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RFP 1126 White StreetTHE CITY OF DUB E ~-~~ MEMORANDUM April 12, 2007 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Request for Proposals - 1126 White Street Housing and Community Development Department Director David Harris is recommending the issuance of a Request for Proposals to convert the vacant nine-unit apartment building at 1126 White Street into three or five owner-occupied townhomes. This will require apublic-private partnership with the Dubuque Community School District, the developer and the City, in that the City would acquire the property from the School District in order to offer it to a developer for redevelopment as part of the Washington Street Neighborhood Redevelopment Strategy. The Dubuque Community School District is currently obtaining an appraisal of the property to help them in establishing a purchase price for the City to acquire the property. The City would commit $100,000 to underwrite this project and provide access to City loan programs. I concur with the recommendation and respectfully request Mayor and City Council approval. u' ~~^ ~ ~~ v - Mic ael C. Van Milligen MCVM/jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager David Harris, Housing and Community Development Department Director TT-IE CITY OF DUB E 29 March 07 MEMORANDUM To: Micha I Van Milligen, City Manager From: David~~arris, Housing and Community Development Department Re: Request for Proposals - 1126 White Street The attached RFP has been prepared for publication. It outlines a concept for purchase and conversion of the School District-owned nine-unit apartment building on White Street, to town homes for owner-occupant households. The public-private partnership formed to accomplish this demonstration project involves both the City and Dubuque Community School District. The City will contribute $100 000 toward up-front costs, and the School District will accept a lower than market value, to enable completed units to be sold at market sustainable prices. The City will also invest up to $30 000 in each unit in forgivable, deferred-payment and 0-interest loans, for rehabilitation and down- payment costs. City objectives of promotion of owner occupancy; market-ability of older, obsolete (yet historic) rental housing stock in converted form as townhouses; endorsement of a `walk-to-work' green neighborhood for the Washington: Revitalize! Initiative; and use of the HEART Program to provide an educational opportunity for Dubuque students interested in the building trades will be achieved through successful development of this project. After Council approval, City staff will hope to complete negotiations with the School District. Action Step The action requested of the City Council is to approve the attached Request for Proposals for the conversion of the School District property at 1126 White Street. '{p ~ s C~' CITY OF DUBUQUE, IOWA REQUEST FOR PROPOSALS TO PURCHASE AND CONVERT AN HISTORIC APARTMENT BUILDING INTO TOWN HOMES FOR RESALE AT MARKET PRICES INTRODUCTION The City of Dubuque is seeking a qualified developer/construction firm to accomplish a demonstration building renovation in the Washington Neighborhood, associated with the Washington: Revitalize! initiative. The purpose of the Washington initiative is to restore an historic downtown neighborhood. The strategy includes increasing homeownership, encouraging a mix of household incomes, and reducing concentrated poverty and the high percentage of rental units. It also involves use of targeted City resources and infrastructure improvements to encourage private investment to improve the livability of the area. PROJECT SUMMARY/SCOPE OF WORK The proposed project consists of three elements. The first is to purchase a vacant 9-unit apartment building at 1126 White Street, owned by the Dubuque Community School District. The second is to convert the building into either three or five townhouse units. The third is to sell the completed town homes to owner occupants. Objectives of this project include the following: 1. To demonstrate the market for town home occupancies in this neighborhood 2. To demonstrate the feasibility of conversion of functionally obsolete older, rental stock - in many cases vacant or under-utilized - to market rate housing 3. To achieve `green' objectives of providing marketable housing to `young professionals' seeking to locate where they can walk to downtown employment and cultural/recreational amenities. Hopefully, School District employees at Prescott School will be interested in this homeownership opportunity. 4. To support the Washington Neighborhood strategy by addressing the imbalance of rental properties. The neighborhood's ratio of 70°k rentals and 30°~ owner- occupancies is the exact opposite of the City-wide 70% homeowner/30% renter rate. ._~ 5. Reverse the long-time lighting influence of this building in the neighborhood. 