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Paragon Square Urban Revitalization Plan_Hearing InformationPUBLIC HEARING Paragon Square Urban Revitalization Area Plan The Dubuque City Council will hold a pub- lic hearing on Monday June 6, 2011 at 6:30 p.m. in the City Council Chambers, 2nd Floor, Historic Federal Build- ing. 350 West 6th Street, Dubuque, Iowa 52001 to obtain com- ments from citizens relative to the pro- posed Paragon Square Urban Revitalization Area Plan. The Plan will establish the Paragon Square Ur- ban Revitalization Area for the purpose of cre- ating multi - family mar- ket rate housing at 2887 and 2901 Central Avenue (former Holy Ghost Convent and Assisi School). Im- provements to quali- fied property within the designated area may receive a total or partial exemption from property taxes for a specified number of years. The Paragon Square Urban Revitalization Area Plan is available for public inspection in the Office of the City Clerk at City Hall, 50 West 13th Street, Du- buque, Iowa and on the City of Dubuque website www.cityofdu- buque.org. Comments regarding the proposed Plan may be submitted on or be- fore the time of the public hearing to the City Clerk, 50 West 13th Street, Dubuque, Iowa 563 -589 -4110 or ci tyclerksoffice @cityofd ubuque.org. Published this 22 day of April 2011. It 4/22 STATE OF IOWA {SS: DUBUQUE COUNTY CERTIFICATION OF PUBLICATION I, Suzanne Pike, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher of the Telegraph Herald,a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper on the following dates: April 22, 2011, and for which the charge is $16.35. c__-?1-.4) P6 Subscribed to before me, a Notar Public in and for Dubuque County, Iowa, this 0 of ______� , 20 . otary Public in and for Dubuque County, Iowa. MARY K. WESTERMEI Commission Number 154 /4/1/i/k PUBLIC HEARING Paragon Square Urban Revitalization Area Plan The Dubuque City Council will hold a pub- lic hearing on Monday June 6, 2011 at 6:30 p.m. in the City Council Chambers, 2nd Floor, Historic Federal Build- ing, 350 West 6th Street, Dubuque, Iowa 52001 to obtain com- ments from citizens relative to the pro- posed Paragon Square Urban Revitalization Area Plan. The Plan will establish the Paragon Square Ur- ban Revitalization Area for the purpose of cre- ating multi -family mar- ket rate housing at 2887 and 2901 Central Avenue (former Holy Ghost Convent and Assisi School). Im- provements to quali- fied property within the designated area may receive a total or partial exemption from property taxes for a specified number of years. The Paragon Square Urban Revitalization Area Plan is available for public inspection in the Office of the City Clerk at City Hall, 50 West 13th Street, Du- buque, Iowa and on the City of Dubuque website www.cityofdu- buque.org. Comments regarding the proposed Plan may be submitted on or be- fore the time of the public hearing to the City Clerk, 50, West 13th Street, Dubuque, Iowa 563-589-4110 or ci tycl erksoffice@cityofd ubuque.org. Published this 22 day of April 2011. It 4/22 STATE OF IOWA {SS: DUBUQUE COUNTY CERTIFICATION OF PUBLICATION I, Suzanne Pike, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher of the Telegraph Herald,a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper on the following dates: April 22, 2011, and for which the charge is $16.35. Subscribed to before me, a Notar Public in and for Dubuque County, Iowa, this 64:72-71-4141ay of , 20// otary Public in and for Dubuque County, Iowa. MARY K. WESTERME'i Commission Numbor 154 F Planning Services Department City Hall 50 West 13th Street Dubuque, IA 52001 -4864 (563) 589 -4210 phone (563) 589-4221 fax (563) 690 -6678 TDD planning@cityofdubuque.org The Honorable Mayor and City Council City of Dubuque 50 W.13 Street Dubuque, IA 52001 RE: Paragon Square Urban Revitalization Area Plan Dear Mayor and City Council Members: Introduction On April 20, 2011, the Long Range Planning Advisory Commission reviewed the proposed Paragon Square Urban Revitalization Area Plan. The proposal, staff reports, and related materials are enclosed. Discussion At the Commission meeting, Aggie Tauke, Community Development Specialist, reviewed the plan and noted that it will provide incentives for the rehabilitation of the former Holy Ghost Convent and the former Holy Ghost Assisi School. She explained both buildings are currently vacant and will be rehabilitated into market -rate residential units. The Commission reviewed the historical significance of the buildings and the use of historic preservation tax credits and property tax abatement. The Commission noted establishment of the urban revitalization area and rehabilitation of the Holy Ghost buildings are great examples of the investment that will benefit the Central Avenue corridor. Recommendation By a vote of 7 to 0, the Long Range Planning Advisory Commission recommends approval of the proposed Paragon Square Urban Revitalization Area Plan as it is consistent with the 2008 Dubuque Comprehensive Plan. Respectfully submitted, Jim Prochaska, Chairperson Long Range Planning Advisory Commission Enclosures Masterpiece on the Mississippi cc: Michael Van Milligen, City Manager David Harris, Housing & Community Development Director Service People Integrity Responsibility Innovation Teamwork Dubuque Ai- Amato Wb 11 2007 April 22, 2011 THE CITY OF Dui Masterpiece on the Mississippi TO: Long Range Planning Advisory Commission FROM: David Johnson, Assistant Planner )ro °°- SUBJECT: Paragon Square Urban Revitalization Area Plan DATE: April 12, 2011 Dubuque bitd Alt America city 2007 Introduction The purpose of this memorandum is to forward the enclosed Paragon Square Urban Revitalization Area Plan for review and comment by the Long Range Planning Advisory Commission. The plan will create an urban revitalization area at the former Holy Ghost Assisi School & Convent at 2887 and 2901 Central Avenue to allow property tax exemption for market rate residential housing. The Plan is enclosed. Discussion The plan provides for the rehabilitation of two former Holy Ghost parish buildings into multi- family residential housing by Paragon Square, LLC and Paragon Square II LLC. 2887 Central contains the former Holy Ghost convent building, a three story masonry building which is currently vacant. The building will be rehabilitated into nine market rate residential units with 11 off - street parking spaces. 