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MX-4140N_20180205_12384311 11 mu 11 1011 11 Doc ID: 008632040001 Type GEN Kind RELEASE OF MORTGAGE Recorded: 05/04/2017 at 10:29:17 AM Fee Amt: $7.00 Page 1 of 1 Dubuque County Iowa John Murphy Recorder File 2017-00005210 Prepared by and return to: Jill Connors, Economic Development Department, 50 W. 13th Street, Dubuque, IA 52001, (563) 589-4393 RE: All of Mortgagors' right, title and interest in and to the following described real estate situated in Dubuque County, Iowa (the "Land"); Lot 60 and the southerly 31.5 feet of lot 59, in the City of Dubuque, Iowa, according to the United States Commissioners Map of the Town of Dubuque, Iowa (also known as 703 Main Street) RELEASE OF REAL ESTATE MORTGAGE The City of Dubuque, Iowa, Economic Development Department, the present owner of the Real Estate Mortgage hereinafter described and encumbering the above-described real estate, hereby acknowledges that said Real Estate Mortgage, bearing date of the September 3, 2009 made and executed by Hartig Realty III, L.C., mortgagor, to the City of Dubuque Economic Development Department, mortgagee, and recorded in the records of the office of the Recorder of the County of Dubuque, State of Iowa, as Instrument No. 2009-00017503 on the 11th day of September, 2009 is redeemed, paid off, satisfied and discharged in full. Dated this 28th day of April, 2017. State of Iowa ) Dubuque County ) ss: City of Dubuque, low By: Michael' C. Van Milligen City Manager City of Dubuque On this a day of , before me, a Notary Public, in and for the state of Iowa, personally appeared Michy I C. Van Milligen, to me personally known, and, who being by me duly sworn, did say that she is the City Manager of the City of Dubuque, Iowa; and that the instrument was signed on behalf of the said City of Dubuque, Iowa, by Michael C. Van Milligen, City Manager and that said Michael C. Van Milligen, acknowledged the execution of the instrument to be her voluntary act and deed and the voluntary act and deed of the City of Dubuque, Iowa, by it voluntarily executed. Notary Public in and for said o�iinty and St to JUAFdITA HILKIN §' if Gommlaalon Numba.r7 �.r �?� x I ret. C tyui y '�Yy,ComralaalonE,1p,,,il .Eommisslon Expires: —" /I --1- ©O C()(1 D4Abd p Ate* CITY OF DUBUQUE, IOWA DOWNTOWN REHABILITATION LOAN PROGRAM LOAN AGREEMENT NUMBER: DRLP # 1 - 09 This AGREEMENT, dated as of the day of 6Pleta , 2009, is entered into by and between the CITY OF DUBUQUE, IOWA, a municipal corporation organized and existing under the laws of the State of Iowa (hereinafter referred to as the "City") and Hartig Realty III, L.C.(hereinafter referred to as the "Owner"). WITNESSETH: Whereas, a Development Agreement with Hartig Realty III, L.C. was approved by the Dubuque City Council on September 18, 2006 by Resolution No. 455-06 to provide a $300,000 Downtown Rehabilitation Loan for the project. Whereas, the Owner's property of 703 Main Street, Dubuque, Iowa, (hereinafter referred to as the "Building") is located within the boundaries of the Greater Downtown Urban Renewal District most recently established by Resolution No. 300-08 on September 2, 2008; and Whereas, the goals and objectives of the Greater Downtown Urban Renewal Plan (the "Plan") provide for the creation of the financial incentives needed to eliminate conditions of blight through a program of voluntary or compulsory repair and rehabilitation of buildings and to retain or create employment and/or housing opportunities within the District; and Whereas, the City desires to assist the Owner in its efforts to bring said Building into compliance with local codes and ordinances, to eliminate certain conditions of physical decay, and to retain or create employment and/or housing opportunities within the District; and Whereas, without the assistance of the Loan Program, the Owner would be unable to operate the Building to its fullest capacity, thereby threatening local employment and/or housing opportunities. NOW THEREFORE, in consideration of the premises and respective covenants, agreements and representations hereinafter set forth, the parties agree as follows: 1. SOURCE OF FUNDS. City is prepared to provide financial assistance to qualified parties through the use of tax increment financing under Chapter 403 of the Iowa Code, and has allocated funds sufficient to carry out its obligations under this Agreement. 