Housing Assist Funds - PottersMEMORANDUM
February 25, 2002
TO:
FROM:
SUBJECT:
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Housing Trust Fund Committee Recommendation for Application for Local
Housing Assistance Program Funds
Housing and Community Development Director David Harris requests authorization to
submit an application to the Iowa Department of Economic Development for Local
Housing Assistance Program funds, for a $250,000 grant to assist Scott and Dawn
Potter to construct a 19-room single room occupancy (SRO) facility on Garfield Avenue.
This project is in response to Request for Proposals requested by the City of Dubuque
Housing Trust Fund Committee. The Housing Trust Fund Committee and the Housing
Commission support this recommendation.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
David Harris, Housing and Community Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
22 February 02
To: Mike Van Milligen, City Manager
From: David Harris, Housing and Community Development Department
Re: Housing Trust Fund Committee recommendation for application for Local
Housing Assistance Program funds
Introduction
The purpose of this memorandum is to request the City Council's approval of an
application to the Iowa Department of Economic Development for Local Housing
Assistance Program funds.
Background
In January, the Department of Economic Development (IDED) published notice
of availability of $2.445 million under the Local Housing Assistance (LHAP)
Program, in state-wide competition. The Department's timeline for approvals
was short, with applications due 15 March. The intended use of the funds was
specific: only projects proposing new construction of single family or multi-family
housing would be considered.
The Housing Trust Fund Committee acted to authorize release of a request-for-
proposals to area developers. The IDED information packet was mailed to all
developers who had participated in the Affordable Housing Committee project
during the past year and to other identified interested persons. Additionally, legal
notice of funds availability was published in the Telegraph-Herald.
Discussion
Four proposals were received, from three developers.
James Kress proposed construction of six attached condominium homes,
located off Tanzanite Drive in the Emerald Acres subdivision. These were
to be sold at $85 000. The LHAP funds, in the amount of $175 000, were
requested as a grant, toward a total project cost of $370 000.
Callahan Construction submitted two proposals. One was for construction
of five single family homes, selling for $130 000 each. $500 000 was
requested, as part of a $650 000 project. The applicant requested the
funds as a 0% loan, with $100 000 "repayments" to be made after sale of
each home, to a revolving loan fund. This fund would then be
continuously recycled by the developer for additional similar new home
construction, until the subdivision would be built out, at which time the
funds would be fully repaid.
The second application proposed construction of a 12-plex apartment
building, to be rented at HUD Fair Market Rents to Section 8 Program-
eligible households. The LHAP funds were requested in the amount of
$500 000, toward a total project cost of $650 000, as a 0%, 15-year loan.
Both projects were to be located on currently undeveloped land at Seippel
and Middle Roads. The developer's intent was to request annexation of
this land into the City.
Scott and Dawn Potter requested a $250 000 grant for a $500 000 project
to build a new 19 room single room occupancy (SRO) facility. This would
be constructed on Garfield Avenue, adjacent to his Davis Place SRO
recently completed with the assistance of a City-sponsored LHAP grant
last year. The Potters would own and operate the facility for lower-
income single men, with rents at $250 per month
The developer has requested the site be designated as an Urban
Revitalization District, in order to obtain a limited-term exemption of
additional real estate taxes resulting from the new construction. The City
Council designated the adjacent Davis Place site as a District in October
2000. Resulting tax savings are estimated at $110 000. A similar
projection has been calculated for the proposed project. This request is
now being prepared by the Housing Department for Manager and Council
review. For purposes of the LHAP application, however, no
documentation of City Urban Revitalization commitment will be included.
Mr Potter has also recently obtained Council approval of rezoning for the
proposed site. In February, the property was rezoned to Office
Residential, as required by the zoning ordinance. A request for replatting
will be considered by the Zoning Commission in March.
Recommendation
The Housing Trust Fund Committee met on 22 February and considered the four
proposals. The Potter application for construction of a 19 room SRO on Garfield
Avenue was the unanimous recommendation. The Committee's action was to
recommend that the City apply for Local Housing Assistance Program funds, in
the amount of $250 000 for assistance to this project.
The Housing Commission also met to consider the Trust Fund Committee's
action, at its meeting on 26 February. The Commission voted unanimously to
support the Trust Fund's recommendation.
Action Step
The action requested of the City Council is to authorize submission of an
application to the Iowa Department of Economic Development for Local Housing
Assistance Program funds, for a $250 000 grant to assist Scott and Dawn Potter
to construct a 19-room SRO facility on Garfield Avenue.
LHAP PROPOSALS
FORM OF OWNER SALE
DEVELOPER PROJECT REQUESTED ASSISTANCE MATCH PRICE
Potter 19 Room SRO $250,000 Grant $250,000 N/A
Kress 6 Condominiums $175,000 Grant $195,000 $85,000
Callahan 1 5 Single Family $500,000 0% Loan $150,000 $130,000
Callahan 2 12 Apartments $500,000 0% Loan $160,000 N/A
RENT
$250
N/A
N/A
1 BR - $409
2 BR - $525
3 BR - $673