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Garfield Pl Urban Revit AmendedMEMORANDUM TO: FROM: SUBJECT: February 9, 2004 The Honorable Mayor and City Council Members Michael C. Van Milligen, City Manager Amended and Restated Garfield Place Urban Revitalization Area Plan Housing and Community Development Department Director David Hards recommends the City Council hold a public hearing on February 16, 2004, on the Amended and Restated Garfield Place Urban Revitalization Area Plan. The amendment adds 515 and 521Garfield to the Garfield Place Urban Revitalization Area and extends the duration of the plan for 3 years. The proposed project includes demolition of a derelict single family home and construction of a third SRO with rooms for 12 Iow-moderate income men at 521 Garfield Avenue. 515 Garfield contains a single family home which will remain as the home for the project manager and no tax exemption will be provided. Scott and Dawn Potter, owners of 521 Garfield, have applied to the Iowa Department of Economic Development for HOME Program funds for a $575,000 forgivable loan. They are requesting the urban revitalization tax exemption to ensure the feasibility of the project. At the public hearing, the Council will not be able to adopt the plan because the Iowa Code requires that property owners and tenants of a proposed district be given thirty days following the first hearing to petition for a second hearing. A second hearing must be held only if the City receives within the thirty days a valid petition from at least ten percent of owners or tenants within the designated revitalization area. If such a petition is submitted, the City Council may set a second public hearing and proceed to act upon the proposed plan following that hearing. If no such petition is presented, the Council may simply adopt the proposed plan following the thirty-day period. respectfully request that the public hearing be held. Michael C. Van Milligen MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager David Hards, Housing and Community Development Department MEMORANDUM February 6, 2004 TO: ,Mich., I~. Van Milligen, City Manager FROM. David H~arris, Housing and Community Development Department SUBJECT: Amended and Restated Garfield Place Urban Revitalization Area Plan Introduction This memorandum recommends that the City Council adopt the ordinance approving the Amended and Restated Garfield Place Urban Revitalization Area Plan, Background In January the City Council adopted a resolution setting a public hearing for February 16, 2004 on the Amended and Restated Garfield Place Urban Revitalization Area Plan. The amended plan will add two adjoining lots to allow property tax exemption for a proposed 12-room single-room occupancy (SRO) facility at 521 Garfield Avenue and extends the duration of the plan. Discussion The amendment adds 515 and 521Garfield to the Garfield Place Urban Revitalization Area and extends the duration of the plan for 3 years. The proposed project includes demolition of a derelict single family home and construction of a third SRO with rooms for 12 Iow- moderate income men at 521 Garfield Avenue. 515 Garfield contains a single family home which will remain as the home for the project manager and no tax exemption will be provided. Scott and Dawn Potter, owners of 521 Garfield, have applied to the Iowa Department of Economic Development for HOME Program funds for a $575,000 forgivable loan. They are requesting the urban revitalization tax exemption to ensure the feasibility of the project. There are currently 19 residents at 511 Garfield Avenue and 19 residents at 513 Garfield. One resident residing at 521 Garfield will be vacating the premises and is not requesting relocation assistance. The amended and restated plan will add the adjoining lots to the district and allows new construction, an improvement for which property tax exemption will be requested. The original Garfield Place Urban Revitalization Area Plan also provided for new construction, which has been completed and tax exemption received. Chapter 404 provides for a public comment pedod pdor to the adoption of an urban revitalization plan. Additionally, the City's Code of Ordinances requires comment by the Long Range Planning Commission on any urban revitalization plan. Based upon these requirements, the Council set a public headng for February 16 2004 that will provide a 30 day comment period on the amended plan. The property owner and tenants were notified of the public hearing. The Long Range Planning Commission reviewed the plan at their January 21st meeting and sent a letter on February 2, 2004 recommending City Council adoption. At the public hearing, the Council will not be able to adopt the plan because the Iowa Code requires that property owners and tenants of a proposed district be given thirty days following the first hearing to petition for a second headng. A