Progressive Processing, LLC Third Amendment to Development Agreement_Initiate Copyrighted
October 7, 2019
City of Dubuque Items to be set for Public Hearing # 4.
ITEM TITLE: Progressive Processing, LLC ThirdAmendmentto
Development Agreement
SUMMARY: City Manager recommending approval of a Third
Amendment to the DevelopmentAgreement between the
City of Dubuque and Progressive Processing, LLC to
facilitate Progressive Processing's expansion.
RESOLUTION of Intent to considera proposed Third
Amendment to Development Agreement; fixing the date for
a public hearing of the City Council of the City of Dubuque,
lowa on the proposed issuance of Urban Renewal Tax
Increment Revenue Grant Obligations to Progressive
Processing, LLC; and providing for the publication of notice
thereof
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt
Resolution(s), Set Public Hearing for November 4, 2019
ATTACHMENTS:
Description Type
Progressi� Processing ThirdAmendmentto City Manager Memo
DevelopmentAgreement-MVM Memo
Staff Memo Staff Memo
3rdAmendment Supporting Documentation
Notice of Hearing Supporting Documentation
Resolution Setting Public Hearing Resolutions
Dubuque
THE CITY OF �
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TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Third Amendment to Development Agreement between the City of
Dubuque and Progressive Processing, LLC
DATE: October 2, 2019
Economic Development Director Jill Connors recommends City Council approval of a
Third Amendment to the Development Agreement between the City of Dubuque and
Progressive Processing, LLC in order to facilitate their expansion, which will create 58
new jobs, 14 of which would qualify for the lowa Economic Development Authority High
Quality Jobs Incentive Program. The Third Amendment provides an extension of the
Tax Increment Financing rebates in an amount not to exceed $19,863, which will be the
required local match for Progressive Processing's application with the lowa Economic
Development Authority.
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 � so west 13<h street
D� L L Alll;EflCijly Dubuque,lowa 52001-4864
1 I I �I Office(563)589-4393
TTY(563)690-6678
http://www.cityofd u b uq ue.org
2007�2012�2013
Masterpiece on the Mississippi zoi�*zoi9
TO: Michael C. Van Milligen, City Manager
FROM: Jill M. Connors, Economic Development Director
SUBJECT: Resolution Setting a Public Hearing on a Proposed Third
Amendment to Development Agreement Between the City of
Dubuque and Progressive Processing, LLC providing for the
Issuance of Urban Renewal Tax Increment Revenue Grant
Obligations Pursuant to the Development Agreement
DATE: October 2, 2019
INTRODUCTION
This memorandum is a request for the City Council to adopt the attached resolution
setting a public hearing for November 4, 2019 on a proposed Third Amendment to
Development Agreement Between the City of Dubuque and Progressive Processing,
LLC providing for the issuance of Urban Renewal Tax Increment Revenue Grant
Obligations.
BACKGROUND
Progressive Processing, LLC is proposing to expand its Dubuque processing facility to
add capacity in its SPAMO production line. Progressive will invest approximately $13
Million in remodeling and machinery/equipment. Progressive is proposing to create 58
newjobs with this expansion, 14 of which would qualify for the IEDA High Quality Jobs
Incentive Program.
On September 16, 2019 the City Council approved Resolution 342-19 authorizing the
City Manager to submit an application to IEDA for business financial assistance.
DISCUSSION
On September 20, 2019, IEDA committed to an agreement with Progressive for
business financial assistance contingent upon a commitment of the required local
match.
Progressive has also submitted an application to the State of lowa for investment tax
credits and a sales tax refund of$575,976. A local match is required and is based upon
the expected increase in the company's local property taxes, more specifically, 45°k of
the increased property value over five years, which will be $19,863. Providing this
funding to the project, thus making the company eligible for the IEDA business financial
assistance, will require an amendment to the Development Agreement with the City. An
extension of the TIF rebates provided in the Development Agreement, in an amount not
to exceed $19,863 is necessary to provide this matching funding.
The proposed Third Amendment to Development Agreement provides for city
incentives, including Urban Renewal Tax Increment Revenue Grant Obligations, for an
additional $19,863 of Tax Increment Finance (TIF) rebates to encourage the
development of the property. Additional terms and conditions of the development are
included in the attached Third Amendment to Development Agreement.
