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Development Agreement with Millwork Flats, L.L.C.City of Dubuque City Council Meeting Public Hearings # 06. Copyrighted June 17, 2024 ITEM TITLE: Resolution Approving a Development Agreement by and between the City of Dubuque, I owa and Millwork Flats, L.L.C. Providing for the Issuance of Urban Renewal Tax Increment Revenue Grant Obligations Pursuant to the Development Agreement SUMMARY: Proof of publication on notice of public hearing to consider City Council adopt a resolution approving a Development Agreement by and between the City of Dubuque, Iowa and Millwork Flats, L.L.C. providing for the issuance of Urban Renewal Tax Increment Revenue Grant Obligations, and City Manager recommending approval. RESOLUTION Approving a Development Agreement by and between the City of Dubuque, Iowa, and Millwork Flats, L.L.C. including the issuance of Urban Tax Increment Revenue Obligations SUGGESTED Suggested Disposition: Receive and File; Adopt Resolution(s) DISPOSITION: ATTACHMENTS: Description Type MVM Memo City Manager Memo Staff Memo Staff Memo Development Agreement Supporting Documentation Resolution Resolutions Supporting Documentation Supporting Documentation THE CITY OF Dubuque DUB TEE1. All -America City Masterpiece on the Mississippi � pp zoo�•*o 13 zoi720zoi9 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Resolution Approving a Development Agreement by and between the City of Dubuque, Iowa and Millwork Flats, L.L.C. Providing for the Issuance of Urban Renewal Tax Increment Revenue Grant Obligations Pursuant to the Development Agreement DATE: May 30, 2024 Economic Development Director Jill Connors is recommending City Council adopt a resolution approving a Development Agreement by and between the City of Dubuque, Iowa and Millwork Flats, L.L.C. providing for the issuance of Urban Renewal Tax Increment Revenue Grant Obligations. Millwork Flats, L.L.C. owns 1065 Jackson Street and intends to raze the existing structure and redevelop the lot. The project will include the creation of 62 market -rate residential rental units as well as first -floor commercial space. The project will be utilizing a combination of public and private financing as well as applying to the Iowa Workforce development Housing Tax Credit Program. The key elements of the Development Agreement include the following: • Developer will make a capital investment of approximately $17.5 million dollars to redevelop the property. • Developer must create 62 market -rate residential rental units. • Developer will receive 15 years of years of tax increment financing incentives in the form of semi-annual rebates. Tax increment financing incentives are estimated to not exceed $3,106,447. • City to award a Forgivable Loan in an amount of $500,000 at 0% interest. For each new rental unit created, $10,000 will be forgiven up to the full balance of $500,000. Unless forgiven, the remaining balance on the loan will be due in full on May 1, 2027. • City of Dubuque will amend the Greater Downtown Urban Renewal District Plan to accommodate the issuance of tax increment financing incentives. The Development Agreement requires Developer to accept applications from prospective tenants with housing choice vouchers (issued under the U.S. HUD's Section 8 voucher program or a similar program) that are otherwise qualified prospective tenants. I concur with the recommendation and respectfully request Mayor and City Council approval. v 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 ' 50 West 131h Street All•AmerieaNy Dubuque, Iowa 52001-4864 DUB &http://www.cityofdubuque.org E 1111. Office (563) 589-4393 TTY (563) 690-6678 f ' 2007*2012.2013 Masterpiece on the Mississippi 2017*2019 TO: Michael C. Van Milligen, City Manager FROM: Jill M. Connors, Economic Development Director SUBJECT: Resolution Approving a Development Agreement by and between the City of Dubuque, Iowa and Millwork Flats, L.L.C. Providing for the Issuance of Urban Renewal Tax Increment Revenue Grant Obligations Pursuant to the Development Agreement DATE: June 13, 2024 INTRODUCTION This memorandum is a request for the City Council to adopt the attached resolution approving a Development Agreement by and between the City of Dubuque, Iowa and Millwork Flats, L.L.C. providing for the issuance of Urban Renewal Tax Increment Revenue Grant Obligations. BACKGROUND The recently -adopted Historic Millwork Master Plan Update recommends adding more residential offerings, including apartments with smaller footprints, to the district, which this project will address. DISCUSSION Millwork Flats, L.L.C. owns 1065 Jackson Street and intends to raze the existing structure and redevelop the lot. The project will include the creation of 62 market -rate residential rental units as well as first -floor commercial space. The project will be utilizing a combination of public and private financing as well as applying to the Iowa Workforce Development Housing Tax Credit Program. The key elements of the Development Agreement include the following: • Developer will make a capital investment of approximately $17.5 million dollars to redevelop the property. • Developer must create 62 market -rate residential rental units. • Developer will receive 15 years of years of tax increment financing incentives in the form of semi-annual rebates. Tax increment financing incentives are estimated to not exceed $3,106,447. • City to award a Forgivable Loan in an amount of $500,000 at 0% interest. For each new rental unit created, $10,000 will be forgiven up to the full balance of $500,000. Unless forgiven, the remaining balance on the loan will be due in full on May 1, 2027. • City of Dubuque will amend the Greater Downtown Urban Renewal District Plan to accommodate the issuance of tax increment financing incentives. The Development Agreement requires Developer to accept applications from prospective tenants with housing choice vouchers (issued under the U.S. HUD's Section 8 voucher program or a similar program) that are otherwise qualified prospective tenants. A recent change to City policy requires all projects receiving City funding to install security cameras. This requirement was omitted in error from the proposed Development Agreement included with the resolution to set the public hearing. The proposed Development Agreement has been revised to include the requirement that the Developer install security cameras on the property. RECOMMENDATION/ ACTION STEP I recommend the City Council adopt the attached resolution approving the revised Development Agreement including the issuance of Urban Renewal Tax Increment Revenue Grant Obligations. 2 DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF DUBUQUE, IOWA AND MILLWORK FLATS, L.L.C. THIS DEVELOPMENT AGREEMENT (Agreement) dated for reference purposes the ? day of _J tp r. , 2024 is made and entered into by and between the City of Dubuque, Iowa (City), and Millwork Flats, L.L.C. (Developer). WHEREAS, Developer is the owner of the real estate locally known as 1065 Jackson St., Dubuque, Iowa and legally described as follows (the Property): Lot 384, 385, 386, 384 and the South one-half of Lot 388, in the City of Dubuque, Iowa, according to the United States Commissioners' plat of the survey of the Town of Dubuque, Iowa, And Lot 2 of City Lot 386A in the City of Dubuque, Iowa, according to the Plat recorded as Instrument 42017-4502, records of Dubuque County, Iowa ; and WHEREAS, the Property is located in the Greater Downtown Urban Renewal District (the District) which has been so designated by City Council Resolution 123-67 as a slum and blighted area (the Project Area) defined by Iowa Code Chapter 403 (the Urban Renewal Law); and WHEREAS, Developer will undertake the redevelopment of the Property (the Project) and will be operating the same during the term of this Agreement; and WHEREAS, it is in the City's best interest to redevelop the Property; and WHEREAS, pursuant to Iowa Code Section 403.6(1), and in conformance with the Urban Renewal Plan for the Project Area adopted on May 18, 1967, and last amended on December 18, 2023, City has the authority to enter into contracts and agreements to implement the Urban Renewal Plan, as amended; and WHEREAS, the Dubuque City Council 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. NOW, THEREFORE, the parties to this Development Agreement, in consideration of the promises, covenants and agreements made by each other, do hereby agree as follows: SECTION 1. REPRESENTATIONS AND WARRANTIES. 05292024ba1 1.1 Representations and Warranties of City. In order to induce Developer to enter into this Agreement, City hereby represents and warrants to Developer 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. City's attorney shall issue a legal opinion to Developer at the time of closing confirming the representations contained herein, in the form attached hereto as Exhibit A. (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. (6) No ordinance or hearing is now 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. (7) The representations and warranties contained in this article shall be correct in all respects on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of the Closing Date. I (8) As of the date of this Agreement there has been prepared and approved by City an Urban Renewal Plan for the Project Area consisting of the Urban Renewal Plan for the Greater Downtown Urban Renewal Plan, most recently approved by City Council of City on December 18, 2023, and as subsequently amended through and including the date hereof, attached as Exhibit E (the Urban Renewal Plan). A copy of the Urban Renewal Plan, as constituted on the date of this Agreement and in the form attached hereto, has been recorded among the land records in the office of the Recorder of Dubuque County, Iowa. 1.2 Representations and Warranties of Developer. The Developer makes the following representations and warranties: (1) Developer is a limited liability corporation duly 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 this Agreement. (2) This Agreement has been duly authorized, executed and delivered by Developer and, assuming due authorization, execution, and delivery by City, 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 City, at the time of closing, confirming the representations contained herein, in the form attached hereto as Exhibit B. (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 incorporation or the bylaws 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 material terms of this Agreement, the Urban Renewal Plan and all local, state, and federal laws and regulations. 3 (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 Closing. The closing shall take place on the Closing Date which shall be the 15th day of January, 2025, or such other date as the parties shall agree in writing but in no event shall the Closing Date be later than the 1st day of March, 2025. 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. 1.4 Conditions to Closing. The closing of the transaction contemplated by this Agreement and all the obligations of Developer under this Agreement are subject to fulfillment, on or before the Closing Date, of the following conditions: (1) The representations and warranties made by City in Section 1.1 shall be correct as of the Closing Date with the same force and effect as if such representations were made at such time. At the closing, City shall deliver a certificate to that effect in the form of Exhibit C. (2) Developer shall have the right to terminate this Agreement at any time prior to the consummation of the closing on the Closing Date if Developer determines in its sole discretion that conditions necessary for the successful completion of the Project contemplated herein have not been satisfied in Developer's sole discretion. Upon the giving of notice of termination by Developer to City, this Agreement shall be deemed null and void. (3) Developer and City shall be in material compliance with all the terms and provisions of this Agreement. (4) 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 Developer's financial ability as City in its reasonable judgment City requires. (5) Developer's counsel shall issue a legal opinion to City confirming the representations contained herein in the form attached hereto as Exhibit B. (6) Developer shall have received Workforce Housing Tax Credits in the amount of One Million Dollars ($1,000,000.00) from the Iowa Economic 4 Development Authority. (7) Developer shall have received Redevelopment Tax Credits (Grayfield) sufficient to make the proposed project viable in Developer's discretion. 