Interstate Building_WS LIve Development AgreementTHE 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: Development Agreement with Interstate Building, LLLP and WS Live, LLC
DATE: October 29, 2008
Economic Development Director David Heiar is recommending approval of an incentive
package to retain 122 employees of WS Live, LLC in Dubuque and for the creation of
an additional 28 positions. These jobs will transfer from the former Advanced
Data-Comm building in the Dubuque Technology Park to the former Interstate Power
building at 131 West 10t" Street.
In the negotiations between the Developer, the Employer and the City, it was agreed
that two things need to happen to retain WS Live in Dubuque. The lease rate needed to
be reduced from $12/sq. ft. to $9.50/sq. ft. and one half of the technology build out cost
needed to be covered by someone other than the Employer.
The key elements of the proposed Development Agreement are as follows:
1) Developer will finalize the $2,000,000 rehabilitation of the Interstate Building by
December 15, 2008.
2) The Employer will sign a 7-year lease for 15,000 sq. ft. of the 20,000 sq. ft.
building.
3) The Employer will retain 90 FTE agents and 32 FTE professional/management
staff.
4) By January 2011, the Employer will create 4 additional FTE management
positions and 10 FTE agents.
5) By January 2013, the Employer will create another 4 FTE management positions
and 10 FTE agents. (Total of 40 management and 110 agents)
6) City will provide developer with a 75% TIF rebate on the increased taxable value
of the building for 7 years.
7) City will provide employer with a $375,000 forgivable loan to fund one-half of the
technology and build out needs of the Company.
8) Both the TIF rebate and the forgivable loan will be based on job retention and
creation.
There will need to be a Special City Council meeting on November 21, 2008, to
consider an amendment to the Community Development Block Grant Annual Action
Plan that would provide the funding for this project. The CDBG Advisroy Commission
will be holding a public hearing on November 20, 2008.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David Heiar, Economic Development Director
THE CITY OF DUBUQUE
Masterpiece on the Mississippi
Dubuque
All-American City
2007
TO: Michael C. Van Milligen City Manager
FROM: David J. Heair, Economic Development Director
RE: Development Agreement with Interstate Building, LLLP and WS Live, LLC
DATE: October 28, 2008
INTRODUCTION
This memorandum presents for City Council consideration a Resolution approving a
development agreement with Interstate Building, LLLP and WS Live, LLC which
includes the lease of 15,000 sq ft of the former Interstate Building (131 West 10t" Street)
to assist with the retention and creation of jobs by WS Live, LLC.
BACKGROUND
City staff has worked with Interstate Building, LLLP as they have completed a $2 million
renovation of the Interstate Building for speculative, first rate office space in the
downtown area.
The Interstate Building project rehabilitated an unattractive building in the heart of
downtown Dubuque which had been vacant for two years. This Smart Growth project
incorporated the re-use of an existing building with existing city infrastructure in a walk-
able neighborhood. The owners understood from realtors, appraisers and stakeholders
that downtown Dubuque was in need of quality office space, but it was the "chicken and
the egg" story. There was no one willing to make that kind of investment without a
secured tenant. Someone needed to step in and make the investment to push the
project forward. The owners also recognized they weren't going to be approached by
possible tenants with just drawings and renderings; the investment to renovate the
building was going to have to be made first, taking a risk that the building would lease-
up after completion.
The Interstate Building consists of 20,000 sq ft of office space throughout four levels as
well as an additional 4000 sq ft in the lower level basement space. It is very close in
proximity to the recently rehabilitated 1000 block of Main Street and the future
rehabilitation project in the 900 block of Main Street.
Improvements to the building included:
• Geothermal heating/cooling system
• High efficiency ventilating system
• Replaced entire window system with a thermally broken window system (all new
glass and framing)
• Reflective membrane roof system
+• Installed a wheelchair ramp making the building accessible
• All new finishes in stairwells, common areas, office space
• Break room with kitchen in the lower level
• Tenant storage area in the lower level
• New mechanicals
o Electrical now metered separately by floor
o High speed elevator
o Relocated restrooms (new men's & women's bathrooms on each floor)
DISCUSSION
City staff and Interstate Building LLLP have worked with WS Live in their search for a
new location in the City of Dubuque. WS Live is relocating from 301 Data Court Drive to
accommodate McKesson Corporation's relocation to the Technology Park. This forced
relocation caused the company to re-evaluate their presence in Dubuque. The
company currently has underutilized space at another facility in Superior, Wisconsin.
