Greenfield Development, LLC_Enterprise ZoneTHE CITY OF DUIJUgU@
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DUB E Ap-AmericaCihit
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Masterpiece on the Mississippi
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Housing Enterprise Zone Program Agreement Number 09-HEZ-009 for
Greenfield Development, LLC
DATE: October 1, 2008
Economic Development Director Dave Heiar recommends City Council approval of a
Housing Enterprise Zone Program Agreement by and among the Iowa Department of
Economic Development, the City of Dubuque, and Greenfield Development, LLC. This
agreement will provide State of Iowa financial benefits to a local housing developer
making a substantial investment, estimated at $600,000, in the property at 197 Main
Street. The project will provide four new housing units in the downtown. There is no
commitment within the agreement of any further City assistance.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
"~
Mi ael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
THE CITY OF Dubuque
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DUB E ~a~
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Masterpiece on the Mississippi
2007
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director~J
SUBJECT: Housing Enterprise Zone Program Agreement Number 09-HEZ-009 for
Greenfield Development, LLC.
DATE: September 30, 2008
INTRODUCTION
This memorandum presents for City Council approval a Housing Enterprise Zone Program
Agreement by and among the Iowa Department of Economic Development (IDED), the City and
Greenfield Development, LLC. The City Council is requested to adopt a resolution approving
the agreement.
BACKGROUND
On August 11, 2008, the City Enterprise Zone Commission approved an application to IDED on
behalf of Greenfield Development, LLC for Housing Enterprise Zone benefits related to the
redevelopment the property located at 197 Main Street. IDED approved the application on
August 27, 2008.
DISCUSSION
Attached to this memorandum is a resolution that provides for the approval of the agreement for
Housing Enterprise Zone benefits for Greenfield Development, LLC. The resolution authorizes
and directs the Mayor to execute the agreement on behalf of the City. The agreement outlines
the State benefits that will accrue to the housing business based on their role as developer of
the housing project. The project will provide 4 new housing units in the downtown area.
Greenfield Development, LLC has estimated a capital investment of $600,000 within the
Enterprise Zone related to the housing units. A copy of the agreement is attached to the
resolution.
RECOMMENDATION
I recommend that the City Council approve the proposed Housing Enterprise Zone Program
Agreement for Greenfield Development, LLC by adopting the attached resolution. This
agreement will provide State of Iowa financial benefits to a local housing developer making a
substantial investment in our downtown. There is no commitment within the agreement of any
further City assistance.
ACTION STEP
The action step for the Council is to adopt the attached resolution.
attachments
F:\USERSWdejong\Enterprise Zone\197 Main Street\20080930 Council Memo.doc
Prepared by: Aaron DeJong, Asst. ED Director, 50 West 13th Street, Dubuque IA 52001 563 589-4393
Return to: Jeanne Schneider, City Clerk, 50 West 13th Street, Dubuque IA 52001 563 589-4121
RESOLUTION NO. 342-08
RESOLUTION APPROVING A HOUSING ENTERPRISE ZONE PROGRAM
AGREEMENT BY AND AMONG THE IOWA DEPARTMENT OF ECONOMIC
DEVELOPMENT, THE CITY OF DUBUQUE AND GREENFIELD DEVELOPMENT, LLC.
Whereas, the City of Dubuque has established two Enterprise Zones and an
Enterprise Zone Commission; and
Whereas, the Enterprise Zone Commission on August 11, 2008 approved the
application of Greenfield Development, LLC for Housing Enterprise Zone benefits; and
Whereas, Greenfield Development, LLC's application was approved by the Iowa
Department of Economic Development on August 27, 2008; and
Whereas, the Iowa Department of Economic Development has prepared and
submitted for City Council approval an agreement relating to Housing Enterprise .Zone
benefits for Greenfield Development, LLC a copy of which is attached hereto and by this
reference made a part hereof; and
Whereas, the City Council finds that the proposed agreement is acceptable and
necessary to the growth and development of the city.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the Iowa Department of Economic Development Housing
Enterprise Zone Program Agreement, Number 09-HEZ-009, is hereby
approved.
Section 2. That the Mayor is hereby authorized and directed to execute the
Agreement on behalf of the City of Dubuque and forward the
executed copy to the Iowa Department of Economic Development for
their approval.
Passed, approved and adopted this 6th day of October, 2008.
