Eagle Valley Sub Amend Devel. Agree
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MEMORANDUM
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May 30, 2006
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Amendment to Development Agreement for Eagle Valley Subdivision
A Development Agreement between Fondell Excavating and the City of Dubuque was
approved by the City Council in December 2003. This was the City's first "affordable
housing subdivision." A total of 16 single family lots were platted, with an initial ceiling
price of $26,500; 54 duplex lots were platted, capped at $53,000 per lot.
Fondell has sold all of the single family lots, ranging in price from $22,750 to $24,750.
Demand for these lots remains high. He has sold only three of the duplex lots and
reports little market interest. The duplex lots have been sold for $34,500 each.
As a result, the developer has requested to amend the agreement to allow construction
of single family homes on the duplex lots. These lots would continue to be sold at
$34,500. With the annual CPI price adjustment allowed by the existing agreement, the
single family lot cap is currently $28,837. Accordingly, the proposed single family lot
price would exceed the current maximum by about $5,600, making the home less
affordable.
When the report of the Affordable Housing Task Force was approved by the Council in
2001, the objective was to provide sufficient incentives to build a home affordable to a
moderate-income family. This was defined as a family earning 90% of area median
income, spending 30% of income for PITI (principal, interest, taxes and home
insurance.) In 2001, the maximum price for that home was calculated at $118,000. Up-
dating those figures to 2006, the calculation of the target price is now $143,000.
This means that a moderate-income family today, spending no more than 30% of
income for PITI, can "afford" a 1200 square foot home, assuming a $90/square foot
construction cost, with a lot cost of $34,500. We have otherwise assumed the same
financing options from 2001, including financing terms and down payment amounts.
According to this scenario, the lot price proposed by Fondell still achieves the
affordability objective of the Task Force Report.
Housing and Community Development Director David Harris recommends City Council
approval of the Amendment to the Development Agreement between the City of
Dubuque and Fondell Excavating for the Eagle Valley housing subdivision.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
David Harris, Housing and Community Development Department Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
23 May 06
To: Mich~\yan Milligen, City Manager
From: Da~arriS, Housing and Community Development Department
Re: Amendment to Development Agreement for Eagle Valley Subdivision
Introduction
The purpose of this memorandum is to request the City Council's approval of an
amendment to the existing development agreement for the Eagle Valley housing
subdivision.
Background
A development agreement between Fondel! Excavating and the City was
approved by the City Council in December 2003. This was the City's first
"affordable housing subdivision," located on Roosevelt Road
A total of 16 single family lots were platted, with an initial ceiling price of $26 500;
54 duplex lots were platted, capped at $53 000 per lot.
Discussion
Fondel! has sold all of the single family lots, ranging in price from $22 750 to
$24 750. Demand for these lots remains high. He has sold only three of the
duplex lots and reports little market interest. The duplex lots have been sold for
$34 500 each.
As a result, the developer has requested to amend the agreement to allow
construction of single family homes on the duplex lots. These lots would
continue to be sold at $34 500. With the annual CPI price adjustment allowed by
the existing agreement, the single family lot cap is currently $28 837.
Accordingly, the proposed single family lot price would exceed the current
maximum by about $5600, making the home less affordable.
All other provisions of the existing agreement would remain in effect. These
include a maximum lot area of 7000 square feet and a maximum home size of
1200 finished square feet.
Analvsis
When the report of the Affordable Housing Task Force was approved by the
Council in 2001, the objective was to provide sufficient incentives to build a home
affordable to a moderate-income family. This was defined as a family earning
90% of area median income, spending 30% of income for PITI (principal, interest,
taxes and home insurance.) In 2001 , the maximum price for that home was
calculated at $118 000. Up-dating those figures to 2006, the calculation of the
target price is now $143 000.
This means that a moderate-income family today, spending no more than 30% of
income for PITI, can "afford" a 1200 square foot home, assuming a $90/square
foot construction cost, with a lot cost of $34 500. We have otherwise assumed
the same financing options from 2001, including financing terms and down
payment amounts. According to this scenario, the lot price proposed by Fondell
still achieves the affordability objective of the Task Force Report.
Recommendation
For this reason, it is recommended that the Council approve the developer's
request. After three years of marketing the Eagle Valley lots, it appears that in
today's market, little interest in the duplex lots exists. Conversely, Fondell states
that demand remains high for single family homes, and that they will be able to
sell the duplex lots for that purpose, at the higher price.
