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
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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
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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