Loading...
Downtown Housing and Downtown Rehabilitation Loan, Grant Application TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Updated Program Guidelines for Downtown Housing Incentive, Downtown Rehabilitation Loan, Planning and Design Grant, Fagade Grant and Financial Consultant Grant Programs DATE: October 30, 2012 Economic Development Director Dave Heiar recommends City Council approval of updated program guidelines for the City's downtown economic development incentive programs, including the Downtown Housing Incentive, Downtown Rehabilitation Loan, Planning and Design Grant, Fagade Grant and the Financial Consultant Grant programs. The updated guidelines would improve the quality of rehabilitation work in the Downtown, align funding with City Council goals and priorities, memorialize existing practices, provide uniformity among the programs and expedite the awarding process. The City has a long established practice of offering various programs through tax increment financing revenues that increase economic development, housing, and historical rehabilitation opportunities in the Greater Downtown Urban Renewal area. Since 1999 the City has awarded or committed 28 low- interest downtown rehabilitation loans, most valued at $300,000 a piece. Since 2007 the City has awarded or committed 21 matching fagade grants for a maximum of $10,000 each, 12 matching planning and design grants for a maximum of $10,000 each, and 6 matching financial consultant grants valued at a maximum amount of $15,000 each. Additionally, since 2010, 191 housing units were approved and 159 housing units have been added to the Downtown utilizing the $10,000 per unit Downtown Housing Incentive Program. While the rehabilitation programs have no doubt been successful, they have not come without lessons learned along the way. Economic Development staff has incorporated those lessons into revised program guidelines that are aimed at improving transparency, efficiency, and overall quality of projects for those that intend to apply in the future. Some of the most significant recommended changes include: • The Downtown Rehabilitation Loan Program is temporarily suspended. The program currently has loan commitments out until 2026. A suspension of the program would prevent any new applications from being submitted until the backlog has been sufficiently reduced. • Planning and Design Grants and Financial Consultant Grants would no longer be limited to projects receiving a Downtown Rehabilitation Loan. • On some projects, exterior alterations may be reviewed by the City Planning Department, as opposed to exclusively the Historic Preservation Commission. Signs that are not compliant with zoning regulations and design guidelines shall also be included in the design review. • Single family homes are not eligible for any assistance. • Rental units within the Washington Neighborhood are not eligible for the Downtown Housing Incentive Program unless they have a commercial component or are rehabilitation of a former school or church. • Projects using low- income housing tax credits are not eligible for the Downtown Housing Incentive Program. • Projects requesting reimbursement for repointing through the Facade Grant Program are required to provide a mortar analysis sample with their applications. I concur with the recommendation and respectfully request Mayor and City Council approval. Michael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Manager David J. Heiar, Economic Development Director 2 THE CITY OF DUB E Masterpiece on the Mississippi DATE: October 30, 2012 TO: Michael C. Van Milligen, City Manager FROM: David J. Heiar, Economic Development Director Dubuque Leal All-America City 11111 2012 SUBJECT: Updated Program Guidelines for Downtown Housing Incentive, Downtown Rehabilitation Loan, Planning and Design Grant, Facade Grant and Financial Consultant Grant Programs. Introduction The purpose of this memorandum is to forward for City Council review and approval updated program guidelines for the City's downtown economic development incentive programs, including the Downtown Housing Incentive, Downtown Rehabilitation Loan, Planning and Design Grant, Facade Grant and the Financial Consultant Grant programs. The updated guidelines would improve the quality of rehabilitation work in the Downtown, align funding with City Council goals and priorities, memorialize existing practices, provide uniformity among the programs and expedite the awarding process. The various guidelines, along with the resolution adopting the guidelines, are attached. Background The City has a long established practice of offering various programs through tax increment financing revenues that increase economic development, housing, and historical rehabilitation opportunities in the Greater Downtown Urban Renewal area. Since 1999 the City has awarded or committed 28 low- interest downtown rehabilitation loans, most valued at $300,000 a piece. Since 2007 the City has awarded or committed 21 matching facade grants for a maximum of $10,000 each, 12 matching planning and design grants for a maximum of $10,000 each, and 6 matching financial consultant grants valued at a maximum amount of $15,000 each. Additionally, since 2010, 191 housing units