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Hitzler Rental, LLC Grant Agreement for 1902 Central Avenue Copyrighted October 7, 2019 City of Dubuque Consent Items # 12. ITEM TITLE: Hitzler Rental, LLC - GrantAgreementfor 1902 Central Avenue SUMMARY: City Manager recommending approval of a resolution approving a Grant Agreement between the City of Dubuque and Hitzler Rental, LLC to redevelop property at 1902 Central Avenue. RESOLUTION Approving a GrantAgreement by and between the City of Dubuque, lowa and Hitzler Rental, LLC for the Redevelopment of 1902 Central Avenue SUGGESTED DISPOSITION: Suggested Disposition: Receiveand File;Adopt Resolution(s) ATTACHMENTS: Description Type 1902 Central Avenue GrantAgreement-MVM Memo City Manager Memo Staff Memo Staff Memo GrantAgreement Supporting Documentation Resolution of Approval Resolutions Dubuque THE CITY OF � uI�AaMca cih DuB E � � I � � I Maste iece on the Mississi i Zoo�•zoiz•zois YP pp zoi�*zoi9 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Approving a Grant Agreement between the City of Dubuque and Hitzler Rental, LLC to Redevelop Property at 1902 Central Avenue DATE: October 1, 2019 Economic Development Director Jill Connors recommends City Council approval of a resolution approving a Grant Agreement between the City of Dubuque and Hitzler Rental, LLC to redevelop property at 1902 Central Avenue. The proposed Grant Agreement provides a grant of $12,500 for eligible farade materials and labor, as well as planning and design costs. Additional terms and conditions are included in the Grant Agreement. I concur with the recommendation and respectfully request Mayor and City Council approval. v Mic ael C. Van Milligen MCVM:jh Attachment cc: Crenna Brumwell, City Attorney Teri Goodmann, Assistant City Manager Cori Burbach, Assistant City Manager Jill M. Connors, Economic Development Director Dubuque Economic Development Department THE CITY OF � 50 West 13th Street All•AmericaCity Dubuque,lowa 52001-4864 U� � "A¶ONA""`"��"� Office(563)589-4393 , I I�I TTY(563)690-6678 http://www.cityofdu buq ue.org 2007*2012*2013 Masterpiece on the Mississippi 2oi�*Zoi9 TO: Michael C. Van Milligen, City Manager FROM: Jill M. Connors, Economic Development Director SUBJECT: Approving A Grant Agreement between the City of Dubuque and Hitzler Rental, LLC to Redevelop Property at 1902 Central Avenue DATE: September 27, 2019 INTRODUCTION This memorandum presents for City Council consideration and action the attached resolution approving a Grant Agreement between the City of Dubuque and Hitzler Rental, LLC. BACKGROUND The Economic Development Department offers a Downtown Rehabilitation Grant to eligible projects in the Greater powntown Urban Renewal Area to improve the farade of existing buildings, as well as cover accompanying planning, design, and financial consultant costs. This program has significantly improved the aesthetics in the downtown area, making it a workforce attraction and retention tool. DISCUSSION The property at 1902 Central Avenue is a mixed-use building with a storefront on the ground level and upper story apartments. The storefront has for a number of years served as a local bar. Hitzler Rental, LLC has applied for a Downtown Rehabilitation Grant to assist with the restoration of the building farade to its architecturally appropriate condition. While it is not a condition of this program, the interior space is also being renovated in an appropriate style, with the building owner intending to provide mercantile space for local entrepreneurs. The proposed Grant Agreement provides a grant of$12,500 for eligible fa�ade materials and labor, as well as planning and design costs. Additional terms and conditions are included in the attached Grant Agreement. This project aligns with the City Council goal of creating livable neighborhoods and having a robust economy, with a focus on revitalizing the Central Avenue Corridor. RECOMMENDATION/ ACTION STEP I recommend the City Council adopt the attached resolution approving the Grant Agreement between the City of Dubuque and Hitzler Rental, LLC for the redevelopment of 1902 Central Avenue. z Prepared by: Jill Connors, Economic Development, 50 W. 13th Street, Dubuque IA 52001, 563 589-4393 Return to: Jill Connors, Economic Development, 50 W. 13th Street, Dubuque IA 52001, 563 589-4393 RESOLUTION NO. 347-19 APPROVING A GRANT AGREEMENT BY AND BETWEEN THE CITY OF DUBUQUE, IOWA AND HITZLER RENTAL, LLC FOR THE REDEVELOPMENT OF 1902 CENTRAL AVENUE Whereas, Hitzler Rental, LLC has applied to the Economic Development Department for a Downtown Rehabilitation Grant (the Grant) for the redevelopment of 1902 Central Avenue in the City of Dubuque, Iowa (the Project); and Whereas, the Project is eligible for the Grant; and Whereas, it is the determination of the City Council that approval of the Grant Agreement, for redevelopment of the Property by Hitzler Rental, LLC according to the terms and conditions set out in the Grant Agreement, is in the public interest of the City of Dubuque. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the Grant Agreement by andbetween the City of Dubuque and Hitzler Rental, LLC, a copy of which is attached hereto, is hereby approved. Section 2. That the Mayor is hereby authorized and directed to execute the Grant Agreement on behalf of the City of Dubuque and the City Clerk is authorized and directed to attest to his signature. Section 3. That the City Manager is authorized to take such actions as are necessary to comply with the terms of the Grant Agreement as herein approved. Passed, approved and adopted this 7th day of October 2019. ake A. Rios, Mayor Pro Tem Attest: Kewrn S. Firnstahl, YCi y Clerk GRANT AGREEMENT FOR THE DOWNTOWN REHABILITATION GRANT PROGRAM BETWEEN THE CITY OF DUBUQUE, IOWA AND HITZLER RENTAL, LLC THIS GRANT REEMENT (the "Agreement"), dated for reference purposes the /day of >r' �.. , 2 , by and between the City Of Dubuque, Iowa, a municipality established pursuant to the Code of Iowa (the "City") and acting under the authorization of Chapter 403 of the Code of Iowa (the "Urban Renewal Act") and Hitzler Rental, LLC, ("Grant Recipient"). WHEREAS, in furtherance of the objectives of the Urban Renewal Act, City has undertaken a program for the development and redevelopment of an area in City known as the Greater Downtown Urban Renewal District (the "District"), an urban renewal area established pursuant to the Urban Renewal Act, and in connection therewith has established the Downtown Rehabilitation Grant Program (the "Program"); and WHEREAS, Grant Recipient intends to complete the renovation and rehabilitation of a building located on property owned by Grant Recipient and within the District legally described as follows: Lots 1 and 2 of the south 75 feet of the south 2/5ths of Out Lot 437, in the City of Dubuque, Iowa, according to the recorded Plat thereof; locally known as 1902 Central Avenue, Dubuque, Iowa (the "Development Property"), which shall include various improvements to the building, as more specifically detailed in Grant Recipient's application to the Program; and WHEREAS, Grant Recipient's renovation and rehabilitation of the Development Property is referred to herein as the "Project"; and WHEREAS, Grant Recipient previously applied for a Downtown Rehabilitation Grant for the Project from City under the Program in amounts collectively up to Twelve Thousand Five Hundred Dollars ($12,500) the terms of which are set forth in this Agreement; and WHEREAS, City believes that the development of the Development Property pursuant to this Agreement and the fulfillment generally of this Agreement, are in the vital and best interests of City and in accord with the public purposes and provisions of the applicable State and local laws and requirements under which the foregoing project has been undertaken and is being assisted. NOW THEREFORE, in consideration of the promises and obligations of the parties hereto, each of them does hereby covenant and agree with the others as follows: 092719ba1 SECTION 1. MINIMUM IMPROVEMENTS. 1.1. Required Minimum Improvements. Grant Recipient shall improve the Development Property as follows: Reconstruction and repair of the building facade as indicated in Exhibit A (the "Minimum Improvements"). The Minimum Improvements shall be completed in substantial conformity with the scope and scale described in Grant Recipient's application to the Program attached hereto as Exhibit B. 1.2. Completion of Minimum Improvements. Grant Recipient shall complete construction of the Minimum Improvements by December 31, 2019. City shall determine in its sole discretion (following an inspection by City's Building Services Department and/or Housing & Community Development Department, and/or Planning Department) when the Minimum Improvements have been completed. In order to be considered completed, the Minimum Improvements must be constructed in accordance with the terms of this Agreement, in compliance with the regulations of the Downtown Rehabilitation Grant Program, and in substantial conformity with Grant Recipient's application to that Program and the Design Letter attached hereto. 1.3 Certificate of Completion. Promptly following the request of Grant Recipient and upon determination of the City Manager that the Minimum Improvements have been completed as required by Section 1.2 of this Agreement, the City Manager shall furnish Grant Recipient with the Certificate of Completion in the form attached as Exhibit C and shall be a conclusive determination of the satisfaction and termination of the agreements and covenants in this Agreement. 