German Bank Bldg Rehab Loan
D~~~E
~<!N--~
MEMORANDUM
September 1, 2006
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Downtown Rehabilitation Loan and Grants for the German Bank Project
(Silver Dollar Cantina)
Economic Development Director Dave Heiar recommends City Council approval of a
letter of commitment for a Downtown Rehabilitation Loan of $300,000, a $10,000 fa9ade
grant and a $10,000 design grant for John Gronen, Michael Steele and Steve Althoff to
support their rehabilitation of the former German Bank Building at 342 Main Street.
At this time insufficient loan funds are available in the Downtown Rehabilitation Loan
Program to fund the loan. The owners have agreed to wait until the funds are available
in Fiscal Year 2013. As of July 1, 2012, the loan funds will be available to the project
and the company would like to proceed with the loan. Should the loan pool be
recapitalized prior to Fiscal Year 2013, this would move forward on the waiting list and
would be funded earlier.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
i r \ I
;'.//./1,/.( (
l_-\...... \.-'-'-.... '-..
Michael C. Van Milligen
,-' i\
!I) II:. .
1". . '...-' -.' .-~/ .- II
" ,'-" -..-:;--.-,'
/(JII)
MCVM/jh .
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J Heiar, Economic Development Director
'-..:
CITY OF DUBUQUE, IOWA
MEMORANDUM
August 31, 2006
TO:
FROM:
Michael Van Milligen, City Manager
David J. Heiar, Economic Development Directo~
Downtown Rehabilitation Loan and Grants for ;:C6~rman Bank
Project (Silver Dollar Cantina)
SUBJECT:
INTRODUCTION
This memorandum presents for City Council consideration a Resolution approving a
letter of commitment for a Downtown Rehabilitation Loan of $300,000, a $10,000
fac;ade grant and a $10,000 design grant for John Gronen, Michael Steele, and Steve
Althoff to support their rehabilitation of the former German Bank Building at 342 Main
Street.
BACKGROUND
Constructed in 1901, this three-story building was built both literally and figuratively on
the foundations of the Dubuque Miners Bank; the first bank in Iowa. Designed by local
architects John Spencer and W.G. Williamson, it is Neo-Classical in style with the first
floor being of polished granite and the upper stories of ornately molded, glazed terra
cotta. The German Bank was and is the most common name used in reference. For
obvious reasons, after World War I, the bank changed its name to American Trust &
Savings Bank... a bank that exists and supports Main Street to this day. The building
served as a bank until 1932. The handsome turn-of-the-century building has been a
tavern and restaurant since 1946.
This building is located in arguably the most historically significant district of Dubuque.
The building was placed on the National Historic Registry in the last 1960's. The
building was severely damaged by fire in October, 2001. The restoration of the German
Bank is estimated to cost over $1.4 million (see attached itemization)
The Downtown Rehabilitation Loan Program encourages private investment and
rehabilitation efforts in the City's Greater Downtown Urban Renewal District's Old Main,
Town Clock Plaza and Upper Main sub areas. The program, capitalized with funds
available through the City's tax increment financing district, provides for a maximum of
$300,000 in attractive low-interest loan monies. The program is unique in that grants of
up to $10,000 are available to offset necessary predevelopment design costs and
$10,000 for fac;ade improvements. The program also includes a forgivable loan element
whereby qualifying applicants may have up to the full amount of the loan forgiven as an
incentive for the creation of new employment and housing opportunities in the district.
DISCUSSION
At this time, insufficient loan funds are available in the Downtown Rehabilitation Loan
Program to fund the loan. The owners have agreed to wait until the funds were
available in FY13. As of July 1, 2012, the loan funds will be available to the project and
the company would like to proceed with the loan. Should the loan pool be recapitalized
prior to FY13, this loan would move forward on the waiting list and would be funded
earlier.
Additional information on the terms and conditions of the proposed Downtown
Rehabilitation Loan is attached in the commitment letter. If the loan is approved by the
City Council, this commitment letter would be executed by the Mayor and by the
owners.