Roy D. Buol, Mayor
Attest:
Jeanne F. Schneider, City Clerk
IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT
HOUSING ENTERPRISE ZONE PROGRAM AGREEMENT
EZ AGREEMENT NUMBER:
APPLICATION APPROVAL DATE
AGREEMENT EFFECTIVE DATE:
ENTERPRISE ZONE NAME:
ZONE EXPIRATION DATE:
09-HEZ-009
August 27, 2008
August 27, 2008
Dubuque County, Dubuque EZ-1A
November 15, 2017
THIS ENTERPRISE ZONE AGREEMENT is made by and among the Iowa Department of Economic
Development, 200 East Grand Avenue, Des Moines, Iowa 50309 ("Department" or "IDED"), City of Dubuque, 50
W 13th ST, Dubuque, IA 52001, ("Community') and Greenfield Development LLC, 801 Cedar Cross RD, ,
Dubuque, IA 52003-7735, ("Housing Business").
WHEREAS, the purpose of the Enterprise Zone Program is to promote new economic development in
economically distressed areas; and
WHEREAS, the Community has designated and the Department has certified the Enterprise Zone
identified above; and
WHEREAS, eligible housing businesses with projects located in a certified Enterprise Zone are authorized
under this program to receive certain tax incentives and assistance; and
WHEREAS, the Enterprise Zone Commission responsible for the above-identified Zone has recommended
approval and the Department has found the Housing Business' application to be consistent with the Act's eligibility
requirements; and
NOW THEREFORE, in consideration of the mutual promises contained in this Agreement and other good
and valuable consideration, it is agreed as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall apply:
1.1 "Act" means 2005 Iowa Code sections 15E.191 through 15E.196 as amended by 2005 Iowa Acts,
House File 857 and House File 882.
1.2 "Administrative Rules" means 261 Iowa Administrative Code, chapter 59.
1.3 "Agreement Effective Date" means the date this Agreement becomes effective and the Housing
Business is authorized to receive program benefits.
1.4 "Agreement Expiration Date" means the date this Agreement ceases to be in force and effect. This
Agreement shall remain in effect until IDED receives written verification that all 4 units have been certified for
occupancy.
1.5 "Application Approval Date" means the date, as identified above, on which the Director or Director's
designee of the IDED approved the Housing Business' Enterprise Zone application.
1.6 "BoarcP' means the IDED Board.
1.7 "Commission"or "Enterprise Zone Commission" means the Enterprise Zone commission
established by the Community responsible for the certified Enterprise Zone.
HEZ Format revised 3/2008
EZ Agreement # 09-HEZ-009
Page 2
1.8 "IDR" means the Iowa Department of Revenue.
1.9 "Enterprise Zone" means the site within the Community certified by the Board for the purpose of
attracting private investment.
1.10 "Project" means the activity, or set of activities, described in this Agreement and the Enterprise
Zone application approved by IDED.
1.11 "Project Comaletion" means the date of completion of construction or if this Project involves
rehabilitation, the date all improvements included in the Project are completed.
ARTICLE II
ENTERPRISE ZONE BENEFITS
2.1 Benefits. The following Enterprise Zone benefits authorized by the Act and IDED administrative
rules are available to the Housing Business under this Agreement:
(a) Investment Tax Credit. The Housing Business may claim an investment tax credit up to a
maximum of 10 percent of the new investment which is directly related to the building or rehabilitating of the units
stated in Article IV, Section 4.1 of this Agreement.
New investment which is directly related to the building or rehabilitating units includes the following costs:
land, surveying, architectural services, building permits, inspections, interest on the construction loan, building
materials, roofing, plumbing materials, electrical materials, amounts paid to subcontractors for labor and materials
provided, concrete, labor, landscaping, appliances normally provided with a new home, heating and cooling
equipment, millwork, drywall and drywall materials, nails, bolts, screws, and floor coverings. New investment does
not include the machinery, equipment, hand or power tools necessary to build or rehabilitate homes.
The new investment that may be used to compute the tax credit shall not exceed the new investment used
for the first one hundred forty thousand dollars of value for each unit. In determining the tax credit, new investment
financed through federal, state, and local government tax credits, grants, and forgivable loans shall not be included.
The tax credit may be used to reduce tax liabilities imposed under Iowa Code chapter 422, Division II,
Division III or Division V or under Iowa Code chapter 432. Any credit in excess of the tax liability for the tax year
may be credited to the tax liability for the following seven years or until depleted, whichever occurs earlier. If the
business is a partnership, subchapter S corporation, limited liability company, or estate or trust electing to have the
income taxed directly to the individual, an individual may claim the tax credit allowed. The amount claimed by the
individual shall be based upon the pro-rata share of the individual's earnings of the partnership, subchapter S
corporation, limited liability company, or estate or trust.