1.4. Construction of Minimum Improvements. Grant Recipient shall complete all work with respect to construction of the Minimum Improvements in conformance with all requirements of the Program, this Agreement, and all federal, State, and local laws, ordinances, and regulations. 1.5. Insurance. (1) Grant Recipient shall provide and maintain or cause to be maintained at all times during the process of constructing the Minimum Improvements (and, from time to time at the request of City, furnish City with proof of insurance in the form of a certificate of insurance for each insurance policy): All risk builder's risk insurance, written on a Completed Value Form in an amount equal to one hundred percent (100%) of the replacement value of the Development Property when construction is completed; 2 (2) Upon completion of construction of the Minimum Improvements and up to the Termination Date, Grant Recipient shall maintain, or cause to be maintained, at its cost and expense (and from time to time at the request of City shall furnish proof of insurance in the form of a certificate of insurance) all-risk property insurance against loss and/or damage to the Development Property under an insurance policy written in an amount not less than the full insurable replacement value of the Development Property. The term "replacement value" shall mean the actual replacement cost of the Development Property (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be reasonably determined from time to time at the request of City, but not more frequently than once every three (3) years. (3) Grant Recipient shall notify City immediately in the case of damage exceeding $50,000.00 in amount to, or destruction of, the Development Property or any portion thereof resulting from fire or other casualty. Net proceeds of any such insurance (Net Proceeds), shall be paid directly to Grant Recipient as its interests may appear, and Grant Recipient shall forthwith repair, reconstruct and restore the Development Property to substantially the same or an improved condition or value as they existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, Grant Recipient shall apply the Net Proceeds of any insurance relating to such damage received by Grant Recipient to the payment or reimbursement of the costs thereof, subject, however, to the terms of any mortgage encumbering title to the Property (as its interests may appear). Grant Recipient shall complete the repair, reconstruction and restoration of the Development Property whether or not the Net Proceeds of insurance received by Grant Recipient for such Purposes are sufficient. SECTION 2. FURTHER COVENANTS OF GRANT RECIPIENT. 2.1. Operation of Development Property; Housing Vouchers. For and in consideration of the Grant offered under this Agreement, during the operation of the Development Property, a portion of which is a rental residential property, Grant Recipient shall accept, or cause to be accepted, applications from prospective tenants with housing choice vouchers (issued under the U.S. HUD's Section 8 voucher program or a similar program) that are otherwise qualified prospective tenants. 2.2. Real Property Taxes. Grant Recipient shall pay or cause to be paid, when due, all real property taxes and assessments payable with respect to all and any parts of the Development Property. 2.3. No Other Exemptions. Until the Termination Date, Grant Recipient agrees not to apply for any state or local property tax exemptions, except for an application for urban revitalization tax abatement under Iowa Code Chapter 404 and 427, which are available with respect to the Development Property or the Minimum Improvements located thereon 3 that may now be, or hereafter become, available under state law or city ordinance during the term of this Agreement. 2.4. Non -Discrimination. In carrying out the Project, Grant Recipient shall not discriminate against any employee or applicant for employment or tenant because of race, religion, color, sex, sexual orientation, gender identity, national origin, age, or disability. SECTION 3. CITY PARTICIPATION. 3.1. Downtown Rehabilitation Grants. (1) For and in consideration of Grant Recipient's completion of the Project, City agrees, subject to the terms and conditions set forth herein, to make the grants described in Sections 3.3 and 3.4 (collectively, the "Grant"), which are individually referred to as the Facade Grant and the Planning & Design Grant, subject to the terms and conditions of each particular grant, as stated herein. The Facade Grant and the Planning & Design Grant are both grants made under subprograms of the Program. (2) The final amounts of the Facade Grant and the Planning & Design Grant shall be determined following City's review of documentation submitted by Grant Recipient showing the eligible expenses (as applicable to the particular grant), and shall each be in an amount equal to $0.50 for each $1.00 of eligible expenses incurred by Grant Recipient within the scope of the Project's approved application, up to the maximum amounts stated below. 