Community Development Block Grant Award to CARADCO ProjectMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: $5.9 Million CDBG Award to CARADCO Project
DATE: December 28, 2010
Mic ael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
Dubuque
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AN-Ammica City
1
2007
The City submitted an application through the Iowa CDBG Rebuild Iowa Office (RIO)
Round 3 funding program and was awarded $5.9 million to create 72 housing units in
the CARADCO Building in the Historic Millwork District.
Economic Development Director Dave Heiar recommends City Council authorization for
the City Manager to indicate the City's interest in accepting this $5.9 million CDBG
award for the CARADCO project.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Masterpiece on the Mississippi
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
SUBJECT: $5.9 Million CDBG Award to CARADCO Project
DATE: December 28, 2010
Dubuque
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Mesita City
11111
2007
PURPOSE
This memorandum is to make the City Council aware of an additional award of special CDBG
funding to create multi - family rental units in the CARADCO Building.
BACKGROUND
The City Council has prioritized the redevelopment of the Historic Millwork District for mixed use
with an emphasis on downtown housing options. The Millwork District would be a large scale
project able to fulfill much of the needed demand for rental housing. Recently, the City received
a $5.6 million federal TIGER grant to assist in infrastructure upgrades for the Millwork District.
This grant will replace underground utilities and reconstruct complete streets for the District.
The Millwork District property owners are positioned to act quickly on their projects, if financing
can be secured to fill current proforma gaps.
In June 2010, Gronen Properties prepared an application to the Iowa Department of Economic
Development for financial assistance in redeveloping the CARADCO Building. On September
8, 2010, Mayor Buol was notified that the State approved an award of $3,000,000 toward this
project. This award was brought before the Council at the October 18, 2010 meeting.
The City submitted another application through the Iowa CDBG Rebuild Iowa Office (RIO)
Round 3 funding program and was awarded an additional $5.9 million to create 72 housing
units. These two awards will be combined into one contract.
The CDBG funds have some income restrictions. At least 51% of the tenants must be below
80% AMI. In Dubuque, that means an employee can earn approximately $36,000, which will
work for many young professionals moving into our community. The construction project will
also have to comply with federal Davis Bacon wage requirements.
RECOMMENDATION
Based on the critical need for quality units in the Historic Millwork District, I recommend that the
City Council authorize the City Manager to indicate the City's interest in accepting this additional
$5.9 million CDBG award for the CARADCO project. A formal contract will be submitted to the
City Council for consideration when it is prepared by the Iowa Department of Economic
Development.
Attachments
F: \USERS\Econ Dev \CARADCO\RIO -CDBG Round 3\20101228 CDBG RD 3 Award CARADCO Project.doc
December 14, 2010
The Honorable Roy D. Buol, Mayor
City of Dubuque
350 West 6th Street, Suite 312
Dubuque, IA 52001
SUBJECT: Dubuque 08 -DRH -212
Dear Mayor Buol:
I am pleased to inform you the Iowa Department of Economic Development (IDED) has awarded
Dubuque a Supplemental Community Development Block Grant (CDBG) for disaster recovery in an
amount not to exceed $5,900,000 for construction of seventy -two (72) units at the Caradco Building.
IDED has received these funds from the United States Department of Housing and Urban Development
( "HUD ") under the Supplemental Appropriations Act of 2008 (Pub. L. 110 -252) and under the
Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of 2009 (Pub. L.110 -329)
under the CDBG Program in order to assist in the recovery from the 2008 floods.
Your contract with respect to this award (the "Contract ") will have a start date of 12/14/2010 pending
successful contract negotiation and complete execution. The Contract between Dubuque and IDED will
be following shortly. Upon its receipt, please review the document thoroughly, and sign and return it to
IDED. With the Contract's return we will execute and return a copy for your files.
No HUD funds or non -HUD funds may be committed to the project until the applicant has secured
environmental approval from the State, as provided in HUD regulation 24 CFR Part 58. In addition,
pending environmental approval and pursuant to 24 CFR Part 58.22(a), no grant recipient or
participant in the development process, including contractors or sub - contractors, may undertake
an activity that may limit the choice of reasonable alternatives. Such choice limiting actions
include real property acquisition, leasing, rehabilitation, repair, demolition, conversion, and new
construction. However, you may incur costs for general administration and for the environmental review
process.
Contract Conditions: No funds can be drawn until funding commitments are received by IDED
from all sources used in the construction of this project.
IF ANY CONDITIONS CONTAINED IN THIS LETTER ARE NOT SATISFIED IN THE SOLE
DISCRETION OF IDED, OR THE CONTRACT IS NOT FULLY EXECUTED BY February 28, 2010, THIS
AWARD OF FUNDS SHALL BE RESCINDED, AND NO REIMBURSEMENT IS AVAILABLE FOR ANY
COSTS INCURRED BY THE CONTRACT RECIPIENT WITH RESPECT TO THIS AWARD.
IDED looks forward to working with Dubuque on its disaster recovery project once all conditions to the
award have been met and the contract is fully executed.
Sincerely,
Bret L. Mills
Director
cc: David Heiar, Economic Development Director, City of Dubuque
Michael C. Van Milligen, City Manager, City of Dubuque
File
Chester J. Culver, Govemor
.L/
IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT PattyJudge, Lieutenant Governor
200 East Grand Avenue, Des Moines, Iowa USA 50309 • Phone: 515.7253000 • Fax: 515.7253010 • www.iowalifechanging.com
Please have an authorized representative sign this page and return it to the IDED if you intend to
accept this CDBG Supplemental award.
Dubuque, acting by and through its duly authorized officers, hereby accepts the award described in this
letter (Award), acknowledges that receipt of this Award is contingent upon the satisfaction of all conditions
of the Program, the receipt of funds by IDED with respect to the Award, and the execution of the Contract,
and agrees to be bound by all program requirements of the CDBG program, IDED guidelines and the
Contract with respect to this Award.
Dubuque
08- DRH -21
By:
Name: " Roy D. Buol
Title
Mayor
4813 - 9933 - 6964 \1 12/14/2010 11:31 AM
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