IDED Agreement with City of Dubuque for IBMPrepared by: David J. Heiar, ED Director, 50 West 13t" Street, Dubuque IA 52001 563 589-4393
Return to: Jeanne Schneider, City Clerk, 50 West 13th Street, Dubuque IA 52001 563 589-4121
RESOLUTION NO. 302-09
RESOLUTION APPROVING AN AGREEMENT BETWEEN THE IOWA DEPARTMENT OF
ECONOMIC DEVELOPMENT AND THE CITY OF DUBUQUE.
Whereas, the City of Dubuque has previously approved an Incentive Agreement with
IBM; and
Whereas, the City of Dubuque has submitted an application to the Iowa Department of
Economic Development for PIAP funding on behalf of IBM; and
Whereas, the Iowa Department of Economic Development has prepared and submitted
for City Council approval an agreement relating to IBM a copy of which is attached hereto and
by this reference made a part hereof; and
Whereas, the City Council finds that the proposed agreement is acceptable and
necessary to the growth and development of the city.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the Iowa Department of Economic Development Agreement is
hereby approved.
Section 2. That the Mayor is hereby authorized and directed to execute the
Agreement on behalf of the City of Dubuque and forward the executed
copy to the Iowa Department of Economic Development for their
approval.
Passed, approved and adopted this 17th day of August, 2009.
f `~'
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oy D. Buol, Mayor
Attest:
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eanne F. Schneider, City Clerk
F:\USERS\DHeiar\IBM\20090814 Resolution IDED_IBM Agreement.doc
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THIS AGREEMENT is made by and between the IOWA DEPARTMENT OF
ECONOMIC DEVELOPMENT ("IDED'), 200 East Grand Avenue, Des Moines, Iowa 50309,
and the CITY OF DUBUQUE, ("C®mmunity") in connection with financial assistance provided
to IBM CORPORATION ("Business"J for a job creation Project located in the Community.
WHEREAS, the Business submitted an application to IDED requesting state assistance
in the financing of a Project located in the Community; and
WHEREAS, the Community pledged to provide local match for the Project in the form of
a Tax Increment Financing (TIE) Rebate in the amount of approximately $1,828,069 over 20
years;
WHEREAS, on February 19, 2009 the Iowa Economic Development Board ("IDED
Board") awarded to Business $11,700,000 to assist the Business with the Project;
WHEREAS, the Business and IDED have entered into Master Contract # P0809M01809
(the "Contract") for the Project; and
WHEREAS, the IDED Board requires as a condition of financing the Project that the
Community agree to be legally obligated to provide the local match pledged;
NOW THEREFORE, in consideration of the mutual promises contained herein and
intending to be legally bound, the Community and IDED agree to the following terms:
1.0 Project. The Community agrees to provide the local match described herein for
the Project as more fully described in the Contract identified below between IDED and the
Business:
BUSINESS: IBM Corporation
MASTER CONTRACT NUMBER: # P0809M01809
FUNDING AGREEMENT NUMBER: # 09-PIAPIVFGF-005
AWARD TYPE: Forgivable loan
AMOUNT: $11,700,000
2.0 Community's Local Commitment. The Community shall provide the local
financial assistance for the Project in the form and annual amounts described in Exhibit A-Tax
Increment Development Agreement By and Between the City of Dubuque, Iowa and IBM
Corporation attached hereto and incorporated by this reference.
3.0 ®efauit; Remedies upon ®efault.
3.1 The Community's failure to provide the annual local financial assistance pledged for
the Project as described in the Contract shall be considered an event of default under this
Agreement.
3.2 If the Community fails to provide the pledged financial assistance for this Project,
IDED will issue a written Notice of Default to the Community setting forth the nature of the
alleged Event of Default in reasonable specificity, and providing therein a reasonable period
time, which shall not be fewer than thirty (30) days from the date of the Notice of Default, in
which the Community shall have an opportunity to cure, provided that cure is possible and
feasible.
3.3 If an Event of Default is not cured within the time allowed, IDED's remedies include but
are not limited to legal action against the Community for payment of the amount of local
financial assistance pledged but not provided by the Community plus 6% default interest
calculated from the first date Award funds were disbursed by IDED to the Business under the
Contract.
4.0 Duration. This Agreement shall remain in effect until the Contract between IDED
and the Business is terminated.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
latest date stated:
FOR T~ IE IDED:
BY:
Michael L. Tramontina, Director
Date
FOR THE COMII~IJNITY: `~~
BY: fit'-~. ~' , ; t -~.,;r~a.
Signatur
Roy D. Buol, Mayor
Typed Name and Title
August 17, 2009
Date
-2-
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: IDED City of Dubuque Agreement for IBM
DATE: August 14, 2009
Economic Development Director David Heiar is recommending that the City Council
approve an agreement between the City of Dubuque and the Iowa Department of
Economic Development acknowledging the City's previous commitment of Tax
Increment Financing to IBM for the creation of 1,300 jobs and acknowledging the State
of Iowa commitment of incentives to that project.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM:Iw
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David Heiar, Economic Development Director
DATE: August 14, 2009
INTRODUCTION
This memorandum presents for City Council approval an Agreement between the Iowa
Department of Economic Development (IDED) and the City. The City Council is requested to
adopt a resolution approving the agreement.
