96-198 Resolution No. 96-198
RESOLUTION
AUTHORIZING EXECUTION OF A PURCHASE OF SERVICE AGREEMENT WITH
NEIGHBORHOOD HOUSING SERVICES FOR MULTIFAMILY CONVERSIONS
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 26 , 1996
Adopted: June 26, 1996
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 -/' 7;e4, day of
June, 1996, 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.
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 June 30, 1996, City shall pay to NHS
the sum of Two Hundred Thousand Dollars ($200,000 .00) .
2 . NHS shall directly and solely utilize the
aforementioned $200,000 . 00 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. A minimum of $50,000 . 00 of the $200,000.00
is for projects not submitted by NHS.
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, 1996 and
shall terminate July 15, 1997 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, 1997, and 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 � i- .
Richard B. Helwig
City Manager
Attest:
Dolonna Mecum
City Clerk
NEIGHBORHOOD HOUSING SERVICES
OF GIN, IN
By B ,1,2 O�fE� - 4011:5
� � ,
Angel Rosenthal
Board President `d
-2-
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 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-
• •
1996 Multi -Family
Conversion Program
Neighborhood Housing Services of Elgin Projects
June 12, 1996
A problem identified time and again in older, established neighborhoods is a housing
stock of single-family structures used for multi-family purpose. The negative impact
on neighborhoods is evidenced by too many cars on the street, homes showing signs
of excessive wear and tear, building exteriors with cut-up facades and added entries,
and established schools facing increased populations.
Included in the City of Elgin's 1996 Budget is $150,000 for multi-family conversion.
The NHS Loan Committee has recommended seven projects. Although five of the
seven projects are submitted by NHS, it should be noted that these properties were
selected for acquisition by NHS because of their extreme negative neighborhood
impact prior to NHS involvement. The properties have been either red-tagged as
unfit for human occupancy, have had numerous police calls, are part of a larger
neighborhood redevelopment effort, or are in a state of extreme disrepair.
This summary is intended to describe the five projects being completed by
Neighborhood Housing Services of Elgin in 1996 using in part multi-family conversion
proceeds.
•
Neighborhood Housing Services of Elgin
Page 2
_ " 305 East Chicago Street
;.- -1 --1 • Lawful nonconforming four-unit.
• Corner property on major arterial,
' �, '' adjoining downtown business
Y district.
=- z • An extensive property maintenance
�—_— -- court case lists 41 separate violation
A „ .5 _f " ■ counts at the property.
0` � `� iiit1-
• Generated 22 calls for Police
Department service in last 18
= ;__ months including two reports
= generated for drugs and one for
'°"i 'mtmlamomo illegal use of a handgun_
imrifigisi
279 Ann Street
-,_, • Lawful nonconforming five unit
(average 14 people).
• Six separate property maintenance
R �° violation cases opened in last 18
,x months.t.
-‘ 1 - .. • Appeared on original Problem
• L -- . – - � ' Property Report, removed only
_ . ye when NHS acquired.
Y f. _=, � '' I • Property part of a major effort to
.. A, - � :. - improve quality of life on a
- ___ = -�"'-'- challenging block-- Located next to
church in new NHS Target area,
across street from property declared
a public nuisance.
• 58 Police Department calls for service to this address since January 1, 1995, of which eight were domestic
trouble calls and four for drugs. Other neighborhood disturbances were for warrant services, theft,
aggravated battery, and simple battery.
Neighborhood Housing Services of Elgin
Page 3
/ 409 North Street
°� • Lawful nonconforming three-unit.
• Located in Elgin Historic District,
~° removing two units.
I "—` • Historically sensitive rehabilitation to
409 _. - I match adjoining property with mirror
ya = image design.
1% _.4. ..
a
,',"'..-,,.r. it '„ 'v_
.Y
' k '� . 0
k a� +S,7. ^i.
f
i .q-.
j 72 j�y,�..
4 ;
409 North Street Upper Bath in a Closet
Neighborhood Housing Services of Elgin
Page 4
-, . 320 North Spring Street
• Lawful nonconforming two-unit
• Located in the heart of the near northeast neighborhood,
one of the areas under highest stress. NHS has
f undertaken a major redevelopment enhancement with the
acquisition of four properties within a one block area. The
r y ` -
`` benefit of rehabilitating en masse these properties is a
major jump-start for the neighborhood, a total $447,000 in
investment for the four properties.
Ft
• In 1995 alone there were 51 calls for service to the Police
Department at this address. Since NHS acquisition there
have been NO problems for the neighborhood. Previous
calls included extensive gang activity, noise complaints,
unlawful use of a handgun, and domestic troubles.
E
4
y. • i
Sunroom used as a kitchen t
i
•
k,
R--
Bathroom in upper unit in closet space on platform
• Neighborhood Housing Services of Elgin
Page 5
'U `y ` � 318 DuPage Street
• Lawful nonconforming two-unit
t x = • Property maintenance court case
� � lists 42 separate property
''''5L. C maintenance code violations
la VI 11,.L "' .' — _ • The property was the site of 18
calls for service to the Police
I IS
t --"—' 1-11�''Ju
+• - : =l Department.
• s `� s ,viii III n J
1� ° : . .
Agenda Item No.
June 5, 1996
TO: - Mayor and Members of the City Council
FROM: Richard B. Helwig, City Manager
SUBJECT: 1996 Purchase of Service Agreement
with Neighborhood Housing Services for
Multi-family Conversion Program
PURPOSE
The purpose of this memorandum is to provide information
regarding consideration of a second year of the multi-family
conversion program.
