Downtown Rehabilitation Loan_1132-1126 Locust StreetMasterpiece on the Mississippi
Dubuque
Ali-A ed cacity
P
m
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Downtown Rehabilitation Loan and Grants for 1132 -1136 Locust Street
DATE: February 15, 2011
Economic Development Director Dave Heiar recommends City Council approval of a
letter of commitment for a Downtown Rehabilitation Loan of $300,000, a $10,000 facade
grant, a $10,000 design grant and a $15,000 financial consultant grant for Judy Davison
to support their rehabilitation of properties located at 1132 -1136 Locust Street.
This project is a renovation of three row houses that are currently uninhabitable due to a
fire and years of neglect. The current configuration of 4 apartments will be totally
renovated into 3 upscale apartments.
At this time, insufficient loan funds are available in the Downtown Rehabilitation Loan
Program to fund the loan. The owners have agreed to wait until the funds are available
in FY2026. The funding for the grant portions of the award is estimated to be available
in FY 2013.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Micha I C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David Harris, Housing and Community Development Department Director
David J. Heiar, Economic Development Director
Masterpiece on the Mississippi
Dubuque
AN- AmerlcaCity
111 r
2007
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
SUBJECT: Downtown Rehabilitation Loan and Grants for 1132 -11y:6 Locust Street
DATE: February 14, 2011
INTRODUCTION
This memorandum presents for City Council consideration a Resolution approving a
letter of commitment for a Downtown Rehabilitation Loan of $300,000, a $10,000 facade
grant, a $10,000 design grant and a $15,000 financial consultant grant for Judy Davison
to support their rehabilitation of properties located at 1132 -1136 Locust Street.
BACKGROUND
The Downtown Rehabilitation Loan Program encourages private investment and
rehabilitation efforts in the City's Greater Downtown Urban Renewal District. The
program, capitalized with funds available through the City's tax increment financing
district, provides for a maximum of $300,000 in attractive low- interest loan monies. The
program is unique in that grants of up to $10,000 are available to offset necessary
predevelopment design costs, $10,000 for facade improvements and $15,000 for hiring
a financial consultant to analyze the financial feasibility of a project. The program also
includes a forgivable loan element whereby qualifying applicants may have up to the full
amount of the loan forgiven as an incentive for the creation of new employment and
housing opportunities in the district.
DISCUSSION
This project is a renovation of three row houses that are currently uninhabitable due to a
fire and years of neglect. The current configuration of 4 apartments will be totally
renovated into 3 upscale apartments. The fa9ade will be restored based on the original
photographs of the building and the back portion will have old porches removed and /or
redesigned into covered balconies or new enclosed porches as determined form
architectural drawings. A possible relocation of a retaining wall at the rear will provide
additional parking space for tenants and improved trash collection area from the alley.
A summer 2011 completion for rental is anticipated.
The project construction is estimated at $400,000. Ms. Davison has requested loan
assistance for the maximum of $300,000, plus Facade, Design, and Financial
Consultant Grants.
At this time, insufficient loan funds are available in the Downtown Rehabilitation Loan
Program to fund the loan. The owners have agreed to wait until the funds are available
in FY2026. As of July 1, 2025, the loan funds should be available to the project and the
company would like to proceed with the loan. Recapitalizations for this program have
been included into the City's Capital Improvements Program. Should the
recapitalization schedule be altered, the timing for the availability of loan funds may
change.
The funding for the grant portions of the award is estimated to be available in FY 2013.
Additional information on the terms and conditions of the proposed Downtown
Rehabilitation Loan /Grant is attached in the commitment letter. If the loan is approved
by the City Council, this commitment letter would be executed by the Mayor and by the
owners.
RECOMMENDATION
Staff has reviewed the application and found it to be in keeping with the requirements of
the Downtown Rehabilitation Loan /Grant Program. The project will begin when other
funding sources have been secured.
I recommend that the City Council adopt the attached Resolution approving a letter of
commitment Judy Davison at 1132 -1136 Locust Street for the $300,000 Downtown
Rehabilitation loan, $10,000 fagade grant, $10,000 design grant and $15,000 financial
consultant grant.
ACTION STEP
The action step for the City Council is to adopt the attached Resolution.
