97-177 Resolution No. 97-177
RESOLUTION
AUTHORIZING EXECUTION OF A PURCHASE OF SERVICE
AGREEMENT WITH NEIGHBORHOOD HOUSING SERVICES
OF ELGIN, INC.
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 a purchase of service agreement on behalf
of the City of Elgin with Neighborhood Housing Services of
Elgin, Inc. , for the 1997 Multifamily Conversion Program, a
copy of which is attached hereto and made a part hereof by
reference.
s/ Kevin Kelly
Kevin Kelly, Mayor
Presented: June 25, 1997
Adopted: June 25, 1997
Vote: Yeas 5 Nays 2
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 / lay of TuLy, 1997, by and
between the City of Elgin, Illinois, an Illinois municipal corporation, (hereinaf'fer referred to as
"the City") and Neighborhood Housing Services of Elgin, Inc., an Illinois not-for-profit
corporation (hereinafter referred to as "NHS"); and
WHEREAS, the City has determined that it is in the best interests of the City and its
citizens to promote and facilitate the conversion of nonconforming 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 its 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 July 15, 1997, City shall pay to NHS the sum of three hundred fifteen
thousand dollars ($315,000.00).
2. NHS shall directly and solely utilize three hundred thousand dollars ($300,000.00) of
the aforementioned three hundred fifteen thousand dollars ($315,000.00) 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 one hundred fifty thousand dollars ($150,000.00) of
the aforementioned three hundred fifteen thousand dollars ($315,000.00) 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. Fifteen thousand dollars
($15,000.00) of the aforementioned three hundred fifteen thousand dollars ($315,000.00) 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 the 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
t
including, but not limited to, failure to adhere to the provisions of the Multifamily Conversion
Program.
5. This agreement shall be effective July 1, 1997 and shall terminate December 31, 1997
unless otherwise terminated as provided herein.
6. This agreement may be terminated by the 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 the City
pursuant to this agreement, which have not been expended directly to property owners pursuant
to this agreement, to the City within thirty (30) days of termination. NHS shall not expend any
funds acquired from the 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 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: 'WI, .1 BY/.
Ro.-rt O. '. m
Inte im City Manager
Attest:
_i5/C ___/ ----
Dolonna Mecum
City Clerk
NEIGHBORHOOD HOUSING SERVICES
OF ELGIN, INC.
By ' / l� - /fir
� �f
Denise Harding Hopk V ,/
Board President
•
EXHIBIT A
MULTIFAMILY CONVERSION PROGRAM
1. "Nonconforming Residential Conversion" shall mean a residential structure in
which additional 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, and the execution
of an affidavit by the residential structure's owner or owners attesting that the residential
structure will be occupied by the owner or owners for a period of twelve (12) months following
the issuance of an occupancy permit for the work performed pursuant to the nonconforming
residential conversion.
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 nonconforming residential structure to its original residential use.
4. All work performed under program shall be performed in compliance with all
applicable city ordinances, specifically including, but not limited to, a final inspection made in
conjunction with a request for the issuance of an occupancy permit.
5. Program shall provide a maximum of twelve thousand dollars ($12,000) 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 shall 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.
-3-
,0oFF/°,ti
Agenda Item No.
o
r .•, , � <<� 4 —City of Elgin g
,,.ill I1 S\R
June 5, 1997
TO: Mayor and Members of the City Council
FROM: Robert 0. Malm, Interim City Manager
SUBJECT: Resumption of 1997 Multi-Family Conversion
Program and Program Enhancements
PURPOSE
The purpose of this memorandum is to provide information for
the Mayor and members of the City Council to consider funding
and program enhancements to resume the Multi-Family Conver-
sion Program in 1997 .
BACKGROUND
Elgin's older neighborhoods have been stressed with
approximately 3,000 homes originally constructed for low
density use but converted to more intensive multi-family
dwellings . To address this stress in the neighborhoods,
Elgin adopted in 1995 a program to assist property owners in
the voluntary reversion of properties back to their original
usage. Once converted, the properties must remain in
conformance with the zoning ordinance. The Multi-Family
Conversion (MFC) program was designed based upon a similar
incentive in Aurora, another community trying to "catch-up"
and rejuvenate established residential neighborhoods .
The Elgin program has worked in meeting its goals . With
Neighborhood Housing Services (NHS) as the program
administrator, 46 units have been removed at an average
reimbursement of $10,826/unit in the first 30 months of
operation. The 1997 allocation of $200,000 was obligated in
the first two months of the year.
Additional home owners are willing and wanting to revert
their properties back to the intended use, if there is
assistance to offset the costs of renovations. The window of
opportunity is now open for these conversions.
With an additional $300,000 for the MFC program in 1997, a
minimum of 25 units of the estimated 3,000 lawful
nonconforming uses could be converted yet this year.
Multi-family Conversion Program
June 5, 1997
Page 2
Program Enhancements :
The City Council may wish to include amendments to the
program rules including:
1. Unlawful Units. Currently deconversion of unlawful
residential uses is not eligible for
reimbursement. However, to address the need for
stabilization, home-ownership, and a timely return
to lawful use, NHS has suggested including
owner-occupied properties willing to convert to
original construction. The assistance may be
limited to pre-1992 conversions (demonstrated with
three proofs showing the use was established prior
to 1992) as that was the last major revision to the
Zoning Ordinance.
2 . Market incentive for South East Elgin
Neighborhood. NHS has provided information that
despite a high concentration of multi-family units,
there have been two conversions approved in this
area. The intensity of multi-family conversion may
be making single-family ownership a more difficult
venture in this area. To address this issue, an
increase in the reimbursement cap from $12,000 to
$15,000 is proposed for projects in the
neighborhood district encompassing the South East
Elgin Neighborhood.
3. Administration. Currently NHS collects $150
application fee from property owners, generating a
total of $4,050 ( 1% of the capital costs) . NHS
provides considerable time in answering questions,
processing applications, reviewing bids, and
pay-out requests and making payments . An amendment
to the fees covering administration costs to
provide 5% of the capital costs for administration
may be appropriate. For instance, with the
proposed $300,000 investment, another $15,000 would
be provided for program management.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
NHS has presented their report to the City Council on the
1997 program to date.
,s FINANCIAL IMPACT
Through April, 1997, $822,551 in riverboat proceeds
(excluding lease payments) has been received above budget
which could be used to provide additional funds for 1997 . A
budget adjustment will be required.
.
Multi-family Conversion Program
June 5, 1997
Page 3
LEGAL IMPACT
4one.
ALTERNATIVES
The City Council requested consideration of the MFC funding
to allow resumption of the program and the alternatives for
edits to the program rules.
RECOMMENDATION
The City Council requested consideration of additional
funding to resume the MFC program. Alternatives for program
revisions have been presented for City Council consideration.
Respectfully submitted,
Clay J. Pearson, Director
Code Administration and
' =i•hborhood Affairs
Ro• -rt f0. Malm
Interim City Manager
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