The building in Wisconsin is less than 50% utilized. If the Company is not able to find
competitively priced space in Dubuque, they would relocate over 100 Dubuque FTE's to
Superior. The company also estimated the additional technological investments and
build out needed for the Interstate Building to cost $750,000.
WS Live is an important employer in Dubuque. Not only are the number of jobs relevant
but the nature of the positions are as well. The Company employs a substantial number
of professional positions including -executives, account managers, information
technology professionals, programmers and operations management. Even more
important are our core group of call center agents. The Company provides a significant
employment opportunity in a professional environment to many Dubuque citizens that
otherwise wouldn't exist. For over 50% of the agents, it is their first real job opportunity
and certainly their most professional employment opportunity to date. The Company
provides an enormous amount of training to people that don't have many other
employment options.
The employment opportunities tie directly to the goals of Project HOPE. In addition,
many of the current WS Live employees live in the downtown and Washington
Neighborhoods. If the Company relocates to the Interstate Building, these employees
will be able to walk, bike, or take public transit to work.
In the negotiations between the Developer, the Employer and the City, it was agreed
that two things need to happen to retain WS Live in Dubuque. The lease rate needed to
be reduced from $12/sq. ft. to $9.50/sq. ft. and one half of the technology build out cost
needed to be covered by someone other than the Employer.
The key elements of the proposed Development Agreement are as follows:
1) Developer will finalize the $2,000,000 rehabilitation of the Interstate Building by
December 15, 2008.
2) The Employer will sign a 7 year lease for 15,000 sq. ft. of the 20,000 sq. ft.
building.
3) The Employer will retain 90 FTE agents and 32 FTE professional/management
staff.
4) By January 2011, the Employer will create 4 additional FTE management
positions and 10 FTE agents.
5) By January 2013, the Employer will create another 4 FTE management positions
and 10 FTE agents. (total of 40 management and 110 agents)
6) City will provide developer with a 75% TIF rebate on the increased taxable value
of the building for 7 years.
7) City will provide employer with a $375,000 forgivable loan to fund one half of the
technology and build out needs of the Company.
8) Both the TIF rebate and the forgivable loan will be based on job retention and
creation.
City Staff is working with the Company in an effort to determine the timing of the
forgivable loan. It is our intent to fund this forgivable loan through Block Grants.
Currently, $108,000 is available in Block Grant funds. The CDBG commission has
scheduled a public hearing on. November 20 to transfer additional funding into this
account. The balance of the loan would be available after this date.
RECOMMENDATION/ACTION STEP
I recommend that the City Council approve the attached Resolution authorizing the
Development agreement with Interstate Building LLLP and WS Live, LLC.
F:\USERS\DHeiar\WS Live\WS Live council memo for DA.doc
RESOLUTION NO. 397-08
A RESOLUTION APPROVING A DEVELOPMENT AGREEMENT WITH
INTERSTATE BUILDING, LLLP AND WS LIVE, LLC
Whereas, the City of Dubuque, Iowa, has created a Downtown Urban Renewal
District for the purpose of stimulating reinvestment in the Greater Downtown area; and
Whereas, the City of Dubuque, Iowa is encouraging the use of loans/grants to
finance code compliance activities and to spur job retention/creation activities; and
Whereas, it is the determination of this Council that approval of the Development
Agreement for the rehabilitation of the Property owned by Interstate Building, LLLP and
leased by WS Live, LLC 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 Interstate Building, LLLP
and WS Live, LLC 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
Interstate Building, LLP and WS Live, LLC.
Section 3. That the City Manager is hereby authorized to execute, on behalf of
the City Council of the City of Dubuque, Iowa, all necessary loan documents and is
further authorized to disburse loan funds in accordance with the terms and conditions of
the executed agreement.