2. LOAN TERMS. City agrees to loan to Owner on the terms and conditions set forth herein the amount of three hundred thousand dollars ($300,000) that shall consist of the Loan Program funds, if and only if such funds are available. Payments shall be based on work completed and expenses encumbered. The term of the loan shall be twenty (20) years. Interest on the loan shall be three percent (3.0%) per annum. Monthly interest payments shall become due and payable the first sixty (60) months of the loan. Monthly interest and principal payments, amortized over a fifteen year period, shall become due and payable beginning the sixty-first (61) month of the loan. The entire balance of the loan, including interest and principal, shall become due and payable not later than the 240th month of the loan. At the time of the initial disbursement of loan funds to Owner, Owner shall execute the Promissory Note in the form attached hereto as Exhibit A payable to the order of the City in the principal amount of three hundred thousand dollars ($300,000) and the Mortgage, attached as Exhibit B. 1 3. DISBURSEMENT AND USE OF LOAN FUNDS. Loan funds shall be disbursed to Owner by City for Qualifying Project Expenses, defined in Paragraph 27(c), for amounts not in excess of the total sum of $300,000 nor more than ninety percent (90%) of the total project cost. Owner shall furnish to City written requests for disbursement of loan funds. Such request shall be accompanied by a statement of Owner's Qualifying Project Expenses and appropriate documentation of such expenses. It is expressly understood that all funds advanced under this Agreement shall be used by Owner only for the purpose of paying the Qualifying Project Expenses set forth in such written requests. Owner shall substantially complete the Project, defined in Paragraph 27(b), in accordance with the terms of this Agreement, on or before December 4, 2006. City shall not be obligated to pay any funds not drawn by Owner as of said date and any undrawn funds as of such date shall be credited against the balance due on the Promissory Note. 4. SECURITY. The loan shall be secured by at least a Second Mortgage on the Building, a copy of which is attached as Exhibit B. The value of the Building shall at no time be less than the unpaid balance of any First Mortgage plus the unpaid balance of the City's mortgage. 5. AVAILABLE INCENTIVES. Up to the full amount of the loan shall be forgiven by the City as an incentive for the creation of new employment and/or housing opportunities. The amount of the loan to be forgiven shall be determined sixty (60) months from the completion of the improvements and a new amortization schedule shall be prepared. The base employment number to be used to calculate the Employment Incentive has been determined to be fifty-five (55) FTE employees for the Building. The amount of the loan forgiven shall be as follows: (a) Two thousand dollars ($2,000) shall be forgiven for each new FTE position created and maintained by the Owner or his/her tenant. (b) To qualify, the Owner must document the following: (1) The job represents a FTE position as defined herein Paragraph 27(d); (2) The job was created between the project completion date and twenty-four (24) months from the completion of the improvements. (3) The job has been maintained by the Owner or his/her tenant for a period of not less than thirty-six (36) months (until December 4, 2011); (4) The job is a paid position; and (5) The job has been created by the Owner or another entity located in the Building and is for employment in a business located in the Building. (c) Two thousand dollars ($2,000) may be forgiven for each new housing unit created. A new housing unit shall be defined as one of the following: (1) The creation of a housing unit where one did not previously exist; or (2) An existing housing unit which has been unlicensed and unoccupied for a period of not less than five years. 7. STATUS OF OWNER. Owner represents that it is a Limited Company duly organized and existing under the laws of the State of Iowa; that it is authorized to borrow under this Agreement, to execute and deliver the note and otherwise perform the obligations of this Agreement; that it has authority and power to own its property and conduct its business as it is currently carried on; that the performance of its obligations under this Agreement and the issuance of any note under it will not conflict with any provision of law, the Articles of Incorporation or the Bylaws of Corporation, or any agreement binding on it. Owner also represents, except as disclosed in writing to City, that it is not a party to any pending or 2 threatened litigation or to any proceeding or action for the assessment or collection of additional taxes, and that it knows of no known contingent liabilities not provided for or disclosed in the financial statement provided City which would affect the ability of the Owner to repay this loan. 8. FINANCIAL CONDITION OF OWNER. Owner has delivered to City a statement of Owner's financial condition as of the date of application for financial assistance which fairly represents the financial condition of Owner as of the date stated, all in accordance with generally accepted accounting principles consistently applied, and that the statements still correctly reflect the financial condition and status of its operations as of the date of this Agreement. 