Collateral Assignement of Development Agreement_40 Main LLC 8 17 09THE CITY OF ~ Du~~buq,,,,u~,,,,~e
AllAllpmii~ii~
DUB E
~ r
Masterpiece on the Mississippi
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: 40 Main, LLC: Consent to Collateral Assignment of Development
Agreement
DATE: August 10, 2009
City Attorney Barry Lindahl recommends City Council approval of the Assignment of
Development Agreement between the City of Dubuque and 40 Main, LLC for purposes
of financing this redevelopment project.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
~.
Mic ael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
THE CITY OF
DUB E
Masterpiece on the Mississippi
~' ~ // ,
BARRY LINDAH'L~~i'~
CITY ATTORNE
MEMORANDUM
To: Michael C. Van Milligen
City Manager
DATE: August 10, 2009
RE: 40 Main, LLC: Consent to Collateral Assignment of Development
Agreement
40 Main, LLC has requested that the City consent to the Assignment of Development
Agreement between the City of Dubuque and 40 Main, LLC for purposes of financing
this redevelopment project.
recommend that the attached Collateral Assignment of Development Agreement be
submitted to the City Council for approval and that upon such approval the City
Manager be authorized to sign the City's Consent regarding the Development
Agreement.
BAL:tIs
Attachment
cc: Cindy Steinhauser, Assistant City Manager
Dave Heiar, Economic Development Director
Flint Drake, Esq.
OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA
SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944
TELEPHONE (563) 583-4113 / FAx (563) 583-1040 / EMAIL balesq@cityofdubuque.org
Drake & Freund, Pc.
ATTORNEYS
D Flint Drake*
fdrake(a~ drake freund. corn
1005 !Main Street, Suite 200
Duhuque, I.1 52001
www.drakefreund.com
John D. Freund
j freund~drakefreund.com
Both admitted in Iowa
":also admitted in Wisconsin
Mayor Roy D. Buol
Mr. Ric Jones
Mr. David Resnick
Mr. Kevin Lynch
Ms. Karla Braig
Ms. Joyce Connors
Mr. Dirk Voetberg
Ci0 City Hall
50 West 13`" Street
Dubuque, IA 52001
August 4, 2009
RE: CONSENT TO COLLATERAL ASSIGNMENT OF
40 MAIN, LLC DEVELOPMENT AGREEMENT
Dear Honurable Mayor and City Council Members:
Telephone: (563) 582-2000
Facsimile: (563) 583-5225
We represent 40 Main, LLC in connection with, among other things, that certain
Development Agreement entered into between the City and 40 Main, LLC dated January 15, 2009
as amended. 40 Main, LLC has borrowed certain funds from Premier Bank to finance the company's
rehabilitation of the real estate locally known as 40-42 Main Street. As a part of this financing
transaction, Premier Bank has required a Collateral Assignment of 40 Main, LLC's rights under the
Development Agreement. A true and correct copy of the Collateral Assignment is attached hereto
for your reference. With this letter we request that the City consent to the Collateral Assignment of
Development Agreement to allow 40 Main, LLC proceed with the redevelopment project.
We appreciate your assistance. Thank you.
Best Regards,
DRAKE & LTND, P.C.
c _ ~
By
D . F 1 t Drake
DFD\db
Prepared By and Return To: D. Flint Drake, 1005 Main Street, Suite 200, Dubuque, IA 52001
(563) 582-2000
COLLATERAL ASSIGNMENT OF DEVELOPMENT AGREEMENT
This Collateral Assignment of Development Agreement ("Assignment") is made and
entered into this ~ day of July, 2009, by 40 MAIN, LLC, an Iowa limited liability company
("Owner") and PREMIER BANK, an Iowa banking corporation ("Bank").
