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Morrison Brothers DevelopmentTHE CITY OF DUBUQUE Masterpiece on the Mississippi Dubuque All-American City 2007 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Expansion of Morrison Bros. Company at the East Seventh Street Facility DATE: October 1, 2008 Economic Development Director Dave Heiar is recommending approval of a Development Agreement with Morrison Brothers for expansion of their East Seventh Street facility. City staff has worked with the Greater Dubuque Development Corporation and Morrison Bros. Company on an expansion at the East Seventh Street Facility. Morrison Bros. Company intends to expand its manufacturing, engineering, and research and development functions. They have committed to retaining the current 88 positions, and adding at least 10 new jobs at the facility. The key elements of the agreement are: 1) The company must expanded its manufacturing facility including warehouse, office, and Engineering and Research and Development Tech Center along with necessary site work and equipment as contemplated in this Agreement at an estimated cost of approximately $3,825,000. 2) Morrison Bros. Company must retain 88 positions and create 10 new jobs within three years. The 98 jobs must be retained for the length of the agreement. 3) The Company will receive an 8-year TIF in the form of a yearly tax rebate on the value of the assessable improvements. I concur with the recommendation and respectfully request Mayor and City Council approval. MCVM/jh Attachment ~~ Michael C. Van Milligen cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager David J. Heiar, Economic Development Director THE CITY OF DUB E Masterpiece on the Mississippi DATE: September 30, 2008 TO: Michael Van Milligen, City Manager Dubuque 2007 FROM: David J. Heiar, Economic Development Directo~~ SUBJECT: Expansion of Morrison Bros. Company at the East Seventh Street Facility INTRODUCTION This memorandum presents for City Council consideration a Resolution approving a Development Agreement with Morrison Bros. Company, who will be expanding their operations at the East Seventh Street Facility. The attached Resolution approves the Development Agreement. BACKGROUND City staff has worked with the Greater Dubuque Development Corporation and Morrison Bros. Company on an expansion at the East Seventh Street Facility. Morrison Bros. Company intends to expand its manufacturing, engineering, and research and development functions. They have committed to retaining the current 88 positions, and adding at least 10 new jobs at the facility. Morrison Bros. has applied for and received approval of Enterprise Zone benefits for the project. The State has committed to providing an investment tax credit, sales and use tax rebate, and a research and development tax credit. A CEBA award was also approved by the Iowa Dept. of Economic Development totaling $40,000. DISCUSSION The proposed Development Agreement provides for a tax rebate to the Company. A 8-year tax rebate has been offered to the company to assist in their expansion and relocation. This is different from many previous development agreements which provided a 10 year rebate. The Urban Renewal District will expire in 2018 and therefore, it is only possible to provide for an 8 year rebate. The rebate is a form of tax increment financing without issuing a tax increment finance bond to loan monies to the company upfront. As the company pays its future tax obligation on the new improvements, the City will rebate 100% (minus debt service and the School District Physical Plant and Equipment Levy) of the new TIF increment for 8 years. The attached Development Agreement establishes the terms of the agreement with Morrison Bros. Company. The key elements of the agreement include the following: 1) The company must expanded its manufacturing facility including warehouse, office, and Engineering and Research and Development Tech Center along with necessary site work and equipment as contemplated in this Agreement at an estimated cost of approximately $3,825,000. 2) Morrison Bros. Company must retain 88 positions and create 10 new jobs within three years. The 98 jobs must be retained for the length of the agreement. 3) The Company will receive an 8 year TIF in the form of a yearly tax rebate on the value of the assessable improvements. Additional terms and conditions of the disposition of the property are included within the attached Development Agreement. RECOMMENDATION I recommend that the City Council approve the attached Development Agreement with Morrison Bros. Company for the purpose of expanding their operations at the East Seventh Street Facility. This action supports the Council's objectives to assist a local business expand its operations and create new jobs. ACTION STEP The action step for the City Council is to adopt the attached Resolution. F:\USERS\DHeiar\Morrison Bros\Council memo to MVM.doc RESOLUTION NO. A RESOLUTION APPROVING A DEVELOPMENT AGREEMENT FOR THE EXPANSION OF MORRISON BROS. COMPANY AT THE EAST SEVENTH STREET FACILITY. Whereas, it is the determination of this Council that approval of the Development Agreement for the expansion of Morrison Bros. Company's operations in Dubuque according to the terms and conditions set out in the Development Agreement is in the public interest of the City of Dubuque. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the Development Agreement with Morrison Bros. Company is hereby accepted and approved. Section 2. That the Mayor is hereby authorized to execute, on behalf of the City Council of the City of Dubuque, Iowa, the attached Development Agreement with Morrison Bros. Company. Passed, approved and adopted this 6th day of October, 2008. Roy D. Buol, Mayor Attest: Jeanne F. Schneider, City Clerk F:\USERS1DHeiar\Morrison Bros\20081006 DA Resolution.doc DEVELOPMENT AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA, AND MORRISON BROS. COMPANY This Agreement, dated for reference purposes the day of 2008 (Effective Date), by and between the City of Dubuque, Iowa, a municipality (City), established pursuant to the Iowa Code and acting under authorization of Iowa Code Chapter 403, as amended (the Urban Renewal Act), and Morrison Bros. Company, an Iowa corporation with its principal place of business in Dubuque, Iowa (Developer). WITNESSETH: WHEREAS, in furtherance of the objectives of the Urban Renewal Act, City has undertaken an Urban Renewal project (the Project) to advance the community's ongoing economic development efforts; and WHEREAS, the Project is located within the East 7th Street Economic Development District (the Project Area); and WHEREAS, as of the date of this Agreement there has been prepared and approved by City the Urban Renewal Plan for the Project Area consisting of the Urban Renewal Plan for the East 7th Street Economic Development District, approved by the City Council of City by Resolution 144-97 on April 7, 1997, and is on file at the office of the Economic Development Department, City Hall, 13th and Central Avenue, Dubuque, Iowa; and WHEREAS, a