F: \USERS \Econ Dev \1132 Locust Judy Davison\20110214 1132 Locust DRLP & Grant App Memo.doc
Created by ADJ
Base data provided by Dubuque County GIS
1132 -1136 Locust Street
1 inch = 100 feet
Page 1 of 1
http: //beacon. schneidercorp. com/ PhotoEngine/Photo.aspx ?appid =93 &keyvalue= 1024454004 &index =0 &... 2/16/2011
RESOLUTION NO. 53 -11
A RESOLUTION AUTHORIZING A LETTER OF COMMITMENT AND
ADDITIONAL ACTIONS CONCERNING A DOWNTOWN REHABILITATION
LOAN, FACADE GRANT, DESIGN GRANT AND FINANCIAL CONSULTANT
GRANT TO JUDY DAVISON.
Whereas, the City of Dubuque, Iowa, has created a Downtown Rehabilitation
Loan /Grant Program for the purpose of stimulating reinvestment in the Greater
Downtown Urban Renewal District; and
Whereas, the City of Dubuque, Iowa is encouraging the use of this loan /grant
program to finance code compliance activities and to spur job creation activities; and
Whereas, the loan application from Judy Davison meets the requirements of this
program; and ,
Whereas, a Commitment Letter, hereto attached and by this reference made a
part hereof, sets forth the terms and conditions of Judy Davison's participation in the
Downtown Rehabilitation Loan Program.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the application of Judy Davison for participation in the
Downtown Rehabilitation Loan and Grant Program is hereby accepted and approved.
Section 2. That the Mayor is hereby authorized to execute, on behalf of the
City Council of the City of Dubuque, Iowa, the attached Commitment Letter and to
forward said letter to Judy Davison for review and approval.
Section 3. That the City Manager be and he is hereby directed to prepare,
upon execution and receipt of the attached Commitment Letter by the applicant, the
necessary loan documents in accordance with the terms and conditions set forth in said
Commitment Letter.
Section 4. That the City Manager is hereby authorized to execute, on behalf of
the City Council of the City of Dubuque, Iowa, all necessary loan documents and is
further authorized to disburse loan funds from the Downtown Rehabilitation Loan /Grant
Program, in accordance with the terms and conditions of the executed agreement.
Passed, approved and adopted this 22 day of February, 2011.
Att- .t:
"(..40(26-
Jeanne F. Schneider, City Clerk
F: \USERS \Econ Dev \1132 Locust Judy Davison\20110222 1132 Locust DRLP Resolution.docm
Roy D. Buol, Mayor
Economic Development Department
City Hall - Second Floor
50 West 13th Street
Dubuque, Iowa 52001 -4864
(563) 589 -4393 office
(563) 589 -1733 fax
(563) 690 -6678 TDD
Judy C. Davison
1722 Chestnut Street #22
Bowling Green, KY 42101
RE: Letter of Commitment/Downtown Rehabilitation Loan Program
Judy Davison, 1132 -1136 Locust Street
Dear Ms. Davison:
I am pleased to inform you that your application for financial assistance for the
renovation of the property located at 1132 -1136 Locust Street has been accepted and
approved by the Dubuque City Council.
The following offer is made:
Source of Funds: Downtown Rehabilitation Loan Program
Amount of Commitment: $300,000
Interest Rate:
Term of Loan:
Est. Funding Date:
Payment Schedule:
Form of Security:
Three percent (3 %) per annum
Twenty (20) years
July 1, 2025
Monthly interest only payments shall be required for the first
sixty (60) months of the loan. Monthly principal and interest
payments, amortized over an additional fifteen (15) year
period, shall begin the sixty -first month of the loan.
You may prepay this loan in whole or in part at any time
without penalty.
The loan shall be secured by a second mortgage on the
Service People Integrity Responsibility
THE CITY OF
DUB
February 22, 2011
Innovation Teamwork
Purpose of the Loan: Renovation of the exterior facade and interior for use as
apartments.
Conditions of this Commitment:
property.
(a) An "after rehab" appraisal must be submitted to the Economic Development
Department prior to the scheduled loan closing. The cost of said appraisal shall be
incurred by the property owner.
(b) A title opinion must be completed at the expense of the property owner. A copy of
said document must be provided at the loan closing.
(c) A loan agreement must be signed no later than June 30, 2026.
(d) The project is to be completed in accordance with the regulations set forth for the City
of Dubuque's Downtown Rehabilitation Loan Program.