Passed, approved and adopted this 3rd day of November, 2008.
~~,t.
Roy D. Buol, Mayor
Atte
eanne F. Schneider, City Clerk
F:\USERS\DHeiar\WS Live\DA res.doc
DEVELOPMENT AGREEMENT
AMONG AND BETWEEN
THE CITY OF DUBUQUE, IOWA,
INTERSTATE BUILDING, LLLP,
AND
WS LIVE, LLC
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),
Interstate Building, LLLP (Developer), and WS Live, LLC (Employer).
WITNESSETH:
WHEREAS, Developer is the owner of the property at 131 West 10t" Street
(the Property), legally described as follows:
Lot 164a in the City of Dubuque, Iowa, according to the United States
Commissioners' Map of the Town of Dubuque, Iowa
WHEREAS, the Property is located in the Greater Downtown Urban Renewal
District (the District) which has been so designated by City Council Resolution 26-
07 as a slum and blight area (the Project Area) defined by Iowa Code Chapter 403
(the Urban Renewal Law); and
WHEREAS, Developer has undertaken the redevelopment of a building
located on the Property and will be operating the same during the term of this
Agreement; and
WHEREAS, Developer has made an additional capital investment in building
improvements, equipment, furniture and fixtures in the Property in the amount in
excess of $2,000,000; and
WHEREAS, pursuant to Iowa Code Section 403.6(1), and in conformance
with the Urban Renewal Plan for the Project Area adopted on February 20, 2007,
City has the authority to enter into contracts and agreements to implement the
Urban Renewal Plan; and
WHEREAS, the City Council of City believes it is in the best interests of the
City to encourage Developer in the development of the Property by providing certain
incentives as set forth herein.
WHEREAS, Developer has agreed to lease offices in the Property to
Employer to allow Employer to relocate its offices to the Property; and
102908ba1
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:
SECTION 1. REPRESENTATIONS AND WARRANTIES
1.1 Representations and Warranties of City. In order to induce Developer and
Employer to enter into this Agreement, City hereby represents and warrants to
Developer and Employer that to the best of City's knowledge:
(1) City has duly obtained all necessary approvals and consents for its
execution, delivery and performance of this Agreement and that it has full
power and authority to execute, deliver and perform its obligations under this
Agreement. This Agreement, upon execution and delivery by the City
(assuming due authorization, execution and delivery by Developer and
Employer), is a valid and legally binding instrument of City, 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) City shall exercise its best efforts to cooperate with Developer in the
development process.
(3) City shall exercise its best efforts to resolve any disputes arising
during the development process in a reasonable and prompt fashion.
(4) The execution and delivery of this Agreement, the consummation of
the transactions contemplated hereby, and the fulfillment of or compliance
with the terms and conditions of this Agreement are not prevented by, limited
by, in conflict with, or result in a violation or breach of, the terms, conditions
or provisions of the charter of City, any evidence of indebtedness, agreement
or instrument of whatever nature to which City is now a party or by which it or
its property is bound, or constitute a default under any of the foregoing.
(5) There are no actions, suits or proceedings pending or threatened
against or affecting City 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 financial position
or operations of City or which affects the validity of the Agreement or City's
ability to perform its obligations under this Agreement.
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1.2 Representations and Warranties of Developer. Developer makes the
following representations and warranties:
(1) Developer is an Iowa limited liability limited partnership organized and
validly existing under the laws of the State of Iowa, and has all requisite
power and authority to own and operate its properties, to carry on its
business as now conducted and as presently proposed to be conducted, and
to enter into and perform its obligations under the Agreement.
(2) This Agreement has been duly authorized, executed and delivered by
Developer and, assuming due authorization, execution and delivery by City
and Employer, is in full force and effect and is a 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. Developer's counsel
shall issue a legal opinion to the City, at time of closing, confirming the
representations contained herein, in the form attached hereto as Exhibit A.
