101-123 Main St. Promissory Note/Mortgage Obligation
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RESOLUTION ~-99
A RESOLUTION APPROVING AN ASSUMPTION AGREEMENT FOR
PROPERTY LOCATED AT 101-123 MAIN STREET.
Whereas, the City of Dubuque, Iowa, provided a CommerciallIndustrial Building
Rehabilitation Loan to William Hos and Sidney Wallace on May 7, 1996 for the exterior
rehabilitation of property located at 101-123 Main Street; and
Whereas, Sidney and Colleen Wallace wish to purchase said property from the William
Hos estate; and
Whereas, Sidney and Colleen Wallace have asked the City to approve their assumption of
mortgage and promissory note liability associated with said property; and
Whereas, the Assumption Agreement, hereto attached and by this reference made a part
hereof, sets forth the terms and conditions of the agreement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
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Section 1.
That the Assumption Agreement is hereby accepted and approved.
Section 2. That the Mayor is hereby authorized to execute, on behalf ofthe City
Council of the City of Dubuque, Iowa, the attached Assumption Agreement.
Passed, approved and adopted this 15thday of Feb'"?'l} 9.
Ait: d ~
Mary ~avis
City lerk
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ASSUMPTION AGREEMENT
This Agreement is made as of the 11 dayof January ,1991-
between W ill; am N. H os8tate (Seller), Si dne v & Co 11 een W a 11 ace(Buyer), and the
CITY OF DUBUQUE, IOWA (City).
WHEREAS, Buyer wishes to buy and Seller wishes to sell certain real estate legally
described as follows, to wit:
Lot 80 ardthe South 1 and 5/12 feet of Lot 79 inthe City of Dubuque, Iowa;
AND WHEREAS, this property is currently subject to a Mortgage held by the City of
Dubuque, Iowa,
NOW THEREFORE, in consideration of the mutual promises set forth herein, the parties
agree as follows:
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Buyer assumes and agrees to pay as part of the purchase price for the above
described real property, the balance owing on a certain Promissory Note to the
City, dated the~f!ay of .?~1?a- , 199 6 secured by a Mortgage
made to the City, dated the~T1fiay of $ePfPrn 17eJ2-- , 199 b which
Mortgage was filed on the ~day of t9v~ ,9~-;;Z- , 199.(; as Inst.
No. 11fJ'q-1...Q6 which Buyer hereby assumes.
2. Buyer agrees to pay said Note according to it's face and terms and comply with
the terms, obligations and conditions of the Mortgage.
3. Seller agrees to transfer the above-described real property to Buyer on the terms
and conditions previously agreed.
4. City releases Seller from any further liability on said Note and Mortgage.
CITY OF DUBUQUE, IOWA
BUYER
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CITY OF DUBUQUE, IOWA
MEMORANDUM
February 11, 1999
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Assumption of Promissory Note and Mortgage Obligation for Property
Located at 101-123 Main Street
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Community and Economic Development Director Jim Burke is recommending
approval of the request from Sidney and Colleen Wallace for the City to sign an
assumption agreement that would allow them to assume responsibility for a
promissory note and mortgage signed by William N. Hos and Sidney Wallace. The
promissory note is currently held by the City to secure a Community Development
Block Grant (CDBG) loan provided to rehabilitate property located at 101-123 Main
Street.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Mi'chael C. Van Milligen
MCVM/j
Attachment
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cc: Barry Lindahl, Corporation Counsel
Tim Moerman, Assistant City Manager
Jim Burke, Community and Economic Development Director
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CITY OF DUBUQUE, IOWA
MEMORANDUM
February 5, 1999
TO: illigen, City Manager
FROM: ommunity and Economic Development Director
SUBJECT: Assumption of Promissory Note and Mortgage Obligation for
Property Located at 101-123 Main Street
Introduction
Sidney and Colleen Wallace have requested that the City sign an assumption agreement that
would allow them to assume responsibility for a promissory note and mortgage signed by
William N. Hos and Sidney Wallace. The promissory note is currently held by the City to secure
a Community Development Block Grant (CDBG) loan provided to rehabilitate property located
at 101-123 Main Street.
Background
On May 7, 1996, the City provided a CDBG Commercial/ Industrial Rehabilitation Loan of
$100,000 to William Hos and Sidney Wallace, co-owners of the subject property, for exterior
rehabilitation purposes. Using loan proceeds, the building was reroofed, the rear wall repaired,
several windows and doors replaced, the building repainted and a dilapidated rear porch structure
removed. The loan repayment was deferred for three years to allow for the completion of interior
renovation and lease-up of 13 proposed apartment units. The interior work was never begun.
On Mr. Hos' death in 1998, partial ownership in the building passed to his estate. Colleen
Wallace is Mr. Hos' daughter and has negotiated a buy-out ofthe property from the estate.
Discussion
The assumption agreement allows the Wallaces to move forward with the purchase of the
property from the Hos estate. The agreement stipulates that the Wallaces assume responsibilities
for both the promissory note and mortgage signed on September 26, 1996 that secure the City's
rehabilitation loan. The City has a first position mortgage on the property.
The Wallaces have met with City staff and indicate that they intend to repay the loan in full and
anticipate that the income from the three first floor storefronts is sufficient to make loan
repayments. They have no plans, at this time, to move forward with the renovation of the upper
floors.
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Recommendation
I recommend that the City Council approve the loan assumption and authorize the Mayor to sign
the agreement on the City's behalf. The agreement allows the Wallaces to move forward with
their plans to purchase the half interest currently held by the William Hos estate thereby
consolidating their ownership ofthe entire property. The Wallaces will then be fully responsible
to satisfy the terms, obligations and conditions of the mortgage.
This agreement has been reviewed and approved by the City Legal Department.
Action Step
The action step for the Council is to adopt the attached resolution.
attachments
Prepared by: Pamela Myhre-Gonyier
Associate Planner
loandoc\wallace\assump.mvm