copy of the Urban Renewal Plan, as amended, is attached hereto as Exhibit C and has been filed of record with the Dubuque County Recorder on ,2008, as instrument No. WHEREAS, Developer has decided to expand its operations in the Project Area; and WHEREAS, City believes that the development of the Property pursuant to this Agreement, and the fulfillment generally of this Agreement, are in the vital and best interests of City and in accord with the public purposes and provisions of the applicable federal, state and local laws and the requirements under which the Project has been undertaken and is being assisted. NOW THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree as follows: 100108ba1Fina1 SECTION 1. DEVELOPMENT ACTIVITIES 2.1 Required Minimum Improvements. City acknowledges that Developer is expanding its manufacturing facility on the Property, specifically for, warehouse, office, Engineering, and Research and Development facilities, without limitation, and all interior improvements (the Minimum Improvements). Minimum Improvements shall include an expanded manufacturing facility including warehouse, office, and Engineering and Research and Development Tech Center along with necessary site work and equipment as contemplated in this Agreement, at an estimated cost of approximately $3,825,000. 2.2 Plans for Construction of Minimum Improvements. Plans and specifications with respect to the development of Property and the construction of the Minimum Improvements thereon (the Construction Plans) shall be in conformity with the Urban Renewal Plan, this Agreement, and all applicable state and local laws and regulations, including but not limited to any covenants, conditions, restrictions, reservations, easements, liens and charges, applicable to the Property, all recorded with the Dubuque County Recorder's office. Developer shall submit to City, for approval by City, plans, drawings, specifications, and related documents with respect to the improvements to be constructed by Developer on the Property. All work with respect to the Minimum Improvements shall be in substantial conformity with the Construction Plans approved by City. 2.3 Timing of Improvements. Developer hereby agrees that construction of the Minimum Improvements on the Property shall be commenced within three (3) months after the Closing Date, and shall be substantially completed by December 31, 2009. For purposes of this section, "substantial completion" shall mean completion of the site work and completion of the core and shell of the building, but shall not include fixtures and equipment, and does not contemplate receipt of a certificate of occupancy. The time frames for the performance of these obligations shall be suspended due to unavoidable delays, meaning delays, outside the control of the party claiming its occurrence in good faith, which are the direct result of strikes, other labor troubles, unusual shortages of materials or labor, unusually severe or prolonged bad weather, acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action or by the exercise of reasonable discretion directly results in delays, or acts of any federal, state or local government which directly result in delays. The time for pertormance of such obligations shall be extended only for the period of such delay. 2.4 Certificate of Completion. Promptly following the request of Developer upon completion of the Minimum Improvements, City shall furnish Developer with an appropriate instrument so certifying. Such certification (the Certificate of Completion) shall be in recordable form and shall be a conclusive determination of the satisfaction and termination of the agreements and covenants in this Agreement and in the Deed with respect to the obligations of Developer to construct Minimum 2 Improvements. The Certificate of Completion shall waive all rights of re-vestment of title in City as provided in Section 5.3, and the Certificate of Completion shall so state. SECTION 3. CITY PARTICIPATION 3.1 Economic Development Grant. (1) For and in consideration of Developer's obligations hereunder, and in furtherance of the goals and objectives of the Urban Renewal Plan for the Project Area and the Urban Renewal Law, City agrees, subject to Developer being in compliance with the terms of this Agreement, to make sixteen (16) consecutive semi-annual payments (such payments being referred to collectively as the Economic Development Grants) to Developer if Developer owns or leases the Property and/or the Minimum Improvements thereon during the period such tax increment revenues accrue, as follows: November 1, 2010 May 1, 2011 November 1, 2011 May 1, 2012 November 1, 2012 May 1, 2013 November 1, 2013 May 1, 2014 November 1, 2014 May 1, 2015 November 1, 2015 May 1, 2016 November 1, 2016 May 1, 2017 November 1, 2017 May 1, 2018 pursuant to Iowa Code Section 403.9 of the Urban Renewal Law, in amounts equal to the portion of the tax increment revenues collected by City described below under Iowa Code Section 403.19 (without regard to any averaging that may otherwise be utilized under Iowa Code Section 403.19 and excluding any interest that may accrue thereon prior to payment to Developer) during the preceding six-month period in respect of the Minimum Improvements constructed by Developer (the Developer Tax Increments). For purposes of calculating the amount of the Economic Development Grants provided in this Section, the Developer Tax Increments shall be only those tax increment revenues collected by the City in respect of the increase in the assessed value of the Property above the assessment of January 1, 2008 ($1,824,400). The Developer Tax Increments shall not include (i) any property taxes collected for the payment of bonds and interest of each taxing district, (ii) any taxes for the regular and voter-approved physical plant and equipment levy, (iii) the remaining actual amount of tax increment revenues collected by the City in respect of the valuations of the Property prior to January 1, 2009 and (iv) any other portion required to be excluded by Iowa law, and thus such incremental taxes will not include all amounts paid by Developer as regular property taxes. 