Multi-Family Rental Unit Production Round 5_901 Jackson StreetMasterpiece on the Mississippi
Dubuque
kital
All- America City
II h/
2012
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Multi - Family Rental Unit Production - Round 5 for 901 Jackson Street
DATE: February 12, 2013
Economic Development Director Dave Heiar is recommending approval of a $2.9 million
application for CDBG Multi - Family Rental Unit Production — Round 5 funding as part of
a $3,467,000 project to create multi - family rental units at 901 Jackson Street.
In late November 2012, the State announced that the CDBG Multi Family Rental Unit
Production Round -5 (NP5) program was accepting applications from developers and
the applications are due no later than March 1, 2013.
Projects can be new construction or adaptive reuse. Fifty -one percent of rental units
must be leased to persons who are at or below 80% of the area median income, which
is $37,000 for a family of one, for a period of 10 years. The funds will be a 10 year
forgivable loan.
This potential funding is essential to the City of Dubuque for two reasons. First, it will
help address the critical shortage of workforce housing and second, it will continue to
help implement the redevelopment of older and under - utilized buildings.
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 met 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.
ECIA and City Staff have reviewed 5 proposals from local developers who had
expressed interest in the NP5 program. Three of these applications either did not meet
the state criteria or were not shovel ready. However, the proposal submitted by Tim
McNamara, Wilmac property Group for his property at 901 Jackson for the NP5
program is a shovel ready project.
The Linseed Oil Paintworks Building is located at 901 Jackson Street in the Millwork
District. The project will include 15 new residential units. The building will have a
handicapped accessible social area and garden on the roof. The Developer is also
looking into a small solar system to supplement the electrical system. The Developer is
estimating the total cost of the project to be $3,476,000. The project will be using State
Historic Tax Credits which have been reserved.
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
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 for 901 Jackson St
DATE: February 7, 2013
Dubuque
knetril
All- America City
1
2007
PURPOSE
This memorandum is to seek City Council approval of an application for CDBG Multi - Family
Rental Unit Production — Round 5 funding to create multi - family rental units at 901 Jackson
Street.
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 funded by the state. 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.
In late November 2012, the State announced that the CDBG Multi Family Rental Unit
Production Round -5 (NP5) program was 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 construction
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 $37,000 for a family of one 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 ".
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 met 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
ECIA and City Staff have reviewed 5 proposals from local developers who had expressed
interest in the NP5 program. Three of these applications either did not meet the state criteria or
were not shovel ready. However, the proposal submitted by Tim McNamara, Wilmac property
Group for his property at 901 Jackson for the NP5 program is a shovel ready project.
The developer is still working on the details of the NP5 application which is due March 1, 2013.
The Linseed Oil Paintworks Building located at 901 Jackson Street in the Millwork District. The
application will include 15 new residential units. The building will have a handicapped
accessible social area and garden on the roof. The Developer is also looking into a small solar
system to supplement the electrical system. The Developer is estimating the total cost of the
project to be $3,476,000. The project will be using State Historic Tax Credits which have been
reserved.
The CDBG Multi - Family Rental Unit Production — Round 5 application requests a grant of up to
$2.9 million to fund the gaps associated with the adaptive reuse of the Linseed Oil Paintworks
Building into up to 15 rental units. The total project cost is estimated at $3,467,000.
RECOMMENDATION
Based on the critical need for rental housing, I recommend that the City Council approve the
attached Resolution to authorize an application for up to $2.9 million of CDBG Multi - Family
Rental Unit Production — Round 5 on behalf of the 901 Jackson Street project proposed by Tim
McNamara, Wilmac Property Group.
F: \USERS \Econ Dev \NP5 \McNamara\20130212_NP5 Funding Council Memo- McNamara.doc
2
Prepared by: David Heiar, Economic Dev Director, 50 West 13th Street, Dubuque IA 52001 563 589 -4393
Return to: Kevin S. Firnstahl, City Clerk, 50 West 13th Street, Dubuque IA 52001 563 589 -4121
RESOLUTION NO. 60 -13
RESOLUTION OF SUPPORT TO THE IOWA ECONOMIC DEVELOPMENT AUTHORITY, ON
BEHALF OF TIM MCNAMARA, WILMAC PROPERTY GROUP FOR SUBMITTAL OF AN
APPLICATION FOR A CDBG DISASTER MULTI - FAMILY UNIT PRODUCTION ROUND 5
APPLICATION.
Whereas, Dubuque County was impacted by the floods of 2008 and the area has a critical
need for additional workforce housing; and
Whereas, in 2009 the Real Property Research Group financed by the IFA along with other
studies concluded that there is a need for additional downtown housing; and
Whereas, the City Council has prioritized the redevelopment of infill space rather than
encouraging urban sprawl; and
Whereas, the project is located at 901 Jackson Street and will provide much needed
residential development to the downtown and North end areas; and
Whereas, the City Council finds that the proposed application is acceptable and necessary to
the growth and development of the city.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Attest:
Kevin , irnstahl, Ci y Clerk
Section 1.
Section 2.
The City of Dubuque agrees to support the CDBG Disaster Multi - Family Unit
Production Round 5 Application on behalf of Tim McNamara, Wilmac
Property Group for the property at 901 Jackson Street
That the Mayor is hereby authorized and directed to execute this Resolution
on behalf of the City of Dubuque and forward the executed copy to the. Iowa
Economic Development Authority.
Passed, approved and adopted this 18t" day of February, 2013.
De
,/,/
Roy D. Buol, Mayor
F: \USERS \Econ Dev \NP5\20130207_ Resolution of Support NP5 - McNamara.doc