were approved and 159 housing units have been added to the Downtown utilizing the $10,000 per unit Downtown Housing Incentive Program. Discussion While the rehabilitation programs have no doubt been successful, they have not come without lessons learned along the way. Economic Development staff has incorporated those lessons into revised program guidelines that are aimed at improving transparency, efficiency, and overall quality of projects for those that intend to apply in the future. Some of the most significant recommended changes include: • The Downtown Rehabilitation Loan Program is temporarily suspended. The program currently has loan commitments out until 2026. A suspension of the program would prevent any new applications from being submitted until the backlog has been sufficiently reduced. • Planning and Design Grants and Financial Consultant Grants would no longer be limited to projects receiving a Downtown Rehabilitation Loan. • On some projects, exterior alterations may be reviewed by the City Planning Department, as opposed to exclusively the Historic Preservation Commission. Signs that are not compliant with zoning regulations and design guidelines shall also be included in the design review. • Single family homes are not eligible for any assistance. • Rental units within the Washington Neighborhood are not eligible for the Downtown Housing Incentive Program unless they have a commercial component or are rehabilitation of a former school or church. • Projects using low- income housing tax credits are not eligible for the Downtown Housing Incentive Program. • Projects requesting reimbursement for repointing through the Facade Grant Program are required to provide a mortar analysis sample with their applications. Recommendation I recommend that the attached resolution adopting program guidelines for the Downtown Housing Incentive Program, along with the Downtown Rehabilitation Loan Program, Planning and Design Grant Program, Facade Grant Program and Financial Consultant Grant Program be approved to improve support of the City's Downtown redevelopment. Action Step The Action Step for the City Council is to review and approve the resolution to adopt the Updated program guidelines. attachments F: \USERS \Econ Dev \Program Handouts\20121030 Update to ED grant programs, Council Memo.docx Prepared by: David Heiar, Economic Dev Director 50 West 13th Street, Dubuque IA 52001 563 589 -4393 Return to: Kevin Firnstahl, City Clerk, 50 West 13th Street, Dubuque IA 52001 563 589 -4121 RESOLUTION NO.309 -12 AMENDING THE GUIDELINES FOR THE DOWNTOWN HOUSING INCENTIVE, DOWNTOWN REHABILITATION LOAN, PLANNING AND DESIGN GRANT, FACADE GRANT AND FINACIAL CONSULTANT GRANT PROGRAM WITHIN THE GREATER DOWNTOWN URBAN RENEWAL DISTRICT Whereas, the City of Dubuque has a long established practice of offering various programs, through tax increment financing revenues, that increase economic development, housing and historical rehabilitation opportunities in the Greater Downtown Urban Renewal District; and Whereas, since 1999, the City of Dubuque has awarded or committed 28 low - interest downtown rehabilitation loans, most at $300,000 a piece, through the Downtown Rehabilitation Loan Program; and • Whereas, since 2007, the City of Dubuque has awarded or committed 12 matching grants, up to $10,000 each, to assist the hiring of engineers or architects through the Planning and Design Grant Program; and Whereas, since 2007, the City of Dubuque has awarded or committed 21 matching grants, up to $10,000 each, for historic facade rehabilitation through the Facade Grant Program, and Whereas, since 2007, the City of Dubuque has awarded or committed 6 matching grants, up to $15,000 each, to assist the hiring of financiaLc_onsultants_ through _ the Financial Consultant Grant Program; and Whereas, since 2010, the City of Dubuque has utilized the $10,000 per unit Downtown Housing Incentive Program to assist private developers in the creation of 191 housing units; and Whereas, City staff, through years of administering the programs, have identified ways to improve the transparency, efficiency and overall quality of the programs for future downtown rehabilitation. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The City Council approves the amended program guidelines for the Downtown Rehab Loan Program in the Greater Downtown Urban Renewal District. Section 2. The City Council approves the amended program guidelines for the Planning and Design Grant Program in the Greater Downtown Urban Renewal District. Section 3. The City Council approves the amended program guidelines for the Facade Grant Program in the Greater Downtown Urban Renewal District. Section 4. The City Council approves the amended program guidelines for the Financial Consultant Grant Program in the Greater Downtown Urban Renewal District. Section 5. The City Council approves the amended program guidelines for the Downtown Housing Incentive Program in the Greater Downtown Urban Renewal District. Passed, approved and adopted this 6th day of November, 2012. oy D. Buol, Mayor Attest: Kevin ' irnstahl, City Clerk L� F: \USERS \Econ Dev \Program Handouts\20121029 Resolution for ED grant programs.docx Economic Development Departm ent City Hall — Second