3 (2) To fund the Economic Development Grants, City shall certify to the County prior to December 1 of each year, commencing December 1, 2009, its request for the available Developer Tax Increments resulting from the assessments imposed by the County as of January 1 of that year, to be collected by City as taxes are paid during the following fiscal year and which shall thereafter be disbursed to Developer if Developer (or a subsequent owner reasonably approved by City) owns or leases the Property and/or Improvements thereon during the period such tax increment revenues accrue, on November 1 and May 1 of that fiscal year. (Example: if City so certifies by December, 2009, the Economic Development Grants in respect thereof would be paid to Developer on November 1, 2010, and May 1, 2011.) (3) The Economic Development Grants shall be payable from and secured solely by the Developer Tax Increments paid to City that, upon receipt, shall be deposited and held in a special account created for such purpose and designated as the "Morrison Bros. II TIF Account" of City. City hereby covenants and agrees to maintain its TIF ordinance in force during the term and to apply the incremental taxes collected in respect of the Property and Minimum Improvements and allocated to the Morrison Bros. II TIF Account to pay the Economic Development Grants, as and to the extent set forth in Section 3.2(1) hereof. The Economic Development Grants shall not be payable in any manner by other tax increments revenues or by general taxation or from any other City funds. City makes no representation with respect to the amounts that may be paid to Developer as the Economic Development Grants in any one year and under no circumstances shall City in any manner be liable to Developer so long as City timely applies the Developer Tax Increments actually collected to the Morrison Bros. II TIF Account (regardless of the amounts thereof) for the payment of the Economic Development Grants to Developer as and to the extent described in this Section. (4) City shall be free to use any and all tax increment revenues collected in respect of other properties within the Project Area, or any available Developer Tax Increments resulting from the termination of the annual Economic Development Grants under Section 3.1 hereof, for any purpose for which such tax increment revenues may lawfully be used pursuant to the provisions of the Urban Renewal Law, and City shall have no obligations to Developer with respect to the use thereof. SECTION 4. COVENANTS OF DEVELOPER 4.1 Job Creation. Developer shall create ten (10) full-time jobs in Dubuque, Iowa prior to June 1, 2011, and shall maintain those jobs during the term of this Agreement. It is agreed by the parties that Developer has eighty-eight (88) full time positions in Dubuque, Iowa as of June 1, 2008. In the event that any certificate provided to City under Section 4.2 hereof discloses that Developer does not as of 4 that date have at least 98 employees as provided hereinabove, the semi-annual Economic Development Grants for such year under Section 3.2 shall be reduced by the percentage that the number of such positions bears to the total number of positions required to be created and maintained (98 jobs) by this Section 4.1. (For example, if Developer has 90 jobs, the semi-annual Economic Development Grants would be 91.83% (90/98 employees) of the available Developer Tax Increment received by City). The reduction of the semi-annual Economic Development Grants shall be City's sole remedy for the failure of Developer to meet the job creation requirements of this subsection 4.1. 4.2 Certification. To assist City in monitoring the performance of Developer hereunder, not later than June 1, 2012, and not later than June 1 of each year thereafter during the term of this Agreement, a duly authorized officer of Developer shall certify to City in a form acceptable to City (a) the number of full time jobs maintained by Developer during the prior year in Dubuque, Iowa, and (b) to the effect that such officer has re-examined the terms and provisions of this Agreement and that at the date of such certificate, and during the preceding twelve (12) months, Developer is not or was not in default in the fulfillment of any of the material terms and conditions of this Agreement and that no Event of Default (or event which, with the lapse of time or the giving of notice, or both, would become an Event of Default) is occurring or has occurred as of the date of such certificate or during such period, or if the signer is aware of any such default, event or Event of Default, said officer shall disclose in such statement the nature thereof, its period of existence and what action, if any, has been taken or is proposed to be taken with respect thereto. Such certificate shall be provided not later than July 1, 2012, and by July 1 of each year thereafter during the term of this Agreement. 4.3 Books and Records. During the term of this Agreement, Developer shall keep at all times and make available to City upon reasonable request proper books of record and account in which full, true and correct entries will be made of all dealings and transactions of or in relation to the business and affairs of Developer related to the Project in accordance with generally accepted accounting principles consistently applied throughout the period involved, and Developer shall provide reasonable protection against loss or damage to such books of record and account. City's agreement to Developer's reasonable confidentiality requirements (including, without limitation, the execution of a commercially reasonable confidentiality agreement) is a condition precedent to City's review and inspection rights under this Section 4.3. 4.4 Real Property Taxes. From and after the Closing Date, Developer shall pay or cause to be paid, when due, all real property taxes and assessments payable with respect to all and any parts of the Property unless Developer's obligations have been assumed by another person or entity pursuant to the provisions of this Agreement. 5 4.5 No Exemptions. During the term of this Agreement, and except as otherwise permitted by this Agreement, Developer agrees not to apply for any state or local property tax exemptions which are available with respect to the Development Property or the Minimum Improvements located thereon that may now be, or hereafter become, available under state law or city ordinance during the term of this Agreement, including those that arise under Iowa Code Chapters 404 and 427, as amended. 4.6 Insurance Requirements. (1) Developer shall provide and maintain or cause to be maintained at all times during the process of constructing the Minimum Improvements (and, from time to time at the request of City, furnish City with proof of insurance in the form of a certificate of insurance for each insurance policy): All risk builder's risk insurance, written on a Completed Value Form in an amount equal to one hundred percent (100%) of the replacement value when construction is completed; (2) Upon completion of construction of the Minimum Improvements and up to the Termination Date, Developer shall maintain, or cause to be maintained, at its cost and expense (and from time to time at the request of City shall furnish proof of insurance in the form of a certificate of insurance) insurance as follows: All risk property insurance against loss and/or damage to Minimum Improvements under an insurance policy written in an amount not less than the full insurable replacement value of Minimum Improvements. The term "replacement value" shall mean the actual replacement cost of the Minimum Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be evaluated for reasonable replacement value from time to time at the request of City, but not more frequently than once every three (3) years. (3) Developer shall notify City immediately in the case of damage exceeding $500,000.00 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. Net proceeds of any such insurance (Net Proceeds), shall be paid directly to Developer as its interests may appear, and Developer shall forthwith repair, reconstruct and restore the Minimum Improvements to substantially the same or an improved condition or value as they existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, Developer shall apply the Net Proceeds of any insurance relating to such damage received by Developer to the payment or reimbursement of the costs thereof, subject, however, to the terms of any mortgage encumbering title to the Property (as its interests may appear). Developer shall complete the repair, reconstruction and restoration 6 of Minimum Improvements whether or not the Net Proceeds of insurance received by Developer for such Purposes are sufficient. 