2901 Central contains the former Holy Ghost Assisi School building, a four -story masonry building, which is currently vacant. The building will be converted to eighteen market rate residential units with 23 off - street parking spaces. Urban revitalization tax exemptions are used to stimulate private investment by abating tax increases that usually accompany property improvements. The additional private investment provides a long -term increase or stabilization in the area's tax base, enhances the viability of revitalization areas and /or supports important city objectives such as economic development and affordable housing. One of the roles of the Long Range Planning Advisory Commission is to review urban revitalization plans and urban revitalization plan amendments for consistency with the comprehensive plan for the city. Planning Services Staff has reviewed the Paragon Square Urban Revitalization Area Plan and finds the objectives are consistent with the 2008 Dubuque Comprehensive Plan, with greatest relevance to the Land Use and Urban Design, Economic Development, and Housing Elements. Paragon Square Urban Revitalization Area Plan Page 2 Recommendation Staff recommends the Long Range Planning Advisory Commission recommend approval of the Paragon Square Urban Revitalization Area Plan, as the proposed plan is consistent with the 2008 Dubuque Comprehensive Plan. Enclosures Masterpiece on the Mississippi TO: Long Range Planning Advisory Commission 1■r FROM: David ITarris, Housing and Community Development Department Dubuque All AmedcaCity [1 2007 SUBJECT: Review and Comment on Paragon Square Urban Revitalization Area Plan DATE: April 11, 2011 Introduction The Long Range Planning Advisory Commission is requested to review the attached Paragon Square Urban Revitalization Area Plan and to comment on its conformance with the general plan for the community. The plan will create an urban revitalization area at the former Holy Ghost Assisi School and convent and 2887 and 2901 Central Avenue to allow property tax exemption for market rate residential housing. Background Section 15 -2 -3 of the Code of Ordinances of the City of Dubuque requires review of an urban revitalization plan as to its consistency with the comprehensive plan for the City. The ordinance assigns this duty to the Long Range Planning Commission. The Commission does not approve or deny the urban revitalization plan but reviews the plan and submits written recommendations with respect to its conformance with the general plan. The City Council received the Paragon Square Urban Revitalization Area Plan at its April 18th meeting and set a public hearing for June 6th following a 30 day public review period. Discussion Urban Revitalization Chapter 404 of the Iowa Code (Urban Revitalization Act) authorizes cities to designate areas as urban revitalization areas. Improvements to qualified real estate within these designated areas may receive a total or partial exemption from property taxes for a specified number of years. The exemptions are intended to stimulate private investment by abating tax increases that usually accompany property improvements. This additional private investment provides a long -term increase or stabilization in the area's tax base, enhances the viability of revitalization areas and /or supports important city objectives such as historic preservation, economic development and affordable housing development In order to implement the provisions of Chapter 404, the City must prepare a revitalization plan for each designated area and hold at least one public hearing after proper notice. The law mandates specific criteria and procedures that must be followed. The plan provides for the rehabilitation of two former Holy Ghost parish buildings into multi- family residential housing by Paragon Square, LLC and Paragon Square 11 LLC. 2887 Central contains the former Holy Ghost convent building, a three story masonry building which is currently vacant. The building will be rehabilitated into nine market rate residential units with 11 off - street parking spaces. 2901 Central contains the former Holy Ghost Assisi School building, a four -story masonry building, which is currently vacant. The building will be converted to eighteen market rate residential units with 23 off - street parking spaces. The owners have applied to have both buildings listed on the National Register of Historic Places and will apply for state and federal Historic Tax Credits. The buildings will be renovated under the Secretary of Interior's standards for the renovation of historic properties. The former Holy Ghost Assisi School building at 2901 Central was rezoned in January to OR Office Residential. The Zoning Board of Adjustment approved a special exception on February 24, 2011 to allow the building to be converted to 18 residential units. The ZBA also approved a variance on December 16, 2010 to allow the former convent building at 2887 Central to be converted to ten residential units. The Paragon Square Urban Revitalization Area Plan supports several goals of the Comprehensive Plan: Housing • Promote recycling existing vacant or under - utilized structures, such as convents, schools, and industrial buildings, into housing with an affordable component, where appropriate. • Encourage a range of affordable, accessible, and decent rental housing options throughout the community. Economic Development • Encourage property improvements and revitalization throughout the city. • Promote the Residential Living element of