9. TITLE OF OWNER. Subject to the liabilities reflected on Owner's financial statement as well as those incurred in relation to this Project, Owner represents that it has good and marketable title, free of any mortgage, pledge, lien, security interest, encumbrance, or charge to all those assets reflected on the financial statement and to assets since acquired. Taxes not due or payable or otherwise delinquent are excepted. 10. CONDITIONS OF BORROWING. On the date on which any sum is to be borrowed, Owner, in addition to the Note, shall deliver to City such other papers and documents as may be required to comply with the conditions of this Agreement, as counsel for City may reasonably request. Owner shall be required at the Closing Date defined herein Paragraph 27(a) to comply, or establish compliance, as follows: (a) That the representations and warranties of Owner are correct on the Closing Date; (b) That Owner has fully complied with the covenants and agreements to the extent required before the Closing Date; (c) That no default or event which might mature into a default has occurred or continues to the Closing Date; (d) That no litigation or proceeding is pending against Owner which would materially affect the assets of Owner, taking into account the entire assets and overall business of Owner; (e) That there has been no material adverse change in the financial condition of Owner from that shown by the financial statement delivered to City under paragraph 8; f) That no fire or casualty has occurred in any building or to any inventories or property of Owner that might substantially, adversely affect the conduct of its business. 11. SPECIAL CONDITIONS. Owner agrees to comply with the following requirements established by the City for the Loan Program: (a) All exterior work must coincide with the historic character of the building. 12. COVENANTS OF OWNER. Owner covenants that it will: (a) Correct code deficiencies in accordance with all applicable building and fire codes within the scope of the project. (b) Provide for the repair and rehabilitation of the Building in accordance with all applicable building, zoning, fire and housing codes. (c) Substantially complete the Project on or before June 30, 2009. 3 (d) Maintain at all times insurance to the extent and against such hazards and liabilities as are in keeping with the current insurance program of Owner, set forth in Exhibit C attached hereto and entitled "Certificate of Insurance". Said certification shall be renewed on an annual basis and provided to City within thirty (30) days of the anniversary date of this Agreement. (e) Pay when due all taxes, assessments and other liabilities, except those contested in good faith where notice of such contest has been given to the City. (f) (g) Not create or permit to exist any other pledge, security interest, lien or other encumbrance on the security for this Agreement provided in Paragraph 4 above and the Note provided pursuant to this Loan Agreement without written consent of City. Give prompt notice in writing to City of any adverse development, financial or otherwise, which would materially affect its business, properties or affairs, or the ability of Owner to perform its obligations under this Agreement or the Note executed pursuant to the terms of this Agreement. (h) Use loan funds only for purposes authorized herein. (i) Pay all recording and filing fees, mortgage taxes, documentary stamps, and any other taxes payable in connection with this transaction. 