Action Step
The action requested of the City Council is to approve an amendment to the
development agreement between the City and Fondell Excavating, as attached,
for the Eagle Valley housing subdivision.
att
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AMENDMENT
TO AGREEMENT BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
FONDELL EXCAVATING, INC.
This Agreement to amend the Agreement between the City of Dubuque, Iowa
and Fondell Excavating, Inc. is entered into by and between the City of Dubuque, Iowa
("City") and Fondell Excavating, Inc. ("Developer"), this day of
2006.
WHEREAS, City and Developer are parties to an Agreement (hereinafter
referred to as "Agreement") by and between the City of Dubuque, Iowa and Fondell
Excavating, Inc. dated the 2nd day of December, 2003 and filed the 3rd day of
December, 2003, as Instrument No. 31579-03 in the records of the Dubuque County
Recorder; and
WHEREAS, the Agreement affected the following described real property in the
City of Dubuque, Iowa:
Lots 1-2, inclusive, of Block 1,
Lots 1-27, inclusive, of Block 2,
Lots 1-13, inclusive, of Block 3,
Lots 1-13, inclusive, of Block 4,
Lots 1-21, inclusive, of Block 6,
Lots 1-10, inclusive, of Block 7,
and Lots A-I, inclusive,
all of Eagle Valley Subdivision, being a subdivision of Lot 1-2 of Mineral
Lot 311, in the City of Dubuque, Dubuque County, Iowa;
(the "Subdivision"); and
WHEREAS, Developer has sought the consent of the City to sell existing platted
duplex lots for construction of single family homes and to price those lots at duplex lot
rates; and
WHEREAS, the City agrees to amend the Agreement between the City of
Dubuque, Iowa and Fondell Excavating, Inc. as previously defined herein, upon the
terms and conditions set forth herein.
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CITY OF DUBUQUE, IOWA
Attest:
Jeanne F. Schneider, CMC
City Clerk
By:
Roy D. Buol
Mayor
STATE OF IOWA
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ss:
DUBUQUE COUNTY
On this day of , 2006, before me, the undersigned, a
Notary Public in and for said County and State, personally appeared ROY D. BUOL
and JEANNE F. SCHNEIDER, to me personally known, who being by me duly sworn,
did say that they are the Mayor and City Clerk, respectively, of the City of Dubuque,
Iowa, a municipal corporation; that the seal affixed to the foregoing instrument is the
corporate seal of the corporation; that said instrument was signed and sealed on behalf
of the corporation by authority of its City Council, as contained in Resolution No.
passed by the City Council on the _ day of , , and that ROY
D. BUOL and JEANNE F. SCHNEIDER acknowledged the execution of the foregoing
instrument to be their voluntary act and deed and the voluntary act and deed of the
corporation, by it and by them voluntarily executed.
Notary Public in and for said State
FONDELL EXCAVATING, INC.
Attest:
By:
Mark R. Fondell
President
By:
James P. Kemp,
Vice President and Secretary
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STATE OF IOWA
ss.
DUBUQUE COUNTY
On this day of , 2006, before me, the undersigned, a
Notary Public in and for said State, personally appeared MARK R. FONDELL and
JAMES P. KEMP, to me personally known, who being by me duly sworn, did say that
they are the President and Vice PresidenUSecretary, respectively, of said corporation;
that [no seal has been procured by the said corporation]; that said instrument was
signed [and sealed] on behalf of said corporation by authority of its Board of Directors;
and that the said MARK R. FONDELL and JAMES P. KEMP, as such officers,
acknowledged the execution of said instrument to be the voluntary act and deed of said
corporation, by it and by them voluntarily executed.
Notary Public in and for said State
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I RECEIVED JUN 122006
Prepared by and return to:
Jennifer A Clemens-Conlon, #000013606, Clemens, Walters, Conlon & Meyer,
p,c. 2080 Southpark Court, Dubuque, Iowa 52003, Telephone: (563) 582-2926
AMENDMENT
TO AGREEMENT BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
FONDELL EXCAVATING, INC.
This Agreement to amend the Agreement between the City of Dubuque, Iowa and
Fondell Excavating, Inc. is entered into by and between the City of Dubuque, Iowa ("City")
and Fondell Excavating, Inc. ("Developer"), this day of
2006.
