Linseed Oil - Amendment to Development AgreementCopyright 2014
City of Dubuque ITEM# 1
ITEM TITLE: Linseed Oil - Amendment to Development Agreement
SUMMARY: City Manager recommending that a public hearing be set for October 20,
2014, on amending the Development Agreement with Wilmac Property
Company for the property located at 151 East 9th Street.
RESOLUTION Fixing the date for a public hearing of the City Council of
the City of Dubuque, Iowa, on the proposed issuance of Urban Renewal
Tax Increment Revenue Obligations and the execution of an Amendment
to the Development Agreement between the City of Dubuque, Iowa and
Betty Building, LLC, and providing for the publication of notice thereof
SUGGESTED DISPOSITION: Other
ATTACHMENTS:
Description Type
❑ Linseed Oil Building Amendment to Development Agreement -MVM
City Manager Memo
Memo
❑ Staff Memo Staff Memo
❑ First Amendment - Linseed 00 Bldg Supporting Documentation
❑ Resolution- Linseed Oil First Amendment Resolutions
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
Dubuque
2007 • 2012 • 2013
SUBJECT: Amendment to Development Agreement with Wilmac Property Company
to Redevelop Property at 151 East 9th Street (Linseed Oil Paintworks
Building)
DATE: October 2, 2014
Economic Development Director Maurice Jones recommends the City Council set a
public hearing for October 20, 2014, on amending the Development Agreement with
Wilmac Property Company for the property located at 151 East 9th Street.
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
Maurice Jones, Economic Development Director
Masterpiece on the Mississippi
TO:
FROM:
A
2007 • 2 12 • 2013
Michael Van Milligen, City Manager
Economic Development Department
50 West 13th Street
Dubuque, Iowa 52001-4864
Office (563) 589-4393
TTY (563) 690-6678
http://www.cityofdubuque.org
Maurice Jones, Economic Development Director
SUBJECT: Amendment of Development Agreement with Wilmac Property
Company to redevelop property at 151 East 9th Street (Linseed
Oil Paintworks Building)
DATE: October 1, 2014
INTRODUCTION
This memorandum is a request for the City Council to set a public hearing on
October 20, 2014 on amending the Development Agreement with Wilmac Property
Company for the property located at 151 East 9th Street.
BACKGROUND
On February 18th, 2013 the City Council approved submittal of an application to the
State for New Production Round 5 of CDBG grant funding to assist in the adaptive
reuse of property at 151 E. 9th Street (known as the Linseed Oil Paintworks
Building) into residential apartments.
On March 7th, 2013 the City Council approved a Development Agreement with
Wilmac Property Company for the rehabilitation of this building.
On June 19, 2013 the Iowa Economic Development Authority approved an
amendment to CDBG contract #08-DRH-212 (for the Caradco Building), increasing
the award amount by $2,248,820 for the purpose of rehabilitating the Linseed Oil
Paintworks Building.
This funding was considered essential to the City of Dubuque for two reasons. First,
it will help address the critical shortage of workforce housing in our community and
second, it will continue to help implement the redevelopment of older and under-
utilized buildings in our community.
The Linseed Oil Paintworks Building will include 16 new residential units. Due to the
CDBG funding, nine (9) of the units will now be dedicated to residents whose income
is at or below 80% area median income. The building will also have a handicapped
accessible social area and garden on the roof. The Developer is also looking into a
small solar system to supplement the electrical system. The Developer is estimating
the total cost of the project to be $5,485,347. In addition to other funding sources,
the project will be using State Historic Tax Credits which are being reserved.
DISCUSSION
The Development Agreement with Wilmac Property Company for the Linseed Oil
Paintworks Building includes several City incentives, namely:
• 10 years of Economic Development Grants funded by Tax Increment
Financing
• Downtown Housing Incentive program of $10,000 per housing unit created
• Planning and Design Grant of up to $10,000
• Facade Grant of up to $10,000
• Financial Consultant Grant of up to $15,000
The Agreement also specified a closing date of no later than August 1, 2013, with a
substantial completion of December 31, 2014. These dates were not achieved for
the following reasons:
1. The release of funds for the CDBG funds, necessary before closing, did not
come until January 8, 2014.
2. Meanwhile, the Iowa Department of Revenue began to indicate they would
like to see legislative changes regarding qualified expenses for CDBG
funding, which would have meant $500,000 that had been incorporated in the
original project pro forma would now be "missing".
3. Finally, the project bids went out in July 2014 and came in with cost overruns
compared to the pro forma (due to the elapsed timing).