the Downtown Master Plan. Land Use and Urban Design • Promote inclusive and economically integrated neighborhoods that allow a diverse mix of residents and housing types. • Promote providing a range of housing options throughout the community. • Support protection of historic neighborhoods from inappropriate development, inconsistent with existing historic development. • Encourage preservation of historic and aesthetic character and function of established neighborhoods. • Promote protection and preservation of the city's historic buildings, urban pattern, and natural environment. • Encourage redevelopment or adaptive reuse of vacant or underutilized buildings and sites. • Encourage reinvestment in our existing neighborhoods (i.e., smart growth). Recommendation Staff encourages the Long Range Planning Advisory Commission to support the efforts to revitalize, preserve and reuse these vacant historic buildings for market rate housing. The Paragon Square Urban Revitalization Area contains historic structures that are worthy of preservation. The plan seeks to preserve and renovate the area's existing buildings into functional residential housing units. Action Step The action step for the Long Range Planning Advisory Commission is to transmit its recommendations as to the conformity of the proposed Paragon Square Urban Revitalization Area Plan to the City Council prior to the June 6, 2011 public hearing. Prepared by Aggie Tauke, Community Development Specialist Attachments Cc: Michael Van Milligen, City Manager Laura Carstens, City Planner F: \USERS\ATAUKE \Urban Revite\Paragon Square UR\Paragon Square UR LRPC mem.2011.doc Paragon Square Urban Revitalization Plan April 2011 1.0 Introduction The following plan describes certain provisions of the Iowa Urban Revitalization Act and proposes the establishment of the Paragon Square Urban Revitalization area. The State of Iowa, under Iowa Code Chapter 404, allows cities to designate areas as urban revitalization districts. Under this Act, improvements to qualified areas may receive a total or partial exemption from property taxes for a specified number of years. The exemptions are intended to stimulate private investment by the reduction of tax increases related to property improvements. Once an area is deemed to meet the requirements established in Chapter 404, a plan must be established which identifies the district boundaries, property owners, existing conditions, proposed plans and the basic abatement provisions for the revitalization area. Iowa Code Chapter 404.1 lists five reasons for which a city or county may establish urban revitalization plans. These include: the existence of numerous buildings that are dilapidated or deteriorated; the need for preservation and restoration of buildings due to their historic significance; the area is appropriated as an economic development region as defined in Iowa Code 403.17; the need for public improvements related to housing; and the encouragement of housing and residential development. The Paragon Square Urban Revitalization Plan will be based upon the need for the encouragement of housing and residential development and the need for preservation and restoration of buildings due to their age, history, and architecture or significance. 2.0 The Area 2.1 Location The area included in the Paragon Square Urban Revitalization district is located at 2887 and 2901 Central Avenue in the City of Dubuque, Iowa, legally described as: Lot 1 of 1 and Lot 2 of 1 of Paragon Square, all in the City of Dubuque, Dubuque County, Iowa. A map of the area boundaries is attached as Exhibit A. Paragon Square Urban Revitalization Plan April2011 Page 2 2.2 Zoning The existing zoning is OR (Office Residential District). 2887 Central Avenue was rezoned in 1994 and 2901 Central was rezoned on January 18, 2011 by Ordinance No. 4 -11. The Zoning Board of Adjustment approved a variance on December 16, 2010 to allow the former convent building at 2887 Central to be converted to ten residential units with a deficit of 5 off - street parking spaces (Docket 62- 10) and on an 8,490 square foot lot where 12,000 square feet of lot areas was required (Docket 63 -10). The Zoning Board of Adjustment approved a special exception on February 24, 2011 to allow the former Holy Ghost Assisi School building at 2901 Central to be converted to 18 residential units on an 18,256 square foot lot where 21,600 square feet of lot area is required (Docket 10 -11) and with a deficit of 4 off - street parking spaces(Docket 11 -11) 2.3 Existing and Proposed Land Use The Paragon Square Urban Revitalization District is comprised of 2 existing structures on two lots. Total acreage is .614 acres (26,746 square feet). 2887 Central contains the former Holy Ghost convent building, a three story masonry building which is currently vacant. The building will be rehabilitated into nine market rate residential units with 11 off - street parking spaces. 2901 Central contains the former Holy Ghost Assisi School building, a four - story masonry building, which is currently vacant. The building will be converted from a school to eighteen market rate residential units with 23 off - street parking spaces. The owners have applied to have both buildings listed on the National Register of Historic Places and will apply for state and federal Historic Tax Credits. The buildings will be renovated under the Secretary of Interior's standards for the renovation of historic properties. 2.4 Assessed Valuations and Owners of Records The owners and existing assessed valuation of the property, including land and building values, as of January 1, 2011 is as follows: 2887 Central Avenue (Lot 2 -1 Paragon Square) is owned by Paragon Square II, LLC and assessed for $81,440 total, which is comprised of $21,080 for the land and $60,360 for the building. 2901 Central Avenue (Lot 1 -1 Paragon Square) is owned by Paragon Square LLC and is assessed for $172,410 total, which is comprised of $42,160 for the land and $130,250 for the building. 