North Grandview Estates Amended Agreement
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MEMORANDUM
June 27,2006
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Amendment to Development Agreement for North Grandview Estates
Subdivision
A Development Agreement between Richard Henkel and the City was approved by the
City Council in April 2005 for an affordable housing subdivision located on North
Grandview Avenue, at West 32nd Street, which included 40 single family lots; 10 along
Grandview Avenue and the remaining lots along Helen Ridge Court. Mr. Henkel now
requests that the subdivision consist of 10 affordable lots located on Grandview, and the
remaining lots to be sold at market rates.
Housing and Community Development Department Director David Harris recommends
City Council approval of the Amendment to Development Agreement for North
Grandview Estates Subdivision. Waiver of water main and sanitary sewer connection
fees and/or assessments would be permitted only for the 10 Grandview Avenue lots.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
f1zJ ~/}ztiL
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
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MEMORANDUM
28 June 06
To: MiCh~~ Milligen, City Manager
From: David Harris, Housing and Community Development Department
Re: Amendment to Development Agreement for North Grandview Estates
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 North Grandview Estates
housing subdivision.
Background
A development agreement between Richard Henkel and the City was approved by the
City Council in April 2005. This affordable housing subdivision is located on North
Grandview Avenue, at West 32nd Street.
Forty single family lots were platted, including ten along Grandview Avenue and the
remaining lots along Helen Ridge Court.
Discussion
Mr Henkel has now requested to divide this subdivision, into ten affordable lots located
on Grandview; with the remaining lots to be sold at market rates. This means that lot
price caps and lot and house size restrictions would apply only on the ten Grandview
lots. Waiver of water main and sanitary sewer connection fees and/or assessments
would be permitted only for the Grandview Avenue lots. City Enterprise Funds have
been reserved for the installation of water main and water services and sanitary sewer
main and laterals, throughout the development. This provides interest-free, five-year
loans for infrastructure costs. All other costs of development would be paid by Mr
Henkel as is customary. All other provisions of the existing development agreement _
for the Grandview lots - would remain in effect.
Per the existing agreement, a sanitary sewer manhole will be installed on Helen Ridge
Court; the City intends to install sanitary and storm sewer - at its own cost - to the west
property line of the subdivision, in order to extend services for future development of the
adjacent vacant property.
Mr Henkel has filed an amended final plat of the subdivision, which was approved by
the Zoning Advisory Commission at its June meeting. This reflects a reconfiguration of
the Helen Ridge Court lots, increasing lot frontage sizes and reducing the total number
of lots available for development.
Recommendation
It is recommended that the City Council approve the amended development agreement.
Because of unanticipated development costs incurred to-date, Mr Henkel has made a
decision to sell the Helen Ridge Court lots at market prices, in order to make the project
economically feasible.
Action Step
The action requested of the Council is to approve the attached amended development
agreement for North Grandview Estates.
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Dubuque County Iowa
Kathy Flynn Thurlow RecorderQ (�
Fi1e2007-00004829
Prepared by: James A. O'Brien, Assistant City Attorney, 300 Main Street, Dubuqu, IAS 01 (563) /
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AMENDED AGREEMENT BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
NORTH GRANDVIEW ESTATES
This Amended Agreement is made and entered into by and between the City of
Dubuque, Iowa (City) and North Grandview Estates, LLC (Developer), this,5-14-1vday of
July, 2006:
WHEREAS, Developer is the owner of the following described real property in the
City of Dubuque, Iowa:
Lot 1 of North Grandview Estates Subdivision and Lots 1 thru 37 and LotA of
North Grandview Estates No. 2 in the City of Dubuque, Iowa (the
Subdivision); and
WHEREAS, the parties entered into an Agreement dated the 21st day of April, 2005
as instrument No. 2005-400006151 granting certain incentives to Developer in return for
his development of the Subdivision for affordable housing (Agreement); and
WHEREAS, Developer has requested changes to the Agreement to allow for the
sale of Tots in the Subdivision for uses other than affordable housing; and
WHEREAS, City is willing to amend the Agreement provided the incentives granted
to Developer are limited to Tots for owner -occupied affordable housing.
NOW, THEREFORE, IT IS AGREED BY AND BETWEEN THE PARTIES THAT
THE AGREEMENT BE AMENDED TO READ AS FOLLOWS:
1. Lot 1 of North Grandview Estates Subdivision and Lots 1 through 9 of North
Grandview Estates No. 2 as shown on the plat attached hereto shall be affordable
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housing Tots as defined in paragraph 2 below and shall comply with the provisions of
this Amended Agreement related to affordable housing Tots.
2. An affordable housing lot shall mean a lot that meets the following standards:
a. A lot for a single family dwelling:
b. The lot upon which a dwelling is constructed may not exceed 6,500 square feet
in area.
c. The street frontage of the lot may not be less than 50 feet and not more than 75
feet.
d. The constructed dwelling may not exceed 1200 square feet of finished space.