RECOMMENDATION
Staff has reviewed the application and found it to be in keeping with the requirements of
the Downtown Rehabilitation Loan Program. The project will begin when other funding
sources have been secured. At this time there is still a funding gap. At some point in the
near future, the Developers intend to pursue other City programs (including TIF and
CDBG monies) to fill a portion of this funding gap.
I recommend that the City Council adopt the attached Resolution approving a letter of
commitment for John Gronen, Michael Steele, and Steve Althoff for the $300,000
Downtown Rehabilitation loan, a $10,000 facade grant and a $10,000 design grant.
ACTION STEP
The action step for the City Council is to adopt the attached Resolution.
F:\USERSIDHeiarlGronenldrtp.mem.doc
RESOLUTION NO. 454-06
A RESOLUTION AUTHORIZING A LETTER OF COMMITMENT AND ADDITIONAL
ACTIONS CONCERNING A DOWNTOWN REHABILITATION LOAN AND GRANTS TO
THE GERMAN BANK PROJECT.
Whereas, the City of Dubuque, Iowa, has created a Downtown Rehabilitation Loan/Grant
Program for the purpose of stimulating reinvestment in the Greater Downtown Urban Renewal
District; and
Whereas, the City of Dubuque, Iowa is encouraging the use of this loan/grant program to
finance code compliance activities and to spur job creation activities; and
Whereas, the loan application from John Gronen, Michael Steele, and Steve Althoff
meets the requirements of this program; and
Whereas, a Commitment Letter, hereto attached and by this reference made a part
hereof, sets forth the terms and conditions of John Gronen, Michael Steele. and Steve Althoff's
participation in the Downtown Rehabilitation Loan Program.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the application of John Gronen, Michael Steele, and Steve Althoff for
participation in the Downtown Rehabilitation Loan and Grant Program is hereby accepted and
approved.
Section 2. That the Mayor is hereby authorized to execute, on behalf of the City
Council of the City of Dubuque, Iowa, the attached Commitment Letter and to forward said letter
to John Gronen, Michael Steele, and Steve Althoff for review and approval.
Section 3. That the City Manager be and he is hereby directed to prepare, upon
execution and receipt of the attached Commitment Letter by the applicant, the necessary loan
documents in accordance with the terms and conditions set forth in said Commitment Letter.
Section 4. That the City Manager is hereby authorized to execute, on behalf of the
City Council of the City of Dubuque, Iowa, all necessary loan documents and is further
authorized to disburse loan funds from the Downtown Rehabilitation Loan/Grant Program, in
accordance with the terms and conditions of the executed agreement.
Passed, approved and adopted this 18th day of September, 2006.
Roy D. Buol, Mayor
Attest:
Jeanne F. Schneider, City Clerk
F:\USERS\DHeia"Gronen\d~p.res.doc
September 18, 2006
Michael D. Steele
Steele Capital Management
788 Main Street
Dubuque, Iowa 52001
RE: Letter of Commitment/Downtown Rehabilitation Loan Program
Former German Bank Building, 342 Main Street
Dear Mr. Steele, Mr. Gronen, and Mr. Althoff:
I am pleased to inform you that your application for financial assistance for the historic
renovation of the former German Bank Building has been accepted and approved by
the Dubuque City Council.
The following offer is made:
Source of Funds:
Downtown Rehabilitation Loan Program
Amount of Commitment:
$300.000
Interest Rate:
Three percent (3%) per annum
Term of Loan:
Twenty (20) years
Payment Schedule:
Monthly interest only payments shall be required for the first sixty (60)
months of the loan. Monthly principal and interest payments, amortized
over an additional fifteen (15) year period, shall begin the sixty-first month
of the loan.
You may prepay this loan in whole or in part at any time without penalty.
Form of Security:
The loan shall be secured by a mortgage and personal guarantees.
Purpose of the Loan:
Historic renovation of the exterior facade and historically significant
elements of the interior with remodeling of the remainder of the interior
for use as commerciaUresidential space.
Conditions of this Commitment:
(a) An "after rehab" appraisal must be submitted to the Economic Development
Department prior to the scheduled loan closing. The cost of said appraisal shall
be incurred by the property owner.