RECOMMENDATION/ ACTION STEP
I recommend the City Council adopt the attached resolution setting a November 4, 2019
public hearing on the Development Agreement providing for the issuance of Urban
Renewal Tax Increment Revenue Grant Obligations.
Prepared by/Return to: Jill Connors, Economic Development. 50 W. 13th Street, Dubuque IA 52001, 563 589-4393
RESOLUTION NO. 358-19
INTENT TO CONSIDER A PROPOSED THIRD AMENDMENT TO DEVELOPMENT
AGREEMENT; FIXING THE DATE FOR A PUBLIC HEARING OF THE CITY COUNCIL
OF THE CITY OF DUBUQUE, IOWA ON THE PROPOSED ISSUANCE OF URBAN
RENEWAL TAX INCREMENT REVENUE GRANT OBLIGATIONS TO PROGRESSIVE
PROCESSING, LLC; AND PROVIDING FOR THE PUBLICATION OF NOTICE
THEREOF
Whereas, the City of Dubuque, Iowa (City) and Progressive Processing, LLC entered
into a Development Agreement (the Development Agreement) dated for reference
purposes the 21st day of April, 2008, for a processing operation in Dubuque Industrial
Center West in the City of Dubuque which included the issuance of economic development
grants (Urban Renewal Tax Increment Revenue Grant Obligations) to Progressive
Processing, LLC in connection with the foregoing development; and
Whereas, Progressive Processing, LLC intends to expand its processing operation
with an additional investment of $13,000,000.00 in machinery and equipment and building
improvements to its facility and to create an additional fifty-eight (58) full-time jobs in
Dubuque; and
Whereas, City has agreed to provide Progressive Processing, LLC additional
economic development grants in consideration for the expansion of its processing
operation; and
Whereas, City and Progressive Processing, LLC now desire to amend the Development
Agreement as set forth in the Third Amendment to Development Agreement, a copy of which
is now on file at the Office of the City Clerk, City Hall, 50 W. 13th Street, Dubuque, Iowa,
providing for the issuance of additional economic development grants (Urban Renewal Tax
Increment Revenue Grant Obligations) to Progressive Processing, LLC in connection with
the foregoing developments; and
WHEREAS, the City Council finds that it is in the best interests of the City to approve
the Third Amendment to Development Agreement; and
WHEREAS, before the Third Amendment to Development Agreement providing for the
issuance of additional Urban Renewal Tax Increment Revenue Grant Obligations may be
approved, Chapter 403 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 the City to such proposed
action.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. The City Council intends to approve the issuance of additional Urban Renewal
Tax Increment Revenue Grant Obligations pursuant to the proposed Third Amendment to
Development Agreement.
Section 2. The City Clerk is hereby authorized and directed to cause a notice to be
published as prescribed by Iowa Code Section 403.9 of a public hearing on the City's intent
to authorize additional Urban Renewal Tax Increment Revenue Grant Obligations, to be
held on the 4th day of November 2019, at 6:00 o'clock p.m. in the City Council Chambers at
the Historic Federal Building, 350 W. 6th St., Dubuque, Iowa.
Section 3. That the notice of the proposed action shall be in substantially the form
attached hereto.
Passed, approved and adopted this 7th day of October, 2019.
Attest:
Kevin 'Firnstahl, CI
y
lerk
Jake A. Rios, ayor Pro Tem
THIRD AMENDMENT
TO
DEVELOPMENT AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
PROGRESSIVE PROCESSING, LLC
This Third Amendment to Development Agreement, dated for reference purposes
the_day of , 2019, is made and entered into by the City of Dubuque,
lowa, a municipality (City), established pursuant to the lowa Code and acting under
authorization of lowa Code Chapter 403, as amended (the Urban Renewal Act), and
Progressive Processing, LLC, a Delaware corporation with its principal place of business
in Austin, Minnesota (Developer), incorrectly named as Progressive Packaging, LLC in
the Development Agreement.