6. Through the HEART Program, promote an educational opportunity for Dubuque Community School District students interested in building trade occupations. Building Description The building is a three-story garden apartments structure, built circa 1900, presently configured as 9one-bedroom apartments. It contains approximately 6500 gross square feet, measuring 52-feet in width and 42-feet deep. Off-street parking is available off the rear alley, for 5-6 vehicles. There is a full, unfinished basement. Concepts for Conversion Two concepts for conversion to townhouses have been developed to-date. One is for a 5 unit building, with three 2-story townhouses, each with two bedrooms and two baths, measuring 1280 square feet. Two additional units would be developed on the third floor, each with two bedrooms and one bath, measuring 1000 square feet. An alternative concept is for conversion of the building to three townhouses. These would be three-story units, each measuring approximately 1965 square feet. These are also two-bedroom, two-bath units. All units would be reached by anewly-constructed enclosed stair tower at the rear of the building. All units would also have rear balconies, at each floor. Interior features would include exposed brick walls, hardwood flooring in living/family room areas, open floor plans on first floor, kitchen breakfast bar-type seating and high ceilings. Exterior restoration would include installation of historically-appropriate full-height windows and installation of original-type front stoops on the White Street front of the building. Financing In order to keep costs at projected levels, apublic-private partnership involving the School District and the City of Dubuque will assist the selected developer. It is anticipated that the District will make the building available for purchase at a cost of $45 000. The City will directly contribute $100 000 toward construction costs. In addition, the Housing Department will make a package of financial assistance available to the developer/purchaser, including the following: 1. $5000/unit forgivable loan for rehab 2. $10 000/unit due-on-sale, 0% interest loan for rehab 3. $10 000/unit 20-year, 0% interest loan for rehab This $25 000 package of financing may be passed through to each town home buyer at sale. The effect of this is 0% interest construction financing for the developer, in the total amount of either $75 000 or $125 000, depending on the number of units constructed. The individual town home buyers will additionally be provided $5000 forgivable loans for purchase. There is no restriction on the income of the buyers. It is anticipated that the Housing Department will also provide the balance of construction financing needed as a 3% loan. This loan will be repaid to the City as the individual town home units are sold. Unit buyers must be owner occupants and must agree to occupy the property for five years in order to take full advantage of the forgivable loan financing. The property is located within an existing Urban Revitalization District. This means that additional real estate taxes resulting from the planned improvements will not be assessed for a period of 10 years. The projected assessed valuation of the building at sale to the developer is $45 000. Financing summary: The buyer of each townhouse will receive City mortgage financing, assumed from the developer, in the amount of $25 000/unit (a combination of forgivable, due-on-sale and 0% interest loans). Each buyer will additionally receive a $5000 forgivable purchase loan. The buyer will also receive the tax benefit from the Urban Revitalization Program, resulting in deferred real estate tax increases (on the improvements) for 10 years. The developer will receive 3% interest construction financing from the City for additional costs needed to complete the constructioNrestoration, should the City receive Iowa Finance Authority funding. This loan will be repaid to the City at sale of the individual units. If IFA funding is not received, the developer will be required to obtain conventional financing. Proposal Requirements Respondents are requested to provide the following information in their proposal: 1. A concept plan for construction/restoration, that either is consistent with the plans conceived to-date, or proposes another alternative approach for re-use of the building. This can be presented as a sketch; scaled drawings are not required. 2. This plan should include the number and configuration of units. 3. This plan should include a description of the interior finishes of the units, including cabinetry, kitchen and bath fixtures and floor/wall/ceiling coverings; and HVAC and lighting systems. 4. A construction and development budget and projected unit sale price. 5. A timeline for construction start-up and completion of the units. 