Lower Main Development_Memorandum of UnderstandingMEMORANDUM
January 15, 2003
TO:The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Memorandum of Understanding with Lower Main Development, LLC
Economic Development Director Bill Baum recommends City Council approval of the
Memorandum of Understanding with Lower Main Development, LLC, concerning the
acquisition and renovation of the former Weber Paper Building, owned by Dubuque
Initiatives.
The redevelopment of the Weber Building is proposed to include:
· One floor would be leased to Platinum Services, a non-retail company now
located on Associates Drive.
· One floor will be leased to You Squared, also located on Associates Drive.
One and a half floors will be leased to the Shepherd Company, an East
Dubuque company with approximately 50 jobs, which is under new ownership.
The new owners prefer a Downtown Dubuque location.
· One half floor will be leased to EPIC Construction Company, owned by Floyd
Kunkel.
· The first floor will be leased to a retail operation, yet to be determined.
In addition to the purchase price for the Weber building and parking lots, the
building must be renovated. The total cost of renovation is estimated to be
$2,000,000.
Because the costs of the renovation are high, the LLC has asked for assistance from
the City. To encourage and attract this private investment and new jobs to downtown,
the attached Memorandum of Understanding (MOU) has been prepared for City Council
review. The MOU agrees to a City Tax Increment Financing Forgivable loan of
$150,000, and a $300,000 3% repayable loan from the City through the Downtown
Rehab loan program in FY 2007.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
William Baum, Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
January 14,2003
To: Michael Van Milligen, City Manager
From: William Baum, Economic Development Director
Subject: Memorandum of Understanding with Lower Main Development, LLC
Background
The attached resolution provides for the approval of a Memorandum of
Understanding between the City and Lower Main Development LLC, concerning the
acquisition and renovation of the former Weber Paper Building.
Discussion
In partnership with the City of Dubuque, Dubuque Initiatives, a private non-profit
organization whose mission is to assist the City in Downtown development,
pumhased the Weber Paper Building in 1996. The organization has also purchased
the parking lot across Main Street from the building (former Kennedy Aquarium),
and the parking lot behind the building fronting Locust Street (former Schoen's
Antiques).
Since that time the property has been for sale, not for speculation, but for the
planned redevelopment of the facility.
This past month, Pam Myhre and I have been meeting with representatives of
Dubuque Initiatives and officers/legal staff of Lower Main Development LLC. to
discuss the potential use and conditions of a potential sale.
The major partners are in the LLC are Floyd Kunkel and Wayne Briggs, both of
whom have the experience and resources to purchase and renovate the building.
Mr. Kunkel has experience in renovating the Bricktown building, and Mr. Briggs has
existing developments on Associates Drive. The attorney representing the company
is Bill Conzett.
The redevelopment of the Weber Building is proposed to include:
· One floor would be leased to Platinum Services, a non-retail company now
located on Associates Drive.
· One floor will be leased to You Squared, also located on Associates Drive.
One and a half floors will be leased to the Shepherd Company, an East
Dubuque company with approximately 50 jobs, which is under new ownership.
The new owners prefer a Downtown Dubuque location.
· One half floor will be leased to EPIC Construction Company, owned by Floyd
Kunkel.
· The first floor will be leased to a retail operation, yet to be determined.
In addition to the purchase price for the Weber building and parking lots, the
building must be renovated. The total cost of renovation is estimated to be
$2,000,000.
Because the costs of the renovation are high, the LLC has asked for assistance
from the City. To encourage and attract this private investment and new jobs to
downtown, the attached Memorandum of Understanding (MOU) has been prepared
for City Council review. The MOU agrees to a City Tax Increment Financing
Forgivable loan of $150,000, and a $300,000 3% repayable loan from the City
through the Downtown Rehab loan program in FY 2007. Additional legal
agreements will come back to the Council prior to final approval of the financing.
The MOU also provides that the LLC would purchase the building and parking lots,
renovate the building, lease the building to the companies described above, make
improvements to the parking lots according to standards similar to the 3rd and Main
parking lot, and allow the City the use of the Weber Building exterior wall signs to
direct visitors to the Port of Dubuque.
Recommendation
I recommend the City Council adopt the attached resolution approving the
Memorandum of Understanding with Lower Main Development, LLC.
F:'~USERS',WBaum'a'~lain Street~Weber Paper memo to Mike.doc
RESOLUTION NO. 30-03
A RESOLUTION APPROVING A MEMORANDUM OF UNDERSTANDING
WITH LOWER MAIN DEVELOPMENT, LLC
Whereas, Lower Main Development, LLC is proposing to acquire the former
Weber Paper Building on Main Street from Dubuque Initiatives, renovate the
building and lease the building to existing companies; and
Whereas, the City is encouraging the LLC to complete the transaction with
Dubuque Initiatives; and
Whereas, a Memorandum of Understanding has been prepared for said
acquisition and renovation.
NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF DUBUQUE,
IOWA, AS FOLLOWS:
Section 1. The attached Memorandum of Understanding is hereby approved.
Section 2. The City Manager is hereby directed to prepare documents necessary
to implement the Memorandum of Understanding
Passed, approved and adopted this 20th day of January, 2003.
Terrance M. Duggan, Mayor
ATTEST:
Jeanne F. Scfineider, City Clerk
F:\USERS\WBaum~Vlain Street'~Resolufion on MOU Weber building.doc
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding is made and entered into this 20th day of
January by and between the City of Dubuque, Iowa,(the City), and Lower Main
Development, LLC, a limited liability company (LLC).
Whereas, LLC intends to purchase the property at 137 Main Street in the City of
Dubuque, locally known as the Weber Paper Building (the Weber Building) and adjacent
parking lots from the owner thereof, Dubuque Initiatives. LLC further intends to lease
the Weber Building to four businesses, namely, YOU Squared, Platinum Services, Epic
Construction, and the Shepherd Company; and
Whereas, LLC's intent to purchase the Weber Building is subject to the receipt of
certain financial incentives from the City; and
Whereas, the City is willing to offer incentives to LLC for the new employment
generated in the City of Dubuque by the Shepherd Company and for renovation of the
Weber Building; and
Whereas, the City, and LLC desire to enter into further discussions, but as a
condition to such further discussions, agree that the following terms and conditions shall
be a part of any final agreement among them with respect to the subject of this
Memorandum of Agreement.
NOW, THEREFORE, IT IS AGREED BY AND BETWEEN THE CITY AND THE
LLC AS FOLLOWS:
1. LLC agrees as follows:
· Purchase of Weber Building: Subject to a wdtten agreement with Dubuque
Initiatives, LLC shall purchase the Weber Building and parking lots.
Lease of Weber Building: After purchase and renovation of the Weber Building,
LLC shall lease the Weber Building to the Shepherd Company, YOU Squared,
Platinum Services, and Epic Construction.
Renovate the Weber Building: LLC shall make a capital investment in building
improvements to the Weber Building, including equipment, furniture and fixtures,
at a cost of not less than $2,000,000. LLC shall not commence any
improvements to the Weber Building until plans therefore have been submitted
to and approved by the City's Building Services Department and the Histodc
Preservation Commission.
Make Improvements to the Parking Lots: LLC shall improve the parking lots to
standards similar to the City-owned parking ~ot at 3rd and Main streets. LLC shall
not commence construction of such improvements until plans therefore have
been submitted to and approved by Dubuque Initiatives and City.
Allow City Use of Si.qn on bu ding: Subject to review and approval of the
Historic Preservation Commission, LLC shall allow the City to use the space on
the Weber building now advertising "Weber Paper" to direct visitors to the Port of
Dubuque.
2. The City agrees as follows:
Tax Increment Financing. Subject to a written agreement with LLC, the City shall
provide a $150,000 Tax Increment Financing Forgivable Loan to LLC. This Tax
Increment Financing is subject to LLC executing a Minimum Assessment
Agreement based on the incremental taxable value added to the Weber Building
by LLC and is contingent upon the Shepherd Company occupying the building.
The Minimum Assessment valuation shall provide enough taxes to retire the
$150,000 Tax Increment Financing within a ten-year period.
Downtown Rehabilitation Loan. Subject to a written agreement executed with
LLC, the City shall provide a $300,000 Downtown RehabiLitation Loan at 3%
interest to LLC in fiscal year 2007. The City may in its discretion forgive $2000 of
the loan for each job provided in the building, but not including any jobs created
by the Shepherd Company.
Iowa New Job Tra ning Program. The City will encourage Northeast Iowa
Community College to provide the Shepherd Company reimbursement for new
employee training.
Main Street Limited Loan Proqram. The City will encourage Dubuque Main Street
Limited to provide a Iow interest loan to LLC to assist in the capital improvements
to the Weber Building.
3. Notwithstanding any other provision of this Memorandum of Understanding, the
City and LLC agree that they shall have no obligations of any kind to each other with
respect to the subject of this Memorandum of Agreement until and unless definitive
agreements are entered into between the City and LLC and approved by the City of
Dubuque City Council and the LLC's appropriate officers.
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Lower Main Development, LLC
By:.
Title:
City of Dubuque
By:
Terrance Duggan, Mayor
By:
Jeanne F. Schneider, City Clerk
F:\USERS\WBaum\Main Street~lemo of Understanding Lower Main LLC.doc
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