(3) The execution and delivery of this Agreement, the consummation of
the transactions contemplated hereby, and the fulfillment of or compliance
with the terms and conditions of this Agreement are not prevented by, limited
by, in conflict with, or result in a violation or breach of, the terms, conditions
or provisions of the articles of organization or the operating agreement of
Developer or any contractual restriction, evidence of indebtedness,
agreement or instrument of whatever nature to which Developer is now a
party or by which it or its property is bound, or constitute a default under any
of the foregoing.
(4) 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,
financial position or result of operations of Developer or which affects the
validity of the Agreement or Developer's ability to perform its obligations
under this Agreement.
(5) Developer will perform its obligations under this Agreement in
accordance with the terms of this Agreement, the Urban Renewal Plan and
all local, State and federal laws and regulations.
(6) Developer will use its best efforts to obtain, or cause to be obtained, in
a timely manner, all material requirements of all applicable local, state, and
federal laws and regulations which must be obtained or met.
(7) Developer has firm commitments for permanent financing for the
Project in an amount sufficient, together with equity commitments, to
successfully complete the requirements of this Agreement and shall provide
evidence thereof to City prior to the Closing Date.
1.3 Representations and Warranties of Employer. Employer makes the following
representations and warranties:
(1) Employer is a Delaware limited Liability company duly organized and
validly existing under the laws of the State of Delaware, and has all requisite
power and authority to own and operate its properties, to carry on its
business as now conducted and as presently proposed to be conducted, and
to enter into and perform its obligations under the Agreement.
(2) This Agreement has been duly authorized, executed and delivered by
Employer and, assuming due authorization, execution and delivery by City
and Developer, is in full force and effect and is a valid and legally binding
instrument of Employer 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. Employer's counsel
shall issue a legal opinion to the City, at time of closing, confirming the
representations contained herein, in the form of Exhibit B, attached hereto.
(3) The execution and delivery of this Agreement, the consummation of
the transactions contemplated hereby, and the fulfillment of or compliance
with the terms and conditions of this Agreement are not prevented by, limited
by, in conflict with, or result in a violation or breach of, the terms, conditions
or provisions of the articles of organization or the operating agreement of
Employer or any contractual restriction, evidence of indebtedness,
agreement or instrument of whatever nature to which Employer is now a
party or by which it or its property is bound, or constitute a default under any
of the foregoing.
(4) There are no actions, suits or proceedings pending or threatened
against or affecting Employer 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,
financial position or result of operations of Employer or which affects the
validity of the Agreement or Employer ability to perform its obligations under
this Agreement.
(5) Employer will perform its obligations under this Agreement in
accordance with the material terms of this Agreement, the Urban Renewal
Plan and all local, state and federal laws and regulations.
(6) Employer will use its best efforts to obtain, or cause to be obtained, in
a timely manner, all material requirements of all applicable local, state, and
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federal laws and regulations which must be obtained or met.
1.4 Closin The closing shall take place on , 2008 or such other
date as the parties shall mutually agree upon in writing (the Closing Date) but which
in no event shall be later than the 15th day of December, 2008. Consummation of
the closing shall be deemed an agreement of the parties to this Agreement that the
conditions of closing shall have been satisfied or waived.
1.5 Conditions to Closing. The closing of the transaction contemplated by this
Agreement and all the obligations of the parties under this Agreement are subject to
fulfillment, on or before the Closing Date, of the following conditions:
(1) City, Developer and Employer shall be in material compliance with all
the terms and provisions of this Agreement.
(2) Developer shall have furnished City with evidence, in a form
satisfactory to City (such as a letter of commitment from a bank or other
lending institution), that Developer has firm financial commitments in an
amount sufficient, together with equity commitments, to complete the
Minimum Improvements (as defined herein) in conformance with the
Construction Plans (as defined herein), or City shall have received such
other evidence of such party's financial ability as in the reasonable judgment
of City is required.
(3) Developer's counsel shall issue a legal opinion to the City confirming
the representations contained herein, in the form of Exhibit A, attached
hereto.
(4) Employer's counsel shall issue a legal opinion to the City confirming
the representations contained herein, in the form of Exhibit B, attached
hereto.
(5) Developer shall provide City with an executed copy of a lease
between Developer and Employer with respect to the Property and the
Minimum Improvements located thereon with a term of not less than seven
(7) years and commencing not later than December 31, 2008.
