Caradco Building CDBG Contract Amendment No. 4_IEDATHE CITY OF
Dui
Masterpiece on the Mississippi
Dubuque
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All- America City
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2012
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Contract Amendment Number 4 for CDBG Contract #08 -DRH -212
(Caradco Building Project)
DATE: April 29, 2013
Economic Development Director Dave Heiar recommends City Council approval of
Amendment #4 to the Community Development Block Grant (CDBG) Housing Disaster
Recovery Fund Contract between the Iowa Economic Development Authority and the
City of Dubuque, on behalf of the Caradco Building Project.
In the course of calculating and finalizing the contractual amounts due to the contractors
and their employees, it was discovered that there were some formula errors on the
spreadsheets and therefore in the final calculations. Although some of these additional
costs will be covered by contingency funds included in Amendment #3, the net project
cost increase is $38,200. The Iowa Economic Development Authority has agreed to
cover these extra costs in Amendment #4 to this contract.
Amendment #4 would also extend the end date of this contract to May 31, 2013, to
accommodate the time needed for these changes to the scope of the work.
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
Masterpiece on the Mississippi
Dubuque
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All-America City
1
2007
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
SUBJECT: Contract Amendment Number 4 for CDBG Contract #08 -DRH -212 (Caradco
Building Project)
DATE: April 26, 2013
PURPOSE
This memorandum presents for City Council a resolution authorizing an amendment to the
Community Development Block Grant (CDBG) Housing Disaster Recovery Fund Contract
between the Iowa Economic Development Authority (IEDA) and the City of Dubuque on behalf
of the Caradco Building Project.
BACKGROUND
The Iowa Economic Development Authority awarded the City of Dubuque CDBG Supplemental
Funds of $8.9 million to help fund the construction of 72 residential units in the Carr, Ryder &
Adams Company Main Plant Building (the Caradco Building) at 900 Jackson Street in
Dubuque's Historic Millwork District.
Caradco Building, a former millwork factory, occupying an entire city block, was built between
1880 and 1906. The renovation of this building is expected to act as a catalyst for the
revitalization of the Historic Millwork District. With its foundation of historic, architecturally
unique warehouses, the district will become an urban mixed -use development containing mixed -
income housing, commercial space, and public gathering places, incorporating sustainable and
energy- efficient technologies.
It was IDED's goal to utilize the CDBG Supplemental Funds in a manner that results in green -
built, sustainable multi - family structures. This project coincides with a full reconstruction of the
district's streets, funded through a $5.6 million TIGER (Transportation Investment Generating
Economic Recovery) grant from the United States Department of Transportation. The
reconstruction features a "complete streets "' design, which facilitates a broad range of users,
with connections to the downtown and Port of Dubuque.
The City worked with the developer, Caradco Building, LLLP, in submitting two grant
applications totaling $8.9 million in Supplemental Funds. IDED prepared one contract to cover
both awards. The grant assisted with the development of 72 workforce housing units: 44 two -
bedroom units and 28 one - bedroom units. Income guidelines will apply for a portion of the
workforce housing units (46/72). Projects constructed with this funding result in mixed - income
projects, in that only a percentage of the total number of units are required to meet the activity
income and rent requirements (i.e., the "assisted" units). The total estimated cost for the
rehabilitation of the Caradco Building is $30 million. Other major funding sources include a $4.5
million loan secured earlier this year from the Iowa Finance Authority.
The CDBG Supplemental Funds is a 10 -year forgivable loan (non- receding), forgiven in full at
the end of the 10 -year compliance period. If the assisted rental project is sold or transferred, or
converted to an alternate (non - residential) use, during the 10 -year period following completion
and acceptance, the entire amount of the CDBG loan must be repaid.
Upon mutual agreement and consent between IDED and the originally assisted rental property
owner, the assisted rental project may be sold or transferred, but only if the new purchaser
agrees to continue with the terms of the forgivable loan agreement, including the covenants and
restrictions in the agreement, to complete the remainder of the 10 -year affordability period with
tenant income and rent limitations. The CDBG Supplemental Funds subsidy amount provided is
secured by a mortgage on the assisted multi - family property. The City, as a CDBG Disaster
Recovery Housing Recipient, must provide a 20% match to the CDBG Supplemental Funds, as
a source of funds for the project. Those funds were committed by City Council resolution and
included City of Dubuque Downtown Housing Incentives and a TIF rebate.
In addition to the residential units, the Caradco Building will feature approximately 35,000
square -feet of first -floor commercial space to attract and support new downtown businesses.
The developer is also exploring the use of 18,000 square -feet of lower level space for
community betterment projects. The project also includes an environmentally sensitive HVAC
system and other measures to enhance the building's energy efficiency.
