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Port of D Land Sale Dbq HardwooMEMORANDUM November 21, 2002 TO:The Honorable Mayor and City Council Members FROM:Michael C. Van Milligen, City Manager SUBJECT:Port of Dubuque Land Sale The City of Dubuque is acquiring property in the Port of Dubuque from Dubuque Hardwoods/Bob Miller. One of the contingencies in the acquisition agreement with Dubuque Hardwoods/Bob Miller is the approval of this land being sold to Dubuque Initiatives. Dubuque Initiatives is a private not-for-profit with a redevelopment mission that focuses on downtown Dubuque. This is necessary because the City of Dubuque does not have the funds available to consummate the Dubuque Hardwoods/Bob Miller land purchase without this prior arranged resale of the property. The key elements to the sale of the property in the Port of Dubuque to Dubuque Initiatives includes: Dubuque Initiatives will pay $1,641,036 for the 4.902 acres being purchased by the City from Dubuque Hardwoods/Robert Miller (indicated in green on the attached map) and the streets and alleys consisting of 1.390' acres that intersect these parcels (indicated in yellow on the attached map). It is important that Dubuque Initiatives own all of this contiguous land to create a marketable piece of property for potential development. This is consistent with the economic analysis the City has done up to this point which advises that the City has to assemble properties for any redevelopment to Occur. The City would not assess Dubuque Initiatives for the street improvements done to Market Street to create a road, as it is now undeveloped, but any future improvements would be assessable. The City would have an option to purchase all of this property back within five years for the same price ($1,641,036) plus one percent over the interest Dubuque Initiatives would have earned on their investments in that period and buyer's holding costs. I will be recommending to the City Council inclusion of these funds in the next Five-Year Capital Improvement Program budget. 4.Should Dubuque Initiatives sell the property, Dubuque Initiatives would first receive their money back as formulated above in Section #3, and any remaining money would go to the City. This is in recognition of the fact that the City is not only acquiring this property, but must move the occupants, demolish the buildings, rough grade the property and seed the area. 5.The City would indemnify Dubuque Initiatives from any pre-existing environmental conditions. 6.The City would close on the property purchased from Dubuque Hardwoods/Bob Miller on December 1, 2002, and would take possession of the property on July 1, 2003. The closing on the sale to Dubuque Initiatives would take place on December 2, 2002, with Dubuque Initiatives taking possession on November 1, 2003. The gap between the City taking possession on July 1, 2003, and Dubuque Initiatives taking possession on November 1, 2003, would allow time for the City to demolish the structures and rough grade and seed the property. 7.Another party owns a 0.529. acre parcel (indicated in pink on the attached map) in amongst the Dubuque Initiatives parcel. The City would agree to acquire this parcel prior to the November 1, 2003 possession date. Until that time, part of Washington Street (0.697 acres indicated in white on the attached map) would not be vacated, as this lot could not be land-locked while under separate ownership. Upon acquisition, the City would deed this property and Washington Street over to Dubuque Initiatives as part of the original purchase price. Negotiations have already begun with the property owner. The sale to Dubuque Initiatives appeared on the October 21, 2002 City Council Agenda as a Set for Public Hearing item, with final consideration on November 25, 2002. As required in an Urban Renewal District, in this period between the October 21 meeting and the November 25 meeting, competitive proposals could be submitted for acquisition of the property. No proposals were submitted. I respectfully recommend approval of the sale of this 6.292 acre parcel to Dubuque Initiatives. MCVM/jh Attachment MiChael C. Van Milligen CC: Dubuque Initiatives Board of Directors Brian Kane, Esq. Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager Tim O'Brien, Esq. Pauline Joyce, Administrative Services Manager Bill Baum, Economic Development Director CITY OF DUBUQUE, IOWA MEMORANDUM November 22, 2002 TO:Michael Van Milligen, City Manager FROM:William Baum, Economic Development Director SUBJECT:Property to Dubuque Initiatives INTRODUCTION This memorandum presents for City Council consideration two resolutions necessary to authorize the sale of the former Dubuque Hardwoods property to Dubuque Initiatives. DISCUSSION The City of Dubuque has an agreement with Bob and Lynn Miller to purchase the Dubuque Hardwoods property, subject to satisfactory environmental testing. Dubuque Initiatives has submitted to the City an offer to purchase the Dubuque Hardwoods property. On October 21,2002, the City Council adopted Resolution No. 570-02 which established terms and conditions of an offering of the Dubuque Hardwoods property, which is urban renewal land, and set a public hearing on the proposed sale of the property to Dubuque Initiatives. The hearing is set for Monday, November 25, 2002. Following the October 21st City Council meeting, the full text of Resolution No. 570-02 was published in the Telegraph Herald to fulfill the state law requirement that disposition of urban renewal land follow reasonable competitive bidding procedures. The resolution states that the City has received a proposal to purchase the property from Dubuque Initiatives and intends to approve the offer unless another qualified, competing proposal is submitted to the City by November 22, 2002 at 10:00 a.m. The requirements for proposals and a procedure for selection are set out in the resolution. Based on the assumption that the Dubuque Initiatives proposal will be the only qualified proposal to be submitted, we have