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HomeMy WebLinkAbout96-198 Resolution No. 96-198 RESOLUTION AUTHORIZING EXECUTION OF A PURCHASE OF SERVICE AGREEMENT WITH NEIGHBORHOOD HOUSING SERVICES FOR MULTIFAMILY CONVERSIONS BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Richard B. Helwig, City Manager, and Dolonna Mecum, City Clerk, be and are hereby authorized and directed to execute a purchase of service agreement on behalf of the City of Elgin with Neighborhood Housing Services to provide property conversion to certain areas within the city limits, a copy of which is attached hereto and made a part hereof by reference. s/ Kevin Kelly Kevin Kelly, Mayor Presented: June 26 , 1996 Adopted: June 26, 1996 Omnibus Vote: Yeas 6 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk PURCHASE OF SERVICE AGREEMENT BETWEEN NEIGHBORHOOD HOUSING SERVICES OF ELGIN, INC. AND THE CITY OF ELGIN THIS AGREEMENT is made and entered into this -/' 7;e4, day of June, 1996, by and between the City of Elgin, Illinois, an Illinois municipal corporation, (hereinafter referred to as "City" ) and Neighborhood Housing Services of Elgin, Inc. , an Illinois not-for-profit corporation (hereinafter referred to as "NHS" ) ; and WHEREAS, City has determined that it is in the best interests of City and its citizens to promote and facilitate the conversion of lawful nonconforming multifamily residential properties to single family use; and WHEREAS, NHS has successfully provided redevelopment services and administration in the Elgin, Illinois area and is familiar with and otherwise experienced in the historical, geographic and architectural attributes of the City of Elgin and surrounding area. NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 1. On or before June 30, 1996, City shall pay to NHS the sum of Two Hundred Thousand Dollars ($200,000 .00) . 2 . NHS shall directly and solely utilize the aforementioned $200,000 . 00 as and for direct payments to property owners of lawful nonconforming residential conversion properties located within the corporate boundaries of the City of Elgin, Illinois, pursuant to the terms and conditions provided herein. A minimum of $50,000 . 00 of the $200,000.00 is for projects not submitted by NHS. 3 . The terms, conditions and criteria by which recipients of the aforementioned payments to property owners shall be selected and governed shall be pursuant to the terms of the Multifamily Conversion Program, which is attached hereto and made a part hereof as Exhibit "A" . City may amend the terms and provisions of the Multifamily Conversion Program from time to time in its sole discretion by providing written notice of such amendments to NHS. 4 . NHS shall hold harmless and indemnify City from and against any and all claims for damages, lawsuits, causes of action or any and all other liability which may arise out of or in connection with NHS ' negligent performance of the terms of this agreement, specifically including, but not limited to, failure to adhere to the provisions of the Multifamily Conversion Program. 5 . This agreement shall be effective July 1, 1996 and shall terminate July 15, 1997 unless otherwise terminated as provided herein. 6 . This agreement may be terminated by City upon fifteen ( 15) days written notice to NHS for any reason. 7 . Upon termination of this agreement, NHS shall return any funds provided by City pursuant to this agreement, which have not been expended directly to property owners pursuant to this agreement, to City within thirty (30) days of termination. NHS shall not expend any funds acquired from City pursuant to this agreement upon receiving notice of termination. 8 . NHS shall provide a detailed written report of all expenditures of funds made pursuant to this agreement to City after July 1, 1997, and before December 31, 1997, which report shall include but not be limited to properties converted, amounts paid and selection criteria used. 9 . The terms and provisions of this agreement shall be severable. In the event that any portion of this agreement is deemed to be void or otherwise unenforceable for any reason, the remainder of this agreement shall remain in full force and effect. 10. This agreement shall be subject to and governed by the laws of the State of Illinois . 