BACKGROUND
On February 13, 2009 the City Council approved an Incentive Agreement with IBM.
DISCUSSION
Attached to this memorandum is a resolution that provides for the approval of the agreement
with IDED for IBM. The resolution authorizes and directs the Mayor to execute the agreement
on behalf of the City. The agreement outlines the State benefits that will accrue to IBM. The
project will create 1,300 new positions in the downtown area.
A copy of the agreement is attached to the resolution.
RECOIInMENDATION
I recommend that the City Council approve the proposed Agreement by adopting the attached
resolution. This agreement will provide State of Iowa financial benefits to IBM, in turn for
creating 1,300 new positions. The City, has previously committed 20 years of TIF rebates as
our local match.
ACTION STEP
The action step for the Council is to adopt the attached resolution.
Attachments
F:\USERS\DHeiar\IBM\20090814 IDED_IBM Agreement Council Memo.doc
INCENTIVES AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA,
AND
INTERNATIONAL BUSINESS MACHINES CORPORATION
This Agreement, dated for reference purposes the /~~''day of February,
2009 ("Effective Date"), by and between the City of Dubuque, Iowa, a municipality
("City"), established pursuant to the Iowa Code and acting under authorization of
Iowa Code Chapter 403, as amended (the "Urban Renewal Act"), and International
Business Machines Corporation, a New York corporation ("Employer").
WITNESSETH:
WHEREAS, Dubuque Initiatives ("Developer") is the owner of the property at
700 Locust Street (the "Property"), legally described as follows:
A parcel of land marked "Public Square" on the United States
Commissioners' Plat of the Survey of the Town of Dubuque, Iowa and
numbered as Lots 141, 142, and 143a, on the various wail maps of
the City of Dubuque, Iowa; and, City Lots 143, 144 and 145, in the
City of Dubuque, Iowa, according to the plat thereof in Book of Plats
34, page 353, records of Dubuque County, Iowa, also described as
follows:
Part of the United Mates Commissioners' Government Plat of the
Original Town, now City, of Dubuque, in Dubuque County, Iowa,
described as follows: Beginning at the southwesterly corner of Lot
141, originally designated as the southwesterly corner of the "Public
Square", being also the intersection of the east line of Locust Street
and the north fine of West Seventh Street; thence North 22 degrees
30 minutes West along the east line of Locust Street to the
northwesterly corner of Lot 145, being also the intersection of the
east line of Locust Street and the southerly line of West Eighth Street;
thence northeasterly along the northerly line of Lot 145 to the
northeasterly corner of Lot 145, being also the intersection of the
south line of West Eighth Street and the west line of the thirty foot
alley East of Locust Street; thence southeasterly along the west line
of said thirty foot alley to the southeasterly corner of Lot 141, originally
designated as the southeasterly corner of the "Public Square", being
also the intersection of the west line of the thirty foot alley and the
north line of West Seventh Street; thence South 67 degrees 30
minutes West to the point of beginning, according to the Plat thereof
recorded as Instrument No. 1798-77, records of Dubuque County,
Iowa.
1.22.09ba[rev020609 2.09.09
WHEREAS, the Property is located in the Greater Downtown Urban Renewal
District which has been so designated by City Council Resolution 26-07 as a slum
and blight area (the Project Area) defined by Iowa Code Chapter 403 (the Urban
Renewal Law); and
WHEREAS, Developer has undertaken the redevelopment of a building
located on the Property (the "Building") and will be operating the Building during the
term of this Agreement; and
WHEREAS, Developer and Employer have entered into the Lease (defined
in paragraph 1.2, below), which Lease contemplates as described therein certain
capital investment in Building improvements, equipment, furniture and fixtures in the
Property (sometimes herein, the "Project"); and
WHEREAS, pursuant to Iowa Code Section 403.6(1), and in conformance
with the Urban Renewal Plan for the Project Area adopted an May 18, 1967, as
amended, City has the authority to enter into contracts and agreements to
implement the Urban Renewal Pian for the District; and
WHEREAS, pursuant to the Lease Developer has agreed to lease offices in
the Property to Employer to allow Employer to locate or re-locate certain of its
offices to the Property and create employment opportunities at the Property; and
WHEREAS, City believes that the development of the Property pursuant to
this Agreement, and the fulfillment generally of Phis Agreement, are in the vital and
best interests of City and in accord with the public purposes and provisions of the
applicable federal, state and local laws and the requirements under which the
Project has been undertaken and is being assisted.
NOW THEREFORE, in consideration of the premises and the mutual
obligations of the parties hereto, each of them does hereby covenant and agree as
follows:
SECTION.1.
