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HomeMy WebLinkAbout01-80 Resolution No. 01-80 RESOLUTION AUTHORIZING EXECUTION OF A PURCHASE OF SERVICE AGREEMENT WITH NEIGHBORHOOD HOUSING SERVICES OF ELGIN, INC . (Revitalization and Redevelopment) 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 revitalization and redevelopment assistance to certain areas within the city, a copy of which is attached hereto and made a part hereof by reference . s/ John Walters John Walters, Mayor Pro Tem Presented: March 28 , 2001 Adopted: March 28, 2001 Omnibus Vote : Yeas 5 Nays : 0 Attest : s/ Suellyn Losch Suellyn Losch, Deputy City Clerk :.,..CHASE CF SERVICE AGREEMENT BETWEEN NEICRBORHOCC HOUSING SE__. _CES CF ELGIN, INC. AND THE CITY OF ELGIN pTHIS AGREEMENT is made and entered into :his ,47-(,C dayof /41 Piet' L- 2001, by and between the Cit: of Elgin, Illinois, a 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" ) . WHEREAS, the City of Elgin, Illinois, a municipal corporation, (hereinafter 'referred to as "City" ) is committed to the revitalization and redevelopment of certain areas within the city limits; and WHEREAS, Neighborhood Housing Services of Elgin, Inc . , an Illinois not-for-profit corporation (hereinafter referred to as "NHS") is incorporated to provide revitalization assistance to certain areas within the city limits; and WHEREAS, City is committed to the revitalization and strengthening of all neighborhoods in Elgin; and WHEREAS, City and NHS wish to work cooperatively to particularly assist older established neighborhoods throughout Elgin under stress . 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 : 1 . NHS shall actively solicit neighborhood representation on the NHS Board of Directors . 2 . NHS shall work with and support neighborhood organizations . 3 . NHS shall designate reasonably sufficient staffing to develop newsletters, monthly meetings, membership recruitment and leadership development . 4 . City shall pay NHS a total sum of One Hundred Seventeen Thousand Five Hundred Dollars and no/100ths ($117, 500 . 00) , in two equal installments of $58, 750, one of which shall be on or before March 30, 2001 and one of which shall be on or before July 1, 2001 . 5 . NHS shall cooperate with resident police officers and the Department of Code Administration and Neighborhood Affairs in building safe neighborhoods . 6 . NHS shall actively seek to develop minority involvement iP_ NHS activities and in the community . 7 . NHS shall encourage home ownership, the conversion of mu_tiram,ly properties to :heir original use, and sound property maintenance rope- maintenance for the betterment of Elgin's neighborhocJ.s . 3 . NHS shall diligently work to assure that all property under its ownership or control shall be in compliance with -iii applicable city codes and ordinances . 9 . No real property shall be conveyed by NHS to a third party unless it has been inspected by the Department of Code Administration and Development Services of the City of Elgin within the past thirty (30) days and found to be in compliance with applicable ordinances . In the event the real property is found not to be in compliance with the applicable provisions of the Property Maintenance Code (Chapter 16 . 12 of the Elgin Municipal Code, 1976, as amended) and such property meets minimum standards of habitability, such property may be conveyed and occupied if a written time schedule setting forth completion dates for all necessary repairs or modifications is filed with the Department of Code Administration and Development Services after being subscribed by the authorized representative of NHS and purchasers of such property. 10 . NHS shall provide two written reports detailing the disbursement of $117, 500. These reports shall be provided to the City Council by May 31, 2001, and December 31, 2001, and shall include all program activity. These reports shall be submitted to the City Manager' s Office, City Hall, 150 Dexter Court, Elgin, Illinois 60120 . 11 . NHS shall provide City with financial statements relative to the organization' s total operations . The statements shall be provided on or before July 31, 2001 and December 31, 2001 . 12 . City shall not be required to make any payment to NHS unless City has been provided with reasonable evidence of compliance with the terms of this agreement by NHS . Such evidence shall include, but not be limited to, receipts and other evidence of expenditures incurred. 13 . This agreement shall not be deemed or construed to create an employment, joint venture, partnership or other agency relationship between the parties hereto. 1a . NHS shall indemnify and hold the City harmless from and against any and all claims, damages, law suits, causes of action or any other liability which may arise out of or in connection with the existence of this agreement or NHS negligent performance of the terms of this agreement . 15 . Unless otherwise terminated as provided herein, this agreement shall terminate December 31, 2001 . 16 . Either part: hereto may terminate this agreement upon thirty (30) days written notice. 