2.5 City Services This area is currently served by city services. 3.0 Relocation 4.0 Qualification of Area Paragon Square Urban Revitalization Plan April 2011 Page 3 No relocation should occur due to the rehabilitation of the parcels identified for this district since the buildings are currently vacant. The Paragon Square Urban Revitalization District Area is an area comprised of 2 parcels and two existing historic buildings. The buildings were formerly used for a school and convent on the Holy Ghost Catholic Parish campus at 29 and Central Avenue. The area is adjoined on the west and south by the Holy Ghost parking lot, on the north by the Holy Ghost rectory, church and existing school and on the east by Central Avenue. Historically, buildings associated with a church campus are difficult to adaptively reuse. These buildings typically sit vacant for long periods of time, due to the size and limitations for these large structures. The revitalization and reuse of these currently vacant buildings will prevent deterioration of the structures and the negative impact on the neighborhood that often results from blighted properties. In addition, the rehabilitation of the buildings will place the formerly tax - exempt buildings on the tax rolls. 4.1 Historic Significance The Paragon Square Urban Revitalization Area contains historic structures that are worthy of preservation. In an effort to stem the deterioration of these buildings, it's appropriate that this area be designated as an urban revitalization area. The plan seeks to preserve and renovate the area's existing buildings into functional residential housing units. The Holy Ghost Assisi School building (2901 Central) was initially constructed in 1896 as a combination school- church - convent building. The former Sisters Convent of Holy Ghost (2887 Central) was then built in 1903. When the Holy Ghost Catholic Church was completed in 1917, the original combination building was remodeled for use only as a school. The three story brick school building exhibits Romanesque Revival style features with some Gothic Revival elements. The convent building has some details reflective of the Romanesque and Gothic revival designs while including other general details of the late Victorian period. The convent reflects the brick architecture and details of the Paragon Square Urban Revitalization Plan April 2011 Page 4 adjoining school, church and rectory buildings and contributes to the architectural significance of the overall historic district. The architectural styles and the use of red brick visually link the Holy Ghost buildings. 4.2 Building Conditions The City Assessor's office has classified the condition of the buildings as very poor. The structures are in need of repair and rehabilitation to preserve their historic features and character. 5.0 Revitalization Program 5.1 Tax Exemption a) Residential property assessed as residential or assessed as commercial property, if the commercial property consists 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. The property tax exemption will be in accordance with the Code of Iowa, Chapter 404.3(4), providing for a ten -year, 100% exemption of the actual value added by the improvements. The revitalization exemption shall be applicable only to property converted to market rate residential units in compliance with the Secretary of Interior's standards for renovation of historic properties. b) "Qualified real estate" means real property, other than land, which is located in a designated revitalization area and to which improvements have been added, during the time the area was so designated, which have increased the actual value by at least fifteen percent, or at least ten percent in the case of real property assessed as residential, or which have, in the case of land upon which is located more than one building and not assesses as residential property, increased the actual value of the buildings to which the improvements have been made by at least fifteen percent. c) Property tax exemption shall be available only for `improvements', which include rehabilitation and additions to the existing structures. "Actual value added by improvements" means the actual value added as of the first year for which the exemption was received. d) Any improvements that were assessed before the area was officially designated will not be eligible for exemption. Improvements begun prior to one year prior to the area becoming designated will not be eligible for exemption. e) Improvements must result in that structure meeting applicable building, Paragon Square Urban Revitalization Plan April 2011 Page 5 plumbing, mechanical, electrical, and other code requirements of the City of Dubuque. f) The actual value of the improvements must result in an increase in assessed value as stated above in (b). Each year that an application is made for tax exemption, the assessed value must have increased in that year by the required percentage. g) The area shall become a Revitalization District commencing upon the adoption of the ordinance approving this Revitalization District by the City Council. The designation of the Paragon Square Urban Revitalization Plan Area will remain in effect until the desired level of revitalization has been attained, or for three years, whichever occurs first. Upon repeal of the ordinance establishing this revitalization area or expiration of the period of effective designation specified above, all existing exemptions' would continue until their previously established expiration date. 5.2 Availability of funding The renovation of the property will be funded with equity investment from investors, a construction loan from a financial institution, Iowa State Historic Tax Credits, Federal Historic Tax Credits, Enterprise Zone Tax Credits and Economic Development Credits. 