Community Housing Initiatives Agreement_Washington Neighborhood PartnershipMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
Dubuque
band
AI -America City
1
2007 • 2012 • 2013
SUBJECT: Agreement between Community Housing Initiatives (CHI), and the City of
Dubuque's Housing & Community Development Department
DATE: August 13, 2014
Housing and Community Development Department Director Alvin Nash recommends
City Council approval of an Agreement between Community Housing Initiatives and the
City of Dubuque's Housing and Community Development Department.
Community Housing Initiatives has been actively working in the Washington
Neighborhood by purchasing and rehabbing approximately ten properties. City funds
will be used to assist in the rehabilitation of ten more properties. The City will be
contributing up to $25,000 per property for the rehabilitation portion of the project.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Mic ael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
Alvin Nash, Housing and Community Devleopment Director
THE CITY OF
Dui
Masterpiece on the Mississippi
To: Mike Van Milligen, City Manager
From: Alvin Nash, Housing and Community Development Director
Dubuque
bitetri
All -America City
1 r
2007 • 2012 • 2013
Subject: Agreement between Community Housing Initiatives (CHI), and the City
of Dubuque's Housing & Community Development Department
Date: August 12, 2014
Introduction
The purpose of this memorandum is to request City Council to authorize signature of
the Agreement between Community Housing Initiatives (CHI) and the City of
Dubuque's Housing & Community Development Department.
Background
On March 18, 2013, City Council approved recommending the partnership between
Community Housing Initiative (CHI), Dubuque Bank and Trust (DB&T) and the City
Housing Department to restore approximately 18 units in the Washington
Neighborhood.
In order to fund the projects, each partner agrees to commit an amount of funds to
address the impact we want to make on the neighborhood. This breakdown of
these funds are as follows:
Community Housing Initiative
Dubuque Bank and Trust
City of Dubuque
$ 800,000
$ 500,000
$ 500,000
$1,800,000
Proposed funding source from the City for the partnership is as follows:
Downtown TIF $334,000
Residential Rehab Program Income Funds-RRP $166,000
$500,000
Discussion
CHI has been actively working in the Washington Neighborhood by purchasing and
rehabbing approximately 10 properties. The City funds will be used to assist in the
rehabilitation of 10 more properties. As stated in the Agreement, the City will be
contributing up to $25,000 per property for the rehabilitation portion of the project.
The WNDC is in full support of this partnership and it is in line with the WNDC 2009
Neighborhood Plan.
Action Step
The action requested is for City Council to approve the attached Agreement between
Community Housing Initiatives and the City of Dubuque's Housing & Community
Development Department.
Attach.
cc: Jenny Larson, Budget Director
Kris Neyen, Rehabilitation Programs Supervisor
Erica Haugen, Community Development Specialist
Ken Tekippe, Finance Director
COPY
AGREEMENT BETWEEN
THE CITY OF DUBUQUE
AND
COMMUNITY HOUSING INITIATIVES, INC. -
WASHINGTON NEIGHBORHOOD HOUSING PARTNERSHIP
Effective Date: August 18, 2014
This Agreement is made by and between the City of Dubuque, Iowa ("City") and
Community Housing Initiatives, Inc, ("CHI") and shall be effective beginning on the
above effective date and remain in effect until August 18, 2018, or for a period of four
(4)full years from the effective date abave.
This Agreement outlines the terms and conditions under which the City shall invest
funding with CHI to assist with the aoqukyition, rehabilitation and resale of residential
units located in the Washington Neighborhood (hereinafter the "Project"),
For purposes of this Agreement the Washington Neighborhood is defined to include:
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(�n�|A�nue:����E��228��Go��dm��E�11 Street, then East
11m Street East to Elm 8troet, Elm Street North until East 20th Street & Rhomberg
Avenuo, Rhomberg Avenue East to Kniest 8tremt, Kniest Street North to East 22nd
Street and back to Central Avenue.
In consideration of the mutual representations and obligations hereunder, the City and
CHI agree as follows:
Section t Funding
CHI agrees to provide a minimum of $800,000 and secure a construction loan from
Dubuque Bank and Trust C'DBT") in the amount of $500,000.
The City agrees to invest with CHI $500.00for the purpose of the Project in Dubuque's
Washington Neighborhood as part of a comprehensive neighborhood rovitmUzodon
initiative. The City funding shall be in the form of payments toward the rehabilitation
costs of each unit up to, but not more than $25,000, and in no event to exceed the total
rehabilitation cost per unit.
