Westbrook Subd. Devel. Agreement
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MEMORANDUM
June 14, 2004
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TO:
The Honorable Mayor and City Council Members
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FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Development Agreement for Westbrook Subdivision
Housing and Community Development Department Director David Harris recommends
City Council approval of a revised Agreement with Callahan Construction, Inc. for
development of affordable single-family housing in the Westbrook Subdivision. The
revision will eliminate the stipulation requiring the developer to designate the
"affordable" lots on the final plat. This will allow the developer to retain flexibility in
designating the affordable and non-affordable lots in the development, while still
adhering to the overall requirement of 80% of the lots meeting the bulk standards for
affordability.
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
David Harris, Housing and Community Development Department Director
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MEMORANDUM
1 June 04
To: Mike '\.a~\Milligen, City Manager
From: Dav~arriS, Housing and Community Development Department
Re: Development Agreement for Westbrook Subdivision
Introduction
The purpose of this memorandum is to request the City Council's approval of the
attached revised Agreement with Callahan Construction Inc., for development of
affordable single-family housing in the Westbrook Subdivision.
Background
The report of the Affordable Housing Task Force for owner-occupied affordable housing
was first released to the Council in December 2001 and presented in two worksessions.
An up-date to this report was submitted to the Council in June 03. In that up-date, it
was noted that a "development agreement" would be signed with the subdivision
developer, specifying the requirements for participation and requiring repayment of any
City subsidies in the event of non-performance.
Staff from the Housing, Planning, Engineering and Water Departments met with several
developers and held a series of inter -departmental meetings. A development
agreement was drafted by the Legal Department and utilized for the first affordable
development - Fondell Excavating's Eagle Valley Subdivision, approved by Council in
December, 2003.
Subsequently, Callahan Construction Inc., developer of the Westbrook Subdivision on
Seippel Road, applied to the City for a number of incentives to assist in development of
affordable housing. An Agreement was drafted specifying the conditions and terms for
the developer's performance. It was approved by Council at its 5 April meeting.
Discussion
After the April Council meeting, we received notification from Mr. Callahan's attorney
that certain provisions of the agreement were objectionable. In particular, it was
requested that the stipulation requiring the developer to designate the "affordable" lots
on the final plat be eliminated. This request was made in the interest of retaining
flexibility in designating the affordable and non-affordable lots in the development, while
still adhering to the overall requirement of 80% of the lots meeting the bulk standards for
affordability.
A revised agreement reflecting these changes was written by City Attorney O'Brien in
response. This has been approved by Mr. Callahan and his attorney. The document is
now ready for Council review and action.
Action Step
The action requested of the City Council is to approve the attached revised Agreement
between the City and Callahan Construction Inc., for the Westbrook Subdivision.
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Prepared by: Barry A. Lindahl, Corporation Counsel, 300 Main St, Dubuque, IA 52001 (563)
583-4113
AGREEMENT BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
CALLAHAN CONSTRUCTION, INC.
This Agreement is made and entered into by and between the City of Dubuque, Iowa
(City) and Callahan Construction, Inc. (Developer), this 2.</"ri-. day of J ()(\ e 2004.
WHEREAS, Developer is the owner of the following described real property in the City of
Dubuque, Iowa:
Lots 1 through 48, inclusive, of Block 1 and Lot A, of Westbrook Subdivision,
Dubuque County, Iowa;
(the Subdivision); and
WHEREAS, Developer is interested in the sale of lots and/or the construction and sale of
homes/units in the Subdivision for owner-occupied affordable housing; and
WHEREAS, City is willing to grant incentives to Developer for the sale of lots and/or the
construction and sale of homes/units for owner-occupied affordable housing upon the terms and
conditions set forth herein.
NOW, THEREFORE, IT IS AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS:
1. Eighty percent (80%) of the lots in the Subdivision described above shall be affordable
housing lots as defined herein and shall comply with the provisions as defined herein.
2. For purposes of this Agreement, an affordable housing lot shall mean a lot that meets the
following standards:
a. If it is a lot for a single family dwelling:
1. The lot upon which a dwelling is constructed may not exceed 6500 square feet in
area.