1.5 City's Obligations at Closing. At or prior to the Closing Date, City shall deliver to Developer such other documents as may be required by this Agreement, all in a form satisfactory to Developer. SECTION 2. DEVELOPMENT ACTIVITIES. 2.1 Required Minimum Improvements. Developer will make a capital investment of approximately Seventeen Million Five Hundred Thousand Dollars ($17,500,000.00) to improve the Property (the Minimum Improvements). The Minimum Improvements include creating first -floor commercial space and at least Sixty -Two (62) rental units. 2.2 Plans for Construction of Minimum Improvements. Plans and specifications with respect to the development of the Property and the construction of the Minimum Improvements thereon (the Construction Plans) shall be in conformity with 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, recorded in the records of Dubuque County, Iowa. 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 by May 1, 2025, and shall be substantially completed by December 31, 2026. The time 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 extraordinary 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 on some or all of the rental units but not later than December 31, 2026, City shall furnish Developer with an appropriate instrument in the form attached as Exhibit F certifying the number of units completed. The Certificate shall be a conclusive determination of the satisfaction of Developer's obligations to make the Minimum Improvements for the rental units completed under this Agreement. 5 2,5 Security Cameras. Developer shall instal newly constructed buildings on the Property and Dubuque Personal Surveillance https://cityofdubuque.org/2980/Secure-Dubuque. SECTION 3. CITY PARTICIPATION. security cameras on the exterior of all register said cameras with the "Secure System" described at 3.1 Economic Development Grants to Developer. 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 and remaining in compliance with the terms of this Agreement, to make thirty (30) consecutive semi-annual payments (such payments being referred to collectively as the Economic Development Grants) to Developer: November 1, 2028 May 1, 2029 November 1, 2029 May 1, 2030 November 1, 2030 May 1, 2031 November 1, 2031 May 1, 2032 November 1, 2032 May 1, 2033 November 1, 2033 May 1, 2034 November 1, 2034 May 1, 2035 November 1, 2035 May 1, 2036 November 1, 2036 May 1, 2037 November 1, 2037 May 1, 2038 November 1, 2038 May 1, 2039 November 1, 2039 May 1, 2040 November 1, 2040 May 1, 2041 November 1, 2041 May 1, 2042 November 1, 2042 May 1, 2043 pursuant to Iowa Code Section 403.9 of the Urban Renewal Law, in amounts equal to a portion of the tax increment revenues collected by City 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 City in respect of the increase in the assessed value of the Property above the assessed value on January 1, 2024, One Million Eleven Thousand Dollars ($1,011,000.00). 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 for the regular and voter -approved physical plant and equipment levy, (iii) the remaining actual amount of tax increment revenues collected by City in respect of the valuations of the Property prior to January 1, 2024 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. 6 3.2 To fund the Economic Development Grants, City shall certify to the County prior to December 1, 2027 its request for the available Developer Tax Increments resulting from the assessments imposed by the County as of January 1 of that year and each year thereafter until and including January 1, 2027, to be collected by City as taxes are paid during the following fiscal year and which shall thereafter be disbursed to the Developer on November 1 and May 1 of that fiscal year. (Example: if City so certifies in December, 2027, the Economic Development Grants in respect thereof would be paid to the Developer on November 1, 2028, and May 1, 2029.) 3.3 The Economic Development Grants shall be payable from and secured solely and only 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 Millwork Flats, L.L.C. TIF Account of City. City hereby covenants and agrees to maintain its TIF ordinance in force during the term hereof and to apply the incremental taxes collected in respect of the Minimum Improvements and allocated to the Millwork Flats, L.L.C. TIF Account to pay the Economic Development Grants, as and to the extent set forth in Section 3.1 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 and held in the Millwork Flats, L.L.C. TIF Account (regardless of the amounts thereof) to the payment of the Economic Development Grants to Developer as and to the extent described in this Section. 3.4 City shall be free to use any and all tax increment revenues collected in respect of other properties within the Project Area and the remaining actual amount of the property taxes paid by Developer to City, 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. 3.5 Forgivable Loan. (1) For and in consideration of Developer's obligations hereunder, City agrees, subject to Developer being and remaining in compliance with the terms of this Agreement, and a Loan Agreement in the form attached hereto as Exhibit G, Promissory Note, in the form attached hereto as Exhibit H, and Mortgage in the form attached hereto as Exhibit I, to make Developer a zero percent (0%) interest loan in the amount of Five Hundred Thousand Dollars ($500,000.00). City agrees to subordinate its mortgage upon terms and conditions acceptable to City in its reasonable discretion to the mortgages or Deeds of Trust to be granted to Developer's primary construction and permanent lender. 7 (2) A Loan Agreement will be executed at the Closing outlining the terms and conditions of the Forgivable Loan, upon such terms as are satisfactory to City. (3) The value of the Property shall at no time be less than the unpaid balance of the Mortgage. (4) Loan funds shall be disbursed to Developer at the same time as Developer closes on its construction financing with its primary lender and upon Developer's written request for funds. (5) The amount of the Forgivable Loan to be forgiven will be determined based on the number of new rental units created as of May 1, 2027. Any remaining Forgivable Loan balance will be due in full on May 1, 2027. SECTION 4. NOW APPROPRIATION / LIMITED SOURCE OF FUNDING. 4.1 Non -Appropriation. (1) Notwithstanding anything in this Agreement to the contrary, the obligation of City to pay any installment of the Economic Development Grants from the pledged tax increment revenues shall be an obligation limited to currently budgeted funds, and not a general obligation or other indebtedness of City or a pledge of its full faith and credit within the meaning of any constitutional or statutory debt limitation, and shall be subject in all respects to the right of non -appropriation by the City Council of City as provided in this Section. City may exercise its right of non -appropriation as to the amount of the installments to be paid during any fiscal year during the term of this Agreement without causing a termination of this Agreement. The right of non -appropriation shall be exercised only by resolution affirmatively declaring City's election to non -appropriate funds otherwise required to be paid in the next fiscal year under this Agreement. (2) In the event the City Council of City elects to not appropriate sufficient funds in the budget for any future fiscal year for the payment in full of the installments on the Economic Development Grants due and payable in that future fiscal year, then City shall have no further obligation to Developer for the payment of any installments due in that future fiscal year which cannot be paid with the funds then appropriated for that purpose. 4.2 The right of non -appropriation reserved to City in this Section is intended by the parties, and shall be construed at all times, so as to ensure that City's obligation to pay future installments on the Economic Development Grants shall not constitute a legal indebtedness of City within the meaning of any applicable constitutional or statutory debt limitation prior to the adoption of a budget which appropriates funds for the payment of that installment or amount. In the event that any of the provisions of this Agreement are determined by a court of competent jurisdiction to create, or result in the creation of, such a legal indebtedness of City, the enforcement of the said provision shall be suspended, 8 and the Agreement shall at all times be construed and applied in such a manner as will preserve the foregoing intent of the parties, and no event of default shall be deemed to have occurred as a result thereof. If any provision of this Agreement or the application thereof to any circumstance is so suspended, the suspension shall not affect other provisions of this Agreement which can be given effect without the suspended provision, and to this end the provisions of this Agreement are severable. SECTION 5. COVENANTS OF DEVELOPER. 5.1. Operation of Property. Housing Vouchers. For and in consideration of the Grant offered under this Agreement, during the operation of the Development Property 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 who are otherwise qualified prospective tenants. Developer shall not deny any tenant a lease based on a public assistance source of income. A public assistance source of income means income and support derived from any tax supported federal, state or local funds, including, but not limited to, social security, supplemental security income, temporary assistance for needy families, family investment program, general relief, food stamps, and unemployment compensation, housing choice voucher subsidies and similar rent subsidy programs. This Section 5.1 shall survive the termination of this Agreement. If Developer or Developer's successors or assigns violates the requirements of this Section 5.1 as determined by the City Manager in the City Manager's sole discretion after the termination of this Agreement, Developer or Developer's successors or assigns shall not be eligible for any City financial assistance programs. 5.2 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 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. 5.3 Real PropertyT. 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 pursuant to the provisions of this Agreement. 5.4 No Other Exemptions. During the term of 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. 