WHEREAS, City and Developer are parties to an Agreement (hereinafter referred
to as "Agreement") by and between the City of Dubuque, Iowa and Fondell Excavating, Inc.
dated the 2nd day of December, 2003 and filed the 3rd day of December, 2003, as
Instrument No. 31579-03 in the records of the Dubuque County Recorder; and
WHEREAS, the Agreement affected the following described real property in
Dubuque County, Iowa:
Lots 1-2, inclusive, of Block 1,
Lots 1-27, inclusive, of Block 2,
Lots 1-13, inclusive, of Block 3,
Lots 1-13, inclusive, of Block 4,
Lots 1-21, inclusive, of Block 6,
Lots 1-10, inclusive, of Block 7,
and Lots A-I, inclusive,
all of Eagle Valley Subdivision, being a subdivision of Lot 1-2 of Mineral Lot
311, in the City of Dubuque, Dubuque County, Iowa;
(the "Subdivision"); and
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,
WHEREAS, Developer has sought the consent of the City to sell existing platted
duplex lots for construction of single family homes and to price those lots at duplex lot
rates; and
WHEREAS, the City agrees to amend the Agreement between the City of Dubuque,
Iowa and Fondell Excavating, Inc. as previously defined herein, upon the terms and
conditions set forth herein.
NOW, THEREFORE, IT IS AGREED BY AND BETWEEN THE PARTIES AS
FOllOWS:
1. The Agreement between the City of Dubuque, Iowa and Fondell Excavating, Inc.,
as defined herein, shall be amended as more particularly set forth herein.
2. A duplex/two-family dwelling lot, as defined by paragraph (2) of the Agreement may
be sold for purposes of a single family dwelling, provided the lot meets the following
standards:
a. The lot upon which a dwelling is constructed may not exceed a total of 7000
square feet.
b. The street frontage of the lot may not be less than 50 feet and not more than
100 feet.
C. The constructed dwelling may not exceed 1200 square feet of finished
space, excluding basement, attic and garage.
d. The 2006 single family dwelling lot price for a lot previously defined as a
duplex/two-family dwelling may not exceed $34,500.00. For the sale of
affordable housing lots in 2007 and subsequent years, the maximum sales
price for each of the lots during each subsequent year shall be the amount
obtained by multiplying $34,500.00 by a fraction, the numerator of which is
the Consumer Price Index - Seasonally Adjusted U.S. City Average For All
Items For All Urban Consumers (1967 = 100) published monthly by the
Bureau of labor Statistics of the United States Department of labor ("CPI-
U"), for December of the year immediately preceding the year at issue, and
the denominator of which is the CPI-U for December of 2002.
3. All other provisions of the original Agreement remain in full force and effect.
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4. Upon execution of this AmendmenttoAgreement, the City shall promptly record this
Agreement with the Dubuque County Recorder.
CITY OF DUBUQUE, IOWA
Attest:
Jeanne F. Schneider, CMC
City Clerk
By:
Roy D. Buol
Mayor
STATE OF IOWA
)
)
)
ss:
DUBUQUE COUNTY
On this day of , 2006, before me, the undersigned, a
Notary Public in and for said County and State, personally appeared ROY D. BUOL and
JEANNE F. SCHNEIDER, to me personally known, who being by me duly sworn, did say
that they are the Mayor and City Clerk, respectively, of the City of Dubuque, Iowa, a
municipal corporation; that the seal affixed to the foregoing instrument is the corporate seal
of the corporation; that said instrument was signed and sealed on behalf ofthe corporation
by authority of its City Council, as contained in Resolution No. passed by the City
Council on the _ day of , , and that ROY D. BUOL and JEANNE F.
SCHNEIDER acknowledged the execution oftheforegoing instrument to be their voluntary
act and deed and the voluntary act and deed of the corporation, by it and by them
voluntarily executed.
Notary Public in and for said State
FONDELL EXCAVATING, INC.
Attest:
By:
Mark R. Fondell
President
By:
James P. Kemp,
Vice President and Secretary
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STATE OF IOWA
DUBUQUE COUNTY
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)
)
ss.
On this day of ,2006, before me, the undersigned, a Notary
Public in and for said State, personally appeared MARK R. FONDELL and JAMES P.
KEMP, to me personally known, who being by me duly sworn, did say that they are the
President and Vice President/Secretary of said corporation; that [no seal has been
procured by the said corporation]; that said instrument was signed [and sealed] on behalf
of said corporation by authority of its Board of Directors; and that the said MARK R.
FONDELL and JAMES P. KEMP, as such officers, acknowledged the execution of said
instrument to be the voluntary act and deed of said corporation, by it and by them
voluntarily executed.
Notary Public in and for said State
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