4.7 Preservation of Property. During the term of this Agreement, Developer shall maintain, preserve and keep, or cause others to maintain, preserve and keep, the Minimum Improvements in good repair and working order, ordinary wear and tear excepted, and from time to time shall make all necessary repairs, replacements, renewals and additions. Nothing in this Agreement, however, shall be deemed to alter any agreements between Developer or any other party including, without limitation, any agreements between the parties regarding the care and maintenance of the Property. 4.8 Non-Discrimination. In carrying out the project, Developer shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, sexual orientation, national origin, age or disability. 4.9 Conflict of Interest. Developer agrees that no member, officer or employee of City, or its designees or agents, nor any consultant or member of the governing body of City, and no other public official of City who exercises or has exercised any functions or responsibilities with respect to the project during his or her tenure, or who is in a position to participate in adecision-making process or gain insider information with regard to the project, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the project, or in any activity, or benefit therefrom, which is part of this project at any time during such person's tenure. In connection with this obligation, Developer shall have the right to rely upon the representations of any party with whom it does business and shall not be obligated to perform any further examination into such party's background. 4.10 Non-Transferability. (1) Until such time as the Minimum Improvements are complete (as certified by City under Section 2.4), and except as permitted by Section 4.10(2), this Agreement may not be assigned by Developer nor may the Property be transferred by Developer to another party without the prior written consent of City, which shall not be unreasonably withheld. Thereafter, Developer shall have the right to assign this Agreement (including, specifically, the Economic Development Grant rights contained in Section 3), and upon assumption of the Agreement by the assignee, Developer shall no longer be responsible for its obligations under this Agreement. (2) Upon notice to, but without the consent of, City, Developer may assign this Agreement to any entity controlling, controlled by, or under common control with Developer. 7 (3) Notwithstanding the foregoing, Developer may desire to exchange other property of like kind and qualifying use within the meaning of Section 1031 of the Internal Revenue Code for fee title in the Property. Developer expressly reserves the right to assign its rights, but not its obligations, hereunder to a Qualified Intermediary as provided in I.R.C. Regulation 1.1031(k)-1(g)(4) either before or after the Closing Date, subject to the approval of City, which approval will not be unreasonable withheld. 4.11 Restrictions on Use. Developer agrees for itself, and its successors and assigns, and every successor in interest to the Property or any part thereof that they, and their respective successors and assigns, shall: (1) Devote the Property to, and only to and in accordance with, the uses specified in the Urban Renewal Plan and City represents and agrees that use of the Property as a manufacturing facility as defined in section 2.1 is in full compliance with the Urban Renewal Plan) (however, Developer shall not have any liability to City to the extent that a successor in interest shall breach this covenant and City shall seek enforcement of this covenant directly against the party in breach of same); and (2) Not discriminate upon the basis of race, religion, color, sex, sexual orientation, national origin, age or disability in the sale, lease, rental, use or occupancy of the Property or any improvements erected or to be erected thereon, or any part thereof (however, Developer shall not have any liability to City to the extent that a successor in interest shall breach this covenant and City shall seek enforcement of this covenant directly against the party in breach of same). 4.12 Release and Indemnification Covenants. (1) Developer releases City and the governing body members, officers, agents, servants and employees thereof (hereinafter, for purposes of this Section, the Indemnified Parties) from, covenants and agrees that the Indemnified Parties shall not be liable for, and agree to indemnify, defend and hold harmless the Indemnified Parties against, any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements. (2) Except for any gross negligence, willful misrepresentation or any willful or wanton misconduct or any unlawful act of the Indemnified Parties, Developer agrees to protect and defend the Indemnified Parties, now or forever, and further agrees to hold the Indemnified Parties harmless, from any claim, demand, suit, action or other proceedings whatsoever by any person or entity whatsoever arising or purportedly arising from (1) any violation of any agreement or condition of this Agreement (except with respect to any suit, action, demand or other proceeding brought by 8 Developer against City based on an alleged breach of any representation, warranty or covenant of City under this Agreement and/or to enforce its rights under this Agreement); or (2) the acquisition, construction, installation, ownership, and operation of the Minimum Improvements; or (3) the condition of the Property and any hazardous substance or environmental contamination located in or on the Property, caused and occurring after Developer takes possession of the Property. (3) The Indemnified Parties shall not be liable to Developer for any damage or injury to the persons or property of Developer or its officers, agents, servants or employees or any other person who may be on, in or about the Minimum Improvements due to any act of negligence of any person, other than any act of negligence on the part of any such Indemnified Party or its officers, agents, servants or employees. (4) All covenants, stipulations, promises, agreements and obligations of City contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of City, and not of any governing body member, officer, agent, servant or employee of City in their individual capacity thereof. (5) The provisions of this Section shall survive the termination of this Agreement. 