prepared two resolutions for consideration by the City Council at the public hearing. The first resolution finds that no qualified, competing proposal was submitted and that the Dubuque Initiatives proposal satisfies the terms of the offering. The second resolution approves the Offer to Buy Real Estate and Acceptance and authorizes its execution and implementation, including the execution and delivery of a deed to the property to Dubuque Initiatives. RECOMMENDATION I recommend that the City Council adopt the attached resolutions approving the sale of the Dubuque Hardwoods property to Dubuque Initiatives. In the event that another qualified proposal is submitted, the City Council should follow the procedure described in Sections 16 through 17 of Resolution No. 570-02. ACTION STEP The action step for the City Council is to adopt the attached resolutions. attachments F:\USERS\Pm~are\WPDOCS\LOANDOC\DBQHARDWOODS\approve.rnern.doc RESOLUTION NO. 619-02 DETERMINING THAT THE PROPOSAL OF DUBUQUE INITIATIVES TO PURCHASE THE DUBUQUE HARDWOODS PROPERTY IS IN COMPLIANCE WITH THE TERMS OF THE OFFERING FOR THE DISPOSITION OF THE DUBUQUE HARDWOODS PROPERTY IN THE CITY OF DUBUQUE, DUBUQUE COUNTY, IOWA. Whereas, this Council, by Resolution No. 570-02 dated October 21,2002, nominated the City Clerk as agent of the City of Dubuque, Iowa, to receive and open on November 22, 2002, at 10:00 a.m. proposals for the purchase and development of the Dubuque Hardwoods property in accordance with the terms and conditions set forth in said resolution; and Whereas, the City had received a proposal, referred to in said resolution, from Dubuque Initiatives, which proposal meets the terms and conditions of Resolution No. 570-02; and Whereas, the City Clerk has reported to this Council that no qualified, competing proposals were submitted. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the report of the City Clerk that no qualified competing proposals were submitted by 10:00 a.m. on November 22, 2002, for the purchase and development of the Dubuque Hardwoods property be received, filed and adopted. Section 2. That it is hereby determined that the proposal of Dubuque Initiatives for the purchase and development of said property is the only proposal which satisfies the terms and conditions set forth in Resolution No. 570-02 adopted by this Council on October 21, 2002. Passed, approved and adopted this 25th day of November, 2002. xT~.l~a~x~cjoja~ Roy D. Buol MayoF Pro-Tem Attest: {/Jeanne F. Schneider -- City Clerk F:\USE RS\Pmyn re\WPDOCS~LOANDOC~DBQHARDWOODS\COMPETE.res.doc CITY OF DUBUQUE, IOWA MEMORANDUM November 22, 2002 TO:Honorable Mayor and City Council Members FROM:Jeanne F. Schneider, City Clerk SUBJECT:Report on Competing Proposals Former Dubuque Hardwoods Property The City Council, by Resolution No. 570-02, nominated the City Clerk to receive and open on November 22, 2002, at 10:00 a.m. proposals in competition to the proposal of Dubuque Initiatives for the purchase of the former Dubuque Hardwoods property in the Port of Dubuque. By this memorandum, I am reporting to the City Council that no competing proposal was submitted by the deadline for submission set forth by Resolution No. 570-02. Respectfully submitted, City Clerk CC:Michael Van Milligen, City Manager Barry Lindahl, Corporation Counsel F:\USERS~F'rn~re\WPDOCS~LOANDOC\DBQHARDWOODS\c[erkreport.mem.doc RESOLUTION NO. 620-02 ACCEPTING THE PROPOSAL OF DUBUQUE INITIATIVES FOR THE PURCHASE AND DEVELOPMENT OF THE DUBUQUE HARDWOODS PROPERTY IN THE CITY OF DUBUQUE, IOWA, AND APPROVING THE OFFER TO BUY REAL ESTATE AND ACCEPTANCE FOR THE PROPERTY. Whereas, this Council, by Resolution No. 570-02 dated October 21, 2002: 1. Adopted terms and conditions for offering for sale certain real property in the Ice Harbor Urban Renewal District in the City of Dubuque, Iowa, referred to as the Dubuque Hardwoods property, for sale and development; 2. Determined that the proposal submitted by Dubuque Initiatives satisfied the requirements of said offering; 3. Declared its intent to accept the Dubuque Initiatives proposal in the event no other qualified proposals were timely submitted for the purchase and development of said property; and 4. Invited competing proposals which met the terms and conditions of said offering to be submitted to the City Clerk on or before 10:00 a.m., November 22, 2002; and; Whereas, on October 23, 2002, the text of said Resolution was published as the official notice of this offering and of the intent of the City of Dubuque, Iowa, in the event no other qualified proposals were timely submitted, to approve the Offer to Buy Real Estate and Acceptance submitted by Dubuque Initiatives; and Whereas, by separate Resolution of this date, this Council has received and approved as its own the report of the City Clerk that no other qualified proposal was received; and Whereas, it is the determination of this Council that approval of the Offer to Buy Real Estate and Acceptance from Dubuque Initiatives, attached hereto, is in the public interest of the citizens of the City, and is consistent with the City's Urban Renewal Plan for the Ice Harbor Urban Renewal District. NOW, TH EREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the attached Offer to Buy Real Estate and Acceptance by and between the City of Dubuque and Dubuque Initiatives is in the public interest of the citizens of the City of Dubuque and in furtherance of the City's Urban Renewal Plan, and is hereby approved. Section 2. That the Mayor is hereby authorized and directed to execute said Offer to Buy Real Estate and Acceptance on behalf of the City and the City Clerk is authorized and directed to attest to his signature. Section 3. That the Mayor and City Clerk are hereby authorized and directed to execute a Warranty Deed for said property on behalf of the City of Dubuque. Section 4. That the City Manager is authorized to take such actions as are necessary to comply with the terms of the Offer to Buy Real Estate and Acceptance as herein approved, including the