5.5 Insurance Requirements. er (1) Developer shall provide and maintain or cause to be maintained at all times during the process of constructing the Minimum Improvements and at its sole cost and expense builder's risk insurance, written on a Completed Value Form in an amount equal to one hundred percent (100%) of the building (including Minimum Improvements) replacement value when construction is completed. Coverage shall include the "special perils" form and developer shall furnish City with proof of insurance in the form of a certificate of insurance. (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 property insurance against loss and/or damage to the building (including the Minimum Improvements) under an insurance policy written with the "special perils" form and in an amount not less than the full insurable replacement value of the building (including the Minimum Improvements). Developer shall furnish to City proof of insurance in the form of a certificate of insurance. (3) The term "replacement value" shall mean the actual replacement cost of the building with Minimum Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be reasonably determined from time to time at the request of City, but not more frequently than once every three (3) years. (4) Developer shall notify City immediately in the case of damage exceeding Two Hundred Thousand Dollars ($200,000.00) 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. 5.6 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 accepted, and from time to time shall make all necessary repairs, replacements, renewals and additions. 5.7 Non -Discrimination. In carrying out the project, Developers shall not discriminate against any employee or applicant for employment because of age, color, familial status, 10 gender identity, marital status, mental/physical disability, national origin, race, religion/creed, sex, or sexual orientation. 5.8 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 a decision -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 or after 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. 5.9 Non -Transferability. Until such time as the Minimum Improvements are complete (as certified by City under Section 2.5), this Agreement may not be assigned by Developer nor may the Property be transferred by Developer to another party, except the Agreement and the Property may be conveyed to a new entity owned or controlled by Developer for purposes of structuring ownership or financing. Thereafter, with the prior written consent of City, which shall not be unreasonably withheld, Developer shall have the right to transfer the Property to another party and assign this Agreement, and upon assumption of the Agreement by the assignee, Developer shall no longer be responsible for its obligations under this Agreement. 5.10 No change in Tax Classification. Developer agrees that it will not take any action to change, or otherwise allow, the classification of the Property for property tax purposes to become other than commercial property and to be taxed as such under Iowa law. This restriction shall terminate upon the termination of this Agreement. However, Developer may apply for a reclassification of the Property in the event Iowa law is modified to allow a building containing four rental units within one building to be classified as residential for property tax purposes. 5.11 Restrictions on Use. Developer agrees for itself, and its successors and assigns, and every successor in interest to the Property or any part thereof, for the duration of this Agreement, 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 restaurant and upper -story housing, 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, gender identity, national origin, age or disability in the sale, lease, rental, use or occupancy of the Property or any improvements erected or to be 11 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). 5.12 Operation as Short -Term Rental. For and in consideration of the Loan offered under this Agreement, until the Termination Date, no more than ten percent (10%) of the Qualifying Housing Rental Units receiving loan funding under Section 3.5 of this Agreement shall be operated as short-term rentals. Short-term rental means a rental period of less than thirty (30) consecutive days. 5.13 Compliance with Laws. Developer shall comply with all laws, rules and regulations relating to its businesses, other than laws, rules and regulations 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 6. EVENTS OF DEFAULT AND REMEDIES. 6.1 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. (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. 6.2. 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: 12 (1) City may suspend its performance under this Agreement until it receives assurances from the Developer deemed adequate by City, that the Developer will cure its default and continue its performance under this Agreement; (2) Until the Closing Date, City may cancel and rescind this Agreement; (3) Until issuance of the Certificate of Completion, City shall be entitled to recover from Developer the sum of all amounts expended by City in connection with the funding of the Downtown Rehab Loan/Grant and Economic Development Grant to Developer and City may take any action, including any legal action it deems necessary, to recover such amounts from the Developer; (4) City may withhold the Certificate of Completion; or (5) 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. 6.3 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. 6.4 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. 6.5 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. 6.6 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 13 adequate by Developer, that City will cure its default and continue its performance under this Agreement. SECTION 7. GENERAL TERMS AND PROVISIONS. 7.1 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, addressed as follows: If to Developer: Michael Fullan Millwork Flats, L.L.C. 7465 Chavenelle Rd. Dubuque, Iowa 52002 With copy to: Drake Law Firm, P.C. D. Flint Drake 300 Main Street, Suite 323 Dubuque, IA 52001 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 either party as that party may, from time to time designate in writing and forward to the other as provided in this Section. 7.2 Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of City and Developer and their respective successors and assigns. 7.3 Force Majeure. A party shall be excused from its obligations under this Agreement if and to the extent and during such time as the party is prevented, impeded, or hindered, unable to perform its obligations or is delayed in doing so due to events or conditions outside of the party's reasonable control and after the party has taken reasonable steps to avoid or mitigate such event or its consequences (each a "Force Majeure Event") including, without limitation in any way, as the result of any acts of God, war, fire, or other casualty, riot, civil unrest, extreme weather conditions, terrorism, strikes and/or labor disputes, pandemic, epidemic, quarantines, government stay-at-home orders, municipal and other government orders, failure of Internet, or other matter beyond the control of 14 such party. Upon the occurrence of a Force Majeure Event, the party incurring such Force Majeure Event will promptly give notice to the other party identifying the Force Majeure Event, explaining how it impacts performance and the estimated duration, identifying the relief requested, agreeing to limit damages to the other party and to immediately resume performance upon termination of the Force Majeure Event, and agreeing to supplement the notice as more information becomes available, and thereafter the parties shall meet and confer in good faith in order to identify a cure of the condition affecting its performance as expeditiously as possible. No obligation to make a payment required by this Agreement is excused by a Force Majeure Event. The nonperforming party shall not be entitled to any damages or additional payments of any kind for any such delay. 7.4 Termination Date. This Agreement and the rights and obligations of the parties hereunder shall terminate on June 1, 2043 (the Termination Date). 7.5 Execution by„Facsimile. The parties agree that this Agreement may be transmitted between them by facsimile machine. 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. 7.6 Memorandum of Development Agreement. Developer 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. IN WITNESS WHEREOF, City has caused this Agreement to be duly executed in its name and behalf by its Mayor and attested to by its City Clerk and Developer has caused this Agreement to be duly executed on or as of the first above written. CITY OF DUBUQUE, IOWA ■_ r B• rlf'+. gh Attest - Adrienne N. Breitfelder, City Clerk 15 MILLWORK FLATS, L.L.C, w�f;;Z By t - Michael Fullan, Organizer 16 LIST OF EXHIBITS EXHIBIT A City Attorney's Certificate EXHIBIT B Opinion of Developer's Counsel EXHIBIT C City Certificate EXHIBIT D Memorandum of Development Agreement EXHIBIT E Urban Renewal Plan EXHIBIT F Certification of Completion EXHIBIT G Loan Agreement EXHIBIT H Promissory Note EXHIBIT I Mortgage 17 EXHIBIT A CITY ATTORNEY'S CERTIFICATE in Barry A. Lindahl, Esq. Senior Counsel THE COF Suite 330, Harbor View Place 300 Main StreetDtUB E Dubuque, Iowa 52001-6944 (563) 583-4113 office (563) 583-1040 fax Masterpiece on the Mississippi balesgkcityofdubuque. org (DATE) RE: Dear Dubuque All-Ameriee dq I IrlI. I I I 2007-2012.2013 2017*2019 I have acted as counsel for the City of Dubuque, Iowa, in connection with the execution and delivery of a certain Development Agreement between Millwork Flats, L.L.C. (Developer) and the City of Dubuque, Iowa (City) dated for reference purposes the day of 12024. 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. BAL:tIs 19 Very sincerely, Barry A. Lindahl, Esq. City Attorney EXHIBIT B OPINION OF DEVELOPER'S COUNSEL 20 Mayor and City Councilmembers City 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 Millwork Flats, L.L.C., 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 , 2024. 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 company organized and existing under the laws of the State of Iowa and has full power and authority to execute, deliver and perform in full the 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 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. 2. To our actual knowledge with no duty to inquire, 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 with no duty to inquire, 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 21 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. This opinion is rendered for the sole benefit of the City of Dubuque and no other party may rely on this opinion. This opinion is rendered and valid as of the date of this letter and we have no duty to update this opinion for any matters which come to our knowledge after the date of this letter. Sincerely, 22 EXHIBIT C CITY CERTIFICATE 23 Dubuque City Manager's Office City Hall THE CITY OF 50 west 13th street All -America Gill Dubuque, Iowa 52001-4864 NAlM NA[, nl:[JA eIL DUB �� (563) 589-41office (563) 589-4149 49 fax ctymgr@cityofdubuque.org 2007.2012.2013 Masterpiece on the Mississippi 2017*2019 (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 Millwork Flats, L.L.C. (Developer) and the City of Dubuque, Iowa (City) dated for reference purposes the day of 12024. On behalf of the City of Dubuque, I hereby represent and warrant to Developer that: (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. 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 B. (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. 