6. A timeline for marketing and sale of the units. An alternative for consideration in the respondent's development proposal: the HEART (Housing Education And Rehabilitation Training) Program The City of Dubuque, School District, the Four Mounds Foundation and the Four Oaks agency have sponsored the HEART Program since 2003. This is arehab-construction training program offered to Four Oaks and District high school students, who perform on-site rehabilitation carpentry on selected construction sites, while earning academic credit. Students work on-site approximately 3-4 hours per day, under the supervision of an experienced construction specialist. In addition, a classroom teacher accompanies each construction crew, consisting of 4-6 students. Students perform all aspects of rehabilitation construction, excepting the mechanical trades. All costs for the crews and supervisors are paid and all personnel are insured. It is the City's and School District's preference that the HEART Program be included as part of the restoration effort for this building. The services are provided at no cost; the work product is uniformly top quality. Preference will be given to proposals that include a description of use of the HEART Program as part of the construction team. The respondent should detail the aspects of the construction work which the student crews would perform. QUALIFICATIONS The selected developer/constnuction firm must have the requisite experience, personnel and credit, and have performed similar work on other projects. INFORMATION TO BE INCLUDED IN PROPOSAL To simplify the review process and to obtain the maximum degree of comparability, the proposal shall include the following information and shall be organized in the manner specified below. Letter of Transmittal Provide a letter of transmittal with the name, address, telephone number and fax number of the firm's primary contact person. Profile of Firm Provide general information about the firm and firm's area of expertise, including the qualifications of the personnel who will be assigned to this project. The proposal should include at least three references of past clients. These projects must have been completed within the past five years with the same project manager proposed for this project. Proposed Project Schedule Provide a project schedule outlining the time period and estimated completion date for each element of the proposed scope of work. Costs Provide a proposed cost and development budget for the completed project This budget should detail the proposed sale price for each of the town home units. SUBMISSION REQUIREMENTS An original copy of the proposal must be received in the Housing Department, 1805 Central Avenue, Dubuque, Iowa 52001 by 07. Each bidding firm assumes full responsibility for delivery of the completed proposal on or before the deadline. The City of Dubuque is not responsible for any loss or delay with respect to delivery of the proposals. The City of Dubuque reserves the right to reject any and all proposals and negotiate changes to proposals. The City of Dubuque is not liable for costs incurred by any respondent prior to the execution of an agreement or contract. The City of Dubuque is not liable for any costs incurred by the respondent that are not specified in any contract. The City of Dubuque is an Equal Opportunity Employer. All questions and correspondence regarding this RFP should be directed to David Hams, Director, Housing and Community Development Department, Dubuque, Iowa, 52001, by telephone at 563-589-4239, by fax at 563-589-4244, or by email at dharris cityofdubuaue.org. EVALUATION CRITERIA Proposals will be evaluated to ensure that they meet minimum requirements. A review of qualifying proposals will be evaluated by a selection committee. Bidders may be invited to an interview with the committee. Evaluation criteria will include the following: • Experience and achievements of the firm. • Quaycations and experience of principal personnel on similar projects. • Grasp of project requirements, understanding of project scope and level of interest by firm. • Design approach/methodology in completing the scope of work. • Approach to communication throughout the project. • Ability to complete the project in a timely manner and within budget. • Proposed schedule to complete the project. • Proposed cost to complete the project. All respondents will be provided with preliminary design drawings; the building has been fully measured and a set of schematic as-is drawings will also be provided. Tours of the building may be scheduled upon request with the Housing Department. SCHEDULE C INSURANCE REQUIREMENTS FOR PROFESSIONAL SERVICES 1. All policies of insurance required hereunder shall be with an insurer authorized to do business in Iowa. All insurers shall have a rating of A of better in the current A.M. Best Rating Guide. 2. All policies of insurance shall be endorsed to provide a thirty (30) day advance notice of cancellation to the City of Dubuque if cancellation is prior to the expiration date. This endorsement supersedes the standard cancellation statement on the Certificate of Insurance. 