Additional Commitments:
(a) A grant not to exceed ten thousand dollars ($10,000) will be available to offset
documented construction costs for facade improvements. A determination must be
made by the City that the project is substantially complete and satisfies the conditions
of the loan prior to the release of any grant monies. Funding is estimated to be
available in FY2013.
(b) A grant not to exceed ten thousand dollars ($10,000) will be available to offset
documented predevelopment costs, architectural and engineering fees and other
miscellaneous soft costs. A determination must be made by the City that the project is
substantially complete and satisfies the conditions of the loan prior to the release of
any grant monies. Funding is estimated to be available in FY2013.
(c) A grant not to exceed fifteen thousand dollars ($15,000) will be available to offset
documented costs associated with hiring a financial consultant to analyze the financial
feasibility of the project. A determination must be made by the City that the project is
substantially complete and satisfies the conditions of the loan prior to the release of
any grant monies. Funding is estimated to be available in FY2013.
(d) Two thousand dollars ($2,000) may be forgiven for each new full -time job or full -time
equivalent created and maintained by the applicant or his /her tenant. "New" shall
mean new to the district.
To qualify, the applicant must document the following:
• The job is a full -time position or a full -time equivalent;
2
(e) Two thousand dollars ($2,000) may be forgiven for each new housing unit
created. A new housing unit shall be defined as one of the following:
This commitment is valid for twenty -one (21) days from the date of this letter. If you
wish to accept the offer, you must return the acknowledgment. Failure to return written
acknowledgment will be cause for the commitment to lapse. This commitment offer
shall lapse if construction on the proposed project does not start within ninety (90) days
of the loan closing.
If the terms offered do not meet your approval, or if you have any questions regarding
the conditions of this commitment, please contact David Heiar, Economic Development
Department, at 589 -4393.
Sincere y,
Roy D'. Buol
Mayor
• The position was created within two years of the approval of this loan;
• The position has been maintained for a period of not less than three (3)
years after the creation timeframe;
• It is a paid position; and
• The position is created by a business or other entity located in the building
rehabbed or improved with loan funds.
• The creation of a housing unit where one did not previously exist; or
• An existing housing unit which has been unlicensed and unoccupied for a
period of not less than five years.
3
We have reviewed the above offer and accept the $300,000 Downtown Rehabilitation
Loan, the $10,000 facade grant, the $10,000 design grant, and the $15,000 financial
consultant grant and all of the terms of this commitment letter.
ACKNOWLEDGMENT
Judy C. Da\fison Date
F: \USERS \Econ Dev \1132 Locust Judy Davison\20110222 1132 Locust DRLP approval Ietter.doc
4
City of Dubuque, Iowa
Downtown Rehabilitation Loan Program,
Planning and Design Grant Program
Facade Grant Program, and
Financial Consultant Grant Program
APPLICATION
Applications for funding through the City of Dubuque's Downtown Rehabilitation Loan Program, Planning and Design
Grant Program, Facade Grant Program, and Financial Consultant Grant Program will be accepted by the Economic
Development Department, 50 West 13 Street, Dubuque, Iowa (563) 589 -4393.
Applications will be reviewed by the Department on a case by case basis with qualifying projects being submitted to the
City Council for final review and approval.
Date of Application November 24, 2010
APPLICANT INFORMATION
Owner Name: Judy C. Davison
Applicant Name: Judy C. Davison
Address of Project: 1132 Locust Street, Dubuque, Iowa
Mailing Address: 1317 Scottsville Road, Apt. 111, Bowling Green, Ky 42104
i
SS# or Federal Tax ID #: 492 -52 -2798
Telephone: 270 - 782 -7200 (home) 270 - 799 -4284 (cell)
Fax: 270 - 745 -6322
E -mail: judy.davisonawku.edu
Which assistance programs is this project seeking?
X Downtown Rehab Loan Program
X Planning and Design Grant Program
X Facade Grant Program
X Financial Consultant Grant Program
Description of Project:
This is a row house that is currently uninhabitable due to a fire and years of neglect. The current configuration
of 4 apartments will be totally renovated into 3 upscale apartments. The facade will be restored based on
original photographs of the building and the back portion will have old porches removed and /or redesigned into
covered balcony's or new enclosed porches as determined from architectural drawings. A possible relocation
1
of a retaining wall at the rear will provide additional parking space for tenants and improved trash collection
area from the alley. A summer 2011 completion for rental is anticipated.
