Quebecor Word Tax Increment FMEMORANDUM
April 28, 2003
TO:The Honorable Mayor and City Council Members
FROM:Michael C. Van Milligen, City Manager
SUBJECT:Tax Increment Financing for Quebecor World Dubuque, Inc.
On Mamh 4, 2002, the City Council approved a Memorandum of Understanding (MOU)
with Quebecor World Dubuque, Inc. regarding certain public financial incentives that
would be available to the company in consideration of their $24 million investment in
property and equipment at their facility on Kerper Boulevard. The company has
committed to creating 106 new jobs averaging $14.63 per hour by Mamh 31, 2005.
The MOU provided that the City would support the project by approving the use of tax
increment proceeds to make reimbursement to the company of the actual new
increment of property taxes that Quebecor will pay over a ten year period. At this time,
the new taxes over the ten year period are expected to be approximately $142,000.
Economic Development Director Bill Baum recommends City Council approval of the
issuance of tax increment revenue obligations for Quebecor World Dubuque, Inc., and
that a public hearing be set for May 19, 2003.
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
April 25, 2003
TO:Michael Van Milligen, City Manager
FROM:William Baum,Economic Development Director
SUBJECT:Tax Increment Financing for Quebecor World/Dubuque, Inc.
INTRODUCTION
This memorandum presents for City Council review and approval a Resolution setting
for public hearing the proposed issuance of tax increment revenue obligations for
Quebecor World Dubuque, Inc. The public hearing would be held on May 19, 2003:
BACKGROUND
On March 4, 2002, the City Council approved a Memorandum of Understanding (MOU)
with Quebecor World Dubuque, Inc. regarding certain public financial incentives that
would be available to the company in consideration of their $24 million investment in
property and equipment at their facility on Kerper Boulevard. The company has
committed to creating 106 new jobs averaging $14.63 per hour by March 31, 2005.
The City has previously approved creating the Quebecor Economic Development
District, an urban renewal designation that allows the use of tax increment funds for
special financing activities, including loans and grants to businesses. The City has also
supported the project with CEBA funding and Enterprise Zone project approval.
DISCUSSION
The MOU provided that the City would support the project by approving the use of tax
increment proceeds to make reimbursement to the company of the actual new
increment of property taxes that Quebecor will pay over a ten (10) year period. At this
time, the new taxes are estimated to be $14,200 per year; however, that amount could
increase based on the actual amount of property taxes paid each year by the company
due to assessment increases and/or tax rate adjustments. It is also not clear yet what
impacts legislation being considered by the Iowa Legislature may have on these
resources. The total reimbursement from tax increment revenues over the ten (10) year
period is expected to be approximately $142,000.
It is proposed that following the public hearing, the City Council would enter into a
Development Agreement (attached for your review) with the company that sets forth the
terms for reimbursement of the TIF revenues generated from the Quebecor Economic
Development District. Should the job creation goals not be met in any given year, the
TIF tax rebate would be reduced on a per/job basis.
RECOMMENDATION
I recommend that the City Council adopt the attached Resolution setting a date for
public hearing on the proposed use of tax increment proceeds to support the expansion
of Quebecor World Dubuque, Inc.
ACTION STEP
The action step for the City Council is to adopt the attached Resolution.
attachments
F:\US ERS~Pm~hre\WPDOCS\LOANDOC\Quebecor\TIF.M EM.doc
RESOLUTION NO. 141-03
FIXING THE DATE FOR A MEETING OF THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA ON THE PROPOSED ISSUANCE OF URBAN RENEWAL TAX
INCREMENT REVENUE OBLIGATIONS AND THE EXECUTION OF A
DEVELOPMENT AGREEMENT RELATING THERETO WITH QUEBECOR WORLD
DUBUQUE, INC., AND PROVIDING FOR THE PUBLICATION OF NOTICE
THEREOF.
Whereas, it is deemed necessary and advisable that the City of Dubuque, Iowa,
should issue Urbarf~Renewal Tax Increment Revenue obligations, as authorized by
Chapter 403 of the Code of Iowa, and to enter into a Development Agreement relating
thereto with QUEBECOR WORLD DUBUQUE, iNC., for the purpose of carrying out an
Urban Renewal Project as hereinafter described; and
Whereas, before said obligation may be approved, Section 403.9 of the Code of
Iowa requires that the City Clerk publish a notice of the proposal and of the time and
place of the meeting at which the City Council proposes to take action thereon and at
which meeting the City Council shall receive oral and/or written objections from any
resident or property owner of said City to such proposed action.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the City Council meet in the Auditorium of the Carnegie-Stout Public
Library in Dubuque, Iowa, at 6;30 p.m. on the 19th day of May 2003, for the purpose of
taking action on the matter of the issuance of Urban Renewal Tax Increment Revenue
, obligations and the execution of a Development Agreement relating thereto with
QUEBECOR WORLD DUBUQUE, INC., the proceeds of which will be used to carry out
certain of the special financing activities described in the Quebecor Economic
Development District Urban Renewal Plan, consisting of the funding of economic
developments grants to QUEBECOR WORLD DUBUQUE, INC. pursuant to a
Development Agreement entered into with QUEBECOR WORLD DUBUQUE, INC.
