Downtown Rehabilitation Loan Program_39 Bluff Street Letter of CommitementMasterpiece on the Mississippi
I concur with the recommendation and respectfully request Mayor and City Council
approval.
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David Heiar, Economic Development Director
Michael C. Van Milligen
Dubuque
tatill
All - America City
I
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Downtown Rehabilitation Loan, Design Grant, Facade Grant and Financial
Consultant Grant for 39 Bluff Street
DATE: May 31, 2011
Economic Development Director Dave Heiar recommends City Council approval of a
Resolution approving a letter of commitment for a Downtown Rehabilitation Loan of
$300,000, Design Grant for $10,000, a Facade Grant of $10,000 and a Financial
Consultant Grant of $5,000 for Franklin Investments, LLC to support their rehabilitation
of property located at 39 Bluff Street (former Central Alternative School building).
This building was formerly the Central Alternative High School and Franklin
Investments, LLC purchased the building in 2010. The company plans to restore the
historic structure with 21 market rate apartments, filling a demand for additional rental
housing in the downtown area. Franklin Investments, LLC plans to invest $1,750,000 in
redeveloping the property.
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.
Masterpiece on the Mississippi
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director 4 1.
Dubuque
111-Ame Icacfty
l
2007
SUBJECT: Downtown Rehabilitation Loan, Design Grant, Fagade Grant and
Financial Consultant Grant for 39 Bluff Street
DATE: May 17, 2011
INTRODUCTION
This memorandum presents for City Council consideration a Resolution approving a
letter of commitment for a Downtown Rehabilitation Loan of $300,000, Design Grant for
$10,000, a Facade Grant of $10,000 and a Financial Consultant Grant of $5,000 for
Franklin Investments, LLC. to support their rehabilitation of property located at 39 Bluff
Street (former Central Alternative School building).
BACKGROUND
The Downtown Rehabilitation Loan /Grant 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 low- interest loan monies. The program
is unique in that grants of up to $10,000 are available to offset costs for Fa9ade
improvements and design costs and up to $15,000 for financial consultant services. 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 /or creation of new housing opportunities in the district.
DISCUSSION
This building was formerly the Central Alternative High School and Franklin
Investments, LLC purchased the building in 2010. The company plans to restore the
historic structure with 21 market rate apartments, filling a demand for additional rental
housing in the downtown area. Franklin Investments, LLC plans to invest $1,750,000 in
redeveloping the property.
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.
Funding for the fagade, design, and financial consultant grants are expected to be
available in the City's FY2014 budget, assuming the Capital Improvement Budget is not
modified.
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 is scheduled to begin in
July 2011.
I recommend that the City Council adopt the attached Resolution approving a letter of
commitment for 39 Bluff Street for the $300,000 Downtown Rehabilitation loan, $10,000
fa9ade grant, $10,000 design grant and $5,000 financial consultant grant.
ACTION STEP
The action step for the City Council is to adopt the attached Resolution.
F: \USERS \Econ Dev \Franklin School \DRLP\20110509 DRLP Memo.doc
RESOLUTION NO. 189-11
A RESOLUTION AUTHORIZING A LETTER OF COMMITMENT AND
ADDITIONAL ACTIONS CONCERNING A DOWNTOWN REHABILITATION
LOAN, DESIGN GRANT, FACADE GRANT AND FINANCIAL CONSULTANT
GRANT TO 39 BLUFF STREET.
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 Franklin Investments, LLC. 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 Franklin Investments, LLC. for
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 Franklin Investments, LLC. 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 Franklin Investments, LLC. 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.
Attest:
Passed, approved and adopted this 6 th day of June, 111.
mil 1' 1 '
Ke in S. Firnsta I, Acting City C erk
F: \USERS \Econ Dev \Franklin School \DRLP\20110509 DRLP Resolution.doc
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
Franklin Investments, LLC
Gary Carner
1290 Jackson Street
Dubuque, IA 52001
RE: Letter of Commitment/Downtown Rehabilitation Loan Program
For 39 Bluff Street
Dear Mr. Carner:
May 17, 2011
I am pleased to inform you that your application for financial assistance for the
renovation of property located at 39 Bluff 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: 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 ban. Monthly principal and interest payments, amortized
over an additional fifteen (15) year period, shall begin the sixty-first month
of the loan.