delivery of the Warranty Deed. Passed, approved and adopted this 25th day of November, 2002. Mayo) Pro-Tem Roy D. Buol Attest: __ City Clerk F:\USERS\Pm~hre\WPDOCS\LOANDOC~DBQHARDWOODS\approve.res.do¢ OFFER TO BUY REAL ESTATE AND ACCEPTANCE TO ,Ch~l~' OF DUBUQLT~ IOWA SEE ATrAC[-I~) LF. GAL DESCI~PTJON S-Dubuque Initi~tive-cit~ of Dubuque ADDENDUM A. Contingent upon an acceptable Phase Il res: as determined by Buyer. B. Contingent upon Seller executing an accepiable indentification agreement on any environmental issue prior to the possession date of November 1, 2003. C. Seller will take necessary steps to vacate all streets, except Market Street, located within the lots being purchased and deed them to Buyer by November 1, 2003. D. By November 1, 2003, all buildings will be removed by Seller, site cleaned and seeded. E. Seller shall not assess the Buyer for any street improvements to Market Street to the extent necessary to construct a roadway. In the event sale by Buyer subsequent to the construction of the roadway, no assessment will be made against the property for the prior construction of the roadway. Once the road is constructed, any improvements to Market Street will be assessable. F. This Offer is contingent upon Seller obtainihg title of the property by December 1, 2002, provided that Seller shall have until July 1,2003 to obta n ttle to Lots 20 through 30 in Block 21. G. Seller shall have an option to purchase th8 Real Estate from Buyer for a period of five (5) years from December 1, 2002. The option price for the purchase shall be $1,641,036.00 plus Buyer's holding costs and interest at the Federal Fund Rate Buyer wou d have earned on its cash nvestments during the period of ownership of the Real Estate by Buyer. This option shall be exercised by Seller giving 30 days advance written notice to Buyer, with the option pumhase price to be paid in cash at closing. H. In the event of sale Prior to the five years, Buyer will receive the entire proceeds for such sale or sales until Buyer has received the sum referred to in paragraph G above. Any sale proceeds thereafter remaining shall be paid by Buyer to the Seller In consideration for release of Seller's option. Buyer understands the Seller's' option as set out in paragraph G and therefore the Buyer agrees to participate with the Seller In a joint marketing with other city projects as shown on the City s master plan without cost to the Buyer. I. In the event that Seller is unable to obtain title to Lots 20 through 30 in Block 21, by July 1, 2003, the parties agree to negotiate a reduced purchase pdce based upon reduced acreage. In the event the parties are not able to agree on a reduce purchase price, Seller shall be required to exercise it's option as referred to in Paragraph G above. Upon negotiation of a reduce purchase price, Seller shall immediately pay to Buyer the difference between the reduced purchase price and the price set forth in Paragraph 2 of this offer. Legal Description of the Real Estate Cypress Street, Wall Street, Washington Street ex'pt that part from Market Street to Cypress Street and alleys located between the NE'LY line of Sixth Street and the NVV'LY line of Market Street and the; SE'LY dght of way line of the Canadian National Illinois Central Railroad in the city of Dubuque, Dubuque County, Iowa Lots 15, 16, 17, 18, 19, 20, 21, and 22; and, That part of lots 1, 2, 3, 4, 5, 6, 7, 8, 12, 13, and 1~, lying southerly Of a line which is parallel to and 50 feet southerly from the Centedine of the Illinois Central Gulf Railroad ComPany's main Tract, as now located; all in Block 18, In Dubuque Harbor lmproz.,ement Company's Addition, in the City of. Dubuque, Iowa, accordin§ to the recorded Plat thereof. Lot lA of vacated alley in Block 18 of Dubuque Harbor Improvement Company's Addition from Market Square to the I CR.R.R.O.W. In the City of Dubuque, Iowa, according to the recoi'ded Plats thereof. Lots 31, 32, 33, 34, 35, and 36, in Block 21, Lots 1 to 38, both inclusive, in Block 27, and Lots 31, 33, 34, and 35, in Block 28, All in Dubuque Harbor Improvement Co.'s Addition, In the City of Dubuque, Iowa, according to the Recorded plat of said Addition. Lots 1, 33, 34, 35, 36, in Block 20; Lots numbered 3 to 19, inclusive, in Block 21; That part of lots 2, 3, 4, 31 and 32, in Block 20, and, That part of lots 8 and 27, in Block 28, lying easterly of the Dubuque & Dunleith Bddge Company's right of way; Lots 1, 2, 3, 4, 5, 6, 7, 28, 29 30, and 32, in Block 28; A in Dubuque Harbor Improvement Company's Addition in the City of Dubuque, Iowa, according to the respective 'ecorded Plats thereof. MEMORANDUM October 17, 2002 TO:The Honorable Mayor and City Council Members FROM:Michael C. Van Milligen, City Manager SUBJECT:Port of Dubuque Land Sale The City of Dubuque is acquiring property in the Port of Dubuque from Dubuque Hardwoods/Bob Miller. One of the contingencies in the acquisition agreement with Dubuque Hardwoods/Bob Miller is the approval of this tand being sold to Dubuque Initiatives. Dubuque Initiatives is a private not-for-profit with a redevelopment mission that focuses on downtown Dubuque. This is necessary because the City of Dubuque does not have the funds available to consummate the Dubuque Hardwoods/Bob Miller land purchase without this prior arranged .resale of the property. The key elements to the sale of the property in the Port of Dubuque to Dubuque Initiatives includes: 1.Dubuque Initiatives will pay $1,641,036 for the 4.902 acres being purchased by the City from Dubuque Hardwoods/Robert Miller (indicated in green on the attached map) and the streets and alleys consisting of 1.390 acres that intersect these parcels (indicated in yellow on the attached map). It is important that Dubuque Initiatives own all of this contiguous land to create a marketable piece of property for potential development. This is consistent with the economic analysis the City has done up to this point which advises that the City has to assemble properties for any redevelopment to occur. 