under the terms and conditions of said Urban Renewal Plan. It is expected that the
aggregate amount of the Tax Increment Revenue obligations will be $142,000, more or
less, due to assessment increases and/or tax rate adjustments.
Section 2. That the Clerk is hereby directed to cause at least one publication to be
made of a notice of said meeting, in a newspaper, printed wholly in the English
language, published at least once weekly, and having general circulation in said City,
said publication to be not less than four days nor more than twenty days before the date
of said meeting on the issuance of said obligations.
Section 3. That the notice of the proposed action to issue said obligations shall be in
substantially the form attached hereto.
Passed, approved and adopted this 5th day of May 2003.
Terrance M. Duggan, Mayor
Attest:
Jeanne F. Schneider
City Clerk
NOTICE OF A MEETING OF THE CITY COUNCIL OF THE CITY OF DUBUQUE,
IOWA, ON THE MATTER OF THE PROPOSED ISSUANCE OF URBAN RENEWAL
TAX INCREMENT REVENUE OBLIGATIONS AND THE EXECUTION OF A
DEVELOPMENT AGREEMENT RELATING THERETO WITH QUEBECOR WORLD
DUBUQUE, INC., AND THE HEARING ON THE ISSUANCE THEREOF.
PUBLIC NOTICE is hereby given that the City Council of the City of Dubuque, Iowa, will
hold a public hearing on the 19th day of May 2003, at 6:30 p.m. in the Carnegie-Stout
Public Library Auditorium, 360 West 11th Street, Dubuque, Iowa, at which meeting the
City Council proposes to take action for the issuance of Urban Renewal Tax Increment
Revenue Obligations and the execution of a Development Agreement relating thereto
with QUEBECOR WORLD DUBUQUE, INC., in order to carry out certain of the special
financing activities in the Quebecor Economic Development District Urban Renewal
Plan, consisting of the funding of economic development grants to QUEBECOR
WORLD DUBUQUE, INC. pursuant to a Development Agreement entered into with
QUEBECOR WORLD DUBUQUE, INC. under the terms and conditions of said Urban
Renewal Plan. It is expected that the aggregate amount of the Tax Increment Revenue
obligations will be $142,000, more or less, due to assessment increases and/or tax rate
adjustments.
At the meeting, the City Council will receive oral and wdtten objections from any
resident or property owner of said City to the above action. After all objections have
been received and considered, the City Council may at this meeting or at any
adjournment thereof, take additional action for the issuance of such Tax increment
Revenue Obligations or will abandon the proposal. By order of the City Council said
hearing and appeals therefrom shall be held in accordance with and governed by the
provisions of Section 403.9 of the Code of Iowa.
This notice is given by order of the City Council of the City of Dubuque, Iowa, as
provided by Sections 403.9 of the Code of Iowa.
Dated this day of ,2003.
Jeanne F. Schneider
City Clerk of Dubuque, Iowa
DEVELOPMENT AGREEMENT
BETWEEN THE CITY OF DUBUQUE, IOWA
AND
QUEBECOR WORLD DUBUQUE, INC.
THIS DEVELOPMENT AGREEMENT dated this __ day of ,2003 by
and between the City of Dubuque, Iowa (the "City"), and QUEBECOR WORLD
DUBUQUE, INC. (the "Developer").
