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HomeMy WebLinkAbout97-177 Resolution No. 97-177 RESOLUTION AUTHORIZING EXECUTION OF A PURCHASE OF SERVICE AGREEMENT WITH NEIGHBORHOOD HOUSING SERVICES OF ELGIN, INC. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Robert O. Malm, Interim 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 of Elgin, Inc. , for the 1997 Multifamily Conversion Program, a copy of which is attached hereto and made a part hereof by reference. s/ Kevin Kelly Kevin Kelly, Mayor Presented: June 25, 1997 Adopted: June 25, 1997 Vote: Yeas 5 Nays 2 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 / lay of TuLy, 1997, by and between the City of Elgin, Illinois, an Illinois municipal corporation, (hereinaf'fer referred to as "the City") and Neighborhood Housing Services of Elgin, Inc., an Illinois not-for-profit corporation (hereinafter referred to as "NHS"); and WHEREAS, the City has determined that it is in the best interests of the City and its citizens to promote and facilitate the conversion of nonconforming 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 its surrounding area; and WHEREAS, the City and NHS have determined that within the South East Elgin Neighborhood, a large number of residences that were originally constructed as single-family dwellings have been converted into multiple-family dwellings. 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 July 15, 1997, City shall pay to NHS the sum of three hundred fifteen thousand dollars ($315,000.00). 2. NHS shall directly and solely utilize three hundred thousand dollars ($300,000.00) of the aforementioned three hundred fifteen thousand dollars ($315,000.00) as and for direct payments to property owners of "nonconforming residential conversion" properties located within the corporate boundaries of the City of Elgin, Illinois, pursuant to the terms and conditions provided herein. Not less than one hundred fifty thousand dollars ($150,000.00) of the aforementioned three hundred fifteen thousand dollars ($315,000.00) shall be expended in payment to property owners other than NHS for nonconforming residential conversion properties located within the corporate boundaries of the City of Elgin. Fifteen thousand dollars ($15,000.00) of the aforementioned three hundred fifteen thousand dollars ($315,000.00) shall be retained by NHS to cover its costs for administering the program. 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". The 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 the 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 t including, but not limited to, failure to adhere to the provisions of the Multifamily Conversion Program. 5. This agreement shall be effective July 1, 1997 and shall terminate December 31, 1997 unless otherwise terminated as provided herein. 6. This agreement may be terminated by the 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 the City pursuant to this agreement, which have not been expended directly to property owners pursuant to this agreement, to the City within thirty (30) days of termination. NHS shall not expend any funds acquired from the 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 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: 'WI, .1 BY/. Ro.-rt O. '. m Inte im City Manager Attest: _i5/C ___/ ---- Dolonna Mecum City Clerk NEIGHBORHOOD HOUSING SERVICES OF ELGIN, INC. By ' / l� - /fir � �f Denise Harding Hopk V ,/ Board President • EXHIBIT A MULTIFAMILY CONVERSION PROGRAM 1. "Nonconforming Residential Conversion" shall mean a residential structure in which additional dwelling units were established (1) consistent with the provisions of the then applicable zoning ordinance, but in which the additional dwelling units are no longer permitted under current provisions of the current zoning ordinance, or (2) before January 1, 1992, as substantiated by three separate and distinct forms of written documentation, and the execution of an affidavit by the residential structure's owner or owners attesting that the residential structure will be occupied by the owner or owners for a period of twelve (12) months following the issuance of an occupancy permit for the work performed pursuant to the nonconforming residential conversion. 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 nonconforming residential structure to its original residential use. 4. All work performed under program shall be performed in compliance with all applicable city ordinances, specifically including, but not limited to, a final inspection made in conjunction with a request for the issuance of an occupancy permit. 