subordination, mortgagePrepared bT: James D. Burke
50W. 13~ S~ee~Dubuque, IA52001
(319) 589-4393
RESOLUTION No. 12-00
RESOLUTION AUTHORIZiNG A SUBORDiNATION AGREEMENT iN REGARD TO A
MORTGAGE INTEREST IN CITY LOT 29, CITY LOT 30 AND SOUTH 1/3 OF CITY LOT
31 iN ORIGINAL TOWN, CITY OF DUBUQUE, DUBUQUE COUNTY, IOWA
Whereas, pursuant to Resolution and published notice of time and place of hearing, the
City Council of the City of Dubuque, Iowa, met on January 17, 2000, to consider the proposal to
dispose of interest in certain real estate by executing a Subordination Agreement for a Real
Estate Mortgage filed November 16, 1998, as Insmunent No. 18110-98, as to the following
described real estate:
City Lot 29, City Lot 30 and the south 1/3 of City Lot 31 in Original Town, City of
Dubuque, Dubuque County, Iowa; and
Whereas, the City Council overruled any and all objections, oral or written, to dispose of
interests of the City of Dubuque, Iowa, in the hereinabove real estate.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the Subordination Agreement attached hereto is hereby approved and the
Mayor and City Clerk are hereby authorized and directed to execute said Subordination
Agreement on behalf of the City of Dubuque, Iowa.
Section 2. That the City Clerk is hereby authorized and directed to deliver the executed
Subordination Agreement and a certified copy of this Resolution to the Iowa Department of
Economic Development.
Passed, approved and adopted this 17th day of January 29, 2000.
Terrance M. Duggan, Mayor
Attest:
Mary A. Davis, City Clerk
SUBORDINATION AGREEMENT
THIS AGREEMENT made this 12th day of November 1999 by and
between The City of Dubuque (hereafter "Community") and the Iowa
Department of Economic Development, 200 East Grand Avenue, Des Moines,
Iowa 50309 (hereafter "Department").
WHEREAS, the Community has entered into a Loan Agreement with
Cottinqham and Butler Insurance Services, Inc. (hereafter "Borrower") in the
principal amount of
$ ~nn. nnn and Borrower has issued a Note in favor of the Community
which is secured by a Mortgaqe covering certain premises (as described in
Attachment A, hereafter "Property"); and
WHEREAS, Borrower has requested a loan from Department; and
WHEREAS, Department will not make a loan to Borrower or accept the
Property as security for the loan unless the Community executes this
Subordination Agreement;
NOW, THEREFORE, the Department and Community agree as follows:
1. Description of Community's Interest.
a. Loan Aqreement. The Community has entered in Loan Agreement
Number np~ p #3-98 with Borrower dated November 13,98, in the principal
amount of $ 300.000 , with interest at 3 % per annum.
b. Note. Borrower has issued a Note of even date with the Loan
Agreement identified above and secured the Note with the Property (as
described in Attachment A and hereby incorporated by this reference).
c. Security. The Note is secured by a mortqaqe dated
11-16-98 and recorded at Dubuque County Recorder on November 16
199~8. #18110-98
2. Description of Department's Interest.
a. Loan. The Bank will loan to Borrower the principal sum of $90,000.
The Department's loan is identified as 99-CEBA-25.
b. Security. The Department's loan is to be secured by a mortgage
covering the Property.
3. Subordination. The Community's interest in the Property shall be
subordinate to the Department's interest.
4. Miscellaneous.
Latest Revision: 7/20/93
a. Term of Aqreement. This Subordination Agreement commences
on its date and continues until the Department's loan to Borrower, as described
herein, has been paid in full.
b. Notice. Department shall give prompt written notice to Community
of any default of Borrower in obligations of Borrower under the loan agreement.
Department shall also provide Community with written notice of Borrower's
payment in full of the loan.
c. Bindin~l Effect This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their respective heirs, personal representatives,
successors, and assigns.
d. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Iowa.
e. Amendment. This Agreement may only be changed by a written
amendment signed by both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the aforementioned date.
Community:
By: /s/ Terrance M. Duggan, Mayor
Attest:
Mary A. Davis, City Clerk
DEPARTMENT:
By:
Attest:
Kenneth H. Boyd, Program Manager
Signature
Latest Revision: 7/20/93
EXHIBIT A
Legal Description of Secured Property:
CL 29, CL 30 and S 1/3 -CL 31 in Original Town, City of Dubuque, Dubuque
County, Iowa.
Latest Revision: 7/20/93
CITY OF DUBUQUE, IOWA
MEMORANDUM
January 13, 2000
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT:
Subordination Agreement--Cottingham & Butler Insurance
Service, Inc., CEBA Loan Agreement #99-CEBA-25
As part of a 890,000 Iowa Department of Economic Development (IDED)
Community Economic Betterment Account (CEBA) loan to Cottingham & Butler,
Inc. for job creation, Community and Economic Development Director Jim Burke is
recommending that the City subordinate its security interest on a $300,000
Downtown Rehabilitation Loan Agreement on the property at 800 Main Street.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
M~chael C Van Mdl~gen
MCVM/dd
Attachment
CC;
Barry Lindahl, Corporation Counsel
Tim Moerman, Assistant City Manager
CITY OF DUBUQUE, IOWA
MEMORANDUM
TO:
FROM:
SUBJECT:
January 12, 2000
sen~ City Manager
q~ B'ur~ce, Community & Economic Development Director
Subordination Agreement
Cottingham and Butler Insurance Service, Inc.
CEBA Loan Agreement #99-CEBA-25
INTRODUCTION
This memorandum requests that the City Cotmcil approve a subordination agreement with Iowa
Department of Economic Development (IDED). The subordination agreement relates to the
Community Economic Betterment Account (CEBA) Loan Agreement #99-CEBA-25 with 1DED and
Cottlngham and Butler.
DISCUSSION
A CEBA Loan Agreement of $90,000 was executed with the Iowa Department of Economic
Development and Cottingham and Butler on March 18, 1999. As part of this loan agreement, the City
agreed to subordinate its security interest on a $300,000 Downtown Rehabilitation Loan Agreement
(DRLP #3-98) with Security Partners aka Cottingham and Butler. The Downtown Loan was executed
in November, 1998 and was secured by a mortgage on the building and land at 800 Main Street.
The Council had previously set a public hearing on the matter for January 17, 2000. Because a
mortgage constitutes an interest in a particular piece of real estate, approval of a subordination of that
mortgage is treated as a disposition of public property. State law requires that before a city may
dispose of public property it must hold a public hearing.
RECOMMENDATION
I recommend that the City Council adopt the attached resolution authorizing the Mayor and City Clerk
to sign the subordination agreement with the Iowa Department of Economic Development.
attachments
Prepared by: Aggie Kramer, Community Development Specialist