6.0 Application Procedure This area, upon designation, will follow the procedures for application and granting of the property tax exemption within the City of Dubuque. a) 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 included in the project are first assessed for taxation, or the following two assessment years, in which case the exemption is allowed for the total number of years in the exemption schedule. Upon the request of the owner, the governing 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. b) 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 occupying the property as of the date of the City's resolution adopting this plan. Paragon Square Urban Revitalization Plan April 2011 Page 6 c) The City reviews all 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 1 with a statement as to which exemption applies. Applications for exemptions for succeeding years on approved projects shall not be required. d) 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 property 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 refile an application in a subsequent year after additional improvements have been made. e) After the tax exemption is granted, the assessor shall continue to grant the tax exemption, with periodic physical review by the assessor, for the ten - year time period specified in the tax exemption schedule. f) 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 1 filing deadline. 7.0 Conclusion The proposed urban revitalization district will assist the rehabilitation efforts of vacant or deteriorating properties by providing needed housing units and supporting reuse of existing structures for the citizens of Dubuque. After the ten -year abatement period lapses on these projects, the full assessed value of the rehabilitation property will go on the tax rolls to the benefit of the entire community. EXHIBIT A (Map) F: \Users\ATAUKE \Urban Revite \Wash Neigh UR \Wash Neigh UR Plan Final.doc . 1 Paragon Square Urban Revitalization District i° GA \28$7 1 DISCLAIMER: This information was compiled using the Dubuque Area Geographic Information System (DAGIS), which includes data created by both the City of Dubuque and Dubuque County. It is understood that, while the City of Dubuque and participating agencies utilized the most current and accurate information available, DAGIS and its suppliers do not warrant the accuracy or currency of the information or data contained herein. The City and participating agencies shall not be held liable for arty direct, indirect, incidental. consequential, punitive, or special damages, whetherforeseeable or h:\ Housing \UrhanRevite \ParagonSquare.mxd unforeseeable, arising out of the authorized or unauthorized use of plotfiles: ParagonSquare,pdf this data or the inability to use this data or out of any breach of created by NMB 2011 -04 -OS warranty whatsoever. AGIS r.«. .....w..e...pm r •n. Masterpiece on the Mississippi Masterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Paragon Square Urban Revitalization Area Plan DATE: April 12, 2011 Dubuque kettil AI-America City 111 2007 Housing and Community Development Department Director David Harris recommends City Council approval to establish that the Paragon Square Urban Revitalization Area Plan is necessary, meets the eligible criteria and should be submitted to the Long Range Planning Advisory Commission for review and comment. It is further recommended that a public hearing be set for June 6, 2011. This plan will create an urban revitalization area at the former Holy Ghost Assisi School and convent at 2887 and 2901 Central Avenue to allow property tax exemption for market rate rental housing. The project provides for the rehabilitation of two former Holy Ghost parish buildings into multi - family residential rental housing by Paragon Square, LLC and Paragon Square II LLC. 2887 Central contains the former Holy Ghost convent building, a three -story masonry building which is currently vacant. The building will be rehabilitated into nine market rate residential rental units with 11 off - street parking spaces. 2901 Central contains the former Holy Ghost Assisi School building, a four -story masonry building, which is currently vacant. The building will be converted to eighteen market rate residential rental units with 23 off - street parking spaces. I concur with the recommendation and respectfully request Mayor and City Council approval. Mi ael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager David Harris, Housing and Community Development Department Director Masterpiece on the Mississippi Dubuque Will AFAmeiica City 2007 MEMORANDUM TO: Michael C. Van Milligen, City Manager FROM: David Harris, Housing and Community Development Department SUBJECT: Paragon Square Urban Revitalization Area Plan DATE: April 11, 2011 Introduction This memorandum recommends that the City Council review and approve a resolution to establish the Paragon Square Urban Revitalization Area Plan. The plan will create an urban revitalization area at the former Holy Ghost Assisi School and convent at 2887 and 2901 Central Avenue to allow property tax exemption for market rate rental housing. Background Urban Revitalization Chapter 404 of the Iowa Code (Urban Revitalization Act) authorizes cities to designate urban revitalization areas. Improvements to qualified real estate within these designated areas may receive a total or partial exemption from property taxes for a specified number of years. The exemptions are intended to stimulate private investment by reducing tax increases that usually accompany property improvements. This additional private investment provides a long -term increase or stabilization in the area's tax base, enhances the viability of revitalization areas and /or supports important city objectives such as historic preservation, economic development and affordable housing development. In order to implement the provisions of Chapter 404, the City must prepare a revitalization plan for each designated area and hold at least one public hearing after proper notice. The law mandates specific criteria and procedures that must be followed. Discussion The plan provides for the rehabilitation of two former Holy Ghost parish buildings into multi- family residential rental housing by Paragon Square, LLC and Paragon Square II LLC. 2887 Central contains the former Holy Ghost convent building, a three story masonry building which is currently vacant. The building will be rehabilitated into nine market rate residential rental units with 11 off - street parking spaces. 