At this point, in order to meet other funding deadlines, Gronen Restoration began
construction on the project, even though the financial closing had not yet taken
place. Wilmac Property Company began negotiations with the Economic
Development department, asking for additional years of Tax Increment Finance
rebates in order to fill the gap created by the political and economic changes that
had occurred in the time lapse.
The development agreement would be amended, going to a fifteen (15) year TIF
rebate from a ten (10) year TIF rebate. Fifteen years is consistent with the Caradco
Building project and the Novelty Iron Works project in the Millwork District.
RECOMMENDATION/ ACTION STEP
Based on the critical need for downtown housing and the City's goal to assist in
redeveloping the Millwork District, I recommend the City Council adopts the attached
resolution to set a public hearing on the attached Amendment to the Development
Agreement.
FIRST AMENDMENT
TO
DEVELOPMENT AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
BETTY BUILDING, LLC
The First Amendment to Development Agreement, dated for reference purposes
the day of , 2014, is made and entered into by and between the
City of Dubuque, Iowa (City) and Betty Building, LLC (Developer).
Whereas City and Wilmac Property Company previously entered into a
Development Agreement dated the 7`h day of March, 2013 (the Development
Agreement); and
Whereas Wilmac Property Company, with the consent of City, assigned its rights
in and under the Development Agreement to Developer, who simultaneously assumed
the duties of Wilmac Property Company under the Development Agreement; and
Whereas City and Developer desire to amend the Development Agreement as
set forth herein.
NOW, THEREFORE, IT IS AGREED BY AND BETWEEN THE PARTIES THAT
THE DEVELOPMENT AGREEMENT IS AMENDED AS FOLLOWS:
1. Section 1.3 of the Development Agreement is hereby amended to read as
follows:
Closing. The closing shall take place on the Closing Date which shall be the 15th
day of October, 2014, or such other date as the parties shall agree in writing but in no
event shall the Closing Date be later than the 15' day of November, 2014.
Consummation of the closing shall be deemed an agreement of the parties to this
Agreement that the conditions of closing shall have been satisfied or waived.
2. Section 2.1 of the Development Agreement is hereby amended to read as
follows:
Required Minimum Improvements. Developer will make a capital investment of
approximately Five Million Dollars ($5,000,000.00) to improve the Property (the
Minimum Improvements). The Minimum Improvements include creating sixteen (16)
apartments for market -rate and rental housing using Historic Tax Credits. Nine (9) of
those apartments may be rent restricted, as defined in Internal Revenue Code Section
42(g)(2)(C), and occupied by individuals whose income as illustrated by HUD Handbook
4350.3 REV -1 (or subsequent versions), is less than or equal to 80 percent of the area
100214ba1
median family income (adjusted for household size) as determined and adjusted
annually by HUD. The remaining apartment units shall be made available at market -
rate rents.
3. Section 2.4 of the Development Agreement is hereby amended to read as
follows:
Timing of Improvements. Developer hereby agrees that construction of the
Minimum Improvements on the Property shall be commenced within thirty (30) days
after the Closing Date, and shall be substantially completed by June 30, 2015. The time
for the performance of these obligations shall be suspended due to unavoidable delays
meaning delays, outside the control of the party claiming its occurrence in good faith,
which are the direct result of strikes, other labor troubles, unusual shortages of
materials or labor, unusually severe or prolonged bad weather, acts of God, fire or other
casualty to the Minimum Improvements, litigation commenced by third parties which, by
injunction or other similar judicial action or by the exercise of reasonable discretion
directly results in delays, or acts of any federal, state or local government which directly
result in extraordinary delays. The time for performance of such obligations shall be
extended only for the period of such delay.
