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Resolution No. 00-50
RESOLUTION
AUTHORIZING EXECUTION OF A PURCHASE OF SERVICE AGREEMENT WITH
NEIGHBORHOOD HOUSING SERVICES OF ELGIN, INC.
(Multifamily Conversion Program)
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,
ILLINOIS, that Joyce A. Parker, 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 administration of the multifamily conversion
program, a copy of which is attached hereto and made a part
hereof by reference .
s/ Ed Schock
Ed Schock, Mayor
Presented: February 23 , 2000
Adopted: February 23 , 2000
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 gq, day of
F66 „ 2000, 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; 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 February 25, 2000, City shall pay to
NHS the sum of Five Hundred Fifty Thousand Dollars
($550 , 000 . 00) .
2 . NHS shall directly and solely utilize Five Hundred
Twenty-Two Thousand Five Hundred Dollars ($522 , 500 . 00) of the
aforementioned Five Hundred Fifty Thousand Dollars
($550, 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 Two Hundred Seventy-Five Thousand
Dollars ($275, 000 . 00) of the aforementioned Five Hundred Fifty
Thousand Dollars ($550, 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. Twenty-Seven Thousand Five Hundred
Dollars ($27, 500) of the aforementioned Five Hundred Fifty
•
Thousand Dollars ($550, 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 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 February 24, 2000
and shall terminate December 31, 2000 unless otherwise
terminated as provided herein.
6 . This agreement may be terminated by City upon thirty
(30) 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 . In the event the program for which the City funds
provided herein are to be applied is discontinued or NHS
ceases its operations prior to December 31, 2000 , NHS shall
refund to the City on a prorata basis the funds paid hereunder
for the portion of the year such programs or NHS operations
were not conducted.
9 . NHS shall provide a detailed written report of all
expenditures of funds made pursuant to this agreement before
December 31, 2000, which report shall include but not be
limited to properties converted, amounts paid and selection
criteria used.
10 . NHS shall work cooperatively with the City and
neighborhood representatives to evaluate the Multifamily
Conversion Program. NHS shall present its written findings
and recommendations to increase participation in the
Multifamily Conversion Program to the City by July 1, 2000 .
11 . 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 .
12 . This agreement shall be subject to and governed by
the laws of the State of Illinois .
13 . 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 .
14 . This agreement shall not be deemed or construed to
create an employment, joint venture, partnership or other
agency relationship between the parties hereto.
CITY OF ELGIN NEIGHBORHOOD HOUSING SERVICES
OF ELGIN, INC.
By By /424--# -Jo e . Parker Denise Harding-Hkin
Ci y Manager Board President
Attest :
99414.„,<7_ Afkr,ez„,_
Dolonna Mecum, City Clerk
•
EXHIBIT A
MULTIFAMILY CONVERSION PROGRAM
1 . "Nonconforming Residential Conversion" shall
mean a residential structure in which 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.
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 the original residential use. It is the express purpose of
the Multifamily Conversion Program to provide for a reduction
of the number of dwelling units on a property. Program
expenditures shall be limited to projects resulting in a
reduction in the number of dwelling units on a property and in
no event shall any expenditures be made to increase the number
of dwelling units on a property.
4 . All work performed under program shall be
performed in compliance with all applicable city codes and
ordinances, specifically including, but not limited to, a
final inspection made in conjunction with a request for the
issuance of all required permits.
5 . Program shall provide a maximum of Twelve
Thousand Dollars ($12 , 000 . 00) 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 will work with SEEN to 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 .
Resolution No . 00-210
RESOLUTION
AUTHORIZING EXECUTION OF AN AMENDMENT TO PURCHASE OF SERVICE
AGREEMENT WITH NEIGHBORHOOD HOUSING SERVICES OF ELGIN, INC.
(Multifamily Conversion Program)
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,
ILLINOIS, that Joyce A. Parker, City Manager, and Dolonna
Mecum, City Clerk, be and are hereby authorized and directed
to execute an amendment to purchase of service agreement on
behalf of the City of Elgin with Neighborhood Housing Services
of Elgin, Inc . , for the administration of the multifamily
conversion program, a copy of which is attached hereto and
made a part hereof by reference .
s/ Ed Schock
Ed Schock, Mayor
Presented: September 27 , 2000
Adopted: September 27 , 2000
Omnibus Vote : Yeas 7 Nays 0
Attest :
s/ Dolonna Mecum
Ddlonna Mecum, City Clerk
•
AMENDMENT TO PURCHASE OF SERVICE AGREEMENT BETWEEN
NEIGHBORHOOD HOUSING SERVICES OF ELGIN, INC .