24 (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. (6) 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. (7) The representations and warranties contained in this article shall be correct in all respects on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of the Closing Date. Sincerely, Michael C. Van Milligen City Manager 25 EXHIBIT D MEMORANDUM OF DEVELOPMENT AGREEMENT 26 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 Millwork Flats, L.L.C. was made regarding the following described premises: Lot 384, 385, 386, 384 and the South one-half of Lot 388, in the City of Dubuque, Iowa, according to the United States Commissioners' plat of the survey of the Town of Dubuque, Iowa, And Lot 2 of City Lot 386A in the City of Dubuque, Iowa, according to the Plat recorded as Instrument #2017-4502, records of Dubuque County, Iowa 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 120 CITY OF DUBUQUE, IOWA By: Barry A. Lindahl, Esq. Senior Counsel 27 STATE OF IOWA ) SS COUNTY OF DUBUQUE ) On this day of , 20_, before me, a Notary Public in and for the State of Iowa, in and for said county, personally appeared Barry A. Lindahl, Esq, to me personally known, who being by me duly sworn did say that he is the Senior Counsel for the City of Dubuque, a Municipal Corporation, created and existing under the laws of the State of Iowa and that said instrument was signed and sealed on behalf of said Municipal corporation by authority and resolution of its City Council and said Senior Counsel acknowledged said instrument to be the free act and deed of said Municipal Corporation by it voluntarily executed. Notary Public, State of Iowa EXHIBIT E URBAN RENEWAL PLAN (on file in City Clerk's office, 50 W. 13th Street, Dubuque, IA 52001) 29 EXHIBIT F CERTIFICATE OF COMPLETION 30 CERTIFICATE OF COMPLETION WHEREAS, the City of Dubuque, Iowa, a municipal corporation (the "Grantor"), has granted incentives to Millwork Flats, L.L.C. (the "Grantee"), in accordance with a Development Agreement dated as of [Date] (the "Agreement"), and as amended by the First amendment to Development Agreement, by and among the Grantor, and the Grantee (collectively, the "Agreement"), certain real property located within the Greater Downtown Urban Renewal District of the Grantor and as more particularly described as follows: Lot 384, 385, 386, 384 and the South one-half of Lot 388, in the City of Dubuque, Iowa, according to the United States Commissioners' plat of the survey of the Town of Dubuque, Iowa, And Lot 2 of City Lot 386A in the City of Dubuque, Iowa, according to the Plat recorded as Instrument #2017-4502, records of Dubuque County, Iowa (the "Development Property"); and WHEREAS, said Agreement incorporated and contained certain covenants and conditions with respect to the rehabilitation of the Development Property, and obligated the Grantee to construct certain Minimum Improvements (as defined therein) in accordance with the Agreement; and WHEREAS, the Grantee has to the present date performed said covenants and conditions insofar as they relate to the construction of the Minimum Improvements for rental units in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; and NOW, THEREFORE, pursuant to Section 2.4 of the Agreement, this is to certify that all covenants and conditions of the Agreement with respect to the obligations of the Grantee, and its successors and assigns, to construct the Minimum Improvements on the Development Property for rental units have been completed and performed by 31 the Grantee to the satisfaction of the Grantor and such covenants and conditions are hereby satisfied. The County Recorder of Dubuque County is hereby authorized to accept for recording and to record the filing of this instrument, to be a conclusive determination of the satisfaction of the covenants and conditions as set forth in said Agreement with respect to the Minimum Improvements on the Development Property for rental units, and that the Agreement shall otherwise remain in full force and effect. (SEAL) STATE OF IOWA ) ) SS COUNTY OF DUBUQUE ) CITY OF DUBUQUE, IOWA Mike Van Milligen, City Manager On this day of , 20_, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared and acknowledged said execution of the instrument to be his/her voluntary act and deed. Notary Public in and for Dubuque County, Iowa 32 EXHIBIT G LOAN AGREEMENT 33 CITY OF DUBUQUE, IOWA DOWNTOWN REHABILITATION LOAN PROGRAM LOAN AGREEMENT NUMBER: # 1 - 24 This AGREEMENT, dated as of the day of , 2024, is entered into by and between the CITY OF DUBUQUE, IOWA, a municipal corporation organized and existing under the laws of the State of Iowa (hereinafter referred to as the "City") and Millwork Flats, L.L.C. (hereinafter referred to as the "Owner"). WITNESSETH: Whereas, a Development Agreement Concerning a Downtown Rehabilitation Loan with Owner was approved by the Dubuque City Council on 2024 by Resolution No. _-24 to provide an $500,000 Forgivable Loan for the project. Whereas, Owner's property at 1065 Jackson Street, Dubuque, Iowa, legally described as follows: Lot 384, 385, 386, 384 and the South one-half of Lot 388, in the City of Dubuque, Iowa, according to the United States Commissioners' plat of the survey of the Town of Dubuque, Iowa, And Lot 2 of City Lot 386A in the City of Dubuque, Iowa, according to the Plat recorded as Instrument #2017-4502, records of Dubuque County, Iowa (the "Property"), is located within the boundaries of the Greater Downtown Urban Renewal District most recently established by Resolution No. 410-23 on December 18, 2023; and Whereas, the goals and objectives of the Greater Downtown Urban Renewal Plan (the "Plan") provide for the creation of the financial incentives needed to eliminate conditions of blight through a program of voluntary or compulsory repair and rehabilitation of buildings and to retain or create employment and/or housing opportunities within the District; and Whereas, the City desires to assist Owner in its efforts to develop the Property in compliance with local codes and ordinances, to eliminate certain conditions of physical decay, and to retain or create housing opportunities within the District; and Whereas, without the assistance of the Forgivable Loan, Owner would be unable to develop the Property to its fullest capacity, thereby threatening local housing opportunities. NOW THEREFORE, in consideration of the premises and respective covenants, agreements and representations hereinafter set forth, the parties agree as follows: 1. SOURCE OF FUNDS. City is prepared to provide financial assistance to qualified parties through the use of tax increment financing under Chapter 403 of the Iowa Code, and has allocated funds sufficient to carry out its obligations under this Agreement. 2. LOAN TERMS. City agrees to loan to Owner on the terms and conditions set forth herein the amount of Five Hundred Thousand Dollars ($500,000) that shall consist of the Forgivable Loan funds. Interest on the loan shall be zero percent (0.0%) per annum. The loan, less any amount forgiven by the creation of the Qualifying Rental Units at $10,000 per unit, including interest and principal, shall become due and payable not later than May 1, 2027. 34 At the time of the initial disbursement of loan funds to Owner, Owner shall execute the Promissory Note in the form attached hereto as Exhibit A payable to the order of the City in the principal amount of Five Hundred Thousand Dollars ($500,000) and the Mortgage, attached as Exhibit B. 3. DISBURSEMENT AND USE OF LOAN FUNDS. Loan funds shall be disbursed to Owner by City at the same time as Developer closes on its construction financing with its primary lender. It shall be a condition precedent to the approval of this Agreement that Owner shall have paid all real property taxes and assessments due and payable with respect to the Property and provide evidence of such payment to City prior to approval of this Agreement by City. Owner shall furnish to City written requests for disbursement of loan funds. Such request shall be accompanied by a statement of Owner's Qualifying Housing Rental Units and appropriate documentation of City Inspection and Construction Services approval. It is expressly understood that all funds advanced under this Agreement shall be used by Owner only for the purpose of creating the Qualifying Housing Rental Units set forth in such written requests. Owner shall substantially complete the Project, defined in Paragraph 27(b), in accordance with the terms of this Agreement, on or before December 31, 2026. 4. SECURITY. The loan shall be secured by a Mortgage on the Property, a copy of which is attached as Exhibit B. The value of the Property shall at no time be less than the unpaid balance of any First Mortgage plus the unpaid balance of the City's mortgage. 5. AVAILABLE INCENTIVES. Up to the full amount of the loan shall be forgiven by the City as an incentive for the creation of new housing opportunities. The amount of the loan to be forgiven shall be determined upon completion of the Qualifying Housing Rental Units, defined in Paragraph 27(c). The amount of the loan forgiven shall be as follows: (a) Upon issuance of the Certificate of Completion, Ten thousand dollars ($10,000) but not to exceed a total of $500,000 may be forgiven for each new housing unit created. A new housing unit shall be defined as one of the following: (1) The creation of a housing unit where one did not previously exist; or (2) An existing housing unit which has been significantly transformed and improved. 6. STATUS OF OWNER. Owner represents that it is an organization duly organized and existing under the laws of the State of Iowa; that it is authorized to borrow under this Agreement, to execute and deliver the note and otherwise perform the obligations of this Agreement; that it has authority and power to own its property and conduct its business as it is currently carried on; that the performance of its obligations under this Agreement and the issuance of any note under it will not conflict with any provision of law, the Articles of Incorporation or the Bylaws of Corporation, or any agreement binding on it. Owner also represents, except as disclosed in writing to City, that it is not a party to any pending or threatened litigation or to any proceeding or action for the assessment or collection of additional taxes, and that it knows of no known contingent liabilities not provided for or disclosed in the financial statement provided to City which would affect the ability of Owner to repay this loan. 7. FINANCIAL CONDITION OF OWNER. Owner has delivered to City a statement of Owner's financial condition as of the date of application for financial assistance which fairly represents the financial condition of Owner as of the date stated, all in accordance with generally accepted accounting principles consistently applied, and that the statements still correctly reflect the financial condition and status of its operations as of the date of this Agreement. 35 8. TITLE OF OWNER. Subject to the liabilities reflected on Owner's financial statement as well as those incurred in relation to this Project, Owner represents that it has good and marketable title to the Property, free of any mortgage, pledge, lien, security interest, encumbrance, or charge to all those assets reflected on the financial statement and to assets since acquired. Owner shall provide to City a title and lien search showing no unsatisfied mortgages, judgements, personal taxes, special assessments, tax liens, mechanics liens, or liens of any kind adverse to the title of the Property at Owner's sole cost. Taxes not due or payable or otherwise delinquent are excepted. 9. CONDITIONS OF BORROWING. On the date on which any sum is to be borrowed, Owner, in addition to the Note, shall deliver to City such other papers and documents as may be required to comply with the conditions of this Agreement, as counsel for City may reasonably request. Owner shall be required at the Closing Date defined herein Paragraph 27(a) to comply, or establish compliance, as follows: (a) That the representations and warranties of Owner are correct on the Closing Date; (b) That Owner has fully complied with the covenants and agreements to the extent required before the Closing Date; (c) That no default or event which might mature into a default has occurred or continues to the Closing Date; (d) That no litigation or proceeding is pending against Owner which would materially affect the assets of Owner, taking into account the entire assets and overall business of Owner; (e) That there has been no material adverse change in the financial condition of Owner from that shown by the financial statement delivered to City under paragraph 8; (f) That no fire or casualty has occurred in any building or to any inventories or property of Owner that might substantially, adversely affect the conduct of its business; and (g) That all taxes due as of the Closing date have been paid. 10. SPECIAL CONDITIONS. Owner agrees to comply with the following requirements established by the City for the Central Avenue Forgivable Loan Program: (a) All exterior work must comply with City of Dubuque Architectural Guidelines. 