Multi-Familly Rental Unit New Production Round 5Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Multi - Family Rental Unit Production - Round 5
DATE: November 15, 2012
Dubuque
kital
All- America City
II 111!
2012
Economic Development Director Dave Heiar recommends City Council approval for City
Staff, along with ECIA, to work with area developers for submittal of CDBG Multi - Family
Rental Unit Production — Round 5 applications, and to narrow the field to the most
competitive applications. Prior to actual submittal to the IEDA, the applications will be
brought back to the City Council for final approval.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
brit44 krt., italy,
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
Masterpiece on the Mississippi
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
SUBJECT: Multi - Family Rental Unit Production — Round 5
DATE: November 14, 2012
Dubuque
knetril
All-America City
1
2007
PURPOSE
This memorandum is to seek City Council approval of the process of submitting applications for
CDBG Multi - Family Rental Unit Production — Round 5 which is a state program designed to
create multi - family rental units in Iowa.
BACKGROUND
On June 4, 2012, the City Council approved an application for the NP4 Program on behalf of
Tim McNamara / Wilmac Property Group. This application was not approved. Since that time
City staff along with ECIA have met with local developers to review the guidelines for submitting
an application once the NP5 program opened.
This potential funding is essential to the City of Dubuque for two reasons. First, it will help
address the critical shortage of workforce housing in our community and second, it will continue
to help implement the redevelopment of older and under - utilized buildings in our community
This would assist in meeting the rental housing needs identified in 2009 IFA housing study,
which indicated a need for 557 new rental units in our community with emphasis on downtown
location. The City has not come close to meeting the rental housing need identified by the 2009
study. In the meantime, local businesses and industries continue to expand. Unfortunately, the
tight rental housing market makes job growth challenging. The demand for quality rental
housing continues to out pace the available rental units.
DISCUSSION
It was announced earlier this week that the NP5 program is now accepting applications from
developers and the applications are due no later than March 1, 2013. Approximately $18 million
is available for cities over 50,000 in population. The maximum allowable per project is $3
million and no more than 2 applications will be accepted per city. Projects need written
acceptance from the local government and will be prioritized according to the following factors.
a) Affordability
b) Sustainability
c) Need (market)
d) Project's relationship to the disasters of 2008
e) Other factors if necessary.
Awards will be given to projects that are most shovel ready. Projects can be new constructions
or adaptive reuse and should reflect a debt service coverage ratio between 1.15 and 1.35. All
other project funding sources need to be secured prior to commitment of these CDBG funds and
51 % of rental units must be leased to persons who are at or below 80% of the area median
income which is $36,200 for a period of 10 years (this restriction is 5 years if project has less
than 12 units). Mixed use projects will be allowed but only the residential portion of the project
will be funded from this program. Davis Bacon wages will apply to the project. The funds will
be a 10 year forgivable loan, 5 years if less than 12 units (non- receding). Each project will need
to submit a "Green Development Plan ".
ECIA and City Staff have met with local developers regarding the NP5 program. We have had 9
developers express interest in this program. The actual application is very extensive and
cumbersome. Rather than asking all the interested developers to complete a full application, I
am recommending that each of the developers submit a letter of interest explaining their project
to City Staff and ECIA who will evaluate which projects would be the most competitive on a
State wide basis, and work with the top 2 or 3 in preparing a full application. We would ask for
these letters of interest to be submitted by the end of November.
RECOMMENDATION
Based on the critical need for quality units in the Downtown Area, I recommend that the City
Council authorize City Staff along with ECIA to work with area developers for submittal of CDBG
Multi - Family Rental Unit Production — Round 5 applications, and to narrow the field to the most
competitive applications. Prior to actual submittal to the IEDA, the applications will be brought
back to the Council for final approval.
F: \USERS \Econ Dev \NP5\20121114_NP5 Funding Council Memo.doc
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