3.2. Payment of the Grant. The Grant shall be payable as follows: (1) Any and all portions of the Grant shall be funded solely and only from available Program funds; (2) Prior to the release of any Grant funds under Sections 3.3 or 3.4, (i) Grant Recipient shall have submitted documentation of its eligible expenses under the corresponding grant program, and (ii) City shall have determined that the Project is substantially complete, as required by Sections 1.2 and 1.3; and (3) The Grant funds shall be disbursed directly to Grant Recipient. 3.3. Facade Grant. City agrees to provide Grant Recipient a grant not to exceed Ten Thousand Dollars ($10,000) for documented costs that improve the overall appearance of the Development Property (the "Facade Grant"), provided the Project as completed meets the criteria of the Facade Grant Program. 3.4. Planning & Design Grant. City agrees to provide Grant Recipient a grant not to exceed Two Thousand Five Hundred Dollars ($2,500) for documented predevelopment 4 costs, architectural and engineering fees, and other authorized soft costs associated with the rehabilitation of the Development Property (the "Planning & Design Grant"), provided the Project as completed meets the criteria of the Planning & Design Grant Program. SECTION 4. EVENTS OF DEFAULT; REMEDIES. 4.1. Events of Default Defined. Failure by Grant Recipient to substantially observe or perform any covenant, condition, obligation, or agreement on its part to be observed or performed under this Agreement shall be an "Event of Default." 4.2. Remedies on Default by Grant Recipient. Whenever any Event of Default 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 Grant Recipient of the Event of Default, but only if the Event of Default has not been cured within thirty (30) days following such notice, or if the Event of Default cannot be cured within thirty (30) days and Grant Recipient does not provide assurances to City that the Event of Default will be cured as soon as reasonably possible thereafter: (1) City may suspend its performance under this Agreement, including suspension of the payment of any installment of the Grant to Grant Recipient, until it receives assurances from Grant Recipient deemed adequate by City, that Grant Recipient will cure its default and continue its performance under this Agreement; (2) City may terminate this Agreement; or (3) 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 Remedy Exclusive. No remedy herein conferred upon or reserved to City is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall 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. 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. 4.4. No Implied Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, 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. SECTION 5. MISCELLANEOUS. 5.1. Conflict of Interest. Grant Recipient represents and warrants that, to its best knowledge and belief after due inquiry, no officer or employee of City, or its designees or 5 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, has had or shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work or services to be performed in connection with the Project, or in any activity, or benefit therefrom, which is part of the Project at any time during or after such person's tenure. 5.2. Grants, Notices, and Demands. A Grant payment, notice, demand, or other communication under this Agreement by any party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, and (1) In the case of Grant Recipient, is addressed or delivered personally to Hitzler Rental, LLC, 1781 White Street, Dubuque, IA 52001; and (2) In the case of City, is addressed to or delivered personally to the City of Dubuque at City Hall, 50 W. 13th Street, Dubuque, IA 52001; Attn: City Manager and City Attorney. or to such other designated individual or officer or to such other address as any party shall have furnished to the other in writing in accordance herewith. 5.3. Titles of Sections. Any titles of the several parts and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. 5.4. Definitions. All capitalized terms used herein shall have the meaning defined herein, unless a different meaning clearly appears from the context. 5.5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. 5.6. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Iowa. 5.7. Amendment. This Agreement may not be amended except by a subsequent writing signed by all parties hereto. 