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HomeMy WebLinkAbout97-283 Resolution No. 97-283 RESOLUTION AUTHORIZING EXECUTION OF AN AMENDED GIFFORD PARK ACQUISITION AND REHABILITATION AGREEMENT 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 an Amended Gifford Park Acquisition and Rehabilitation Agreement on behalf of the City of Elgin with the Gifford Park Association for the rehabilitation of 40 N. Gifford Street, a copy of which is attached hereto and made a part hereof by reference. s/ Kevin Kelly Kevin Kelly, Mayor Presented: December 3, 1997 Adopted: December 3, 1997 Omnibus Vote: Yeas 7 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk RAGREE/GIFFORD .PK Draft 11/11/97 AMENDED GIFFORD PARK ACQUISITION AND REHABILITATION AGREEMENT WHEREAS, the City of Elgin (hereafter Elgin) is a municipal corporation and a home rule unit pursuant to the constitution and laws of the State of Illinois ; and WHEREAS , the Gifford Park Association (hereafter GPA) is an Illinois not-for-profit corporation dedicated to improving housing and conditions in the Elgin Historic District of the City of Elgin; and WHEREAS, Elgin and GPA have previously entered into a Gifford Park Acquisition and Rehabilitation Agreement dated March 25 , 1986 ; and WHEREAS , Elgin and GPA have determined that it is necessary and desirable to enter into an amended agreement pursuant to the terms and conditions provided herein. WITNESSETH NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained herein, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows : I . Project Established. There is hereby established the Gifford Park Acquisition and Rehabilitation Project (Project) to be jointly funded and administered by the parties . This project shall consist of the acquisition, rehabilitation and resale of deteriorated residential property within the Elgin Historic District. The GPA shall be responsible for the costs of acquisition and resale and Elgin shall be responsible for the cost of rehabilitation. The project is intended to be an ongoing program with resale proceeds being used The acgtsre duties and obligations additional property. r the property. g parties shall be as set forth herein. II . Funding Sources A. The GPA shall establish and fund a special financial account (known as the Wayne Landers Memorial Fund) , for the purpose of providing acquisition and operating capital necessary to acquire deteriorated residential structures (hereafter property) located within the Elgin Historical h This fundshalltbe restr icted e icctedas follows : agreement 1 . The account shall be deposited in the "Participating Lending Institution" (PLI) as determined by Section II (D) herein. 2 . Interest earned on the account shall be reinvested in the account and used for current or future rehab properties . 3 . Proceeds and/or recaptured profits, if any, earned from the sale of the property shall be returned to the account for future projects as provided in Section VII . 4 . Disbursements must be approved by the GPA board in accordance with its By-laws and the President of GPA or an authorized representative . B. The GPA may elect to provide additional financing through first mortgage financing necessary to facilitate the acquisition of properties as provided herein . C . The City of Elgin shall establish and fund, as provided in Section II (E) below, a special financial account (known as the Elgin Historic District Rehabilitation Fund) for the purpose of providing funds necessary for the rehabilitation of the rehab property. 1 . The account shall be deposited in the "Participating Lending Institution" as determined by Section II (D) herein. 2 . Interest earned on the account shall be retained in the account and used for current or future projects . 3 . Proceeds and/or recaptured profits , if any, earned from the sale of the property shall be returned to the account for future projects as provided in Section VII . 4 . Disbursements from the account shall require the prior written approval of Elgin and the GPA. D . The Participating Lending Institution (PLI ) shall be as mutually agreed by the parties . The parties shall enter into an escrow or similar agreement with the PLI regarding the Wayne Landers Fund and the Elgin Historic District Rehabilitation Fund governing their deposit, interest, administration, disbursement and such additional matters as may be deemed necessary and proper by either party hereto . _2- E . Elgin ' s financial obligations under this agreement shall not exceed the current account balance of the Elgin Historic District Rehabilitation Fund of $26 , 919 . 22 plus an additional $15 , 000 . III . Payment Responsibilities A. GPA (Wayne Landers Fund) shall be responsible for payment of acquisition and resale costs which shall include but is not limited to the following: 1 . Down Payment. 2 . Principal , interest, taxes and insurance. 3 . Title insurance . 4 . Legal fees . 5 . Utilities . 6 . Maintenance of grounds . 