(b) A title opinion must be completed at the expense of the property owner. A copy
of said document must be provided at the loan closing.
(c) A loan agreement must be signed no later than June 30, 2012.
(d) The project is to be completed in accordance with the regulations set forth for the
City of Dubuque's Downtown Rehabilitation Loan Program.
Additional Commitments:
(a) A grant not to exceed ten thousand dollars ($10,000) will be available to offset
documented predevelopment costs, architectural and engineering fees and other
miscellaneous soft costs. A determination must be made by the City that the project
is substantially complete and satisfies the conditions of the loan prior to the release
of any grant monies.
(b) A grant not to exceed ten thousand dollars ($10,000) will be available to offset
documented front or rear fagade renovations to eliminate inappropriate additions or
alterations and restore the fac;;ade to its historic appearance, or to rehabilitate the
fac;;ade to include new windows, paint, signage, awnings, etc. to improve overall
appearance. Landscaping or screening with fencing or retaining walls may also be
allowed, especially as it may improve property adjacent to the public right-of-way.
(c) A rebate equal to two thousand dollars ($2,000) may be forgiven for each new full-
time job or full-time equivalent created within two years of the execution of the loan
documents and maintained by the applicant or hislher tenant for a period of not less
than three years. The amount of the loan to be forgiven shall be determined by the
City on the fifth anniversary of the loan based on documented evidence of job
creation.
(d) A rebate equal to two thousand dollars ($2,000) may be forgiven for each new
housing unit created. A new housing until shall be defined as one of the following:
. The creation of a housing unit where one did not previously exist; or
. An existing housing unit which has been unlicensed and unoccupied for a
period of not less than five years.
The amount of the loan to be forgiven shall be determined by the City on the fifth
anniversary of the loan based on documented evidence of new housing units created.
This commitment is valid for twenty-one (21) days from the date of this letter. If you
wish to accept the offer, you must return the acknowledgment. Failure to return written
acknowledgment will be cause for the commitment to lapse. This commitment offer
shall lapse if construction on the proposed project does not start within ninety (90) days
of the loan closing.
If the terms offered do not meet your approval, or if you have any questions regarding
the conditions of this commitment, please contact David Heiar, Economic Development
Department, at 589-4393.
Sincerely,
Roy D. Suol
Mayor
ACKNOWLEDGMENT
We have reviewed the above offer and accept the $300,000 Downtown Rehabilitation
Loan, the $10,000 fayade grant, and the $10,000 design grant and all of the terms of
this commitment letter.
Michael Steele
Date
John Gronen
Date
Steve Althoff
Date
F :IUSERSIDHeiarIGronenldrlp.ltr.doc
July 28, 2006
RE: Downtown Rehabilitation Loan Program - German Bank Building
This is a letter of intent applying for a Downtown Rehabilitation Loan for
$300,000.
I. Michael D. Steele, Steele Capital Management, 788 Main Street,
Dubuque, IA 52001 563-588-2097 481-58-4575
John Gronen, Gronen Restoration, Inc, PO Box 1862, Dubuque, IA
52004 563-557-7010
Steve Althoff, PO Box 1866, Dubuque IA 52004,563543-3624
2. German Bank, 342 Main Street, Dubuque, IA 52001
3. Constructed in 1901, this three-story building was built both literally
and figuratively on the foundations of the Dubuque Miners Bank---the
first bank in Iowa. Designed by local architects John Spencer and W. G.
Williamson, it is Neo-Classical in style with the first floor being of
polished granite and the upper stories of ornately molded, glazed terra
cotta. The German Bank was and is the most common name used in
reference. For obvious reasons, after World War I, the bank changed its
name to American Trust & Savings Bank . . . a bank that exists and
supports Main Street to this day. The building served as a bank until
1932. The handsome turn-of-the-century building has been a tavern and
restaurant since 1946.
This building is located in argnably the most historically significant district of
Dubuque. The building was placed on the National Historic Registry in the late
1960's.The restoration of the German Bank, 342 Main St., Dubuque, IA will
proceed with the following scope of work:
The scope of work includes:
· The rear addition requires a new internal steel structure from the
basement to roofline.
