Cooper Dev Release escrow fundsMEMORANDUM
April 3, 2003
TO:The Honorable Mayor and City Council Members
FROM:Michael C. Van Milligen, City Manager
SUBJECT:Release of Escrow Agreement - Downtown Rehabilitation Loan for Cooper
Building / 299 Main Street
Economic Development Director Bill Baum is recommending release of escrow funds
required as part of the financing for Cooper Development Company LLC's renovation of
the former Cooper Wagon Works building at 299 Main Street.
The escrow agreement has four months remaining, but the investors would like access
to the funds and the bank agrees it is appropriate to release the funds.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
William Baum, Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
TO:Michael Van Milligen, City Manager
FROM:William Baum, Economic Development Director
SUBJECT:Release of Escrow Agreement - Downtown Rehabilitation Loan for
Cooper Building / 299 Main Street
April 2, 3003
INTRODUCTION
This memorandum presents for City Council consideration a letter authorizing the
release of escrowed funds required as part of the financing for Cooper Development
Company, L.LC's renovation of the former Cooper Wagon Works building at 299 Main
Street.
BACKGROUND
On July 16, 2001, the City Council approved by Resolution #328-01 a Commitment
Letter of $300,000 for the renovation project. One of the conditions of the commitment
letter made the City party to a $200,000 escrow agreement that was required by the
developer's primary lender, Dubuque Bank & Trust Company. The escrow was meant
to cover any construction overruns and/or working capital needs dudng the first 18
months after permanent financing was in place.
DISCUSSION
As indicated in the attached letter from the bank, they have agreed to release the
escrowed funds prior to the timeline established in the original escrow agreement. No
escrowed funds were ever drawn, and the company's financial statement as of
December 31, 2002 shows sufficient capital to allow the release.
RECOMMENDATION
I recommend that the City Council authorize the release of the escrow agreement and
direct the City Manager to sign the attached letter to Dubuque Bank & Trust Company.
attachments
F:\USERS\Pmyhre\WPDOCS~_OAN DOC\COOPER\escrowrelease.mem.rtf
City Manager's Office
City Hall
50 West 13th Street
Dubuque, Iowa 52001-4864
(563) 5894110 office
(563) 5894149 fax
ctymgr@cityofdubuque.org
April 8, 2003
Duane Frick, VP
Dubuque Bank & Trust Company
1398 Central Avenue
Dubuque, Iowa 52001
RE: Release of Escrow Agreement
Cooper Development Company, L.L.C.
Dear Mr. Frick:
At its April 7, 2003 meeting, the City Council indicated its willingness to release
the Agreement dated July 31, 2001 regarding a $200,000 escrow to be used to
cover any construction overruns or working capital needs of the Cooper
Development Company's renovation of the Cooper Wagon Works building and
operation of the Bricktown complex. We understand that none of the escrowed
funds were required by the project.
On review of the LL.C.'s financial statement dated December 31, 2002 and the
bank's recommendation to release the funds, the City concurs with the release of
funds. This letter will serve as written notice by the City of Dubuque authorizing
the release of the Agreement.
Sincerely,
Michael C. Van Milligen
City Manager
F:\US ERS~Pmyhre\WPDOCS\LOANDOC\COOPER~escrow. ltr.doc
DUBUQUE BANK& TRUST
MEMBER HEARTLAND FINANCIAL USA, INC,
April 1, 2003
1398CENTRALAVENUE · P.O. BOX778 · DUBUQUE, IA52004-0778
PBONE(563)5~9-2000 · TOLLFREE(800)397-2000 * FAX (563)589-2~11
Mr. William Baum
Director
Economic Development Department
City of Dubuque
50 West 13th Street
Dubuque, IA 52001
RE: Cooper Development Company Escrow
Dear Bill:
Please be advised that Dubuque Bank & Trust has accepted a request to release funds
held in escrow for Cooper Development Company. This escrow agreement is dated July
31, 2001.
The escrow was established prior to renovation beginning on the old Cooper building at
299 Main Street, Dubuque, IA, to ensure completion of such renovations and also to
ensure sufficient working capital as the business operations began.
All terms for release of this agreement has been met accept for the 18-month minimum
time period, which began when permanent financing was in place. The company and its
investors believe that permanent financing has been in place since the construction loan
was originally signed which was over 20 months ago. We believe that the permanent
loan began when all funds were advanced which was 14 months ago. In either case, we
feel the request to release is acceptable at this time.
Since the City is also a party to this agreement, please advise us at to your decision on
this request. Should you require any additional information or would like to discuss
further, please call me at 589-2180.
Sincerely,
DuaneT. Frick
Vice President
Commercial Lending