How will the project further the revitalization of downtown?
This is one of two final properties in the revitalization area to be renovated. All surrounding properties have
been completed. These are not only an eve sore to the community and a negative impact on property values
but also in such disrepair to be an attraction to vagrants and /or criminal activities.
Number of current housing units on property? 4 but non inhabitable
Number of new housing units created from project? 3 upscale
Number of jobs currently in building? None
Number of jobs created after project completed? None — iust as associated with renovation process
Is proof of building ownership attached? Yes X No
If the owner is a for - profit or non - profit organization, is a Resolution
adopted by the Board of Directors which authorizes both the Yes No X
project and the application attached with the Minutes of the Meeting (not applicable)
when it was adopted?
2
Downtown Rehab Loan Program
Amount of financing requested: $150,000
Total cost of project seeing assistance: $150,000
Proposed security or collateral for the financing: 1132 Locust Property
What is the construction schedule for the project: Interior demolition completed by Jan 1, 2011.
Facade and interior complete by June 15, 2011.
Is a Historical Income Statement for the property (for 2 years)
attached
Is a cash flow projection indicating the ability to repay the
loan attached?
*Loan Funds will be dispensed on a requisition basis as project costs are incurred for completed work. Written requests
for payment must be submitted to the Economic Development Department.
Planning and Design Grant
What are the estimated costs for planning and design? 12 %x$150,000= $18,000.
How much assistance is the project requesting? $9,000.
Will invoices be made available to confirm expenditures? Yes X No
*Planning and Design Grant Funds will be dispensed on completion of work, documentation of costs and an inspection of
th completed project at a rate of $.50 for each $1.00 of costs incurred. Partial payments may be made for completed work.
Written requests for payment must be submitted to the Economic Development Department.
Facade Grant
What are the estimated costs for facade improvements? $20,000.
How much assistance is the project requesting? $10,000.
What is the construction schedule for facade improvements? Completed by mid May, 2011
(dependant on weather)
Will invoices be made available to confirm expenditures?
*Facade Grant Funds will be dispensed on completion of work, documentation of costs and an inspection of the
completed project at a rate of $.50 for each $1.00 of costs incurred. Partial payments may be made for completed work.
Written requests for payment must be submitted to the Economic Development Department.
Financial Consultant Grant
3
Yes No X
YesX No
YesX No
What are the estimated costs for financial consultant services? $250 /hr x 15 hrs= $3,750.00
How much assistance is the project requesting? $1875.00
*Financial Consultant Grant Funds will be dispensed on completion of work, documentation of costs and an inspection of
the completed project at a rate of $.50 for each $1.00 of costs incurred. Financial Consultant Grant Funds will be
dispensed after the project has been completed. Written requests for payment must be submitted to the Economic
Development Department.
4
Attachment
Project Description
I have recently purchased this 3 story row house at1132 Locust St that was previously converted into
4 apartments. It has been allowed to go into disrepair to the point of being unsafe for residents. The
ground floor has been destroyed by a fire further endangering tenants. The building is now vacant.
This house is a companion to the old Senator Allison house next door (1134 Locust) in the Jackson
Park Historic District. I am seeking assistance in restoring the entire exterior as close as possible to
its original beauty. The interior will be reconfigured into 3 upscale apartments with an effort to retain
as much character as possible by incorporating original fireplaces, woodwork, and brick walls into the
architectural design. New individual unit mechanical systems will result in safe upscale apartments to
address a shortage of quality housing in Dubuque downtown district.
The house's rear exterior currently has unsightly enclosed porches. These will be removed and
replace d with attractive outdoor spaces that are compatible with the original 19 century architecture.
New parking spaces will be incorporated into the property design by, most likely, relocating a
retaining wall off the alleyway. This would improve appearance and services to tenants as well as city
access. A large tree that encroaches on major electrical transformer behind the house will be
removed.
Cash Flow & Personal Income
The units have been either vacant or had problem tenants for the past year so has had a negative
cash flow. When complete, I anticipate a $1200. Positive cash flow per month discounting
maintenance and insurance. Tenants will be responsible for individual heating units.
Annual personal base income is $68,000. but is usually closer to $78,000. depending on amount of
summer and winter term teaching I choose to do.
5