Floor 50 West 13th Street Dubuque, Iowa 52001 -4864 (563) 589 -4393 Office (563) 589 -1733 Fax (563) 589 -6678 TDD Masterpiece on the Mississippi October 30, 2012 DOWNTOWN HOUSING INCENTIVE PROGRAM David J. Heiar Economic Development Director dheiarat citvofdubuque.ora Phil Wagner Asst. Economic Development Director pwagner@cityofdubuque.org 50 West 13th Street Dubuque, IA 52001 563 -589 -4393 Proiects eligible to receive assistance from this established pool of funds must meet the following requirements: • The project must assist in the creation of new market -rate downtown rental and/or owner- occupied residential units within the Greater Downtown Urban Renewal District. • The project must be the rehabilitation of an existing structure. • Within the Washington Neighborhood, rental units must be located above a commercial component on the first floor of the building unless the project is rehabilitating or reusing a former church or school building. • Exterior alterations are subject to design review and approval. The Historic District Guidelines shall apply to projects located in Historic Preservation District. The Downtown Design Guidelines shall apply to all other project locations. Projects which conform to the applicable guidelines may be reviewed and approved by the City Planner. Projects that do not strictly conform to the applicable guidelines will be forwarded to the Historic Preservation Commission (HPC) for consideration. New construction or substantial rehabilitation projects may also be considered by the HPC. The process for review is at the discretion of the City Planner. Guidelines can be viewed and downloaded at httb:llwww.citvofdubuque.org /design guidelines. • Any signs on the property that do not comply with City zoning regulations and design guidelines must be included in the design review and improved to comply with applicable City Codes. Submittal must include the design materials and colors that will be used on the sign face, how the sign will be displayed, and any lighting proposed. • Include detailed drawing of the proposed project. The plans should include dimensions and architectural details and label materials. Plans prepared by a design professional (e.g. architect or draftsperson) are strongly recommended. Applications without detailed drawings will not be considered complete and will not be accepted by the City. • Deviation from an approved project plan may disqualify the project from the program. • Preference will be given to projects that also utilize Federal and /or State Historic Tax Credits. • No more than $10,000 in assistance will be considered per residential unit. • In general, no more than $750,000 will be provided to a single project. • No developer fee will be permitted until all city assistance is paid or satisfied in full. • The City will disperse awarded funds for the benefit of the project once the project is completed and a Certificate of Occupancy has been given for the housing units. • Each approved project will also be eligible to receive site - specific Tax Increment Financing (TIF) for up to a 10 year period, depending on the project type and scope. • A minimum of 2 new housing units must be created in the project. • Units smaller than 650 square feet will not be eligible for this project. • No residential units will be allowed to have a restriction of less than 80% of the median income. • No more than 65% of the units of any project can have a restriction of 80% of the median income. • A project that is funded by Low Income Tax Credits (LITC) is not eligible. • The owner(s) of the property must certify that all other property in the City of Dubuque in which the owner(s) has any interest, complies with all applicable City of Dubuque ordinances and regulations, including, but not limited to, housing, building, zoning, fire, health, and vacant and abandoned building regulations. F: \USERS \Econ Dev \Program Handouts \Downtown Housing Incentive Program\20121029 Downtown Housing Incentive Final.docx City of Dubuque, Iowa Downtown Rehabilitation Loan Program, Planning and Design Grant Program, Facade Grant Program, and Financial Consultant Grant Program PROGRAM GUIDELINES (10/2012) 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: Owners of property within the Greater Downtown Urban Renewal District (map attached). Eligible Activities and Assistance: Downtown Rehab Loan Program — TEMPORARILY SUSPENDED A maximum of a three hundred thousand dollar ($300,000) low- interest loan is available for interior and exterior rehabilitation, facade renovation and adaptive reuse of existing buildings. Up to the full amount of the loan may be forgiven for projects which create additional employment opportunities and /or new housing units within the District. Planning and Design Grant Program —A maximum of a ten thousand dollar ($10,000) matching grant is available to provide assistance on pre - development costs associated with a project. Facade Grant Program — A maximum of a ten thousand dollar ($10,000) matching grant is available to provide assistance on labor or material costs for front or rear facade renovations to restore a building's historic appearance or eliminate inappropriate additions or alterations to improve overall appearance. Financial Consultant Grant Program — A maximum of a fifteen thousand dollar ($15,000) matching grant is available to provide assistance on hiring a financial consultant used to analyze the feasibility of a project. 