RECITALS
A. Owner is the owner of real estate locally known as 40-42 Main Street, Dubuque, Iowa
(the "Real Estate") and has undertaken a rehabilitation of this historic structure (the "Project")
pursuant to all loan documents between the parties (the "Loan Documents");
B. Bank has agreed to make certain loans to Owner in connection with the Project;
C. In connection with the Project, Owner has entered into that certain Development
Agreement dated the 15~~' day of January, 2009 between the City of Dubuque, Iowa (the "City")
and Owner (together with all amendments, modifications or replacements thereof, the
"Development Agreement");
D. Owner will materially benefit from Bank making loans to Owner and Bank will not
make such loan unless this assignment is executed;
E. The parties desire to set forth their agreement regarding such assignment in writing.
THEREFORE, in consideration of the mutual terms and covenants contained herein and
in the loan documents between Bank and Owner, the parties agree as follows:
1. Assignment. Owner does hereby absolutely and unconditionally sell, assign, transfer,
Page 1 of 3
set over and deliver to Bank for the benefit of Bank all of Owner's now existing or hereafter
acquired right, title and interest in and to the Development Agreement. This Assignment
includes the immediate and continuing right of Owner to enforce any rights and receive any
benefits of the Development Agreement. Notwithstanding the assignment set forth above, so
long as no event of default, as defined under the terms of the Loan Documents, has occurred,
Owner shall have a license, revocable upon the occurrence of any such event of default, to
collect and retain all amounts which may become payable to Owner under the Development
Agreement and otherwise exercise and enforce all of Owner's respective rights thereunder and
receive and enjoy any benefits thereunder, subject to the limitations hereof and of the Loan
Documents. The parties agree and acknowledge that this Assignment is subject to the consent of
City to such Assignment.
2. Limitation on Assignment. Neither this assignment nor any action by Bank shall
constitute an assumption by Bank of any obligations under the Development Agreement and
Owner shall continue to be liable for all obligations of Owner thereunder. Owner hereby agrees
to perform all its obligations under the Development Agreement and agrees to indemnify and
hold Bank harmless against and from any loss, cost, liability or expense (including but not
limited to, reasonable attorney's fees) resulting from any failure of Owner to so perform.
3. Right to Take Action. Bank shall have the right at any time (but shall have no
obligation) to take in its name or the name of Owner such action as Bank may at any time
determine to be necessary or advisable to cure any default under the Development Agreement, to
exercise and enjoy Borrower's rights and benefits under the Development Agreement, including
utilizing the Development Agreement in connection with completion of the project and to
otherwise protect the rights of Owner or Bank thereunder and shall not incur any liability if any
action so taken by it or on its behalf shall prove to be inadequate or invalid and Owner agrees to
hold Bank free and harmless against and from any loss, cost, liability or expense (including, but
not limited to, reasonable attorney's fees) incurred in connection with any such action. Owner
hereby irrevocably constitutes and appoints Bank to be Owner's attorney in fact in Owner's or
Bank's name to enforce all rights of Owner under the Development Agreement provided,
however, such Power of Attorney shall be effective only in the event of a default by Owner under
the terms of the Loan Documents.
4. Miscellaneous. This Assignment is binding upon Owner and its respective
successors, legal representatives and assigns and shall inure to the benefit of Bank and its
respective successors and assigns, including any purchaser upon foreclosure of the mortgage
securing the loans made by Bank to Owner, and any receiver in possession of the property
described herein and any corporation or entity formed by or on behalf of Bank to assume its
obligations hereunder. This assignment shall be governed by the laws of the State of Iowa and
the parties hereto agree to jurisdiction in the district court in and for Dubuque County, State of
Iowa with respect to any disputes which arise hereunder.
5. Waiver of Jurv Trial. EACH PARTY HERETO DOES HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY OR THEIR
Page 2 of 3
RESPECTIVE SUCCESSORS OR ASSIGNS MAY HAVE TO A TRIAL BY JURY 1N
RESPECT TO ANY LITIGATION IN CONNECTION WITH THIS ASSIGNMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR
WRITTEN) OR ACTION OF OWNER OR BANK. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE BANK ENTERING INTO THIS ASSIGNMENT.
40 MAIN, LLC
By: 40 MAIN MM, LLC, Its Manager
By
Patri k Duffy, It anager
STATE OF IOWA )
COUNTY OF DUBUQUE ) ss:
On this ~~ day of ~~ ~ ~ , 2009, before me, a Notary Public in and for
the State of Iowa, personally appeared Patrick Duffy, to me personally known, who being by me
duly sworn did say that he is the managing member of the managing member of said limited
liability company, that no seal has been procured by the said limited liability company and that
said instrument was signed on behalf of said limited liability company by authority of its
managers and the said Patrick Duffy acknowledged the execution of said instrument to be the
voluntary act and deed of said limited liability company, it v tari exe~u ed.