2901 Central contains the former Holy Ghost Assisi School building, a four -story masonry building, which is currently vacant. The building will be converted to eighteen market rate residential rental units with 23 off - street parking spaces. The owners have applied to have both buildings listed on the National Register of Historic Places and will apply for state and federal Historic Tax Credits. The buildings will be renovated under the Secretary of Interior's standards for the renovation of historic properties. The former Holy Ghost Assisi School building at 2901 Central was rezoned in January to OR Office Residential. The Zoning Board of Adjustment approved a special exception on February 24, 2011 to allow the building to be converted to 18 residential units. The ZBA also approved a variance on December 16, 2010 to allow the former convent building at 2887 Central to be converted to ten residential units. Chapter 404 provides for a public comment period prior 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 is requested to set a public hearing for June 6, 2011 that will provide a 30 day comment period on the proposed plan. The property owners will be notified. The Long Range Planning Commission will review the plan at their April 20th meeting. Recommendation I recommend that the City Council approve the attached resolution directing the Paragon Square Urban Revitalization Plan be set for a public hearing on June 6, 2011. Action Requested The Action Step is for the City Council to adopt the attached resolution. Prepared by: Aggie Tauke, Community Development Specialist F: \USERS\ATAUKE \Urban Revite \Paragon Square UR \Paragon Square UR Council memo.2011.doc RESOLUTION NO. 138 -2011 [Resolution No. 138-11] RESOLUTION FINDING THAT THE DESIGNATION OF THE PARAGON SQUARE URBAN REVITALIZATION PLAN IS NECESSARY IN THE INTEREST OF THE PUBLIC HEALTH, SAFETY AND WELFARE OF THE RESIDENTS OF THE CITY OF DUBUQUE, IOWA AND PROVIDING FOR A PUBLIC HEARING THEREON. Whereas, the City Council of the City of Dubuque finds that the property at 2887 and 2901 Central Avenue is currently vacant and underutilized, and Whereas, Paragon Square LLC and Paragon Square II LLC have purchased the properties to create multi - family residential rental housing and requests the establishment of an urban revitalization district; and Whereas, the area proposed for designation under the Urban Revitalization Act is based upon the need for the encouragement of housing and residential development and the need for preservation and restoration of buildings due to their age, history, and architecture or significance; and Whereas, Chapter 404 of the Code of Iowa provides that a public hearing shall be held on any proposed Urban Revitalization Area Plan. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the rehabilitation and redevelopment of the hereinafter described area at 2887 and 2901 Central Avenue is found to be necessary in the interest of the public health, safety and welfare of the residents of the City and to preserve historic structures, to wit: Lot 1 of 1 and Lot 2 of 1 of Paragon Square, all in the City of Dubuque, Dubuque County, Iowa according to the recorded plat thereof. Section 2. That the Paragon Square Urban Revitalization Area Plan as proposed meets the eligibility criteria of Chapter 404.1 of the Code of Iowa, 2001. Section 3. That the proposed Paragon Square Urban Revitalization Area Plan attached hereto, shall be a matter of record and shall be available for pubic inspection in the office of the City Clerk at City Hall, 50 West 13 Street, Dubuque, Iowa. Section 4. That the City is authorized and directed to submit the Paragon Square Urban Revitalization Area Plan to the City's Long Range Planning Advisory Commission for review and comment; and Section 5. That the City Clerk is directed to publish notice of a public hearing on the Paragon Square Urban Revitalization Area Plan to be held on June 6, 2011 at 6:30 p.m. in the Council Chambers,2 Floor, Historic Federal Building, Dubuque, Iowa 52001; and Section 6. That the owners of record will be notified by the thirtieth day prior to the public hearing. Passed, approved and adopted this 18 day of April, ; 011. Attest: eanne F. Schneider, CMC City Clerk Roy 11. Buol, Mayor F: \USERS\ATAUKE \Urban Revite \Paragon Square UR \Paragon Square UR Res. Set hearing.doc Paragon Square Urban Revitalization Plan April 2011 1.0 Introduction The following plan describes certain provisions of the Iowa Urban Revitalization Act and proposes the establishment of the Paragon Square Urban Revitalization area. The State of Iowa, under Iowa Code Chapter 404, allows cities to designate areas as urban revitalization districts. Under this Act, improvements to qualified areas may receive a total or partial exemption from property taxes for a specified number of years. The exemptions are intended to stimulate private investment by the reduction of tax increases related to property improvements. Once an area is deemed to meet the requirements established in Chapter 404, a plan must be established which identifies the district boundaries, property owners, existing conditions, proposed plans and the basic abatement provisions for the revitalization area. Iowa Code Chapter 404.1 lists five reasons for which a city or county may establish urban revitalization plans. These include: the existence of numerous buildings that are dilapidated or deteriorated; the need for preservation and restoration of buildings due to their historic significance; the area is appropriated as an economic development region as defined in Iowa Code 403.17; the need for public improvements related to housing; and the encouragement of housing and residential development. The Paragon Square Urban Revitalization Plan will be based upon the need for the encouragement of housing and residential development and the need for preservation and restoration of buildings due to their age, history, and architecture or significance. 