1.1 This Agreement becomes effective when the Employer executes an agreement
(inclusive of all other agreements and all related documentation) for financial
assistance with the State of Iowa Department of Economic Development on such
terms and conditions as Employer in its sole, absolute and unfettered discretion
deems to be satisfactory (the IDED Assistance) (Employer will provide written
notice to the City if and when the IDED Assistance has been obtained; such notice
being a condition precedent to the Effective Date actually occurring, notwithstanding
any other provision to the contrary) and (ii) the Ci#y Council of the City of Dubuque,
Iowa, in its sole, absolute and unfettered discretion, having approved a
Development Agreement between City and Developer (the "Development
1.22.09balrev020609 2.09.09
Agreement" or "DA")) by not later than February 19, 2009 in form and substance
satisfactory to Employer (City shall deliver to Employer (i} for review and comment
each draft of the DA at such time as any such draft is delivered to Developer and (ii)
the final, executed form of the DA within five (5) days of its execution). Employer
may terminate this Agreement at any time on or before May 1, 2009 (by delivering
written notice thereof to the City) in the event Employer determines that the IDED
Assistance is unsatisfactory to Employer.
1.2. Notwithstanding the restrictions contained in Sections 14.03 or 29.04 of the
Lease, or otherwise, but specifically in accordance with and subject to the terms of
this paragraph 1.2, the Employer consents to, and agrees to cooperate with City
with respect to, (i) the transfer of ownership of the Complex (as defined in the
Lease) to another entity (the "Master Landlord") for the purpose of facilitating
financing involving both new markets tax credits under Section 45D of the Internal
Revenue Code ("the Code") and federal historic rehabilitation tax credits under
Section 47 of the Code, and (ii) the assignment to and assumption of the Lease by
an entity (the "Master Tenant") formed to master lease (the "Master Lease") the
Complex for the purpose of facilitating financing involving federal historic
rehabilitation tax credits under Section 47 of the Code; provided, however, that such
consent is hereby specifically conditioned upon (i.e, said consent and agreement to
cooperate shall not be effective unless and until the following conditions have been
satisfied in Employer's sole, absolute and unfettered discretion; and satisfactory
proof thereof shall have been furnished to Employer as determined by Employer),
which conditions shall be so satisfied prior #o the transfers specified above:
1. Employer shall receive a representation from both .Master Landlord and
Master Tenant of any and all mortgages and deeds of trust (or like instruments) (in
any case, a "mortgage") that are (or are to become) liens on the Complex or their
respective interests therein (and Employer shall also receive a "pro forma" title
policy (or mark-up) evidencing title insurance where any and all such mortgages are
shown as title exception(s) (the "Title Policy"")). Any mortgage (whether from the
Master Landlord or the Master Tenantt) secured by the Complex sha(I be made
subordinate to the Master Lease and the Lease (and Employer's leasehold interest
therein), such that in the event any such mortgagee forecloses its mortgage,
Employer shall not be disturbed in its tenancy under the Lease (such subordination
shall be pursuant to a form of subordination, non-disturbance, attornment and
recognition agreement, in form satisfactory to Employer (it being specifically
understood That the Lease shall be senior to any such mortgage, and it shall not be
the case that the Lease is subordinate to any such mortgage).
2. IBM shall have the right to approve the form of the assignment of the
Lease into Master Tenant. IBM shall also have the right to approve the form of the
Master Lease, as well as a right to approve the form of any constituent documents
used to structure the Master Landlord and/or Master Tenant,
3. A. The Master Lease structure described above shall not modify any terms
of the Lease (except as specifically provided respecting Sections 14.03 or 29.04 of
the Lease}, such that Employer shall receive and continue to receive the benefit of
its bargain as stated in the Lease including, without limitation, that Dubuque
Initiatives will (but only in the case Master Tenant fails to do so) promptly and fully
fund the Tenant Improvments (as such term is defined in Section 5.01 of the
Lease}; that Employer will receive the Services described in Section 6.01 and
otherwise in the Lease, and that Employer shall keep and maintain its rights
respecting renewal, expansion, and termination of the Lease Premises, as and to
the extent described in the Lease (it being further provided tha# in the event tha#
either Master Landlord or Master Tenant conveys its interest in the Complex,
Employer shall have the benefit of the right of first refusal stated in Section 29.01 of
the Lease, as same needs to be modified to take into account the Master Landlord,
Master Tenant, Master Lease structure).
B. Master Landlord shall furnish to Employer a "recognition agreement," in
form satisfactory to Employer, that will result in a direct tenancy (pursuant to the
terms of the Lease) in the event the Master Lease is terminated (Employer agrees
to reasonably cooperate with Master Landlord to reduce or eliminate any adverse
tax consequences, if any exist or arise, due to such recognition agreement being
given effect). Such recognition agreement shall have the effect of, among other
things, that in the event of any such direct tenancy due to the elimination of the
Master Tenant's interest in the complex, Master Landlord shall inherit all obligations
and liabilities of Master Tenant vis-a-vis Employer.
4. A limited liability company 100% owned by Developer shalt be designated
as the initial non-member manager of both the Master Tenant and the Master
Landlord.