13. DEFAULT. Owner shall be in default upon the occurrence of any of the following events: (a) Owner fails to pay any installment of principal or interest on any note (whether to City or any other public or private lender) when due or within thirty (30) days thereafter; (b) Owner becomes insolvent or admits in writing its inability to pay its debts as they mature; or applies for, consents to or acquiesces in the appointment of a trustee or receiver for any of its property; or in the absence of an application for consent or acquiescence, a trustee or receiver is appointed for it or a substantial part of its property and is not discharged within ten (10) days; or it otherwise commits an act of bankruptcy; or any bankruptcy, reorganization, debt arrangement or other proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding is instituted by or against it and if instituted is consented to or acquiesced in by it or remains for ten days undismissed; (c) Owner fails in the performance of any of the terms and conditions of this Agreement and such non-performance continues for ten (10) days after written notice thereof from City or from the holder of a note; (d) Any warranty made by Owner is untrue in any material respect, or any schedule, statement, report, notice or writing furnished by Owner to City is untrue in any material respect on the date as of which the facts set forth are stated or certified, provided any such error is not the result of unintentional errors which are capable of correction without prejudice to the City; (e) Any government board, agency, department, commission or public or private lender takes possession or control of any substantial part of any property of Owner. 14. ACCELERATION AT OPTION OF CITY. If any event of default occurs, City may, after ten days written notice of default to Owner, declare Note immediately due and payable, at which time all unpaid principal and interest shall immediately become due and payable. City shall promptly advise Owner in writing of any acceleration under this paragraph, but the failure to do so shall not impair the effect of such declaration. 15. MAINTENANCE OF RECORDS AND RIGHT TO INSPECT. Owner shall keep and maintain books, records and other documents relating directly to the receipt and disbursement of loan 4 funds; and any duly authorized independent accounting representative of City shall at all reasonable times have access to and the right to inspect, copy, audit and examine all such books and other documents of Owner pertaining to the project until the completion of all close out procedures respecting City's loan and the final settlement and conclusion of all issues arising out of said loan. 16. ADDRESS. Owner's principal business address is: Hartig Realty III, L.C. Attn: Richard J. Hartig 703 Main Street Dubuque, IA 52001 Owner shall promptly give City written notice of any further change in its principal office address. City's address is: City Manager City Hall 50 West 13th Street Dubuque, Iowa 52001 17. LIMITATION OF CITY'S LIABILITY FOR PROJECT ACTMTIES. City shall not be liable to Owner, or to any party, for the completion of, or the failure to complete, any activities which are part of the Project, except as may be specifically provided in this Agreement or other written agreements between City and Owner or any of Owner's affiliates or subsidiaries. Owner agrees to indemnify, hold harmless and defend City from any such claims. 18. CONFLICT OF INTEREST. Owner certifies that to its knowledge 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 inside information with regard to the Project, has nor shall have any interest, direct or indirect, in any contract or subcontract, or in any activity, or benefit therefrom, which is part of this Project at any time during or for one year after such person's tenure. 19. NONDISCRIMINATION. In carrying out the Project, Owner shall not discriminate against any employee or applicant for employment or tenancy because of race, religion, color, sex, national origin, age or disability. Owner shall post in a conspicuous place, available to employees and applicants for employment, notices to be provided by City setting forth the provisions of this nondiscrimination clause. Owner shall state that all qualified applicants will receive consideration for employment without regard to race, religion, color, sex, national origin, age or disability. 20. DISCLAIMER OF RELATIONSHIPS. Nothing contained in this Agreement between the parties, nor any act of City or Owner shall be deemed or construed by any of the parties, or by any third persons, to create any relationship of third party beneficiary, principal or agent, limited or general partnership, or joint venture. 21. NOTICE. Any notice, if mailed by United States certified mail, shall be deemed given when mailed, postage prepaid, addressed to the other party at its address shown above, or at any other address subsequently designated by either party to the other. 