5. Program shall provide a maximum of twelve thousand dollars ($12,000) in financial assistance per dwelling unit. For properties located in "User Defined Area 5," as set forth in the United States Census designation (the South East Elgin Neighborhood), a maximum of fifteen thousand dollars ($15,000.00) per dwelling unit shall be provided. Funds shall be disbursed in accordance with the criteria adopted by NHS. NHS shall devise a marketing program specifically designed to induce nonconforming residential conversions in the South East Elgin Neighborhood. 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- ,0oFF/°,ti Agenda Item No. o r .•, , � <<� 4 —City of Elgin g ,,.ill I1 S\R June 5, 1997 TO: Mayor and Members of the City Council FROM: Robert 0. Malm, Interim City Manager SUBJECT: Resumption of 1997 Multi-Family Conversion Program and Program Enhancements PURPOSE The purpose of this memorandum is to provide information for the Mayor and members of the City Council to consider funding and program enhancements to resume the Multi-Family Conver- sion Program in 1997 . BACKGROUND Elgin's older neighborhoods have been stressed with approximately 3,000 homes originally constructed for low density use but converted to more intensive multi-family dwellings . To address this stress in the neighborhoods, Elgin adopted in 1995 a program to assist property owners in the voluntary reversion of properties back to their original usage. Once converted, the properties must remain in conformance with the zoning ordinance. The Multi-Family Conversion (MFC) program was designed based upon a similar incentive in Aurora, another community trying to "catch-up" and rejuvenate established residential neighborhoods . The Elgin program has worked in meeting its goals . With Neighborhood Housing Services (NHS) as the program administrator, 46 units have been removed at an average reimbursement of $10,826/unit in the first 30 months of operation. The 1997 allocation of $200,000 was obligated in the first two months of the year. Additional home owners are willing and wanting to revert their properties back to the intended use, if there is assistance to offset the costs of renovations. The window of opportunity is now open for these conversions. With an additional $300,000 for the MFC program in 1997, a minimum of 25 units of the estimated 3,000 lawful nonconforming uses could be converted yet this year. Multi-family Conversion Program June 5, 1997 Page 2 Program Enhancements : The City Council may wish to include amendments to the program rules including: 1. Unlawful Units. Currently deconversion of unlawful residential uses is not eligible for reimbursement. However, to address the need for stabilization, home-ownership, and a timely return to lawful use, NHS has suggested including owner-occupied properties willing to convert to original construction. The assistance may be limited to pre-1992 conversions (demonstrated with three proofs showing the use was established prior to 1992) as that was the last major revision to the Zoning Ordinance. 2 . Market incentive for South East Elgin Neighborhood. NHS has provided information that despite a high concentration of multi-family units, there have been two conversions approved in this area. The intensity of multi-family conversion may be making single-family ownership a more difficult venture in this area. To address this issue, an increase in the reimbursement cap from $12,000 to $15,000 is proposed for projects in the neighborhood district encompassing the South East Elgin Neighborhood. 3. Administration. Currently NHS collects $150 application fee from property owners, generating a total of $4,050 ( 1% of the capital costs) . NHS provides considerable time in answering questions, processing applications, reviewing bids, and pay-out requests and making payments . An amendment to the fees covering administration costs to provide 5% of the capital costs for administration may be appropriate. For instance, with the proposed $300,000 investment, another $15,000 would be provided for program management. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED NHS has presented their report to the City Council on the 1997 program to date. ,s FINANCIAL IMPACT Through April, 1997, $822,551 in riverboat proceeds (excluding lease payments) has been received above budget which could be used to provide additional funds for 1997 . A budget adjustment will be required. . Multi-family Conversion Program June 5, 1997 Page 3 LEGAL IMPACT 4one. ALTERNATIVES The City Council requested consideration of the MFC funding to allow resumption of the program and the alternatives for edits to the program rules. RECOMMENDATION The City Council requested consideration of additional funding to resume the MFC program. Alternatives for program revisions have been presented for City Council consideration. Respectfully submitted, Clay J. Pearson, Director Code Administration and ' =i•hborhood Affairs Ro• -rt f0. Malm Interim City Manager CJP/sm