5. Employer shall be given the right under the Master Lease to cure any
default by the Master Tenant under the Master Lease and shall be made a third
party beneficiary of the Master Lease.
6. Employer shall be given the right under any mortgage secured by the
Complex to cure any default thereunder by the Master Landlord and shall be made
a third party beneficiary of any such mortgage.
SECTION 2. CITY PARTICIPATION.
2.1 Economic Development Grant to Employer. Pursuant to the Lease, Employer
shall pay to its landlord under the Lease Tenant's Share of Real Estate Taxes (as
such terms are defined in the Lease), which are initially anticipated to be in the
amount of (and in any event in the approximate amount of) $.32 per square foot per
year (the "Initial Tax Rate"). I# is the intention of the parties hereto that during the
4
term of the Lease (inclusive of any extensions thereof) Employer (as tenant under
the Lease) shall, as a result of the Employer Economic Development Grant
payments described in this Section 2.1, continue to pay said Real Estate Taxes in
amounts that (on a net basis, following payment by Employer of amounts required
under the Lease and then subsequent payment by the City of the Employer
Economic Development Grants described herein) will result in an effective tax rate
for Employer equal to the Initial Tax Rate, so long as Employer complies with the
terms and conditions of this Agreement. The Initial Tax Rate may be increased only
by the additional amounts resulting from the application of certain statutory
provisions (i.e., Iowa Code sec. 403.19(a)(2), or any successor thereto) in the
calculation of tax increment revenues described below.
(1) (i) For and in consideration of Employer's obligations hereunder, and
in furtherance of the goals and objectives of the Urban Renewal Plan for the
Project Area and the Urban Renewal Law, City agrees, subject to Employer
being in compliance with the terms of this Agreement, to make forty (40)
consecutive semi-annual payments (such payments being referred to
individually as an "Employer Economic Development Grant," and collectively,
as the "Employer Economic Development Grants") to Employer if Employer
leases the Property pursuant to the Lease on the .applicable payment dates
later described (immediately below) in this Section. The Employer Economic
Development Grants shall be payable as follows:
November 1, 2010
November 1, 2011
November 1, 2012
November 1, 2013
November 1, 2014
November 1; 2015
November 1, 2016
November 1, 2017
November 1, 2018
November 1, 2019
November 1, 2020
November 1, 2021
November 1, 2022
November 1, 2023
November 1, 2024
November 1, 2025
November 1, 2026
November 1, 2027
November 1, 2028
November 1, 2029
May 1, 2011
May 1, 2012
May 1, 2013
May 1, 2014
May 1, 2015
May 1, 2016
May 1, 2017
May 1, 2018
May 1, 2019
May 1, 2020
May 1, 2021
May 1, 2022
May 1, 2023
May 1, 2024
May 1, 2025
May 1, 2026
May 1, 2027
May 1, 2028
May 1, 2029
May 1, 2030
pursuant to Iowa Code Section 403.9 of the Urban Renewal Law, in amounts
equal to the portion of the tax increment revenues collected by City described
below under Iowa Code Section 403.19 (without regard to any averaging that
may otherwise be utilized under Iowa Code Section 403.19 and excluding
any interest that may accrue thereon prior to payment to Employer} during
the preceding six-month period in respect of the "Employer Minimum
Improvements (also, sometimes, defined herein, as the "Minimum
Improvements") constructed by Employer andlor Developer (the "Employer
Tax Increments"). For purposes of calculating the amount of the Employer
Economic Development Grants provided in this Section, the Employer Tax
increments shall be deemed to be equal in amount to a pro rata share of
those tax increment revenues collected by the City in respect of the increase
in the assessed value of the Property leased by Employer and Employer's
prorated share of the common areas above the assessment of January 1,
1967 (on such date the entire Property was assessed for $567,000.00). The
Employer Tax Increments shall not include (i) any property taxes collected for
the payment of bonds and interest of each taxing district, (ii) any taxes
collected for the regular and voter-approved physical plant and equipment
levy, and (iii) any other portion required to be excluded by Iowa law, and thus
such incremental taxes will not include all amounts paid by Employer as
regular property taxes. The assessed value of the Property leased by
Employer and the assessed value of the Property other than the part of the
Property leased by Employer on any assessment date shall be allocated
according to the percent that the part of the Property leased by Employer
bears to the total leasable space.
(ii) IBM shall have the right to request the City (and the City shall) deliver the
Employer Economic Development Grant(s) to the landlord of the Lease or, in
the alternative, deliver the Employer Economic Development Grant(s) directly
to Employer. Said right of election may be exercised by Employer from time
to time, so long as Employer does not make request thereof from the City
any more than once in any six (6) month period.
(2) To fund the Employer Economic Development Grants, City shall
certify to the County prior to December 1 of each year, commencing
December 1, 2009, its request for the available Employer Tax Increments
resulting from the assessments imposed by the County as of January 1 of
that year, to be collected by City as taxes are paid during the following fiscal
year and which shall thereafter be disbursed to Employer (but only if
Employer then leases the Property, on November 1 and May 1 of that fiscal
year. (Example: if City so certifies by December 1, 2009, the Employer
Economic Development Grants in respect thereof would be paid to Employer
on November 1, 2010, and May 1, 2011.)