4. Section 3.2 is amended to read as follows:
Economic Development Grants to Developer. For and in consideration of
Developer's obligations hereunder, and in furtherance of the goals and objectives of the
urban renewal plan for the Project Area and the Urban Renewal Law, City agrees,
subject to Developer being and remaining in compliance with the terms of this
Agreement, to make thirty (30) consecutive semi-annual payments (such payments
being referred to collectively as the Economic Development Grants) to Developer:
November 1, 2015
November 1, 2016
November 1, 2017
November 1, 2018
November 1, 2019
November 1, 2020
November 1, 2021
November 1, 2022
November 1, 2023
November 1, 2024
November 1, 2025
November 1, 2026
November 1, 2027
November 1, 2028
November 1, 2029
May 1,2016
May 1,2017
May 1,2018
May 1, 2019
May 1, 2020
May 1, 2021
May 1, 2022
May 1, 2023
May 1, 2024
May 1, 2025
May 1, 2026
May 1, 2027
May 1, 2028
May 1, 2029
May 1, 2030
2
pursuant to Iowa Code Section 403.9 of the Urban Renewal Law, in amounts equal to a
portion of the tax increment revenues collected by City under Iowa Code Section 403.19
(without regard to any averaging that may otherwise be utilized under Iowa Code
Section 403.19 and excluding any interest that may accrue thereon prior to payment to
Developer) during the preceding six-month period in respect of the Minimum
Improvements constructed by Developer (the Developer Tax Increments). For purposes
of calculating the amount of the Economic Development Grants provided in this Section,
the Developer Tax Increments shall be only those tax increment revenues collected by
City in respect of the increase in the assessed value of the Property above the
assessment of January 1, 2012 ($79,970.00). The Developer Tax Increments shall not
include (i) any property taxes collected for the payment of bonds and interest of each
taxing district, (ii) any taxes for the regular and voter -approved physical plant and
equipment levy, (Hi) the remaining actual amount of tax increment revenues collected by
City in respect of the valuations of the Property prior to January 1, 2012 and (iv) any
other portion required to be excluded by Iowa law, and thus such incremental taxes will
not include all amounts paid by Developer as regular property taxes.
5. Section 6.3 is amended to read as follows:
Termination Date. This Agreement and the rights and obligations of the parties
hereunder shall terminate on June 1, 2030 (the Termination Date).
6. Except as expressly amended in this First Amendment to the
Development Agreement, the terms of the Development Agreement will remain in full
force and effect as set forth in the Development Agreement.
CITY OF DUBUQUE, IOWA BETTY BUILDING, LLC
By: By:
Roy D. Buol, Mayor
Its:
Attest:
By:
Kevin S. Firnstahl, City Clerk
Prepared by Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113
RESOLUTION NO. 312-14
FIXING THE DATE FOR -A -PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA ON THE PROPOSED ISSUANCE OF URBAN RENEWAL TAX
INCREMENT REVENUE OBLIGATIONS AND THE EXECUTION OF AN
AMENDMENT TO THE DEVELOPMENT AGREEMENT BETWEEN THE CITY OF
DUBUQUE, IOWA AND BETTY BUILDING, LLC, AND PROVIDING FOR THE
PUBLICATION OF NOTICE THEREOF
Whereas, the City of Dubuque (City) and Wilmac Property Company (Wilmac)
entered into a Development Agreement on March 7, 2013 for the rehabilitation of the
Linseed Oil Paintworks Company Building located at 151 East 9th Street, Dubuque,
Iowa (the Property); and
Whereas, the Development Agreement was assigned by Wilmac to Betty Building,
LLC (Betty) to facilitate the rehabilitation of the Property; and
Whereas, Betty has requested certain amendments to the Development Agreement
set forth in the First Amendment to Development Agreement attached hereto, including
authorizing an increase in the Urban Renewal Tax Increment Revenue obligations, as
provided by Chapter 403 of the Code of Iowa, for the purpose of carrying out the
rehabilitation of property located at 151 East 9th Street as hereinafter described; and
Whereas, before said obligations may be approved, Chapter 403 of the Code of
Iowa requires that the City Clerk publish a notice of the proposal and of the time and
place of the meeting at which the City Council proposes to take action thereon and at
which meeting the City Council shall receive oral and/or written objections from any
resident or property owner of said City to such proposed action.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. The City Clerk is hereby authorized and directed to cause this
Resolution and a notice to be published as prescribed by Iowa Code Section 403.9 of a
public hearing on the City's intent authorize Urban Renewal Tax Increment Revenue
100214ba1
obligations, to be held on the 20th day of October, 2014, at 6:30 o'clock p.m. in the City
Council Chambers at the Historic Federal Building, 350 W. 6th St., Dubuque, Iowa.
Section 2. The City Council will meet at said time and place for the purpose of
taking action on approving the First Amendment to Development Agreement and
authorizing an increase in the Urban Renewal Tax Increment Revenue obligations
relating thereto, the proceeds of which obligations will be used to carry out certain of the
special financing activities described in the Greater Downtown Urban Renewal District,
consisting of the funding of economic developments grants to Betty Building, LLC
pursuant to the Development Agreement, as amended, under the terms and conditions
of said West 11th Street Urban Revitalization District Plan. It is expected that the
aggregate amount of the Tax Increment Revenue obligations is approximately
$1,240,000.
Section 3. The Clerk is hereby directed to cause at least one publication to be
made of a notice of said meeting, in a newspaper, printed wholly in the English
language, published at least once weekly, and having general circulation in said City,
said publication to be not Tess than four days nor more than twenty days before the date
of said meeting on the issuance of said obligations.
