is located within the existing Enterprise Zone, making it
eligible for State tax credits and sales tax rebates, in the approximate amount of
$128 000, pending approval by the Enterprise Zone Committee and issuance of
a contract from the Iowa Department of Economic Development.
Recommendation
The proposed Upper Main Revitalization project will result in renovation and re-
use of 30 upper-story apartments, many of which have been vacant for ten or
more years. It will also accomplish the historical restoration and re-occupancy of
as many as 13 Main Street storefronts. This will be accomplished by a local
owner/developer, in partnership with the City, a local lender, the Iowa Finance
Authority and both State and Federal tax credit programs. This $5 million project
will have a significant impact on the revitalization of the Upper Main
neighborhood and should serve as a catalyst for other private reinvestment
efforts in the area.
Action Step
The City Council is requested to approve the Mayor's execution of two attached
resolutions, both required by the Iowa Finance Authority as part of the application
for Affordable Housing Tax Credits. The first is a "Resolution of Support," which
simply states the City's support for the developer's application to the Finance
Authority.
The second is a ~Resolution of Local Contributing Effort," which signifies the
City's support of the developer's applications for the public funding assistance, as
listed in the Discussion section, above. These include applications for Urban
Revitalization Program tax abatement, Enterprise Zone tax credits and sales tax
rebates, a Downtown Rehabilitation Program loan for $300 000 and
a loan from the City's Lead Paint Hazard Reduction Program, in the amount of
$120 000.
CC:
Bill Baum, Director, Economic Development Department
RESOLUTION NO. 467-03
A RESOLUTION OF SUPPORT FOR THE DEVELOPMENT OF
AFFORDABLE HOUSING ON MAIN AND WEST 11TM STREETS
Whereas, the City of Dubuque, Iowa has been informed by Gronen Properties
that a Iow income housing tax credit application will be filed with the Iowa Finance
Authority for the development of affordable rental housing to be located in Dubuque,
Iowa with a legal description as follows:
Lot 39 in the City of Dubuque, Iowa, according to the United States
Commissioner's Map thereof; and
Lot 40 in the City of Dubuque, Iowa, according to the United States
Commissioner's Map thereof; and
City Lot 40A in the City of Dubuque, Dubuque County, Iowa, according to the
United States Commissioner's Map of the Town (now City) of Dubuque, Iowa;
and
Lots 42, 42A and the south 8 feet of Lot 41, in the City of Dubuque, Iowa,
according to the United States Commissioner's Map of the Town of Dubuque,
Iowa; and
The North 43.2 feet of Lot 41 in the City of Dubuque, Iowa, according to the
United States Commissioners Map thereof.
Whereas, this housing project will contain 30 units;
Whereas, the units will be targeted to family mixed income;
Whereas, the project will be acquisition and rehabilitation;
Whereas, the project will have the following amenities:
Green space
Community room
Computer room
Whereas, The Sponsor has requested local assistance through a tax abatement;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. The City supports the application of Gronen Properties for Affordable
Housing Tax Credits, subject to necessary public hearings and building permits.
Section 2. This resolution shall remain effective until 1 July 04. In the event that
any of the above-listed characteristics should materially change pdor to the issuance of
a building permit, this resolution shall be null and void.
of November, 2003
Passed' appr°ved and ad°pted this 17th day of November, 2003.
Terrance M. Duggan, Mayor
Attest:
Jeanne F. Schneider, CMC
City Clerk
468
RESOLUTION NO. 468-03
A RESOLUTION OF LOCAL CONTRIBUTING EFFORT FOR THE
DEVELOPMENT OF AFFORDABLE HOUSING ON MAIN AND WEST
11TM STREETS
Whereas, the City of Dubuque, Iowa has been informed by Gronen Properties
that a Iow income housing tax credit application will be filed with the Iowa Finance
Authority for the development of affordable rental housing to be located in Dubuclue,
iowa, at 1042, 1066, 1069, 1086 and 1091 Main Street and at 248 West 11th Street: and
Whereas, a local contributing effort is required by the Qualified Allocation Plan
and the Iowa Code Section 16.4, to be provided by a local governmental unit or by local
or regional agencies public or private; and
Whereas, the Iowa Finance Authority may consider any type of proposed local
contributing effort; and the agency making the local contributing effort must indicate the
value of its contribution; and
Whereas, the proposed affordable housing project is located in the Upper Main
Urban Revitalization District and it therefore eligible for consideration for a tax
abatement; and
Whereas, the Sponsor intends to apply for tax abatement benefits provided
through the Urban Revitalization Program in the estimated amount of $135 843; and
Whereas, the proposed project is located in an Enterprise Zone and is therefore
eligible for consideration for Enterprise tax credits; and
Whereas, the Sponsor intends to apply for Enterprise tax credits in the estimated
amount of $128 000; and
Whereas, the proposed project is located in the Downtown Urban Renewal
District and is therefore eligible for a Downtown Rehabilitation Program loan; and
Whereas, the Sponsor intends to apply for these funds and has received a
forward commitment from the City of Dubuque in the amount of $300 000; and
Whereas, the proposed project is located in the target area for the City's Lead
Paint Hazard Reduction Program; and
Whereas, the Sponsor intends to apply for these funds and has received a
forward commitment from the City of Dubuque in the amount of $120 000.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. The City ~s supportive of the application of Gronen Properties for a tax
abatement for the proposed affordable housing project provided through the Urban
Revitalization Program, subject to the application cycle and subsequent City Council
review and approval.