17 . In the event this agreement is terminated or in the event the program for which the city funds provided herein are to be applied is discontinued or NHS ceases its ooerations orlor to December 31 , 2001, snail refund to the City on a ororata basis the funds paid hereunder for the portion of the year remaining after a^_ such termination or for the portion of the ear such programs or VHS operations were not conducted. The terms agreementshallbe In the event . of this =e-rera _e . _ � t that any of the terms or provisions of this agreement are found to be -:;id or otherwise unenforceable, the remainder of this agreement shall remain in full force and effect . CITY OF ELGIN NEIGHBORHOOD HOUSING SERVICES OF ELGIN, INC. By • By Jo_ de A Parker City Manager Board President Attest : _fik.S Dolonna Mecum, City Clerk -Z- ofe<c 1„1 ti City of Elgin Agenda Item No. o ►! it tip^ E `r Jt March 14, 2001 I • TO: Mayor and Members of the City Council N QUALITY HOUSING FROM: Joyce A. Parker, City Manager SUBJECT: 2001 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 2001 Budget includes $117, 500 to provide operational support for NHS, recapitalization of $100, 000, and $525, 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 . 2001 PSA with NHS March 14 , 2001 Page 2 In 2000 alone, NHS provided 54 loans to Elgin residents totaling $625, 000 . - 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 19 property improvement projects . Property acquisition criteria focus on neighborhood impact, density reduction, and financial feasibility. - Multi-family Conversion Program Turns Properties Back to Original Use . Since 1995, the multi-family conversion program, administered by NHS and funded by the City of Elgin, has reduced density of 181 properties with the removal of 125 units . In 2000, 11 properties participated in the program, eliminating 20 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. 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 the formation of a City - wide neighborhood council . In September, the NHS Management Consultant from Neighborhood Reinvestment Corporation in Kansas City addressed the committee, and in subsequent months, much progress has been made towards making a Neighborhood Council a reality after over ten years of discussion. NHS has also worked closely with residents in the Sunset Park neighborhood and the newly formed South West Area Neighborhood (SWAN) assisting with leadership development and structure . NHS continues to publish the monthly publication, The Neighborhood Voice to help neighborhoods get their message out to the public . Over 8, 000 copies distributed monthly, with nearly half of the copies going directly to neighborhood' s doorsteps . • 2001 PSA with NHS March 14 , 2001 em. Page 3 — 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. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None. cyll....-TINANCIAL IMPACT Funding in the 2001 budget is from the General Fund and the Riverboat Fund. For operational support, there is a total of $117, 500 - $42 , 500 from the General Fund Non-departmental (010- 6902-719 . 80-16) and $75, 00) in the Riverboat Fund (275-0000-791 . 80- 25) . The recapitalization is funded at $100, 000 from the Riverboat Fund(275-0000-791 . 80-25) . The Multi-family Housing Conversion Program is funded by $525, 000 from the Riverboat Fund (275-0000- 791 . 92-32 , project 157200) . ,bo EGAL 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. Res.iectfully submitted, a . Joe A. Parker City Manager DKN/od Attachment FEB-20-01 04 :23 PM NHS OF ELGIN 8476957011 P. 02 • *V • • N, III. 64 v • ti Neighborhood Housing Services of Elgin Report to the Partnership Fourth Quarter 2000 FEB-20-01 04 :23 PM NHS OF ELGIN 8476957011 P. 03 i 1 1 i Introduction NHS began the new millennium with a few changes of its own. Angel Rosenthal was named Executive Director of the organization in April of 2000 after four years • as its Lending'Director. With a rededication to the basic services that have allowed the organization to help rebuild Elgin's neighborhoods, It kept its eyes on the future, continuing to search out new and innovative ways to work with its partners to mobilize change. the year 2000 was an exciting one for the NHS and Elgin! . Major initiatives for 2000 included: - First NHS Rehab in Two Years Purchased ' - New R PE house in the Near West neighborhood. - City of Elgin home improvement fund allows for Property Acquisition and rehabs - The Ne ghborhood Voice continues to serve the neighborhoods - The Mi higan Triangle neighbors work towards a formal organization - New staff members bring strengths, skills to NHS F roperty Acqul lection, Rehabilitation and Redevelopment In January, the! City Council approved $300,000 in funds over the next two years allowing NHS tp once again look towards making a direct impact in Elgin's n''eighborhoods by acquiring problem properties for rehab and resale. The organization's nternal Rehab Committee worked throughout the end of 1999 and into the first qurter of 2000 to formalize