2. The street frontage of the lot may not be less than 50 feet and not more than 75
feet.
3. The constructed dwelling may not exceed 1200 square feet of finished space,
excluding basements, attics, and garages.
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4. The 2004 lot price may not exceed $26,500. For the sale of affordable
housing lots in 2005 and subsequent years, the maximum sales price for
each of the lots during each subsequent year shall be the amount
obtained by multiplying $26,500.00 by a fraction, the numerator of which is
the Consumer Price Index - Seasonally Adjusted U.S. City Average For All
Items For All Urban Consumers (1967 = 100) published monthly by the
Bureau of Labor Statistics of the United States Department of Labor ("CPI-
U"), for December of the year immediately preceding the year at issue,
and the denominator of which is the CPI-U for December of 2003.
b. If it is a lot for a duplex/two-family dwelling:
1. The lot upon which a duplex/two family dwelling is constructed may not
exceed a total of 7000 square feet.
2. The street frontage of the lot may not be less than 50 feet and not more
than 100 feet.
3. The constructed dwelling may not exceed 1200 square feet of finished
space per dwelling unit, excluding basements, attics and garages.
4. The 2004 duplex/two-family lot price may not exceed a total of $53,000
per lot. For the sale of an affordable housing duplex/two family lot in 2005
and subsequent years, the maximum sales price for each of the lots
during each subsequent year shall be the amount obtained by multiplying
$53,000.00 by a fraction, the numerator of which is the Consumer Price
Index - Seasonally Adjusted U.S. City Average For All Items For All Urban
Consumers (1967 = 100) published monthly by the Bureau of Labor
Statistics of the United States Department of Labor ("CPI-U"), for
December of the year immediately preceding the year at issue, and the
denominator of which is the CPI-U for December of 2003.
c. If it is a lot for a multi-family dwelling.
1. The lot upon which a multi/three or more family dwelling is constructed
may not exceed 6,500 square feet per dwelling unit.
2. The street frontage of the lot may not be less than 50 feet and not more
than 180 feet.
3. The constructed dwelling may not exceed 1200 square feet of finished
space per dwelling unit, excluding basements, attics and garages.
4. The 2004 multi-family dwelling lot price shall not exceed $26,500 x the
number of units the lot is platted for. For the sale of an affordable housing
multi-family lot in 2005 and subsequent years, the maximum sales price
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for each of the lots during each subsequent year shall be the amount
obtained by multiplying the price calculated as identified herein for 2004
by a fraction, the numerator of which is the Consumer Price Index -
Seasonally Adjusted U.S. City Average For All Items For All Urban
Consumers (1967 = 100) published monthly by the Bureau of Labor
Statistics of the United States Department of Labor ("CPI-U"), for
December of the year immediately preceding the year at issue, and the
denominator of which is the CPI-U for December of 2003.
3. If eighty percent (80%) of the lots in the Subdivision identified above are
designated as affordable housing lots, City shall provide to Developer the
following incentives:
a. The minimum width of public street pavement width shall be 27 feet and the
minimum right-of-way width shall be 42 feet. Parking shall be restricted to
one side of the street only.
b. Sanitary interceptor sewer connection fees will be waived on the R-2 portion
of the subdivision.
c. The lot frontage minimum for a single-family dwelling shall be 50 feet and the
maximum lot width for a single-family dwelling shall be 75 feet.
d. Sanitary sewer mains shall be constructed using 8" PVC SDR26 pipe with 4"
PVC laterals, except for lots adjacent to City's future industrial park at the end
of the cul-de-sac or otherwise denoted on the approved plans and
specifications. This incentive shall be applicable only if the Developer
prohibits underground storage tanks within 300 feet of any R-2 lots.
e. Water mains shall be constructed using 8" PVC C900 DR14 pipe, except for
the east part of the Phase II cul-de-sac. This incentive shall be applicable
only if the Developer prohibits underground storage tanks within 300 feet of
any R-2 lots.
f. City will waive the $500 per acre sewer interceptor fee for the R-2 portion of
the development
g. City will waive the $1,000 rezoning fee and the $1,460 preliminary plat fee.
h. City will provide interest free loans for water hookup fees for the R-2 lots only,
to be repaid at the closing on the sale of each lot but to be paid in full in five
(5) years regardless of the lot sales.
i. City will provide an interest free $500 per acre loan for the sewer interceptor
fee in the CS portion to be repaid as lots are sold but to be paid in full in five
(5) years regardless of lot sales.