At this time, insufficient loan funds are available in the Downtown
Rehabilitation Loan Program to fund the loan. 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.
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 second mortgage on the property.
Service People Integrity Responsibility Innovation Teamwork
Purpose of the Loan: Renovation of the exterior facade and interior for use as residential
space.
Conditions of this Commitment:
(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 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 authorization of
the loan by the Dubuque City Council 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. Any jobs relocated from another
location within the downtown area will not count as a new job.
(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 authorization of
the loan by the Dubuque City Council 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. Any jobs relocated from another
location within the downtown area will not count as a new job.
(c) A grant not to exceed ten thousand dollars ($10,000) will be available to offset
documented construction costs for fagade improvements. Fagade 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.
Funds are expected to be available to fund the grant in FY2014.
(d) A grant not to exceed ten thousand dollars ($10,000) will be available to offset
costs related to planning and design for the rehabilitation project. Planning and
(e) A grant of five thousand dollars ($5,000) will be available to offset cost related to
hiring a financial consultant to evaluate the project's feasibility. Financial
Consultant Grant Funds will be dispensed on completion of work, documentation
of costs and an inspection of 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. Funds are expected to be available to
fund the grant in FY2014.
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.
Sincerel
Design 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. Funds are expected to be available to fund the grant in FY2014.
Roy D. BuoI
Mayor
ACKNOWLEDGMENT
We have reviewed the above offer and accept the $300,000 Downtown Rehabilitation
Loan, $10,000 design grant, $10,000 facade grant, $5,000 financial consultant grant
and all of the terms of this commitment letter.
Gary Carner Date
Franklin Investments, LLC
F: \USERS \Econ Dev \Franklin School \DRLP\20110509 Franklin InvestmentsDRLP approval letter.doc
City of Dubuque, Iowa
Downtown Rehabilitation Loan Program,
Planning and Design Grant Program,
Facade Grant Program, and
Financial Consultant Grant Program
PROGRAM GUIDELINES
(11/2009)
The Downtown Rehabilitation Loan, Planning and Design Grant, Facade Grant, and Financial
Consultant Grant Programs are designed to further the goals and objectives of the Greater
Downtown Urban Renewal Plan by creating the financial incentives needed to eliminate
conditions of blight, encourage revitalization efforts and to retain or create employment
opportunities and /or new housing units within the district. This program will address building code
deficiencies as part of each approved project.
Eligible Applicants:
Eligible Activities:
Assistance:
Owners of property within the Greater Downtown Urban Renewal
District (map attached).
Downtown Rehab Loan Program - Interior and exterior rehabilitation,
facade renovation and adaptive reuse of existing buildings and must
include code - related improvements.
Planning and Design Grant Program — In conjunction with a
Downtown Rehab Loan, assistance is available for pre - development
costs associated with the project.
Facade Grant Program - front or rear facade renovations to eliminate
inappropriate additions or alterations and restore the facade to its
historic appearance, or to rehabilitate the facade to include new
windows, paint, signage, awnings, etc. to improve overall appearance.
Landscaping or screening with fencing or retaining walls may also be
allowed, especially as it may improve property adjacent to the public
right -of -way.
Financial Consultant Grant Program — In conjunction with a
Downtown Rehab Loan, assistance is available for hiring a financial
consultant to analyze the financial feasibility of a project.
Downtown Rehab Loan Program - Low interest loans shall be
provided to qualified applicants with up to the full amount of the loan
1
being forgiven for projects which create additional employment
opportunities and /or new housing units within the district. Grant monies
may be awarded to offset planning and design expenses.
Planning and Design Grant Program - A maximum of ten thousand
dollars ($10,000) per building may be awarded by the City to offset the
actual pre - development costs incurred by Rehabilitation Loan Program
participants.