· A new floor system for the entire first floor; steel structural system
using a new thickened slab footing in the basement to remove most of
the load off existing masonry walls.
· Restoration to the primary f~ade, which is ornamental terra cotta. It
will be washed to remove years of pollution and smoke damage and
repaired where needed.
· The south fayade -will be rebuilt using salvaged brick to match
existing brick. This wall was not originally exposed to the weather.
The building adjacent on this side has been removed.
PO ~0l1862 . DU~UQU[ . lown .52004.1862. pnont 56).557.7010 . fn! 557.690.1610
. Rear facade walls on 1"' & 2nd floors; walls to be cleaned and tuck
pointed where needed -- fire damaged areas will be cleaned, and brick
replaced only where needed.
. The rear porch and deck was destroyed. It has been redesigned by an
architect experienced in Historic Tax Credit projects (Jeff Morton,
designer on the Town Clock Building, the former Weber Paper
Company/Platinum Building, the Grand Theater exterior, and the Upper
Main Restoration project) (Dubuque 2002 Challenge Grant project has
just been retained) the plan is to replace as close to the original design
as possible.
. Removal of both vaults, one in the south east comer concrete reinforced
iron and two stories, the second vault is a two story brick, to reduce load
on structure and create additional room.
. The wooden windows will be repaired or replaced, where necessary.
. Will install first floor concrete floor system.
. The installation of all new mechanicals on 1 st, 2nd and 3rd floors
. The restoration and replacement for ornamental ceiling and plaster
walls, first floor.
. The completion of all new finishes on first 11001'.
. The replacement of historic lighting fixtures.
. The replacement of all new restaurant and bar equipment/fixtures.
. ADA approved restrooms will be designed and installed on first floor.
. The basement- limestone walls are to be cleaned using detergent and
specified chemicals to remove smoke/soot damage. The walls will be
re-pointed where needed. The concrete floor system is to be removed
and replaced. The West end of the basement will be designed for
storage.
· Restore entrance lighting.
It should be noted, that this at risk building housed the Silver Dollar, which was
extremely popular long before the Old Main District was revitalized.
Downtown employees would flock to the Cantina for great Mexican fare, and
the single storefront space was transformed on weekend evenings into one of
the most popular nightclubs in the entire city. This was before the neighborhood
becanle a hub entertaimnent district. The damage occurred prior to the opening
ofBricktown, the Busted Lift hish Pub, Lot One, the Grape Harbor Wine shop,
the Manna Java coffee houselbakery, etc. The reopening of the Silver Dollar
will be widely celebrated.
The plan is to retain and preserve character defining features which will
continue to impact this part of Main Street, with SHPO and NPS-National Park
Service approval. This top-tier total building rehabilitation on a building feared
lost by many will inspire the general public. It will bring even more people
downtown. And, believe it or not, there are still buildings in Old Main, mainly
single storefronts, which still need to have f~ade renovations. Through media
coverage on this project and thf: grant, we will use it as a catalyst to spur more
activity in this respect, as well as encourage property owners who did minor
repairs to also take it to the next level.
4. The German Bank/Silve:r Dollar will employ 20 new employees.
5. The Owner of the German Bank/Silver Dollar is Steve Althoff, the deed
is located at US Bank.
6. The loan amount we are requesting is $300,000.
7. Conventional Loan with personal guarantee.
. The Preliminary project budget is $1,420,461.60. Attached you
will find the brellk down of the budget.
. The Construction schedule will take approximately 9 months.
· Financial Statements: attached you will find the Silver Dollar
rehab proforma.
. Resolution authorizing the application: attached.
September 1, 2006
Mr. Dave Heiar
City of Dubuque
Economic Development
City Hall
Dubuque IA 52001
Re: German Bank Building
Dear Dave,
Per our telephone conversation this morning, I am writing to acknowledge
that we did, inadvertently, omit the request for the f~ade and design grant
from the Downtown Rehabilitation Loan application.