Transferable replacement tax credit certificates may be issued by the Department to projects as described
in Iowa Administrative Code 59.8(2)a.(8) and Iowa Administrative Code 59.8(2)a.(9):
(i) Approved housing development projects using low-income housing tax credits authorized under
Section 42 of the Internal Revenue Code and as described in Iowa Administrative Code
59.8(2)a.(8).
(ii) Approved housing development projects located in a brownfield site as defined in section 15.291 or
housing development projects located in a blighted area as defined in section 403.17 and as
described in Iowa Administrative Code 59.8(2)a.(9). The Department shall not issue more than
three million dollars worth of transferable tax credits for housing developments that are located in a
brownfield site as defined in section 15.291 or housing developments located in a blighted area as
defined in section 403.17 in a calendar year. The Department shall not issue more than one million
five hundred thousand dollars in tax credit certificates for transfer to any one eligible housing
Format revised 10/2005
EZ Agreement # 09-HEZ-009
Page 3
business assisted in a Brownfield site as defined in section 291 or in a blighted area as defined in
section 403.17.
(b) Refund Of Sales. Service And Use Taxes Paid To Contractors Or Subcontractors The Housing
Business is eligible for a refund of sales, service and use taxes paid by an eligible business, including an eligible
business acting as a contractor or subcontractor as authorized in Iowa Code section 15.331A.
(i) The Housing Business may apply for a refund of the sales and use taxes paid under Iowa Code
chapters 422 and 423 for gas, electricity, water or sewer utility services, goods, wares, or
merchandise, or on services rendered, furnished, or performed to or for a contractor or
subcontractor and used in the fulfillment of a written contract relating to the construction or
rehabilitation of the units within the Enterprise Zone.
(ii) Taxes attributable to intangible property and furniture and furnishings shall not be refunded.
To receive a refund of the sales, service and use taxes paid to contractors or subcontractors, the Housing
Business must, within one year after Project Completion, make an application to the IDR.
2.2 Duration Of Benefits. The Enterprise Zone designation shall remain in effect for ten years following
the date of certification. Any state incentives or assistance that may be conferred must be conferred before the
designation expires. However, the benefits of the incentive or assistance may continue beyond the expiration of
the Enterprise Zone designation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUSINESS
To induce the Department and the Community to authorize Enterprise Zone benefits referred to in this
Agreement, the Housing Business represents, covenants and warrants that:
3.1 Authority. The Housing Business is a corporation duly organized and validly existing under the
laws of its state of incorporation and is in good standing, and has complied with all applicable laws of the State of
Iowa. The Housing Business is duly authorized and empowered to execute and deliver this Agreement. All action
on the Housing Business' part (e.g. where required, appropriate resolution of its Board of Directors) for the
execution and delivery of this Agreement, has been effectively taken.
3.2 Business Information. All written financial statements and related materials concerning the
Housing Business and the Project provided to the Department and the Community are true and correct in all
material respects and completely and accurately represent the subject matter thereof as of the effective date of the
statements and related materials, and no material adverse change has occurred since that date.
3.3 Application. The contents of the application the Housing Business submitted to the Department for
Enterprise Zone program benefits (Attachment A) is a complete and accurate representation of the Housing
Business and the Project as of the date of submission and there has been no material adverse change in the
organization, operation, business prospects, fixed properties or key personnel of the Housing Business since the
date the Housing Business submitted its application to the Department. The application and any requested changes
must be approved in writing by the local enterprise zone commission prior to acceptance by the Department.
3.4 Claims And Proceedings. There are no actions, lawsuits or proceedings pending or, to the
knowledge of the Housing Business, threatened against the Housing Business affecting in any manner whatsoever
its rights to execute this Agreement or to otherwise comply with the obligations of the Housing Business contained
under this Agreement. There are no actions, lawsuits or proceedings at law or in equity, or before any
governmental or administrative authority pending or, to the knowledge of the Housing Business, threatened against
the Housing Business or affecting the Housing Business' ability to proceed with the Project.
3.5 Permits. All necessary permits have been issued or will be applied for in a timely manner with
reasonable expectation that they will be issued.
Format revised 10/2005
EZ Agreement # 09-HEZ-009
Page 4
ARTICLE IV
CONDITIONS TO RECEIPT OF ENTERPRISE ZONE BENEFITS
The Enterprise Zone Benefits authorized under Article II of this Agreement are available to the Housing
Business provided the Housing Business, (and where applicable, the Community) satisfies each of the following
conditions:
4.1 Build or Rehabilitate. The Housing Business must rehabilitate 4multi-family units in the Dubuque
EZ-1A Enterprise Zone.
