Fifth Amendment to Development Agreement by and between the City of Dubuque, Iowa and Port of Dubuque LLC Copyrighted
October 16, 2023
City of Dubuque Public Hearings # 03.
City Council Meeting
IT EM TIT LE: Fifth Amendment to Development Agreement by and between the City of
Dubuque, lowa and Port of Dubuque LLC
SUMMARY: Proof of Publication on notice of public hearing to consider Fifth
Amendment to Development Agreement by and between the City of
Dubuque, lowa and Port of Dubuque LLC and City Manager
recommending approval.
RESOLUTION Approving the Fifth Amendment to Development Agreement
Between the City of Dubuque, lowa and Port of Dubuque LLC, Including the
Proposed Issuance of Urban Renewal Tax Increment Revenue Obligations
Relating Thereto, and Providing for the Publication of Notice Thereof
SUGGESTED Suggested Disposition: Receive and File;Adopt Resolution(s)
DISPOSITION:
ATTACHMENTS:
Description Type
MVM Memo City Manager Memo
Staff Memo Staff Memo
Resolution Resolutions
Fifth Amendment Supporting Documentation
Dubuque
THE CITY QF �
All-Meriea Ciry
DLT B E ; . � . �
�� � �
MaSt� Z�C� aYd t�Q Mt55ZSSZ Z zoa�•zoiz•�ai3
YP pp za��*zai�
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Approving a Fifth Amendment to Development Agreement Between the
City of Dubuque and Port of Dubuque LLC
DATE: October 11, 2023
Economic Development Director Jill Connors is recommending City Council adopt a
resolution approving the Fifth Amendment to Development Agreement Between the City
of Dubuque and Port of Dubuque LLC.
The City Council has given additional support to the creation of housing in the Greater
Downtown Urban Renewal Area. Multifamily housing creation projects are now eligible
for either 10-years of tax abatement followed by 5-years of tax increment financing or
15-years of tax increment financing. The proposed First Amendment to Grant
Agreement includes 15-years of tax increment financing for the project.
A Fifth amendment has been prepared, which increases the tax increment financing
rebates from 75% allowable to the full 100% allowable. In conjunction with this increase,
a base value for the property has been set at $499,800. The amendment also updates
the schedule for Developer receiving tax increment financing rebates, and creating jobs
based on the project timeline. This meets City Council's goal of more aggressively
incentivizing the creation of housing in the community.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
�
Mic ael C. Van Milligen
MCVM:sv
Attachment
cc: Crenna Brumwell, City Attorney
Cori Burbach, Assistant City Manager
Jill Connors, Economic Development Director
Dubuque Economic Development
Department
THE CITY OF ' ' 1300 Main Street
All-America City Dubuque,lowa 52001-4763
U� � n'�N",`�""""�� Office(563)589-4393
� �
TTY(563)690-6678
� http://www.cityofdubuque.org
2007*2012�2013
Masterpiece on the Mississippi zoi�*zoi9
TO: Michael C. Van Milligen, City Manager
FROM: Jill M. Connors, Economic Development Director
SUBJECT: Approving a Fifth Amendment to Development Agreement Between
the City of Dubuque and Port of Dubuque LLC
DATE: October 10, 2023
INTRODUCTION
This memorandum presents for City Council consideration a Fifth Amendment to
Development Agreement Between the City of Dubuque and Port of Dubuque LLC.
BACKGROUND
The City of Dubuque and Merge, LLC, an lowa limited liability company doing business
as Merge Urban Development Group, entered into a Development Agreement dated
November 18, 2019 with respect to the development of property in the North Port.
On February 13, 2020, pursuant to an Assignment of Development Agreement, Merge,
LLC as Assignor assigned all of its right, title, and interest in, to, and under the Agreement
to Port of Dubuque LLC as Assignee, and Assignee accepted, assumed, and agreed to
perform all of the obligations and liabilities of Assignor under the Development Agreement
as if it were the original party to the Development Agreement.
On April 6, 2020, a First Amendment to Development Agreement extended the closing
date to October 1, 2020 due to financing and material delays resulting from the COVID-
19 pandemic.
