95-143 Resolution No. 95-143
RESOLUTION
AUTHORIZING EXECUTION OF A PURCHASE OF SERVICE
AGREEMENT WITH NEIGHBORHOOD HOUSING SERVICES
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 28, 1995
Adopted: June 28, 1995
Omnibus Vote: Yeas 7 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 /( 4:, day of
*SUL , 1995, by and between the City of Elgin, Illinois,
an Ill nois 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 July 17, 1995, City shall pay to NHS
the sum of One Hundred Thousand Dollars ($100,000 . 00) .
2 . NHS shall directly and solely utilize the
aforementioned $100,000 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.
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, 1995 and
shall terminate July 15, 1996 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, 1996, and before July 15, 1996, 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
Richard B. Helwig
City Manager
Attest:
Dolonna Mecum
City Clerk
NEIGHBORHOOD HOUSING SERVICES
OF 'ir GI 1 I ./ ,
By B macl
'
g=1 Rosent .
:o.. d President
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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, 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 .
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•
Agenda Item No.
�. , err
May 12, 1995
TO: Mayor and Members of City Council
FROM: Richard B. Helwig, City Manager
SUBJECT: Multi-Family Housing Conversion Program
PURPOSE
The purpose of this memorandum is to provide background infor-
mation to the Mayor and members of the City Council for the
implementation of a multi-family housing conversion program.
BACKGROUND
Throughout discussions with elected officials, neighborhood
groups, real estate professionals, and staff on improving the
quality of life in Elgin's inner-ring, one problem has been
identified time and again -- overcrowded housing. The nega-
tive impact on neighborhoods is evidenced by too many cars on
the street, housing stock showing signs of distress, building
exteriors with cut-up facades and added entries, and estab-
lished schools facing increased populations despite service
areas without additional structures .
Overcrowded housing can often be unsafe housing for occu-
pants . Conditions provide an environment for neighborhood
disputes and possible violence. The current conditions re-
sult from a time in American cities when it was common prac-
tice to allow conversion of single-family residences to
multi-family uses . Under current zoning ordinances, such
conversions are not permitted. However, properties remain
throughout the city as lawful nonconforming conversions .
Most obvious are traditional single-family structures with
multi-family uses . Large suburban cities such as Elgin are
making a priority of downsizing housing uses . Aurora has
increased its funding for a successful conversion program
from $570,000 to $1,000,000 in 1995. City departments contin-
ue to attack unlawful conversions, now with riverboat pro-
ceeds programmed over the next five years, lawful nonconform-
ing structures can be downsized.
Multi-family Housing Conversion Program
May 12 , 1995
Page 2
The proposal before the City Council is for Neighborhood
Housing Services of Elgin to administer the multi-family
conversion program. NHS has a proven track record as a part-
ner redevelopment agency. Although NHS has been focused to
this point on specific target areas in the City, the new
conversion program will be available for strategic properties
city-wide. The essential specifics of the program are:
• Properties must be lawful nonconforming structures . The
property must be brought to a single-family use.
• The program will provide funding for reconversions in
the form of a three-year forgivable loan for construc-
tion costs related to the funding. 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
* installatior, of siding, windows, etc.
* elimination of some off-street parking
* other construction-related items as approved
• The three-year note would be forgiven at a rate of 33%
per year. The loan would become due and payable immedi-
ately for violation of program guidelines (sale or trans-
fer of property within three years, substantial and/or
continued noncompliance with property maintenance codes ) .
▪ All work requires approved building permits .
• Maximum $12 , 000 loan per structure.
• $150 non-refundable application fee to NHS .
• Properties will be selected by NHS Loan Committee based
upon available funding and in consultation with neighbor-
hood groups based upon properties that will have the
highest positive impact from their conversion.
The program will be operated through NHS for one-year and
then evaluated.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None.
FINANCIAL IMPACT
The 1995 Budget includes $100,000 for the multi-family conver-
'" sion program (Acct. #275-0000-791 .92-32, Project 157200) .
Each subsequent year in the Five-Year Financial Plan shows in-
creased support for this effort, totalling $1 .2 million dur-
ing 1995-1999 .
Multi-family Housing Conversion Program
May 12 , 1995
Page 3
rak LEGAL IMPACT
None.
RECOMMENDATION
It is recommended that the City Council request that staff
develop the necessary agreement with Neighborhood Housing
Services to administer the multi-family housing conversion
program.
Respectfully submitted,
L;. ;)VCI"ay A. Pearson
B;iet/Publ ' 6-Information Officer
Roger K. Dahlstrom
Planning Director
f Richard B. Helwig
City Manager
RBH/CJP/sg