(3) The Employer Economic Development Grants shall be payable from
and secured solely by the Employer Tax Increments paid to City that, upon
receipt, shall be deposited and held in a special account created for such
purpose and designated as the "Dubuque Building IBM TIF Account' of City.
6
City hereby covenants and agrees to maintain its TIF ordinance (as it is
colloquially known) in force during the term of this Agreement and to apply
the incremental taxes collected in respect of the Property and the Employer
Minimum Improvements and allocated fo the Dubuque Building IBM TIF
Account to pay the Employer Economic Development Grants, as and to the
extent set forth in this Section 2. The Employer Economic Development
Grants shall not be payable in any manner by other tax increments revenues
or by general taxation or from any other City funds. City makes no
representation with respect to the amounts that may be paid to Employer as
the Employer Economic Development Grants in any one year.
(4) City shall be free to use any and all tax increment revenues collected
in respect of.other properties within the Project Area, including the Property,
or any available Employer Tax Increments resulting from the termination of
the annual Employer Economic Development Grants under this Section 2.1,
for any purpose for which such tax increment revenues may lawfully be used
pursuant to the provisions of the Urban Renewal Law, and City shall have no
obligations to Employer with respect to the use thereof.
2.2 Rehabilitation Loan. City hereby commits to provide, as described below, to
Employer a $300,000 no-interest forgivable loan (the "Forgivable Loan").
(1) The Forgivable Loan is for thirty (30) months and is intended for
renovation of the interior of the Building for use as commercial space.
(2) An amount of the Forgivable Loan equal to two thousand dollars
($2,000}, but not to exceed $300,000, shall be forgiven for each new full-time
job or full-time equivalent created before September 1, 2009 and retained
until September 1, 2011. Any balance of principle on the Forgivable Loan on
September 1, 2011 shall be due and payable on September 1, 2011.
2.3 Workforce Development Additional Staff. City agrees to provide to Greater
Dubuque Development Corporation $125,000 per year for each of three years, the
first such year commencing thirty days after approval of this Agreement by the City
Council, to hire a staff person dedicated exclusively to assisting Employer with its
workforce development, as further described in the attached Agreement Between
the City of Dubuque, Iowa and Greater Dubuque Development Corporation, Exhibit
B.
2.4 AccessDubuaueJobs.com. Greater Dubuque Development Corporation shall
provide Employer, at no charge or cost to Employer, five {5) years of membership to
AccessDubuqueJobs.com in order to assist Employer in employee recruitment, as
further described in the attached Agreement Between the City of Dubuque, Iowa
and Greater Dubuque Development Corporation, Exhibit B.
7
2.5 Application for Grants and Tax Credits. Employer and City agree to
cooperate (the term "cooperate" as used here and anywhere else in this Agreement
shall mean, respecting Employer, that Employer shall reasonably assist the City as
the City requests; provided, however, that Employer shall in no event (i) be required
to incur any costs or expenses in connection with such cooperation and/or (ii) be
required to devote any burdensome time commitment or effort in connection with
such cooperation, as shall be reasonably determined by Employer) with each other
in applying for grants and tax credits to fund the Minimum Improvements and to
retire the Minimum Improvements Loan, including, but not limited to, state and
federal historic tax credits, New Market Tax Credits, and Iowa Department of
Economic Development funding.
2.6 Shuttle Service. City shall provide a free shuttle service for all Employer
employees who park in Port of Dubuque parking spaces or facilities to and from the
Building on a first-come, first-served basis. The shuttle will run from 6:30 a.m. to
9:30 a.m. and from 4:00 p.m. to 7:00 p.m. Monday through Friday except
holidays, which times may be adjusted by City if based on Employer's expressed
needs; provided, however, such shuttle service shall not exceed (in total) six (6)
hours per day. The parking facilities in the Port of Dubuque will have parking
spaces available for genera( public, including Tenant's employees, parking. Said
shuttle service is a material matter for Employer (and a material inducement to enter
into the Lease and this Agreement), and thus it It is agreed that said shuttle services
(i) shall be provided by the City at no cost or expense to Employer (or Employer's
employees) and (ii) shall be provided for the full term of the Lease, plus any and all
term extensions of the Lease.
2.7 Parking. City intends to explore additional parking which will be available to
the general public, including tenants of the Building inclusive of Employer, under
similar terms and conditions as other downtown public parking, and City and
Employer agree to reasonably cooperate with each other in applying for grants and
tax credits, including but not limited to United States Economic Development
administration funding, to fund such parking; provided, however, in no event shall
such cooperation and results thereof result in any material modification of, or
diminishment of, Employer's parking rights described in the Lease, unless
consented to by Employer.
SECTION 3 COVENANTS OF EMPLOYER AND DEVELOPER.