22. SUCCESSORS AND ASSIGNS. All covenants, representations, warranties and agreements herein set forth shall be binding upon Owner, and its legal representatives, successors and assigns. This Agreement may not be assigned by City or Owner, without the express written consent of the other party. 5 23. LEGALITY. If any provision of this Agreement shall, for any reason, be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, but this Agreement shall be construed as if such invalid or unenforceable provision had never been contained herein. 24. GOVERNING LAW. This Agreement and all rights and duties hereunder, including but not limited to all matters of construction, validity and performance shall be governed by the laws of the State of Iowa. 25. SURVIVAL OF REPRESENTATIONS. All representations or warranties of Owner shall survive the execution and delivery of this Agreement and any note executed and delivered under it, and no investigation by City nor any closing shall affect the representations or warranties or the right of City to rely on and enforce them. 26. DELAY. No delay on the part of City or the holder of any note in the exercise of any right shall operate as a waiver, nor shall any single or partial exercise of any right preclude other or additional exercise of any right. 27. DEFINITIONS. (a) "Closing Date" shall mean the date on which this Agreement is executed by the parties. (b) "Project" shall mean the rehabilitation project of Owner's property at 703 Main Street, Dubuque, Iowa, identified in Owner's application for financial assistance. Said application is on file in the office of the Economic Development Department, 50 West 13th Street, Dubuque, Iowa 52001. (c) "Qualifying Project Expenses" shall mean those expenditures or expenses incurred by Owner during and for the Project and identified in the Owner's application for financial assistance, whether paid to third parties or incurred as wage expense, fringe benefit expense or other costs of Owner's employees, agents and contractors. (d) "Full -Time Job Equivalent (FTE)" shall equal a total of forty hours of labor per workweek. Such hours may be accrued by single individuals or divided among two or more individuals. (e) "New housing unit" shall mean either a housing unit created where one did not previously exist, or an existing housing unit which has been unlicensed and unoccupied for a period of 12 r-ot le s than five years. 3= ►o Dated this day of ,L , 2009. CITY OF DUBUQUE, IOWA Michael C. Van Milligen, City Manager Richard J. Harti Hartig Realty III, L.C. F:\USERS\DHeiar\Hartig\DRLP\703 Main DRLP Agreement.doc 6 Loan Number: Fund Source: $300,000 City of Dubuque, Iowa PROMISSORY NOTE EXHIBIT A Date: S -6m �2 DRLP # 1 - 09 Downtown Rehabilitation Loan Program (TIF) 3, 2009 FOR VALUE RECEIVED, the undersigned, Hartig Realty III, L.C. 703 Main Street, Dubuque, Iowa, promises to pay to the order of the City of Dubuque, Iowa, 50 W. 13th Street, Dubuque, Iowa, 52001, or at such place as it may direct, the sum of THREE HUNDRED THOUSAND DOLLARS ($300,000), together with interest at the rate of 3 % per annum, upon the unpaid balance, in monthly interest only payments for the first sixty (60) months of the loan and monthly principal and interest payments, amortized over an additional one hundred - eighty (180) months, beginning in the sixty-first month of the loan, on the 1st day of each month beginning after the final disbursement of the loan proceeds and continuing on the 1st day of each month until paid in full. The entire outstanding principal balance and interest, if not sooner paid, shall be paid in full on the 1st day of the two hundred -fortieth (240) month after final disbursement of the loan proceeds. If a default occurs under this Promissory Note or any of the other agreements between the undersigned and the holder and is not cured within TEN (10) DAYS after written notice to the undersigned, then the holder may, as its right and option, declare immediately due and payable the principal balance of this Promissory Note and interest accrued hereon. The undersigned further agrees to pay all costs of collection, including reasonable attorneys' fees. The City of Dubuque may at any time renew this Promissory Note or extend its maturity date for any period and release any security for, or any party to this Promissory Note, all without notice to or consent of and without releasing any maker, accommodation maker, endorser or guarantor from any liability on the Promissory Note. Presentment or other demand for payment, notice of dishonor and protest