5.8. Successors and Assigns. This Agreement is intended to and shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. 5.9. Termination Date. This Agreement shall terminate and be of no further force or effect upon issuance of the Certificate of Completion and payment of the Grant as 6 provided in Section 3, unless the Agreement is terminated earlier by the other terms of this Agreement. 5.10. No Third -Party Beneficiaries. No rights or privileges of either party hereto shall inure to the benefit of any landowner, tenant, contractor, subcontractor, material supplier, or any other person or entity, and no such landowner, tenant, contractor, subcontractor, material supplier, or any other person or entity shall be deemed to be a third -party beneficiary of any of the provisions contained in this Agreement. 5.11. Indemnification. Grant Recipient hereby agrees to defend, indemnify and hold harmless City against any claims made by Grant Recipient, or any third party relating to or arising out of this Agreement, including costs, expenses, or attorneys' fees. 5.12. No Assignment; Non -Transferability. Following the execution of this Agreement and until the Termination Date: (1) Grant Recipient represents and agrees that it will not transfer, convey or make any assignment of any of its rights or interests in the Development Property, Minimum Improvements, or this Agreement to any other party unless: (i) the transferee partnership, corporation, or individual assumes in writing all of the obligations of Grant Recipient under this Agreement, and (ii) City consents thereto in writing in advance thereof; and (2) Grant Recipient represents and agrees that it will not assign its rights or interests in this Agreement, including the Grant, to any other party unless City consents thereto in writing in advance thereof. CITY OF DUBUQUE, IOWA By: Jake A. Rios, Mayor Pro Tem ATTEST: Kevin ,b . Firnstahl, City Clerk HITZLER RENTAL, LLC Printed Name F:\USERS\tsteckle\Lindahl\Agreements\HitzlerRental-1902 Central Grant Award Agreement_091719bal.docx 7 DUB �� E 'I�� M �„v,F, . ,., n,T.�a 4o-,y �,,.,� e .�..�.,...__a ro_ �mco��os, ewr�ommcevewwn��oirenor Faou cnnsHawaso�,n isumAN�g CK� oa��. s�mce�x.mis RE Fa4�G�vilyqlra�lmlorl9]2CailrzlAnnue IMaluclpn ilils memo�andumlwwa�0.ctle�ud��slgn rene.Vb�xoMNnd�WN Fapa]eand �dlgn Grzn66itle�b�e0m pml�� �9�2 CailMPnnue, �eleanG�g Ne a[qlPaWn byHltrle�Rmhl LLC. 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Maln �izmaneomre ]<N. 6nndhew 995YokSL Atlac�meMJ 22 EXHIBIT C CERTIFICATE OF COMPLETION 23 CERTIFICATE OF COMPLETION WHEREAS, the City of Dubuque, lowa, a municipal corporation (the "Grantor"), has granted incentives to CSB Consulting Company (the "Grantee"), in accordance with a Development Agreement dated as of [Date] (the "AgreemenY'), certain real property located within the Greater powntown Urban Renewal District of the Grantor and as more particularly described as follows: Lots 1 and 2 of the south 75 feet of the south 2/5ths of Out Lot 437, in the City of Dubuque, lowa, according to the recorded Plat thereof; locally known as 1902 Central Avenue, Dubuque, lowa (the "Development Property"); and WHEREAS, said Agreement incorporated and contained certain covenants and conditions with respect to the rehabilitation of the Development Property, and obligated the Grantee to construct certain Minimum Improvements (as defined therein) in accordance with the Agreement; and WHEREAS, the Grantee has to the present date performed said covenants and conditions insofar as they relate to the construction of the Minimum Improvements in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; and NOW, THEREFORE, pursuant to Section 1 .3 of the Agreement, this is to certify that all covenants and conditions of the Agreement with respect to the obligations of the Grantee, and its successors and assigns, to construct the Minimum Improvements on the Development Property have been completed and performed by the Grantee to the satisfaction of the Grantor and such covenants and conditions are hereby satisfied. The County Recorder of Dubuque County is hereby authorized to accept for recording and to record the filing of this instrument, to be a conclusive determination of the 24 satisfaction of the covenants and conditions as set forth in said Agreement, and that the Agreement shall otherwise remain in full force and effect. (SEAL) CITY OF DUBUQUE, IOWA By: Mike Van Milligen, City Manager STATE OF IOWA ) ) SS COUNTY OFDUBUQUE ) On this _day of , , before me, the undersigned, a Notary Public in and for the State of lowa, personally appeared and acknowledged said execution of the instrument to be his/her voluntary act and deed. Notary Public in and for Dubuque County, lowa 25