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j. City will provide an interest free loan for installation of the sewer main for
Phase I of R-2 section to be repaid as lots are sold but to be paid in full in five
(5) years regardless of lot sales.
k. City will provide an interest free loan for installation of the sewer collector
portion of the sanitary sewer through the R-2 section to the north property
line, to be repaid as lots are sold but to be paid in full in five (5) years
regardless of lot sales.
I. City will provide an interest free loan for the extension of two (2) sewer
collectors through the CS section to the R-2 section, to be repaid as lots are
sold but to be paid in full in five (5) years regardless of lot sales.
m. City will provide an interest free $75,000 loan for the installation of internal
water main and service lines for Phase I of the R-2 section, to be repaid as
lots are sold but to be paid in full in five (5) years regardless of lot sales.
n. City will accept dedication of a park area of approximately three (3) acres in a
location acceptable to City and install a pavilion and playground equipment
totaling approximately $150,000 in cost, after the street to the park is
completed and not sooner than six (6) years.
4. Developer agrees that no more than twenty percent (20%) of the lots in the
Subdivision shall be sold for more than the maximum sales price for an
affordable housing lot as defined herein. This paragraph shall not apply to the
sale of any lot upon which a dwelling unit has been built at the time the lot is sold.
5. The Developer shall provide a copy of the purchase agreement and the
declaration of value for the sale by developer of each affordable housing lot in
the Subdivision to City's Building Services Department prior to the time of closing
on the sale. Developer shall include in the agreement for the purchase of each
affordable housing lot in the Subdivision, and in any deed conveying such
affordable housing lot, a provision that if the purchaser or any subsequent
purchaser of the lot does not construct a dwelling unit on the lot, then the
purchaser or any subsequent purchaser shall be bound by the maximum sales
price as determined by this Agreement and that in the event of a sale in excess
of the maximum sales price, the seller shall pay to City, upon City's demand, the
difference between the actual sales price and the maximum sales price as
defined herein.
6. Developer agrees that eighty percent (80%) of the dwelling units in the
Subdivision shall not exceed 1200 square feet in interior finished space at the
time of transfer of title to the purchaser. Except for the other twenty percent
(20%) of the dwelling units in the Subdivision, for each dwelling unit constructed
on an affordable housing lot with an interior finished space in excess of 1200
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square feet at the time the unit is transferred to the purchaser, the party
constructing said unit shall pay to the City a surcharge of $25.00 per square foot
for each square foot in excess of said limit
Developer shall include in any agreement for the purchase of a lot or unit in the
Subdivision, and in any deed conveying an affordable housing lot or unit, a
provision that requires the party who constructs a dwelling unit with interior
finished space in excess of 1200 square feet, to pay to the City a surcharge of
$25.00 per square foot for each square foot in excess of said limit.
7. After a dwelling unit on an affordable housing lot has been transferred to a
purchaser, the purchaser shall not be bound by the 1200 square feet restriction
provided for in paragraphs 2 and 6 above and the purchaser may expand the
exterior structure or interior finished square feet of the unit without limit, except
as may be limited only by the size of the lot and other applicable laws. No
penalty shall be imposed, in accordance with paragraph 6, for any expansion of
the exterior structure or interior finished space occurring after transfer of title to
the purchaser.