On November 16, 2020 a Second Amendment to Development Agreement provided the
Developer additional time to apply for an lowa Economic Development Authority (IEDA)
Workforce Housing Tax Credit Award and an lowa Redevelopment Tax Credit Award for
Brownfield or Grayfield Sites in the 2021 and 2022 application rounds (in the event the
2021 round was not successful). As such, the Second Amendment also extended the
closing date to December 31, 2022. This amendment also increased the number of years
of economic development grants (TIF rebates) from 10 years to 15 years, to facilitate the
project.
On May 15, 2023 a Third Amendment revised the closing date to July 31, 2023 to
accommodate for the Developer having to put the project out for bid a second time in
order to get better pricing on the project.
On August 21, 2023 a Fourth Amendment extended the closing date to October 31, 2023
or such other date as the parties shall agree in writing and included a Housing Creation
Land Acquisition Grant reducing the Developer's acquisition cost of the land by $20,000
for every residential unit created, but not to exceed the purchase price.
DISCUSSION
The City Council has given additional support to the creation of housing in the Greater
Downtown Urban Renewal Area. Multifamily housing creation projects are now eligible
for either 10-years of tax abatement followed by 5-years of tax increment financing or 15-
years of tax increment financing. The proposed First Amendment to Grant Agreement
includes 15-years of tax increment financing for the project.
A Fifth amendment has been prepared, which increases the tax increment financing
rebates from 75% allowable to the full 100% allowable. In conjunction with this increase,
a base value for the property has been set at $499,800. At the time of the original
agreement, the City was not in the practice of setting a base value when selling City-
owned land for a project. What the City has discovered is that by not setting a base value
in a development agreement, the City ends up subsidizing a portion of TIF payments to
projects (since the assessor does set a base value). And so our practice has changed to
setting a base value equal to the assessed value as of January 1 of the year an agreement
is executed. This is the practice we have always used on private property projects. The
amendment also updates the schedule for Developer receiving tax increment financing
rebates, and creating jobs based on the project timeline. This meets City Council's goal
of more aggressively incentivizing the creation of housing in the community.
RECOMMENDATION/ ACTION STEP
Based on this project's alignment with the City Council's goal of having a Robust Local
Economy and Livable Neighborhoods and Housing, I recommend, following the public
hearing, the City Council adopt the attached resolution approving the Fifth Amendment
to Development Agreement.
2
Prepared by:Jill Connors, Economic Development, 1300 Main Street, Dubuque IA 52001, 563 589-4393
Return to: Jill Connors, Economic Development, 1300 Main Street, Dubuque IA 52001, 563 589-4393
RESOLUTION NO. 346-23
APPROVING THE FIFTH AMENDMENT TO DEVELOPMENT AGREEMENT
BETWEEN THE CITY OF DUBUQUE, IOWA AND PORT OF DUBUQUE LLC,
INCLUDING THE PROPOSED ISSUANCE OF URBAN RENEWAL TAX INCREMENT
REVENUE OBLIGATIONS RELATING THERETO, AND PROVIDING FOR THE
PUBLICATION OF NOTICE THEREOF
Whereas, the City of Dubuque, Iowa (City) and Merge, LLC entered into a
Development Agreement dated the 18th day of November, 2019, as amended, which
provided among other things for the issuance of urban renewal tax increment revenue
grant obligations (the Grants); and
Whereas, Merge, LLC assigned the Development Agreement to Port of Dubuque,
LLC on the 13th day of February, 2020, with the consent of City; and
Whereas, City and Port of Dubuque, LLC. now desire to further amend the
Development Agreement as set forth in the attached Fifth Amendment, subject to the
approval of the City Council; and
Whereas, the City Council has tentatively determined that it would be in the best
interests of City to approve the Fifth Amendment to Development Agreement; and
Whereas, before said Fifth Amendment may be approved, Chapter 403 of the Code
of Iowa requires that the City Clerk publish a notice of the proposal and of the time and
place of the meeting at which the City Council proposes to take action thereon and at
which meeting the City Council shall receive oral and/or written objections from any
resident or property owner of said City to such proposed action.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the Fifth Amendment to Development Agreement by and
Between the City of Dubuque, Iowa and Port of Dubuque LLC, a copy of which is attached
hereto, including the issuance of Urban Renewal Tax Increment Revenue Obligations, is
hereby approved.
