Manassah House Urban Revite SRO facility
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MEMORANDUM
January 4, 2006
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Manasseh House Urban Revitalization Area Plan
Housing and Community Development Department Director David Harris recommends
City Council approval of the establishment of the Manasseh House Urban Revitalization
Area Plan and that a public hearing be set for February 20, 2006. This plan will create
an urban revitalization area at 2080 Elm Street to allow property tax exemption for a
proposed 19 room single-room occupancy (SRO) facility for women.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Mic~ael 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
December 27, 2005
TO: Michael \~an Milligen, City Manager
FROM: David HafAs, Housing and Community Development Department
SUBJECT: Manasseh House Urban Revitalization Area Plan
Introduction
This memorandum recommends that the City Council review and approve a resolution to
establish the Manasseh House Urban Revitalization Area Plan. The plan will create an
urban revitalization area at 2080 Elm Street to allow property tax exemption for a proposed
19 room single-room occupancy (SRO) facility for women.
Background
Urban Revitalization Chapter 404 of the Iowa Code (Urban Revitalization Act) authorizes
cities to designate areas as urban revitalization areas. Improvements to qualified real
estate within these designated areas may receive a total or partial exemption from property
taxes for a specified number of years. The exemptions are intended to stimulate private
investment by reducing tax increases that usually accompany property improvements.
This additional private investment provides a long-term increase or stabilization in the
area's tax base, enhances the viability of revitalization areas and/or supports important city
objectives such as historic preservation, economic development and affordable housing
development.
In order to implement the provisions of Chapter 404, the City must prepare a revitalization
plan for each designated area and hold at least one public hearing after proper notice.
The law mandates specific criteria and procedures that must be followed.
Discussion
The plan provides for the construction of a 19 room single room occupancy (SRO) facility
for low- and moderate-income women on the vacant site at 2080 Elm Street. Michelle
Mihalakis is proposing to buy the property from Gronen Properties and has applied to the
Iowa Department of Economic Development for HOME Program funds for a $680,000
forgivable loan. She is requesting the urban revitalization tax exemption to ensure the
feasibility of the project.
Chapter 404 provides for a public comment period prior to the adoption of an urban
revitalization plan. Additionally, the City's Code of Ordinances requires comment by the
Long Range Planning Commission on any urban revitalization plan. Based upon these
requirements, the Council is requested to set a public hearing for February 20 2006 that
will provide a 30 day comment period on the amended plan. The property owner will be
notified. The Long Range Planning Commission will review the plan at their January 18th
meeting.
At the public hearing, the Council will be able to approve the plan and pass a first reading
of an ordinance designating the property as an urban revitalization area. A second hearing
must be held only if the City receives within the thirty days a valid petition from at least ten
percent of owners or tenants within the designated revitalization area. If such a petition is
submitted, the City Council may set a second public hearing and proceed to act upon the
proposed Plan following that hearing. If no such petition is presented, the City Council may
simply adopt the proposed plan following the thirty-day period.
Recommendation
I recommend that the City Council approve the attached resolution directing the Manasseh
House Urban Revitalization Plan be set for a public hearing on February 20, 2006. At the
public hearing an ordinance can be adopted which directs the City Clerk to publish the
ordinance following the 30 day period if no valid petition for a second hearing is filed. This
will expedite the process for the developer.
Action Requested
The Action Step is for the City Council to adopt the attached resolution.
Prepared by: Aggie Tauke, Community Development Specialist
F:\Users\ATAUKE\Urban Revite\Manasseh House\Manasseh House UR Council memo,06,doc
RESOLUTION NO. 20-06
RESOLUTION FINDING THAT THE DESIGNATION OF THE MANASSEH
HOUSE URBAN REVITALIZATION PLAN IS NECESSARY IN THE INTEREST
OF THE PUBLIC HEALTH, SAFETY AND WELFARE OF THE RESIDENTS OF
THE CITY OF DUBUQUE, IOWA AND PROVIDING FOR A PUBLIC HEARING
THEREON.
Whereas, the City Council of the City of Dubuque finds that the property at 2080
Elm Street is currently vacant and underutilized, and
Whereas, Michelle Mihalakis has proposed to purchase the property and
construct a 19 room single room occupancy (SRO) facility and requests the
establishment of an urban revitalization district.; and
Whereas, the area proposed for designation under the Urban Revitalization Act
is an economic development area appropriate for housing and residential development
as defined by Section 403.17 of the Iowa Code; and
Whereas, Chapter 404 of the Code of Iowa provides that a public hearing shall
be held on any proposed Urban Revitalization Area Plan.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the rehabilitation, redevelopment and economic development of the
hereinafter described area at 2080 Elm Street is found to be necessary in the
interest of the public health, safety and welfare of the residents of the City, to wit:
Lot 10f Lot 2 of Lot 1 of Lot 2 of Lot 2 of Lot 3 of Lot 10 and part of Lot 1 of Lot 1
of Lot 2 of Lot 3 of Lot 10 in Kniest Subdivision in the County of Dubuque, City of
Dubuque, Iowa, according to the recorded plat thereof.