11. INSURANCE REQUIREMENTS. Owner agrees to comply with the following requirements established by the City for the Forgivable Loan: (a) 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. (b) Upon completion of construction of the Minimum Improvements and up to the Termination Date, Owner shall maintain, or cause to be maintained, at its cost and expense property insurance against loss and/or damage to the building (including the Minimum Improvements) under an insurance policy written with the "special perils" form and in an amount not less than the full insurable replacement value of the building (including the Minimum 36 Improvements), naming City as lender loss payable. Owner shall furnish to City proof of insurance in the form of a certificate of insurance. (c) The term "replacement value" shall mean the actual replacement cost of the building with Minimum Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be reasonably determined from time to time at the request of City, but not more frequently than once every three (3) years. (d) Owner shall notify City immediately in the case of damage exceeding $200,000 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 Owner as its interests may appear, and Owner 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, Owner shall apply the Net Proceeds of any insurance relating to such damage received by Owner 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). Owner shall complete the repair, reconstruction and restoration of Minimum Improvements whether or not the Net Proceeds of insurance received by Owner for such purposes are sufficient. 12. COVENANTS OF OWNER. Owner covenants that it will: (a) Correct code deficiencies in accordance with all applicable building and fire codes within the scope of the project. (b) Provide for the development, repair, and rehabilitation of the Property in accordance with all applicable building, zoning, fire and housing codes. (c) Substantially complete the Project on or before December 31, 2026. (d) Maintain at all times insurance as described in the attached Insurance Schedule A as evidenced by Exhibit C attached hereto and entitled "Certificate of Insurance". Said certification shall be renewed on an annual basis and provided to City within thirty (30) days of the anniversary date of this Agreement. (e) Pay when due all taxes, assessments and other liabilities, except those contested in good faith where notice of such contest has been given to the City. (f) Not create or permit to exist any other pledge, security interest, lien or other encumbrance on the security for this Agreement provided in Paragraph 4 above and the Note provided pursuant to this Loan Agreement without written consent of City. (g) Give prompt notice in writing to City of any adverse development, financial or otherwise, which would materially affect its business, properties or affairs, or the ability of Owner to perform its obligations under this Agreement or the Note executed pursuant to the terms of this Agreement. (h) Use loan funds only for purposes authorized herein. (i) Pay all recording and filing fees, mortgage taxes, documentary stamps, and any other taxes payable in connection with this transaction. (j) For and in consideration of the loan offered under this Agreement, during the operation of the Property as a rental residential property, Owner shall accept, or cause to be accepted, 37 applications from prospective tenants with a public assistance source of income including but not limited to housing vouchers issued under the U.S. HUD's Section 8 voucher program or a similar program who are otherwise qualified prospective tenants. Owner shall not deny any tenant a lease based on a public assistance source of income. A public assistance source of income means income and support derived from any tax supported federal, state or local funds, including, but not limited to, social security, supplemental security income, temporary assistance for needy families, family investment program, general relief, food stamps, unemployment compensation, housing choice voucher subsidies, and similar rent subsidy programs. This shall survive the termination of this Agreement. If Owner, or Owner's successors or assigns violates this requirement as determined by the City Manager in the City Manager's sole discretion after the termination of this Agreement, Owner or Owner's successors or assigns shall not be eligible for any City financial assistance programs. 13. DEFAULT. Owner shall be in default upon the occurrence of any of the following events: (a) Owner fails to pay any installment of principal or interest on any note (whether to City or any other public or private lender) when due or within thirty (30) days thereafter; (b) Owner becomes insolvent or admits in writing its inability to pay its debts as they mature; or applies for, consents to or acquiesces in the appointment of a trustee or receiver for any of its property; or in the absence of an application for consent or acquiescence, a trustee or receiver is appointed for it or a substantial part of its property and is not discharged within ten (10) days; or it otherwise commits an act of bankruptcy; or any bankruptcy, reorganization, debt arrangement or other proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding is instituted by or against it and if instituted is consented to or acquiesced in by it or remains for ten days undismissed; (c) Owner fails in the performance of any of the terms and conditions of this Agreement (d) Any warranty made by Owner is untrue in any material respect, or any schedule, statement, report, notice or writing furnished by Owner to City is untrue in any material respect on the date as of which the facts set forth are stated or certified, provided any such error is not the result of unintentional errors which are capable of correction without prejudice to the City; (e) Any government board, agency, department, commission or public or private lender takes possession or control of any substantial part of any property of Owner. 14. ACCELERATION AT OPTION OF CITY. If any event of default occurs, City may, after ten days' written notice of default to Owner, declare Note immediately due and payable, at which time all unpaid principal and interest shall immediately become due and payable. City shall promptly advise Owner in writing of any acceleration under this paragraph, but the failure to do so shall not impair the effect of such declaration. 15. MAINTENANCE OF RECORDS AND RIGHT TO INSPECT. Owner shall keep and maintain books, records and other documents relating directly to the receipt and disbursement of loan funds; and any duly authorized independent accounting representative of City shall at all reasonable times have access to and the right to inspect, copy, audit and examine all such books and other documents of Owner pertaining to the project until the completion of all close out procedures respecting City's loan and the final settlement and conclusion of all issues arising out of said loan. 16. ADDRESS. Owner's principal business address is: Millwork Flats, L.L.C. 7465 Chavenelle Rd Dubuque, IA 52002 IN Owner shall promptly give City written notice of any further change in its principal office address. City's address is: City Manager City Hall 50 West 13th Street Dubuque, Iowa 52001 17. LIMITATION OF CITY'S LIABILITY FOR PROJECT ACTIVITIES. City shall not be liable to Owner, or to any party, for the completion of, or the failure to complete, any activities which are part of the Project, except as may be specifically provided in this Agreement or other written agreements between City and Owner or any of Owner's affiliates or subsidiaries. Owner agrees to indemnify, hold harmless and defend City from any such claims. 18. CONFLICT OF INTEREST. Owner certifies that to its knowledge 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 a decision making process or gain inside information with regard to the Project, has nor shall have any interest, direct or indirect, in any contract or subcontract, or in any activity, or benefit therefrom, which is part of this Project at any time during or for one year after such person's tenure. 19. NONDISCRIMINATION. In carrying out the project, Developer shall not discriminate against any employee or applicant for employment because of age, color, familial status, gender identity, marital status, mental/physical disability, national origin, race, religion/creed, sex, or sexual orientation. Owner shall post in a conspicuous place, available to employees and applicants for employment, notices to be provided by City setting forth the provisions of this nondiscrimination clause. 20. DISCLAIMER OF RELATIONSHIPS. Nothing contained in this Agreement between the parties, nor any act of City or Owner shall be deemed or construed by any of the parties, or by any third persons, to create any relationship of third party beneficiary, principal or agent, limited or general partnership, or joint venture. 21. NOTICE. Any notice, if mailed by United States certified mail, shall be deemed given when mailed, postage prepaid, addressed to the other party at its address shown above, or at any other address subsequently designated by either party to the other. 22. SUCCESSORS AND ASSIGNS. All covenants, representations, warranties and agreements herein set forth shall be binding upon Owner, and its legal representatives, successors and assigns. This Agreement may not be assigned by City or Owner without the express written consent of the other party. 23. LEGALITY. If any provision of this Agreement shall, for any reason, be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, but this Agreement shall be construed as if such invalid or unenforceable provision had never been contained herein. 24. GOVERNING LAW. This Agreement and all rights and duties hereunder, including but not limited to all matters of construction, validity and performance shall be governed by the laws of the State of Iowa. 25. SURVIVAL OF REPRESENTATIONS. All representations or warranties of Owner shall survive the execution and delivery of this Agreement and any note executed and delivered under it, and no investigation by City nor any closing shall affect the representations or warranties or the right of City to rely on and enforce them. 39 26. DELAY. No delay on the part of City or the holder of any note in the exercise of any right shall operate as a waiver, nor shall any single or partial exercise of any right preclude other or additional exercise of any right. 