3.1 Job Creation.
(1) Employer reasonably expects to create approximately 1,300 new full-
time (or full-time equivalent) employment positions in Dubuque, Iowa prior to
June 30, 2011, and reasonably expects to maintain those jobs during the
term of the Lease (though, and notwithstanding any provision herein to the
contrary, it is understood and agreed that it is not an Event of Default in the
case that Employer does not maintain said 1,300, or any other number, of
jobs).
(2) Far the positions that Employer fails to create and maintain for any
year during the term of this Agreement after June 30, 2011, the semi-annual
Employer Economic Development Grants to be made to Employer for such
year under Section 2.1 shall be reduced by the percentage that the number
of such positions bears to the total number of positions expected to be
created and maintained (1,300 positions) by this Section 3.1 (for example, if
Employer has 1,250 jobs, the semi-annual Employer Economic Development
Grants would be 96.15% (1,250/1,300 employees) of the available Employer
Tax Increment received by City). The reduction of the semi-annual Employer
Economic Development Grants shall be City's sole remedy far the failure of
Employer to meet the job creation requirements or expectations of this
Agreement, including this subsection 3.1
3.2 Certification. To assist City in monitoring the performance of Employer
hereunder and for purposes of Employer realizing the loan forgiveness described in
paragraph 2.2(2) hereof, Employer shall certify as of January 1, 2011, and January
1 of each year thereafter during the term of this Agreement, by an appropriate
employee of Employer, to City in a form reasonably acceptable to City (a) the
number of positions maintained by Employer during the prior year in Dubuque,
Iowa, and (b) to the effect that such certifying employee has re-examined the terms
and provisions of this Agreement and that at the date of such certifica#e, and during
the preceding twelve (12) months, Employer, to the best of its knowledge, is not or
was not in default in the fulfillment of any of the material terms and conditions of this
Agreement and that no Event of Default is occurring or has occurred as of the date
of such certificate or during such period, or if the certifying employee is actually
aware of any Event of Default, said employee shall disclose in such statement the
nature thereof, its period of existence and what action, if any, has been taken or is
proposed to be taken with respect thereto. Such certificate shall be provided not
later than February 1, 2011, and by February 1 of each year thereafter during the
term of this Agreement; provided, however, in the event no such certificate shall
have been delivered then the City shall send a written notice to Employer
demanding such certificate, whereupon Employer shall have ten (10) days after is
receipt of said notice to furnish City the certificate so demanded.
3.3 IBM Fund for Sustainable Dubuque. Developer has agreed in the Development
Agreement to enter into a Donor Advised Permanent Endowment Fund Agreement
to fund "The IBM Fund for Sustainable Dubuque" (the "Fund") at the Community
Foundation of Greater Dubuque in the amount of ten per cent (10%) of the net
benefits to Developer of the New Market Tax Credits for the Minimum
Improvements and upon the terms and conditions set forth in The Development
Agreement.
3.4 Books and Records. During the term of this Agreement, and only for the
limited purpose of verifying (no more than once in any 3-month period) the aspects
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of this Agreement described in paragraphs 2.1, 2.2 and 3.1 hereof, Employer shall
keep at all times and make available to City upon reasonable substantive and timely
request proper and accurate books and records, that verify the number (e.g., the
1,300 or other number) of employees employed in full-time or full-time equivalent
positions in Dubuque, Iowa, in accordance with generally accepted accounting
principles consistently applied throughout the period involved.
3.5 Non-Discrimination. In carrying out the project, Employer shall not discriminate
against any employee or applicant for employment because of race, religion, color,
sex, sexual orientation, national origin, age or disability.
3.6 Conflict of Interest. As and to the extent required by applicable law, Employer
agrees that no member, officer or employee of City, or its designees or agents, nor
any consultant or member of the governing body of City, and no other public official
of City who exercises or has exercised any functions or responsibilities with respect
to the project during his or her tenure, or who is in a position to participate in a
decision-making process or gain insider information with regard to the project, shall
have any in#erest, direct or indirect, in any contract or subcontract, or the proceeds
thereof, for work to be performed in connection with the Project, or in any activity, or
benefit therefrom, which is part of this project at any time during such person's
tenure. In connection with this obligation, Employer shat( have the right to rely upon
the representations of any party with whom they do business and shall not be
obligated to perform any further examination into such party's background.
3.7 Compliance with Laws. Employer shall comply with all laws, rules and
regulations relating to its business, other than laws, rules and regulations for which
the failure to comply with or the sanctions and penalties resulting therefrom, would
not have a material adverse effect on the business, property, operations, financial or
otherwise, of Employer.
SECTION 4. EVENTS OF DEFAULT AND REMEDIES.
4.1 Events of Default Defined. The following shall be Events of Default under
this Agreement and the term Event of Default shall mean, whenever it is used in this
Agreement, any one or more of the following events: failure by Employer or City to
substantially observe or perform any covenant, condition, obligation or agreement
on its part to be observed or performed under this Agreement.