AND THE CITY OF ELGIN
THIS AMEN M T AGREEMENT made and entered into this ;Z3/g,3
day of c 2000 , by and between the City of Elgin,
Illinois, a municipal corporation, (hereinafter referred to as
the "City" ) and Neighborhood Housing Services of Elgin, Inc . ,
an Illinois not-for-profit corporation (hereinafter referred
to as "NHS" ) .
WHEREAS, the City and NHS have previously entered into a
Purchase of Service Agreement dated February 29, 2000 wherein
the City has provided funds to NHS to administer and implement
the City' s multiple family conversion program as set forth in
such agreement (the Purchase of Service Agreement between the
City and NHS dated February 29, 2000 is hereinafter referred
to as "the Subject Purchase of Service Agreement" ) ; and
WHEREAS, the City and NHS agree that it is desirable to
increase the maximum dollar amounts of financial assistance as
set forth in paragraph 5 of Exhibit A to the Subject Purchase
of Service Agreement which provides for the City' s multiple
family conversion program.
NOW, THEREFORE, for and in consideration of the mutual
promises and undertaking as set forth in the Subject Purchase
of Service Agreement, and the mutual promises and undertakings
as 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 . That the Subject Purchase of Service Agreement
between the City and NHS is hereby amended by amending the
$12 , 000 figure in paragraph 5 of Exhibit A to read $20 , 000,
and by amending the $15, 000 figure in paragraph 5 of Exhibit A
to read $23 , 000 .
2 . That except as amended herein the Subject Purchase
of Service Agreement between the City and NHS shall remain in
full force and effect .
IN WITNESS WHEREOF, the parties have executed and entered
into this Amendment Agreement on the date and year first
written above .
CITY OF ELGIN NEIGHBORHOOD HOUSING SERVICES
OF ELGIN, INC .
By .i BY AI aA2-
J•q e /. Parker J -f Gcicken
City Manager Board President
Attest :
6,444-1(._ ka-
Dolonna Mecum, City Clerk
ti
ark City of Elgin Agenda Item No.
ern 11folk
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September 6, 2000 G ,_
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TO: Mayor and Members of the City Council
NEIGHBORHOOD VITALITY
FROM: Joyce A. Parker, City Manager
SUBJECT: Multiple Family Deconversion Program
PURPOSE
The purpose of this memorandum is to recommend a change in the
Multiple Family Deconversion program which will increase the grant
amount from the current $12, 000 per dwelling unit to $20, 000 per
dwelling unit .
BACKGROUND
The Multiple Family Deconversion Program is administered by
Neighborhood Housing Services of Elgin (NHS) . The program was
implemented in 1995 . Since the initiation of the program, 207
dwelling units have been deconverted, decreasing the occupancy of
those units from 581 to 263 persons . During the first few years
of the program, there were more requests received than the money
allotted could cover. From 1995 to 1997, 121 units were
deconverted. From 1998 to the present, 86 units have been
deconverted, with only 14 so far in 2000 .
These statistics show a decrease in the number of properties
utilizing the program over the past two years . City staff has
discussed the situation with NHS staff. The staff believes that
the reason for this lack of interest in the program is due to the
fact that the incentive for deconverting is no longer sufficient to
interest property owners . Those who were very interested in the
program when it was first offered, took advantage of it during
those first two years . The inquiries we are now receiving indicate
that people are still interested in the program, but they are
concerned that the income they lose from the deconversion is not
adequately compensated by the grant . Therefore, it is felt that in
order to keep the program moving forward, a change in the amount of
grant money available needs to be considered (reference the attached
letter from NHS and the current purchase of service agreement) .
,
femb- Deconversion Program
September 7 , 2000
Page 2
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
Neighborhood Housing Services .
0-
FINANCIAL IMPACT
There is no additional financial impact because this proposal only
seeks to increase the amount of grant money available to each
project and not increase the amount of money provided for the
program.
LEGAL IMPACT
None.
ALTERNATIVES
Leave the program as is and continue to promote it within the
community.
RECOMMENDATION
It is recommended that the amount of the grant available to
properties be increased from the current maximum of $12, 000 per
dwelling unit to $20, 000 per dwelling unit . It is also recommended
that the additional incentive of $3, 000 approved in 1999 for the
Southeast Elgin Neighbors Area be maintained as is .