8. The Developer agrees that for development of any CS lot, exterior storage shall
be prohibited on lots fronting Seippel Road. On all other lots, storage shall be
limited to raw or finished goods and equipment, and shall occur only on the rear
or side yards. Front yard storage is prohibited. All exterior storage shall be
screened to eliminate the visual impact of the items stored by obscuring them
from view outside the premises. Screening materials shall be similar in color to
the building, shall be 100% opaque, and shall be at least six (6) feet in height but
no more than fifteen (15) feet in height
9. In the event the Developer violates any requirement or condition of this
Agreement, the Developer shall repay to the City any and all assessments
waived under this Agreement, any connection fees waived under this Agreement
and a penalty equal to fifteen percent (15%) of the Developer's cost of street
construction in the Subdivision. In addition, any money loaned by City to
Developer shall bear an interest rate of five and one-half percent ( 5 1/2%) per
annum retroactive to the date the funds were borrowed.
10. The Developer agrees to file, prior to the sale of any lot in the Subdivision,
restrictive covenants applicable to the subdivision which include a restriction
prohibiting the rental or lease of any dwelling unit constructed on an affordable
housing lot, except as specifically allowed herein and a prohibition of
underground storage tanks within 300 feet of any R-2 lots, and outdoor storage
restrictions and screening requirements in accordance with paragraph 8 above.
11. It is contemplated and assumed by this Agreement that an affordable housing lot
or unit may be transferred by land contract and that an owner/occupant of an
affordable housing unit may be a contract buyer pursuant to such a land contract.
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12. A rental agreement with an option to purchase shall be permissible and an
owner/occupant of an affordable housing unit may be a tenant/buyer pursuant to
a rental agreement with an option to purchase, provided that the term of rental
shall not exceed a term of two (2) years. The lease purchase agreement must
be approved by the City of Dubuque Housing Department.
13. The provisions of this Agreement are binding upon the parties, purchaser,
successors, heirs and assigns of each lot and unit only until such time as the
property is transferred to the first owner/occupant. Thereafter, so as to allow the
homes to grow with the needs and financial abilities of the owner/occupant, the
restrictions identified herein no longer apply.
14. This Agreement shall terminate twenty (20) years from the date if its execution.
15. Upon execution of this Agreement, the City shall promptly record this Agreement
with the Dubuque County Recorder.
CITY OF DUBUQUE, IOWA
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DUBUQUE COUNTY )
On this,3,4,tf day ~LÁ/ , 2004, before me, the undersigned, a
Notary Public in and for sai County and State, personally appeared TERRANCE M.
DUGGAN and JEANNE F. SCHNEIDER, to me personally known, who being by me
duly sworn, did say that they are the Mayor and City Clerk, respectively, of the City of
Dubuque, Iowa, a municipal corporation; that the seal affixed to the foregoing
instrument is the corporate seal of the corporation; that said instrument was signed and
sealed on behalf of the corporation by authority of its City Council, as c9ntaiAse! in
R9soll.ltion No. - !'laEsae! BY the City Ceuneil on tho - e!ay sf ,
=, and that TERRANCE M. DUGGAN and JEANNE F. SCHNEIDER acknowledged
the execution of the foregoing instrument to be their voluntary act and deed and the
STATE OF IOWA
ss:
voluntary act and deed of the corporation, by it and by them voluntarily executed.
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CALLAHAN CONSTRUCTION, INC.
Attes~:. 6~~ J4ffr~
STATE OF IOWA
DUBUQUE COUNTY
SSe
On this ;(( day of JvA/£ , 2004, before me, the undersigned, a
Notary Public in and for said State, personally appeared Joel Callahan, to me personally
known, who being by me duly sworn, did say that he is the President of said
corporation; that [no seal has been procured by the said corporation]; that said
instrument was signed [and sealed] on behalf of said corporation by authority of its
Board of Directors; and that the said Joel Callahan, as such officer, acknowledged the
execution of said instrument to be the voluntary act and deed of said corporation, by it
and by him voluntarily executed.
.rZ:-, ROBERTW~:;.i:~")lJ IWH
'..§ì!~ CommiSSion N.urnbO'J:;;;1
'0", My Comm. ~ :J:-l .
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Notary Public in and for said stãïe
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