11 . This agreement represents the entire agreement between the parties hereto. No other oral or written agreements currently exist which shall modify or supersede the terms of this agreement. CITY OF ELGIN By � i- . Richard B. Helwig City Manager Attest: Dolonna Mecum City Clerk NEIGHBORHOOD HOUSING SERVICES OF GIN, IN By B ,1,2 O�fE� - 4011:5 � � , Angel Rosenthal Board President `d -2- EXHIBIT A MULTIFAMILY CONVERSION PROGRAM 1 . "Lawful Nonconforming Residential Conversion" shall mean a residential structure to which additional dwelling units were constructed consistent with the provisions of the then applicable zoning ordinance. 2 . Program shall operate under established objective criteria with respect to selection of participating properties . 3 . Program expenditures shall be limited to construction items required to convert a residential structure to single family residential use. 4 . All work performed under program shall be performed in compliance with all applicable city codes and ordinances specifically including but not limited to approved final inspection. 5 . Program shall provide a maximum of $12,000 in financial assistance per dwelling unit. 6 . All recipients of funds pursuant to this Multifamily Conversion Program shall be required by NHS to enter into an agreement which shall specifically require that such recipient shall not participate, either directly or indirectly in the Elgin Residential Rehabilitation Grant Program or any other federally funded housing rehabilitation program for one year from the date the conversion permit is issued, and shall not sell or otherwise convey their interest in the subject property prior to completion of their participation in the Multifamily Conversion Program. Such agreement shall further require compliance with all other provisions of the Multifamily Conversion Program, and shall provide that such recipient shall indemnify, reimburse and hold harmless the City of Elgin, Illinois from and against any claims for damages, causes of action, lawsuits, and any and all other liability which may arise out of or in connection with said recipient's breach of the terms of the aforementioned agreement or other negligent or reckless acts. -3- • • 1996 Multi -Family Conversion Program Neighborhood Housing Services of Elgin Projects June 12, 1996 A problem identified time and again in older, established neighborhoods is a housing stock of single-family structures used for multi-family purpose. The negative impact on neighborhoods is evidenced by too many cars on the street, homes showing signs of excessive wear and tear, building exteriors with cut-up facades and added entries, and established schools facing increased populations. Included in the City of Elgin's 1996 Budget is $150,000 for multi-family conversion. The NHS Loan Committee has recommended seven projects. Although five of the seven projects are submitted by NHS, it should be noted that these properties were selected for acquisition by NHS because of their extreme negative neighborhood impact prior to NHS involvement. The properties have been either red-tagged as unfit for human occupancy, have had numerous police calls, are part of a larger neighborhood redevelopment effort, or are in a state of extreme disrepair. This summary is intended to describe the five projects being completed by Neighborhood Housing Services of Elgin in 1996 using in part multi-family conversion proceeds. • Neighborhood Housing Services of Elgin Page 2 _ " 305 East Chicago Street ;.- -1 --1 • Lawful nonconforming four-unit. • Corner property on major arterial, ' �, '' adjoining downtown business Y district. =- z • An extensive property maintenance �—_— -- court case lists 41 separate violation A „ .5 _f " ■ counts at the property. 