Freedom Inc Lease Salina St.CITY OF DUBUQUE, IOWA
MEMORANDUM
June 14, 2001
TO:
FROM:
SUBJECT:
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Freedom, Inc. Land Acquisition
During the process of an assessable reconstruction project on Salinas Street, the owner
of a parcel of property approached the City about acquiring that parcel. Freedom, Inc.
owns the property where Alter Scrap is currently doing business under a lease.
Acquisition of this property would further the City's efforts to clean up the gateways into
our community.
Corporation Counsel Barry Lindahl has negotiated a Post-Lease Mutual Option
Agreement related to this property. The lease to Alter Scrap currently expires
October 31, 2001, however Alter has the right to renew the lease for two successive
three-year terms, the first expiring in October 2004, and the seCond expiring in October
2007. At the point in time when the lease expires, the City will then have an option to
purchase the property after dOing an environmental review. The sale price is the
appraisal value of $140,000,00. The consideration for the option agreement is waiver of
Freedom, lnc.'s Salinas Street Reconstruction Project assessment for this parcel,
estimated at $16,696.17.
I respectfully request Mayor and City Council approval of the Agreement for the Post-
Lease Mutual Option and authorization to sign it on behalf of the City.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Barry A. Lindahl, Esq.
Corporation Counsel
196 Dubuque Building
700 Locust Street
Dubuque, Iowa 52001-6824
(319) 583-4113
(319) 583-1040 FAX
E-mail: balesq~mwci.net
June 13, 2001
Mr. Michael Van Milligen, City Manager
City Hall - City Manager's Office
50 West 13~h Street
Dubuque, IA 52001
RE: Freedom, Inc./City of Dubuque/Alter Scrap
Dear Mike:
Enclosed is an Agreement for Post-Lease Mutual Option by the City and Freedom, Inc. with
respect to the property known as the Alter Scrap property, located on Salina Street in Dubuque,
Iowa.
The Agreement provides for an option in favor of the City of Dubuque to purchase the property
for the appraised value of $140,000. This option may be exercised on or before the expiration of
sixty (60) days after the termination of the, current lease between Alter Trading Corporation and
Freedom, Inc. The Agreement also provides that Freedom, Inc. may require the City to purchase
the property for the same consideration following the expiration of the lease. If either party
exercises its option, the City, as a condition to purchasing the property, has the right to conduct
an environmental investigation of the property. If there is no environmental issue with respect to
the property, the City would be obligated to purchase the property and to release, indemnify and
hold Freedom, Inc. harmless from any claims relating to environmental issues.
This Agreement is consistent with the terms required by the City Council for purchase of this
property.
I would request that you present this Agreement to the City Council for consideration and
approval.
Very sincerely,
Barry Lindahl
Corporation Counsel
BAL/j m/Enclo sure
Cc: Brian Kane, Esq.
Service People Integrity Responsibility Innovation Teamwork
AGREEMENT FOR POST -LEASE MUTUAL OPTION
This AGREEMENT FOR POST -LEASE MUTUAL OPTION ("Agreement") is made and
entered into this ,42'4A --'day of June, 2001, by and between FREEDOM, INC., an Iowa business
corporation ("Grantor") and the CITY OF DUBUQUE, IOWA, an Iowa municipal corporation
("Grantee").
RECITALS
A. Grantor is the owner of that certain real estate located along Salina Street in Dubuque,
Iowa, and legally described as:
Lots 7, 8, 9, 10, 11 and Lot 2 of Lot 1 of Lot 12, in Block 13, Dubuque Harbor Co.'s
Addition,
together with any easements and appurtenant servient estates, but subject to any easements of record
for public utilities or roads, any zoning restrictions, customary restrictive covenants, and mineral
reservations of record, if any, hereafter referred to as the "Property";
B. The Property is leased by the Grantor to Alter Trading Corporation, as tenant,
pursuant to the Lease as amended attached hereto as Exhibit "A" and by this reference made a part
hereof (the "Lease");
C. Grantee has proposed a special assessment in connection with the Property in
connection with the Salina Street Reconstruction Project in the approximate amount of $16,696.17
(the "Assessment");
D. Grantor desires to grant to Grantee an option to purchase, and Grantee desires to grant
to Grantor an option to sell, such options to commence upon termination of the Lease for a period
of sixty (60) days thereafter, subject to the terms and conditions of this Agreement. In
consideration of such option, Grantee hereby relieves Grantor of any obligation whatsoever with
regard to the Assessment (or any future assessment) in connection with the Property during the term
of this Agreement plus ninety (90) days hereafter; and
E. The parties desire to reduce their agreement to writing.
AGREEMENT
1. Exclusive Option in Favor of Grantee. Grantor hereby grants to Grantee an exclusive
option to purchase and require Grantor to sell the Property for a total option price of $140,000.00
to be paid in full at the closing (defined below). Grantor shall produce marketable title to the
Property pursuant to the Iowa Land Title Standards and Iowa law prior to or at the closing of the
purchase described above. Grantee shall exercise this option, if at all, by giving written notice of
such intent to exercise this option on or before the expiration of sixty (60) days after termination of
Page 1 of 4
the Lease. Such exercise shall be only with respect to the purchase of all of the Property, and not
any lesser portion thereof. Notice shall be given by certified mail, return receipt requested, and shall
be deemed given upon mailing.