..-
Notary Publlc in and for
P~A~ ~ D. FLINT DRAKE State of Iowa
COMMISSION NO. 161463
• ~~ • MY COMMISSION EXPIRES
,owe ~ -3-.1.-cZ
P:\Premier Bank\40 Main, LLC\COLLATERAL ASSIGNMENT OF DEVELOPMENT AGREEMENT.wpd
Page 3 of 3
,~
CITY'S CONSENT REGARDING DEVELOPMENT AGREEMENT
The undersigned, CITY OF DUBUQUE, IOWA, an Iowa municipal corporation ("City")
hereby consents to the attached Assignment of Development Agreement by 40 MAIN, LLC
("Owner") and each and every term thereof, as an inducement to PREMIER BANK, an Iowa
banking corporation ("Bank") to make, and in consideration of Bank making, loans to Owner, agrees
with Bank as follows:
1. City shall immediately notify Bank in writing of any default by Owner under the
Development Agreement. All notices to Bank pursuant hereto shall be delivered to:
Premier Bank
Attn: Mr. Tom A. Johnson
2625 NW Arterial
Dubuque, IA 52002
Facsimile: (563) 588-0383
2. Bank, or its designee may enjoy the benefits of and enforce the obligations of the
Development Agreement with the same force and effect as if enforced by Owner and Bank may
perform the obligations of Owner thereunder, and City will accept such performance in lieu of
performance by Owner in satisfaction of Owner's obligations thereunder. In the event Bank or
Bank's designee ("Assuming Administrative Agent") expressly elects in writing to assume Owner's
obligations under the Development Agreement, Assuming Administrative Agent shall perform and
be liable for all obligations of Owner under the Development Agreement to the same extent as
Owner.
3. City will not terminate the Development Agreement on account of any default of Owner
thereunder without written notice to Bank expressly stating that City intends to terminate the
Development Agreement by first providing to Bank a reasonable opportunity (but not less than thirty
(30) days) to, at the option of Bank: (a) effect a cure of the default, if curable; or (b) to declare
Owner in default under the Assignment and commence to complete or cause a completion of
construction of the Project (defined as rehabilitation of the building locally known as 40-42 Main
Street, Dubuque, Iowa) by expressly assuming the Development Agreement in writing. In the event
Assuming Administrative Agent so elects to complete or cause the completion of the Project and
assumes the Development Agreement, City agrees not to terminate the Development Agreement so
long as the material defaults of Owner thereunder are cured by Assuming Administrative Agent
within the time allowed under the Development Agreement (but in no event less than thirty (30)
days). However, nothing herein shall require Bank to cure any default of Owner under the
Development Agreement, but only gives it the option to do so.
4. Notwithstanding anything in the Development Agreement or herein to the contrary, Bank
shall not have any personal liability to City.. unless Bank expressly elects in writing to assume the
Page 1 of 2
Development Agreement, the City shall look solely to Owner for satisfaction of any and all claims
which City may have against Owner under the Development Agreement.
Dated the ~~'day of ~~` ~;; f~_~_ ~, 2009.
CITY OF DUBUQUE, IOWA
By:
Michael Van Milligen, City Manager
Page 2 of 2
Doc ID: 006550540008 Type: GEN
Kind: AGREEMENT
Recorded: 08/25/2009 at 09:49:07 AM
Fee Amt: $44.00 Paqe 1 of 8
Dubuque County Iowa
Kathy Flynn Thurlow Recorder
Prepared by David J. Heiar, 50 W. 131h Street, Dubuque IA 52001. 563-589-4393
Return to David J. Heiar, 50 W. 13th Street, Dubuque IA 52001. 563-589-4393
MINIMUM ASSESSMENT AGREEMENT
CITY OF DUBUQUE, IOWA
THIS MINIMUM ASSESSMENT AGREEMENT, dated. for reference
purposes the ( day of _ �tjS , 2009, by and among the City of Dubuque,
Iowa (City), 40 Main, LLC, an Iowa limited liability company with its principal place of
business at Dubuque, Iowa (Developer), 40 Main Tenant, LLC, an Iowa limited liability
company (Master Tenant) and the City Assessor of the City of Dubuque (Assessor).