0` � `� iiit1- • Generated 22 calls for Police Department service in last 18 = ;__ months including two reports = generated for drugs and one for '°"i 'mtmlamomo illegal use of a handgun_ imrifigisi 279 Ann Street -,_, • Lawful nonconforming five unit (average 14 people). • Six separate property maintenance R �° violation cases opened in last 18 ,x months.t. -‘ 1 - .. • Appeared on original Problem • L -- . – - � ' Property Report, removed only _ . ye when NHS acquired. Y f. _=, � '' I • Property part of a major effort to .. A, - � :. - improve quality of life on a - ___ = -�"'-'- challenging block-- Located next to church in new NHS Target area, across street from property declared a public nuisance. • 58 Police Department calls for service to this address since January 1, 1995, of which eight were domestic trouble calls and four for drugs. Other neighborhood disturbances were for warrant services, theft, aggravated battery, and simple battery. Neighborhood Housing Services of Elgin Page 3 / 409 North Street °� • Lawful nonconforming three-unit. • Located in Elgin Historic District, ~° removing two units. I "—` • Historically sensitive rehabilitation to 409 _. - I match adjoining property with mirror ya = image design. 1% _.4. .. a ,',"'..-,,.r. it '„ 'v_ .Y ' k '� . 0 k a� +S,7. ^i. f i .q-. j 72 j�y,�.. 4 ; 409 North Street Upper Bath in a Closet Neighborhood Housing Services of Elgin Page 4 -, . 320 North Spring Street • Lawful nonconforming two-unit • Located in the heart of the near northeast neighborhood, one of the areas under highest stress. NHS has f undertaken a major redevelopment enhancement with the acquisition of four properties within a one block area. The r y ` - `` benefit of rehabilitating en masse these properties is a major jump-start for the neighborhood, a total $447,000 in investment for the four properties. Ft • In 1995 alone there were 51 calls for service to the Police Department at this address. Since NHS acquisition there have been NO problems for the neighborhood. Previous calls included extensive gang activity, noise complaints, unlawful use of a handgun, and domestic troubles. E 4 y. • i Sunroom used as a kitchen t i • k, R-- Bathroom in upper unit in closet space on platform • Neighborhood Housing Services of Elgin Page 5 'U `y ` � 318 DuPage Street • Lawful nonconforming two-unit t x = • Property maintenance court case � � lists 42 separate property ''''5L. C maintenance code violations la VI 11,.L "' .' — _ • The property was the site of 18 calls for service to the Police I IS t --"—' 1-11�''Ju +• - : =l Department. • s `� s ,viii III n J 1� ° : . . Agenda Item No. June 5, 1996 TO: - Mayor and Members of the City Council FROM: Richard B. Helwig, City Manager SUBJECT: 1996 Purchase of Service Agreement with Neighborhood Housing Services for Multi-family Conversion Program PURPOSE The purpose of this memorandum is to provide information regarding consideration of a second year of the multi-family conversion program. BACKGROUND A problem identified time and again in older, established neighborhoods is a housing stock of single-family structures used for multi-family purposes . The negative impact on neighborhoods is evidenced by too many cars on the street, homes showing signs of excessive wear and tear, building exteriors with cut-up facades and added entries, and established schools facing increased populations . Program Administration The City Council adopted its first multi-family housing conversion program in June, 1995 . The program is administered by contract through Neighborhood Housing Services of Elgin. Specifics of the current program include: Properties must be lawful nonconforming structures . The property must be brought to a single-family use. The program provides reimbursement for reconversion construction costs . Expenses related to the conversion may include items such as : * removal of electrical meter and rewiring * removal of kitchens * removal of exterior stairwells and exits * installation of siding, windows, etc * elimination of some off-street parking * other construction-related items as approved Multi-family Conversion Program June 5, 1996 Page 2 1995 Program Report Seven properties have or are in the process of returning to their single-family use. Of the $100, 000 provided for property conversion, $96 , 000 is currently obligated. The balance is available for 1996 projects . Projects from -the 1995 program, all returning the properties to their original single-family use, include: Units Maximum Address removed Reimbursement Owners 264 Ann Street 1 unit $12, 000 L. Williams 359 Park Street 1 unit 12, 000 J. Koko 259 Villa Street 1 unit 12,000 Knuth 18 Warwick Place 2 units 24 , 000 D. Jurina 34 N. Gifford 1 unit 12, 000 A. Conte * 211 N. Gifford 1 unit 12, 000 J. Anderson 573 Division 1 unit 12,000 R. Pumo TOTAL 8 units $96, 000 Balance $ 4, 000 * Note: The property owner also sits on the NHS Loan Committee. He abstained from all discussion on this particular application. All the properties above have obtained building permits to formalize the conversion of land use back to single-family status . The intended effect of the program is to reduce the intensity of residential uses in single-family structures . The city average for persons per dwelling unit is 2 . 