Section 2. That the Mayor is hereby authorized and directed to execute the Fifth
Amendment to Development Agreement on behalf of the City of Dubuque and the City Clerk
is authorized to attest to his signature.
Section 3. That the City Manager is authorized to take such actions as are
necessary to comply with the terms of the Fifth Amendment to Development Agreement
as herein approved.
Passed, approved, and adopted this 16th day of October, 2023.
Brad M. Ca h,Mayor
Attest:
Trish L. Gleason, Assistant City Clerk
2
FIFTH AMENDMENT TO
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
PORT OF DUBUQUE LLC
THIS FIFTH AMENDMENT TO DEVELOPMENT AGREEMENT (the "Fifth
Amendment"), dated for reference purposes the day of , 2023, is
made and entered by and between the CITY OF DUBUQUE, IOWA, a municipality ("City")
and PORT OF DUBUQUE LLC, a Delaware limited liability company, as assignee of
Merge, LLC, an Iowa limited liability company, doing business as Merge Urban
Development Group ("Developer") (City and Developer are hereinafter sometimes
collectively referred to as the "parties").
WHEREAS, City and Merge, LLC, an Iowa limited liability company doing business
as Merge Urban Development Group entered into that certain Development Agreement
dated November 18, 2019, as amended, with respect to the matters specified therein;
and,
WHEREAS, on February 13, 2020, pursuant to an Assignment of Development
Agreement, Merge, LLC as Assignor assigned all of its right, title, and interest in, to, and
under the Development Agreement to Port of Dubuque LLC as Assignee, and Assignee
accepted, assumed, and agreed to perform all of the obligations and liabilities of Assignor
under the Development Agreement as if it were the original party to the Development
Agreement; and,
WHEREAS, the parties have previously amended the Development Agreement;
and
WHEREAS, the parties desire to further modify the Development Agreement as
hereinafter provided to include additional incentives to Developer.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the receipt and sufficiency of which are acknowledged by the parties, the parties agree
as follows:
Section 1. Section 11 of the Development Agreement is hereby amended to
read as follows:
SECTION 11. CITY PARTICIPATION.
11.2 Economic Development Grants.
(1) Minimum Improvements. For and in consideration of Developer's
obligations hereunder, and in furtherance of the goals and objectives of the Urban
employees of Developer's commercial tenants (for purposes of clarification,
employees, self-employed business owners, independent contractors and other
self-employed individuals using the Property as their primary place of service
rendered, including, without limitation in any way those individuals working in
shared spaces or co-working space configurations shall be included in the
calculation of FTEs,) and shall be calculated on the basis of 2080 hours per year
as one FTE employee. In the event that the certificate provided to City under
Section 12.2 hereof on January 1, 2042 (the "FTE Date") discloses that the
Property has not as of the FTE Date resulted in at least 10 FTE employees as
provided hereinabove, Developer shall pay to City, promptly upon written demand
therefor, an amount calculated by dividing the Acquisition Grant by 10 (the required
number of FTE employees) and multiplying that product by the number of FTE
employee positions that do not exist as of the FTE Date. For example, if only 8
FTE employee positions exist as of the FTE Date, the amount'calculated above
shall equal the amount calculated by (1) taking $807,842.52 (subject to adjustment
under Section 11 ,1 above), (2) dividing $807,842.52 by 10 for a result of
$80,784.25 and (3) multiplying that result ($80,784.25) by 2 (which is the number
of FTE positions absent as of the FTE Date) for a total payment obligation of
$161 ,568.50.
The foregoing payment and reduction of the Acquisition Grants shall be the City's
sole remedies for the failure of Developer to meet the job creation requirements of
this Section 12.1.