2. Exclusive Option in Favor of Grantor. Grantee hereby grants to Grantor an exclusive
option to sell and require Grantee to purchase the Property for a total option price of $140,000.00
to be paid in full at the closing. Grantor shall produce marketable record title to the above described
Property pursuant to the Iowa Land Title Standards and Iowa law prior to or at the closing. Grantor
shall exercise this option and sell, if at all, by giving written notice of such intent to exercise this
option on or before the expiration of sixty (60) days after termination of the Lease. Such exercise
shall be only with respect to the sale of all of the Property, and not any lesser portion thereof. Notice
shall be given by certified mail, return receipt requested, and shall be deemed given upon mailing.
3. Priority of Options. The first of Grantor or Grantee to exercise its option,
respectively, shall control.
4. No Exercise of Options. If neither Grantor nor Grantee exercises its option,
respectively, in a timely fashion as provided hereunder, then this Agreement shall be null and void
and of no further force or effect unless otherwise specifically provided for herein.
5. Procedure upon Exercise. Upon the timely and first exercise of either option, as
applicable, Grantor, at Grantor's expense, shall promptly continue and pay for the abstract of title to
the Property, continued through a date not more than thirty (30) days prior to the closing date. Such
closing date shall be not later than thirty (30) days after the date of the notice of the exercise of the
option, as applicable. Such abstract shall show merchantable title to the Grantor in conformity with
this Agreement and as otherwise provided herein. The abstract shall become the Property of Grantee
when the purchase price is paid in full. Grantor shall pay costs of additional abstracting or title work
due to acts or omissions of Grantor. Upon payment of the purchase price, Grantor shall convey the
above described Property to Grantee (or its assignee) by warranty deed (corporate grantor), free and
clear of all liens, restrictions and encumbrances. Grantor shall be responsible for normal seller's
closing costs for this type of real estate transaction in Dubuque County, Iowa, and Grantee shall be
responsible for normal buyer's costs in connection with such transaction.
6. Release from Assessment. In consideration of this Agreement, Grantee hereby
releases and terminates any obligation of Grantor with regard to the Assessment (or any future
assessment) in connection with the Property. Upon approval hereof by the city council of Grantee,
Grantor shall be relieved from, and the Assessment shall be terminated as to, the Grantor. With
regard to any future assessments in connection with the Property, Grantor shall be relieved from, and
such assessment, if any, shall not apply to the Grantor from the date of this Agreement through and
including the date which is ninety (90) days after the termination of the Lease. If Alter Trading
Corporation, as tenant under the Lease, gives timely notice referred to in Section 8 below and agrees
to become bound by the terms of this Agreement, Alter Trading Corporation shall be responsible for
the payment of any and all assessments, including the Assessment or any future assessments in
connection with the Property.
Page 2 of 4
7. Grantor as Landlord. Grantor shall remain landlord under the Lease according to its
terms until such time as the Lease is terminated, and shall be entitled to all the benefits of such Lease
and be responsible for all landlord obligations thereunder. Grantee shall have no interest in the
Lease whatsoever during its term.
8. Inapplicability of Right of First Refusal under Lease. Under section 23 of the Lease,
a right of first refusal is provided in favor of the tenant as follows:
If Landlord [Grantor], during the term of this Lease or any extension thereof as herein
provided, receives any bona fide offer to purchase the property described in
paragraph 1 hereof subject to the terms of this Lease and Landlord desires to sell for
such a price, Landlord before making any such sale will give Tenant the right of first
refusal to buy the property on the same terms by giving written notice thereof to the
Tenant. If Tenant fails to exercise its right to purchase the same on said terms by
giving notice in writing to Landlord ten (10) days after receiving notice of offer made
to Landlord, then Landlord shall have the right to complete the sale with the third
party who made the original offer to buy.