WITNESSETH:
WHEREAS, the Developer and the City have entered into a Memorandum of
Understanding, approved by the City Council of Dubuque, Iowa on Mamh 4, 2002,
which Memorandum of Understanding provides that the Developer will make a capital
investment of not less than $24 Million in building improvements, equipment, furniture
and fixtures, ("the Minimum Improvements"), and employ 106 additional persons at
Developer's facility in Dubuque, Iowa; and
WHEREAS, the Developer's facility is located on the real property, the legal description
of which is
Lot 1 of Lot 1 of Lot 1 of Block 5 and Lot 1 of Lot 2 of Lot 1 of Block 5 of River Front
Subdivision No. 3, and Lot 1 of Lot 2 of Lot 4 and Lot 2 of Lot 2 of Lot 4 of Block 1 of
River Front Subdivision No. 5 and Lot 1 of Lot 2 of Block 1 of River Front Subdivision
No. 5 and Lot 2 of Lot 1 of Lot 1 of Lot 1 of Lot 1 of Block 1 in River Front Subdivision
No. 5 in the City of Dubuque, Iowa, Dubuque County, Iowa
(the "Property"), which is located in the Quebecor Economic Development District (the
"District") which has been so designated by City Council Resolution 594-02 as an
economic development area (the "Project Area") defined by Chapter 403 of the Iowa
Code (the "Urban Renewal Law"); and
WHEREAS, the Developer has undertaken the redevelopment of an industrial building
located on the Property and is operating the same during the term of this Agreement;
and
WHEREAS, pursuant to Section 403.6(1) of the Iowa Code, and in conformance with
the Urban Renewal Plan for the Project Area adopted on November 4, 2002, the City
has the authority to enter into contracts and agreements to implement the Urban
Renewal Plan.
NOW, THEREFORE, the parties to this Development Agreement, in consideration of
the promises, covenants and agreements made by each other, do hereby agree as
follows:
1. The substantial completion of the Minimum Improvements by the Developer has
occurred on or before December 31, 2002.
2. The Developer agrees to operate the Minimum Improvements until at least the
termination of this Agreement.
3. The Developer agrees to maintain its existing (March 1, 2002) employment of
two hundred thirty (230) full time equivalent positions in Dubuque, Iowa, at all times until
the termination of this Agreement, and to create or cause to be created not less than
one hundred six (106) new full time equivalent (1820 hours per year) jobs by no later
than March 31, 2005. It is agreed by the parties that the new jobs created shall be
calculated by subtracting the existing employment (230) from the Developer's actual
total employment in Dubuque, Iowa on March 31, 2005, and annually on March 31 of
each year thereafter until termination of this Agreement. The Developer agrees to
maintain not less than a total of 336 full time equivalent positions from March 31, 2005
until the termination of this Agreement.
4. To assist the City in monitoring the requirements of Section 3, Developer, on
May 1, 2005, and annually on May 1 of each year thereafter until the termination of this
Agreement, a duly authorized officer of the Developer shall certify to the City (a) the
number of full time equivalent jobs employed at the Property on such date, and (b) that
as of the date of such certificate, the Developer is not in default (or is in default) in the
fulfillment of the terms and conditions of this Agreement. The Developer shall attach to
the certification a copy of the Developer's March 31 Quarterly State of Iowa "Employer's
Contribution and Payroll Report.
5. In the event that any certificate provided to the City discloses that the Developer
has not created at least one hundred six (106) new FTE employees as provided in
Section 3, the Developer shall pay to the City, promptly upon written demand therefore,
an amount equal to $134 for each job less than one hundred six (106), or the City, at its
sole discretion, may deduct said amount from the annual Economic Development Grant
paid to the Developer according to Section 6.
6. For and in consideration of the obligations being assumed by the Developer
hereunder, and in furtherance of the goals and objectives of the Urban Renewal Plan
for the Project Area and the Urban Renewal Law, the City agrees, subject to the
Developer being and remaining in compliance with the terms of this Agreement, to
make up to ten (10) consecutive annual payments (such payments being referred to
collectively as the "Economic Development Grants") to the Developer, pursuant to
Section 403.9 of the Urban Renewal Law, in amounts equal to the actual amount of tax
increment revenues collected by the City (without regard to any averaging that may
otherwise be utilized under Section 403.19 and excluding any interest that may accrue
thereon prior to payment to the Developer) during the preceding twelve-month period in
respect of the Minimum Improvements constructed by the Developer (the "Developer
Tax Increments").
7. To fund the Economic Development Grants, the City shall certify to the Dubuque
County prior to December 1 of each year, commencing December 1, 2003, its request
for the available Developer Tax Increments resulting from the assessments imposed by
the County on the Minimum Improvements as of January 1 of that year, to be collected
by the City as taxes are paid during the following fiscal year and which shall thereafter
be disbursed to the Developer on June 1 of that fiscal year. (Example: If the City so
certifies in December, 2003, the Economic Development Grant in respect thereof would
be paid to the Developer on June 1, 2005).
