Loading...
Approving a First Amendment to a Development Agreement with Switch Homes, LLC Copyrighted April 15, 2024 City of Dubuque Consent Items # 020. City Council Meeting ITEM TITLE: Approving a FirstAmendmentto a DevelopmentAgreement byand between the City of Dubuque and Switch Homes, LLC SUM MARY: City Manager recommending approving a First Amendment to a Development Agreement by and between the City of Dubuque and Switch Homes, LLC to provide authority for the collateral assignment of Economic Development Grants to the Developer's lender. The project promotes the City's goal of Livable Neighborhoods and Housing: Great Place to Live. RESOLUTION Approving the First Amendment to Development Agreement by and Between the City of Dubuque, lowa and Switch Homes, LLC SUGGESTED Suggested Disposition: Receive and File;Adopt Resolution(s) DISPOSITION: ATTACHMENTS: Description Type MVM Memo City Manager Memo Staff Memo Staff Memo Resolution of Approval Resolutions 1stAmendment 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 First Amendment to a Development Agreement by and between the City of Dubuque and Switch Homes, LLC DATE: April 8, 2024 Economic Development Director Jill Connors is recommending City Council adopt the attached resolution approving a First Amendment to a Development Agreement by and between the City of Dubuque and Switch Homes, LLC to provide authority for the collateral assignment of Economic Development Grants to the Developer's lender. The project promotes the City's goal of Livable Neighborhoods and Housing: Great Place to Live. The Developer's lender is requesting authority in the Development Agreement for collateral assignment of the Economic Development Grant proceeds as part of its financing to the project. The attached First Amendment to the Development Agreement provides for this authority. The amendment has been reviewed and approved by the City Attorney's Office. As part of the arrangement, the City will require the following in the assignment document: 1. Developer remains responsible for completing the obligations in the Development Agreement. 2. The Bank's rights to the ED Grants are no greater than those of Developer; the Assignment does not alter the terms of the Development Agreement. 3. Developer releases any claims against the City if the City makes the payments to the Bank under the terms of the Assignment. 4. The Bank needs to provide written notice to the City when payments should be made to it versus the Developer, and if/when the payments should go back to being paid to the Developer. 5. The manner in which payment should be made to the Bank, and the name and address to which any written notice should be made to the Bank. 6. The Bank cannot further assign its rights to such payments without the City's consent. All other requirements of the Development Agreement remain the same. 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 2 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 First Amendment to a Development Agreement by and between the City of Dubuque and Switch Homes, LLC DATE: March 21, 2024 INTRODUCTION This memorandum presents for City Council consideration and action the attached resolution approving a First Amendment to a Development Agreement by and between the City of Dubuque and Switch Homes, LLC to provide authority for the collateral assignment of Economic Development Grants to the Developer's lender. BACKGROUND Switch Homes, LLC (Developer) has proposed to construct 105 single-family homes and multifamily units in an area locally referred to as Mozena Farms, located south of the Northwest Arterial and east of John F. Kennedy Road. The City entered into a Development Agreement with Switch Homes, LLC by Resolution 199-23 dated June 20, 2023. DISCUSSION As part of the project, numerous public improvements must be made, including the construction of streets and installation of public utilities. Under lowa Code, the City may exercise its urban renewal authority and use tax increment to reimburse expenses for public improvements. Urban Renewal Tax Increment Revenue Grant Obligations (Economic Development Grants) will be made to the Developer based on the actual increment received by the City, minus the 38% set-aside for low-income housing programs, for each 6-month period during the term of the Development Agreement. The Developer's lender is requesting authority in the Development Agreement for collateral assignment of the Economic Development Grant proceeds as part of its financing to the project. The attached First Amendment to the Development Agreement provides for this authority. The amendment has been reviewed and approved by the City Attorney's Office. As part of the arrangement, the City will require the following in the assignment document: 1. Developer remains responsible for completing the obligations in the Development Agreement. 2. The Bank's rights to the ED Grants are no greater than those of Developer; the Assignment does not alter the terms of the Development Agreement. 3. Developer releases any claims against the City if the City makes the payments to the Bank under the terms of the Assignment. 4. The Bank needs to provide written notice to the City when payments should be made to it versus the Developer, and if/when the payments should go back to being paid to the Developer. 5. The manner in which payment should be made to the Bank, and the name and address to which any written notice should be made to the Bank. 6. The Bank cannot further assign its rights to such payments without the City's consent. All other requirements of the Development Agreement remain the same. RECOMMENDATION /ACTION STEP I recommend that the City Council adopt the attached resolution approving a First Amendment to a Development Agreement by and between the City of Dubuque and Switch Homes, LLC. The project promotes the City's goal of Livable Neighborhoods and Housing: Great Place to Live. 2 Prepared by: Jill Connors, Economic Development, 50 W. 13�h Street, Dubuque IA 52001, 563 589-4393 Return to: Jill Connors, Economic Development, 50 W. 1311 Street, Dubuque IA 52001, 563 589-4393 RESOLUTION NO. 92 - 24. APPROVING THE FIRST AMENDMENT TO DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF DUBUQUE, IOWA AND SWITCH HOMES, LLC WHEREAS, the City of Dubuque (City) and Switch Homes, LLC (Developer) previously entered into that certain Development Agreement dated June 20, 2023 with respect to the matters specified therein; and WHEREAS, the parties desire to further modify the Development Agreement as set out in the First Amendment to Development Agreement; and WHEREAS, the City Council finds that it is in the interests of the City of Dubuque to approve the First Amendment to Development Agreement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the First Amendment to Development Agreement between the City of Dubuque, Iowa and Switch Homes, LLC, a copy of which is attached hereto, is hereby approved. Section 2. That the Mayor is hereby authorized and directed to execute the First Amendment to Development Agreement on behalf of the City and the City Clerk is authorized and directed 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 First Amendment to Development Agreement as herein approved. Passed, approved and adopted this 15th day of April, 2024. Brad M, Cavamlgh, Mayor Attest: a6"- - Aif" Adrienne N. Breiffelder, City Clerk FIRST AMENDMENT TO DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF DUBUQUE, IOWA AND SWITCH HOMES, LLC This First Amendment to Development Agreement, dated for reference purposes the 1.5 '"day of AyT f , 2024, is made and entered into by the City of Dubuque, Iowa, a municipality (City), and Switch Homes, LLC, an Iowa limited liability company (Developer). City and Developer are hereinafter sometimes collectively referred to as the Parties. Whereas, City and Developer previously entered into that certain Development Agreement dated June 20, 2023 (the Agreement) with respect to the matters specified therein; and Whereas, City and Developer desire to modify the Agreement as set forth herein. NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL TERMS AND COVENANTS CONTAINED HEREIN, THE RECEIPT AND SUFFICIENCY OF WHICH ARE ACKNOWLEDGED BY THE PARTIES, THE PARTIES AGREE AS FOLLOWS: Section 1. Section 3.1 of the Development Agreement is hereby amended to add a Section 3.1(G): 3.1 (G) Assignment of Economic Development Grants. Notwithstanding Section 5.6, Developer may make a collateral assignment of its rights under this Agreement to the Economic Development Grants for purposes of financing the construction of the Minimum Improvements upon the prior written consent of the City to the terms and conditions of the assignment, which consent shall not be unreasonably withheld. Section 2. All other terms of the Development Agreement, as amended, shall remain in full force and effect. CITY OF DUBUQUE, IOWA SWITCH HOMES, LLC 03222024bal By: Brad M. Cavanagh a - ATTEST: Adrienne N. BTeitfelder, City Clerk Y. Matthew T. Muili n President