1 General Conditions: • Property must be located in Greater Downtown Urban Renewal District. • Projects must be the rehabilitation of an existing structure. • Property cannot be a single family home. • All existing code deficiencies within a scope of a project must be corrected and new improvements must comply with all applicable codes and ordinances. • Owner of property must certify that all property in the City of Dubuque, for which the owner has any interest, complies with all applicable City of Dubuque ordinances and regulations, including, but not limited to, housing, building, zoning, fire, health, and vacant and abandoned building regulations. • Exterior alterations are subject to design review and approval. The Historic District Guidelines shall apply to projects located in Historic Preservation Districts. The Downtown Design Guidelines shall apply to all other project locations. Projects which conform to the applicable guidelines may be reviewed and approved by the City Planner. Projects that do not strictly conform to the applicable guidelines will be forwarded to the Historic Preservation Commission (HPC) for consideration. Substantial rehabilitation projects may also be considered by the HPC. The process for review is at the discretion of the City Planner. Guidelines can be viewed and downloaded at http:// www. cityofdubuque .org /designguidelines. • Any signs on the property that do not comply with City zoning regulations and design guidelines must be included in the design review and improved to comply with applicable City Codes. Submittal must include the design materials and colors that will be used on the sign face, how the sign will be displayed, and any lighting proposed. • Include detailed drawings of the proposed project. The plans should include dimensions and architectural details and label materials. Plans prepared by a design professional (e.g. architect or draftsperson) are strongly recommended. Applications without detailed drawings will not be considered complete. • Applicant will not be reimbursed for personal labor costs or labor costs of family members, nor can these costs be counted in the total project costs. • Projects may not receive the maximum amount of each form of assistance more than once. • Deviation from an approved project plan may disqualify the project from the program. FOR MORE INFORMATION, please contact: City of Dubuque Economic Development Department 50 West 13th Street Dubuque, Iowa 52001 (563) 589 -4393 2 DOWNTOWN REHABILITATION LOAN INFORMATION TEMPORARILY SUSPENDED UNTIL FURTHER NOTICE Amount of Loan: A maximum of three hundred thousand dollars ($300,000) per building shall be loaned during the life of the program. Projects may be phased with a minimum often thousand dollars ($10,000) loaned at any one time. Interest: Three percent (3 %) per annum. Amortization: Twenty (20) years. Repayment: • Monthly payments. • Interest only payments from the beginning of the loan until the end of year 5. • Principal and interest payments from year 6 through 20. Loan Specific Conditions: • Rehabilitation projects must include a commercial component. • Loans shall not exceed ninety percent (90 %) of total project costs. • Applicant must provide at least a second mortgage as security. • Additionally, applicant must provide a personal guaranty or other collateral the value of which is equal to the amount of the loan. Approval Process: 1. Design review by the City Planning Department or the Historical Preservation Commission is required for exterior work on the project. 2. Loans are reviewed by City staff and approved by the City Council. 3. Funding will be dispersed upon execution of all loan and security documents. 3 AVAILABLE INCENTIVES Up to the full amount of the loan may be forgiven by the City as an incentive for the creation of new employment and /or housing opportunities in the Greater Downtown Urban Renewal District. Once a loan agreement is fully executed, loan forgiveness shall occur either after the fifth anniversary of the completion of work or the fifth anniversary of initial payments on the loan, whichever comes sooner, in accordance with the following guidelines. Employment Incentive Two thousand dollars ($2,000) may be forgiven for each new full -time job or full -time equivalent created and maintained by the applicant or his /her tenant. "New" shall mean new to the district. To qualify, the applicant must document the following: • The job is a full -time position or a full -time equivalent. • It is a paid position. • The position is created by a business or other entity located in the building rehabbed or improved with loan funds. • The position was created within two years of the city council's approval of the loan. • The position has been maintained for a period of not less than three (3) years. Housing Incentive Two thousand dollars ($2,000) may be forgiven for each new housing unit created. A new housing unit shall be defined as one of the following: • The creation of a housing unit where one did not previously exist; or • An existing housing unit which has been unlicensed and unoccupied for a period of not less than five years. To qualify, the applicant must document the following: • The unit is licensed by the City. • The unit was created within two years of the City Council's approval of the loan. • The unit has been occupied for a period of not less than three (3) years. 