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TO: Mayor Thomas J. Weisner
FROM: Daniel Barreiro, Chief Community Services Officer
DATE: April 21, 2016
SUBJECT:
Resolution Authorizing the Mayor to Execute a Service Agreement and All Other Necessary Documentation Between the City of Aurora and Fox Valley Habitat for Humanity Under Illinois Housing and Development Authority (IHDA) Blight Reduction Program, Round 1 and Authorizing the Disposition of Real Estate Property known as 823 Gillette Avenue, Aurora, Illinois and Real Estate Property known as 1126 S. Fourth Street, Aurora Illinois to Fox Valley Habitat for Humanity (FVHFH).
PURPOSE:
Essentially, the Blight Reduction Program provides funding to cover costs related to property acquisition, demolition, and greening of eight City identified blighted properties. Under this Program, the City is required to transfer title of the blighted properties to FVHFH and in turn, FVHFH will demolish and redevelop the properties.
IHDA's Blight Reduction Program Guidelines require that a Services Agreement be established between the City and FVHFH to identify roles and responsibilities (see Attached Exhibit A). Such identified responsibilities include the City's role in acquisition, disposition, demolition, and greening and FVHFH's administrative and maintenance responsibilities throughout the Program's compliance period. The Services Agreement also identifies the reimbursement procedures for program costs. FVHFH is responsible for the demolition post-title transfer, FVHFH may elect to have the City perform the demolition and greening responsibilities, and FVHFH has opted to utilize the City to perform the demolition. The City will provide initial funds for acquisition, demolition, and greening cots. In turn and following the completion of the demolition and greening of a property, the Services Agreement states that the FVHFH will seek reimbursement on behalf of the City for the City's acquisition, demolition and greening costs in an amount not to exceed $30,250 per property.
BRP funds will reimburse/refinance costs in an amount not to exceed $35,000 per property which are incurred by the City and FVHFH as follows:
- $30,250 for Acquisition, Demolition, Lot treatment/greening
- $3,000 for Maintenance
- $1,750 for Administrative expense
FVHFH will be required to maintain the property throughout the three-year compliance period. Upon completion of the compliance period and provided that all requirements have been met, the lien will be released.
BACKGROUND:
In 2015, the City of Aurora was allocated $280,000 under IHDA's Blight Reduction Program, Round 1. The Blight Reduction Program (“BRP”) was created in 2014 by the Illinois Housing Development Authority (“IHDA”) under the Hardest Hit Fund Program, a U.S. Treasury funded resource dedicated to foreclosure prevention and neighborhood stabilization. The Blight Reduction Program is awarded to Local Units of Government and their identified Not-For-Profit agencies. The City's participation is limited to being the administrating unit of local government and to assist its non-profit partner as a collaborative partner towards the implementation of the program. The intended program implementation includes the acquisition, demolition, greening and maintaining certain blighted properties until the eventual reuse or redevelopment of the properties by its non-profit partner.
DISCUSSION:
The City must execute the Services Agreement with FVHFH, and following acquisition of a property, transfer clear title and debt (based on eligible uses of funds) to FVHFH and fund the Eligible Uses with a loan to FVHFH with an instrument of debt. In exchange for the title, FVHFH will agree to a note for each acquired property (maximum of $35,000.00 loan for each property). The note will be structured as a zero percent (0%) non-amortizing loan, secured by a recorded lien. The loan will be subject to a 3-year recapture period, during which FVHFH would agree to repay the loan if a recapture event occurs. At the close of the compliance period, FVHFH will retain ownership, and the lien will be released provided that all program requirements have been met.
To ensure the BRP's timeliness objectives, Staff also seeks Council authorization to permit the execution of all documents related to the real estate acquisition and title transfer of future BRP properties subject to the Program Guidelines and without further City Council approval.
IMPACT STATEMENT:
The Blight Reduction Program will have impact in various neighborhoods where a project will occur due to the reduction of blight. The impact administratively will be through city staff in the Mayor's Office, Neighborhood Redevelopment, Neighborhood Standards, Legal Counsel and Finance.