ReClipl-c-
ctfully submitted,%
(Ciii-
. ,,,......_
Jo A. `g'arker
City Manager
JAP/mtb
Attachments
r
♦
ribf;
;kR •• • Neighborhood Housing Services of Elgin, Inc.
300 Douglas Avenue ❖ Elgin, Illinois 60120 : 847-695-0399 :• Fax 847-695-7011
4.
Mission Statement
To renew pride,restore confidence,
promote reinvestment and revitalize
the NHS neighborhoods through the
efforts of local residents,financial August 21,2000
institutions,the business community,
foundations and local government.
Board of Directors Joyce Parker
Officers City Manager
City of Elgin
President 150 Dexter Court
Denise Harding-Hopkins Elgin, IL 60120
First Vice President
Miriam Scott
Second Vice President Dear Joyce,
Anne Anderson
joikTreasurer
Since 1995, Neighborhood Housing Services has administered the City
Jeffrey Gocken of Elgin's Multi Family Conversion program. Through the first four
Secretary years of the program, demand for grant funds under the program was
Mike Miner high enough to warrant the creation of a waiting list during two
separate years. Since 1999 however, while inquiries regarding the
Directors program have remained high, the actual number of applications
Sheri Buttstadt processed has dwindled. Marketing for the program has remained
Jo Ellen Doscher steady, with contact made with local realtors via NHS staff and
neighborhood groups such as the South East Elgin Neighbors and
Jim Lamkin Gifford Park Association. NHS staff has also addressed realtor offices
Bob Richardson and lenders regarding the program, as well as other neighborhood
Karen Schock groups. An additional incentive of$3,000 for conversions in the
Adam Schuessler Southeast Elgin Neighborhood (SEEN) was approved by the City
Eric Stuckey Council in 1999.
Dave Towe
Jose Zavala When the program was first adopted in 1995, it was modeled after the
City of Aurora's Reconversion Incentive Program, with the exception of
one component— a subsidy for loss of rental income for the property
Executive Director owner. The Aurora program allowed for a grant of$21,000, which was
Angel Rosenthal the equivalent of a rental income loss subsidy for a period of five years
at $350.00 per month. This subsidy was to cover the cost of the
rehabilitation of the property, as well as the loss of income.
N ghborW rkr
CHARTERED MEMBER Building Pride, City-wide!
r
The Elgin program has always been able to attract applicants to the
program that have occupied these multi-family dwellings. It has had
less success in attracting investors to voluntarily convert their non-
owner occupied properties. During discussions held earlier this year
with NHS and Mark Bernacki and his staff, the idea of increasing the
grant amount to $20,000 was raised. The increase could be supported
in light of higher construction costs over the past five years, as well as
the potential to address the loss of income for some property owners. It
is hoped that the increase could provide some stimulus to private
investors to voluntarily convert their already owned properties or to
purchase multi family units on the market for the purpose of converting
them back to their original use.
I endorse the idea of increasing the grant to a minimum of $20,000 per
unit to be converted, while also maintaining the additional incentive to
conversions in the SEEN neighborhood. It is hoped that this increase
could be approved by Council in September and introduced to
applicants soon after. Please let me know if you would require any
supporting documentation or demographics to be presented to the
Council or if you have any other questions or concerns.
Sincerely,
A I / 4
• -I Rosenthal
Executive Director
r
4 OF FSC
Agenda Item No.
City of Elgin g
January 28, 2000
TO: Mayor and Members of the City Council
FROM: Joyce A. Parker, City Manager
SUBJECT: 2000 Purchase of Service Agreements with
Neighborhood Housing Services of Elgin
PURPOSE
The purpose of this memorandum is to provide information to the
Mayor and members of the City Council to consider three Purchase of
Service Agreements with Neighborhood Housing Services of Elgin,
Inc. (NHS) : (1) operational support for neighborhood
revitalization, (2) Re-capitalization and (3) multi-family housing
conversion efforts .
BACKGROUND
The 2000 Budget includes $114, 200 to provide operational support
for NHS, recapitalization of $200, 000, and $550, 000 for the Multi-
family Housing Conversion Program (MFC) .
NHS is chartered through a national, Congressionally-chartered
organization, Neighborhood Reinvestment Corporation. The NHS
partnership is a structure fostering involvement and cooperation
from the community, bringing together citizens, financial
institutions and city government. The cooperation is evident in
the NHS budget, which supplements City support by leveraging
contributions from local banks, grants and other fund raising.