7 . Incidental costs not considered taxes and rehabilitation costs including maintenance cost ( i . e . , heat in winter) . g . All marketing and selling costs . B. Subject to the limitation contained in Section II (E) above, Elgin (Elgin Historic District Rehabilitation Fund) shall be responsible for payment of : 1 . Costs incurred in the preparation of bid specification package for the property rehabilitation including, but not limited to, preparation of preliminary specifications . 2 . Costs incurred for the property rehabilitation work. 3 . Costs incurred in overseeing of the general contractor to a compliance with th applicable codesandordinancese bid packages an d pP IV. Acquisition A. GPA shall select potential acquisition sites within the Elgin Historic District which sites will be rated according to the following criteria: 1 . Potential impact and visibility. 2 . Degree of deterioration. -3- 3 . Potential for stimulation of private investment . 4 . Historic/architectural significance . 5 . Potential for stabilization of a localized area . 6 . Potential for expedient turn-around ( sale) . 7 . Economic feasibility. g . Exterior rehabilitation emphasis . 9 . Reduction of housing density. , B. From their list of potential acquisition sites, the GPA shall designate preferred sites and shall prepare preliminary cost estimates for acquisition and rehabilitation for such preferred sites . Elgin will assist GPA in preparing the rehabilitation cost estimates . Preferred sites shall be subject to the approval of the City Council of the City of Elgin. GPA shall review and approve selection of one or more of the preferred sites as permitted within the financial limits of the Wayne Landers Fund and other sources pursuant to Section II (B) . C. The GPA shall take all steps necessary to acquire the selected preferred site including but not limited to negotiations , execution of all contracts , obtaining the necessary funding from the Wayne Landers Fund or from other sources pursuant to Section II (B) , attorney fees and closing costs . Elgin shall have no financial responsibility for the acquisition of selected preferred sites . V. Rehabilitation. A. Rehabilitation plans and specifications along with cost estimates therefore shall be prepared by GPA with the assistance of Elgin. Such plans , specifications and cost estimates shall be submitted to the City' s Preservation Specialist for processing and approval . Plans and specifications shall be reviewed according rdind to the same standards for building permits Certificates of Appropriateness . B . When in the joint opinion of the parties due to the complexity of the rehabilitation or other facts an architect, specification specialist or other professional service is necessary, the GPA may, with the prior advice and consent of Elgin, retain the services of such person. -4- C. GPA shall let all necessary contracts for completion of the rehabilitation consistent with the approved plans and specifications . The rehabilitation contracts , contractors and change orders shall be subject to the prior written consent of Elgin. D . Rehabilitation costs , including costs incurred pursuant to Section V(B) above, shall be paid from the Elgin Historic District Rehabilitation Fund. No contracts for rehabilitation shall be approved unless there are sufficient monies in said fund to pay all costs and expenses associated with said contract. All payouts from said fund shall be subject to the prior written approval of Elgin and GPA or their designated agents . VI . Disposal of Rehabilitated Property A. Upon completion of rehabilitation work, or as otherwise mutually agreed by the parties , the GPA shall endeavor to sell the property at its fair market value . Fair market value_ of the property shall be established by a qualified appraiser approved by the GPA. B. GPA shall take such steps as are necessary to solicit buyers for the property which may include listing the property in the Elgin Multiple Listing Service . GPA shall endeavor to solicit offers from the greatest number of buyers possible. In the event the property does not sell within nine months of active promotion, the GPA may place the property for sale at auction, subject to the prior consent of Elgin as to the minimum acceptable bid. C . GPA shall take all steps necessary to sell the property including execution of all contracts and deeds . D. GPA may lease the property provided such lease shall not affect GPA efforts to sell and convey the property as soon as practical after rehabilitation. It is the expressed intent of the parties that the property is to be resold as soon as practical . Any lease of the property shall be for a term no longer than month to month without the prior consent of Elgin. VII . Disbursement of Proceeds A. GPA shall receive and distribute proceeds from the sale or rental of any rehabilitated property in conformance with this agreement . It is intended that such proceeds will be used to finance additional acquisitions and rehabilitations as provided herein. -5- B. Proceeds from the sale of any property shall be disbursed as provided below: 1 . Full payment of any mortgage or lien on the property necessary to obtain clear title . 