Section 2. That the Manasseh House Urban Revitalization Area Plan as proposed
meets the eligibility criteria of Chapter 404.1 of the Code of Iowa, 2001.
Section 3. That the proposed Manasseh House Urban Revitalization Area Plan
attached hereto, shall be a matter of record and shall be available for pubic
inspection in the office of the City Clerk at City Hall, 50 West 13th Street, Dubuque,
Iowa.
Section 4. That the City is authorized and directed to submit the Manasseh House
Urban Revitalization Area Plan to the City's Long Range Planning Advisory
Commission for review and comment; and
Section 5. That the City Clerk is directed to publish notice of a public hearing on
the Manasseh House Urban Revitalization Area Plan to be held on February 20,
2006 at 6:30 p.m. in the Carnegie Stout Library Auditorium, 360 West 11th Street,
Dubuque, Iowa 52001; and
Section 6. That the owners of record will be notified by the thirtieth day prior to the
public hearing.
Passed, approved and adopted this 17th-day of January, 2006.
Roy D. Buol, Mayor
Attest:
Jeanne F. Schneider, City Clerk
M.n...... Hou..
Urb.n Revlt.llz.tlon Are. PI.n
January 2006
Introduction
The State of Iowa Urban Revitalization Act, Code of Iowa, Chapter 404, authorizes
cities to designate an area of the City as a revitalization area. Improvements to
qualified real estate within these designated areas may then become eligible for an
exemption from property taxes for a specified number of years. To implement the
provisions of the Act, the City must prepare a revitalization plan for each designated
area. This document is the plan addressing the requirements of the Act for an area to
be known as the Manasseh House Urban Revitalization Area.
Area eligibility criteria
The City Council has determined that this area is eligible for designation as a
revitalization area as it meets one of the criteria outlined in Iowa Code. Specifically,
the City Council has found this area to qualify as an economic development area as
defined by Section 403.17 of the Iowa Code. This definition includes housing
development where there is an inadequate supply of affordable, decent and safe
housing and the provision of that housing will help to retain or attract industry or meet
the needs of the elderly or disabled or of a population which may not be adequately
served.
Designating this area as an Urban Revitalization Area will assist the provision of
housing to a population which is not adequately served. The proposed Single Room
Occupancy facilities will provide single women with decent housing at affordable rent.
The property tax exemption will make this project feasible.
Legal description
The property to be included in the Manasseh House Urban Revitalization Area is
located at 2080 Elm Street, legally described as:
Lot 10f Lot 2 of Lot 1 of Lot 2 of Lot 2 of Lot 3 of Lot 10 and part of Lot 1 of Lot 1
of Lot 2 of Lot 3 of Lot 10 in Kniest Subdivision in the County of Dubuque, City of
Dubuque, Iowa, according to the recorded plat thereof.
A map of the area boundaries is attached as Exhibit A.
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Current assessed value
The current assessed valuation for the property as 2005 is as follows:
2080 Elm - $24,000 in total, which is for the land only. No building on the site.
Property ownership
The current property owner within the area, as of December 13, 2005 is:
Gronen Properties LLC
Existing zoning classification
The existing zoning as December 5,2005 is OR (Office Residential) for the entirety of
the property within the boundaries of the proposed Urban Revitalization Area.
The zoning was changed at from R-2A (Alternate Two-Family Residential district) on
September 19, 2005, to allow for the construction of a 19 room single room occupancy
facility for women.
On August 25, 2005, the Zoning Board of Adjustment approved a variance to allow
construction twelve (12) feet from the front property lines of Elm Street and Lincoln
Avenue. They also approved a variance allowing a 20-room boarding house with two
employees and nine (9) off-street parking spaces.
Existing and proposed land use
The property is currently vacant. A 19 room single room occupancy (SRO) facility for
low- and moderate-income women is proposed for the site and will be constructed with
limited rents.
City services
There are no current plans to expand or improve City services to this area. Currently
the area enjoys the same level of City services as most other areas of the City.
Exemption details
Only residential property, assessed as commercial and consisting of three or
more separate living quarters with at least seventy-five percent of the space
used for residential purposes will be eligible for property tax exemption. This will
assist the Single Room Occupancy (SRO) housing facilities that will provide
single women with decent housing at affordable rent, a population which is not
adequately served. The property tax exemption will make these projects feasible
"Qualified real estate" means real property other than land, which is located in a
designated revitalization area and to which improvements have been added,
during the time the area was so designated, which have increased the actual
value by at least fifteen percent.
