Progressive Processing, LLC Third Amendment to Development Agreement_Hearing Copyrighted
November4, 2019
City of Dubuque Public Hearings # 2.
ITEM TITLE: Progressive Processing, LLC ThirdAmendmentto
Development Agreement
SUMMARY: Proof of publication on notice of public hearing to consider
approval of a Third Amendment to the Development
Agreement between the City of Dubuque and Progressive
Processing, LLC to facilitate Progressive Processing's
expansion, and the City Manager recommending approval.
RESOLUTION Approving the Third Amendment to
Development Agreement between the City of Dubuque,
lowaand Progressive Processing, LLC
SUGGESTED DISPOSITION: Suggested Disposition: Receiveand File;Adopt
Resolution(s)
ATTACHMENTS:
Description Type
Progressi� Processing ThirdAmendmentto City Manager Memo
DevelopmentAgreement-MVM Memo
Staff Memo Staff Memo
DevelopmentAgreement Staff Memo
Resolution Resolutions
Proof of Publication Supporting Documentation
Dubuque
THE CITY OF �
uI�AaMca cih
DuB E � �
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Maste iece on the Mississi i Zoo�•zoiz•zois
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TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Approving the Third Amendment to Development Agreement between the
City of Dubuque, lowa, and Progressive Processing, LLC
DATE: October 28, 2019
Economic Development Director Jill Connors recommends City Council approval of the
Third Amendment to the Development Agreement between the City of Dubuque and
Progressive Processing, LLC.
Progressive Processing plans to invest an additional $13,000,000 in machinery and
building improvements to increase production capacity, which will create 58 new jobs.
The 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 Rebates.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
�
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 � 130o n�ain street
D� L L Alll;EflCijly Dubuque,lowa 52001-4763
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: Approving the Third Amendment to Development Agreement
Between the City of Dubuque, lowa and Progressive Processing, LLC
DATE: October 19, 2019
INTRODUCTION
This memorandum presents for City Council consideration and action the attached
resolution approving the Third Amendment to the Development Agreement between the
City of Dubuque (City) and Progressive Processing, LLC.
BACKGROUND
City staff has worked with the Greater Dubuque Development Corporation and
Progressive Processing, LLC on an agreement for the expansion of its business at its
facility in Dubuque Industrial Center West.
The original Development Agreement dated April 21, 2008, required an investment of
approximately $89,000,000 and the creation of 196 jobs within two years, which were to
be maintained for ten years. This requirement has been met.
On March 17, 2014, Progressive Processing, LLC and City executed a Second
Amendment to the Development Agreement to support Hormel's $34,400,000
investment to expand operations and to create an additional 91 jobs.
DISCUSSION
Progressive Processing, LLC now plans to invest an additional $13,000,000 in
machinery and building improvements to increase production capacity. These
improvements will bring the processing of two additional product lines to this facility, as
well as 58 new jobs.
To fully fund this project, Progressive Processing, LLC applied to the State of lowa for
investment tax credits and a sales tax refund of$575,976. This requires a local match
based upon the anticipated increase in the company's property taxes. The expected
increase in the company's local property taxes over five years will be $19,863.
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 respectfully request City Council approval of the attached resolution approving the
Third Amendment to Development Agreement between the City of Dubuque, lowa and
Progressive Processing, LLC.
2
Prepared by: Jill Connors, Economic Development, 1300 Main Street, Dubuque IA 52001, 563 589-4393
Return to: Jill Connors, Economic Development, 1300 Main Street, Dubuque IA 52001, 563 589-4393
RESOLUTION NO. 388-19
APPROVING THE THIRD AMENDMENT TO DEVELOPMENT AGREEMENT
BETWEEN THE CITY OF DUBUQUE, IOWA AND PROGRESSIVE PROCESSING, LLC
WHEREAS, The City of Dubuque (City) and Progressive Processing, LLC (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 by the First
Amendment dated May 1, 2008, and Second Amendment dated March 17, 2014; 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; and
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. That the Third Amendment to Development Agreement between City and
Developer is hereby approved.
Section 2. That the Mayor is hereby authorized and directed to execute the Third
Amendment to Development 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 Third Amendment to Development Agreement as herein
approved.
Passed, approved, and adopted this 4th day of November 2019.