4.13 Compliance with Laws. Developer shall comply with all laws, rules and regulations relating to its businesses, other than laws, rules and regulations for which the failure to comply with or the sanctions and penalties resulting therefrom, would not have a material adverse effect on the business, property, operations, financial or otherwise, of Developer. SECTION 5. EVENTS OF DEFAULT AND REMEDIES 5.1 Events of Default Defined. The following shall be Events of Default under this Agreement and the term Event of Default shall mean, whenever it is used in this Agreement, any one or more of the following events: (1) Failure by Developer to pay or cause to be paid, before delinquency, all real property taxes assessed with respect to the Minimum Improvements and the Property. (2) Failure by Developer to cause the construction of the Minimum Improvements to be commenced and completed pursuant to the terms, conditions and limitations of this Agreement. 9 (3) Transfer of any interest by Developer of the Minimum Improvements in violation of the provisions of this Agreement prior to the issuance of the final Certificate of Completion. (4) Failure by Developer or City to substantially observe or perform any other material covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement. 5.2. Remedies on Default by Developer. Whenever any Event of Default referred to in Section 5.1 of this Agreement occurs and is continuing, City, as specified below, may take any one or more of the following actions after the giving of written notice by City to Developer (and the holder of any mortgage encumbering any interest in the Property of which City has been notified of in writing) of the Event of Default, but only if the Event of Default has not been cured within sixty (60) days following such notice, or if the Event of Default cannot be cured within sixty (60) days and Developer does not provide assurances to City that the Event of Default will be cured as soon as reasonably possible thereafter: (1) City may suspend its performance under this Agreement until it receives assurances from the defaulting party deemed adequate by City, that the defaulting party will cure its default and continue its performance under this Agreement; (2) Until the Closing Date, City may cancel and rescind this Agreement; (3) City may withhold the Certificate of Completion; or (4) City may take any action, including legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. 5.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to City is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 5.4 No Implied Waiver. In the event any agreement contained in this Agreement should be breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. 10 5.5 Agreement to Pay Attorneys' Fees and Expenses. If any action at law or in equity, including an action for declaratory relief or arbitration, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs of litigation from the other party. Such fees and costs of litigation may be set by the court in the trial of such action or by the arbitrator, as the case may be, or may be enforced in a separate action brought for that purpose. Such fees and costs of litigation shall be in addition to any other relief that may be awarded. 5.6 Remedies on Default by City. If City defaults in the performance of this Agreement, Developer may take any action, including legal, equitable or administrative action that may appear necessary or desirable to collect any payments due under this Agreement, to recover expenses of Developer, or to enforce performance and observance of any obligation, agreement, or covenant of City under this Agreement. Developer may suspend their performance under this Agreement until they receive assurances from City, deemed adequate by Developer, that City will cure its default and continue its performance under this Agreement. SECTION 6. GENERAL TERMS AND PROVISIONS 6.1 Notices and Demands. Whenever this Agreement requires or permits any notice or written request by one party to another, it shall be deemed to have been properly given if and when delivered in person or three (3) business days after having been deposited in any U.S. Postal Service and sent by registered or certified mail, postage prepaid, or one (1) business day after deposit with a nationally recognized overnight courier, addressed as follows: If to Developer: Morrison Bros. Company 325 E. 24th St. Dubuque, IA 52004-0238 Attention: Charlie Glab Phone: (563) 583-5701 Fax: (563) 583-5028 With copy to: John C. O'Connor, Attorney 700 Locust Street Suite 200Address Dubuque, Iowa 52001City, state zip Phone: 563-557-8400 Fax: 563-556-1867 e-mail: joconnor@octhomaslaw.com If to City: City Manager 50 W. 13th Street Dubuque, Iowa 52001 11 Phone: (563) 589-4110 Fax: (563) 589-4149 With copy to: City Attorney City Hall 50 W. 13t" Street Dubuque, IA 52001 or at such other address with respect to any party as that party may, from time to time designate in writing and forward to the other as provided in this Section. 6.2 Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of City, Developer and their respective successors and assigns. 6.3 Termination Date. This Agreement and the rights and obligations of the parties hereunder shall terminate on May 1, 2018 (the Termination Date). 6.4. Execution By Facsimile. The parties agree that this Agreement may be transmitted between them by facsimile. The parties intend that the faxed signatures constitute original signatures and that a faxed Agreement containing the signatures (original or faxed) of all the parties is binding on the parties. 6.5 Memorandum of Development Agreement. City shall promptly record a Memorandum of Development Agreement in the form attached hereto as Exhibit D in the office of the Recorder of Dubuque County, Iowa. Developer shall pay the costs for so recording. CITY OF DUBUQUE, IOWA By: By: Roy D. Buol, Mayor MORRISON BROS. COMPANY By: Jeanne F. Schneider, City Clerk Its 12 List of Exhibits Exhibit A No Exhibit A Exhibit B City Attorney Certificate Exhibit C Urban Renewal Plan Exhibit D Memorandum of Development Agreement Exhibit E City Certificate Exhibit F Opinion of Counsel to Developer 13 EXHIBIT B CITY ATTORNEY'S CERTIFICATE 14 BARRY A. LINDAHL, ESQ. CITY ATTORNEY (DATE) RE: Dear THE CTI'Y OF ~, DuB ~ E have acted as counsel for the City of Dubuque, Iowa, in connection with the execution and delivery of a certain Development Agreement between (Developer) and the City of Dubuque, Iowa (City) dated for reference purposes the day of , 20 The City has duly obtained all necessary approvals and consents for its execution, delivery and performance of this Agreement and has full power and authority to execute, deliver and perform its obligations under this Agreement, and to the best of my knowledge, the representations of the City Manager in his letter dated the day of , 20_, are correct. Very sincerely, Barry A. Lindahl, Esq. City Attorney BAL:tIs 15 EXHIBIT C URBAN RENEWAL PLAN 16 URBAN RENEWAL PLAN East 