Prior to the developer starting the Caradco Building Project, City Staff requested a clarification
from the IEDA on what part of the project would require Davis Bacon prevailing wages. The
directive from the State was that if the Developer was able to separate the residential portion of
the construction project from the Commercial portion of the construction that Davis Bacon would
only apply to the residential rehabilitation work since the CDBG funds were provided for
housing. In order to comply with this directive, the Developer delayed the start of the project for
nearly two months to rewrite the bid documents. As the residential portion of the Caradco
Building Project was being completed, there were numerous conversations among staff for
IEDA, the City, ECIA, the Department of Labor, the Department of Housing and Urban
Development (HUD) and the developer about the necessity of additional CDBG program
compliance requirements beyond the original contract scope of the project.
Based on those discussions, it was determined that the DOL and HUD did not agree with the
information provided to City Staff by IEDA and that Davis Bacon prevailing wages would also
apply to the core and shell rehabilitation work. During these discussions, it was also agreed that
the IEDA would provide additional funding for the extra costs associated with these compliance
requirements. Therefore, IEDA approved an amendment to the CDBG Supplement Funds
award for $1,299,000 to cover the additional costs. The CDBG Contract went from $8,900,000
to $10,199,000.
DISCUSSION
In the course of calculating and finalizing the contractual amounts due to the contractors and
their employees, it was discovered that there were some formula errors on the spreadsheets
and therefore in the final calculations. Although some of these additional costs will be covered
by contingency funds included in amendment number 3, the net project cost increase is
$38,200. The Iowa Economic Development Authority has agreed to cover these extra costs in
amendment number 4 to this contract.
The Amendment number 4 would also extend the end date of this contract to May 31, 2013 to
accommodate the time needed for these changes to the scope of the work.
RECOMMENDATION
I recommend that the City Council approve the attached Resolution authorizing the submittal
and execution of amendment number 4 to the Community Development Block Grant Housing
Disaster Recovery Fund Contract Agreement between the Iowa Economic Development
Authority and the City of Dubuque on behalf of the Caradco Building Project.
F: \USERS \Econ Dev \CARADCO \RIO -CDBG Round 3\20130129 RIO -CDBG Caradco Contract Amendment #3 Memo.doc
Prepared by: David J. Heiar, ED Director, 50 West 13th Street, Dubuque IA 52001 563 589 -4393
Return to: David Heiar, ED Director, 50 West 13th Street, Dubuque IA 52001 563 589 -4121
RESOLUTION NO. 134 -13
APPROVING AMENDMENT NUMBER 4 TO THE COMMUNITY DEVELOPMENT BLOCK
GRANT (CDBG) HOUSING DISASTER RECOVERY FUND CONTRACT BETWEEN THE
IOWA ECONOMIC DEVELOPMENT AUTHORITY AND THE CITY OF DUBUQUE ON
BEHALF OF THE CARADCO BUILDING PROJECT
Whereas, the City of Dubuque worked with Caradco Building, LLLP and Caradco
Landlord, LLC to prepare CDBG Housing Disaster Recovery Fund grant applications to assist
in the funding of residential rehabilitation for the Caradco Building Project; and
Whereas, the Iowa Economic Development Authority approved CDBG Contract #08-
DRH -212 dated January 21, 2011 between the City of Dubuque and the Iowa Economic
Development Authority authorizing $8,900,000 of CDBG Housing Disaster Recovery Funds for
the Caradco Building Project; and
Whereas, this agreement was last amended on February 4, 2013.
Whereas, additional CDBG program compliance requirements beyond the original
contract scope of the Caradco Building Project are being required by the Iowa Economic
Development Authority; and
Whereas, upon the request of the City of Dubuque, the Iowa Economic Development
Authority has agreed to amend CDBG Contract #08 -DRH -212 to include such additional costs.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1.
Section 2.
That the City requests that the Iowa Economic Development Authority
amend CDBG contract #08 -DRH -212 to include the additional costs of
the CDBG program compliance requirements beyond the scope of the
original contract and to extend the contract period to May 31, 2013.
That the City Manager is hereby authorized and directed to execute
amendment number4 to CDBG Contract #08 -DRH -212 on behalf of the
City of Dubuque and to forward the executed copy to the Iowa Economic
Development Authority for its approval, and to take such other action as
may be necessary with respect to the amended contract.
Passed, approved and adopted this 6th day of May, 2013.