Finished space shall be defined as the square footage of those parts of the
structure available for human habitation, excluding unimproved basements,
attics, and garages.
e. The 2006 lot price may not exceed $28,837.00. For the sale of affordable
housing lots in 2007 and subsequent years, the maximum sales price for each of
the Tots during each subsequent year shall be the amount obtained by
multiplying $28,837.00 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 2004.
3. City shall provide to Developer the following incentives for the Subdivision:
a. Developer shall pay a water connection fee for the lots on Helen Ridge Court of
this development. This fee is calculated based on 210 feet of street frontage
along North Grandview Avenue at $11.00 per lineal foot. This current
connection fee is calculated to be in the amount of $2,310.00. This fee will be
paid on the terms and conditions set out in Section 4 of this Amended
Agreement.
b. Water main and sanitary sewer connection fees and lot assessment will be
waived for affordable housing only. All sewer connection fees and/or
assessments for other lots and individual water service tap fees per lot in this
development must be paid prior to the actual water tap being installed. This fee
is based on the size of the service lines and is subject to change annually.
c. City shall extend an estimated 1,100 feet of 8 inch water main, including 26
service line stubs on Helen Ridge Court, at a cost not to exceed $78,001.00 as a
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loan from the new proposed intersection of Helen Ridge Court on North
Grandview Avenue west to the deadend/cul-da-sac of Helen Ridge Court. The
repayment schedule for this loan will be on the same terms and conditions set
out in Section 4 of this Amended Agreement.
d. The lot frontage minimum for affordable housing lots only shall be 50 feet and
the maximum lot width for a single family dwelling shall be 75 feet.
e. Subject to the availability of funds and plan approval by City, Developer may
apply for City Enterprise Funds (0 interest, 5 -year loans) for the installation of
water main and water services and sanitary sewer main and laterals on Helen
Ridge Court and North Grandview Avenue. Other developers applying for such
funds for affordable housing lots will receive a preference for such funds.
f. City will assume the cost of drain tile and it's installation under the curb for
affordable housing lots only, and then only if City Engineering determines it
necessary.
4. In order for City to recoup its costs for sewer and water construction (including
loans, if any), a per lot payment will be established for each lot, payable by the
Developer, its successors and assigns to the City of Dubuque due upon sale of
each lot in the Subdivision. Any balance remaining unpaid after 5 years shall be
paid by the Developer as a lump -sum balloon payment.
Prior to the disbursement of any additional funds by City, Developer shall execute
and deliver to City an amended promissory note in an amount equal to the
estimated funds to be paid by City for the sanitary sewer and water construction.
Such promissory note shall be secured by a mortgage on the Subdivision which
shall provide for the release of lots upon payment of the above-mentioned per lot
payment. Developer may elect to provide alternate security for such note in a form
acceptable to City
5. Developer shall provide a copy of the purchase agreement and the declaration of
value for the sale by developer of each affordable housing lot in the Subdivision to
City's Building Services Department prior to the time of closing on the sale.
Developer shall include in the purchase agreement for the purchase of each
affordable housing lot in the Subdivision, and in any deed conveying such
affordable housing lot, a provision that if the purchaser or any subsequent
purchaser of the lot does not construct a dwelling unit on the lot, then the purchaser
or any subsequent purchaser shall be bound by the maximum sales price as
determined by this Amended Agreement and that in the event of a sale in excess of
the maximum sales price, the seller shall pay to City, upon City's demand, the
difference between the actual sales price and the maximum sales price as defined
herein.
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6. For each dwelling unit constructed on an affordable housing lot with an interior
finished space in excess of 1200 square feet at the time the unit is transferred to the
purchaser, the party constructing said unit shall pay to City a surcharge of $25.00
per square foot for each square foot in excess of said limit.
Developer shall include in any agreement for the purchase of an affordable housing
lot in the Subdivision, and in any deed conveying an affordable housing lot, a
provision that requires the party who constructs a dwelling unit with interior finished
space in excess of 1200 square feet, to pay to City a surcharge of $25.00 per
square foot for each square foot in excess of said limit.
7 After a completed dwelling unit on an affordable housing lot has been transferred to
a purchaser, the purchaser shall not be bound by the 1200 square feet restriction
provided for in paragraphs 2 and 6 above and the purchaser may expand the
exterior structure or interior finished square feet of the unit without limit, except as
may be limited only by the size of the lot and other applicable laws. No penalty shall
be imposed, in accordance with paragraph 6, for any expansion of the exterior
structure or interior finished space occurring after transfer of title to the purchaser.
8. In the event Developer, or any of its purchasers, successors, heirs or assigns,
violates any requirement or condition of this Amended Agreement, the person
violating this Amended Agreement shall repay to City any and all assessments
waived under this Amended Agreement, any connection fees waived under this
Amended Agreement and a penalty equal to fifteen percent (15%) of Developer's
cost of street construction in the Subdivision. In addition, the promissory note
referred to in paragraph 3 above shall accrue interest at the rate of five and one-half
percent (5'/z%) per annum retroactive to the date the funds were borrowed.