7th Street Economic Development District City of Dubuque, Iowa A. INTRODUCTION This URBAN RENEWAL PLAN (the "Plan") has been prepared pursuant to Resolution 144-97 of the City Council of the City of Dubuque as adopted on April 7, 1997. Its intent is to stimulate economic development activities within the EAST 7TH STREET ECONOMIC DEVELOPMENT DISTRICT (the "District") through the commitment of public actions as specified herein. To achieve this objective, the City of Dubuque shall undertake the urban renewal actions specified in this Plan, pursuant to the powers granted to it under Chapter 403 of the Iowa Code, Urban Renewal Law. B. OBJECTIVES OF THE PLAN The primary objectives of the Plan are the development and redevelopment of the District for economic development activities, through: 1. Provision of public infrastructure improvements supportive of full development of the District; Creation of financial incentives necessary to encourage new and existing businesses to invest in the District; and Expansion of the property tax base of the District. C. DISTRICT BOUNDARIES The District is located within the City of Dubuque, County of Dubuque, State of Iowa. The District shall consist of the real property legally described as follows: Block 13 Lot 1 of Lot 4, Lot 1 of Lot 5, Lot 1 of Lot 6, and Lots 7, 8, 9, 10, 11, 12, 13 and 14; Block 16 Lots 1, 2, 3, 4 and 5; and Block 17 Lots A, B, C, D, E, F, Lots 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, and 15, Lot 1 of Lot 16, Lot 1 of Lot 1 of Lot 17, Lot 2 of Lot 1 of Lot 18, Lot 2 of Lot 20, Lot 2 of Lot 21, Lot 2 of Lot 22, Lot 2 of Lot 23, Lot 2 of Lot 24, Lot 2 of Lot 25, Lot 2 of Lot 26, Lot 2 of Lot 27, Lot 3 of Lot 28, Lot 3 of Lot 29,Lot 3 of Lot 30, Lot 3 of Lot 31, Lot 3 of Lot 32 all in the Dubuque Harbor Improvement Co.'s Addition, Township 89 North, Range 3 East of the 5th P.M., Dubuque County, Iowa and any adjoining public right-of--way. The boundaries of the District are delineated on the URBAN RENEWAL DISTRICT map (Attachment A). The City of Dubuque reserves the right to modify the boundaries of the District at some future date. Any amendments to the Plan will be completed in accordance with Chapter 403 of the Iowa Code, Urban Renewal Law. D. PUBLIC PURPOSE ACTIVITIES To meet the OBJECTIVES of this Plan, the City of Dubuque is prepared to initiate and support development and redevelopment of the District through, among other things, the following PUBLIC PURPOSE ACTIVITIES: Improvement, installation, construction and reconstruction of streets, utilities and other 1~ improvements and rights-of--ways; Use of tax increment fmancing, loans, grants and other appropriate financial tools in support of eligible public and private development and redevelopment efforts; and Enforcement of applicable local, state and federal laws, codes and regulations. Public purpose activities are limited to those areas delineated on the PUBLIC PURPOSE ACTIVITY AREA map (Attachment B). All public purpose activities shall be conditioned upon and shall meet the restrictions and limitations placed upon the District by the Plan. E. DEVELOPMENT AND REDEVELOPMENT REQUIREMENTS The LAND USE and PLANNING AND DESIGN CRITERIA set forth herein shall apply to any and all District properties the development and/or the redevelopment of which is assisted by the City through any of the PUBLIC PURPOSE ACTIVITIES listed above. Land Use The intent of this Plan is to promote the development of industrial land uses within the District. All uses shall be regulated by the zoning district established for the property. LAND USE maps (Attachments C1 and C2) identify the existing and the proposed land uses within the District. Planning and Design Criteria The planning criteria to be used to guide the physical development of the District are those standards and guidelines contained within the City of Dubuque's Zoning Ordinance and other applicable local, state and federal codes and ordinances. F. LAND ACQUISITION Land Acquisition The City does not intend to acquire any property within the District. However, the City reserves the right to acquire, by negotiation or eminent domain, property rights required for the construction or reconstruction of streets and public utilities, or any other public facility or improvement. G. FINANCING ACTIVITIES To meet the OBJECTIVES of this Plan and to encourage the development of the District and private investment therein, the City of Dubuque is prepared to provide financial assistance to qualified industries and businesses through the making of loans or grants under Chapter 15A of the Iowa Code and through the use of tax increment fmancing under Chapter 403 of the Iowa Code. Chanter 15A Loan or Grant The City of Dubuque has determined that the making of loans or grants of public funds to qualified industries and businesses is necessary to aid in the planning, undertaking and completion of urban renewal projects authorized under this Plan within the meaning of Section 384.24(3)(q) of the Iowa Code. Accordingly, in furtherance of the objectives of this Plan, the City of Dubuque may determine to issue bonds or loan agreements, in reliance upon the authority of Section 384.24A, Section Ig 384.24(3)(q), Section 403.12 (general obligation bonds) or Section 403.9 (tax increment bonds), for the purpose of making loans or grants of public funds to qualified businesses. Alternatively, the City may determine to use available funds for the making of such loans or grants. In determining qualifications of recipients and whether to make any such individual loans or grants, the City of Dubuque shall consider one or more of the factors set forth in Section 15A.1 of the Iowa Code on a case-by-case basis. Tax Increment Financin The City of Dubuque is prepared to utilize tax increment fmancing as a means of financing eligible costs incurred to implement the Public Purpose Activities identified in Part D of this Plan. Bonds or loan agreements may be issued by the City under the authority of Section 403.9 of the Iowa Code (tax increment bonds) or Section 384.24A, Section 384.24(3)(q) and Section 403.12 (general obligation bonds). The City acknowledges that the use of tax increment revenues delays the ability of other local taxing bodies to realize immediately the direct tax benefits of new development in the District. The City believes, however, that the use of tax increment revenues to finance new development in the District is necessary in the public interest to achieve the OBJECTNES of this Plan. Without the use of this special financing tool, new investment may not otherwise occur or may occur within another jurisdiction. If new development does not take place in Dubuque, property values could stagnate and the City, County and School District may receive less taxes during the duration of this Plan than they would have if this Plan were not implemented. Tax increment fmancing will provide along-term payback in overall increased tax base for the City, County and School District. The initial public investment required to generate new private investment will ultimately increase the taxable value of the District well beyond its existing base value. Tax increment reimbursement may be sought for, among other things, the following costs to the extent they are incurred by the City: a. Planning and administration of the Plan; b. Construction of public infrastructure improvements and facilities within the District; c. Acquisition, installation, maintenance and replacement of public investments throughout the District; d. Loans or grants to qualified businesses under Chapter 15A of the Iowa Code, including debt service payments on any bonds issued to finance such loans or grants, for purposes of expanding the business or activity, or other qualifying loan programs established in support of the Plan; and e. Providing the matching share for a variety of local, state and federal grants and loans. 