Interstate Power Building Facade GrantTHE CITY OF
DUB E
Masterpiece on the Mississippi
MEMORANDUM
August 28, 2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Downtown Rehabilitation Loan and Facade Grant for the former Interstate
Power Company Building at 131 W. 10th Street
Economic Development Director Dave Heiar is recommending approval of a letter of
commitment for a Downtown Rehabilitation Loan of $300,000 and a Facade Grant of
$10,000 for Interstate Building, LLLP to support their rehabilitation of the former
Interstate Power Company Building at 131 W. 10th Street. Interstate Building, LLLP, is a
partnership among John Gronen, Mike Steele and Greg Timmerman. They are
planning a complete renovation of all 20,000 square feet on all four floors in this
building.
According to the developers on the application; "The building could potentially house
several different companies employing approximately 75 people. These office workers
will be adding to the synergy that is being created in downtown and Upper Main.
Additional downtown employees will utilize the shopping and dining in the area,
especially at mid-day. Some of these people may live downtown in apartments or even
town homes."
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Michael C. Van Milligen
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Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
THE CITY OF ,,,,..
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DUB E
Mnster~iece can the Mississii~~i
MEMORANDUM
August 24, 2007
TO: Michael Van Milligen, City Manager
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FROM: David J. Heiar, Economic Development Director ~ ~' (,
SUBJECT: Downtown Rehabilitation Loan and Facade Grant for the former
Interstate Power Company Building at 131 W. 10t" Street
INTRODUCTION
This memorandum presents for City Council consideration a Resolution approving a
letter of commitment for a Downtown Rehabilitation Loan of $300,000 and a Facade
Grant of $10,000 for Interstate Building, LLLP to support their rehabilitation of the former
Interstate Power Company Building at 131 W. 10th Street.
BACKGROUND
The Interstate Building was built in 1956 with a fourth floor addition in 1962. It was built
specifically for Interstate Power Company. The building is approximately 20,000 square
feet (5,000 per floor). Interstate Building, LLLP, a partnership among John Gronen,
Mike Steele, and Greg Timmerman, is planning a complete renovation of all 20,000
square feet on all four floors.
The Downtown Rehabilitation Loan/Grant 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 costs for Facade 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
The renovations that Interstate Building, LLLP is planning will include a new elevator
and new relocated bathrooms. Interior finishes will be completely updated. The goal is
to create a modern, first-rate office building. The facade will be cleaned and they plan
to remove all glass as well as aluminum infill that replaced glass. This will be replaced
with a continuous band of glass on all four floors. The glass will be specialized so you
will be able to see into the building, creating a modern look.
According to the developers on the application;
"The building could potentially house several different companies
employing approximately 75 people. These office workers will be
adding to the synergy that is being created in downtown and Upper
Main. Additional downtown employees will utilize the shopping and
dining in the area, especially at mid-day. Some of these people may
live downtown in apartments or even town homes."
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 FY2012. As of July 1, 2011, the loan funds should be available to the project and the
company would like to proceed with the loan. Recapitalizations for this program have
been included into the City's Capital Improvements Program. Should the
recapitalization schedule be altered, the timing for the availability of loan funds may
change.
Additional information on the terms and conditions of the proposed Downtown
Rehabilitation Loan/Grant 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/Grant Program. The project will begin when other
funding sources have been secured.
I recommend that the City Council adopt the attached Resolution approving a letter of
commitment for Interstate Power Company Building at 131 W. 10th Street for the
$300,000 Downtown Rehabilitation loan and $10,000 facade grant.
ACTION STEP
The action step for the City Council is to adopt the attached Resolution.
Y:\USERSWdejong\Downtown Rehab Loan\Interstate Building 131 W 10th\20070727 DRLP Memo.doc
RESOLUTION NO. 461-07
A RESOLUTION AUTHORIZING A LETTER OF COMMITMENT AND
ADDITIONAL ACTIONS CONCERNING A DOWNTOWN REHABILITATION
LOAN AND FACADE GRANT TO THE FORMER INTERSTATE POWER
COMPANY BUILDING.
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 Interstate Power Company Building, LLLP
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 Interstate Power Company Building,
LLLP 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 Interstate Power Company Building, LLLP
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 Interstate Power Company Building, LLLP 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 4th day of September, 2007.
Roy D. Buol, Mayor
Attest:
Jeanne F. Schneider, City Clerk
F:\USERS\Adejong\Downtown Rehab Loan\Interstate Building 131 W 10th\20070806 DRLP Resolution.doc
September 5, 2007
Interstate Building, LLLP
Attn: John Gronen
P.O. Box 1986
Dubuque, Iowa 52004-1862
RE: Letter of Commitment/Downtown Rehabilitation Loan Program
Former Interstate Power Company Building, 131 W. 10th Street
Dear Mr. Gronen:
I am pleased to inform you that your application for financial assistance for the
renovation of the former Interstate Power Company 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 second mortgage on the property.
Purpose of the Loan: Renovation of the exterior facade and interior for use as commercial
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 construction costs for facade improvements. 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 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 his/her 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. Any jobs relocated from another location
within the downtown area will not count as a new job.
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. Buol
Mayor
ACKNOWLEDGMENT
We have reviewed the above offer and accept the $300,000 Downtown Rehabilitation
Loan, and the $10,000 facade grant and all of the terms of this commitment letter.
John N. Gronen
Date
F:\USERSWdejong\Downtown Rehab Loan\Interstate Building 131 W 10th\20070806 DRLP approval letter.doc