This letter serves as an amendment to the loan application that we are
requesting $10,000.00 in far,:ade grant funds and $10,000.00 in design
grant funds.
Should you have any questions or require additional information, please
don't hesitate to let us kno . Thank you very much.
ohn Gronen
Gronen Restoration, Inc.
DO ~O! 1862. DU~UOUf. 10WN. 52Don862. PHOUE 560.557.7010. fftX 557.690.1610
RESOLUTIONS
OF TIlE
BOARD OF DIRECTORS
OF
Gronen Restoration, Inc.
WHEREAS, Gronen Restoration, Inc. (the "Corporation''), was organized for the
purpose, among others, of developirrg and operating both commercial and residential
buildings;
WHEREAS, the Corporation wishes to develop a project known as the German Bank
Project, consisting of three stories at 342 Main St., Dubuque lA.
WHEREAS, the Corporation wishes to obtain funding in the form of a Downtown
Rehabilitation Loan in the amount of $300,000.00 from the City of Dubuque.
NOW, THEREFORE BE IT RESOLVED, that the Corporation is hereby authorized to
apply for said funding per the decision of the July 5, 2006 Board of Directors meeting.
CERTIFICATION
I, Mary Gronen, Secretary of Gronen Restoration, Inc., do hereby certifY and declare that
the foregoing is a full, true and correct copy of the resolution duly passed and adopted by
the Board of Directors of said corporation, by written consent of all Directors of said
corporation or at a meeting of said Board duly and regularly called, noticed and held on
July 5, 2006, at which meeting a quorum of the Board of Directors was present and voted
in favor of said resolutions.
IN TESTIMONY WHEREOF, I have hereunto set my hand as secretary of said
corporation as of July 10, 2006.
~~
C)
Page 1
Silver Do....r Rehab Project
Estimated Breakdown of Expenses to Rehab
Architect
Engineer
General Conditions
Excavation
Vault Demo
Crane Rental
Concrete:
Patio
Basement
Main Floor
Tuckpoinl
Basement
Exterior
Precast - Main Floor
Precast -Install Labor
Steel- ColumnslBeamslBar Joists & Roof Pans
Steel - Install Labor
Stael - Basement Stairs
Spahn & Rose
Building Malefials
Install labor
Building Insulation
RoolinglGultalll-4" ISO, All flashings & install
Exterior Windows
Install Labor
Repair window JambslTrim
Storefront
FlnishesJPaint
Flooring
Decorative Plaster
Kitchen Tile CeIlings
Spec:ialties
Restaurant Equipment KilchenIHood Ansul System
BarsIBadtbarslFumishings
Special ConstructionfTerra Colla
Dumb Waller
Plumblng/Gas Piping & Frxlures
HVAC
Electrical
Exterior lighlslSignage
light FIxtures
legal Fees
Abestos Abatement
Apartments
Subtotal
Contingency - 10%
Professional Fee - Construction mt. - 10%
TOTAL
Expense
$ 17,000.00
$ 6,000.00
$ 30,000.00
$ 16.380.00
$ 35,000.00
$ 10,000.00
$ 5,000.00
$ 22,000.00
$ 12,000.00
$ 10,000.00
$ 50,000.00
$ 16,000.00
$ 9,715.00
$ 31,125.00
$ 34,500.00
$ 10,000.00
$ 50,000.00
$ SO,OOO.OO
$ 10,000.00
$ 22,258.00
$ 10,900,00
$ 10,000.00
$ 4,000.00
$ 15,000.00
$ 88,000.00
$ 12,000.00
$ 30,000.00
$ 3,000.00
$ 10,000.00
$ 75,000.00
$ 120,000.00
$ 10,000.00
$ 15,000.00
$ 69,950.00
$ 43,950.00
$ 59,940.00
$ 5,000.00
$ 10,000.00
$ 10,000.00
$ 7,000.00
$ 128,000.00
$1,183,718.00
$ 118,371.80
$ 116,371.80
S ,46
I 'd 198L'oN
ONI 1N3W3~VNVW 1V11dVO 31331S
WdLV:11 9001 'Idas