8. The Economic Development Grants shall be payable from and secured solely
and only by the Developer Tax Increments, which, upon receipt, shall be deposited and
held in a special account created for such purpose and designated as the "Quebecor
TIF Tax Increment Financing Account" of the City. The City hereby covenants and
agrees to maintain its TIF ordinance in force during the term hereof and to apply the
incremental taxes collected in respect of the Minimum Improvements and allocated to
the Quebecor TIF Account to pay the Economic Development Grants, as and to the
extent set forth in Section 6 hereof. The Economic Development Grants shall not be
payable in any manner by other tax increment revenues or by general taxation or from
any other City funds. The City makes no representation with respect to the amounts
that may be paid to the Developer as the Economic Development Grants in any one
year, and under no circumstances shall the City in any manner be liable to the
Developer so long as the City timely applies the Developer Tax Increments actually
collected and held in the Quebecor TIF Account (regardless of the amounts thereof) to
the payment of the Economic Development Grants to the Developer as and to the
extent described in this Section.
9. The City shall be free to use any and all tax increment revenues collected in
respect of other properties within the Project Area, or any available Developer Tax
Increments resulting from the termination of the annual Economic Development Grants
under Section 6 hereof, for any purpose for which such tax increment revenues may
lawfully be used pursuant to the provisions of the Urban Renewal Law, and the City
shall have no obligations to the Developer with respect to the use thereof.
10. Neither the preambles nor provisions of this Agreement are intended to modify,
nor shall they be construed as modifying, the terms of any other contract between the
City and the Developer.
11. This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the parties.
CITY OF DUBUQUE, IOWA
By
Terrance M. Duggan
Mayor
Attest:
Jeanne F. Schneider
City Clerk
QUEBECOR WORLD DUBUQUE, INC.
By
It's President
(City Seal)
STATE OF IOWA )
) SS;
COUNTY OF DUBUQUE )
On this __ day of 2003, before me the undersigned, a Notary
Public in and for the said County and State, personally appeared Terrance M. Duggan
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 executing the instrument to which this is attached; that the seal
affixed hereto is the seal of said municipal corporation; that said instrument was signed
and sealed on behalf of the City of Dubuque, Iowa, by authority of its City Council; and
that said Mayor and City Clerk acknowledged the execution of said instrument to be the
voluntary act and deed of said City, by it and by them voluntarily executed.
Notary Public
STATE OF IOWA )
.) SS:
COUNTY OF DUBUQUE )
On this day of 2003, before me the undersigned, a Notary
Public in and for the State of Iowa, personally appeared ,
to me personally known, who, being by me duly sworn, did say that he is the President
of QUEBECOR WORLD DUBUQUE, INC., the corporation executing the instrument to
which this is attached and that as said President of QUEBECOR WORLD DUBUQUE,
INC. acknowledges the execution of said instrument to be the voluntary act and deed of
said company, by it and by him, an individual, voluntarily executed.
Notary Public
RESOLUTION NO.
AUTHORIZING THE EXECUTION OF A DEVELOPMENT AGREEMENT WITH QUEBECOR
WORLD DUBUQUE, INC.
Whereas, the City Council of the City of Dubuque, Iowa, after public hearing, duly adopted
an Urban Renewal Plan (the Plan) for the Quebecor Economic Development District (the District);
and
Whereas, the Plan provides that the City may undertake special financing activities,
including loans or grants to private developers, to meet the objectives of the Plan and to encourage
the development of the District; and
Whereas, the City Council has determined, in accordance with Section 15A. 1 of the Iowa
Code, that QUEBECOR WORLD DUBUQUE, INC. is qualified to receive such loan or grant
assistance to assist with the expansion of its facility in the District; and
Whereas, pursuant to published notice, the CityCouncil has held a public hearing on the
proposition of obligating Tax Increment Revenue to assist QUEBECOR WORLD DUBUQUE, INC.,
and has considered and overruled any and all objections thereto; and
Whereas, it is expected that the aggregate amount ofthe Tax Increment Revenue
obligations will be $142,000, more or less, due to assessment increases and/or taxrate
adjustments; and
Whereas, a Development Agreement, attached hereto and bythis reference made a part
hereof, sets forth the terms and conditions ofthe disbursement of Tax Increment Revenue
proceeds to QUEBECOR WORLD DUBUQUE, iNC.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CiTY OF DUBUQUE,
IOWA:
Section 1. That the form of Development Agreement by and between the City of Dubuque and
Quebecor World Dubuque, Inc., attached hereto, is herebyapproved.
Section 2. That the Mayor and City Clerk are hereby authorized and directed to execute, on
behalf of the City of Dubuque, Iowa, said Development Agreement.
Passed, approved and adopted this 19th day of May 2003.
Attest:
Terrance M. Duggan
Mayor
Jeanne F. Schneider
City Clerk
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