North Grandview Estates Development Agreement
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MEMORANDUM
March 28, 2005
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Development Agreement for Grandview Estates
Housing and Community Development Department Director David Harris recommends
City Council approval of an agreement with Richard Henkel and Sandra Williams for
development of affordable single-family housing in the Grandview Estates.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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(I{L/ C/ {t! --I
rv1ichael C. Van Milligen
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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
30 March 05
To: Mike V,~iIIigen, City Manager
From: David 1ta'his, Housing and Community Development Department
Re: Development Agreement for North Grandview Estates Subdivision
Introduction
The purpose of this memorandum is to request the City Council's approval of the
attached Agreement with Richard Henkel and Sandra Williams for development of
affordable single-family housing in the North Grandview Estates.
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 - Fondel! Excavating's Eagle Valley Subdivision, approved by Council in
December, 2003.
A second agreement was approved in June, 2004, for the Westbrook Subdivision on
Seippel Road.
Discussion
The City Council has approved the final plat of the North Grandview Estates
Subdivision, an 11 acre site at Grandview and 3200 Streets. 35 new homes will be
constructed in this development, with two lots reserved for on-site storm water retention
and the two existing homes.remaining. This is a development partnership, owned by
Richard Henkel and Sandra Williams. An Agreement has been drafted that specifies
the conditions and terms for the developer's performance. It is ready for Council review
and approval. These include:
1. Eighty percent (80%) of the lots, excluding detention lots and existing
homesteads in the subdivision, will be affordable housing lots as defined in the
Task Force report as approved by the Council.
2. Lots may not exceed 6,500 square feet in area except for Lots 3,4,5,6,7,8,9,
10 and 16, due to terrain hardship.
3. The street frontage of the lot may not be less than 50 feet and not more than 75
feet.
4. The constructed dwelling may not exceed 1200 square feet of finished space.
Finished space is defined as the square footage of those parts of the structure
available for human habitation, excluding unimproved basements, attics, and
garages.
5. The 2005 lot price may not exceed $27,877.00. For the sale of affordable
housing lots in subsequent years, the maximum sales price will be determined by
multiplying $27877.00 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 of sale, and the denominator of which is the CPI-
U for December 2004.
6. In order for City to recoup its costs for sewer and water construction, a per lot
payment will be established for each lot, payable by the developer, its
successors and assigns, to the City of Dubuque upon sale of each lot. Any
balance remaining unpaid after 5 years will be paid by the developer as a lump-
sum balloon payment.
7. Prior to the disbursement of any funds by the City, the developer will execute a
promissory note in an amount equal to the estimated funds to be paid by the City
for the sanitary sewer and water construction. This promissory note will be
secured by a mortgage on the subdivision which will provide for the release of
lots upon the per lot payment. The developer may elect to provide altemate
security for the note in a form acceptable to the City
8. The developer agrees that no more than twenty percent (20%) of the lots in the
subdivision will be sold for more than the maximum sales price for an affordable
housing lot.
9. The developer will include in the agreement for the purchase of each affordable
housing lot in the subdivision, and in any deed conveying an affordable housing
lot, a provision that if the purchaser does not construct a dwelling unit on the lot,
then any subsequent purchaser will be bound by the maximum sales price and
that in the event of a sale in excess of the maximum price, the seller will pay to
the City, upon City's demand, the difference between the actual sales price and
the maximum sales price.
10. The developer agrees that eighty percent (80%) of the dwelling units in the
subdivision will not exceed 1200 square feet in interior finished space at the time
of transfer of title to the purchaser.
The developer will 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 the limit.
11. The developer agrees to install a sanitary sewer manhole over the sanitary sewer
at a point adjacent to the southeast comer of Lot 28. The developer agrees that
the City at its cost may extend the sanitary sewer and storm sewer from the
manhole at the southeast corner of Lot 28 to the west property line of the
subdivision and that the developer will grant an easement to the City at no cost
for the extension.
The City will provide to the developer the following incentives:
1. The minimum width of public street pavement width will be 27 feet and the
minimum right-of-way width will be 42 feet. Parking will be restricted to one side
of the street only.