4.2 . Remedies on Default by Employer. Whenever any Event of Default referred
to in Section 4.1 of this Agreement occurs and is continuing, City, as specified
below, may take any one or more of the following actions after the giving of written
notice by City to the defaulting party of the Event of Default, but only if the Event of
Default has not been cured within sixty (60) days following such notice, or if the
Event of Default cannot be cured within sixty (60) days and the defaulting party
does not provide assurances to City that the Event of Default will be cured as soon
as reasonably possible thereafter:
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(1) City may suspend its performance under this Agreement until it
receives assurances from Employer, deemed reasonably adequate by City,
that Employer will cure its default and continue its performance under this
Agreement;
(2) City may take any action, including legal, equitable or administrative
action, which may appear necessary or desirable to enforce performance
and observance of any obligation, agreement, or covenant under this
Agreement.
4.3 No Remedv Exclusive and Conseauential Damages Waiver.
4.3.1 No Remedv Exclusive. No remedy herein conferred upon or reserved to City
or Employer is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shaft be cumulative and shall be in addition to
every other remedy given under this Agreement or now or hereafter existing at law
or in equity or by statute, except as specifically otherwise provided in section 4.3.2
below. No delay or omission to exercise any right or power accruing upon any
default shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right and power may be exercised from time to time and as
often as may be deemed expedient.
4.3.2 Conseauential Damages Waiver. Notwithstanding any provision in this
Agreement (including paragraph 4.3.1, above) or principle of law or equity to the
contrary, in no event shall either party hereto be liable to the other or third party
under this Agreement for incidental damages, lost profits, lost savings, punitive,
exemplary or any other consequential, special or indirect damages. This Section
4.3.2 shall survive the Termination Date or any earlier termination of this
Agreement.
4.4 No Implied Waiver. In the event any agreement contained in this Agreement
should be breached by either party hereto and thereafter waived by the other party
hereto, such waiver shall be limited to the particular breach so waived and shall not
be deemed to waive any other concurrent, previous or subsequent breach
hereunder.
4.5 Remedies on Default by City. If City defaults in the performance of this
Agreement, Employer may take any action, including legal, equitable or
administrative action that may appear necessary or desirable to enforce
performance and observance of any obligation, agreement, or covenant of City
under this Agreement. Employer may suspend its performance under this
Agreement until it receives assurances from City, deemed reasonably adequate by
Employer, that City will cure its default and continue its performance under this
Agreement.
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SECTION 5. GENERAL TERMS AND PROVISIONS.
5.1 Notices and Demands. Whenever this Agreement requires or permits any
notice or written request by one party to another, it shall be deemed to have been
properly given if and when delivered in person or three (3) business days after
having been deposited in any U.S. Postal Service and sent by registered or certified
mail, postage prepaid, or one (1) business day after deposit with a nationally
recognized overnight courier, addressed as follows:
If to Employer: International Business Machines Corporation
71 South Wacker Drive
Chicago, Illinois 60606
Attn; Senior Program Manager
With copy to: International Business Machines Corporation
1 New Orchard Road
Armonk, New York 10504
Attn: Associate General Counsel, Global Real
Estate Operations
If to City: City of Dubuque
City Manager
50 W. 13th Street
Dubuque, Iowa 52001
With copy to: City of Dubuque
City Attorney
City Hall
50 W. 13~" Street
Dubuque, IA 52001
or at such other address with respect to any party as that party may, from time to
time designate in writing and forward to the other as provided in this Section.
5.2 Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of City and Employer and their respective successors and assigns. This
Agreement is solely for the benefit of the parties hereto and it is the intent of the
parties hereto that no third party beneficiaries shall exist.
5.3 Termination Date. This Agreement and the rights and obligations of the parties
hereunder shall terminate on the sooner of (i) the date the Lease terminates or (ii)
May 2, 2030 (the Termination Date), unless sooner terminated due to any sooner
termination of the Lease for whatever reason or cause.
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5.4 Execution By Facsimile. The parties agree that this Agreement may be
transmitted between them by facsimile. The parties intend that the faxed signatures
constitute original signatures and that a faxed Agreement containing the signatures
(original or faxed) of all the parties is binding on the parties.
5.5 Memorandum of Development Agreement. City shall promptly record a
Memorandum of this Agreement (the Memo) in the form attached hereto as Exhibit
A in the office of the Recorder of Dubuque County, Iowa. City shall pay the costs
for so recording. Promptly after receiving the actually-recorded-Memo, City shall
furnish a photocopy thereof to Employer.