4 PLANNING AND DESIGN GRANT INFORMATION This program provides grants in the Greater Downtown Urban Renewal District for hiring architects, engineers or other professional services used prior to construction. Amount of Grant: 1:1 matching grant not to exceed ten thousand dollars ($10,000) per building may be awarded by the City to offset the actual pre - development costs. (Example: $8,500 in eligible project costs would receive $4,250 grant matched by $4,250 in private contribution; $20,000 or greater eligible project costs would receive the maximum $10,000 grant.) Grant Specific Conditions: • Reimbursement is for architectural and engineering fees, feasibility studies, environmental assessments or other related soft costs. • Reimbursable expenditures must be documented. • Owner / developer fees are not permitted as reimbursable expenditures. • The grant shall not exceed ten percent (10 %) of total project costs. • Grants will be dispersed upon completion of the project at a rate of $0.50 for each $1.00 of qualified costs. Approval Process: 1. Design review by the City Planning Department or the Historical Preservation Commission is required for exterior work on the project. 2. Grant applications will be reviewed by City staff and approved by the City Manager. 3. Funding will be dispersed upon staff review of documented expenditures and inspection of a completed project. 5 FACADE GRANT INFORMATION This program provides grants in the Greater Downtown Urban Renewal District for front or rear facade renovation to restore the facade to its historic appearance, or improve the overall appearance. Amount of Grant: 1:1 matching grant not to exceed ten thousand dollars ($10,000) shall be awarded by the City to qualifying projects based on total eligible project costs. (Example: $8,500 in eligible project costs would receive a $4,250 grant matched by $4,250 in private contribution; $20,000 or greater eligible project costs would receive the maximum $10,000 grant.) Grant Specific Conditions: • Reimbursement is for labor and material costs associated with facade improvements, including, but not limited to rehabilitating or improving windows, paint, signage, or awnings to enhance overall appearance. • Landscaping or screening with fencing or retaining walls may be a reimbursable expense if a determination is made that property is improved adjacent to public right -of -way. • In order to receive reimbursement for repointing, a mortar analysis sample must be provided for each facade that will be repointed. The applicant must adhere to the results of that analysis in their rehabilitation work as part of their approved project plan. The City may request verification that the new mortar matches the results of the mortar analysis. • Language from the National Park Service Technical Preservation Services Briefs may be attached as a condition for a building permit if the applicant chooses to perform repointing on the project. • Reimbursable expenditures must be documented. • Grants will be dispersed upon completion of work at a rate of $.50 for each $1.00 of qualified costs. Approval Process: 1. Design review by the City Planning Department or the Historical Preservation Commission is required for exterior work on the project. 2. Grant applications will be reviewed by City staff and approved by the City Manager. 3. Funding will be dispersed upon staff review of documented expenditures and inspection of a completed project. 6 FINANCIAL CONSULTANT GRANT INFORMATION This program provides grants in the Greater Downtown Urban Renewal District for hiring a financial consultant to analyze the feasibility of projects. Amount of Grant: 1:1 matching grant not to exceed fifteen thousand dollars ($15,000) shall be awarded to qualifying projects based on total eligible project costs. (Example: $8,500 in eligible project costs would receive a $4,250 grant matched by $4,250 in private contribution; $30,000 or greater eligible costs would receive the maximum $15,000 grant.) Grant Specific Conditions: • Reimbursement is for fees associated with hiring a professional financial consultant. • Reimbursable expenditures must be documented. • The grant shall not exceed ten percent (10 %) of total project costs. • The rehabilitation project must be completed for the Financial Consultant Grant to be funded. • Grants will be dispersed upon completion of work at a rate of $.50 for each $1.00 of qualified costs. Approval Process: 1. Design review by the City Planning Department or the Historical Preservation Commission is required for exterior work on the project. 2. Grant applications will be reviewed by City staff and approved by the City Manager. 3. Funding will be dispersed upon staff review of documented expenditures and inspection of a completed project. F: \USERS \Econ Dev \Program Handouts \DRLP \20121029 Downtown Rehab Loan Program Final.docx 7