3. Proposed Amount of Indebtedness At this time, the extent of improvements and new development within the District is only generally known. As such, the amount and duration for use of the tax increment revenues for public improvements and/or private development can only be estimated; however, the actual use and amount of tax increment revenues to be used by the City for District activities will be determined at the time specific development is proposed. It is anticipated that the maximum amount of indebtedness which will qualify for tax increment revenue reimbursement during the duration of this Plan, including public improvements and private development assistance, will not exceed $650,000. 19 At the time of adoption of this Plan, the City of Dubuque's current general obligation debt is $11,755,000 (a list of obligations is found as Attachment D) and the applicable constitutional debt limit is $91,286,810. H. STATE AND LOCAL REQUIREMENTS All provisions necessary to conform with state and local laws have been complied with by the City of Dubuque in the implementation of this Plan and its supporting documents. DURATION OF APPROVED URBAN RENEWAL PLAN This Plan shall continue in effect until terminated by the City Council; provided, however, that the collection of tax increment revenues from properties located in the District shall be limited to twenty (20) years from the calendar year following the calendar year in which the City first certifies to the County Auditor the amount of any loans, advances, indebtedness or bonds which qualify for payment from the division of tax increment revenue provided for in Section 403.19 (tax increment financing) of the Iowa Code. The DEVELOPMENT AND REDEVELOPMENT REQUIREMENTS established, or as amended from time to time by the City of Dubuque Zoning Ordinance, shall remain in effect in perpetuity. J. SEVERABILITY In the event one or more provisions contained in this Plan shall be held for any reason to be invalid, illegal, unauthorized or unenforceable in any respect, such invalidity, illegality, unauthorization or unenforceability shall not affect any other provision of this Plan and this Urban Renewal Plan shall be construed and implemented as if such provision had never been contained herein. K. AMENDMENT OF APPROVED URBAN RENEWAL PLAN This Plan may be amended from time to time to respond to development opportunities. Any such amendment shall conform to the requirements of Chapter 403 of the Iowa Code. Any change effecting any property or contractual right can be effectuated only in accordance with applicable state and local law. L. ATTACHMENTS A Urban Renewal District Map B Public Purpose Activity Area Map C Existing and Proposed Land Use Maps D List of General Obligations 20 EXHIBIT D MEMORANDUM OF DEVELOPMENT AGREEMENT 21 Prepared by: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113 Return to: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113 MEMORANDUM OF DEVELOPMENT AGREEMENT A Development Agreement by and among the City of Dubuque, Iowa, an Iowa municipal corporation, of Dubuque, Iowa, and was made regarding the following described premises: The Development Agreement is dated for reference purposes the day of 20_, and contains covenants, conditions, and restrictions concerning the sale and use of said premises. This Memorandum of Development Agreement is recorded for the purpose of constructive notice. to the event of any conflict between the provisions of this Memorandum and the Development Agreement itself, executed by the parties, the terms and provisions of the Development Agreement shall prevail. A complete counterpart of the Development Agreement, together with any amendments thereto, is in the possession of the City of Dubuque and may be examined at its offices as above provided. Dated this day of , 20 CITY OF DUBUQUE, IOWA By: Roy D. Buol, Mayor 22 By: Jeanne F. Schneider, City Clerk STATE OF IOWA DUBUQUE COUNTY ss: On this day of , 20_, before me, a Notary Public in and for the State of Iowa, in and for said county, personally appeared Roy D. Buol and Jeanne F. Schneider, to me personally known, who being by me duly sworn did say that they are the Mayor and City Clerk, respectively of the City of Dubuque, a Municipal Corporation, created and existing under the laws of the State of Iowa, and that the seal affixed to said instrument is the seal of said Municipal Corporation and that said instrument was signed and sealed on behalf of said Municipal corporation by authority and resolution of its City Council and said Mayor and City Clerk acknowledged said instrument to be the free act and deed of said Municipal Corporation by it voluntarily executed. Notary Public, State of Iowa STATE OF IOWA DUBUQUE COUNTY ss: On this day of , 20_, before me, a Notary Public in and for the State of Iowa, in and for said county, personally appeared to me personally known, who being by me duly sworn did say that they are the and that said instrument was signed on behalf of said company by authority of its members and that they acknowledged the execution of this instrument to be the voluntary act and deed of said company by it voluntarily executed. Notary Public, State of Iowa 23 EXHIBIT E CITY CERTIFICATE 24 (DATE) Dear I am the City Manager of the City of Dubuque, Iowa and have acted in that capacity in connection with the execution and delivery of a certain Development Agreement between (Developer) and the City of Dubuque, Iowa (City) dated for reference purposes the day of , 20 On behalf of the City of Dubuque, I hereby represent and warrant to Developer that: (1) There is no action, suit or proceeding pending, or to the best of City's knowledge, threatened against City which might result in any adverse change in the Property being conveyed or the possession, use or enjoyment thereof by Developer, including, but not limited to, any action in condemnation, eminent domain or public taking. (2) No ordinance or hearing is now or before any local governmental body that either contemplates or authorizes any public improvements or special tax levies, the cost of which may be assessed against the Property. To the best of City's knowledge, there are no plans or efforts by any government agency to widen, modify, or re-align any street