WHEREAS, City and Developer previously entered into a Development
Agreement dated April 21 , 2008, for its processing facility in the City of Dubuque (the
Development Agreement), as amended; and
WHEREAS, Developer has proposed to expand its processing facility and has
agreed to an additional investment of approximately $13 Million in building improvements,
construction and machinery/equipment and to create 58 additional new jobs with this
expansion,
WHEREAS, City and Developer desire to further amend the Development
Agreement as set forth herein.
NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL TERMS AND
COVENANTS CONTAINED HEREIN, CITY AND DEVELOPER AGREE AS FOLLOWS:
Section 1 . Section 2.1 of the Development Agreement is hereby amended to
read as follows:
2.1 Required Minimum Improvements.
(1) City acknowledges that Developer is building a manufacturing facility on the
Property, specifically, a building and certain internal systems thereto, and
including, without limitation, all interior improvements (the Original Minimum
Improvements), all as more particularly depicted and described on the plans and
specifications to be delivered to and approved by City as contemplated in this
Agreement. Developer hereby agrees that the Original Minimum Improvements
shall include a manufacturing facility with approximately three hundred twenty-
seven thousand (327,000) square feet of floor space, along with necessary site
100219ba1
work and equipment as contemplated in this Agreement, at an estimated cost of
approximately $89,000,000.
(2) Developer agrees to make additional Minimum Improvements of
$34,400,000.00 in machinery and building improvements (the Additional Minimum
Improvements).
(3) Developer agrees to make subsequent Minimum Improvements of
$13,000,000.00 in machinery and building improvements (the Subsequent
Minimum Improvements).
(4) The Original Minimum Improvements, the Additional Minimum
Improvements, and the Subsequent Minimum Improvements are referred to herein
collectively as the Minimum Improvements.
Section 2. Section 2.3 of the Development Agreement is hereby amended to
read as follows:
2.3 Timing of Improvements.
(1) Developer hereby agrees that construction of the Original Minimum
Improvements on the Property shall be commenced within three (3) months after
the Closing Date, and shall be substantially completed by December 31 , 2009. For
purposes of this section, "substantial completion" shall mean completion of the site
work and completion of the core and shell of the building, but shall not include
fixtures and equipment, and does not contemplate receipt of a certificate of
occupancy.
(2) The Additional Minimum Improvements shall be substantially completed by
June 1 , 2018.
(3) The Subsequent Minimum Improvements shall be substantially completed by
July 1 , 2020.
(4) The time frames for the pertormance of these obligations shall be
suspended due to unavoidable delays, meaning delays, outside the control of the
party claiming its occurrence in good faith, which are the direct result of strikes,
other labor troubles, unusual shortages of materials or labor, unusually severe or
prolonged bad weather, acts of God, fire or other casualty to the Minimum
Improvements, litigation commenced by third parties which, by injunction or other
similar judicial action or by the exercise of reasonable discretion directly results in
delays, or acts of any federal, state or local government which directly result in
delays. The time for performance of such obligations shall be extended only for
the period of such delay.
Section 3. Section 3.2(1) of the Development Agreement is hereby amended to
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read as follows:
(1) For and in consideration of Developer's obligations hereunder, and in
furtherance of the goals and objectives of the Urban Renewal Plan for the Project
Area and the Urban Renewal Law, City agrees, subject to Developer being in
compliance with the terms of this Agreement as follows:
(a) To make twenty (20) consecutive semi-annual payments (such
payments being referred to collectively as the Economic Development
Grants) to Developer if Developer owns or leases the Property and/or the
Minimum Improvements thereon during the period such tax increment
revenues accrue, as follows:
November 1 , 2011 May 1 , 2012
November 1 , 2012 May 1 , 2013
November 1 , 2013 May 1 , 2014
November 1 , 2014 May 1 , 2015
November 1 , 2015 May 1 , 2016
November 1 , 2016 May 1 , 2017
November 1 , 2017 May 1 , 2018
November 1 , 2018 May 1 , 2019
November 1 , 2019 May 1 , 2020
November 1 , 2020 May 1 , 2021
The foregoing Economic Development Grants will be made pursuant to
lowa Code Section 403.9 of the Urban Renewal Law in amounts equal to
the actual amount of tax increment revenues collected by City under lowa
Code Section 403.19 (without regard to any averaging that may otherwise
be utilized under lowa Code Section 403.19 and excluding any interest that
may accrue thereon prior to payment to Developer) during the preceding
six-month period in respect of the Property and Minimum Improvements
constructed by Developer (the Developer Tax Increments).