NHS Activities
Beginning in 1996 NHS operational support has increased, allowing
NHS to provide services city-wide. In previous years, NHS work had
been directed to selected target areas . While still focused on
older, established neighborhoods, NHS is growing its capability to
meet the needs that occur in similar neighborhoods throughout
Elgin. Five primary program areas continue to be the focus of the
organization:
- Rehabilitation Loan Portfolio continues to grow. The addition
of a lending officer position in 1996 has resulted in an
increase in low interest loans provided to otherwise non-
bankable property owners for residential improvements. In
2000 PSA' s with NHS
January 28, 1999
tow Page 2
1999 alone, NHS provided 60 loans to Elgin residents totaling
$625, 000 The home improvement loans are reviewed in more
detail on page 4 of the attached Fourth Quarter 1999 Report to
the Partnership.
- Home Improvement Fund. Established in 1996 through the City' s
$300, 000 capitalization, the Home Improvement Fund has
resulted in an aggressive program of acquiring,
rehabilitating, and reselling properties. The City' s original
investment of $300, 000 has been leveraged by commitments from
local area lenders and the Grand Victoria Foundation resulting
in $1. 9 million available to re-invest in Elgin' s older
housing stock. Through the Home Improvement Fund, NHS has
been able to undertake 15 property improvement projects.
Property acquisition criteria focus on neighborhood impact,
density reduction, and financial feasibility. Described on
page 2 of the attached Fourth Quarter Report, the initial
capitalization of the Home Improvement Fund has been drawn
down and an additional capitalization is necessary to continue
this investment in Elgin' s neighborhoods.
- Multi-family Conversion Program Turns Properties Back to
Original Use. Since 1995, the multi-family conversion
few program, administered by NHS and funded by the City of Elgin,
has reduced density of 204 properties with the removal of 112
units. In 1999, 38 properties participated in the program,
eliminating 19 units. In recent years, the City Council has
increased funding for these voluntary deconversions. While
NHS has seen actual growth in the number of inquiries into the
program each year, the level of participation is not as high
as previous years. As a result, NHS will work cooperatively
with neighborhood groups, realtors, and the City to examine
the program. A report evaluating the multi-family program and
making recommendations to increase participation in the
program will be provided the City by July 1, 2000 . Since
program inception, NHS projects have used 16% of total multi-
family conversion funding with the remaining 84% used by
private voluntary conversion.
- Neighborhood Leadership Development and Organizing. The NHS
Resident Committee continues to meet monthly providing
opportunities for neighborhood groups to share information,
discuss common challenges and explore possible solutions to
issues facing neighborhoods. Extensive work took place this
year in examining issues related to overcrowding. NHS has
also worked closely with residents in the Sunset Parks
neighborhood the the newly formed South West Area Neighborhood
ew (SWAN) assisting with leadership development and structure.
2000 PSA' s with NHS
January 28, 1999
Page 3
NHS continues to published the monthly publication, The
Neighborhood Voice to help neighborhoods get their message out
to the public.
- Grand Victoria Foundation Corridor Redevelopment Fund. In
March of 1997, the Grand Victoria Foundation granted NHS
$500, 000 to fund the Corridor Redevelopment Fund. NHS
continues to use various initiatives to revitalize the
Michigan Street Triangle area. 1999 initiatives included the
"My Dream Home Front" contest, neighborhood organizing and
communications, and neighborhood identification projects.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None.
FINANCIAL IMPACT
cY4-'
Funding in the 2000 budget is from the General Fund and the
Riverboat Fund. For operational support, there is a total of
$114, 200 - $41, 200 from the General Fund Non-departmental (010-
6902-719. 80-16) and $73, 000 in the Riverboat Fund (275-0000-791. 80-
r 25) . The recapitalization is funded at $200, 000 from the Riverboat
Fund(275-0000-791. 80-25) . The Multi-family Housing Conversion
Program is funded by $550, 000 from the Riverboat Fund (275-0000-
791. 92-32, project 157200) .
OWLEGAL
IMPACT
None.
ALTERNATIVES
Alternatives are to approve the three Purchase of Service
Agreements as presented, edit the draft agreements, or decline to
provide the support for the programs and activities being supplied
by NHS.
RECOMMENDATION
It is recommended that the City Council approve the Agreements with
NHS for operational support, re-capitalization, and the Multi-
family Conversion Program.
R- _ .ectfully submitted,
4111Foi A /724,___
JIce A! Parker
emb. City Manager