27. DEFINITIONS. (a) "Closing Date" shall mean the date on which this Agreement is executed by the parties. (b) "Project" shall mean the development project of Owner's property at 1065 Jackson Street, Dubuque, Iowa. (c) "Qualifying Housing Rental Units" shall mean those eighty-three (83) residential rental units created by Owner during and for the Project and identified in Owner's application for financial assistance. (d) "New housing unit" shall mean either a housing unit created where one did not previously exist, or an existing housing unit which has been significantly transformed and improved. Dated this day of 12024. CITY OF DUBUQUE, IOWA By: Brad M. Cavanagh, Mayor ATTEST: MILLWORK FLATS, L.L.C. By: Adrienne N. Breitfelder, City Clerk .m Michael Fullan, Organizer EXHIBIT H PROMISSORY NOTE 41 City of Dubuque, Iowa PROMISSORY NOTE Date: 2024 Loan Number: DRLP # 1 - 24 Fund Source: Downtown Rehabilitation Loan Program (TIF) $500,000 FOR VALUE RECEIVED, the undersigned, Millwork Flats, L.L.C., 1065 Jackson Street, Dubuque, Iowa, promises to pay to the order of the City of Dubuque, Iowa, 50 W. 13th Street, Dubuque, Iowa, 52001, or at such place as it may direct, the sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000), together with interest at the rate of 0 % per annum, upon the unpaid balance, in monthly principal payments in the amount of $0.00, beginning on the first day of the first month after initial disbursement and on the first day of each month thereafter until paid in full. The loan, less any amount forgiven by the creation of the Qualifying Rental Units at $10,000 per unit, including interest and principal, shall become due and payable not later than May 1, 2027. If a default occurs under this Promissory Note or any of the other agreements between the undersigned and the holder and is not cured within TEN (10) DAYS after written notice to the undersigned, then the holder may, as its right and option, declare immediately due and payable the principal balance of this Promissory Note and interest accrued hereon. The undersigned further agrees to pay all costs of collection, including reasonable attorneys' fees. The City of Dubuque may at any time renew this Promissory Note or extend its maturity date for any period and release any security for, or any party to this Promissory Note, all without notice to or consent of and without releasing any maker, accommodation maker, endorser or guarantor from any liability on the Promissory Note. Presentment or other demand for payment, notice of dishonor and protest are hereby waived by the undersigned and each endorser and guarantor. This Promissory Note is subject to the Loan Agreement of same date by and between the undersigned and the City of Dubuque (including but not limited to a reduction in the principal amount of this Promissory Note as authorized by paragraph 5 of said Loan Agreement) and any default under said Loan Agreement is a default under this Promissory Note. Signed, Millwork Flats, L.L.C. Michael Fullan, Organizer 42 EXHIBIT I MORTGAGE 43 Prepared by: Jill M. Connors City Hall, 50 W. 13th Street, Dubuque, Iowa 52001 Phone: 563-583-4213 Return to: same MORTGAGE THIS MORTGAGE is made between Millwork Flats, L.L.C. ("Mortgagor") and City of Dubuque, Iowa ("Mortgagee"). [ ] If this box is checked, this Mortgage is a Purchase Money Mortgage as defined in the Iowa Code. 1. Grant of Mortgage and Security Interest. Mortgagor hereby sell, convey and mortgage unto Mortgagee, and grant a security interest to Mortgagee in the following described property: a. Land and Buildings. All of Mortgagor's' right, title and interest in and to the following described real estate situated in Dubuque County, Iowa (the "Land"); Lot 384, 385, 386, 384 and the South one-half of Lot 388, in the City of Dubuque, Iowa, according to the United States Commissioners' plat of the survey of the Town of Dubuque, Iowa, And Lot 2 of City Lot 386A in the City of Dubuque, Iowa, according to the Plat recorded as Instrument #2017-4502, records of Dubuque County, Iowa b. Personal Property. All fixtures and other personal property integrally belonging to, or hereafter becoming an integral part of the Land or Buildings. whether attached or detached, including but not limited to, light fixtures, shades, rods, blinds, Venetian blinds, awnings, storm windows, screens, linoleum, water softeners, automatic heating and air- conditioning equipment and all proceeds, products, increase, issue, accessions, attachments, accessories, parts, additions, repairs. replacements and substitutes of, to, and for the foregoing (the "Personal Property"). c. Revenues and Income. All rents, issues, profits, leases, condemnation awards and insurance proceeds now or hereafter arising from the ownership, occupancy or use of the Land, Buildings and Personal Property, or any part thereof (the "Revenues and Income"). TO HAVE AND TO HOLD the Land, Buildings, Personal Property and Revenues and Income (collectively called the "Mortgaged Property"), together with all privileges, hereditaments thereunto now or hereafter belonging, or in any way appertaining and the products and proceeds thereof, unto Mortgagee, its successors and assigns. 2. Obligations. This Mortgage secures the following (hereinafter collectively referred to as the "Obligations"): a. The payment of the loan made by Mortgagee to Millwork Flats, L.L.C. evidenced by a promissory note dated , 2024 in the principal amount of $500,000.00, any renewals, extensions, modifications or refinancing thereof and any promissory notes issued in substitution therefor; and b. All other obligations of Mortgagor to Mortgagee, now existing or hereafter arising, whether direct or indirect, contingent or absolute and whether as maker or surety, including, but not limited to, future advances and amounts advanced and expenses incurred by Mortgagee pursuant to this Mortgage. 3. Representations and Warranties of Mortgagor. Mortgagor represents, warrants and covenants to Mortgagee that (i) Mortgagors hold clear title to the Mortgaged Property and title in fee simple in the Land; (ii) Mortgagor has the right, power and authority to execute this Mortgage and to mortgage, and grant a security interest in the Mortgaged Property; (iii) the Mortgaged Property is free and clear of all liens and encumbrances, except for real estate taxes not yet delinquent and except as otherwise stated in subparagraph 1a. herein; (iv) Mortgagor will warrant and defend title to the Mortgaged Property and the lien and priority of this Mortgage against all claims and demands of all persons, whether now existing or hereafter arising; and (v) all buildings and improvements now or hereafter located on the Land are, or will be, located entirely within the boundaries of the Land. 4. Payment and Performance of the Obligations. Mortgagor will pay all amounts payable under the Obligations in accordance with the terms of the Obligations when and as due and will timely perform all other obligations of Mortgagor under the Obligations. The provisions of the Obligations are hereby incorporated by reference into this Mortgage as if fully set forth herein. 5. Taxes. Mortgagor shall pay each installment of all taxes and special assessments of every kind, now or hereafter levied against the Mortgaged Property before the same become delinquent, without notice or demand, and shall deliver to Mortgagee proof of such payment within fifteen (15) days after the date in which such tax or assessment becomes delinquent. 6. Liens. Mortgagor shall not create, incur or suffer to exist any lien, encumbrance, security interest or charge on the Mortgaged Property or any part thereof which might or could be held to be equal or prior to the lien of this Mortgage, other than the lien of current real estate taxes and installments of special assessments with respect to which no penalty is yet payable. Mortgagor shall pay, when due, the claims of all persons supplying labor or materials to or in connection with the Mortgaged Property. 7. Compliance with Laws. Mortgagor shall comply with all present and future statutes, laws, rules, orders, regulations and ordinances affecting the Mortgaged Property, any part thereof or the use thereof. 8. Permitted Contests. Mortgagor shall not be required to (i) pay any tax, assessment or other charge referred to in paragraph 5 hereof, (ii) discharge or remove any lien, encumbrance or charge referred to in paragraph 6 hereof, or (iii) comply with any statute, law, rule, regulation or ordinance referred to in paragraph 7 hereof, so long as Mortgagor shall contest, in good faith, the existence, amount or the validity thereof, the amount of damages caused thereby or the extent of Mortgagor's liability therefor, by appropriate proceedings which shall operate during the pendency thereof to prevent (A) the collection of, or other realization upon the tax, assessment, charge or lien, encumbrances or charge so contested, (B) the sale, forfeiture or loss of the Mortgaged Property or any part thereof, and (C) any interference with the use or occupancy of the Mortgaged Property or any part thereof. Mortgagor shall give prompt written notice to Mortgagee of the commencement of any contest referred to in this paragraph 8. 9. Care of Property. Mortgagor shall take good care of the Mortgaged Property; shall keep the Buildings and Personal Property now or later placed upon the Mortgaged Property in good and reasonable repair and shall not injure, destroy or remove either the Buildings or Personal Property during the term of this Mortgage. Mortgagor shall not make any material alteration to the Mortgaged Property without the prior written consent of Mortgagee. 10. Insurance. a. Risks to be Insured. Mortgagor, at its sole cost and expense, shall maintain insurance on the Building and other improvements now existing or hereafter erected on the Land and on the Personal Property included in the Mortgaged Property against loss by fire, extended coverage perils and such other hazards as Mortgagee may from time to time require, such insurance to have a "Replacement Cost" endorsement attached thereto, with the amount of the insurance at least equal to the balance of the Obligations. Such insurance shall name Mortgagee as a loss payee. At Mortgagor's option, such policy may have a coinsurance clause of not less than 90% of replacement cost provided the policy contains an appropriate form of cost escalation endorsement. Mortgagor will at its sole cost and expense, from time to time, and at any time at the request of Mortgagee, provide Mortgagee with evidence satisfactory to Mortgagee of the replacement cost of Mortgaged Property. Mortgagor will maintain such other insurance as Mortgagee may reasonably require. b. Policy Provisions. All insurance policies and renewals thereof maintained by Mortgagor pursuant to this Mortgage shall be written by an insurance carrier satisfactory to Mortgagee, contain a mortgagee clause in favor of and in form acceptable to Mortgagee, contain an agreement of the insurer that it will not amend, modify or cancel the policy except after thirty (30) days prior written notice to Mortgagee, and be reasonably satisfactory to Mortgagee in all other respects. c. Delivery of Policy or Certificate. If requested by Mortgagee, Mortgagor will deliver to Mortgagee original policies satisfactory to Mortgagee evidencing the insurance which is required under this Mortgage, and Mortgagor shall promptly furnish to Mortgagee all renewal notices and, upon request of Mortgagee, evidence of payment thereof. At least ten (10) days prior to the expiration date of a required policy, Mortgagor shall deliver to Mortgagee a renewal policy in form satisfactory to Mortgagee. d. Assignment of Policy. If the Mortgaged Property is sold at a foreclosure sale or if Mortgagee shall acquire title to the Mortgaged Property, Mortgagee shall have all of the right, title and interest of Mortgagor in and to any insurance policies required hereunder, and the unearned premiums thereon, and in and to the proceeds thereof resulting from any damage to the Mortgaged Property prior to such sale or acquisition. e. Notice of Damage or Destruction; Adjusting Loss. If the Mortgaged Property or any part thereof shall be damaged or destroyed by fire or other casualty, Mortgagor will, within five (5) calendar days after the occurrence of such damage or destruction, give written notice thereof to the insurance carrier and to Mortgagee and will not adjust any damage or loss which is estimated by Mortgagor in good faith to exceed $25,000 unless Mortgagee shall have joined in or concurred with such adjustment; but if there has been no adjustment of any such damage or loss within four (4) months from the date of occurrence thereof and if an Event of Default shall exist at the end of such four (4) month period or at any time thereafter, Mortgagee may alone make proof of loss, adjust and compromise any claim under the policies, and appear in and prosecute any action arising from such policies. In connection therewith, Mortgagor do hereby irrevocably authorize, empower and appoint Mortgagee as attorney -in -fact for Mortgagor (which appointment is coupled with an interest) to do any and all of the foregoing in the name and on behalf of Mortgagor. f. Application of Insurance Proceeds. All sums paid under any insurance policy required by this Mortgage shall be paid to Mortgagee, which shall, at its option, apply the same (after first deducting therefrom Mortgagee's expenses incurred in collecting the same including but not limited to reasonable attorney's fees) to the reduction of the Obligations or to the payment of the restoration, repair, replacement or rebuilding of Mortgaged Property that is damaged or destroyed in such manner as Mortgagee shall determine and secondly to the reduction of the Obligations. Any application of insurance proceeds to principal of the Obligations shall not extend or postpone the due date of the installments payable under the Obligations or change the amount of such installments. g. Reimbursement of Mortgagee's Expenses. Mortgagor shall promptly reimburse Mortgagee upon demand for all of Mortgagee's expenses incurred in connection with the collection of the insurance proceeds, including but not limited to reasonable attorneys fees, and all such expenses shall be additional amounts secured by this Mortgage. 