2.0 The Area 2.1 Location The area included in the Paragon Square Urban Revitalization district is located at 2887 and 2901 Central Avenue in the City of Dubuque, Iowa, legally described as: Lot 1 of 1 and Lot 2 of 1 of Paragon Square, all in the City of Dubuque, Dubuque County, Iowa. A map of the area boundaries is attached as Exhibit A. Paragon Square Urban Revitalization Plan April 2011 Page 2 2.2 Zoning The existing zoning is OR (Office Residential District). 2887 Central Avenue was rezoned in 1994 and 2901 Central was rezoned on January 18, 2011 by Ordinance No. 4 -11. The Zoning Board of Adjustment approved a variance on December 16, 2010 to allow the former convent building at 2887 Central to be converted to ten residential units with a deficit of 5 off - street parking spaces (Docket 62- 10) and on an 8,490 square foot lot where 12,000 square feet of lot areas was required (Docket 63 -10). The Zoning Board of Adjustment approved a special exception on February 24, 2011 to allow the former Holy Ghost Assisi School building at 2901 Central to be converted to 18 residential units on an 18,256 square foot lot where 21,600 square feet of lot area is required (Docket 10 -11) and with a deficit of 4 off - street parking spaces(Docket 11 -11) 2.3 Existing and Proposed Land Use The Paragon Square Urban Revitalization District is comprised of 2 existing structures on two lots. Total acreage is .614 acres (26,746 square feet). 2887 Central contains the former Holy Ghost convent building, a three story masonry building which is currently vacant. The building will be rehabilitated into nine market rate residential rental units with 11 off - street parking spaces. 2901 Central contains the former Holy Ghost Assisi School building, a four - story masonry building, which is currently vacant. The building will be converted to eighteen market rate residential rental units with 23 off - street parking spaces. The owners have applied to have both buildings listed on the National Register of Historic Places and will apply for state and federal Historic Tax Credits. The buildings will be renovated under the Secretary of Interior's standards for the renovation of historic properties. 2.4 Assessed Valuations and Owners of Records The owners and existing assessed valuation of the property, including land and building values, as of January 1, 2011 is as follows: 2887 Central Avenue (Lot 2 -1 Paragon Square) is owned by Paragon Square II, LLC and assessed for $81,440 total, which is comprised of $21,080 for the land and $60,360 for the building. 2901 Central Avenue (Lot 1 -1 Paragon Square) is owned by Paragon Square LLC and is assessed for $172,410 total, which is comprised of $42,160 for the land and $130,250 for the building. 2.5 City Services This area is currently served by city services. 3.0 Relocation 4.0 Qualification of Area Paragon Square Urban Revitalization Plan April 2011 Page 3 No relocation should occur due to the rehabilitation of the parcels identified for this district since the buildings are currently vacant. The Paragon Square Urban Revitalization District Area is an area comprised of 2 parcels and two existing historic buildings. The buildings were formerly used for a school and convent on the Holy Ghost Catholic Parish campus at 29 and Central Avenue. The area is adjoined on the west and south by the Holy Ghost parking lot, on the north by the Holy Ghost rectory, church and existing school and on the east by Central Avenue. Historically, buildings associated with a church campus are difficult to adaptively reuse. These buildings typically sit vacant for long periods of time, due to the size and limitations for these large structures. The revitalization and reuse of these currently vacant buildings will prevent deterioration of the structures and the negative impact on the neighborhood that often results from blighted properties. In addition, the rehabilitation of the buildings will place the formerly tax - exempt buildings on the tax rolls. 4.1 Historic Significance The Paragon Square Urban Revitalization Area contains historic structures that are worthy of preservation. In an effort to stem the deterioration of these buildings, it's appropriate that this area be designated as an urban revitalization area. The plan seeks to preserve and renovate the area's existing buildings into functional residential housing units. The Holy Ghost Assisi School building (2901 Central) was initially constructed in 1896 as a combination school- church - convent building. The former Sisters Convent of Holy Ghost (2887 Central) was then built in 1903. When the Holy Ghost Catholic Church was completed in 1917, the original combination building was remodeled for use only as a school. The three story brick school building exhibits Romanesque Revival style features with some Gothic Revival elements. The convent building has some details reflective of the Romanesque and Gothic revival designs while including other general details of the late Victorian period. The convent reflects the brick architecture and details of the Paragon Square Urban Revitalization Plan April 2011 Page 4 adjoining school, church and rectory buildings and contributes to the architectural significance of the overall historic district. The architectural styles and the use of red brick visually Zink the Holy Ghost buildings. 4.2 Building Conditions The City Assessor's office has classified the condition of the buildings as very poor. The structures are in need of repair and rehabilitation to preserve their historic features and character. 