Section 2. The City is supportive of the application of Gronen Properties for
Enterprise Zone tax credits, subject to review and approval by the Enterprise Zone
Commission and issuance of a contract from the Iowa Department of Economic
Development.
Section 3. The City is supportive of the application of Gronen Properties for a
Downtown Rehabilitation Program loan, subject to the availability of funds and
subsequent City Council review and approval.
Section 4. The City is supportive of the application of Gronen Properties for a
Lead Paint Hazard Reduction Program forgivable loan.
Passed, approved and adopted this17th day of November, 2003.
Terrance M. Duggan, Mayor
Jeanne F. Schneider, CMC
City Clerk
Contine tM Real ./ & Felderrn A4 . r als
1179 Iowa Slxeet, Dubuque, IA 52001
(563) 557-1465 Office; (563) 588-4214 Fax
Web site: www.feldarmans.com
Dubuque City Council and City Manager
50 W. 13t~ Street
Dubuque, IA 52001
2003
RE: Gronen Properties, 1000 Block Main Street Projects, Dubuque, Iowa 52001
I am writing to express my support for the Gronen Properties proposed renovation
projects in the 1000 block of Main Street. John & Mary Gronen continue show a sense of
preservation that embodies Dubuque, many times at a financial loss.
They have taken an aggressive approach to renovation with experience in
residential and commercial projects. The development proposes to renovate 11 or 12
commercial spaces, and 30 upper level apartments.
As President of Dubuque Main Street LTD, I can state that our organization is
behind this type of project improvement. One of the commercial spaces will be the future
location for Dubuque Main Street LTD, giving our organization the opportunity to offer
more vis~ility along "Main Street" Dubuque.
The revitalization of these projects is going to include over $4 million in costs,
and it will help to extend the growing support for such renovations in our downtown.
This project will complement many of the ideas and actions discussed and planned for the
City of Dubuque Downtown Comprehensive Plan, and support some of the council top
goals.
I strongly encourage you to take positions of support for this project, and if there
are any oppommities to provide financial assistance, or direct them to such assistance,
you will he helping a "good neighbor" for Dubuque.
Bob Felderman, Broker
For the BLUE
REALTY
City Manager's Office
City Hail
50 West 13th Street
Dubuque, Iowa 52001~864
(563) 5894110 office
(563) 5894149 fax
ctyrngr@cityofclubuque.org
EXHIBIT 4d
LOCAL CONTRIBUTING EFFORT VERIFICATION
DATE: 12 November 03
Iowa Finance Authority
100 E. Grand, Suite 250
Des Moines, IA 50309
RE:
Upper Main Revitalization Project
1042, 1066, 1069,1086 and 1091 Main Street; 248 West 11th Street
Gmnen Properties
Ladies and Gentlemen:
This letter will verify the local contributing effort required by the Qualified Allocation Plan
and Iowa Code Section 16.4. A local contributing effort can be provided by local
governmental units or by local or regional agencies public or pdvate. The IFA roles
provide that any of the following items will constitute a local contributing effort:
Payment of funds by a political subdivision or governmental entity, or by a private
agency. Pdvate agency means any entity from the location that contributes
something of value and intends that the contribution qualify as the local
contributing effort.
Real property which may be vacant or improved property, suitable, in the
judgment of the IFA, to the proposed housing project. Liens and encumbrances,
if any, shall be disclosed to satisfaction of the IFA.
Personal property which may include appliances, furnishings, property
maintenance tools, re-modeling material to be purchased subsequent to project
approval, and any other personal property, which in the judgment of the IFA, is of
relevance to the proposed housing project.
The IFA may consider any type of proposed local contributing effort, in addition to or
other than the above. Local contributing efforts may be combined by type or source.
The IFA's rules provide that the agency making the local contributing effort must indicate
the value of its contribution. The value of the local contributory effort is the value of the
contribution made by the agency minus the value of any consideration or accommodation
received by the agency in return for the contribution. Evidence of payment and the
authority to provide the funds shall be furnished upon request of the IFA.
Based on the foregoing, the local contributing effort for the above named project by
The City of Dubuque is as follows:
Item Amount/Value Legal Authority for
Contribution
Payment of governmental funds
Cash payment (5) 420,000 City of Dubuque
Tax Increment Financing
Tax Abatement (4) 135,$43 (estimated) City of Dubuque
Enterprise Zone designation 71,000 (estimated tax rebate) City of Dubuque
Other. Please describe 57,000 City of Dubuque
Est. Enterprise Zone Credit Proceeds
Payment of funds from a private
agency
Contribution of land (1)
Contribution of personal property (2)
Other (3)
We understand that IFA will rely on these valuations to determine whether the Developer
has met the requirements of the QAP for a local contributing effort.
Sincerely,
Michael C. Van Milligen
City Manager