CHI may begin accessing City funding upon completion of at least 25% of the work per
unit as outlined in Section 2. The remaining funds may be requested upon 50%
completion, 75% completion and upon final comptetion of each unit. Funding requests
to the City shall be in writing and include supporting documentation of work completed.
Upon the sale of all residential units completed for the Pj otunderUhisAgroen1ant.Ule
aggregate sales proceeds received will be distributed in the following order:
1) Dubuque Bank & Trust Loan
2) Any remaining funds (profit) must be used for the puncheaa, rehabilitation,
and resale of additional residential units, or such other use that is approved
by the City in writing.
Section 2. Scope of Work
CHI Obligations:
• CHI agrees to acquire, rehabilitate and resell a minimum of twenty (20)
residential units during the term of this Agreement (hereinafter the "Minimum
Improvements"). A residential unit can be a single-family structure or multi -unit
structure as long as the intent is for the resale of the housing unit(s). Each unit
within a multi -unit structure, such as a duplex, shall constitute a residential unit.
• Acquisition of at least twenty (20) residential units shall be comleted by the end
date of this Agreement. The Minimum Improvements will be completed in
accordance with all federal, state, and local laws and be finished within six (6)
months after the expiratiori of this Agreement.
*
Exhibit A outlines the estimated budget for completion of the Minimum
Improvements through a detailed Scope ofWork.
• CHI agrees to maintain the properties during the course of the Project ino|uding,
but not Umited to lawn care, snow removal, and mairitenance
• CHI will mantain insurance in accordance with the provisions of this Agreement
and as outlined in Section 5.
°
CHI agrees to maintain accurate records that include detailed costs associated
with the Project and K4inhnurn lmprovements as well as proceeds received from
the sale of each residential unit. In addition, all cost and sales records will
accompany alt requests to draw frorn City funds,
n
CHI will determine the selling price of residential units. Factors determining the
selling price may include costs incurred and the appraised value of the
rehabilitated residential units.
▪ There will be no income restrictions with naopadto buyers purchasing residential
City Obligations:
• Assist CHI with initial inspection of residential units to be purchased by CM{ as
part ofthe Project.
Develop Minimum improvements documents for rehabiUtation including scope of
°
Perform final inspections with CHI to assure satisfactory work completed by the
Contractor(s).
Section 3. P ' ct Budget
Exhibit A hereto represents a Scope of Work budget estimate for the Minimum
Improvements required for competion af the Project.
Section 4. Indemniflcation
CHI shall indemnify, defend and hold harmless the City, its governing body,
departments, dffioia|u, employees and agents from and against all liability, okanlm,
actions, damages, losses and expenses arising out of the City's work in performing its
obligations under this Agreement.
Section 5. Insurance
�.
CHI must provide and maintain or cause to be maintained at all
times during the Project at its sole cost and expense builder's risk
inaunance, written on a Completed Value Form in an amount equal
to one hundred percent (10O96) of the buildings replacement
va|uea, including irnprovennentm, when construction is completed.
Coverage shall include the "special perils" form and CHI shall
furnish City with proof of insurance in the form of a certificate of
insurance,
b. Upon completion of the Project and up to the Termination Date,
CHI shall nnaintahn, or cause to be n1aintmiMed, at its cost and
expense property insurance against loss and/or damage to the
buildings (including the Minimum Improvements) under an
insurance policy written with the "special perils" form and in an
amount not less than the full insurable replacement value of the
buildings (including the Minimum Improvements). CHI shall furnish
c. The term ''replacement value" shall mean the actual replacement
cost of the building with Minimum Improvements (excluding
foundation and excavation costs and costs of underground flues,
pipes, drains and other uninsurable items) and equipment, and
shall be reasonably determined from time to time at the request of
City, but not more frequently than once every three (3) years.
d. CHI shall notify City immediately in the case of damage exceeding
$50,000 in amount to, or destruction of, the Minimum
Improvements or any portion thereof resulting from fire or other
casualty. Net proceeds of any such insurance (Net Proceeds), shall
be paid directly to CHI as its interests may appear, and CHI shall
forthwith repair, reconstruct and restore the Minimum
Improvements to substantially the same or an improved condition
or value as they existed prior to the event causing such damage
and, to the extent necessary to accomplish such repair,
reconstruction and restoration, CHI shall apply the Net Proceeds of
any insurance relating to such damage received by CHI to the
payment or reimbursement of the costs thereof, subject, however,
to the terms of any mortgage encumbering title to the Property (as
its interests may appear). CHI shall complete the repair,
reconstruction and restoration of Minimum Improvements whether
or not the Net Proceeds of insurance received by CHI for such
purposes are sufficient.