a policy and procedures manual which should be finale ed and approved by the NHS Board of Directors in 2001 eiabling the organization to address issues relating to recent Department of Housing and Urban Development lead based paint regulations. The first purchase rehab acquired by NHS in two years is located at 116 Hill Avenue. This property was acquired from Elgin Financial Savings Bank as a fcreclosure. Several surrounding properties have received assistance from NHS over the years through revolving loan funds or multi family conversion grants, and several other properties have or are currently undergoing extensive rehab projects. rk 9476957011 P.04 FEB-20-01 04 :24 PM NHS OF ELGIN • it 4th Quarter Report Page Two During the second quarter of 2000 the organization was busy Identifying a new Site for the ROPE officer serving Elgin's Near West Neighborhood, Officer Rob Hartman was currently residing in a property owned by St. Edward's High School that was to be'demolished later in the year. The NHS Rehab Committee identified three properties for potential acquisition. At the end of June, negotiations began to purchase the property at 58 S. Jackson. NHS closed on the purchase in early September, and begin construction soon after to provide for d final, permanent home for Officer Hartman in November of 2000. In December, the NHS Board of Directors approved the hiring of a Rehab Specialist to coordinate the rehab efforts of the organization. NHS had not had a staff member Whose sole responsibility covered any NHS owned properties as ell as NHS p 'rchase rehab projects, which lead to inefficiencies In managing projects over the years. Interviews for the position took place during the end of December, witty a hiring expected to be announced in early January 2001. With Is critical staff position filled, as well as the City of Elgin capitalization funds and nds received from Neighborhood Reinvestment Corporation to meet *development costs, p NHS plans to undertake five to seven additional (111.4 acquisition projoets in 2001, looking closely at properties available in the Triangle a ea, as well the Spring-Douglas corridor area and an additional ROPE site to serve Elgin's Grant Park neighborhood. Hbme Improveirnent Lending NHS hired Sylvis Soto as its new Director of Lending in April, replacing Angel Rosenthal who assumed the position of Executive Director for the organization. SjiIvia brings fifteen years of banking experience to the organization, with a specialization in mortgage lending and homebuyer education programs. The loan portfolio currently has a balance of over 1.6 million dollars with 237 accounts. Whilethe portfolio has remained at this size for some time, there is mytch activity in terms of new loans as well as payoffs. This turnover in the portfolio is promising; it means we are meeting our stated goals of our clients beiing able to return to a level of financial stability after NHS provides funding for mulch needed improvements to their homes, • r • FEB-20-01 04 :24 PM NHS OF ELGIN 6476957011 P. 05 4th Quarter Report Page Three NHS received a grant of$50,000 from Neighborhood Reinvestment Corporation, and an additional grant of$50,000 from Elgin Financial Foundation to help meet year 2000 loan activity. All other loan funds come from existing loan receivables, es well as recapitalization agreements established with local lenders. Bank One, tIgin Financial Savings Bank, Amcore Bank and Harris Bank are the lending partners that have made loans to NHS secured by home improvement loans 4Iready made to clients. The loan proceeds then provide additional capital to make more loans to NHS clients. Doan activity involves the origination of second mortgage loans for home improvement purposes to clients that are considered unbankable. The following i$ statistical and demographic information for loans originated between 1/1/2000 and 12/31/2000. Lending Activity 1-1-00 through 12-31-00 Number of Loans . Units Impacted Amount Loaned Average Loan Amount 54 66 $599,560 $11,103 H''lusehold Description Percent of Loans Number of Loans H spanic 57% 31 Black 6% 3 White 37% 20 Male 15% 5 Male/Female 89% 37 Female17% 9 • Low income 65% 35 Moderate Income 35% 19 Est Side 70% 38 West Side 30% 16 r FEB-20-01 04 :25 PM NHS OF ELGIN 0476957011 P. 06 Au" Quarter Report .Page Four Multi Family Conversion Program The City Council approved an allocation of$550,000 for year 2000 projects. For administering this program, NHS receives an administrative fee of five percent, or $27,500.00. Eleven projects have been approved since the beginning of 2000, In late 2000, the maximum grant amount per unit was raised from $12,000 to $20,000, which spurred much interest in the program from property owners as Well as area real estate professionals. . The following is a summary of projects approved this year through December 31, 2000. Multi-Family Conversion Program Summary of Projects Address Original Units After MFC Grant MFC Project ynits Conversion Amount Year Status 3,03 Douglas ' 2 1 $ 12,000 2000 Complete 588 S. Liberty ': 2 1 $ 12,000 2000 Under Construction 253 Brook . 