Section 4. That the notice of the proposed action to issue said obligations
shall be in substantially the form attached hereto.
Passed, approved and adopted this 6th day of October, 2014.
Attest:
Kevin -irnstahl, City CI lc
Roy D. ` uol, Mayor
F:\USERS\tsteckle\Lindahl\Resolutions\Wilmac Resolution setting Public Hearing_100214.doc
2
STATE OF IOWA {SS:
DUBUQUE COUNTY
CERTIFICATION OF PUBLICATION
I, Suzanne Pike, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher
of the Telegraph Herald,a newspaper of general circulation published in the City of Dubuque, County
of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper
on the following dates: October 10, 2014, and for which the charge is $82.94.
Sr..„( -24
Subscribed to before me, a otary Public in and for Dubuque County, Iowa,
this 1, day of , 20 /9- _.
otary Public in and for Dubuque County, Iowa.
MARV
p�r
Commis w..,r q 1
Commission �Jurr3�q
My Comm, Exp, FED, 1,
RESOLUTION,
. N0.312-14
rt THE TE
FOR
FIXING
PUBLIC.HEAI-
DA
ING OF - THE ..CITY
COUNCIL OF . •THE
CITY OF DUBUQUE,
IOWA ON THE PRO-
POSED ISSUANCE OF •
URBAN INCREMENT
TAX
REVENUE DBLIGA-
,TIONS AND',THEEXE I
CUTION. OF AN
AMENDMENT TO THE
DEVELOPMENT
AGREEMENT BE-
TWEEN THE CITY OF
DUBUQUE;` IOWA. ANO
BETTY BUILDING
LLC, AND PROVIDING
F.OR THE PUBLICA-
TION °OF' NOTIOE
THEREOF
whereas,the C ty. of
Dubuque (City) and
Wilmac ProliertY Com-
pany (Wilmac) entered
a Development
into
Agreementon March 7,
2013 for th'e rehabilita-,
tion of the LiTlseed 011
Paintwork$ Company
Building located at 151
Eastr9th;Street Dubu-'
quef IoWa,(the Proper
tY); and ,
Whereas the Pevel
opmept Agreement
was assigned, by .-
Wilmac to BettY Build-
ipgt LLC, (Betty) to, fa
cihtate ,tiler rehabihta .
tion c off the' Property;
and r
Whereas petty 'has
requested; certain
amendments,to the De=
velopment Agreement
settforth in, the First
Amepdmepit io -Deyel-
oprrient =Agreementat-
tached hereto rnclud=,,
ing in=r.
crease in:the°Urban;eRe,
.
n*al Tax Increment
Revenue'; obligations,
as provided byChapter
403•ofthe Code of 10-
wa for,the purpose,of
carrY,lfD,pkt thegre
bilitation', of,•pr0pertyba-
located at 151 ,East 9th
Streetn:as ;hereinafter
deser,ibed,and,
Whereas, before said I,
obligations may be'4p-
proved; Chapter 403 of
the,, Code of Iowa re-
quires that the''City' .
Clerk publish a notice
of the proposal and of
theairne and place, of i
the meeting at Which
the .Oity Council `pro-
poses;-- to take.;action
thereon, and, at which
meeting, the City-Coun-,
cil shall receive oral
and/or written :objec-
tionfrom any resident
or property owner -of
said City to such pro;•
posed ;action
NOW THEREFORE,
BE , IT RESOLVED BY
THE ;CITY COUNCIL
OF4HE CITY OF DU-
BUQUE,40WA:
Section 1. The City
Clerk. is hereby author;
ized..,and directed,;to
cause, xthis ,Resolution
and notice to be pub -
aa. prescribed' by
Iowa, Code Section
403.9of a public; hear-
pn the City's Antent
authorize Urban Re-
newal : ;Tax Increment
Revenue obligations, to
be held on the 20th day
of Qctober, t 2014, --at
6:30' o'clock p.rn: `in the
CityCouncil:Chambers
atthe Historic;Federal
Building, 350 yif. 6th St.