2.The City would not assess Dubuque Initiatives for the street improvements done to Market Street to create a road, as it is now undeveloped, but any future improvements would be assessable. 3.The City would have an option to purchase all of this property back within five years for the same price ($1,641,036) plus one percent over the interest Dubuque Initiatives would have earned on their investments in that pedod and buyer's holding costs. l will be recommending to the City Council inclusion of these funds in the next Five-Year Capital Improvement Program budget. 4.Should Dubuque Initiatives sell the property, Dubuque Initiatives would first receive ·their money back as formulated above in Section #3, and any remaining money would go to the City. This is in recognition of the fact that the City is not only acquiring this property, but must move the occupants, demolish the buildings, rough grade the property and seed the area. 5.The City would indemnify Dubuque Initiatives from any pre-existing environmental conditions. 6.The City would close on the property purchased from Dubuque Hardwoods/Bob Miller on December 1, 2002, and would take possession of the property on July 1,2003. The closing on the sale to Dubuque Initiatives would take place on December 2, 2002, with Dubuque Initiatives taking possession on November 1, 2003. The gap between the City taking possession on July 1, 2003, and Dubuque Initiatives taking possession on November 1, 2003, would allow time for the City to demolish the structures and rough grade and seed the property. 7.Another party owns a 0.529 acre parcel (indicated in pink on the attached map) in amongst the Dubuque Initiatives parcel. The City would agree to acquire this parcel prior to the November 1, 2003 possession date. Until that time, part of Washington Street (0.697 acres indicated in white on the attached map) would not be vacated, as this lot could not be land-locked while under separate ownership. Upon acquisition, the City would deed this property and Washington Street over to Dubuque Initiatives as pad of the original purchase prise. Negotiations have already begun with the property owner. The sale to Dubuque Initiatives appears on the October 21, 2002 City Council Agenda as a Set for Public Headng item, with final consideration on November 25, 2002. As required in an Urban Renewa] District, in this pedod between the October 21 meeting and the November 25 meeting, competitive proposals could be submitted for acquisition of the property. I respectfully recommend that a public headng be set for November 25, 2002 to consider sale of this 6.292 acre parcel to Dubuque Initiatives. Michael C. Van Milligen MCVM/jh · Attachment Dubuque Initiatives Board of Directors Brian Kane, Esq. Barry Lindaht, Corporation Counsel Cindy Steinhauser, Assistant City Manager Tim O'Brien, Esq. Pauline Joyce. Administrative Services Manager Bill Baum, Economic Development Director CITY OF DUBUQUE, IOWA MEMORANDUM November 22, 2002 TO:Michael Van Milligen, City Manager FROM:William Baum, Economic Development Director SUBJECT:Property to Dubuque Initiatives INTRODUCTION This memorandum presents for City Council consideration two resolutions necessary to authorize the sale of the former Dubuque Hardwoods property to Dubuque Initiatives. DISCUSSION The City of Dubuque has an agreement with Bob and Lynn Miller to pumhase the Dubuque Hardwoods property, subject to satisfactory environmental testing. Dubuque Initiatives has submitted to the City an offer to pumhase the Dubuque Hardwoods property. On October 21, 2002, the City Council adopted Resolution No. 570-02 which established terms and conditions of an offering of the Dubuque Hardwoods property, which is urban renewal land, and set a public hearing on the proposed sale of the property to Dubuque Initiatives. The hearing is set for Monday, November 25, 2002. Following the October 21st City Council meeting, the full text of Resolution No. 570-02 was published in the Telegraph Herald to fulfill the state law requirement that disposition of urban renewal land follow reasonable competitive bidding procedures. The resolution states that the City has received a proposal to purchase the property from Dubuque Initiatives and intends to approve the offer unless another qualified, competing proposal is submitted to the City by November 22, 2002 at 10:00 a.m. The requirements for proposals and a procedure for selection are set out in the resolution. Based on the assumption that the Dubuque Initiatives proposal will be the only qualified proposal to be submitted, we have prepared two resolutions for consideration by the City Council at the public hearing. The first resolution finds that no qualified, competing proposal was submitted and that the Dubuque Initiatives proposal satisfies the terms of the offering. The second resolution approves the Offer to Buy Real Estate and Acceptance and authorizes its execution and implementation, including the execution and delivery of a deed to the property to Dubuque Initiatives. RECOMMENDATION I recommend that the City Council adopt the attached resolutions approving the sale of the Dubuque Hardwoods property to Dubuque Initiatives. In the event that another qualified proposal is submitted, the City Council should follow the procedure described in Sections 16 through 17 of Resolution No. 570-02. ACTION STEP The action step for the City Council is to adopt the attached resolutions. attachments F:\US ERS~Pm~re\WPDOCS~LOANDOC\DBQHARDWOODS\approve.mem.doc 0 © I Company's dght of way; that notice shall be pebIished Lots 1, 2, 3, 4, 5, 6, 7, 28, 29, of the intent of the City of_ 30, and 32, in Block 28; Dubuque, iowa, to enter into All in Dubuque Harbor the resuittsg contract, as Improvement Company's required by law. Addition in tl~e City of Passed approved and I Dubuque, Iowa/according to adopted th~s 21at day of $1,641,036.00. City Clerk meets these mielmum mquim-~ a) Contains an agreement to Plan;, by expansion of an existing d) Sets out or provides to the satisfaction of the City CounciF' Section 5. That for the STATE OF IOWA DUBUQUE COUNTY {SS: CERTIFICATION OF PUBLICATION I, Tammy M Feldmann, 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: October 23, 2002, and for which the charge is $I 17.24. Subscribed to before me, a Notary Public in and for Dubuque County, Iowa, this c~.