WHEREAS, City and Developer have entered into a Development Agreement
dated as of January 19, 2009, as amended (Development Agreement) regarding certain
real property ( the Property) described in Exhibit A attached hereto, located within the
City of Dubuque; and
WHEREAS, it is contemplated that Developer will undertake the development of
an area (the Project) within the Greater Downtown Urban Rcnewal District by the
construction of the Minimum Improvements on the Property as provided in the
Development Agreement; and
WHEREAS, pursuant; to Section 403.6 of the Iowa Code, as amended, City, and
Developer desire to establish a minimum actual value for the Minimum Improvements
and the Property, which shall be effective upon substantial completion and from then
until this Agreement is terminated pursuant to the terms herein; and
WHEREAS, City and Assessor have reviewed the preliminary plans and the
specifications for the Minimum Improvements which it is contemplated will be erected.
NOW, THEREFORE, the parties to this Agreement, in consideration of the
promises, covenants and agreements made by each other, do hereby agree as follows:
1) Commencing January 1, 2010, the minimum actual value which shall be fixed
for assessment purposes for the Property described in Exhibit A attached hereto, together
with the Minimum Improvements to be constructed thereon by Developer shall be not
less than three million one hundred eighty-five thousand three hundred dollars
($3,185,300.00), until termination of this Agreement. The parties hereto expect that the
construction of the Minimum Improvements will be substantially completed on or before
the 1 st day of July, 2010.
2) The minimum actual value herein established shall be of no further force and
effect and this Agreement shall terminate on the 30th day of June, 2021, the final date of
the City's obligation to pay interest or principal with respect to the indebtedness incurred
in support of the Project, in the principal amount of $690,529.42. The final scheduled
maturity date of the said indebtedness is June 30, 2021. Provided, further, that in the
event said indebtedness had not been fully paid as to principal and interest as of January
1, 2021, this Agreement shall continue in effect for such additional time as shall be
required therefore, but not later than January 1, 2023.
3) This Agreement shall be promptly recorded by Developer.. Developer shall pay
all costs of recording.
4) Neither the preambles nor provisions of this Agreement are intended to, nor
shall be construed as, modifying the terms of the Development Agreement between City
and Developer.
5) This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the parties.
THE CITY OF DUBUQUE, IOWA
��px�
ROD. Buol,
Shy, A'�`ET
✓4w S.
yor
711
°Jear�r� I� Schneider, City
�.
StATE'OFIOWA )
) SS
COUNTY OF DUBUQUE )
On this Wts day of f , 20 U , before me, the undersigned, a Notary
Public in and for the State of Iowa, personally appeared Roy D. Buol and Jeanne F.
Schneider, to me personally known, who, being by me duly sworn, did say that they are the
Mayor and City Clerk, respectively, of the City of Dubuque, Iowa; a municipal
corporation; that the seal affixed to the foregoing instrument is the corporate seal of the
corporation, and that the instrument was signed and sealed on behalf of the corporation, by
authority of its City Council, as contained in Resolution No. a - 0 11 passed by the
City Council on the 1 - o - 0I ; and Roy D. Buol and Jeanne F. Schneider
acknowledged the execution of the instrument to be t eir voluntary act and deed and the
voluntary act and deed of the corporation, by it volunt rily executed
Notary Public, State of Iowa
e'A`�� SUS.AN M. W(NTER
COMMISSION A}Q.183274
MY comm/s�q/
OWN
2114111
CERTIFICATION OF ASSESSOR
The undersigned, having reviewed the plans and specifications for the Minimum
Improvements to be constructed and the market value assigned to the land upon which
the Minimum Improvements are to be constructed, and being of the opinion that the
minimum market value contained in the foregoing Assessment Agreement appears
reasonable, hereby certifies as follows: The undersigned Assessor, being legally
responsible for the assessment of the property described in the foregoing Assessment
Agreement, upon completion of Minimum Improvements to be made on it and in
accordance with the Assessment Agreement, certifies that the actual value assigned to
such land, building and equipment upon completion shall not be less than three million
one hundred eighty-five thousand three hundred Dollars ($3,185,300.00) until
termination of this Assessment Agreement pursuant to the terms hereof.