Dubuque, Iowa
Section 2. The City
Coui ciI will' meet �t
said tine and place for
the purpose of takings
action on :approving.
the: First_ Amendment
to.;Devel"Q`pment Agree-
ment. and sauthorizing
ani the,,Ur
ban itenevfa1 Tax Incre '
ment Reueriue obliga
tions relating thereto
the proceeds of which
oblgations will be used
to=carry out certam_of
the +special financing
activities described;in
the Greater. Dowptawn
Urban Renewal Disirict
consisting of the fund-
ing of economic devel
opments grants to.Bet
ty, Building, LLC . pyr
suant to ,the Develop
Ment • Agreement; as
amended, under the
terms and conditions
of said and,.
llth
Street Urban Revitaji
zation District Plan. It
iso expected that, the
aggregate aount -of
m
the Tax Increment Rey I
enue obligations is,ap
pGo-���atelX$��QAQ, ii
• eetion 3 ;The Clerkeis
hereby d:.lrecte'd . to
cause at least one,pvb-'
lipattoo'to be made,cifa
notice of said meeting,,
in, at,nawspaper,;.print,'
ed wholly, in the Eng-,
lishlanguage publish-
ed at least once week-
lyand having general .I
circulationlin said City, I
said, .publication to be I
not, less than fourdays
nor more; than twenty
dayslbefore the dateof,
saiOr eeting on the is
suance ofsaid obliga,
tions
Sectiop 4. Thatthe no
tice of tthe proposed
action to issue said•ob
I gations .-shall be - in-;
substantially theifform
attached'hereto.,
,Passed; approved and
adopted this 6th day Of/
October ;2014
Roy b; Buol Mayor
Attest Kevin Firnstahl
City Clerk°
ciry (3F DUBUQUE
OFFICIAL NOTICE
NOTICE'OF A PUBLIC -
HEARING , '0F 0TH$
C TY COUNCIL: 'OF
THE nCIt%,0F DUB07
QUE, 10WA, ,0�1 CHE
MATTER OFTHE• PRO
POSED =AUTHORIZA,
T ON OF URBAN •.RE '
NEWAL TAX, INCRE
MENT REVENUE'OBLI-.
GATIONS AND THE
EXECUTION OF A`DE-
VELOPMENT,.. AGREE
MENT • ',RELATING
THERETO; WITH, BET-
TY;B,UILD,,ING,LLC. ,
PUBLIC NOTICE:.is•
hereby given that:.the
City:Council of the City,
of Dubuque loWa,'iwill.
hdld.,a public hearing::
ori -the 20th, day,of._Oc
tuber., "at p.m in':
the City:Council Chain-
bers at the Historic,-
Federal ;Building :.350
W 6th St., Dubuque, to-;
wa at Which time -City;
Couricll: will meet for,
the purpose of ,taking
action on' approving
the First Amendment,
to ;Development Agree-'
ment and authorizing.,
an mpre'ase ih.the` Ur=
ban„Renewai,iax mcre -
ment Revenue obliga
tions relating; theret9p
the prodeeds‘of whioh°'
obligations will be used;'
to .carry out certain of j
the special ; mancing
activities'deserlbed in
the 'Gres ei' Downtown i,
Urbon Renewal Disrict rl
corisisting.0,f the fund
oprl`ent
ing bf eco
s gnomrantsipytBbevel :.
Bet
ty,� Bijildlrrg LLC
su�J;iutito� hea1Devd#bp �
menu Ag�eement a`s
arner��edF",under" the:
terms and conditions,
S feta t ,bane evltali
za"tbn District Qlan , It
is' �Xpected ,that they
aggregate arr oltntr ofA.
the;�"�axfilncret�eh� R�V
e�}iloe,obhgatro$1240,ns iV 0ap .
phKim1�ately 0;;;
At9tfe meeting the
City 1 oincii will re '
ceiye gyral and written v
objetti ins ,f'omk f'
resident or' property
owner' of ),said pity, to” 1
th`e above action Afte;•
all` obecti0 shave
bee�OV eceiVed and con-
sideced the :City Coun
cil;may, at tills meeting °.
ora anY idiee. anent
thereof approve the
Development Agree.-
rne_nt „and, _ authorize
such , `Tax` ncrenient
Revenue grant Obliga-
tions or will abandon"'
the,proposal By order'
of the City Council said
hearing and appeals
there from; shall, Abe
help m. :accordance.
with and governed;by
the, provisions, of Sect
tion 403 9 of the Code
ofaowa
Any visual orhearing
impairetl, persons
needing special assi
tadce or persons with
special, accessibility
needs shouldcontact
the City'Cler'k'Sx Office
at',.."(563)''',,,5894.100. .lor
TTY,r(563) 556-9948urs.prior toat
least 48 ho
the meeting k , ; .
;This natice`is given by
orderkof the.City.Coun
ciJ'of theCity of Dubin
que lows, as provided
byChapte,r'403 of the
Code of Iowa
Dated this; -6th day of
Ogtober 20'14
Kevin S. Firnstahl
City Clerk of Dubuque, I
Iowa
1t10/10.