5.0 Revitalization Program 5.1 Tax Exemption a) Residential property assessed as residential or assessed as commercial property, if the commercial property consists 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. The property tax exemption will be in accordance with the Code of Iowa, Chapter 404.3(4), providing for a ten -year, 100% exemption of the actual value added by the improvements. The revitalization exemption shall be applicable only to property converted to market rate residential rental units in compliance with the Secretary of Interior's standards for renovation of historic properties. b) "Qualified real estate" means real property, other than land, which is located in a designated revitalization area and to which improvements have been added, during the time the area was so designated, which have increased the actual value by at least fifteen percent, or at least ten percent in the case of real property assessed as residential, or which have, in the case of land upon which is located more than one building and not assesses as residential property, increased the actual value of the buildings to which the improvements have been made by at least fifteen percent. c) Property tax exemption shall be available only for 'improvements', which include rehabilitation and additions to the existing structures. "Actual value added by improvements" means the actual value added as of the first year for which the exemption was received. d) Any improvements that were assessed before the area was officially designated will not be eligible for exemption. Improvements begun prior to one year prior to the area becoming designated will not be eligible for exemption. e) Improvements must result in that structure meeting applicable building, Paragon Square Urban Revitalization Plan April 2011 Page 5 plumbing, mechanical, electrical, and other code requirements of the City of Dubuque. f) The actual value of the improvements must result in an increase in assessed value as stated above in (b). Each year that an application is made for tax exemption, the assessed value must have increased in that year by the required percentage. g) The area shall become a Revitalization District commencing upon the adoption of the ordinance approving this Revitalization District by the City Council. The designation of the Paragon Square Urban Revitalization Plan Area will remain in effect until the desired level of revitalization has been attained, or for three years, whichever occurs first. Upon repeal of the ordinance establishing this revitalization area or expiration of the period of effective designation specified above, all existing exemptions would continue until their previously established expiration date. 5.2 Availability of funding The renovation of the property will be funded with equity investment from investors, a construction loan from a financial institution, Iowa State Historic Tax Credits, Federal Historic Tax Credits, Enterprise Zone Tax Credits and Economic Development Credits. 6.0 Application Procedure This area, upon designation, will follow the procedures for application and granting of the property tax exemption within the City of Dubuque. a) 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 included in the project are first assessed for taxation, or the following two assessment years, in which case the exemption is allowed for the total number of years in the exemption schedule. Upon the request of the owner, the governing 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. b) 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 occupying the property as of the date of the City's resolution adopting this plan. Paragon Square Urban Revitalization Plan April 2011 Page 6 c) The City reviews all 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 1 with a statement as to which exemption applies. Applications for exemptions for succeeding years on approved projects shall not be required. d) 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 property 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 refile an application in a subsequent year after additional improvements have been made. e) After the tax exemption is granted, the assessor shall continue to grant the tax exemption, with periodic physical review by the assessor, for the ten - year time period specified in the tax exemption schedule. f) 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 1 filing deadline. 7.0 Conclusion The proposed urban revitalization district will assist the rehabilitation efforts of vacant or deteriorating properties by providing needed housing units and supporting reuse of existing structures for the citizens of Dubuque. After the ten -year abatement period lapses on these projects, the full assessed value of the rehabilitation property will go on the tax rolls to the benefit of the entire community. EXHIBIT A (Map) F: \Users\ATAUKE \Urban Revite \Wash Neigh UR \Wash Neigh UR Plan Final.doc Paragon Square Urban Revitalization District DISCLAIMER: This information was compiled using the Dubuque Area Geographic Information System (DAGIS), which includes data created by both the City of Dubuque and Dubuque County. It is understood that, while the City of Dubuque and participating agencies utilized the most current and accurate information available, DAGIS and its suppliers do not warrant the accuracy or currency of the information or data contained herein. The City and participating agencies shall not be held liable for any direct, indirect, incidental, h: \ Housing \UrbanRevite \ParagonSquare.mxd consequential, punitive, or special damages, whether foreseeable or unforeseeable, arising out of the authorized or unauthorized use of plotfiles: ParagonSquare.pdf this data or the inability to use this data or out of any breach of created by NMB 2011 - - warranty whatsoever. 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