4.2 Modest Homes. The single-family homes and dwelling units which are rehabilitated or constructed
by the Housing Business shall be modest homes or units, but shall include the necessary amenities. When
completed and made available for occupancy, the single-family homes and dwelling units shall meet the United
Sates Department of Housing and Urban Development's housing quality standards and local safety standards.
4.3 Completed within Two Years. The Housing Business shall complete its building or rehabilitation
within two years from the time the Housing Business begins construction or rehabilitation of the units described in
Section 4.1.
4.4 Records And Accounts. The Housing Business shall maintain information, books, records,
documents and other evidence concerning the Project, in sufficient detail to permit the Department and the
Community to assess compliance with the terms of this Agreement. The Housing Business shall retain the
aforementioned records for a period of three (3) years from the Agreement Expiration Date.
4.5 Access To Records/Inspections. The Housing Business shall, upon prior reasonable notice and at
any time (during normal business hours), permit the Community and its representatives and the Department, its
representatives or the State Auditor to examine, audit and/or copy:
(i) any plans and work details pertaining to the Project,
(ii) all of the Housing Business' books, records and accounts relating to the Project, and
(iii) all other documentation or materials related to this Agreement.
The Housing Business shall provide proper facilities for making such examination and/or inspection.
Records of the Housing Business furnished to the Department in connection with this Project are subject to the
provisions of Iowa Code chapter 22 and administrative rules adopted by the Department concerning public records
and requests for confidential treatment of records.
4.6 Notice Of Proceedings. The Housing Business shall promptly notify the Community and IDED of
the initiation of any claims, lawsuits, bankruptcy proceedings or other proceedings brought against the Housing
Business which would adversely impact the Project.
4.7 Reports: Community Monitoring/Reporting.
(a) The Housing Business shall prepare, sign and submit the following reports:
Report Due Date
Annual Certification January 30
The Housing Business shall, for the length of its designation as an Enterprise Zone business, certify
annually to the Community and the Department its compliance with the requirements of the Act. The Housing
Business shall use the form provided by the Department for its annual certification. Documentation of compliance
with the conditions detailed in Article IV shall be included with the annual certification.
Format revised 10/2005
EZ Agreement # 09-HEZ-009
Page 5
4.8 Notice Of Business Changes. The Housing Business shall provide prompt advance notice to the
Community and the Department of any proposed change in the Housing Business ownership, structure or control
which would materially and directly affect the Project.
ARTICLE V
DEFAULT AND REPAYMENT
5.1 Events Of Default. Enterprise Zone benefits described in Article II are only available to the Housing
Business to the extent the Housing Business satisfies the conditions described in Article IV. Any of the following
shall constitute an Event of Default under this Agreement:
(a) Material Misrepresentation. If at any time any representation, warranty or statement made or
furnished to the Department or the Community by, or on behalf of, the Housing Business in connection with this
Agreement shall be determined by the Department to be incorrect, false, misleading or erroneous in any material
respect when made or furnished.
(b) Breach Of Agreement. If there is a failure of the Housing Business to comply with any of the
covenants, terms or conditions contained in this Agreement.
(c) Relocation Or Abandonment. If there is an abandonment of the Project and the Housing Business
fails to renew the Project within the Enterprise Zone within 30 days. If the relocation or abandonment is due to a
natural disaster (e.g. flood, tornado), the Housing Business shall have 120 days to renew the Project within the
Enterprise Zone.
(d) Insolvency Or Bankruptcy. If the Housing Business becomes insolvent or bankrupt, or admits in
writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors, or the
Housing Business applies for or consents to the appointment of a trustee or receiver for the Housing Business or
for the major part of its property; or if a trustee or receiver is appointed for the Housing Business or for all or a
substantial part of the assets of the Housing Business and the order of such appointment is not discharged,
vacated or stayed within sixty (60) days after such appointment; or if bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceedings or other proceedings for relief under any bankruptcy or similar law or laws for
the relief of debtors, are instituted by or against the Housing Business and, if instituted against the Housing
Business, is consented to, or, if contested by the Housing Business is not dismissed by the adverse parties or by
an order, decree or judgment within sixty (60) days after such institution.
5.2 Notice Of Default.
(a) From Department. If, through the annual certification report or other means, the Department has
reason to believe the Housing Business is in default of the terms of this Agreement, the Department will issue a
written notice of default to the Housing Business, setting forth the nature of the default in reasonable specificity, and
providing therein a reasonable period of time, which shall not be less than 30 days from the date of the notice of
default, in which the Housing Business shall have an opportunity to cure, provided that cure is possible and
feasible. A copy of any Notice of Default will also be provided to the Community and IDR.