are hereby waived by the undersigned and each endorser and guarantor. This Promissory Note is subject to the Loan Agreement of same date by and between the undersigned and the City of Dubuque (including but not limited to a reduction in the principal amount of this Promissory Note as authorized by paragraph 5 of said Loan Agreement) and any default under said Loan Agreement is a default under this Promissory Note. Signed, Hartig Realty III, L.C. DUBUQUE COUNTY ABSTRACT & TITLE COMPANY ABSTRACTS OF TITLE TELEPHONE 563/583-4538 FAX 563/583-2709 830 IOWA STREET P.O. BOX 565 DUBUQUE, IOWA 52004-0565 Title Guaranty Division Member No. 8209 A,E. COOPER, President P. W. COOPER, Vice President DIANNE H. SKEMP, Secretary JEAN M. SAWVEL, Ass't Secretary July 14, 2009 City Of Dubuque Attn: Aaron RE: Hartig To Whom It May Concern: We have this date made a search of the records of Dubuque County, Iowa, as to Lot 60 and the Southerly 31.5 feet of Lot 59, in the City of Dubuque, Iowa, according to the United States Commissioners' Map of the City of Dubuque, Iowa, from July 13, 1999, title to which rests in Richard J. Hartig and Brenda Hartig, husband and wife as joint tenants with full rights of survivorship and not as tenants in common. The Financing Statement made and executed by Hartig Drug Company to American Trust & Savings Bank, filed May 4, 1988 and recorded in the Office of the Recorder, Dubuque County, Iowa, as Instrument No. 3528-1988, remains unsatisfied of record. Said Financing Statement having been extended by Extensions with the last Extension filed on November 9, 2007 and recorded as Instrument No. 2007-17027. Real Estate Taxes on said premises are paid for fiscal year 2007-2008 & for prior years. Unpaid for fiscal year 2008-2009. Except as above shown, we find no unsatisfied mortgages, judgments, special assessments, tax liens, mechanics liens or liens of any kind adverse to the title to the above described real estate or against the above named owners. Respectfully submitted A. E. Cooper President is Copy To: Barry Lindahl ( (HAIVIG) pag- Corporate Office 703 Main Street • P.O. Box 709 • Dubuque, Iowa 52004-0709 563-588-8700 • Fax: 563-588-8750 August 30, 2006 Mr. David Heiar City of Dubuque Economic Development Department 50 West 13th Street Dubuque, IA 52001 Dear David: This is a formal letter of application for financial assistance for the Downtown Rehabilitation Loan Program which is offered by the City of Dubuque. Following is the information for each request in the application: • Applicant information 1. Hartig Realty III PO Box 709 Dubuque, IA 52004- 0709 (563) 588-8700 Phone (563) 588-8750 Fax FEIN # 42-1470631 2. Property address 703 Main Street, Dubuque, IA 52004 3. Description of project The main floor of the building located at 703 Main Street has been vacant since October, 2000 and is somewhat unattractive to passersby because of the empty store front on the main level. Through rehabilitation of the building and having a major business on the street level, the activity level will increase in the downtown area and benefit all merchants and businesses in the downtown area. This will further enhance and reflect the vitality and rejuvenation of the downtown area in the city of Dubuque. The rehabilitation of the building will also increase the tax base for the city of Dubuque. 1 Downtown Rehabilitation Loan Application Hartig Drug Company 4. Employment Elements of project Through the revitalization of this building there will be 40 jobs retained in the city of Dubuque's downtown area and the potential of 10 additional full time positions over the next five years. 5. Proof of building ownership See following pages for building ownership from the Dubuque County Assessor's office. 6. Loan amount request $300,000.00 7. Proposed Security There is not a mortgage on this property and Dick Hartig personally guarantees this loan. Please refer to the following letter from Thomas Utzig, Executive Vice President and Chief Credit Officer of American Trust Bank for his comments on Dick's personal character. • Preliminary project budget Please refer to following indexed page. • Preliminary Construction Schedule September 15 — October 1, 2006 — demolition of interior and site preparation October 1 — November 15, 2006 — Build out of interior • Financial Statements Please refer to following indexed pages. Resolution authorizing the application Please refer to following indexed pages. If you have any questions after reviewing this application, please feel free to contact me. Regards, Chief Executive Officer Page 2