CITY OF DUBUQUE, IOWA
By: d C~
Roy Buol, Mayor
''
eanne F. Schneider, City Clerk
INTERNATIONAL BuslNESs
MACHINES CORPORATIO
1' ~ f
~/ 7
By: `
Name: Jam, ~-. Cc, ~ 1 ~ ns S,-ri.e_e_ ,
Title: ~~~r,~ T~~:t ~ ~E-~~L, C;,.~..~_: ~ c.~~
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List of Exhibits
Exhibit A Memorandum of Incentives Agreement
Exhibit B Agreement Between the City of Dubuque, Iowa and Greater Dubuque
Development Corporation
EXHIBIT A
MEMORANDUM OF INCENTIVE AGREEMENT
Prepared by: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113
Return to: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113
MEMORANDUM OF INCENTIVE AGREEMENT
An Incentives Agreement by and among the City of Dubuque, Iowa, an Iowa municipal
corporation, of Dubuque, Iowa, and International Business Machines Corporation was
made regarding the following described premises:
A parcel of land marked "Public Square" on the United States
Commissioners' Plat of the Survey of the Town of Dubuque, Iowa and
numbered as Lots 141, 142, and 143a, on the various wall maps of the
City of Dubuque, Iowa; and, City Lots 143, 144 and 145, in the City of
Dubuque, Iowa, according to the plat thereof in Book of Plats 34, page
353, records of Dubuque County, Iowa, also described as follows:
Part of the United States Commissioners' Government Plat of the Original
Town, now City, of Dubuque, in Dubuque County, Iowa, described as
follows: Beginning at the southwesterly corner of Lot 141, originally
designated as the southwesterly corner of the "Public Square", being also
the intersection of the east line of Locust Street and the north line of West
Seventh Street; thence North 22 degrees 30 minutes West along the east
line of Locust Street to the northwesterly corner of Lot 145, being also the
intersection of the east line of Locust Street and the southerly line of West
Eighth Street; thence northeasterly along the northerly line of Lot 145 to
the northeasterly corner of Lot 145, being also the intersection of the
south line of West Eighth Street and the west line of the thirty foot alley
East of Locust Street; thence southeasterly along the west line of said
thirty foot alley to the southeasterly corner of Lot 141, originally
designated as the southeasterly corner of the "Public Square", being also
the intersection of the west line of the thirty foot alley and the north line of
West Seventh Street; thence South 67 degrees 30 minutes West to the
point of beginning, according to the Plat thereof recorded as Instrument
No. 1798-77, records of Dubuque County, Iowa.
The Incentives Agreement is dated for reference purposes the day of
20_, and contains covenants, conditions, and restrictions concerning the
sale and use of said premises.
This Memorandum of Incentives Agreement is recorded for the purpose of
constructive notice. In the event of any conflict between the provisions of this
Memorandum and the Incentives Agreement itself, executed by the parties, the terms
and provisions of the Incentives Agreement shall prevail. A complete counterpart of the
Incentives Agreement, together with any amendments thereto, is in the possession of
the City of Dubuque and may be examined at its offices as above provided.
Dated this day of , 20
CITY OF DUBUQUE, IOWA
By:
Roy D. Buol, Mayor
By:
Jeanne F. Schneider, City Clerk
STATE OF IOWA
DUBUQUE COUNTY
ss:
On this day of , 20_, before me, a Notary Public in and for the State of
Iowa, in and for said county, 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, a Municipal Corporation,
created and existing under the laws of the State of Iowa, and that the seal affixed to
said instrument is the seal of said Municipal Corporation and that said instrument was
signed and sealed on behalf of said Municipal corporation by authority and resolution of
its .City Council and said Mayor and City Clerk acknowledged said instrument to be the
free act and deed of said Municipal Corporation by it voluntarily executed.
Notary Public, State of Iowa
EXHIBIT B
AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
GREATER DUBUQUE DEVELOPMENT CORPORATION
This Agreement, dated for reference purposes the -day of , 2009,
is made and entered into by and between the City of Dubuque, Iowa (City), and Greater
Dubuque Development Corporation (GDDC).
Whereas, City has entered into an Incentives Agreement (the Incentives
Agreement) with International Business Machines Corporation (Employer); and
Whereas, a condition of the Incentives Agreement is that City provide certain
benefits to GDDC to allow GDDC to assist Employer with Employer's workforce
development in Dubuque, Iowa.
NOW, THEREFORE, IT IS AGREED BY AND BETWEEN THE PARTIES AS
FOLLOWS:
1. City agrees to provide to GDDC $125,000 per year for each of three
years, the first such year commencing thirty days after approval of the Incentives
Agreement by the City Council to hire a GDDC staff person who shall be dedicated
exclusively to assisting Employer with its workforce development and such other
activities as maybe required by Employer.
2. GDDC shall provide, at no charge or cost to Employer, five (5) years of
membership in AccessDubuqueJobs,com to Employer to assist Employer in employee
recruitment.
3. This Agreement shall take effect upon approval of the Incentives
Agreement by the City Council, and in the event that the Incentives Agreement is not
approved by the City Council by ,this Agreement shall be nul[ and void.
C1TY OF DUBUQUE, IOWA
By: D
Roy . Buol, Mayor
~~ .~
eanne F. Schneider, City Clerk
GREATER DUBUQUE DEVELOPMENT
CORPORAT
ck Dic inson, Executive Director
In order to acknowledge it is entitled to
receive the benefits and incentives
described herein, and for no other
purpose, IBM hereby signs below:
INTERNATIONAL BUSINESS
MACHINES C RPORATI `N ~ ~~
Name: ~~.+~ C~ I I i ~s S -~~~..
Title: G~mTrT(~~ I ~y~.rLt + tj,r-~Gn C_c~S