(b) From Community. If, through monitoring, auditing or other means, the Community has reason to
believe the Housing Business is in default of the terms of this Agreement, the Community will issue a written notice
of default to the Housing Business, setting forth the nature of the default in reasonable specificity, and providing
therein a reasonable period of time, which shall not be less than 30 days from the date of the notice of default, in
which the Housing Business shall have an opportunity to cure, provided that cure is possible and feasible. A copy
of any Notice of Default will also be provided to the Department and IDR.
5.3 Repayment; Loss of Benefits.
Format revised 10/2005
EZ Agreement # 09-HEZ-009
Page 6
(a) Failure to meet/maintain requirements. If the Housing Business fails in any year to meet or
maintain any one of the requirements of the Act, the Housing Business shall repay the value of the incentives
received for each year during which it was not in compliance.
(b) IDR recovery. Once it has been established, through the Housing Business' annual certification,
monitoring, audit or otherwise, that the Housing Business is required to repay all or a portion of the incentives
received, the IDR shall collect the amount owed. IDR has the authority, pursuant to the Act, to recover the value of
state taxes or incentives provided under the Act. The value of state incentives provided under the Act includes
applicable interest and penalties.
ARTICLE VI
GENERAL TERMS AND PROVISIONS
6.1 Compliance With Laws And Regulations. The Housing Business shall comply with all applicable
State and federal laws, rules (including the administrative rules adopted by the Department for the Enterprise Zone
Program - 261 Iowa Administrative Code, chapter 59), ordinances, regulations and orders.
6.2 Termination. This Agreement may be terminated by the Department or the Community: (a) in the
event of an unremedied material Event of Default by the Housing Business under Article V of this Agreement; or (b)
by mutual agreement of all parties.
6.3 Survival OfAareement. If any portion of this Agreement is held to be invalid or unenforceable, the
remainder shall be valid and enforceable.
6.4 Governing Law. This Agreement shall be interpreted in accordance with the law of the State of
Iowa, and any action relating to this Agreement shall only be commenced in the Iowa District Court for Polk County
or the United States District Court for the Southern District of Iowa.
6.5 Modification. This Agreement may only be modified by a written document signed by all Parties.
6.6 Notices. Whenever this Agreement requires or permits any notice or written request by one party
to another, it shall be in writing, enclosed in an envelope, addressed to the party to be notified at the address
heretofore stated (or at such other address as may have been designated by written notice), properly stamped,
sealed and deposited in the United States Mail. Any such notice given hereunder shall be deemed delivered upon
the earlier of actual receipt or three (3) business days after posting. The Department may rely on the addresses of
the Housing Business and Community set forth heretofore, as modified from time to time, as being the addresses of
the Community and Housing Business.
6.7 Waivers.. No waiver by a party of any Event of Default hereunder shall operate as a waiver of any
other Event of Default or of the same Event of Default on any future occasion. No delay on the part of a party in
exercising any right or remedy hereunder shall operate as a waiver thereof. No single or partial exercise of any
right or remedy by a party shall preclude future exercise thereof or the exercise of any other right or remedy.
6.8 Headings. The headings in this Agreement are intended solely for convenience of reference and
shall be given no effect in the construction and interpretation of this Agreement.
6.9 Integration. This Agreement contains the entire understanding between the Community, Housing
Business and the Department and any representations that may have been made before or after the signing of this
Agreement, which are not contained herein, are nonbinding, void and of no effect. None of the parties have relied
on any such prior representation in entering into this Agreement.
6.10 Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.
Format revised 10/2005
EZ Agreement # 09-HEZ-009
Page 7
6.11 Document Incorporated By Reference. The following document is hereby incorporated by
reference:
(a) Attachment A, "Housing Business' Enterprise Zone Application." Due to its size, Attachment A will
not be attached to this Agreement, but will be kept on file at the Iowa Department of Economic
Development. It shall, nevertheless, be considered an incorporated element of this Agreement.
6.12 Order Of Priority. In the event of a conflict between documents of this Agreement, the following
order of priority shall govern:
(a) Articles 1 through 6 herein.
(b) Attachment A, "Housing Business' Enterprise Zone Application."
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date
first stated:
FOR THE COMMUNITY: FOR IDED:
City of Dubuque
Signature
Michael Miller, Investment Management
Type or Print Name, Title
FOR THE HOUSING BUSINESS:
Greenfield Development LLC
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~ype or Print Name, Title
Format revised 10/2005
ATTACHMENT A
Housing Business' Enterprise Zone Application
Due to its size, Attachment A will not be attached to this Agreement, but will be kept on file at the Iowa Department
of Economic Development. It shall, nevertheless, be considered an incorporated element of this Agreement.
HEZ Format revised 3/2008