Miller Development MOA 40-42 Main StreetTHE CITY OF
DUB E
Masterpiece on the Mississippi
MEMORANDUM
August 29, 2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Proposed Memorandum of Understanding with Miller Development Group
Economic Development Director Dave Heiar recommends City Council approval of a
Memorandum of Understanding between the City of Dubuque and Miller Development
Group to redevelop property located at 40-42 Main Street in downtown Dubuque.
Miller Development Group plans to redevelop 40-42 Main Street into market rate
apartments. The property is approximately 30,000 sq. ft. and will have 14 apartments
and 9,000 sq. ft. of commercial space when completed. The anticipated investment in
the project is $3,200,000.
The implementation of the Memorandum of Understanding will include the following
steps:
The preparation and approval of an application for Enterprise Zone
Benefits, and the approval of a contract between the Iowa Department of
Economic Development, the Company, and the City Council.
2. Applications for State and Federal Historic Tax Credits.
3. Expansion of the Greater Downtown Urban Renewal District to include the
property located at 40-42 Main Street.
4. The preparation and approval of loan documents for the Downtown
Rehabilitation Loan and Grant program. This will include a $300,000
Downtown Rehabilitation Loan, $10,000 Facade Grant, and a $10,000
Design Grant.
It should be noted that all the available funds in the downtown loan pool
are currently committed to other projects until FY 2014. If the loan pool is
recapitalized beyond the recapitalization amounts stated in the FY2008
Budget, it is possible to close on this loan prior to FY 2014. If no new
funds are provided to recapitalize this loan pool, and if all current loan
payments are received on time, this loan would commit our loan pool
resources until FY 2016.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
THE CITY OF ~,,,
SUB E MEMORANDUM
Master~?iece on the Mississippi.
August 28, 2007
TO: Michael C. Van Milligen, City Manager
~~
FROM: David J. Heiar, Economic Development Department
SUBJECT: Proposed Memorandum of Understanding with Miller Development Group
INTRODUCTION
The attached resolution provides for the approval of a Memorandum of Understanding
between the City and Miller Development Group to redevelop property located at 40-42
Main Street in downtown Dubuque.
DISCUSSION
Miller Development Group is owned by Chris Miller who recently moved back to the
area from Philadelphia, Pennsylvania. He worked for a real estate investment firm in
Philadelphia where he was the Associate Director of Site Acquisitions. His family
decided to move back to the area so his wife could join her father's (Dr. John P.
Kramer) dental practice. Chris hopes to redevelop 40-42 Main Street. Chris's father, Bill
Miller, has over 35 years of experience in the construction industry and is the premier
builder in the Galena Territory. He will be retiring from Galena Hillside Homes at the
end of the year and will be joining Miller Development Group full time.
Miller's plans are to redevelop 40-42 Main Street into market rate apartments. The
property is approximately 30,000 sq. ft. and will have 14 apartments and 9,000 sq. ft. of
commercial space when completed. The anticipated investment in the project is
$3,200,000.
To help finance the redevelopment, Miller plans to access several public funding
sources. Miller would like to gain access to the City's Downtown Rehabilitation Loan
Program, Facade Grant Program, and Design Grant Program which are only available
to properties within the Greater Downtown Urban Renewal District. Miller is asking the
City to expand the Greater Downtown Urban Renewal District to include 40-42 Main
Street.
Miller is also planning to use Federal and State Historic Tax Credits to fund this project.
He is currently in the application phase for these credits.
40-42 Main Street is currently located in one of the City's Enterprise Zones which
makes available a 10% investment tax credit on housing expenditures. Miller has asked
for assistance from the City to utilize this program.
The Memorandum of Understanding spells out the condition that the City will assist in
accessing these funds if Miller completes the redevelopment of the property by
December 31, 2009. This timeline will allow for the Historic Tax Credit process, the
Urban Renewal Amendment process, and for the construction phase of the project.
The implementation of the Memorandum of Understanding will include the following
steps:
The preparation and approval of an application for Enterprise Zone
Benefits, and the approval of a contract between the Iowa Department of
Economic Development, the Company, and the City Council.
2. Applications for State and Federal Historic Tax Credits.
3. Expansion of the Greater Downtown Urban Renewal District to include the
property located at 40-42 Main Street.
4. The preparation and approval of loan documents for the Downtown
Rehabilitation Loan and Grant program. This will include a $300,000
Downtown Rehabilitation Loan, $10,000 Facade Grant, and a $10,000
Design Grant.
It should be noted that all the available funds in the downtown loan pool
are currently committed to other projects until FY 2014. If the loan pool is
recapitalized beyond the recapitalization amounts stated in the FY2008
Budget, it is possible to close on this loan prior to FY 2014. If no new
funds are provided to recapitalize this loan pool, and if all current loan
payments are received on time, this loan would commit our loan pool
resources until FY 2016.
RECOMMENDATION
I recommend the City Council review, discuss, and approve the Memorandum of
Understanding.
ACTION STEP
The requested action is for the City Council to adopt the attached resolution approving
the Memorandum of Understanding, and instructing the City Manager to prepare the
appropriate documents for City Council approval of the incentive package.