second hearing must be held only if the City receives within the thirty days a valid petition from at least ten percent of owners or tenants within the designated revitalization area. If such a petition is submitted, the City Council may set a second public hearing and proceed to act upon the proposed plan following that hearing. If no such petition is presented, the Council may simply adopt the proposed plan following the thirty-day period. The attached ordinance directs the City Clerk to publish the Ordinance following the 30-day period if no valid petition for a second hearing is filed. This should reduce the waiting time for the developer. Recommendation I recommend that the City Council approve the ordinance authorizing adoption of the amended and restated Ga~eld Place Urban Revitalization Plan on or after March 18 2004 if no valid petition for a second hearing is filed. Action Requested The Action Step is for the City Council to adopt the attached ordinance. Prepared by: Aggie Tauke, Community Development Specialist F:\Users~ATAUKE~Urban Red,Garfield Place~Gar~P~ceordmem04.doc / ORDINANCE NO. 7-04 AN ORDINANCE ESTABLISHING THE AMENDED AND RESTATED GARFIELD PLACE URBAN REVIT ALiZA TION AREA AS AN URBAN REVIT ALiZA TION AREA PURSUANT TO CHAPTER 404 OF THE CODE OF IOWA. ~ NOW, THEREFORE, BE IT .ORDAINED OF DUBUQUE, IOWA: BY THE CITY COUNCIL OF THE CITY Section 1. That the Amended and Restated Garfield Place Urban Revitalization Area as herein described shall hereafter be designated an urban revitalization area pursuant to Chapter 404 of the Code of Iowa 1999, to wit: Lot 1, Lot 2 and Lot 3 of Davis Place II and Lot 2 Scharle Subdivision in the County of Dubuque, City of Dubuque, Iowa, according to the recorded plat thereof, commonly known as 511, 513, 515 and 521 Garfield. Section 2. That the Amended and Restated Garfield Place Urban Revitalization Area as hereto attached is hereby adopted and approved and the properties within said described area shall be subject to the provisions of said Plan. Section 3. That said Amended and Restated Garfield Place Urban Revitalization Area shall hereafter be on file in the City Clerk's Office, City Hall, Dubuque, Iowa. Section 4. That the City Clerk is hereby authorized and directed to publish this Ordinance on or after March 18, 2004, provided that the City Clerk prior to that date has received no valid petition requesting a second public hearing, and in the event such petition has been received, then this Ordinance shall be null and void. Passed, approved and adopted this 16th day of February, 2004. Terrance M. Duggan, Mayor Attest: Jeanne F. Schneider, City Clerk F:IUsers\ATAUKElUrban ReviteIGarfieId PlacelGar UR EJd Ord.doc Garfield Place Urban Revitalization Area Plan Amended and Restated January 2004 Introduction The State of Iowa Urban Revitalization Act, Code of Iowa, Chapter 404, authorizes cities to designate an area of the City as a revitalization area. Improvements to qualified real estate within these designated areas may then become eligible for an exemption from property taxes for a specified number of years. To implement the provisions of the Act, the City must prepare a revitalization plan for each designated area. This document is the plan addressing the requirements of the Act for an area to be known as the "Garfield Place" Urban REvitalization Area, as amended. Area eligibility criteria The City Council has determined that this area is eligible for designation as a revitalization area as it meets one of the criteria outlined in Iowa Code. Specifically, the City Council has found this area to qualify as an economic development area as defined by Section 403.17 ofthe Iowa Code. This definition includes housing development where there is an inadequate supply of affordable, decent and safe housing and the provision of that housing will help to retain or attract industry or meet the needs of the elderly or disabled or of a population which may not be adequately served. Designating this area as an Urban Revitalization Area will assist the provision of housing to a population which is not adequately served. The proposed Single Room Occupancy facilities will provide single men with decent housing at affordable rent. The property tax exemption will make this project feasible. Legal description The property to be included in the Garfield Place Revitalization Area is located at 511, 513, 515 and 521 Garfield, legally described as: Lot 1, Lot 2 and Lot 3 of Davis Place II and Lot 2 Scharle Subdivision in the County of Dubuque, City of Dubuque, Iowa, according to the recorded plat thereof. A map of the area boundaries is attached as Exhibit A. Current assessed value The current assessed valuation for the property as December 11, 2003 is as follows: 511 Garfield - $19,070 in total, which is $14,620 for the land and $54i0 for the building, with an additional exemption of $350,110 for the building. 