The parties acknowledge and agree that this Agreement is not a ". o . bona fide offer to purchase
the . o ." Property "... subject to the terms of this Lease ..." and Grantor -landlord is not agreeing
to sell the Property during the term of the Lease, nor is Grantee making a bona fide offer to purchase
the Property subject to the terms of the Lease during the term of the Lease. It is the intent of the
parties that this Agreement, except as otherwise expressly provided herein with regard to the
Assessment and the reservation of the landlord's rights and obligations under the Lease, shall come
into effect only after termination of the Lease.
Notwithstanding the foregoing, Grantor, at Grantee's request, shall provide notice to Alter
Trading Corporation, as tenant under the Lease, pursuant to the above -referred to Section 23 of the
Lease. If Alter Trading Corporation, as tenant, fails to give notice in writing to Grantor/Landlord
as provided above, then Grantee shall proceed with this Agreement according to its terms. If Alter
Trading Corporation, as tenant, gives notice in writing to Grantor/Landlord as provided above, then
Grantee acknowledges that Grantee no longer has any interest in this Agreement and that Alter
Trading Corporation, for all purposes hereof, shall become the "Grantee" with regard to this
Agreement. By providing the timely notice referred to in writing above, Alter Trading Corporation
agrees to become bound by the terms of this Agreement and shall be the "Grantee" for all purposes
hereunder including, but not limited to, Sections 1, 2, 6 and 10 hereof,
9. Condition to Grantee Purchasing the Property. Purchase of the Property by Grantee,
after the termination of the Lease but in a timely fashion, is subject to (1) Grantee performing
environmental investigation(s) at, in, on, under, and about the Property, including, without limitation,
Phase I and Phase II environmental assessments, and (2) Grantee being satisfied that there are no
unresolved environmental concerns identified by such investigation and no likely contaminants or
pollutants, above any action level, reporting level, cleanup level, or standard established or used by
any local, state, or federal government with geographic jurisdiction over the Property at, in, under
Page 3 of 4
and/or about the Property and/or no environmental concern or activity on adjacent or neighboring
properties that may migrate to, through, onto, into, under or about the Property. Grantee shall initiate
its environmental investigation no later than thirty (3 0) days after termination of the Lease and shall
use its best efforts to conclude such environmental investigation no later than sixty (60) days after
termination of the Lease. Grantor hereby authorizes Grantee and its employees, agents, consultants,
and representatives full and unfettered access to the Property immediately upon termination of the
Lease for purposes of preparing for and conducting the environmental investigation(s) contemplated
by this Agreement, including, without limitation, authority to conduct soil, groundwater, water, air,
surface, and subsurface sampling. The environmental investigation(s) hereunder shall be solely at
the Grantee's expense. Grantee's closing of this transaction shall be conclusive evidence of Grantee's
acceptance of any such environmental matters and the waiver of this condition.
10. Indemnity, Release and Hold Harmless. Upon the closing hereof, and after the
environmental testing referred to above, Grantee shall release, indemnify and hold harmless Grantor,
Grantor's officers, directors and shareholders, and Grantor's successors in interest, with regard to any
environmental claim, cleanup or remediation imposed or threatened by the state of Iowa, the federal
government, or any other governmental agency or entity, or any private person, arising out of or
related to the Property which accrued prior to the conveyance by Grantor to Grantee of the Property
upon exercise of the option, as applicable, hereunder, which release, indemnity and hold harmless
shall survive such closing.
11. Binding upon Successors and Assigns; Governing Law. This Agreement shall apply
to and bind the parties and their respective successors in interest and permitted assigns. This
Agreement shall not be assigned without the prior written consent of the other party hereto, which
consent shall not be unreasonably withheld. This Agreement shall be governed by and construed in
accordance with the laws of the state of Iowa.
Dated this /gill"' day of June, 2001.
FREEDOM, INC., an Iowa
corporation, Grantor
By. y !✓f ✓ k d 1474 / Fi"� 7 i.1/
y7"' /c: it,
Sandra Barbara Gordon
Its President and Secretary
CITY OF DUBUQUE, IOWA, an Iowa
municipal corpor i&/i Grantee
By
kichael C. Van Milligen
Its City Manager
G:\WPDOCS\DONNAB\Docs\Freedom City of Dubuque Agr for Post -Lease Option-Put.wpd
Page 4 of 4
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TAXES.
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This
Lease Addendum is made and entered into as of the ~
day of September, 1998 by and between Freedom ~nc., an Iowa
business corporation ("Landlord") and Alter Trading Corporation
("Tenant"}.
Tenant entered into that certain Lease Agreement dated
February !2, 1988 wi~k David Solomon Company, an Iowa
corporation ("Lease").
B. Landlord is the successor in interest to the Lease.
Landlord and Tenant desire to amend and supplement the
Lease as herein provided.