(2) City retains the right to begin escrowing amounts in anticipation of
Developer's obligation to refund a portion of the Acquisition Grant under
subsection 12.1(1) above by withholding a portion of the semi-annual Economic
Development Grant payable under Section 12.1(1) of this Agreement beginning
February 1 , 2040 if the certificate provided to City under Section 12.2 hereof on
January 1, 2040 discloses that Developer as of that date has not created and
maintained, as of the date of such certificate, the FTE employees required by
Section 12.1(1). City shall not withhold any amount in excess of the amount
calculated in Section 12.1(1 ). In the event that the certificate provided to City under
Section 12.2 hereof on the FTE Date discloses that Developer does have, as of
the FTE Date, at least the required FTE employees as provided in subsection
12.1(1 ) of this Agreement, City shall release to Developer the amount of the
Economic Development Grants withheld under this subsection 12.1(2) of this
Agreement.
(3) Operation of Property: Housing Vouchers. For and in consideration of the
Grant offered under this Agreement, during the operation of the Property, including
the Building, as a rental residential property, Developer shall accept, or cause to
be accepted, applications from prospective tenants with housing vouchers (issued
under the U.S. HUD's Section 8 voucher program or a similar program) that are
otherwise qualified prospective tenants.
-4-
12.2 Certification. To assist City in monitoring the creation and maintenance of FTE
employees resulting from the ownership, operation management and maintenance of the
Property hereunder, not later than January 15, 2027, and not later than January 15 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 the number of FTE employees
employed on January 1, 2027 and on January 1 of each year thereafter calculated by
adding together all hours worked by direct or indirect employees related to the Property
including, without limitation in any way, all full-time employees, part-time employees,
employees of Developer's commercial tenants (for purposes of clarification, employees,
self-employed business owners, independent contractors and other self-employed
individuals using the Property as their primary place of service rendered, including,
without limitation in any way those individuals working in shared spaces or co-working
space configurations FTEs) at the Property in Dubuque, Iowa on the first day of each of
the preceding 12 months determined based on the terms set forth in Section 12.1.
Section 2. All other terms of the Development Agreement, as amended, shall
remain in full force and effect.
CITY OF DUBUQUE, IOWA
Brad M. a.ej , Mayor
ATTEST:
r• Sin L C� ¢RSca ', M.5 i b5c1nN' Ca CL.f`+
DEVELOPER
PORT OF DUBUQUE LLC
A Delaware limited liability company
By: OZ Dubuque LLC
A Delaware limited liability company
Its Manager
By: Merge, LLC
5
An Iowa limited liability company
Its Manager
By:
ren ahlstrom, Manager
6
STATE OF IOWA SS:
DUBUQUE COUNTY
CERTIFICATE OF PUBLICATION
I, Kathy Goetzinger, a Billing Clerk for Woodward
Communications, Inc., an Iowa corporation, publisher
of the Telegraph Herald, a newspaper of general
circulation published in the City of Dubuque, County
of Dubuque and State of Iowa; hereby certify that the
attached notice was published in said newspaper on the
following dates:
10/06/2023
and for which the charge is 89.98
Subscribed to before me, a Notary Public in and for
Dubuque County, Iowa,
this 6th day of October, 2023
Notary ' • in and for Dubuque County, Iowa.
JANET K. PAPE
Commission Number 199659
My Commission Expires
12/11/2025
Ad text : CITY OF DUBUQUE, IOWA
OFFICIAL NOTICE
PUBLIC NOTICE is hereby given that the City Council of the
City of Dubuque, Iowa, will hold a public hearing on the 16th
day of October, 2023 at 6:30 p.m. in the Historic Federal
Building, 350 West 6th Street, second floor, Dubuque, Iowa.
At said meeting the City Council proposes to take action on
the approval of the Fifth Amendment to Development Agreement
between the City of Dubuque, Iowa and Port of Dubuque LLC, as
amended, which provided for the issuance of Urban Renewal Tax
Increment Revenue Grant Obligations described therein in order
to carry out the purposes and objectives of the Urban Renewal
Plan for the Greater Downtown Urban Renewal District,
consisting of the funding of economic development grants to
Port of Dubuque, LLC. The Fifth Amendment provides additional
Urban Renewal Tax Increment Revenue Grant Obligations. The
total amount of the Urban Renewal Tax Increment Revenue Grant
Obligations are estimated to be $6,750,529.