Facade Grant Program - Matching grants shall be provided to
qualified applicants for projects meeting program guidelines.
Financial Consultant Grant Program — A maximum of fifteen
thousand dollars ($15, 000) per project may be awarded by the City of
offset Financial Consultant expenditures incurred by Rehabilitation
Loan Program participants.
Date of Application:
Telephone:
Fax:
E -mail:
Dgi
City of Dubuque, Iowa
Downtown Rehabilitation Loan Program,
Planning and Design Grant Program,
Facade Grant Program, and
Financial Consultant Grant Program
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 13th 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.
APPLICANT INFORMATION TION }
Owner Name: X ;L T 1,; JI u -11/ 1 a,C
Applicant Name : PTfk(o 011-Pl -
Address of Project: 39 -
Mailing Address:
1 a9b 7S14 S4.
SS# or Federal Tax ID #: - 1 -1661677
siG-11161/
Which assistance programs is this project seeking?
Downtown Rehab Loan Program
Planning and Design Grant Program
Facade Grant Program
Financial Consultant Grant Program
Description of Project:
(If additional space is needed, please attach description as Attachment �A)
hls 6`•lG N c ;.+J Sloe b luAM tl !ti i6
Add
APPLICATION
Page 1 of 3
�l >R
How will the project further the revitalization of downtown?
(If additional space is needed, please attach as Attachment B) ll [r 1
hMO ej .Q4.1 0 fc Oh\ &(1c\ h IS�nc1C LLI J�it) (Uh el CO/ I/ LrAUlW
Number of current housing units on property?
Number of new housing units created from project?
Number of jobs currently in building?
Number of jobs created after project completed?
If the owner is a for - profit or non - profit organization, is a Resolution
adopted by the Board of Directors which authorizes both the project
and the application attached with the Minutes of the Meeting when it
was adopted?
Page 2 of 3
F: \USERS \Econ Dev \Program Handouts \DRLP\20091123_Downtown Housing Application.doc
6
Is proof of building ownership attached? Yes w No ❑
If no, reason for not providing proof of building ownership?
Yes[ No
Downtown Rehab Loan Program
Amount of financing requested:
Total cost of project seeking assistance:
Proposed security or collateral for the financing:
What is the construction schedule for the project: 124,;, In it 0.17)a
Is ilistorical Income Statement for the property (for 2 years) rgi
attached? Yes El No
Is a cash flow projection indicating the ability to repay the loan Yes No ❑
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?
How much assistance is the project requesting?
Will invoices be made available to confirm expenditures?
*Planning and Design 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.
Facade Grant
Rd, oar, Oa
/ 9 lllu/I
rt a/ 81.0
VV
What are the estimated costs for fagade improvements? /66 ,
iQ
How much assistance is the project requesting? `6 O1
What is the construction schedule for facade improvements? 'di/ - 1/5
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
What are the estimated costs for financial consultant services? /t7,
How much assistance is the project requesting?
Yes ® No ❑
Page 3 of 3
S; CO6
Yes No ❑
*Financial Consultant Grant Funds will be dispensed on completion of work, documentation of costs and an
inspection of 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.