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"Qualified real estate" also means land upon which no structure existed at the
start of new construction, which is located in a designated revitalization area and
upon which new construction has been added during the time the area was so
designated.
Property tax exemption shall be available only for 'improvements'
"Improvements" include new construction on vacant land.
"Actual value added by improvements" means the actual value added as of the
first year for which the exemption was received.
Any improvements that were assessed before the area was officially designated
will not be eligible for exemption. Improvements begun prior to one year prior to
the area becoming designated will not be eligible for exemption.
Improvements must result in that structure meeting applicable building code
requirements of the City of Dubuque.
The actual value of the improvements must result in an increase in assessed
value by at least fifteen percent. Each year that an application is made for tax
exemption, the assessed value must have increased in that year by at least
fifteen percent.
The property tax exemption schedule, in accordance with 1999 Code of Iowa,
Chapter 404.3 Subsection 4, is as follows:
A ten-year, 100% exemption of the actual value added by the
improvements.
The designation of the Manasseh House Urban Revitalization Area will remain in
effect only until the area is fully redeveloped or for three years, whichever occurs
first. Upon repeal or expiration of the ordinance establishing the revitalization
area, all existing exemptions would continue until their previously established
expiration date.
Industrial revenue bonds
There are no plans to issue industrial revenue bonds for revitalization projects in this
area.
Relocation
Relocation will not be necessary since the property has no structures and is vacant.
3
Anticipated grant or loan programs
The project at 2080 Elm has requested Iowa Department of Economic Development
HOME Program funds in the amount of $ 680,000.
Conclusion
The Manasseh House Urban Revitalization Area will assist the redevelopment efforts of
area by providing for the new SRO building, which will provide housing for 19 female
occupants. After the ten-year property tax exemption period elapses, the full assessed
value of the properties will revert to the tax rolls to the benefit of the entire community.
This area, upon designation, will follow the procedures for application and granting of
the property tax exemption within the City of Dubuque.
Application procedure
1. The property owner must apply for an exemption by February 1 st of the
assessment year for which the exemption is first claimed, but not later than the
year in which all the improvements are first assessed for taxation. Upon the
request of the owner, the governing body of the City may provide by resolution
that the owner may file an application no later than February 1 of the tenth
assessment year.
2. The application must contain, at a minimum, the following:
a. The nature of the improvements,
b. The cost of the improvements,
c. The actual or estimated date of completion, and
d. The tenants living on the property as of the date of the City's
resolution adopting this plan.
3. The property owner has the option of submitting a proposal for an
improvement project to the City prior to submitting a formal application. If the
proposed project is in conformance with the revitalization plan, the City Council
shall, by resolution, give preliminary approval of the project. Such preliminary
approval shall not entitle the owner to exemption until the improvements have
been completed and found to be qualified. If the proposal is rejected, the owner
may submit an amended proposal.
4. The City reviews all applications to determine whether the improvement
project conforms to the revitalization plan, is within a designated area, and if the
improvements were made during the appropriate time period. If the project
meets all three criteria, the City shall forward the application to the assessor by
March 1 st, with a statement as to which exemption applies. Applications for
exemptions for succeeding years on approved projects shall not be required.
4
5. The local assessor shall review each application by making a physical review
of the property, to determine if the improvements made increased the actual
value of the qualified real estate by at least fifteen percent or ten percent in the
case of real property assessed as residential property. If the assessor
determines that the actual value of that real estate has increased by at least the
requisite percent, the assessor shall certify the property valuation, determined
pursuant to the tax exemption schedule, to the County Auditor at the time of
transmitting the assessment rolls. The assessor shall notify the applicant of the
determination, and the assessor's decision may be appealed to the local board
of review at the time specified in Iowa Code. The property owner may also refile
an application in a subsequent year after additional improvements have been
made.
6. After the tax exemption is granted, the assessor shall continue to grant the
tax exemption, with periodic physical review by the assessor, for the ten-year
time period specified in the tax exemption schedule.
7. An application for exemption received by February 1 in any year after the
year in which the improvement was completed and first assessed for taxation, is
a late application. Late application may be made in any year up to the tenth
year following completion of the improvement. The exemption period will be the
remainder of the ten year period, which began upon completion of the
improvement, except the total number of years in the exemption schedule will be
allowed if a claim for exemption is filed within two years of the February 1 filing
deadline.
EXHIBIT A (Map)
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D Manasseh House Urban Revitalization Area
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AMENDED AND RESTATED
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MANASSEH HOUSE REVITALIZATION AREA
PROPOSED LOCATION:
2080 Elm Street
LEGAL DESCRIPTION:
LOT 1 of LOT 2 of LOT 1 of
LOT 2 of LOT 2 of LOT 3 of
LOT 10 and PART of LOT 1
of LOT 1 of LOT 2 of LOT 3
of LOT 10 In Knlest Subdivision
ZONING:
OR . OffICe Residential