Written comments regarding the above public hearing should
be submitted to the City Clerk's Office, 50 W. 13th St.,
Dubuque, IA 52001, ctyclerk@cityofdubuque.org, on or before
said time of public hearing. At said time and place of public
hearings all interested citizens and parties will be given an
opportunity to be heard for or against said proposal. Agendas
can be accessed at https://www.cityofdubuque.org/Agendas.
Copies of supporting documents for the public hearing are on
file in the City Clerk's Office, City Hall, 50 W. 13th St.,
Dubuque, Iowa, and may be viewed during normal working hours.
Individuals with limited English proficiency, vision,
hearing or speech impairments or requiring special assistance
should contact the City Clerk's Office at (563) 589-4100,
ctyclerk@cityofdubuque.org as soon as feasible. Deaf or
hard -of -hearing individuals can use Relay Iowa by dialing 711
or (800) 735-2942.
Published by order of the City Council given on the 2nd day
of October 2023.
Trish L. Gleason, Assistant City Clerk
RESOLUTION NO. 327-23
FIXING THE DATE FOR A PUBLIC HEARING OF THE CITY COUNCIL OF
THE CITY OF DUBUQUE, IOWA ON THE FIFTH AMENDMENT TO
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF DUBUQUE IOWA, AND
PORT OF DUBUQUE LLC, INCLUDING THE PROPOSED ISSUANCE OF URBAN
RENEWAL TAX INCREMENT REVENUE OBLIGATIONS RELATING THERETO,
AND PROVIDING FOR THE PUBLICATION OF NOTICE THEREOF
Whereas, the City of Dubuque, Iowa (City) and Merge, LLC
entered into a Development Agreement dated the 18th day of
November, 2019, as amended, which provided among other things
for the issuance of urban renewal tax increment revenue grant
obligations (the Grants); and
Whereas, Merge, LLC assigned the Development Agreement to
Port of Dubuque, LLC on the 13th day of February, 2020, with
the consent of City; and
Whereas, the parties have previously amended the Development
Agreement; and
Whereas, City and Port of Dubuque, LLC now desire to further
amend the Development Agreement as set forth in the attached
Fifth Amendment, subject to the approval of the City Council;
and
Whereas, the City Council has tentatively determined that it
would be in the best interests of City to approve the Fifth
Amendment to Development Agreement; and
Whereas, before said Fifth Amendment may be approved,
Chapter 403 of the Code of Iowa requires that the City Clerk
publish a notice of the proposal and of the time and place of
the meeting at which the City Council proposes to take action
thereon and at which meeting the City Council shall receive
oral and/or written objections from any resident or property
owner of said City to such proposed action.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF DUBUQUE, IOWA:
Section 1. The City Clerk is hereby authorized and directed
to cause this Resolution and a notice to be published as
prescribed by Iowa Code Section 364.7 of a public hearing on
the Citys intent to approve the Fifth Amendment, to be held on
the 16th day of October, 2023 in the form attached hereto.
Section 2. The City Council will meet at said time and place
for the purpose of taking action on the matter of approval of
the Fifth Amendment to Development Agreement, providing for
the issuance of urban renewal tax increment revenue
obligations in the estimated amount of $6,750,529.
Section 3. The City Clerk is hereby directed to cause at
least one publication to be made of a notice of said meeting,
in a newspaper, printed wholly in the English language,
published at least once weekly, and having general circulation
in said City, said publication to be not less than four days
nor more than twenty days before the date of said meeting on
the disposal of the Citys interest in the Property and the
issuance of said obligations.
Section 4. That the notice of the proposed action shall be
in substantially the form attached hereto.
Passed, approved, and adopted this 2nd day of October, 2023.
/s/Brad M. Cavanagh, Mayor
Attest:/s/Trish L. Gleason,
Assistant City Clerk
It 10/6