2. Water main and sanitary sewer connection fees and/or assessments will be
waived, but the water main tap fee will be paid by the developer.
3. The lot frontage minimum for a single family dwelling will be 50 feet and the
maximum lot width for a single family dwelling will be 75 feet.
4. Subject to the availability of funds and plan approval by the City, the developer
will receive a preference when applying for City Enterprise Funds (0 interest, 5-
year loans) for the installation of water main and water services and sanitary
sewer main and laterals on Helen Ridge Court and North Grandview Avenue.
5. The City will assume the cost of drain tile and its installation under the curb if City
Engineering determines it necessary.
We have additionally revised the security required for the Enterprise Fund loans, to be
used for this and all future subdivision loans. A per-lot payment will be established for
each lot, to be payable by the developer or successors or assigns, to the City upon sale
of each lot. Any balance remaining unpaid after five years will be paid as a lump-sum
balloon payment.
Prior to disbursement of Enterprise Funds, the developer will execute a promissory note
in an amount equal to the estimated funds to be loaned for sanitary sewer and water
infrastructure installation. This note will be secured by a mortgage on the subdivision
which will provide for the release of lots upon payment, on a pro-rated basis. The
developer may elect to provide alternate security in a form acceptable to the City.
Action Step
The action requested of the City Council is to approve the attached Agreement between
the City and Richard Henkel-Sandra Williams partnership, for the North Grandview
Estates Subdivision.
AGREEMENTBEnNEEN
THE CITY OF DUBUQUE, IOWA
AND
North Grandview Estates, LlC
This Agreement is made and entered into by and between the City of Dubuque,
Iowa (City) and North Grandview Estates, lLC (Developer), this day of April, 2005.
WHEREAS, Developer is the owner of the following described real property in the
City of Dubuque, Iowa:
lots 1 thru 40 and lot A of North Grandview Estates in the City of Dubuque,
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 BEnNEEN THE PARTIES AS
FOLLOWS:
1. Eighty percent (80%) of the lots, excluding detention lots and existing homesteads
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. A lot for a single family dwelling:
1. The lot upon which a dwelling is constructed may not exceed 6,500 square
feet in area except for Lots 3, 4, 5, 6, 7, 8, 9, 10 and 16, due to terrain
hardship.
2. The street frontage ofthe 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. For the purpose of this agreement finished space shall be defined as
the square footage of those parts of the structure available for human
habitation, excluding unimproved basements, attics, and garages.
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4. The 2005 lot price may not exceed $27,877.00. For the sale of affordable
housing lots in 2006 and subsequent years, the maximum sales price for
each of the lots during each subsequent year shall be the amount obtained
by multiplying $27877.00 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 2004.
3. 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. Water main and sanitary sewer connection fees and/or assessments will be
waived, but the water main tap fee shall be paid by the Developer.
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. Subject to the availability of funds and plan approval by City, Developer will
receive a preference when applying for City Enterprise Funds (0 interest, 5-year
loans) for the installation of water main and water services and sanitary sewer
main and laterals on Helen Ridge Court and North Grandview Avenue.
e. City will assume the cost of drain tile and it's installation under the curb if City
Engineering determines it necessary.
4. In order for City to recoup its costs for sewer and water construction, a per lot
payment will be established for each lot be payable by the Developer, its
successors and assigns to the City of Dubuque upon sale of each lot in the
subdivision. Any balance remaining unpaid after 5 years shall be paid by the
Developer as a lump-sum balloon payment.
Prior to the disbursement of any funds by City, Developer shall execute and deliver
to City a promissory note in an amount equal to the estimated funds to be paid by
City for the sanitary sewer and water construction. Such promissory note shall be
secured by a mortgage on the Subdivision which shall provide for the release of lots
upon payment of the above-mentioned per lot payment. Developer may elect to
provide alternate security for such note in a form acceptable to City
5. 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
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housing lot as defined herein. This paragraph shall not apply to the sale of any lot
upon which a dwelling unit has been built.
6. 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.
7. 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 square feet at the time the unit
is transferred to the purchaser, the party constructing said unit shall pay to 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 City a surcharge of $25.00 per square foot for
each square foot in excess of said limit.