1.6 City's Obligations at Closing. At or prior to the Closing Date, City shall
deliver to Developer and Employer such other documents as may be required by
this Agreement, all in a form satisfactory to Developer and Employer.
SECTION 2. DEVELOPMENT ACTIVITIES
2.1 Required Minimum Improvements. Developer agrees to rehabilitate,
construct and improve approximately 20,000 square feet of office space on the
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Property (the Minimum Improvements) at an estimated cost of not less than
$2,000,000.
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 Minimum 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 substantially completed by
December 15, 2008. For purposes of this section, "substantial completion" 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 performance 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
with respect to the obligations of Developer to construct Minimum Improvements.
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 fourteen (14)
consecutive semi-annual payments (such payments being referred to
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collectively as the Economic Development Grants) to Developer if Developer
owns and leases the Property and/or the Minimum Improvements to the
Employer on the applicable payment later described in this Section. The
Economic Development Grants shall be payable 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
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 deemed to be equal in
amount to seventy-five per cent (75%) of 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 ($348,600.00). 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
collected 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.
(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 (but only if Developer or a
subsequent owner reasonably approved by City then owns and leases the
Property and/or the Minimum Improvements thereon to the Employer), 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.)
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(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 "Interstate Building 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 Interstate Building
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 Interstate Building 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.
3.2 Forgivable Loan. City agrees to provide Employer with a forgivable loan in
the amount of $375,000.00 for the purchase of equipment to be used on the
Property. The loan shall not bear interest (0%) and shall be payable over a term of
7 years and shall be forgivable as follows, subject to Section 4.1(3) and Employer's
continued compliance with this Agreement:
End of Year Amount Forgiven Balance
2011 $ 75,000.00 $300,000.00
2012 $ 75,000.00 $225,000.00
2013 $ 75,000.00 $150,000.00
2014 $ 75,000.00 $ 75,000.00
2015 $ 75,000.00 $ -0-
The loan shall be in a form acceptable to City. The loan shall be secured by
the equipment acquired with the proceeds of the loan or other security as
may be acceptable to City.
SECTION 4. COVENANTS OF EMPLOYER
4.1 Job Creation and Retention.
(1) It is agreed by the parties that Employer has the following full-time
equivalent positions in Dubuque, Iowa as of October 1, 2008: 32 full-time
professional/management and 90 full-time equivalent agents. Employer shall
maintain all such positions during the term of this Agreement.
(a) By January 1, 2011, Employer shall create the following new
additional full-time equivalent positions: 4professional/management
and 10 agents, so that the total number of full-time equivalent
positions is 36 professional/management and 100 agents.
(b) By January 1, 2013, Employer shall create the following new
additional full-time equivalent positions: 4professional/management
and 10 agents, so that the total number of full-time equivalent
positions is 40 professional/management and 110 agents.
(2) In the event that any certificate provided to City under Section 4.2
hereof discloses that Employer does not as of that date have at least the
number of full-time equivalent positions as provided hereinabove, the semi-
annual Economic Development Grants to be paid to the Developer for such
year under Section 3.1 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 by this Section 4.1. (For example, if Employer on
January 1, 2010, has 108 positions, the semi-annual Economic Development
Grants would be 88.52% (122 positions) of the available Developer Tax
Increment received by City).
(3) In addition, in the event that any certificate provided to City under
Section 4.2 hereof discloses that Employer does not as of that date have at
least the number of full-time equivalent positions as provided hereinabove,
the forgivable portion of the loan provided to Employer in Section 3.2 shall be
reduced by the percentage that the employment shortfall bears to the total
number of positions required to be created and maintained by this Section
4.1. (For example, if Employer on December 31, 2011, has 125 positions, the
forgivable portion on that date would be 91.91 % (136 positions) of the
available forgivable portion.
4.2 Certification. To assist City in monitoring the performance of Employer
hereunder, Employer shall certify as of January 1, 2010, and January 1 of each year
thereafter during the term of this Agreement, by a duly authorized officer of
Employer to City in a form acceptable to City (a) the number of full-time equivalent
positions maintained by Employer 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
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(12) months, Employer 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 April 1, 2010, and
by April 1 of each year thereafter during the term of this Agreement.