9. Developer agrees to file, prior to the sale of any lot in the Subdivision, restrictive
covenants applicable to the Subdivision which include a restriction prohibiting the
rental or lease of any dwelling unit constructed on an affordable housing lot, except
as specifically allowed herein.
10. An affordable housing lot may be transferred by land contract and an
owner/occupant of an affordable housing lot may be a contract buyer pursuant to
such a land contract.
11. A rental agreement with an option to purchase shall be permissible and an
owner/occupant of an affordable housing lot may be a tenant/buyer pursuant to a
rental agreement with an option to purchase, provided that the term of rental shall
not exceed a term of two (2) years. The lease purchase agreement must be
approved by the City of Dubuque Housing Department.
12. The provisions of this Amended Agreement are binding upon the parties, purchaser,
successors, heirs and assigns of each affordable housing lot only until such time as
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the property is transferred to a natural person who occupies a permanent legal
structure on the lot as that person's residence. Thereafter, so as to allow the
homes to grow with the needs and financial abilities of the owner -occupant, the size
restrictions identified herein shall no longer apply.
13. Under current City policy, if North Grandview Avenue is reconstructed, abutting
owners must pay an assessment for a portion of the project cost. If only asphalt
resurfacing is performed it is currently not an assessable project. This policy could
be changed by a vote of the City Council.
14. Developer agrees that storm water detention basins and related improvements on
Lots 10 and 12 will not be accepted by the City until 80% of the lots in the
Subdivision have been fully developed with a habitable residential structure,
including grass and ground cover and the remaining 20% of the Tots have
established grass and ground cover. Until such acceptance by City, any property
taxes due for such Lots and improvements thereon shall be the responsibility of
Developer. Any maintenance expenses incurred by City for the detention basins
shall be assessed equally against the developable Tots in the Subdivision and
collected in the same manner as property taxes. Developer shall grant an easement
to City to perform such maintenance as City deems necessary.
15. On or before homes have been constructed on 80% of the Tots in the Subdivision,
sidewalks shall be installed in the Subdivision along Grandview Avenue and on both
sides of Helen Ridge Court. The cost of sidewalk installation shall be born by the
Developer or the purchaser of a lot as may be negotiated by the Developer.
Sidewalks along West 32nd St. shall be installed by Developer or the lot owner at
such time as West 32nd St. is improved with curb and gutter. Sidewalks shall be
installed on the street frontages of Lots 10, 12 and 37 and the existing home on Lot
11.
16. Developer agrees to install a sanitary sewer manhole over the sanitary sewer at a
point adjacent to the southeast corner of Lot 26. Developer agrees that the City at
its cost may extend the sanitary sewer and storm sewer from the manhole at the
southeast corner of Lot 26 to the west property line of the Subdivision and that
Developer will grant an easement to City at no cost for such extension.
17. The cost of improvements to any existing facilities in the Subdivision and any
additional costs necessitated by the revised plat attached hereto shall be born by
the Developer.
18. This Amended Agreement is contingent upon the Developer securing all necessary
approvals for the plat attached hereto and filing said plat with the Dubuque County
Recorder.
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19. Any costs incurred by City as a result of this Amended Agreement shall be
reimbursed to City by Developer.
20. This Amended Agreement shall terminate twenty (20) years from the date if its
execution.
21. Upon execution of this Amended Agreement, City shall promptly record this
Amended Agreement with the Dubuque County Recorder.
CITY OF DUBUQUE, IOWA
By:
eanne F. Schneider, CMC Roy D. uol
City Clerk Mayor
STATE OF IOWA )
DUBUQUE COUNTY )
ss:
On this 5th day of July , 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-Resoltttton-No. passed by the City
Council on the 5th day of July , 2006 , 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 dee; of the corporation, by it and by them
voluntarily executed.
Attest:
SUSAN M. WINTER 4019
COMMISSION N0.18327
MY COMMISSION EX'
I,
2%14/08 •
ary Public in and for said State
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NORTH GRANDVIEW ESTATES, LLC
BY: Z,-/(./
!chard A. Hen
STATE OF IOWA )
DUBUQUE COUNTY )
ss.
On this day of , 2006, before me, the undersigned, a Notary
Public in and for said State ersoly appeared Richard A. Henkel, to me personally
known, who being by me du y sworn, did say that that person is a representative of said
limited liability company; that no seal has been procured by the said limited liability
company; that said instrument was signed on behalf of said limited liability company by
authority of its managers; and that said Richard A. Henkel acknowledged the execution of
said instrument to be the voluntary act and deed of said limited liability company, by it by
voluntarily executed.
otary Public in
otary Public and for said State
F:\USERS\tsteckle\O'Brien\North Grandview Estates LLC\AmendedAgreement_NorthGrandviewEstates_062906.doc
Last saved by Tracey Stecklein; 6/29/2006 12:59 PM
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c iki t „.0.,.
. JEANNE F. SCHNEIDER
COMMISSION NO.709037
' ' MY COMMISSION EXPIRES
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