8. After a completed 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.
9. In the event Developer, or any of its purchasers, successors, heirs or assigns,
violates any requirement or condition of this Agreement, the person violating the
Agreement shall repay to 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 Developer's cost of street construction in the Subdivision.
In addition, the promissory note referred to in paragraph 3 above shall accrue
interest at the rate of five and one-half percent (5%%) per annum retroactive to the
date the funds were borrowed.
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10. 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.
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.
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 size
restrictions identified herein shall no longer apply.
14. Developer hereby designates as affordable housing lots the lots specified on the
attached final plat for the Subdivision.
15. Under current City policy, if North Grandview Avenue is reconstructed, abutting
owners must pay an assessment for a portion of the project cost. If only asphalt
resurfacing is performed it is currently not an assessable project. This policy could
be changed by a vote of the City Council.
16. Developer agrees that the dedication of the storm water detention basins and
related improvements on Lots 11 and 14 will not be accepted by the City until 80%
of the lots in the Subdivision have been fully developed with a habitable residential
structure, including grass and ground cover and the remaining 20% of the lots have
established grass and ground cover. Until such acceptance by City, any property
taxes due for such Lots and improvements thereon shall be the responsibility of
Developer. Any maintenance expenses incurred by City for the detention basins
whether before or after acceptance of the dedication shall be assessed equally
against the developable lots in the Subdivision and collected in the same manner as
property taxes. Developer shall grant an easement to City to perform such
maintenance as City deems necessary.
17. On or before homes have been constructed on 80% of the lots in the Subdivision,
sidewalks shall be installed in the Subdivision along Grandview Avenue and on both
sides of Helen Ridge Court. The cost of sidewalk installation shall be born by the
Developer or the purchaser of a lot as may be negotiated by the Developer.
Sidewalks along West 32"d St. shall be installed by Developer or the lot owner at
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such time as West 32"d St. is improved with curb and gutter. Sidewalks shall be
installed on the street frontages of Lots 11 and 14 and the existing homes on Lots
12 and 13.
18. Developer agrees to install a sanitary sewer manhole over the sanitary sewer at a
point adjacent to the southeast comer of Lot 28. Developer agrees that the City at
its cost may extend the sanitary sewer and storm sewer from the manhole at the
southeast comer of Lot 28 to the west property line of the Subdivision and that
Developer will grant an easement to City at no cost for such extension.
19. The cost of improvements to any existing facilities in the Subdivision shall be born
by the Developer.
20. This Agreement shall terminate twenty (20) years from the date if its execution.
21. Upon execution of this Agreement, City shall promptly record this Agreement with
the Dubuque County Recorder.
CITY OF DUBUQUE, IOWA
Attest:
By'
Terrance M. Dug
Mayor
anne F. Schneider, CMC
City Clerk
STATE OF IOWA )
) ss:
DUBUQUE COUNTY )
On this/7~~ day of ~~~ ,2005, before me, the undersigned, a
Notary Public in and for said 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 G~w Coun~i~,}tS ~t8i"ed m Rcselt:ltion No. _
passed by the City Council on the ~ day of~ ,;?tH.}"' I 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 voluntary act and deed of the
corporation, by it and by them voluntarily executed.
~I ~W/.;~
~~~ Public in and for said State
~"\A(. SUSAN M. WINTER
~ ' ...-:: COMMISSION NO,183274
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. . MY COMMISSION EXPIRES
10"'-':- 2/14/08
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Attest:
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North Grandview Estates, LLC
STATE OF IOWA
DUBUQUE COUNTY
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)
ss.
On this 21st day of April ,2005, before me, the undersigned, a Notary
Public in and for said State, personally appeared Richard A. Henkel to me personally
known, who being by me duly sworn, did say that that person isa representative of said
limited liability company; that no seal has been procured by the said limited liability
company; that said instrument was signed on behalf of said limited liability company by
authority of its managers; and that said Richard A. Henkel acknowledged the execution of
said instrument to be the voluntary act and deed of said limited liability company, by it
voluntarily executed.
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