2. Liability Insurance. CHI must maintain a commercial general liability
insurance policy with coverage and limits not less than the following:
General Aggregate Limit $2,000,000
Products -Completed Operations Aggregate Limit $1,000,000
Personal and Advertising Injury Limit $1,000,000
Each Occurrence $1,000,000
Fire Damage Limit (any one occurrence) $50,000
Medical Payments $5,000
Section 6. Amendments
This Agreement may be modified or amended only in writing by a duly authorized
representative and executed by both CHI and City. It may not be amended or modified
by oral agreement or understanding between the parties unless the same shall be in
writing, duly approved, and executed by both parties.
Section 7. Parties Bound
The covenants and conditions herein contained shall apply to and bind the legal
repnasenbohvea, suooemyoro, and assigns of all of the parties hereh», and all of the
parties hereto shall be jointly and severally liable hereunder.
Section 8. Notices
All notices or demands to be givon, nlade, or sent, or which may be Qiven, made, or
sent by one party to the other pursuant to thihall be deemed to have been
given, made, or sent when made in vvrdbnQ, and deposited in the U.O. mail, certified and
postage prepaid, addressed as follows:
a. To City: City of Dubuque
Housing & Community Development
Attn: Alvin Nash, Housing Director
350 West 6th Street, Suite 312
Dubuque, IA 52003
b. To CHI: CHI
Doug LaBounty
500 EasLocust Street, Suite 500
Des Moines, IA 50309
The address to which any notice, demand, or other writing may be given, made, or sent
by any party as above provided may be changed by written notice given by such party
as above provided.
Section 9. Ter nation
Either party may terminate the Agreement for any reason by providing sixty k60\ days
written notice. HmxvoYer, termination does not preclude CHI's obiigation to repay the
City for its investment up to the date of tenninabon, nor the City's obligation to
reimburse CHI for work completed through the date of termination by the City.
Addibona|k/, termination does not preclude the parties from meeting any other
obligations under the Agreement for work started prior to the date of termination which
must be completed.
Section 10. Governing Law
This Agreement wiUbegovemed by and construed in accordance with the laws of the
Section 11. SeverabUity
If any term, covenant, or condition of this Agreement is held by a court of competent
jurisdiction to be invalid, or unenforceable, the rest of the Agreement will remain in full
force and effect and will in no way be offeoted, impaired, or invalidated, unless such
enforcement vvill frustrate the purpose of this Agreement.
Section 12. Force Majeure
In the event that either party hereto will be delayed or hindered in or prevented from the
performance ofany act required hereunder by reason of strikes, |ockquLa, labor
troub|es, unavailability or excessive price of fuel, power fai|4na, riots, insu[nacUOn, war,
terrorist activities, chemical exp|Vsions, hazardous conddions, fire, weather or acts of
God, or by reason of any other cause beyond the exclusive and reasonable control of
the party delayed in performing work or doing acts required under the terms of this
Agreement, then performance of such act will be excused for the period of the delay
arid the period for the performance of any such act will be extended for a period
equivalent to the period ef such delay.
Section 13. Paragraph Headings
The titles to the paragraphs of this Agreement are solely for the convenience of the
parties and will not be used to explain, [nodifv, sinnpUfv, or aid in the interpretation of the
provisions of this Agreement.
Section 14, Entire Agreement
This Agreement constitutes the entire agreement between the partieo, and any prior
understanding ar representation of any kirid preceding the date of this Agreement shall
not be binding on either party except to the extent incorporated in this Agreement.
IN WTNESS WHEREOF, the parties have executed these presents the day and year
first above written.
City of Dubuque, Iowa
Name:
Title:
Mayor
Exhibit A
Exhibit B
Com . Inc.
By:
Name:
Title .
Estimated Budget for Completion of the Scope of Work
CHI Certificate of Insurance