~r~ day of ~//~_~._~.~._~ ,20 ~ ~ Section fi. That the Offer to Buy Real Estate and Acceptance submitted by the Developer satisfies the requirements of the or~itng and, in the event that no other qualified pn0pesals are timely submitted, that the City_ intends to accept and Section 7. 3Ttat it is hereby determined that the Developer possesses ~ qualifications, financial resources and isgel ability necessary to acquire and develop the property in the manner proposed by this_ offering in accordance with the Section 8. That it is hereby determined that the disposi- tion price for the property offered to the Developer shall be in the arapunt of the Fair Market Value as eatab[ished by the City Council for uses in accordance with the Plan. . Section 9.That the City Clerk shell receive and retain for public examination the attached Offer to Buy Real Estate and Acceptance sub- mired by the Developer and, in the event no other qualified proposals are timaty s~bmit: ted, shall resubmit the Same to the Ci~7 Council for t approval and execution u Notary Public in and for l~'ubuque County, Iowa. Ii MARY I[ WI 8?EIRllEyE. I ~,..1~ *" Ic°mmlslslOn Nqmber 15488sI · '~'~' I MyC0mm. Exp. FER, 1,2005 I Estate and Acceptance, shall be a true copy of thisI · Resolution, but without the I attachments referred to herein. Seotkm 12. That the City ~esal, is Clerk is authorized and direct- I ed to secure immediate publi-.~ ~ cation of said official notice in / the Telegraph Herald, a news-[ paper having a general elrCula- , ti0n in the community, by pub-Ii lioation of the text of this Reso ut on without attach- [ ments on or before the 24th ! day of October, 2002. I Section 13. That writ[eh prc- pesals for the sale and devel-~ opment of the property will be ,~ received by the City Clerk at or before 10:00 &m., November 22, 2002 in the Office of the City Clerk, located on the first floor at City Hall, Dubuque, 52001. Each proposel will be opened at the hour of 10:00 a.m. in City Hall, Dubuque, Iowa on November~ 22, 2002. Se. sf propossts will thqn be presented to the City iowa. CItY OF DUBUQUE, IOWa MEMORANDUM October 17, 2002 TO:Michael Van Milligen, City Manager FROM:William Baum, Economic Development Director SUBJECT:Disposition of Former Dubuque Hardwoods Property to Dubuque Initiatives INTRODUCTION This memorandum presents for City Council consideration a Resolution initiating disposition by sale of the former Dubuque Hardwoods site to Dubuque Initiatives. The attached Resolution establishes the minimum development requirements for the site, approves an Offer to Buy Real Estate and Acceptance with Dubuque Initiatives, and solicits competitive proposals from other developers. Unless competing proposals are received, the City Council will act on the Offer to Buy Real Estate and Acceptance at a public hearing on November 25, 2002. BACKGROUND The City has negotiated with Dubuque Initiatives, a non-profit development organization, to assist the City in the purchase of the former Dubuque Hardwoods property.. Dubuque Initiatives, whose redevelopment mission is a focus on the city's downtown core, will assist the City by providing a portion of the financial resources to secure the purchase of the Dubuque Hardwoods property at this time. For that investment, the City will sell the property to Dubuque Initiatives but retain an option to · purchase all of the property back within five years. The current Board of Directors of Dubuque Initiatives includes: Katie Kdeg, President, Bill Callahan, Dave Frommelt, Judie Fjellman, Rick Dickinson, Terry Duggan, Ann Michalski, John Markham and Mike Van Milligen. The City Council members and City Manager abstained from yoting on the Offer to Buy Real Estate and Acceptance. Because the Dubuque Hardwoods property is located in an urban renewal district, the City must follow state law urban renewal disposition requirements. In general, the law requires that the City may sell or lease property to private persons only under reasonably competitive bidding procedures. These include an invitation for competing proposals and a thirty-day public notice of the City's intent to execute any land sale or lease contract. Additionally, the City must dispose of the property at its fair market value for uses in accordance with the urban renewal plan. DISCUSSION Disposition Resolution Accompanying this memorandum is a Resolution that initiates the proceedings required for disposing of the Dubuque Hardwoods property in the Ice Harbor Urban Renewal District to Dubuque Initiatives. In brief, the resolution: 1) establishes the fair market value of the property; 2) approves minimum requirements for submission of competitive proposals to the City Council for the purchase and development of the property; 3) approves the form of the Offer to Buy Real Estate and Acceptance from Dubuque Initiatives; 4) sets a procedure for receipt and review of competing proposals; 5) declares that the Dubuque Initiatives' Offer to Buy satisfies the offering requirements and that the City intends to execute the Offer to Buy if no other qualified proposal is submitted; and, 6) directs the publication of notice of the opportunity to compete for the purchase and development of the site. The Resolution sets the disposition price for the property at its fair market value of $1,641,036.00. This price is based on a recent appraisal by Felderman Appraisals. Offer to Buy Real Estate and Acceptance The terms of the Dubuque Initiatives' Offer to Buy Real Estate and Acceptance are incorporated in the Resolution and establish the terms of the sale of the property to Dubuque Initiatives. The key elements of the agreement include the following: 1)The purchase price is $1,641,036, with $1000 down payment, $1,049,000 due at closing and the balance of $591,036 due on July 1,2003. 