(b) To make ten (10) consecutive semi-annual payments (such
payments being referred to collectively as the Economic Development
Grants) to Developer if Developer owns or leases the Property and/or the
Minimum Improvements thereon during the period such tax increment
revenues accrue, as follows:
November 1 , 2021 May 1 , 2022
November 1 , 2022 May 1 , 2023
November 1 , 2023 May 1 , 2024
November 1 , 2024 May 1 , 2025
November 1 , 2025 May 1 , 2026
The foregoing Economic Development Grants will be made pursuant to
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lowa Code Section 403.9 of the Urban Renewal Law in amounts equal to
forty percent (40°k) of the actual amount of tax increment revenues
collected by City under lowa Code Section 403.19 (without regard to any
averaging that may otherwise be utilized under lowa Code Section 403.19
and excluding any interest that may accrue thereon prior to payment to
Developer) during the preceding six-month period in respect of the Property
and Minimum Improvements constructed by Developer (the Developer Tax
Increments).
(c) To make additional consecutive semi-annual payments on
November 1 and on May 1 of subsequent years following the May 1 , 2026
payment (such payments being referred to collectively as the Subsequent
Economic Development Grants) to Developer if Developer owns or leases
the Property and/or the Minimum Improvements thereon during the period
such tax increment revenues accrue, until the additional payments are
equal to but do not exceed $19,863.00.
The foregoing Subsequent Economic Development Grants will be made
pursuant to lowa Code Section 403.9 of the Urban Renewal Law in amounts
equal to one hundred percent (100°k) of the actual amount of tax increment
revenues collected by City under lowa Code Section 403.19 (without regard
to any averaging that may otherwise be utilized under lowa Code Section
403.19 and excluding any interest that may accrue thereon prior to payment
to Developer) during the preceding six-month period in respect of the
Property and Minimum Improvements constructed by Developer (the
Developer Tax Increments).
Developer recognizes and agrees that the Economic Development Grants shall be
paid solely and only from the incremental taxes collected by City in respect to the
Property and Minimum Improvements, which does not include property taxes
collected for the payment of bonds and interest of each taxing district, and taxes
for the regular and voter-approved physical plant and equipment levy, and any
other portion required to be excluded by lowa law, and thus such incremental taxes
will not include all amounts paid by Developer as regular property taxes.
Section 4. Section 4.1 of the Development Agreement is hereby amended to
read as follows:
4.1 Job Creation.
(1) Developer agreed to create one hundred and ninety-six (196) full-
time jobs in Dubuque, lowa prior to January 1 , 2011 , and maintain those
jobs during the Term of this Agreement. It is agreed by the parties that
Developer had eight (8) full time positions in Dubuque, lowa as of March 1 ,
2008. City agrees this requirement has been met.
4
Developer also agreed to create an additional ninety-one (91) full-time jobs
in Dubuque, lowa, prior to June 1 , 2018. City agrees this requirement has
been met.
Developer agrees to create an additional fifty-eight (58) full-time jobs in
Dubuque, lowa prior to January 1 , 2021 , and shall maintain those 58 jobs
during the term of this Agreement.
Developer agrees that the total of 353 full-time jobs agreed to in the
Agreement, as amended, shall be maintained during the term of this
Agreement. In the event that the certificate provided to City under Section
4.2 hereof on January 1 , 2026 discloses that Developer does not as of that
date have at least 353 employees as provided hereinabove, then Developer
shall pay to City, promptly upon written demand therefore, an amount equal
to $ 8,402.97 per job not created or maintained ($2,966,250.00 divided by
353 jobs = $ 8,402.97). The payments provided for herein shall be City's
sole remedy for the failure of Developer to meet the job creation
requirements of this Section 4.1(1).
(2) City retains the right to begin escrowing amounts in anticipation of
Developer's obligation to refund a portion of the Acquisition Grant under
subsection 4.1 (1) above by withholding a portion of the semi-annual
Economic Development Grant payable under Section 4.1 (1) of this
Agreement beginning February 1 , 2025 if the certificate provided to City
under Section 4.2 hereof on January 1 , 2025 discloses that Developer as
of that date has not created and maintained, as of the date of such
certificate, the FTE employees required by Section 4.1 (1). City shall not
withhold any amount in excess of the amount calculated in Section 4.1(1).