513 Garfield - $8,760 for the land in total, with an additional exemption of $355,520 for the building. 515 Garfield - $88,260 in total, which is $10,520 for the land and $77,740 for the building. 521 Garfield - $38,080 in total, which is $8,530 for the land and $29,550 for the building. Property ownership The current property owner within the area, as of December 11, 2003 is: 511, 513 and 515 Garfield is owned by Davis Place LLC, 17132 Freund Road, Dubuque, IA. 521 Garfield is owned by Scoff A. Potter and Dawn L. Potter, 521 Garfield, Dubuque, IA Existing zoning classification The existing zoning as December 11, 2003 is OR (Office Residential) for the entirety of the property within the boundaries of the Urban Revitalization Area. The zoning was changed at 511 Garfield from R-2A (Altemate Two-Family Residential district) on May 1, 2000, to allow for the construction of the existing 19 room facility. 513 and 515 Garfield were rezoned from R-2A on January 21, 2002. The zoning was changed at 521 Garfield from R-2A on November 17, 2003. Existing and proposed land use A 19 room single room occupancy (SRO) facility for Iow- and moderate-income men was constructed in November 2000 at 511 Garfield and a second 19 room SRO constructed at 513 Garfield on June 2002. Rents are limited to $250 per month for Iow- income residents. Rents may be higher for moderate income residents. The income and rent constraints will remain in place for a 20-year term. 515 Garfield contains a single family home which will remain. 521 Garfield currently contains a single family home which will be removed and a 12 room SRO facility will be constructed with limited rents as established for the other two SRO facilities. City services There are no current plans to expand or improve City services to this area. Currently the area enjoys the same level of City services as most other areas of the City. Exemption details Only residential property, assessed as commemial and consisting of three or more separate living quarters with at least seventy-five percent of the space used for residential purposes will be eligible for property tax exemption. This will assist the Single Room Occupancy (SRO) housing facilities that will provide single men with decent housing at affordable rent, a population which is not adequately served. The property tax exemption will make these projects feasible "Qualified real estate" means real property other than land, which is located in a designated revitalization area and to which improvements have been added, dudng the time the area was so designated, which have increased the actual value by at least fifteen percent. "Qualified real estate" also means land upon which no structure existed at the start of new construction, which is located in a designated revitalization area and upon which new construction has been added during the time the area was so designated. Property tax exemption shall be available only for 'improvements' "Improvements" include new construction on vacant land. "Actual value added by improvements" means the actual value added as of the first year for which the exemption was received. Any improvements that were assessed before the area was officially designated will not be eligible for exemption. Improvements begun prior to one year pdor to the area becoming designated will not be eligible for exemption. Improvements must result in that structure meeting applicable building code requirements of the City of Dubuque. The actual value of the improvements must result in an increase in assessed value by at least fifteen percent. Each year that an application is made for tax exemption, the assessed value must have increased in that year by at least fifteen percent. The property tax exemption schedule, in accordance with 1999 Code of Iowa, Chapter 404.3 Subsection 4, is as follows: A ten-year, 100% exemption of the actual value added by the improvements. 3 The designation of the amended and restated Garfield Place Urban Revitalization Area will remain in effect only until the area is fully redeveloped or for three years, whichever occurs first. Upon repeal or expiration of the ordinance establishing the revitalization area, all existing exemptions would continue until their previously established expiration date. Industrial revenue bonds There are no plans to issue industrial revenue bonds for revitalization projects in this area. Relocation Relocation will occur due to the redevelopment of the property and will affect one person. The 38 residents in the existing SRO's will remain. The one resident at 521 Garfield will be vacating the premises and is not requesting relocation assistance. Anticipated grant or loan programs The project at 511 Garfield was funded through the Housing Trust Fund $200,000 forgivable loan (Local Housing Assistance Program - Iowa Department of Economic Development). Additional funding of $300,000 was