2)The closing is scheduled for December 2, 2002 with possession November 1,2003. 3)The sale is contingent upon an acceptable Phase Il environmental report. The City will agree to indemnify and hold harmless the buyer for any environmental problems that occurred prior to taking possession of the property. 4)The City will have an option to purchase back the real estate for a period of five years from the date of closing. The option price for the purchase is the City's odginal purchase price of $1,641,036.00 plus Dubuque Initiative's holding costs plus interest calculated periodically at the average daily Federal Funds rate during the five year period. That rate is equal to 1% over the interest rate Dubuque Initiatives is currently earning on its cash investments. 5)Any net profit resulting from the sale of the property by Dubuque Initiatives, above and beyond the original purchase price of $1,641,036.00 will be paid to the City. 6)The City agrees to acquire title to additional proped:y described as Lots 20-30 in Block 21, Dubuque Harbor Improvement Co.'s Addition. If the City fails to acquite title to that property by July 1, 2003, the parties will negotiate a reduced land price for the original purchase price or the City will be required to exercise' its option. 7)Dubuque Initiatives will agree to participate in the joint marketing and development of the property with the other City-owned property in the Port of Dubuque in accordance with the objectives of the Master Plan for the Port of Dubuque. Although Dubuque Initiatives has executed the offer to Buy Real Estate and Acceptance, the City Council may not give final approval to the contract at this time. Urban renewal law requires that other qualified parties must be given an opportunity to submit competing proposals. The above-described Resolution provides for that procedural requirement with the result that the City Council may not approve the contract before November 25, 2002. RECOMMENDATION I recommend that the City Council initiate the procedures required for the disposition of the former Dubuque Hardwoods site to Dubuque initiatives. This action is consistent with and flows from the Council's objective to redevelop property in the Port of Dubuque in accordance with the recently adopted Master Plan. Dubuque Initiatives is a key: economic development partner of the City and, through this purchase, will assist the City financially in meeting the overall goals for the redevelopment of the Port of Dubuque. ACTION STEP The action step for the City Council is to adopt the attached Resolution. attachments F:\US ERS~Pmyhre\W PDOCS\LQAN DOC\DBQHAP, DW OODS~fferto DLmem.doc RESOLUTION NO. -02 RESOLUTION (1) APPROVING THE MINIMUM REQUIREMENTS, COMPETITIVE CRITERIA, OFFERING PROCEDURES FOR DISPOSITION OF CERTAIN URBAN RENEWAL PROPERTY; (2) DETERMINING THAT THE OFFER TO BUY REAL ESTATE AND ACCEPTANCE SUBMITTED BY DUBUQUE INITIATIVES SATISFIES THE OFFERING REQUIREMENTS AND DECLARING THE INTENT OF THE CITY TO SIGN THE OFFER TO BUY REAL ESTATE AND ACCEPTANCE WITH DUBUQUE INITIATIVES IN THE EVENT THAT NO COMPETING PROPOSALS ARE SUBMITTED; AND (3) SOLICITING COMPETING PROPOSALS. Whereas, the City of Dubuque, Iowa; did on March 4, 2002, adopt an Amended and Restated Urban Renewal Plan for the lce Harbor Urban Renewal District (the "Plan") for the urban renewal area described therein; and Whereas, such Plan provides for, among other things, the disposition of properties for pdvate development purposes as a proposed economic development action; and Whereas, Dubuque Initiatives ("Developer") has submitted to the City an Offer to Buy Real Estate and Acceptance for the acquisition .of certain property hereinafter described for redevelopment purposes, together with the request that this property be made available for disposition as rapidly as possible; and Whereas, in order to establish reasonably competitive bidding procedures for disposition of the property in accordance with the statutory requirements of Chapter 403, Code of Iowa, 2001, particularly Section 403.8, and to assure that the City extends a full and fair opportunity to all developers interested in submitting a proposal, a summary of submission requirements and minimum requirements and competitive criteria for the property offering is included herein; and Whereas, said Developer has tendered an Offer to Buy Real Estate and Acceptance with the City, attached hereto as Exhibit "A"; and Whereas, to recognize both the firm proposal for disposition of the property already received by the City, as described above, and to give full and fair opportunity to other developers interested in submitting a proposal for development of the property, this Council should by '~his Resolution: 1) Set the Fair Market Value of the parcel as determined by an independent appraiser for uses in accordance with the Urban Renewal Plan; 2) Approve the minimum requirements and competitive criteria included herein; 3) Approve as to form the Developer's Offer to Buy Real Estate and Acceptance attached hereto as Exhibit "A"; 4) Set a date for receipt of competing proposals and the opening thereof; 5)Declare that the proposal submitted by Developer satisfies the minimum requirements of the offering, and that in the event no other qualified proposal is timely submitted that the City intends to accept such proposal and sign the Offer to Buy Real Estate and Acceptance and direct publication of notice of said intent; 6)Approve and direct publication of a notice to advise any would be competitors of the opportunity to compete for purchase of the property for development on the terms and conditions set out herein; 7)Declare that in the event another qualified proposal is timely submitted and accepted, another and future notice will be published on the intent of the City to enter into the resulting contract, as required by law; and Whereas, this Council believes it is in the best interest of the City and the Pian to act as expeditiously as possible to offer this property for development as set forth herein. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the following described property shall be offered for development in accordance with the terms and conditions contained in this Resolution, to wit: Cypress Street, Wall Street, Washington Street except that part from Market Street to Cypress Street and atleys located between the NE'LY line of Sixth Street and the NW'LY line of Market Street.and the SE'LY right of way line of the Canadian National lltinois Central Railroad in the City of Dubuque, Dubuque County, Iowa Lots 15, 16, 17, 18, 19, 20, 21, and 22; and, That part of lots 1, 2, 3, 4, 5, 6, 7, 8, 12, 13, and 14, lying southerly Of a line which is parallel to and 50 feet southerly from the Centerline of the Illinois Central Gulf Railroad Company's main Tract, as now located; all in Block 18, In Dubuque Harbor Improvement Company's Addition, in the City of Dubuque, Iowa, according to the recorded Rlat thereof. Lot lA of vacated alley in Block 18 of Dubuque Harbor Improvement Company's Addition from Market Square to the LC.R.R.R.O.W. In the City of Dubuque, Iowa, according to the recorded Plats thereof. Lots 31, 32, 33, 34, 35, and 36, in Block 21, Lots 1 to 38, both inclusive, in Block 27, and Lots 31, 33, 34, and 35, in Block 28, All in Dubuque Harbor Improvement Co.'s Addition, In the City of Dubuque, Iowa, according to the Recorded plat of said Addition. Lots 1,33, 34, 35, 36, in Block 20; Lots numbered 3 to 19, inclusive, in Block 2I; That part of lots 2, 3, 4, 31 and 32, in Block 20, and, That part of lots 8 and 27, in Blodk 28, lying easterly of the Dubuque & Dunleith Bridge Company's dght of way; Lots 1,2, 3, 4, 5, 6, 7, 28, 29.30. and 32, in Block 28; Ail in Dubuque Harbor Improvement Company's Addition. in the City of Dubuque, Iowa, according to the respective recorded Plats thereof. Section 2. That the Fair Market Value of the property shall be $1.641,036.00. Section 3. That it is hereby determined that in order to qualify for consideration for selection each Developer must submit a proposal which meets these minimum requirements: a) Contains an agreement to acquire the property at not less than the Fair Market V.alue for use in accordance with the Plan; b) Is intended for the redevelopment of the property for use by expanding and new businesses in conformance with the Plan; c)Sets out or provides through other means acceptable to the City the proposed developer's experience in working with other development projects and with construction; d)Sets out or provides through other means acceptable to the City the experience of the principals and key staff who are directly engaged in performance of contract obligations in carrying out projects of similar scale and character; and e)Meets, at a minimum, the conditions of the Offer to Buy Real Estate and Acceptance submitted by the Developer. Section 4. That the Offer to Buy Real Estate and Acceptance by and between the City and Developer be and is hereby approved as to form for the purposes hereinafter stated. Section 5. That for the purpose of defining the offering of the property for development, said Offer to Buy Real Estate and Acceptance shall be deemed to be illustrative of the terms acceptable to the City with respect to: a) Purchase price; b) Conveyance of property; c) City participation; d) Conditions; e) General terms and provisions Section 6. That the Offer to Buy Real Estate and Acceptance submitted by the Developer satisfies the requirements of the offering and, in the event that no other qualified proposals are timely submitted, that the City enter into said Offer is hereby accepted and approved. Section 7. That it is hereby determined that the Developer possesses the qualifications, financial resources and legal ability necessary to acquire and develop the property in the manner proposed by this offering in accordance with the Plan. Section 8. That it is hereby determined that the disposition price for the proper~y offered to the Developer shall be in the amount of the Fair Market Value as established by this Council for uses in accordance with the Plan. Section 9. That the City Clerk shall receive and retain for public examination the attached Offer to Buy Real Estate and Acceptance submitted by the Developer and, in the event no other qualified proposals are timely submitted, shall resubmit the same to this Council for final approval and execution upon expiration of the notice hereinafter prescribed. Section 10. That the action of this Council be considered to be and does hereby constitute notice to all concerned of the intention of this Council, in the event that no other 'qualified proposals ar? timely submitted, to accept the proposal of the Developer to acquire and develop the property and to sign the Offer to Buy Real Estate and. Acceptance by and between City and Developer. Section 11. That the official notice of this offering and of the intent of the City, in the event no other qualified proposals are timely submitted, to sign the Offer to E~uy Real Estate and Acceptance, shall be a true copy of this Resolution, but without the attachments referred to herein. 