Heartland Financial USA TIFMEMORANDUM
April 28, 2003
TO:The Honorable Mayor and City Council Members
FROM:Michael C. Van Milligen, City Manager
SUBJECT:Tax Increment Financing for Heartland Financial USA, Inc.
On January 7, 2002, the City Council approved a Memorandum of Understanding
(MOU) with Heartland Financial USA, Inc. regarding certain public financial incentives
that would be available to the company in consideration of their not less than $4 million
investment in property located in the 1300 block between Central Avenue and Iowa
Street (the former Walsh Store property). The company committed to creating 45 new
jobs by December 31, 2008.
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 Heartland Financial will pay over a ten year period. At
this time, the new taxes over the ten year period are expected to be approximately
$478,000.
Economic Development Director Bill Baum recommends City Council approval of the
issuance of tax increment revenue obligations for Heartland Financial USA, Inc., and
that a public hearing be set for May 19, 2003.
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 Heartland Financial USA, 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
Heartland Financial USA, Inc. The public hearing would be held on May 19, 2003.
BACKGROUND
On January 7, 2002, the City Council approved a Memorandum of Understanding
(MOU) with Heartland Financial USA, Inc. regarding certain public financial incentives
that would be available to the company in consideration of their not less than $4 million
investment in property located in the 1300 block between Central Avenue and Iowa
Street (the former Walsh Store property). The company committed to creating 45 new
jobs by December 31, 2008.
In April 2002, the City expanded the Downtown Dubuque Urban Renewal District to
allow the use of tax increment financing for this project. The City has also supported
the project with CDBG funding, Enterprise Zone project approval and has committed
future Downtown Rehabilitation Loan program funds when they become available.
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 Heartland Financial will pay over a ten (10) year period.
At this time, the new taxes are estimated to be $47,800 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 $478,000.
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 Heartland Financial
project. 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 relocation
and expansion of Heartland Financial USA, Inc.
ACTION STEP
The action step for the City Council is to adopt the attached Resolution.
attachments
F:\USERS/Pmyhre\WPDOCS/LOANDOC/HeartlandFinanciaI\TIF.MEM.doc
RESOLUTION NO. 144-03
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 HEARTLAND
FINANCIAL USA, INC., AND PROVIDING FOR THE PUBLICATION OF NOTICE
THEREOF.
Whereas, it is deemed necessary and advisable that the City of Dubuque, Iowa,
should issue Urban 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 HEARTLAND FINANCIAL USA, 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 wdtten 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
HEARTLAND FINANCIAL USA, INC., the proceeds of which will be used to carry out
certain of the special financing activities described in the Downtown Dubuque Urban
Renewal Plan, consisting of the funding of economic developments grants to
HEARTLAND FINANCIAL USA, INC. pursuant to a Development Agreement entered
into with HEARTLAND FINANCIAL USA, 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 $478,000, 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 cimulation 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 HEARTLAND
FINANCIAL USA, 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 HEARTLAND FINANCIAL USA, INC., in order to carry out certain of the special
financing activities in the Downtown Dubuque Urban Renewal Plan, consisting of the
funding of economic development grants to HEARTLAND FINANCIAL USA, INC.
pursuant to a Development Agreement entered into with HEARTLAND FINANCIAL
USA, 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 $478,000,
more or less, due to assessment increases and/or tax rate adjustments.
At the meeting, the City Council will receive oral and written 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
HEARTLAND FINANCIAL USA, INC.
THIS DEVELOPMENT AGREEMENT dated this day of 2003
by and between the City of Dubuque, Iowa (the "City"), and HEARTLAND FINANCIAL
USA, 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 January 7, 2002,
which Memorandum of Understanding provides that the Developer will make a capital
investment of not less than $4 Million in building improvements, equipment, furniture
and fixtures, ("the Minimum Improvements"), and employ not less than twenty (20) new
full time equivalent jobs within two (2) years and not less than forty-five (45) jobs within
five (5) years 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
N1/5-CL 449, Nl/2-NMl/5-CL449, S1/2-NMI/5-CL 449, MI/5-CL 449,S2/5-CL 449,
N.25'5"-M1/5-CL 456, L4-S2/5-CL 456, L1-L3-S1/2-CL 456, L2-L3-S1/2-CL 456, L2-
S1/2-CL 456, L1-S1/2-CL 456 Original Town in the City of Dubuque, Iowa, Dubuque
County, Iowa
(the "Property"), which is located in the Downtown Dubuque Urban Renewal District
(the "District") which has been so designated by City Council Resolution 187-02 as an
urban renewal 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 a commercial/office
building located on the Property and will 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 April 1, 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 will
occur on or before December 31, 2003.
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 (May 16, 2002) employment of two
hundred fifty-five (255) 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
forty-five (45) new full time equivalent (1820 hours per year) jobs by no later than
December 31, 2008. It is agreed by the parties that the new jobs created shall be
calculated by subtracting the existing employment (255) from the Developer's actual
total employment in Dubuque, Iowa on December 31, 2008, and annually on December
31 of each year thereafter until termination of this Agreement. The Developer agrees to
maintain not less than a total of 300 full time equivalent positions from December 31,
2008 until the termination of this Agreement.
4. To assist the City in monitoring the requirements of Section 3, Developer, on
February 1, 2009, and annually on February 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 December 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 forty-five (45) new FTE employees as provided in Section 3, the
Developer shall pay to the City, promptly upon written demand therefore, an amount
equal to $1,062 for each job less than forty-five (45), 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 Dubuque
County prior to December 1 of each year, commencing December 1, 2004, 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, 2004, the Economic Development Grant in respect thereof would
be paid to the Developer on June 1, 2006).
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 "Heartland
Financial 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 Heartland Financial 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 Heartland Financial 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
Heartland Financial USA, INC.
By
Lynn B. Fuller
Chairman and CEO
(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 Lynn B. Fuller, to me
personally known, who, being by me duly sworn, did say that he is the Chairman and
CEO of HEARTLAND FINANCIAL USA, INC., the corporation executing the instrument
to which this is attached and that as said Chairman and CEO of HEARTLAND
FINANCIAL USA, 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 HEARTLAND
FINANCIAL USA, INC.
Whereas, the City Council of the City of Dubuque, Iowa, after public hearing, duly adopted
an Urban Renewal Plan (the Plan) for the Downtown Dubuque Urban Renewal 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 ~th Section 15A. 1 of the Iowa
Code, that HEARTLAND FINANCIAL USA, INC. is quali~fed to receive such loan or grant
assistance to assist with the relocation and 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 HEARTLAND FINANCIAL USA, INC.,
and has considered and overruled any and all objections thereto; and
Whereas, it is expected that the aggregate amount of the Tax Increment Revenue
obligations will be $478,000, 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 HEARTLAND FINANCIAL USA, iNC.
NOW, THEREFORE, BE IT RESOLVED BYTHE CITY COUNCIL OF THE CITY OF DUBUQUE,
IOWA:
Section 1. That the form of Development Agreement by and between the City of Dubuque and
Heartland Financial USA, 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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