Heartland - Walsh St Bldg Loan
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MEMORANDUM
May 10, 2004
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The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Downtown Rehabilitation Loan for Heartland Financial USA, Inc. -- Former
Walsh Store Building
On January 7,2002, the City Council approved a Memorandum of Understanding with
Heartland Financial to provide certain financial assistance to the rehabilitation of the
former Walsh Store Building, including a $300,000 downtown Rehabilitation Loan. The
project has committed to creating at least 47 new jobs. At the time of the Memorandum
of Understanding, insufficient loan funds were available in the Downtown Rehabilitation
Loan Program to fully fund the loan. Heartland Financial agreed to wait until the funds
were available in Fiscal Year 2005. As of July 1, 2004, the loan funds will be available
to the project and the company would like to proceed with the loan.
Economic Development Director Bill Baum recommends City Council approval of a
Downtown Rehabilitation Loan of $300,000 for Heartland Financial USA, Inc. to support
their rehabilitation of the former Walsh Store Building in the 1300 block of Central
Avenue.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
William Baum, Economic Development Director
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CITY OF DUBUQUE, IOWA
MEMORANDUM
April 23, 2004
TO:
FROM:
Michael Van Milligen, City Manager
William Baum, Economic Development Director ~
Downtown Rehabilitation Loan for Heartland Financial USA, Inc. --
Former Walsh Store Building
SUBJECT:
INTRODUCTION
This memorandum presents for City Council consideration a Resolution approving a
Downtown Rehabilitation Loan of $300,000 for Heartland Financial USA, Inc. to support
their rehabilitation of the former Walsh Store Building in the 1300 block of Central
Avenue.
BACKGROUND
On January 7, 2002, the City Council approved a Memorandum of Understanding with
Heartland Financial to provide certain financial assistance to the rehabilitation project,
including the $300,000 Downtown Rehabilitation Loan. The project has committed to
creating at least 47 new jobs.
The Downtown Rehabilitation Loan Program encourages private investment and
rehabilitation efforts in the City's Greater Downtown Urban Renewal District's Old Main,
Town Clock Plaza and Upper Main Subareas. 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 costs. 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
At the time of the Memorandum of Understanding, insufficient loan funds were available
in the Downtown Rehabilitation Loan Program to fully fund the loan. Heartland
Financial agreed to wait until the funds were available in FY'05. As of July 1, 2004, the
loan funds will be available to the project and the company would like to proceed with
the loan.
Additional information on the terms and conditions of the proposed Downtown
Rehabilitation Loan is attached in the commitment letter. If the loan is approved by the
City Council, this commitment letter would be executed by both the Mayor and by
Heartland Financial.
RECOMMENDATION
Staff has reviewed the application and found it to be in keeping with the requirements of
the Downtown Rehabilitation Loan Program. The project is substantially complete and
clearly meets the intent of the loan program.
I recommend that the City Council adopt the attached Resolution approving Heartland
Financial USA, Inc.'s request for the $300,000 loan. The Resolution directs the City
Manager to prepare and execute the final documents as per the terms and conditions of
the attached commitment letter and to disburse loan funds.
ACTION STEP
The action step for the City Council is to adopt the attached Resolution.
attachments
F : IUS E R S IPm)h reI W P Does IL CANDee IH ea rtla n d Finan cia lId rip. me m . doc
RESOLUTION NO. 209-04
A RESOLUTION AUTHORIZING A LETTER OF COMMITMENT AND
ADDITIONAL ACTIONS CONCERNING A DOWNTOWN REHABILITATION
LOAN TO HEARTLAND FINANCIAL USA, INC.
Whereas, the City of Dubuque, Iowa, has created a Downtown Rehabilitation
Loan 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 program
to finance code compliance activities and to spur job creation activities; and
Whereas, the loan application from Heartland Financial USA, Inc. 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 Heartland Financial USA, Inc.'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 Heartland Financial USA, Inc. for
participation in the Downtown Rehabilitation Loan 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 Heartland Financial USA, Inc. 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
Program, in accordance with the terms and conditions of the executed agreement.
Passed, approved and adopted this 17th day of May, 2004.
Terrance M. Duggan, Mayor
Attest
Jeanne F. Schneider, City Clerk
Office of the Mayor
and Oty Council
OtyHall
50 West 13th Street
Dubuque, Iowa 52001-4864
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May 3, 2004
Lynn B. Fuller
Heartland Financial USA, Inc.
1398 Central Avenue
Dubuque, Iowa 52001
RE:
Letter of Commitment/Downtown Rehabilitation Loan Program
Former Walsh Store Building, 1300 Block of Central Avenue
Dear Mr. Fuller:
I am please to inform you that your application for financial assistance for the historic
renovation of the former Walsh Store Building 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:
Three percent (3%) per annum
Term of Loan:
Twenty (20) years
Payment Schedule:
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.
Form of Security:
The loan shall be secured by a letter of credit.
Purpose of the Loan:
Historic renovation of the exterior facade and historically significant
elements of the interior with remodeling of the remainder of the interior
for use as commercial office space.
Service
People
Integrity
Responsibility
Iunovation
Teamwork
Conditions of this Commitment:
(a) An "after rehab" appraisal must be submitted to the Eeonomic Development
Department prior to the scheduled loan closing. The cost of said appraisal shall
be incurred by the property owner.
(b)
(c)
(d)
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.
A loan agreement must be signed no later than June 30, 2004.
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 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.
(b)
A rebate equal to two thousand dollars ($2,000) may be forgiven for each new
full-time job or full-time equivalent created within two years of the execution of
the loan documents and maintained by the applicant or his/her tenant for a
period of not less than three years. The amount of the loan to be forgiven shall
be determined by the City on the fifth anniversary of the loan based on
documented evidence of job creation.
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 Pamela Myhre, Economic
Development Department, at 589-4393.
Sincerely,
Terrance M. Duggan
Mayor
ACKNOWLEDGMENT
We have reviewed the above offer and accept the $300,000 Downtown Rehabilitation
Loan and all of the terms of this commitment letter.
Heartland Financial USA, Inc.
Lynn B. Fuller
Chairman of the Board
Date
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