NOW, THEREFOP~E, for good and valuable Consideration, the
receipt and sufficiency of which is hereby acknowledged, Landlord
and Tenant agree as follows:
2. Renewal..~rm and Rental. Tenant hereby exercises its
right e~ renewal extending the Lease for th_tee (3) years
commencing November 1, 1998. Tenet acknowledges that such
renewal is late inasmuch as a timely renewal should have been
made more than ~ix (6) months prior to October 31, 1998. Without
waiving its rights hereunder, Landlord hereby accepts Tenant's
late renewal. Pursuant to Section 2 of the Lease, the monthly
rental to be paid during the renewal term commencing November 1,
1998 is $1,4~4.40. Attached hereto as Exhibit A and by this
reference is incorporated herein is a ~chedule il!ustratin~ the
rent adjustment.
2. Future Lease RgnewaI~. Pursuant to Section i o~ ~he
Lea~e, there remains, in favor of Tena/%t, the right to'renew the
Lease for two (2) ~uccessive ~hree (3) year terms once the ~hree
year renewal term commencing November 1, 1998 expires on October
3!, 200!. The Lease provides that, in order to exercise a right
of renewal, the Tenant must give Landlord written notice six (6)
months before expiration of the prior three year term. The
parties hereby amend the Lease by deleting the second sentence in
section ! of the Lease in its entirety and inserting in lieu
thereof the following:
From and after November 1, 1998, Landlord grants Tenant
the right of renewal for two (2) consecu=ive thre~ (3)
year terms commencing November 1, 2001. Each renewal
term shall be automatic and the parties shall be bound
by the Lease for such renewal term{s) un!e~s Tenant
gives Landlord written notice, not later ~han six (6)
Page I of 2.
._un,13. 2001 ':43PM 3ARRY A LJNDAHL. E$8 No.3814 P, 9/1]
months prior to the expiration of the preceding renewal
term, that Tenant does not intend to extend the Lease.~
3. Use of tbs premises. Tenant agrees to promptly take
such corrective measures with respeot to its use of the leased
premises to comply with mll ordinances of the City of Dubuque,
Iowa with respect TenaNt's use of the leased pr~mlses and to
comply with Section 4 of the Lease.
IN WITNESS WHEREOF, the parties have executed this Addendum
ms of the date first above written.
FREEDOM, II~C, ,
an !ow~ business corporation
!ts ~resident
ALTER TRADING COMPANY, INC.
By: ~
PaEe 2 of 2
,Jun.13. 200] l:43PM BARRY A LINDAHL, ESQ No.381¢ P. 10/11
RENT ADJUSTM2ENT
l, STEP ONE:
CPI-U (June 1, 1995)(se attached) 453.2
Prev~ou~ Index (lune I_lgRT~ 340 ,,1.
Index Point Change ~
Ind~,c Point Change
Previous. Index
Pereema~ Change
Percentage Change
148.10
340..10
.43546
43.546%
Rent Change
Inifi~l Rent
Percentaee Chan~e
Rent Increase
$935/month
x 43. 546
g407.16
Adjusted Momhly Rental
($93~ * $407.16)
_. STEP TWO:
Present Rent
Pi'esent Kent increased by 15%
(Section 2 of Lease)
STEP THREE:
Rent (Greater of Step One and
Step Two)
$1,256,00
$ I,'.444_40
$ t,44..4. :40
D
0
: O
9
o
a0
0
09-02-1996
U.S. Department Of Inbar
Murton of Labor MU/tics
Wa,hingtob, D.C. 20212
consrmet Price hider
All Vrhon consumer, - CCP1-U0
[Ls. elty nV4rnge
All items
1967.100
5614IA38RUAI.
Page 1
"sr up
YEAR J7 W, 2814.08181 CAN=6E8. 1048. APR. 1a1[. JUNE. JULY AUG. SRP. OCP. SW. D2C. RRALF RALF AVG. DSC -TSC AVO -AV.
1993 .427.0 428.7 430.1 431.2 432.0 432.4 432,6 433.9 434.7 436.4 436.9 436.8 430.2 435.2 432./
1994 437.8 439.3 441.1 441.4 441.9 443.3 444,4 446,4 447.5 448.0 418.5 440.4 440.8 447.2 444.0
1995 450.3 452.0 453,5 455.0 455.8 456,7 457.0 955.0 459.0 460,3 150.1 459.4 453.9 459.1 456.5
1996 462.5 464.2 466.5 468.2 469.0 469.5 470,4 411.1 472.7 474.1 475.0 415.0 456.7 473.1 469.9
1997 476.7 476.2 479.3 479.7 479.5 400.2 480.7 481.6 483.0 484.1 493.9 483.2 419.0 482.0 400.8
1990 484.2 404.9 405.6 466.0 487.7 468.2 400,8
406.3
1