2 . In the event there are proceeds remaining after payment provided in Subparagraph 1 above, payment shall be made to the GPA as reimbursement for, and in an amount equal to, costs and expenses incurred pursuant to Paragraph III (A) for the subject property. 3 . In the event there are proceeds remaining after payment provided in Subparagraph ( 1) and (2 ) above, payment shall be made to the Elgin Historic District Rehabilitation Fund as reimbursement for, in an amount equal to, costs and expenses incurred pursuant to Paragraph III (B) for the subject property. 4 . In the event there are proceeds remaining after disbursements as provided in Subparagraphs ( 1) , ( 2 ) and ( 3) above, such proceeds shall be divided equally between the Wayne Landers Fund and the Elgin Historic Rehabilitation Fund. C . Proceeds from the rental of the property shall be first applied to GPA' s cost and expenses in maintaining the property. Any excess shall be disbursed in the manner provided for sales proceeds pursuant to Subsection (B) above . VIII . Records and Reports A. The GPA shall maintain complete and accurate records regarding the project which records shall include, but are not limited to, financial records and acquisition and sales documents . B. The GPA shall provide Elgin with bi-monthly status reports regarding the project and shall furnish a complete report to Elgin upon the sale of any property. C . Elgin shall have the right to inspect the records of GPA regarding the project during normal business hours . IX. Miscellaneous A. Any approval or review required of Elgin under any section of this agreement may be requested and obtained simultaneous with any other approval or -6- review required of Elgin provided such simultaneous review and approval is appropriate and feasible, in the opinion of Elgin. B. Either party may terminate this agreement any time upon six ( 6 ) months written notice to the other party. Such termination shall take effect upon the date specified in the written notice, provided, such termination shall not affect, nor shall the parties be released from any obligation herein provided, regarding any property then owned by GPA pursuant this agreement . C . To the extent permitted by law and except where City Council action is expressly required any approval or action required of Elgin under this agreement may be given or performed by such agent or employee of Elgin to the extent and within such limitations as the City Council may so authorize and establish. D. This agreement shall supersede and replace the Gifford Park Acquisition and Rehabilitation Agreement entered into between Elgin and GPA on March 25 , 1986 . In the event of any conflict between the terms of this amended agreement and the terms of the March 25 , 1986 agreement, the terms of this amended agreement shall control . IN WITNESS WHEREOF the parties have executed this agreement this Z& day of DE c , , 1997._._-� TY F G By City Manager Attest: p /� City Clerk GIFFO PARK Al SOCIATION h l By Its Attest: Secretary -7- Agenda Item No. City of Elgin November 11, 1997 TO: Mayor and Members of the City Council FROM: Robert 0. Malm, Interim City Manager SUBJECT: Gifford Park Association/City Rehabilitation Project PURPOSE ' The purpose of this memorandum is to provide the Mayor and members of the City Council with information to consider entering into a rehabilitation project with the Gifford Park Association (GPA) . BACKGROUND The City has provided financing for neighborhood residential rehabilitation projects through an innovative partnership with GPA, an established neighborhood group. The partnership was formalized in 1986 with the establishment of a program in March, 1986 definining the partnership and providing $35, 000 in City capitalization for the fund. Under the rehabilitation program, GPA acquires a neighborhood deteriorated property and provides the project coordination and the volunteer labor to bring back the property to an improved condition. The City and GPA partnership has successfully rehabilitated two properties, 28 N. Gifford and 21 N. Porter. Once the work is complete, the house is sold on the open market. In the two previous projects, one realized a profit and the other a loss, due to the substantial work required. Proposed 40 N. Gifford Project GPA has already acquired the house at 40 N. Gifford. Located at the intersection of two well-travelled neighborhood streets, Gifford and Division, the house will complement other rehabilitations on the corners, including one immediately north just completed by NHS and GPA. The house in question was secured from the Florida mortgage holder. The property has been vacant and deteriorated, in part due to a lack of eolk utilities. Planned improvements to the property include removal of the stucco, reconstruction of a front porch and demolition of the garage. A landscape plan is also proposed for