3. shall furnish a Certificate of Insurance to the City of Dubuque, Iowa for the coverage required in Paragraph 6 below. Such Certificates shall include copies of the following endorsements: a) Thirty day notice of cancellation to the City of Dubuque. b) Commercial General Liability policy is primary and non-contributing. c) Commercial General Liability additional insured endorsement. d) Governmental Immunities Endorsement. e) Waiver of Recovery under workers compensation. shall also be required to provide Certificates of Insurance of all subcontractors and all sub-sub contractors who perform work or services pursuant to the provisions of this contract. Said certificates shall meet the same insurance requirements as required of 4. Each certificate shall be submitted to the contracting department of the City of Dubuque. 5. Failure to provide minimum coverage shall not be deemed a waiver of these requirements by the City of Dubuque. Failure to obtain or maintain the required insurance shall be considered a material breach of this agreement. 6. Contractor shall be required to carry the following minimum coverage/limits or greater if required by law or other legal agreement: a) COMMERCIAL GENERAL LIABILITY General Aggregate Limit $2,000,000 Products-Completed Operations Aggregate Limit $1,000,000 Personal and Advertising Injury Limit $1,000,000 Each Occurrence Limit $1,000,000 Fire Damage Limit (any one occurrence) $ 50,000 Medical Payments $ 5,000 This coverage shall be written on an occurrence, not claims made, form per project. All deviations or exclusions from the standard ISO commercial general liability form CG 0001 or Businessowners BP 0002 shall be clearly identified. Governmental Immunity endorsement identical or equivalent to form attached. An additional insured endorsement identical or equivalent to ISO Form CG 2026 and include as additional insureds: "The City of Dubuque, including all its elected and appointed officials, a!I its employees and volunteers, all its boards, commissions and/or authorities and their board members, employees, and volunteers." b) WORKERS COMPENSATION 8~ EMPLOYERS LIABILITY Statutory for Coverage A Employers Liability: $100,000 each accident $100,000 each employee-disease $500,000 policy limit-disease Policy shall include an endorsement waiving right of recovery against City of Dubuque. c) PROFESSIONAL LIABILITY: $1,000,000 d) UMBRELLA/EXCESS LIABILITY Coverage to be determined on a case-by-case basis by Finance Director. POLICY NUMBER COMMERCIAL GENERAL LIABILITY THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ fT CAREFULLY. ADDITIONAL INSURED -DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART. SCHEDULE Name of Person Or Organization: The City of Dubuque, including all its elected and appointed officials, all its employees and volunteers, all its boards, commissions and/or authorities and their board members, employees, and volunteers. (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your operations or premises owned by or rented to you. Copyright. Insurance Services Office. Inc. 1994 CG 20 26 11 85 CITY OF DUBUQUE, IOWA GOVERNMENTAL tMMUNiTtES ENDORSEMENT Nonwaiver of Govemmental Immunity. The insurance carrier expressly agrees and states that the purchase of this policy and the including of the City of Dubuque, Iowa as an Additional Insured does not waive any of the defenses of govemmental immunity avaitak~le to the City of Dubuque, Iowa under Code of Iowa Section 670.4 as it is now exists and as it may be amended from time to time. 2. Claims Coverage. The insurance carrier further agrees that this policy of insurance shall cover only those claims not subject to the defense of governmental immunity under the Cade o€ Iowa Section 67D.4 as it now exists and- as it may be amended from- time #o time. Those claims not subject to Code of Iowa Section 670.4 shall be covered by the terms and conditions of this insurance policy. 3. Assertion of Government Immunity. The City of Dubuque, Iowa shall be responsible for asserting any defense of governmental immunity, and may do so at any time and shall do so upon the timely written request of the insurance carrier. 4. Non-Denial of Coverage. The insurance carrier shall not deny coverage under this policy and the insurance carrier shall not deny any of the rights and benefits accruing to the City of Dubuque, Iowa under this policy for reasons of governmental immunity unless and- until- a court of competent jurisdiction has ruled in favor of the defense(s) of govemmental immunity asserted by the City of Dubuque, Iowa. No Other Change in Policy. The above preservation of governmental immunities shall not otherwise change or alter the coverage available under the policy. . _.. -- __ C h } Y 0 _J~acc -.b~raaisnr~u.: .: . ~'*-- -.... - _ _~__~_~ r ~ ~ __ . i Rs r z~aot~ 12 rN ~ l~! ~ t ~ ~ S ?F'~ S c A L~ ~/+{ ~~ U_ 3-crs Ate, FL ro FL, FIRST 1O~_$'~ ~~l'.O lT=~ldq~ ~ gu _ _t6t f^ ~ ~$° 1 6'_ H'/~^ 1:-01 5 E c v R Q ~lraat2 ~X- s ri N ~ s~c~k p ~ c.boR I~ ~ YY N l l G ~! ~ ~s c A L it '/y" 11•~-oc AEL Proposed 5-Townhouse Design ~~ " F~ i a s r ~ ~~~o ~ Q ~ ; -- N M ep ~ Q h ~ . ~ h Proposed 5-Townhouse Design Proposed 5-Townhouse Design 7' tit ~ i ~ n F L ~ ~' tZ'