11. Inspection. Mortgagee, and its agents, shall have the right at all reasonable times, to enter upon the Mortgaged Property for the purpose of inspecting the Mortgaged Property or any part thereof. Mortgagee shall, however, have no duty to make such inspection. Any inspection of the Mortgaged Property by Mortgagee shall be entirely for its benefit and Mortgagor shall in no way rely or claim reliance thereon. 12. Protection of Mortgagee's Security. Subject to the rights of Mortgagor under paragraph 8 hereof, if Mortgagor fails to perform any of the covenants and agreements contained in this Mortgage or if any action or proceeding is commenced which affects the Mortgaged Property or the interest of the Mortgagee therein, or the title thereto, then Mortgagee, at Mortgagee's option, may perform such covenants and agreements, defend against or investigate such action or proceeding, and take such other action as Mortgagee deems necessary to protect Mortgagee's interest. Any amounts or expenses disbursed or incurred by Mortgagee in good faith pursuant to this paragraph 12 with interest thereon at the rate of 10% per annum, shall become an Obligation of Mortgagor secured by this Mortgage. Such amounts advanced or disbursed by Mortgagee hereunder shall be immediately due and payable by 45 Mortgagor unless Mortgagor and Mortgagee agree in writing to other terms of repayment. Mortgagee shall, at its option, be subrogated to the lien of any mortgage or other lien discharged in whole or in part by the Obligations or by Mortgagee under the provisions hereof, and any such subrogation rights shall be additional and cumulative security for this Mortgage. Nothing contained in this paragraph shall require Mortgagee to incur any expense or do any act hereunder, and Mortgagee shall not be liable to Mortgagor for any damage or claims arising out of action taken by Mortgagee pursuant to this paragraph. 13. Condemnation. Mortgagor shall give Mortgagee prompt notice of any action, actual or threatened, in condemnation or eminent domain and hereby assign, transfer and set over to Mortgagee the entire proceeds of any award or claim for damages for all or any part of the Mortgaged Property taken or damaged under the power of eminent domain or condemnation. Mortgagee is hereby authorized to intervene in any such action in the names of Mortgagor, to compromise and settle any such action or claim, and to collect and receive from the condemning authorities and give proper receipts and acquittances for such proceeds. Any expenses incurred by Mortgagee in intervening in such action or compromising and settling such action or claim, or collecting such proceeds shall be reimbursed to Mortgagee first out of the proceeds. The remaining proceeds or any part thereof shall be applied to reduction of that portion of the Obligations then most remotely to be paid, whether due or not, or to the restoration or repair of the Mortgaged Property, the choice of application to be solely at the discretion of Mortgagee. 14. Fixture Filing. From the date of its recording, this Mortgage shall be effective as a financing statement filed as a fixture filing with respect to the Personal Property and for this purpose the name and address of the debtor is the name and address of Mortgagor as set forth in paragraph 20 herein and the name and address of the secured party is the name and address of the Mortgagee as set forth in paragraph 20 herein. 15. Events of Default. Each of the following occurrences shall constitute an event of default hereunder ("Event of Default"): a. Mortgagor shall default in the due observance or performance of or breach its agreement contained in paragraph 4 hereof or shall default in the due observance or performance of or breach any other covenant, condition or agreement on its part to be observed or performed pursuant to the terms of this Mortgage. b. Mortgagor shall make an assignment for the benefits of its creditors, or a petition shall be filed by or against Mortgagor under the United States Bankruptcy Code or Mortgagor shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of a material part of its properties or of the Mortgaged Property or shall not, within thirty (30) days after the appointment of a trustee, receiver or liquidator of any material part of its properties or of the Mortgaged Property, have such appointment vacated. c. A judgment, writ or warrant of attachment or execution, or similar process shall be entered and become a lien on or be issued or levied against the Mortgaged Property or any part thereof which is not released, vacated or fully bonded within thirty (30) days after its entry, issue or levy. d. An event of default, however defined, shall occur under any other mortgage, assignment or other security document constituting a lien on the Mortgaged Property or any part thereof. 16. Acceleration; Foreclosure. Upon the occurrence of any Event of Default and at anytime thereafter while such Event of Default exists, Mortgagee may, at its option, after such notice as may be required by law, exercise one or more of the following rights and remedies (and any other rights and remedies available to it): a. Mortgagee may declare immediately due and payable all Obligations secured by this Mortgage, and the same shall thereupon be immediately due and payable, without further notice or demand. b. Mortgagee shall have and may exercise with respect to the Personal Property, all the rights and remedies accorded upon default to a secured party under the Iowa Uniform Commercial Code. If notice to Mortgagor of intended disposition of such property is required by law in a particular instance, such notice shall be deemed commercially reasonable if given to Mortgagor at least ten (10) days prior to the date of intended disposition. c. Mortgagee may (and is hereby authorized and empowered to) foreclose this Mortgage in accordance with the law of the State of Iowa, and at any time after the commencement of an action in foreclosure, or during the period of redemption, the court having jurisdiction of the case shall at the request of Mortgagee appoint a receiver to take immediate possession of the Mortgaged Property and of the Revenues and Income accruing there from, and to rent or cultivate the same as he may deem best for the interest of all parties concerned, and such receiver shall be liable to account to Mortgagor only for the net profits, after application of rents, issues and profits upon the costs and expenses of the receivership and foreclosure and upon the Obligations. 17. Redemption. It is agreed that if this Mortgage covers less than ten (10) acres of land, and in the event of the foreclosure of this Mortgage and sale of the property by sherifrs sale in such foreclosure proceedings, the time of one year for redemption from said sale provided by the statues of the State of Iowa shall be reduced to six (6) months provided the Mortgagee, in such action files an election to waive any deficiency judgment against Mortgagor which may arise out of the foreclosure proceedings; all to be consistent with the provisions of Chapter 628 of the Iowa Code. If the redemption period is so reduced, for the first three (3) months after sale such right of redemption shall be exclusive to the Mortgagor, and the time periods in Sections 628.5, 628.15 and 628.16 of the Iowa Code shall be reduced to four (4) months. It is further agreed that the period of redemption after a foreclosure of this Mortgage shall be reduced to sixty (60) days if all of the three following contingencies develop: (1) The real estate is less than ten (10) acres in size; (2) the Court finds affirmatively that the said real estate has been abandoned by the owners and those persons personally liable under this Mortgage at the time of such foreclosure; and (3) Mortgagee in such action files an election to waive any deficiency judgment against Mortgagor or their successors in interest in such action. If the redemption period is so reduced, Mortgagor or their successors in interest or the owner shall have the exclusive right to redeem for the first thirty (30) days after such sale, and the time provided for redemption by creditors as provided in Sections 628.5, 628.15 and 628.16 of the Iowa Code shall be reduced to forty (40) days. Entry of appearance by pleading or docket entry by or on behalf of Mortgagor shall be a presumption that the property is not abandoned. Any such redemption period shall be consistent with all of the provisions of Chapter 628 of the Iowa Code. This paragraph shall not be construed to limit or otherwise affect any other redemption provisions contained in Chapter 628 of the Iowa Code. 18. Attorneys' Fees. Mortgagor shall pay on demand all costs and expenses incurred by Mortgagee in enforcing or protecting its rights and remedies hereunder, including, but not limited to, reasonable attorneys' fees and legal expenses. 19. Forbearance not a Waiver, Rights and Remedies Cumulative. No delay by Mortgagee in exercising any right or remedy provided herein or otherwise afforded by law or equity shall be deemed a waiver of or preclude the exercise of such right or remedy, and no waiver by Mortgagee of any particular provisions of this Mortgage shall be deemed effective unless in writing signed 46 by Mortgagee. All such rights and remedies provided for herein or which Mortgagee or the holder of the Obligations may have otherwise, at law or in equity, shall be distinct, separate and cumulative and may be exercised concurrently, independently or successively in any order whatsoever, and as often as the occasion therefor arises. 20. Notices. All notices required to be given hereunder shall be in writing and deemed given when personally delivered or deposited in the United States mail, postage prepaid, sent certified or registered, addressed as follows: a. If to Mortgagor, Millwork Flats, L.L.C., 7465 Chavenelle Rd., Dubuque, Iowa 52002 b. If to Mortgagee, to: Economic Development Department; City Hall; 1300 Main St., Dubuque, Iowa 52001 or to such other address or person as hereafter designated in writing by the applicable party in the manner provided in this paragraph for the giving of notices. 