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Prepared by and Return to: Douglas M. Henry. 200 Security Building. 151 W. 8th Street Dubuque. IA 52001. (563) 556 -4011
Douglas M. Henry AT #0003395 SPACE ABOVE THIS LINE FOR RECORDER
Address Tax Statements: Franklin Investments, LLC, 1664 Washington Street, Dubuque, IA 52001
For the consideration of Ten ($10.00) Dollars and other valuable consideration, Dubuque Community School District,
in the Counties of Dubuque and Jackson, State of Iowa, a.k.a. Dubuque Community School District, f/k/a Independent School
District of Dubuque, organized and existing under the laws of State of Iowa does hereby Convey to Franklin Investments, LLC,
an Iowa limited liability company, as Assignee of all of the right, title and interest of Gary Carner in and to one certain Offer to
Buy Real Estate and Acceptance dated October 25, 2010, by and between Dubuque Community School District as Seller and Gary
Carver as Buyer with respect to the real property conveyed, the following described real estate in Dubuque County, Iowa:
Lot 2 of Lot 1, and Lot 2 of Lot 2, both of City Lot 595; City Lot 596; City Lot 597; City Lot 597A, Lot 1 of
Lot 2 of Lot 1, Lot 2 of Lot 1 of Lot 2, Lot 2 of Lot 2, Lot 3, Lot 4, Lot 5, and Lot 6, all of City Lot 600; all in
the City of Dubuque, Iowa, according to the United States Commissioners' Survey of the City of Dubuque,
and the recorded plats thereof
together with any easements and appurtenant servient estates, but subject to any reasonable easements ofrecord for public utilities
or roads, any zoning restrictions, customary restrictive covenants and mineral reservations of record, if any.
This deed is exempt from transfer tax according to Section 428A.2.6, Code of Iowa, and is exempt from Declaration of
Value requirements according to Section 428A.1, Code of Iowa.
Grantor does hereby covenant with grantees and successors in interest, that it holds the real estate by title in fee simple;
that it has good and lawful authority to sell and convey the real estate; that the real estate is free and clear of all liens and
encumbrances, except as may be above stated; and it covenants to Warrant and Defend the real estate against the lawful claims
of all persons, except as may be above stated.
Words and phrases herein, including acknowledgment hereof, shall be construed as in the singular or plural number,
according to the context.
Dated: November / L , 2010
DUBUQUE COMMUNITY SCHOOL DISTRICT
By
W/ , , ll
Michael P. Brannon, President of the Board of
Education of the Dubuque Community School
District
d 7L /6 M (12.P cz,iJ,/l
WARRANTY DEED
CORPORATE GRANTOR
Dated: November ! 1 , 2010
DUBUQUE COMMUNITY SCHOOL DISTRICT
By
4 _1.4
Jp
• S. Luc , Secretary of said Board
of Education
STATE OF IOWA )
) SS:
COUNTY OF DUBUQUE )
On this 11 day of November, 2010, before me, the undersigned, a Notary Public in and for said County and
State, personally appeared Michael P. Brannon and Joni S. Lucas, who being by me duly sworn, and acknowledged to me that
they are the President and Secretary respectively of said corporation; that the seal affixed thereto is the seal of said
corporation; that said instrument was signed and sealed on behalf of said corporation by authority of its Board of Directors;
and that said Michael P. Brannon and Joni S. Lucas as such officers acknowledged the execution of said instrument to be the
voluntary act and deed of said corporation, by it and by them voluntarily executed.
(Seal)
JOAN M. SIGWAFITH
Commission Number 737370
M� Comm. Er;, OCT. 27 2011
MINUTES OF SPECIAL MEETING OF
THE MEMBERS OF JERANI LIN INVESTMENTS, LLC.
A Special Meeting of the Members of Franklin Investments, LLC was held on the 2n day of
April, 2011 at the offices of counsel for the company. Gary Carver was elected chairman and secretary of
the meeting. Carner then presented for consideration of the members the prospect of moving forward
with the renovation of the former Franklin School to create 21 new housing units and further the question
of whether the company should make application to the City of Dubuque through its Downtown
Rehabilitation and Loan Program, Planning and Design Grant Program, Facade Grant Program and
Financial Consultant Grant Program. After thorough discussion the following resolution was
unanimously approved:
RESOLVED, that the company is hereby authorized to proceed with rehabilitation of the former
Franklin School to create 21 new housing units;
IT IS FURTHER RESOLVED that the company is hereby authorized to prepare and file an
application to the City of Dubuque for the Downtown Rehabilitation Loan Program, Planning and Design
Grant Program, Facade Grant Program and Financial Consultant Grant Program. Gary Carner is
authorized to sign all documents on behalf of the company with respect to all such applications.
There being no further business to come before the meeting, the meeting was adjourned.
Gary Carner, C a Ilan and Secretary