9 . 1996 Program/Enhancements Included in the 1996 Budget is $150,000 for multi-family conversion. In anticipation of funding and to expedite projects, the NHS Loan Committee has reviewed and recommended the following projects for funding in 1996 : Units Maximum Address removed Reimbursement Owners 305 E. Chicago St. 3 units $ 36,000 NHS 387 Ryerson 1 unit 12,000 J. Fulin 639 Park 1 unit 10,000 T. Budz 409 North St. 2 units 24,000 NHS 279 Ann St. 4 units 48,000 NHS 320 N. Spring St. 1 unit 12,000 NHS 318 DuPage St. 1 unit 12,000 NHS TOTAL 13 units $154,000# # Note: Includes $4 , 000 carryover from 1995 Multi-family Conversion Program June 5, 1996 Page 3 Although five of the seven projects are submitted by NHS, it should be noted that these properties were selected for acquisition by NHS because of their negative neighborhood impact. The properties have been either red-tagged as unfit for human occupancy, have had numerous police calls, or are in a state of extreme disrepair. Projects are selected by the NHS Loan Committee (Ginger Stace, Home -Federal Savings of Elgin; Dan Zimmer, Bank One; Paul Bednar, resident; Neil Steffens, appraiser; August Conte, resident business; Bob Johnson, resident) . The Committee evaluates proposals and scores them based upon the attached Multi-Family Conversion Selection Criteria rating form. NHS reports there are at least two additional projects in the process of developing conversion applications . These applications and any further marketing will be put on hold in 1996 until 1997 funding is approved, or if additional City support is secured. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED Neighborhood Housing Services . FINANCIAL IMPACT The 1996 Budget for this program totals $150,000 from riverboat proceeds (275-0000-791 . 92-32, project 157200) . Each subsequent year in the Five-Year Financial Plan shows increased support for this effort, totalling $1 . 5 million during 1996-2000 . It should be noted that the $250, 000 to convert 22 properties in Elgin would cost the City of Aurora $462 , 000 using their program rules ( $21, 000/unit) . LEGAL IMPACT None. ALTERNATIVES 1) Renew the Purchase of Service Agreement with Neighborhood Housing Services of Elgin and fund the second year of the multi-family conversion program at the budgeted $150,000 . 2) Renew the Purchase of Service Agreement with Neighborhood Housing Services of Elgin and fund the program at $200,000 using $50,000 of unprogrammed riverboat proceeds, thereby leveraging the removal of an additional four dwelling units ($12,000/unit) . 3) Not fund the program. Multi-family Conversion Program June 5, 1996 Page 4 RECOMMENDATION Alternative #1 is recommended consistent with the 1996 budget of $150, 000. Please note that demand for these Multi-family Conversion Program dollars has already resulted in the entire 1996 budget allocation being programmed. Respectfully submitted, V /L.444.0--- Clay J. Pearson, Director Department of Code Administration and Neighborhood Affairs Richard B. Helwig City Manager Multi-Family Conversion Selection Criteria Applicant Address Criteria Description Points 1) Number of Units to be converted X 10 pts 2) Owner-occupied 20 pts Nonowner- occupied 10 pts 3) Rentals on Block(including subject) 1 Rental Property 10 pts 2 Rental Properties 20 pts 3 Rental Properties 30 pts 4) Project Cost $36,000 + 30 pts $24,000 - $35,999 20 pts Less than $23,999 10 pts 5) Location Within Neighborhood Arterial St. (e.g. Villa, Liberty) 30 pts Collector St. (e.g. Park, Gifford) 20 pts Local St. (e.g. North Street) 10 pts 6) Project Scope Cost of Conversion 51%to Ext. 5 pts Total Points Points required for participation 50