21. Severability. In the event any portion of this Mortgage shall, for any reason, be held to be invalid, illegal or unenforceable in whole or in part, the remaining provisions shall not be affected thereby and shall continue to be valid and enforceable and if, for any reason, a court finds that any provision of this Mortgage is invalid, illegal, or unenforceable as written, but that by limiting such provision it would become valid, legal and enforceable then such provision shall be deemed to be written, construed and enforced as so limited. 22. Further Assurances. At any time and from time to time until payment in full of the Obligations, Mortgagor will, at the request of Mortgagee, promptly execute and deliver to Mortgagee such additional instruments as may be reasonably required to further evidence the lien of this Mortgage and to further protect the security interest of Mortgagee with respect to the Mortgaged Property, including, but not limited to, additional security agreements, financing statements and continuation statements. Any expenses incurred by Mortgagee in connection with the recordation of any such instruments shall become additional Obligations of Mortgagor secured by this Mortgage. Such amounts shall be immediately due and payable by Mortgagor to Mortgagee. 23. Successors and Assigns bound; Number; Gender; Agents; Captions. The rights, covenants and agreements contained herein shall be binding upon and inure to the benefit of the respective legal representatives, successors and assigns of the parties. Words and phrases contained herein, including acknowledgment hereof, shall be construed as in the singular or plural number, and as masculine, feminine or neuter gender according to the contexts. The captions and headings of the paragraphs of this Mortgage are for convenience only and are not to be used to interpret or define the provisions hereof. 24. Governing Law. This Mortgage shall be governed by and construed in accordance with the laws of the State of Iowa. 25. Release of Rights of Dower, Homestead and Distributive Share. Each of the undersigned hereby relinquishes all rights of dower, homestead and distributive share in and to the Mortgaged Property and waives all rights of exemption as to any of the Mortgaged Property. 26. Acknowledgment of Receipt of Copies of Debt Instrument. Mortgagor hereby acknowledge the receipt of a copy of this Mortgage together with a copy of each promissory note secured hereby. 27. Additional Provisions. Dated: 12024. Millwork Flats, L.L.C., Mortgagor Michael Fullan, Organizer I UNDERSTAND THAT HOMESTEAD PROPERTY IS IN MANY CASES PROTECTED FROM THE CLAIMS OF CREDITORS AND EXEMPT FROM JUDICIAL SALE; AND THAT BY SIGNING THIS MORTGAGE, I VOLUNTARILY GIVE UP MY RIGHT TO THIS PROTECTION FOR THIS MORTGAGED PROPERTY WITH RESPECT TO CLAIMS BASED UPON THIS MORTGAGE. Dated: STATE OF IOWA ss: COUNTY OF DUBUQUE On this day of , 2024, before me, the undersigned, a Notary Public, personally appeared Michael Fullan, to me known to be the identical person named in and who executed the foregoing instrument, and acknowledged that they executed the same as their voluntary act and deed. 47 Prepared by: Ian Hatch, Economic Development, 1300 Main Street, Dubuque IA 52001, 563 589-4105 Return to: Ian Hatch, Economic Deveopment, 1300 Main Street, Dubuque IA 52001, 563 589-4105 RESOLUTION NO. 199-24 APPROVING A DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF DUBUQUE, IOWA, AND MILLWORK FLATS, L.L.C. INCLUDING THE ISSUANCE OF URBAN TAX INCREMENT REVENUE OBLIGATIONS WHEREAS, Millwork Flats, L.L.C. is the owner of the property legally described as follows: Lot 384, 385, 386, 384 and the South one-half of Lot 388, in the City of Dubuque, Iowa, according to the United States Commissioners' plat of the survey of the Town of Dubuque, Iowa, And Lot 2 of City Lot 386A in the City of Dubuque, Iowa, according to the Plat recorded as Instrument #2017-4502, records of Dubuque County, Iowa (the Property); and WHEREAS, the City Council, by Resolution No. 165-24, dated June 3, 2024, declared its intent to enter into a Development Agreement by and between the City of Dubuque, Iowa, and Millwork Flats, L.L.C., including the issuance of Urban Renewal Tax Increment Revenue Obligations; and WHEREAS, pursuant to published notice, a public hearing was held on the proposed Development Agreement on June 17, 2024 at 6:30 p.m.; and WHEREAS, it is the determination of the City Council that approval of the Development Agreement for redevelopment of the Property by Millwork Flats, L.L.C., 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 by and between the City of Dubuque, Iowa, and Millwork Flats, L.L.C., 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 Development Agreement on behalf of the City of Dubuque 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 Development Agreement as herein approved. Passed, approved and adopted this 17th day of June, 2024. Attest: Adrienne N. Breitfelder, City Clerk a• aMayor 2 1065 JACKSON STREET/HISTORIC MILLWORK DISTRICT DUBUQUE, IOWA MILLWORK PLZ21=0 PRESS RELEASE Millwork Flats to Enhance Dubuque's Historic Millwork District with New Mixed -Use Development Dubuque, IA —A groundbreaking partnership development is looking to transform 1065 Jackson Street into Millwork Flats, an innovative mixed -use, multi -family project in Dubuque's Historic Millwork District. A true collaboration by local leaders in hospitality and digital branding, Offal Food Group and Gigantic Design Co., along with a new local developer, Outfly Real Estate, this project is a standout example of community -centric urban design driven by master plans, and feedback from a vast array of Dubuque stakeholders. Millwork Flats will feature first -level commercial spaces with 62 residential units above, designed to be more affordable by offering smaller, efficient living spaces. This strategic development addresses the community's need for diverse housing options, contributing to the district's revitalization and enhancing the urban living experience for all residents. A key component of this exciting development is the introduction of new hospitality concepts by Chef Kevin Scharpf and Offal Food Group, promising to deliver accessible culinary experiences. "We are excited to add to the district's vibrant mix of hospitality options, creating new complementary experiences," said Chef Scharpf. "This infill project offers unique design opportunities that allow us to create something distinctive. Something that stands on its own but also leverages the momentum of the already established concepts in the district." Millwork Flats will host the new headquarters for local design agency, Gigantic Design Co. This move marks a significant expansion for the agency, which has been a cornerstone of Dubuque's Millwork District since 2015 with leadership playing pivotal roles throughout the district's evolution. "Our commitment to the Millwork District is deep-rooted," stated Tom Culbertson. "Evolving alongside the Millwork District since 1996, we understand its unique dynamics and potential. We believe Millwork Flats will be a transformational development for our downtown community, offering our team, future employees, and clients a one -of -a -kind environment for work and collaboration." Currently employing 14 team members, Gigantic Design Co. will benefit from the increased space at Millwork Flats, which will accommodate their growth and enhance their service offerings. The new headquarters will feature a more dynamic photo and video studio, as well as expanded brand application production services for their clients throughout the Greater Dubuque area. Guided by the updated comprehensive master plan for the Millwork District, and inspired by Dubuque Forward's' focus areas and call to action, Millwork Flats is a thoughtfully researched and community -aligned development. This project addresses the critical need for diverse residential options, and aims to create innovative living spaces conducive to both remote work and dynamic urban lifestyles, targeting young professionals and supporting population growth essential for the community's prosperity. Millwork Flats' mixed -use development fosters a sense of place that encourages mobility, green spaces, and entrepreneurial activation and serves as a cultural hub for the district and the wider community. "As we build Millwork Flats, we're not just constructing a building; we're aspiring to cultivate a community," said Michael Fullan, Principal & Co -Founder of Outfly Real Estate. "This project is a testament to thoughtful urban planning and collaborative placemaking. We have been guided by the efforts and expertise of many, and we are thankful for this invaluable input. We are excited to realize a development that fulfills many objectives for the district and the community." The project is contingent upon an approved Development Agreement with the City of Dubuque and the successful approval of State Workforce Housing and Redevelopment Tax Credits. For more information, updates, or general inquiries about Millwork Flats, please visit our dedicated landing page millworkflats.com. ^^� F Air, L e If ■■ ones 1 , ,os,�.cKsohs.aEE.ixs.oACM���w A Kos.A.. DUBUQUE, IOWA MILLWORK is-- e. y i r l` Ell ,p r.MAP y ti A ks� o , I E. IO RK i'e 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: Obi07i2024 and for which the charge is 44.71 Subscribed to before me, a Notary Public in and for Dubuque County, Iowa, this 7th day of June, 2024 4� 2'.- Notary P bl'c in and for Dubuque ounty, Iowa. o z ..,, Ccr�miss;199659 fAy �s�mrniesien Expires Ad text CITY OF DUBUQUE, IOWA OFFICIAL NOTICE PUBLIC NOTICE is hereby given that the Dubuque City Council will conduct a public hearing on the 17th day of June, 2024, at 6:30 p.m., in the Historic Federal Building, 350 W. 6th Street, 2nd floor, Dubuque, Iowa, at which meeting the City Council proposes to take action to approve a Development Agreement between the City of Dubuque, Iowa and Millwork Flats, L.L.C., a copy of which is now on file at the Office of the City Clerk, City Hall, 50 W 13th Street, Dubuque, Iowa, providing for the issuance of economic development grants (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 Area Economic Development District, consisting of the funding of economic development grants for Millwork Flats, L.L.C., under the terms and conditions of the Urban Renewal Plan for the Greater Downtown Urban Renewal Area Economic Development District. The aggregate amount of the Urban Renewal Tax Increment Revenue Grant Obligations cannot be determined at the present time, but is not expected to exceed $3,106,447. At the meeting, the City Council will receive oral and written comments from any resident or property owner of said City to the above action. The official agenda will be posted the Friday before the meeting and will contain public input options. The City Council agenda can be accessed at https://cityofdubuque.novusagenda.conVAgendaPublic/ or by contacting the City Clerk's Office at 563-589-4100, ctyclerk@cityofdubuque.org. Written comments regarding the above public hearings may be submitted to the City Clerk's Office via email at ctyclerk@cityofdubuque.org or by mail to City Clerk's Office, City Hall, 50 W. 13th St., Dubuque, IA 52001, before said time of public hearing. At said time and place of public hearings the City Council will receive any written comments. Copies of supporting documents for the public hearings are on file in the City Clerk's Office and may be viewed Monday through Friday between 8:00 a.m. and 5:00 p.m. Individuals with limited English proficiency, vision, hearing, or speech impairments requiring special assistance should contact the City Clerk's Office at (563) 589-4100, TDD (563) 690-6678, 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 3rd day of June 2024. Adrienne N. Breitfelder, City Clerk It 6/7