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File #: 47690    Version: 1 Name: Small Cap TIF loan #32 to Peter Linsmeier for up to $90,000 to purchase and renovate the property located at 515 E. Mifflin Street, Madison, WI.
Type: Resolution Status: Passed
File created: 6/14/2017 In control: FINANCE COMMITTEE
On agenda: 7/11/2017 Final action: 7/11/2017
Enactment date: 7/18/2017 Enactment #: RES-17-00587
Title: Approving a Small Cap TIF #32 Mansion Hill-James Madison Park Neighborhood loan of up to $90,000 to Peter Linsmeier Borrower for the purchase and renovation of the property located at 515 E. Mifflin Street, Madison, WI and its conversion from rental to owner-occupied housing; and authorizing the Mayor and City Clerk to execute a loan agreement with the Borrower to effectuate this transaction.
Sponsors: Ledell Zellers

Fiscal Note

The proposed resolution approves a Small Capital Loan grant totaling $90,000 to convert property at 515 E Mifflin Street from rental property to owner occupied. The 2017 Adopted Capital Budget includes $440,000 for the State Street District Improvement Retail Grant and Small Capital Loan Programs. The retail grant program has awarded $132,242.30 to date and disbursement of $90,000 for the proposed small capital loan will leave a balance of $217,757.70. This grant program is funded by Tax Increment District 32.

Title

Approving a Small Cap TIF #32 Mansion Hill-James Madison Park Neighborhood loan of up to $90,000 to Peter Linsmeier Borrower for the purchase and renovation of the property located at 515 E. Mifflin Street, Madison, WI and its conversion from rental to owner-occupied housing; and authorizing the Mayor and City Clerk to execute a loan agreement with the Borrower to effectuate this transaction.

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BACKGROUND

The Mansion Hill-James Madison Park Neighborhood program, part of the approved plan for Tax Incremental District #32 (Upper State Street) was created on January 2011 (RES-11-00042, Legistar #20749) for the purpose of assisting with conversion of deteriorating rental housing into renovated owner occupied housing.  The program was amended on August 2014 (RES-14-00576, Legistar #34644), April 2015 (RES-15-00344, Legistar #37775) and November 2016 (RES-16-00856, Legistar #44934).  It provides forgivable loans to eligible borrowers for the purchase and/or renovation of rental properties in the Mansion Hill-James Madison Park Neighborhood. 

 

Loan funds provided through the Program for each renovation project are subject to the following conditions:

 

                     TIF assistance is provided in the form of a 0% interest note secured by subordinated mortgage on the Property, with no debt service payments.  Principal balance is forgiven after the completion of renovation work has been verified by the City. A Land Use Restriction Agreement (LURA) is also executed, to ensure owner-occupancy for the entire ten-year period, and contains a penalty provision requiring loan repayment of up to $50,000 to the City if the Property is rented for more than 12 consecutive months or becomes non-owner occupied.

 

                     Borrower must provide a commitment for a title insurance policy of the proper type and amount of coverage to the City. The City shall receive a lender’s policy.

 

                     Borrower and its contractors/subcontractors must comply with all applicable provisions of the Madison General Ordinance (MGO) 39.02(9), concerning contract compliance requirements. Prior to commencing construction, Borrower must:

                                          contact the City’s Civil Rights Division to assure that Borrower is in compliance with the

                                          aforementioned requirements;

                     assist and actively cooperate with the Civil Rights Division in obtaining the compliance of contractors and subcontractors with such applicable provisions of the MGO; and

                     allow maximum feasible opportunity to minority/disadvantaged women business

                     enterprises to compete for any contract.

 

                     Borrower must meet applicable accessibility accommodations for the Project, as required by

MGO 39.05.

 

                     Borrower must comply with all applicable local, state and federal provisions concerning Equal Opportunity and Fair Housing.

 

                     Borrower must guarantee that the construction of the Project with be completed within one year of closing, or City approves an extension.

 

ACTION

 

WHEREAS, Peter Linsmeier (“Borrower”) agrees to purchase and renovate the property located at

515 E. Mifflin Street, Madison, WI (“Property”) and either be the owner-occupant(s) or sell the Property to a “Qualified Buyer”; and

 

WHEREAS, after review of the Borrower’s Small Cap TIF application and its attachments, staff has concluded that Small Cap TIF assistance  of up to $90,000 would stimulate the rehabilitation and conversion of the Property into owner-occupied housing as set forth in the adopted Small Cap TID #32; and

 

WHEREAS in addition to any other powers conferred by law, the City may exercise any power necessary and convenient to carry out the purpose of the TIF law, including the power to cause Project Plans to be prepared, to approve such plans, and to implement the provisions that effectuate the purpose of such plans; and

 

NOW THEREFORE BE IT RESOLVED that the City hereby finds and determines that the Project is consistent with the public purposes, plans and objectives set forth in the TIF #32 Project Plan and that the City’s loan to the Borrower will stimulate redevelopment in TID #32, thereby contributing to accomplishment of the public purpose objectives set forth in the Project Plan and its amendment, the TIF Law and City TIF Policy; and,

 

BE IT FURTHER RESOLVED, that funding is subject to the conditions described herein; and

 

BE IT FINALLY RESOLVED, that the TIF loan to the Borrower is hereby approved in an amount not to exceed $90,000, and that the Mayor and City Clerk are hereby authorized to execute a loan agreement and other documents as may be necessary to effectuate the transaction all of which are subject to the approval of the City Attorney.