BACKGROUND
A problem identified time and again in older, established
neighborhoods is a housing stock of single-family structures
used for multi-family purposes . The negative impact on
neighborhoods is evidenced by too many cars on the street, homes
showing signs of excessive wear and tear, building exteriors
with cut-up facades and added entries, and established schools
facing increased populations .
Program Administration
The City Council adopted its first multi-family housing
conversion program in June, 1995 . The program is administered
by contract through Neighborhood Housing Services of Elgin.
Specifics of the current program include:
Properties must be lawful nonconforming structures . The
property must be brought to a single-family use.
The program provides reimbursement for reconversion
construction costs . 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
* installation of siding, windows, etc
* elimination of some off-street parking
* other construction-related items as approved
Multi-family Conversion Program
June 5, 1996
Page 2
1995 Program Report
Seven properties have or are in the process of returning to
their single-family use. Of the $100, 000 provided for property
conversion, $96 , 000 is currently obligated. The balance is
available for 1996 projects .
Projects from -the 1995 program, all returning the properties to
their original single-family use, include:
Units Maximum
Address removed Reimbursement Owners
264 Ann Street 1 unit $12, 000 L. Williams
359 Park Street 1 unit 12, 000 J. Koko
259 Villa Street 1 unit 12,000 Knuth
18 Warwick Place 2 units 24 , 000 D. Jurina
34 N. Gifford 1 unit 12, 000 A. Conte *
211 N. Gifford 1 unit 12, 000 J. Anderson
573 Division 1 unit 12,000 R. Pumo
TOTAL 8 units $96, 000
Balance $ 4, 000
* Note: The property owner also sits on the NHS Loan
Committee. He abstained from all discussion on this particular
application.
All the properties above have obtained building permits to
formalize the conversion of land use back to single-family
status .
The intended effect of the program is to reduce the intensity of
residential uses in single-family structures . The city average
for persons per dwelling unit is 2 . 9 .
1996 Program/Enhancements
Included in the 1996 Budget is $150,000 for multi-family
conversion. In anticipation of funding and to expedite
projects, the NHS Loan Committee has reviewed and recommended
the following projects for funding in 1996 :
Units Maximum
Address removed Reimbursement Owners
305 E. Chicago St. 3 units $ 36,000 NHS
387 Ryerson 1 unit 12,000 J. Fulin
639 Park 1 unit 10,000 T. Budz
409 North St. 2 units 24,000 NHS
279 Ann St. 4 units 48,000 NHS
320 N. Spring St. 1 unit 12,000 NHS
318 DuPage St. 1 unit 12,000 NHS
TOTAL 13 units $154,000#
# Note: Includes $4 , 000 carryover from 1995
Multi-family Conversion Program
June 5, 1996
Page 3
Although five of the seven projects are submitted by NHS, it
should be noted that these properties were selected for
acquisition by NHS because of their negative neighborhood
impact. The properties have been either red-tagged as unfit for
human occupancy, have had numerous police calls, or are in a
state of extreme disrepair.
Projects are selected by the NHS Loan Committee (Ginger Stace,
Home -Federal Savings of Elgin; Dan Zimmer, Bank One; Paul
Bednar, resident; Neil Steffens, appraiser; August Conte,
resident business; Bob Johnson, resident) . The Committee
evaluates proposals and scores them based upon the attached
Multi-Family Conversion Selection Criteria rating form.
NHS reports there are at least two additional projects in the
process of developing conversion applications . These
applications and any further marketing will be put on hold in
1996 until 1997 funding is approved, or if additional City
support is secured.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
Neighborhood Housing Services .
FINANCIAL IMPACT
The 1996 Budget for this program totals $150,000 from riverboat
proceeds (275-0000-791 . 92-32, project 157200) . Each subsequent
year in the Five-Year Financial Plan shows increased support for
this effort, totalling $1 . 5 million during 1996-2000 .
It should be noted that the $250, 000 to convert 22 properties in
Elgin would cost the City of Aurora $462 , 000 using their program
rules ( $21, 000/unit) .
LEGAL IMPACT
None.
ALTERNATIVES
1) Renew the Purchase of Service Agreement with Neighborhood
Housing Services of Elgin and fund the second year of the
multi-family conversion program at the budgeted $150,000 .
2) Renew the Purchase of Service Agreement with Neighborhood
Housing Services of Elgin and fund the program at $200,000 using
$50,000 of unprogrammed riverboat proceeds, thereby leveraging
the removal of an additional four dwelling units ($12,000/unit) .
3) Not fund the program.
Multi-family Conversion Program
June 5, 1996
Page 4
RECOMMENDATION
Alternative #1 is recommended consistent with the 1996 budget of
$150, 000. Please note that demand for these Multi-family
Conversion Program dollars has already resulted in the entire
1996 budget allocation being programmed.
Respectfully submitted,
V
/L.444.0---
Clay J. Pearson, Director
Department of Code Administration
and Neighborhood Affairs
Richard B. Helwig
City Manager
Multi-Family Conversion
Selection Criteria
Applicant Address
Criteria Description Points
1) Number of Units to be converted
X 10 pts
2) Owner-occupied 20 pts
Nonowner- occupied 10 pts
3) Rentals on Block(including subject)
1 Rental Property 10 pts
2 Rental Properties 20 pts
3 Rental Properties 30 pts
4) Project Cost
$36,000 + 30 pts
$24,000 - $35,999 20 pts
Less than $23,999 10 pts
5) Location Within Neighborhood
Arterial St. (e.g. Villa, Liberty) 30 pts
Collector St. (e.g. Park, Gifford) 20 pts
Local St. (e.g. North Street) 10 pts
6) Project Scope
Cost of Conversion 51%to Ext. 5 pts
Total Points
Points required for participation 50