Attest: r'oy D. Buol, Mayor
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Kevi Fi nstahl, Cit Clerk
F: \USERS \Econ Dev \CARADCO\RIO -CDBG Round 3 \CDBG Contract Documents\Amendment 4\20130425 Caradco Resolution
IDED_ CDBG Amendment #4.doc
IOWA ECONOMIC DEVELOPMENT AUTHORITY
200 East Grand Avenue 1 Des Moines, Iowa 50309 USA 1 Phone: 515.725.3000
iowaeconomicdevelopment.com
May 8, 2013
The Honorable Roy D. Buol, Mayor
City of Dubuque
City Hall - 50 W. 13th Street
Dubuque, IA 52001
RECEIVED
13 MAY 1 5 PM 2: 19
City Clerk's Office
Dubuque, IA
SUBJECT: Contract Number 08 -DRH -212, Amendment # 4
Dear Mayor Buol:
K)VVA
economic development
The Iowa Economic Development Authority recently amended the CDBG Housing contract for the City of
Dubuque. Enclosed is the original document for this amendment. Review the document carefully, then sign
and return the original document to my attention. When the amendment is returned, I will secure the IEDA
signature and return a copy for your files. Failure to return the original document will result in unnecessary
delays in your ability to request funds.
If you have any questions please feel free to contact your Project Manager, Julie Lunn, at (515) 725 -3082 or e-
mail at Julie.Lunn @iowa.gov.
Sincerely,
Tim Metz
Contract and Compliance Manager
Enclosure
cc: Janet Walker, City of Dubuque
Julie Lunn, IEDA
1
Governor Terry E. Branstad 1 Lt. Governor Kim Reynolds 1 Director Debi V. Durham
IOWA ECONOMIC DEVELOPMENT AUTHORITY
200 East Grand Avenue I Des Moines, Iowa 50309 USA I Phone: 515.725.3000
iowaeconomicdevelopment.com
May 28, 2013
The Honorable Roy D. Buol, Mayor
City of Dubuque
City Hall - 50 W. 13th Street
Dubuque, IA 52001
RECEIVED
13 JUN PM 2:53
City Clerk's Office
Dubuque, IA
SUBJECT: Contract Number 08 -DRH -212, Amendment # 4
Dear Mayor Buol:
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The Iowa Economic Development Authority recently amended the CDBG Contract for Dubuque, in response to
your request. Enclosed is your copy of the executed amendment. Changes made by this amendment are now
in effect.
Please file your copy of this amendment with your original contract document so that you will have current
information on the status of your contract. If your amendment includes a budget change, be sure that is
reflected on your next "Request for Payment /Activity Status Form." If you have any questions please feel free
to contact your Project Manager, Julie Lunn, at (515) 725 -3082 or e -mail at Julie.Lunn @iowa.gov.
Sincerely,
Tim Metz
Contract and Compliance Manager
Enclosure
cc: Janet Walker, City of Dubuque
Julie Lunn, IEDA
Governor Terry E. Branstad I Lt. Governor Kim Reynolds 1 Director Debi V. Durham
Iowa Economic Development Authority
Community Development Block Grant (CDBG) Program
Contract Amendment
CJ.OPy-
Recipient: Dubuque
Contract Number: 08 -DRH -212
Contract Amendment Number: Four (4)
Amendment Effective Date: April 23, 2013
The Iowa Economic Development Authority (IEDA) hereby amends the above referenced Community
Development Block Grant (CDBG) Program contract by increasing the amount of the budget and extending the
contract end date.
The contract by and between the Iowa Economic Development Authority ( "Department or IEDA ") and Dubuque
( "Recipient ") is amended as of the date shown above as follows:
AMEND each Article in the Contract that refers to "Attachment A, Program Description and Budget" to
"Attachment A, Program Description and Budget, as amended."
AMEND AWARD AMOUNT from $10,199,000 to $10,237,200.
AMEND Contract End Date to: September 30, 2013
Except as otherwise revised above, the terms, provisions, and conditions of the Contract remain unchanged and
are in full force and effect.
RECIPIENT: D buque
BY:
May r, Dubuque
IOWA ECON I PMENT AUTHORITY
BY:
imothy Waddell, Division Administrator
IOWA CDBG DISASTER RECOVERY HOUSING FUND PROGRAM DESCRIPTION & BUDGET
ATTACHMENT A
DATE: April 23, 2013
Name of Recipient: Dubuque
Contract Number: 08 -DRH -212
To be filled in by IDED
Original
Amendment # Four (4)
Proj Mgr Sign jml
ACTIVITY DESCRIPTION -
PERFORMANCE
TARGETS /MEASURE
NATIONAL
OBJECTIVE
BUDGET
Activity 4: 876 Unit Production
72 Total Units
46 LMI
LMI
$10,237,200
GENERAL ADMINISTRATION 181
TOTAL BUDGET:
$10,237,200
G: \BCF\ Recipients \Disaster \08DRH \Dubuque - 212 \Dubuque 08- DRH- 212AttachAAmend4.xlsx