In the event that the certificate provided to City under Section 4.2 hereof on
the FTE Date discloses that Developer does have, as of the FTE Date, at
least the required FTE employees as provided in subsection 4.1 (1) of this
Agreement, City shall release to Developer the amount of the Economic
Development Grants withheld under this subsection 4.1 (2) of this
Agreement.
(3) In addition, for the positions that Developer fails to create and
maintain:
(a) For any year from 2018 to and including 2021 , the semi-
annual Economic Development Grants for such year under Section
3.2 shall be reduced by the percentage that the number of such
positions bearsto the total number of positions required to be created
and maintained (292 jobs) by this Section 4.1 . (For example, if
Developer has 250 jobs, the semi-annual Economic Development
Grants would be 85.62°k (250/292 employees) of the available
Developer Tax Increment received by City). The reduction of the
5
semi-annual Economic Development Grants shall be City's sole
remedy for the failure of Developer to meet the job creation
requirements of Section 4.1 (1) for such years.
(b) For any year from 2022 to and including 2026, the semi-
annual Economic Development Grants for such year under Section
3.2 shall be reduced by the percentage that the number of such
positions bearsto the total number of positions required to be created
and maintained (353 jobs) by this Section 4.1 times forty percent
(40°k). (For example, if Developer has 300 jobs, the semi-annual
Economic Development Grants would be 85°k (300/353 employees)
x 40°k of the available Developer Tax Increment received by City).
The reduction of the semi-annual Economic Development Grants
shall be City's sole remedy for the failure of Developer to meet the
job creation requirements of Section 4.1 (1) for such years.
Section 5. Section 6.3 is amended to read as follows:
6.3. Termination Date. This Agreement and the rights and obligations of the
parties hereunder shall terminate on the day after the last payment required by
Section 3.1 (2)(c).
Section 6. Except as modified herein, the Development Agreement shall remain
in full force and effect.
CITY OF DUBUQUE, IOWA PROGRESSIVE PROCESSING, LLC
By: By:
Roy D. Buol, Mayor Gary Jamison, VP & Treasurer
F:\Users\Laserfche Legal\Hormel Foods-Progressive Packaging\Third AmendmentToDA_100219.docx
6
NOTICE OF A PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA ON THE APPROVAL OF A THIRD AMENDMENT TO
DEVELOPMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND PROGRESSIVE
PROCESSING, LLC. PROVIDING FOR THE ISSUANCE OF ADDITIONAL URBAN
RENEWAL TAX INCREMENT REVENUE GRANT OBLIGATIONS PURSUANT TO THE
DEVELOPMENT AGREEMENT
PUBLIC NOTICE is hereby given that the City Council of the City of Dubuque,
lowa, will hold a public hearing on the 4�h day of November, 2019, at 6:00 p.m.
in the City Council Chambers at the Historic Federal Building, 350 W. 6th St.,
Dubuque, lowa, at which meeting the City Council proposes to take action to
approve a Third Amendment to Development Agreement between City and
Progressive Processing, LLC, a copy of which is now on file at the Office of the
City Clerk, City Hall, 50 W. 13�h Street, Dubuque, lowa, providing for the
issuance of additional economic development grants (Urban Renewal Tax
Increment Revenue Grant Obligations) described therein in order to carry out
the purposes and objectives of the Urban Renewal Plan for the Dubuque
Industrial Center Economic Development District, consisting of the funding of
economic development grants for Progressive Processing, LLC, under the
terms and conditions of the Urban Renewal Plan for the Dubuque Industrial
Center Economic Development District. The additional amount of the Urban
Renewal Tax Increment Revenue Grant Obligations shall not exceed $19,863.
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,
authorize such issuance of the additional Urban Renewal Tax Increment Revenue Grant
Obligations or 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 lowa.
This notice is given by order of the City Council of the City of Dubuque, lowa, as provided
by Chapter 403 of the Code of lowa.
Dated this 7�h day of October 2019.
Kevin S. Firnstahl
City Clerk of Dubuque, lowa