F:\USERS\DHeiar\40-42 South Main\Council Memo for MOU.doc
Prepared by David J. Heiar City of Dubuque 50 West 13~' Street Dubuque, IA 52001 (563) 589-4393
RESOLUTION NO. 463-07
A RESOLUTION APPROVING A MEMORANDUM OF UNDERSTANDING WITH
MILLER DEVELOPMENT GROUP FOR THE REDEVELOPMENT OF 40-42 MAIN
STREET
Whereas, Miller Development Group is proposing to redevelop property located
at 40-42 Main Street in the City of Dubuque, and
Whereas, the City is encouraging the Company to invest in Downtown Dubuque,
and
Whereas, a Memorandum of Understanding has been prepared for said
redevelopment,
NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF DUBUQUE,
IOWA, AS FOLLOWS:
Section 1. The attached Memorandum of Understanding is hereby approved.
Section 2. The City Manager is hereby directed to prepare documents necessary
to implement the Memorandum of Understanding
Passed, approved and adopted this 4th day of September, 2007.
~/I~.O
Roy D. Buol, Mayor
ATTEST:
Jeanne F. Schneider, City Clerk
1=:\USERS\DHeiar\40-42 South Main\Resolution MOU.doc
MEMORANDUM OF UNDERSTANDING
Whereas, Miller Development Group, a local developer wishes to redevelop property
located at 40-42 South Main Street into a Mixed-Use facility; and
Whereas, the property is not currently located within the Greater Downtown Urban
Renewal District making the property ineligible for the Downtown Rehabilitation Loan
Program; and
Whereas, the City of Dubuque believes this project will be beneficial to the community;
and
Whereas, the City of Dubuque and Miller Development Group desire to enter into further
discussions concerning placing the property into the Greater Downtown Urban Renewal
District, the parties propose the following:
1. Miller Development Group (Developer), owning the building as 40 Main LLC, will
redevelop the property located at 40-42 South Main Street into amixed-use
facility. The redevelopment will consist of renovating 30,000 sq. ft. of space into
14 housing units and 9,000 sq. ft. of commercial space at a minimum investment
of $3,200,000.
2. The property will be fully redeveloped and completed by December 31, 2009.
3. The City of Dubuque will expand the Greater Downtown Urban Renewal District
to include property located at 40-42 South Main Street to make the property
eligible for the Downtown Rehabilitation Loan Program, Facade Grant Program,
and Design Grant Program.
a. The amount of funding from each of these programs the property would be
eligible for are as follows:
i. $300,000 Downtown Rehabilitation Loan
ii. $10,000 Facade Grant
iii. $10,000 Design Grant
The first 5 years of the loans are interest only payments. Interest rate is
3%. Principal and interest payments begin in year 6 and the principal is
amortized over 15 years. At each location a $2,000 credit is given for
every job or housing unit created within two years of the closing of the
loan and maintained for a three year period.
4. In consideration for the Company's intentions as described in Paragraphs 1. and
2., and as an incentive for expanding downtown, the City will provide the
following incentive package to the Developer:
• Enterprise Zone Benefits: Subject to the Company meeting the
requirements of the program, approval by the Dubuque Enterprise Zone
Commission and State of Iowa approval of the Company's application, the
City will execute a three party Enterprise Zone Agreement with the State
and the Company, pursuant to which the Company would be eligible for
benefits under the program. These benefits include a refund of sales and
use tax charged for materials in the renovation of the building and an Iowa
State tax credit equal to 10% of the Company's investment in the project.
5. The Company acknowledges that in order for the City to secure such incentives,
certain requirements are imposed upon the Company as specified in the
respective program regulations. The Company agrees to cooperate with the
City, the State of Iowa, and the United States Department of Housing and Urban
Development by providing the information and documents necessary for the
approval of loans and applications for financial assistance above.
6. Notwithstanding any other provision of this Memorandum of Understanding, the
City shall have no obligation to the Company under this Memorandum of
Understanding until and unless definitive agreements are entered into between
the Company and the City, and approved by the City Council and the Company's
appropriate officers.
2
Approved this 4th day of September, 2007 by and between Miller Development Group,
and the City of Dubuque, Iowa.
MILLER DEVELOPMENT GROUP
Christopher Miller
Attest:
CITY OF DUBUQUE
Roy D Buol, Mayor
Jeanne F. Schneider, City Clerk
F:\USERS\DHeiar\40-42 South Main\MEMO of UNDERSTANDING.doc
3
July 23, 2007
Mike Van Mi{iigen
City Manager
2'~ Floor, City Hall
50 West 13'h Street
Dubuque, IA 52001
Re: Expansion of the Greater Downtown
Urban Renewal District
Mr. Van Milligan,
I am writing fio request the expansion of the Greater Downtown Urban Renewal District th
encompass 40-42 Main Street. I currently have the property unc~r contract with Wally BroMm and plan an
adaptive reuse of the vacant building. The building stands three sfiories and is 28,566 square feet.
Please find included in this package the plans which show commercial use on the fast floor and
residential apartments on the second and third floors. I am sane you are aware renovations of historical
buildings are very costly. tf included in the Urban Renewal District, I plan to apply th apply for the
revolving loan program, which will make finanang this project more feasible. Also included is the budget
for the project completed by Chris Wand of Dumant The initial renovation costs for this project are aver
$3 MiNion. I have applied for Federal and State Tax Credits and plan to enlist the property ~ the National
Register of Historic Places when completed. Without multiple programs like tax credits and law interest
loans, a project like this could not be completed. Feel free to corrtact me with any questions you may
have. I kx~k forward to hearing from you.
Regards,
Chris Miller
563-580-9306
Christ~millerclevelopmentgroup.Corr
CC: David Heiar
Dubuque
Legend °®d,
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Chris Miller Project Location ~~~~~%
Ice Harbor Subarea A TF'E~'T'"°' '-.
Old Main Subarea DUBtE
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