or highway providing access to the Property and there are no pending or intended public improvements or special assessments affecting the Property which will result in any charge or lien be levied or assessed against the Property. (3) All leases, contracts, licenses, and permits between City and third parties in connection with the maintenance, use, and operation of the Property have been provided to Developer and City has provided true and correct copies of all such documents to Developer, and there are no defaults thereunder, nor any event that, with either or both the giving of notice or passage of time, would become a default thereunder. (4) City has good and marketable fee simple title interest in the Property. (5) The Property has a permanent right of ingress or egress to a public roadway for the use and enjoyment of the Property. (6) There are no notices, orders, suits, judgments or other proceedings relating to fire, building, zoning, air pollution, health violations or other matters that have not been corrected. City has notified Developer in writing of any past notices, orders, suits, judgments or other proceedings relating to 25 fire, building, zoning, air pollution or health violations as they relate to the Property of which it has actual notice. The Property is in material compliance with all applicable zoning, fire, building, and health statutes, ordinances, and regulations. The Property is currently zoned PUD and Developer's intended use of the Property as a manufacturing facility is a permitted use in such zoning classification. (7) Payment has been made for all labor or materials that have been furnished to the Property or will be made prior to the Closing Date so that no lien for labor performed or materials furnished can be asserted against the Property. (8) The Property will, as of the Closing Date, be free and clear of all liens, security interests, and encumbrances objected to by Developer in accordance with the terms of this Agreement. (9) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement do not and shall not result in any material breach of any terms or conditions of any mortgage, bond, indenture, agreement, contract, license, or other instrument or obligation to which City is a party or by which either the City or the Property being conveyed are bound, nor shall the execution, delivery and performance of this Agreement violate any statute, regulation, judgment, writ, injunction or decree of any court threatened or entered in a proceeding or action in which City may be bound or to which either City or the Property being conveyed may be subject. (10) City has duly obtained all necessary approvals and consents for its execution, delivery and performance of this Agreement, and has full power and authority to execute, deliver and perform its obligations under this Agreement. City's attorney shall issue a legal opinion to Developer at time of Closing confirming the representation contained herein, in the form attached hereto as Exhibit C. (11) The Property is free and clear of any occupants, and no party has a lease to or other occupancy or contract right in the Property that shall in any way be binding upon the Property, Developer. (12) City represents and warrants that any fees or other compensation which may be owed to a broker engaged directly or indirectly by City in connection with the purchase and sale contemplated in this Agreement are the sole responsibility and obligation of City and that City will indemnify Developer and hold Developer harmless from any and all claims asserted by any broker engaged directly or indirectly by City for any fees or other compensation related to the subject matter of this Agreement. 26 (13) City shall exercise its best efforts to assist with Developer in the development process. (14) City shall exercise its best efforts to resolve any disputes arising during the development process in a reasonable and prompt fashion. (15) With respect to the period during which City has owned or occupied the Property, and to City's knowledge after reasonable investigation with respect to the time before City owned or occupied the Property, no person or entity has caused or permitted materials to be stored, deposited, treated, recycled, or disposed of on, under or at the Property, which materials, if known to be present, would require cleanup, removal or some other remedial action under environmental laws. (16) All city utilities necessary for the development and use of the Property as a manufacturing facility adjoin the Property and Developer shall have the right to connect to said utilities, subject to City's connection fees. (17) The representations and warranties contained in this letter are correct in all respects on and as of the date hereof. Sincerely, Michael C. Van Milligen City Manager MCVM:jh 27 EXHIBIT F OPINION OF COUNSEL TO DEVELOPER 28 Mayor and City Councilmembers Cit~ Hall 13t and Central Avenue Dubuque IA 52001 Re: Development Agreement between the City of Dubuque, Iowa and Dear Mayor and City Councilmembers: We have acted as counsel for (Developer) in connection with the execution and delivery of a certain Development Agreement (Development Agreement) between Developer and the City of Dubuque, Iowa ("City") dated for reference purposes the day of 20 . We have examined the original certified copy, or copies otherwise identified to our satisfaction as being true copies, of the Development Agreement and such other documents and records as we have deemed relevant and necessary as a basis for the opinions set forth herein. Based on the pertinent law, the foregoing examination and such other inquiries as we have deemed appropriate, we are of the opinion that: 1. Developer is a corporation organized and existing under the laws of the State of Iowa and has full power and authority to execute, deliver and perform in full Development Agreement. The Development Agreement has been duly and validly authorized, executed and delivered by Developer and, assuming due authorization, execution and delivery by City, is in full force and effect and is valid and legally binding instrument of Developer enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally. 2. The execution, delivery and performance by Developer of the Development Agreement and the carrying out of the terms thereof, will not result in violation of any provision of, or in default under, the articles of incorporation and bylaws of Developer, any indenture, mortgage, deed of trust, indebtedness, agreement, judgment, decree, order, statute, rule, regulation or restriction to which Developer is a party or by which Developer's property is bound or subject. 3. To our actual knowledge, there are no actions, suits or proceedings pending or threatened against or affecting Developer in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business (present or prospective), financial position or results of operations of Developer or which in any manner raises any questions affecting the validity of the Agreement or the Developer's ability to perform Developer's obligations thereunder. 29