Rick gngelken, Dubuque City Assessor
Date: Ypxzo-
STATE OF IOWA )
) SS
COUNTY OF DUBUQUE )
Subscribed and sworn to before me by F City
Assessor for the City of Dubuque, Iowa.
Notary Public in and f >� St l of Iowa
My Commission expires:----- Z0
Date: .� 'j
EA�] ERENUA FGG!SANG
C:OMMxISSION N0,745361
My CClvMISSION EXPIRES
3119110
DCORNELL/ 625912.1 /MSWord\10422.090
40 MAIN, LLC
(DEVELOPER)
By: 40 Main MM, LLC
its manager
By:
Patrick J. 15uffy, Jr., i manager
STATE OF IOWA )
) SS
DUBUQUE COUNTY )
On this day of 3 N ( " 1 , 2009, before me, a Notary Public in and for said
county and state, personally appeared Patrick J. Duffy, Jr., to me personally known, who
stated that he is the manager of 40 Main MM, LLC, the manager of 40 Main LLC, and
that said instrument was signed on behalf of said company by authority of its members
and that he acknowledged the execution of this instrument to be the voluntary act and
deed of said company by him and by it voluntarily executed.
b
D. FLINT DRAKE
COMMISSION NO. 161463
MY COMMISSION EXPI�iES
rc�wd� °17 _)'), IL
`.
/)
Notary Public, State of Iowa
40 MAIN TENANT, LLC
(MASTER TENANT)
By; 40 Main Tenant MM, LLC
its manager
By: ��aiz
Patrick f Duffy, Jr. manager
STATE OF IOWA )
) SS
COUNTY OF DUBUQUE )
On this r day of 1, ( `I , 2009, before me the
undersigned, a Notary Public in and for the State of Iowa, personally appeared Patrick J.
Duffy, Jr., to me personally known, who, being duly sworn, did say that he is the
manager of 40 MAIN TENANT MM, LLC, the manager of 40 MAIN TENANT, L.L.C.,
an Iowa limited liability company, that no seal has been procured by the said limited
liability company, that said instrument was signed on behalf of said limited liability
company; and that said Patrick Duffy acknowledged the execution of said instrument to
be the voluntary act and deed of said limited liability company, by it voluntarily
executed.
4 MY C0A L
�'T 'I , EY f:
,�,,�, Notary Public in and for the State of Iowa
CONSENT OF LENDER
The undersigned, as holder of a mortgage on the Development Property, hereby
consents to the Developer's execution and delivery of this Minimum Assessment
Agreement and agrees to be bound by the terms hereof to the same extent as the
Developer with respect to the Minimum Actual Value set forth herein.
By:
Its: 6
STATE OF IOWA )
) SS
COUNTY OF �, � )
On this day of w { , 20 d 5 before me, a Notary Public in and for
said County, personally appeared `�� �-�d- , to me personally known, who,
being by me duly sworn, did say that that person is the V f' of
Premier Bank; that said instrument was signed on behalf of said corporation by authority
of its Board of Directors; and k o — > Id acknowledged the execution of the
foregoing Consent to be the voluntary act and deed of said corporation, by it voluntarily
executed.
Dated this � k _ day of
OAL O. F®Lr. 9 f' DRAKE
c COMM13SK'N NO. 161463
r ease My COMMISSION EXPIRES
a�wA
20 c "
Notary Public in and for said County
and State
1:',XFIIBIT A
Legal De,,;cription
Lots 16 and 17 in the Subdivision ofthe west flalfof Block 1, in Dubuque Harbor
Company's Addition, in the City of Dubuque, lowsi, according to [lie recorded
plat thereof
I)CO1tNEIL/616615.1 NISWord110,122.090