4 1 $36,000 2000 Under Construction 608 Villa 2 1 $ 12,000 2000 Under Construction 07 Wellington :2 1 $ 15,000 2000 Under Construction 4y2 Franklin 2 1 $ 12,000 2000 Complete 629 Prospect 2 1 $20,000 2000 Under Construction 5B S.Jackson 2 1 $20,000 2000 Complete 610 Wright 2 1 $ 15,000 2000 Complete 409 Ball 2 1 $20,000 2000 Under Construction 269/275 Dupage 12 4 $160,000 2000 Under Construction 158 Harding 2 1 $20,000 2000 Under Construction TOTAL 38 : 15 $388,000 The following applications were in process as of December 31, 2000, expected to be approved in January of 2001 for funding: Address Original Units After MFC Grant Units Conversion Amount 44 Julian 4 1 $ 60,000 450 Addison 2 1 $ 20,000 140 N. Gifford 6 1 $100,000 4d9 Arlington 2 1 $ 23,000 TOTAL 14 4 $203,000 6476957011 P. 07 FEB-20-01 04 :25 PM NHS OF ELGIN rilk 4th Quarter Report Page Five Population/Density Reduction —Historical Since its inception in 1995, the Multi Family Conversion program has reduced 115 units, with a population reduction In converted units of over 50%, Estimates of pre and post conversion populations were based upon 1990 census data that showed total occupied persons per unit in the City of Elgin at 2.8 persons. Program Units Preconversion Units After Post Conversion Year (Ori.Ina]) Po s ulation Estimate Conversion Po•uiation 2000 36 101 15 42 1:999 27 78 15 42 1'998 45 128 20 56 t997 73 204 34 95 1998 34 95 14 39 1995 ,14 39 5 14 TOTAL 229 643 103 288 r r FEB-20-01 04 :25 PM NHS OF ELGIN 6476957011 P. 06 4t' Quarter Report Page Six Community Organizing Efforts John Hartney joined the NHS staff as a part time community organizer in May of 2000, and assumed a full time schedule in December. John was one of the founders of the South West Ar9a Neighbors, one of Elgin's newest and most vibrant neighborhood organizations, John brings a diverse work background to NHS, with experience as a freelance writer and over twenty years experience as a network and free-lance television camera operator and audio technician. John's first major project with NHS was the production of a fourteen-minute video titled Sharing Visions which was shown at the NHS Annual Meeting in June. This video showcased Elgin residents and community leaders talking about their hopes and dreams for Elgin's future. It will be used as a marketing tool for the organization and will be shown at community events. John is also responsible for coordinating the monthly Resident Committee meetings, as well as the in-house production of The Neighborhood Voic . Staff continued its work in the Michigan Triangle. After the dedication of the Welcome to Michigan Street sign at the end of March, neighbors and NHS and City of Elgin staff worked on a landscaping plan for the sign and surrounding lot. During the city-wide cleanup day in May, residents gathered together to clear bush from the lot and plant annuals and perennials around the base of the sign. Jose Bernal continued to serve as the community organizer for the Triangle area, rub.' working with residents on the organization of a formal neighborhood group, as Well as a Neighborhood Watch program for the area. Jose has spearheaded this effort with Gilbert Feliciano, City of Elgin Neighborhood Planner and Outreach Coordinator, as well Dennis Hood, Elgin Police Neighborhood officer. The NHS Resident Committee continues to meet monthly to discuss neighborhood issues and to serve as a forum for each of Elgin's neighborhood groups to meet with ROPE, Code Administration and NHS staff on topics of interest. During the second quarter of the year, the group has heard presentations on the Elgin Recreation Center and on the proposed City ordinance controlling development. This discussion lead to a representative from the Resident Committee being named to fill a place on the Comprehensive Plan Advisory Committee which will meet over the next two years to help form Elgin's new Comprehensive Plan, which was last updated in 1983. Members of the Resident Committee participated in a Neighborhood Reinvestment Corporation training session in September regarding exploring the formation of a city wide neighborhood council. Discussions regarding a neighborhood council have been ongoing for over ten years. Since the training session in September, much work has taken place to make this long standing dream a reality. The Neighborhood Voice continued to reach out to the Elgin community by publicizing news of special interest to area residents. Distribution of the free monthly newspaper remains at approximately 10,000 copies, covering all areas of town. In 2000, The Voice has reflected more of NHS, with regular articles by staff and the Executive Director appearing monthly to highlight programs end services available. • 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 epik 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 Twenty Thousand Dollars ($20 , 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 Twenty-Three Thousand Dollars ($23 , 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.