4 Section 12. That the City Clerk is authorized and directed to secure immediate publication of said officiaI notice in the Tele(~raph Herald, a newspaper having a general circulation in the community, by publication of the text of this Resolution without attachments on or before the 24th day of October, 2002. Section 13. That written proposals for the sale and development of the property will be received by the City Clerk at or before I 0:00 a.m., November 22, 2002 in the Office of the City Clerk, located on the first floor at City Hail, Dubuque, Iowa 52001. Each proposal will be opened at the hour of 10:00 a.m. in City Hall, Dubuque, Iowa on November 22, 2002. Said proposals will then be presented to the City Council at 6:30 p.m., November 25, 2002, at a meeting to be held in the Auditorium of the Carnegie-Stout Public Library, Dubuque, Iowa. Section 14. That such offering shaIl be in substantial conformance with the provisions of Section 403.8, Code of Iowa, requiring "reasonable competitive bidding procedures" as are hereby prescribed which method is hereby determined to be the appropriate method for making the Property available for development. Section 15. Thatthe required documents forthe submission of a proposal shalI be substantial conformity with the provisions of this Resolution. Section 16. That the City Clerk is hereby'nominated and appointed as the agent of the City of Dubuque, Iowa to receive proposals for the sale of the property at the date and according to the procedure hereinabove specified for receipt of such proposals and to proceed at such time to formally acknowledge receipt of each of such proposals by noting the receipt of same in the Minutes of the Council; that the City Manager is hereby authorized and directed to make preliminary analysis of each such proposal for compliance with the minimum requirements established by this Council hereinabove. For each proposal which satisfies these requirements, the Council shall judge the strength of the proposal by the competitive criteda established hereinabove. The Council shaIl then make the final evaluation and selection of the proposals. Section 17. That in the event another qualified proposal is timely submitted and accepted by the City, another and further notice shall be published of the intent of the City of Dubuque, iowa, to enter into the resulting contract, as required by law. Passed, approved and adopted this 21st day of October, 2002. Terrance M. Duggan Mayor Attest: Jeanne F. Schneider City Clerk F:\USERS\Pmyhre\WPDOCS\LOAN DOC\D BQHAP~DW©OD S\dispo.res,doc 6 OFFER TO BUY REAL ESTATE AND ACCEPTANCE ADDENDUM A. Contingent upon an acceptable Phase II test as determined by Buyer. B. Contingent upon Seller executing an acceptable indemnification agreement on any environmental issue prior to the possession date of November 1,2003. C. Seller will take necessary steps to vacate all streets, except Market Street, located within the lots being purchased and deed them to Buyer by November 1, 2003. D. By November 1,2003, all buildings will be removed by Seller, site cleaned and seeded. E. Seller shall not assess the Buyer for any street improvements to Market Street to the extent necessary to construct a roadway. In the event sale by Buyer subsequent to the construction of the roadway, no assessment will be made against the properly for the prior construction of the roadway. Once the road is constructed, any improvements to Market Street will be assessable. F. This Offer is contingent upon Seller obtaining title of the property by December 1, 2002, provided that Seller shatl have until July 1,2003 to obtain title to Lots 20 through 30 in Block 21. G. Seller shall have an option to purchase the Real Estate from Buyer for a period of five (5) years from December 1, 2002. The option price for the purchase shall be $1,641,036.00 plus Buyer's homing costs and interest at the Federal Fund Rate Buyer would have earned on its cash investments during the periodof ownership of the Real Estate by Buyer. This option shall be exercised by Seller giving 30 days advance written notice to Buyer, with the option purchase pdce to be paid in cash at closing. H. In the event of sale prior to the five years, Buyer will receive the entire proceeds for such sale or sales until Buyer has received the sum referred to in paragraph G above. Any sale proceeds thereafter remaining shall be paid by Buyer to the Seller in consideration for release of Seller's option. Buyer understands the Seller's option as set out in paragraph G and therefore the Buyer agrees to participate with the Seller in a joint marketing with other city projects as shown on the City's master plan without cost to the Buyer. I. In the event that Seller is unable to obtain title to Lots 20 through 30 in Block 21, by July 1,2003, the parties agree to negotiate a reduced purchase pdce based upon reduced acreage. In the event the parties are not able to agree on a reduce purchase pdce, Seller shall be required to exercise its option as referred to in Paragraph G above. Upon negotiation of a reduce purchase price, Seller shall immediately pay to Buyer the difference between the reduced purchase price and the pdce set forth in Paragraph 2 of this offer. Legal Description of the Real Estate Cypress Street, Wall Street, Washington Street except that part from Market Street to Cypress Street and alleys located between the NE'LY line of Sixth Street and the NW'LY line of Market Street and the SE'LY right of way line of the Canadian National Illinois Central Railroad in the City of Dubuque, Dubuque County, Iowa Lots 15, 16, 17, 18, 19, 20, 21, and 22; and, That part of lots 1, 2, 3, 4, 5, 6, 7, 8, 12, 13, and 14, lying southerly Of a line which is parallet to and 50 feet southerly from the Centedine of the IItinois Central Gulf Railroad Company's main Tract, as now located; all in Block 18, In Dubuque Harbor Improvement Company's Addition, in the City of. Dubuque, Iowa, according to the recorded Plat thereof. Lot lA of vacated alley in Block 18 of Dubuque Harbor Improvement Company's Addition from Market Square to the I.C.R.R.R.O.W. In the City of Dubuque, Iowa, according to the recorded Plats thereof. Lots 31,32, 33, 34, 35, and 36, in Block 21, Lots I to 38, both inclusive, in Block 27, and Lots 31, 33, 34, and 35, in Block 28, All in Dubuque Harbor Improvement Co.'s Addition In the City of Dubuque, Iowa, according to the Recorded plat of said Addition. Lots 1, 33, 34, 35, 36, in Block 20; Lots numbered 3 to 19, inclusive, in Block 21; That part of lots 2, 3, 4, 31 and 32, in Block 20, and, That part of lots 8 and 27, in Block 28, lying easterly of the Dubuque & Dunteith Bddge Company's right of way; Lots 1, 2, 3, 4, 5, 6, 7, 28, 29, 30, and 32. in Block 28: All in Dubuque Harbor Improvement Company's Addition, in the City of Dubuque, Iowa, according to the respective recorded Plats thereof.