4.3 Books and Records. During the term of this Agreement, Employer 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 Employer related to
the Project in accordance with generally accepted accounting principles consistently
applied throughout the period involved, and Employer shall provide reasonable
protection against loss or damage to such books of record and account.
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.
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)
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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
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 and Employer
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 and Employer agree 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
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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 and Employer shall have the right to rely upon the
representations of any party with whom they do 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.
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 an office building as defined in section 2.1 is in full
compliance with the Urban Renewal Plan; 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.
4.12 Release and Indemnification Covenants.
(1) Developer and Employer release 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.
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(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
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 or Employer
for any damage or injury to the persons or property of Developer or Employer
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 and Employer shall comply with all laws,
rules and regulations relating to their 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 or Employer.
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:
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(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.
(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, Employer 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 the defaulting party (and the holder of any mortgage encumbering
any interest in the Property of which City has been notified of in writing if Developer
is the defaulting party) 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 the defaulting party 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
14
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.
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: Interstate Building, LLLP
788 Main St.
Dubuque, Iowa 52001
With copy to: D. Flint Drake
Drake & Freund, P.C.
1005 Main Street, Suite 200
15
Dubuque, IA 52001
Telephone: (563) 582-2000
Facsimile: (563) 583-5225
If to Employer: WS Live, LLC
Jeff Mentzer
131 W. 10t" Street
Dubuque, Iowa 52001
With copy to: Tim Houlne
1820 Preston Park Blvd.
Suite 450
Plano Texas 57093
If to City: City Manager
50 W. 13th Street
Dubuque, Iowa 52001
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 Employer and their respective successors and
assigns.
6.3 Termination Date. This Agreement and the rights and obligations of the
parties hereunder shall terminate on December 31, 2015 (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.
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CITY OF DUBUQUE, IOWA
By:
Roy D. Buol, Mayor
By:
Jeanne F. Schneider, City Clerk
INTERSTATE BUILDING, LLLP
By:
John Gronen
By:
Michael Steele
WS LIVE, LLC
By:
Jeff Mentzer, CFO
F:\USERS\DHeiar\WS Live\WS Live Development Agreement.doc
10/29/2008 1:28 PM
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List of Exhibits
Exhibit A Opinion of Counsel to Developer
Exhibit B Opinion of Counsel to Employer
Exhibit C Memorandum of Development Agreement
18
Mayor and City Councilmembers
Cit~ Hall
13t and Central Avenue
Dubuque IA 52001
Re: Development Agreement among and between the City of Dubuque, Iowa and
Dear Mayor and City Councilmembers:
We have acted as counsel for
connection with the execution and delivery of a certain
(Development Agreement) between Developer,
the City of Dubuque, Iowa (City) dated for reference
20_.
(Developer) in
Development Agreement
Employer and
purposes the day of
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 limited liability limited partnership 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 organization and
operating agreement 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
20
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.
Very truly yours,
21
Mayor and City Councilmembers
Cit~r 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 (Employer) in
connection with the execution and delivery of a certain Development Agreement
(Development Agreement) between (Developer), Employer 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. Employer is a limited liability company organized and existing under
the laws of the State of Delaware 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 Employer and,
assuming due authorization, execution and delivery by City, is in full force and effect
and is valid and legally binding instrument of Employer 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 Employer 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 organization and
operating agreement of Employer, any indenture, mortgage, deed of trust,
indebtedness, agreement, judgment, decree, order, statute, rule, regulation or
restriction to which Employer is a party or by which Employer property is bound or
subject.
3. To our actual knowledge, there are no actions, suits or proceedings
pending or threatened against or affecting Employer 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
Employer or which in any manner raises any questions affecting the validity of the
23
Agreement or the Employer's ability to perform Employer's obligations thereunder.
Very truly yours,
24
EXHIBIT C
MEMORANDUM OF DEVELOPMENT AGREEMENT
25
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. In 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
26
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
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