the site. V Gifford Park Association/City Rehabilitation Project November 11, 1997 Page 2 In order for the project to proceed, it is proposed that the existing agreement with GPA be modified in two substantive ways: 1 . The acquisition process needs to be simplified. GPA has undertaken the search, due diligence, negotiation, and purchase of the property at 40 N. Gifford. GPA purchased the property from the bank which had foreclosed upon the property. Before purchasing this house, two other properties in the neighborhood were considered. One was found to have had sufficient interior rehabilitation already completed that it would be more appropriate for a private owner to purchase. The second property was a converted multi-family unit, which was desirable in order to return it to single-family use, but all the funding for the Multi-Family conversion program 'had already been committed. 2 . An increase in the City' s monetary participation has been requested by GPA. Since its inception eleven years ago, the cost of doing work (technical trades, materials, and acquisition costs) has increased. In order to complete a project with the desired improvement, an additional $15, 000 is requested to be capitalized. After sale of the property, the mortgage of the property is repaid, GPA is repaid for reimbursable expenses, and then the Elgin Rehabilitation Fund is repaid. Finally, if there are any profits from the sale, they will be equally divided between GPA, for their work in neighborhood improvements, and the City' s Fund for future rehabilitation projects. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED The request letter from GPA is attached. FINANCIAL IMPACT The current account balance of the Elgin Historic District Rehabilitation Fund is $26, 919.22 (kept in account at Old Kent Bank) . This fund has never been included within the City' s overall accounting structure. The Finance Director' s name is required on all disbursements for internal control reasons. Additional capital of $15, 000 for the fund is available in the General Fund Contingency account (010-6902-719. 84-01) . LEGAL IMPACT �� None. Gifford Park Association/City Rehabilitation Project November 11, 1997 Page 3 ALTERNATIVES Options include adopting the revisions to the initiative or keeping the requirements of the existing program. RECOMMENDATION It is recommended that the City Council authorize a revised resolution for the Gifford Park Acquisition and Rehabilitation Agreement with an additional $15, 000 capitalization be drafted for the proposed rehabilitation of 40 N. Gifford. Respe ctfu 1 submitted, ea4J Pearson, Direct or Depar menf Code Administration N ghborhood Affairs Rob t O. Malm Inte im City Manager CJP/sm 1 6 Or� ° ar ASSOCIATION Gifford Park Association • P.O. Box 928 • Elgin,IL 60121 November 4, 1997 Clay Pearson, Director Department of Code Administration and Neighborhood Affairs City of Elgin 150 Dexter Court Elgin, IL 60120 SUBJECT: Gifford Park Association Restoration Project Dear Clay Pearson: As the process of neighborhood revitalization and enhancement continues within the established core of the City of Elgin by both private investment of land owners and financial programs offered by the City,the Gifford Park Association(GPA)reaffirms its recognized commitment to the improvement of Elgin's oldest residential area. GPA is therefore pleased to announce the beginning of another neighborhood rehabilitation and restoration project. A distressed and vacant although architecturally meritorious property has been selected and acquired by GPA as the subject of the current rehabilitation endeavor. Its location within the Elgin Historic District is at the southwest corner of the intersection of Gifford Street, which serves as a collector street, and Division Street, having a common address of 40 North Gifford Street. (Please refer to Exhibit A.) The city block with which the project site shares frontage along Gifford Street suffered from blight and neglect as recently as eight(8)years ago, at which time GPA undertook a similar rehabilitation of a property located in the middle of the block at the common address of 28 North Gifford Street. (Please refer to Exhibit B.) Since the completion of the project at 28 North Gifford Street and its subsequent sale to a home owner in the year 1992,positive changes have occurred with respect to the use and appearance of several other properties along the block. United efforts of Neighborhood Housing Services with GPA yielded the interior rehabilitation and exterior restoration of a house located directly north of the project site and has a common address of 396 Division Street which was completed and sold in the year 1996. The project site was chosen to finalize the stabilization of a once overlooked city block and to transform a highly visible property from one which contributes little if anything favorable to the streetscape to one which becomes a visual asset within the neighborhood. Page 1 of 2 i 6 ora ar ASSOCIATION Gifford Park Association . P.O. Box 928 • Elgin,IL 60121 The subject of a protracted foreclosure suit, the project site remained unoccupied inasmuch as the former owners had abandoned their interest in the property. Already deteriorated and damaged, the house fell into further disrepair as a consequence of a lack of maintenance. Without utilities,hosting unsanitary conditions, with a ruptured water distribution system and an accessory appurtenance (garage) which has been structurally compromised by rain and snow, the property is in a nonhabitable state. Due to the condition of the project site, GPA will engage in an extensive interior rehabilitation and a careful exterior restoration which requires the removal of a substitute siding material of stucco,the reconstruction of a front porch and the demolition of a garage. A landscape plan is also proposed for the site. For the purpose of facilitating the project, ten (10) members of GPA have joined to constitute a committee, and have reserved a membership position to be filled by a City staff liaison. The committee holds the responsibility to recommend direction of all aspects of the project including site selection, property acquisition, contract administration, construction management and property �*. disposition. f Acquisition of the property has been accomplished by the combination of GPA capital withdrawn from the Wayne Landers Memorial Fund and a mortgage loan issued by Home Federal Savings and Loan Association. In order to effect the rehabilitation process, GPA seeks to renew its partnership with the City of Elgin pursuant to the Gifford Park Acquisition and Rehabilitation Agreement. Executed in the year 1986, the original agreement provides for the establishment by the City of a special financial account known as the Elgin Historic District Rehabilitation Fund. GPA solicits the resources available at the current balance of said fund along with the addition of fifteen thousand dollars($15,000), an increase attributable to the difference between the cost of the performance of construction work, labor and materials at the time of implementation of the agreement and that at the present. (Please refer to Exhibit C.) Utilization of the joint resources of GPA, which would include volunteer labor, and of the City of Elgin will render possible the reclaiming of another property from the status of a noncontributing element to one of a noteworthy gain for the community. Cordially yours, �. Brian D. Anderson Vice President Restoration Project Committee Chairman attachments c: Pat Andrews Page 2 of 2 '^ EXHIBIT A 40 North Gifford Street 1997 PHOTOGRAPH ` �t " r Y - . EXHIBIT B i North Gifford Street 9:9 PHOTOGRAPH .r 99 PHOTOGRAPH EXHIBIT C Gifford Park Association Rehabilitation/Restoration Project 40 North Gifford Street PROJECTED COST SUMMATION ACQUISITION COSTS Earnest Money 1,000.00 Down Payment 7,700.00 Mortgage Loan Interest Prorated 95.18 Appraisal (Donation by Home Federal) 0.00 Attorney Fee (Donation by Fred J. Steffen) 0.00 Closing Fee 185.00 Title Insurance 160.00 EPL Endorsement 30.00 Recording Fee 33.00 Cashiers Checks 10 00 Total 9,213.18 OPERATING COSTS Property&Liability Insurance 1506.00 Real Estate Taxes 2,500.00 Mortgage Loan Interest(259.58/month) 3,114.96 Water Gas 160.00 Electricity 400.00 160 00 Total 7,840.96 Page 1 of 4 EXHIBIT C (Continued) 40 North Gifford Street INCIDENTAL COSTS Waste Disposal 235.00 Project"Construction" Sign 225.00 Landscaping 1,000.00 Miscellaneous 100.00 Total 1,560.00 PROPERTY DISPOSITION COSTS Marketing 250.00 Plat of Survey 200.00 Appraisal 300.00 Attorney Fee 300.00 Closing Fee 200.00 Title Insurance 450.00 County Transfer Stamps 55.00 State Transfer Tax Total —110-00 1,865.00 CONSTRUCTIONBID DOCUMENT COSTS Architectural Fee Specifications 300.00 Total 400.00 700.00 Page 2 of 4 EXHIBIT C (Continued) 40 North Gifford Street EXTERIOR REHABILITATION/RESTORATION COSTS Demolition/Stucco Removal 6,285.00 Concrete Removal Painting 300.00 6,000.00 Front Porch Reconstruction 2,000.00 Driveway& Approach Installation 1,000.00 Garage Replacement 1,700.00 Clapboard/Siding Replacement 1,000.00 Window Repair 1,400.00 Art Glass Restoration 400.00 Rear Stoop Repair 100.00 Cellar Door Assembly Replacement 200.00 Foundation Repair/Repointing 500.00 Electrical Service Upgrade —900.00 Total 21,785.00 INTERIOR REHABILITATION/RESTORATION COSTS Salvage Materials Heating System Repair 600.00 Plumbing System Repair/Installation 3,000.00 Electrical System Repair/Installation 4,000.00 Kitchen Reconstruction 500.00 Plaster Repair 6,000.00 Hardwood Floor Refinishing 300.00 Painting 2,000.00 Carpentry 1,500.00 Basement Concrete Floor Repair 1,300.00 Total 100-0 19,300.00 Page 3 of 4 EXHIBIT C (Continued) 40 North Gifford Street PROJECTED PROFIT/LOSS EVALUATION Estimated Sale Price 120,000.00 GPA Costs Subtotal 20,479.14 City Costs Subtotal 41,785.00 Project Costs Total 62,264.14 62,264.14 Mortgage Loan Debt(GPA Liability) 62,300.00 Total Project Investment 124,564.14 124, 64.14 Profit/Loss [4,564.14] Page 4 of 4