provided through a conventional bank loan. The project at 513 Garfield was funded through a Local Housing Assistance Program (LHAP) $250,000 forgivable loan through the Iowa Department of Economic Development. Additional funding of $250,000 was received through a conventional bank loan. The project at 521 Garfield has requested Iowa Department of Economic Development HOME Program funds in the amount of $ 575,000. No additional funding will be required. Conclusion The Amended and Restated Garfield Place Urban Revitalization Area will assist the redevelopment efforts of deteriorated property which will provide for three buildings for Single Room Occupancy housing (males only) for the citizens of Dubuque. Two existing buildings contain 19 tenants each and the new SRO building will provide housing for 12 occupants. After the ten-year property tax exemption period elapses, the full assessed value of the properties will revert to the tax rolls to the benefit of the entire community. This area, upon designation, will follow the procedures for application and granting of the property tax exemption within the City of Dubuque. 4 Application procedure 1. The property owner must apply for an exemption by February 1~ of the assessment year for which the exemption is first claimed, but not later than the year in which all the improvements are first assessed for taxation. Upon the request of the owner, the goveming body of the City may provide by resolution that the owner may file an application no later than February 1 of the tenth assessment year. 2. The application must contain, at a minimum, the following: a. The nature of the improvements, b. The cost of the improvements, c. The actual or estimated date of completion, and d. The tenants living on the property as of the date of the City's resolution adopting this plan. 3. The property owner has the option of submitting a proposal for an improvement project to the City prior to submitting a formal application. If the proposed project is in conformance with the revitalization plan, the City Council shall, by resolution, give preliminary approval of the project. Such preliminary approval shall not entitle the owner to exemption until the improvements have been completed and found to be qualified. If the proposal is rejected, the owner may submit an amended proposal. 4. The City reviews ali applications to determine whether the improvement project conforms to the revitalization plan, is within a designated area, and if the improvements were made during the appropriate time period. If the project meets all three criteria, the City shall forward the application to the assessor by March 1st, with a statement as to which exemption applies. Applications for exemptions for succeeding years on approved projects shall not be required. 5. The local assessor shall review each application by making a physical review of the property, to determine if the improvements made increased the actual value of the qualified real estate by at least fifteen percent or ten percent in the case of real preper[y assessed as residential property. If the assessor determines that the actual value of that real estate has increased by at least the requisite percent, the assessor shall certify the property valuation, determined pursuant to the tax exemption schedule, to the County Auditor at the time of transmitting the assessment rolls. The assessor shall notify the applicant of the determination, and the assessor's decision may be appealed to the local board of review at the time specified in Iowa Code. The property owner may also reflle an application in a subsequent year after additional improvements have been made. 5 6. After the tax exemption is granted, the assessor shall continue to grant the tax exemption, with pedodic physical review by the assessor, for the ten-year time period specified in the tax exemption schedule. 7. An application for exemption received by February 1 in any year after the year in which the improvement was completed and first assessed for taxation, is a late application. Late application may be made in any year up to the tenth year following completion of the improvement. The exemption period will be the remainder of the ten year period, which began upon completion of the improvement, except the total number of years in the exemption schedule will be allowed if a claim for exemption is filed within two years of the February I filing deadline. EXHIBIT A F:~Users'~ATAUKE',Urban Revite~Garfield Place~Gadield placeAmd.04.doc Garfield Place Urban Revitalization Area Proposed Addition AMENDED AND RESTATED GARFIELD PLACE URBAN REVITALIZATION AREA PROPOSED LOCATION: 51515ZI Garfield Avenue LEGAL DESCRIPTION: Lot 1 of Da~s Place II and Lot 2 Scha~le Subdivision ZONING: OR - Ol~ice Residential EXISTING LOCATION: 511/513 Garfield Avenue LEGAL DESCRIPTION: Lot 2 & Lot 3 of Davis Place ZONING: OR- Office Resident a