The City will payout initial funds (and request reimbursement) for the program costs from the following City budget line-items:
Acquisition Costs: Cost of Land Account: 215-1710-417-71-01
Demolition/Greening Costs: Property Standards: 101-1727-424-36-25
RECOMMENDATIONS:
Staff recommends adoption of the Resolution Authorizing the Mayor to Execute a Service Agreement and All Other Necessary Documentation Between the City of Aurora and Fox Valley Habitat for Humanity Under Illinois Housing and Development Authority (IHDA) Blight Reduction Program, Round 1 and Authorizing the Disposition of Real Estate Property known as 823 Gillette Avenue, Aurora, Illinois and 1126 S. Fourth Street, Aurora Illinois to Fox Valley Habitat for Humanity. Additionally, Daniel Barreiro, Chief Community Services Officer, and/or Alayne Weingartz, Corporation Counsel, or their designees, are hereby authorized to act on behalf of the City of Aurora and execute any necessary subsequent agreements, consistent with this Resolution, to complete the transfer of these properties.
cc: Alderman O’Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Mesiacos, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Authorizing the Mayor to Execute a Service Agreement and All Other Necessary Documentation Between the City of Aurora and Fox Valley Habitat for Humanity Under Illinois Housing and Development Authority (IHDA) Blight Reduction Program, Round 1 and Authorizing the Disposition of Real Estate Property known as 823 Gillette Avenue, Aurora, Illinois and Real Estate Property known as 1126 S. Fourth Street, Aurora Illinois to Fox Valley Habitat for Humanity.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, (the Illinois Housing Development Authority (IHDA) has created the Blight Reduction Program Round 1 (BRP) to decrease preventable foreclosure and stabilize neighborhoods by supporting Illinois units of government and their Not-For-Profit Partners as they target blighted, vacant residential properties for demolition, greening and eventual reuse or redevelopment; and
WHEREAS, the City approved participation in the Blight Reduction Program via Resolution Number R15-165 on June 23, 2015; and
WHEREAS, as a requirement of the IHDA BRP, the City must also enter into a Services Agreement with Fox Valley Habitat for Humanity outlining the roles and responsibilities of each entity which is attached as Exhibit A; and
WHEREAS, eligible properties identified under the BRP must be acquired by the City the City must then transfer title to Fox Valley Habitat for Humanity prior to demolition; and
WHEREAS, the City's funds to cover acquisition costs will come from the Cost of Land Account Number: 215-1710-417-71-01 and funds to cover demolition and greening costs will come from the Property Standards Account Number: 101-1727-424-36-25; and
WHEREAS, on behalf of the City, Fox Valley Habitat for Humanity will seek reimbursement from IHDA for all costs up to $30,250 per BRP property which are related to City's acquisition, demolition, and lot treatment/greening costs; and
WHEREAS, 823 Gillette Avenue, Aurora, Illinois and 1126 S. Fourth Street, Aurora Illinois have been identified as eligible BRP properties and are requested for disposition to Fox Valley Habitat for Humanity; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that the Mayor is Authorized to Execute a Service Agreement and All Other Necessary Documentation Between the City of Aurora and Fox Valley Habitat for Humanity Under Illinois Housing and Development Authority (IHDA) Blight Reduction Program, Round 1 and that the Mayor is also authorized to execute all documentation for the Disposition of Real Estate Property known as 823 Gillette Avenue, Aurora, Illinois and 1126 S. Fourth Street, Aurora Illinois to Fox Valley Habitat for Humanity..
BE IT FURTHER RESOLVED, that the Mayor is hereby authorized and empowered to execute and deliver in the name of or on behalf of the City of Aurora, all documents related to the acquisition and title transfer of the Blight Reduction Round One properties subjectto the Program Guidelines and to execute and deliver such additional documents, instruments and certificates, as may be necessary or desirable for the City to perform its obligations which shall include the approval of each property’s interim and long term revitalization plans/end uses under the Tri-Party Agreement and the other Program documents, without further City Council Approval.
BE IT FINALLY RESOLVED, that Daniel Barreiro, Chief Community Services Officer, and/or Alayne Weingartz, Corporation Counsel, or their designees, are hereby authorized to act on behalf of the City of Aurora and execute any necessary subsequent agreements, consistent with this Resolution, to complete the transfer of Blight Reduction Round One properties.