Attest:
in S. Firnstahl, City Clerk
oy D. Buol, Mayor
THIRD AMENDMENT
TO
DEVELOPMENT AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
PROGRESSIVE PROCESSING, LLC
This Third A mendment to Development Agreement, dated for reference purposes
the�� day of 1'/r , 2019, is made and entered into by the City of Dubuque,
Iowa, a munici•ality (City), established pursuant to the Iowa Code and acting under
authorization of Iowa 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
100219bal
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 performance 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
2
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
November 1, 2012
November 1, 2013
November 1, 2014
November 1, 2015
November 1, 2016
November 1, 2017
November 1, 2018
November 1, 2019
November 1, 2020
May 1,2012
May 1, 2013
May 1, 2014
May 1, 2015
May 1, 2016
May 1, 2017
May 1,2018
May 1, 2019
May 1, 2020
May 1, 2021
The foregoing Economic Development Grants will be made pursuant to
Iowa Code Section 403.9 of the Urban Renewal Law in amounts equal to
the actual amount of tax increment revenues collected by City under Iowa
Code Section 403.19 (without regard to any averaging that may otherwise
be utilized under Iowa 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
November 1, 2022
November 1, 2023
November 1, 2024
November 1, 2025
May 1, 2022
May 1, 2023
May 1, 2024
May 1, 2025
May 1, 2026
The foregoing Economic Development Grants will be made pursuant to
3
Iowa Code Section 403.9 of the Urban Renewal Law in amounts equal to
forty percent (40%) of the actual amount of tax increment revenues
collected by City under Iowa Code Section 403.19 (without regard to any
averaging that may otherwise be utilized under Iowa 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 Iowa Code Section 403.9 of the Urban Renewal Law in amounts
equal to one hundred percent (100%) of the actual amount of tax increment
revenues collected by City under Iowa Code Section 403.19 (without regard
to any averaging that may otherwise be utilized under Iowa 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 Iowa 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, Iowa 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, Iowa 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, Iowa, 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, Iowa 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 bears to 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% (250/292 employees) 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.
(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 bears to the total number of positions required to be created
and maintained (353 jobs) by this Section 4.1 times forty percent
(40%). (For example, if Developer has 300 jobs, the semi-annual
Economic Development Grants would be 85% (300/353 employees)
x 40% 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
Bv.
Roy 1/ Buol, Mayor
PROGRESSIVE PROCESSING, LLC
By. drI
/Garyamison, VP & Treasurer
F:\Users\Laserfiche Legal\Hormel Foods -Progressive Packaging\Third AmendmentToDA_100219.docx
6
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_ �
CITY OF DUBUQUE, ! �
IOWA
OFFICIAL;NOTICE �
STATE OF IOWA {SS. N071GEOFAPUBLIC r,
HEARING OF 'THE ;�
DUBUQUE COUNTY CRY COUNCIL oF ;
THE ' CITY OF i
DUBUQUE, IOWA ON �
THE'APPROVAL OF A:I ji
THIRD AMENDMENT.', ;;
TO ,' DEVELOPMENT', !I
CERTIFICATION OF PUBLICATION BEf4NEEN. THE CITY
OF"�UBUQUEf"IUWA ' I
AND�-, PRdG[�F,.SSI�E�'! II
PROGES§ING,-'' LLC. 'j
PROVIDING FOR THE ' �I
IS5UANCE OF ADDI- '
TIONAL URBAN RE•;� '
I, Suzanne Pike, a Billing Clerk for Woodward NEINAL r,nx..�Nce,e-;
MENTBEVENUE GRANT'
Communications, Inc., an Iowa corporation, publisher OBLIGATIONS 'Pue� �
SUANT, T0.THE DE- ;i
of the Telegraph Herald, a newspaper of general UELOP,MENT. pGREE�� �
MENT;,; , � ;
circulation published in the City of Dubuque, County PUBLIC N0710E �S i
hereby given that the I
of Dubuque and State of Iowa; hereby certify that the c�cv,.co�n��i of tne c�ty', �{
of Dubuque, lowa, will',
attached notice was published in said newspaper on the n�oia a;.pubr� nea�;ng �ii
followin dates: on the ;ath day ot
g N,oVember, .2019, ,at,'.
6:00 p;m.,in�the City'
OCtobeT 25 2019 counci�'; chambers at,; w
> > the Historic'.�Fgder,al; ��
Building 350 Wi6th St.,-.
Dubupue lowa; at'
and for which the char e is $48.36 'i
g which meeting tlie Cit`y� �
Council; �propbses "to; i�
� take,actiori to�approve j
a;Third Amendment to�
,-- Development Agree-!, �
Rro ressive prty and j
ment between¢i
g ocess-i
Subscribed to befor me, a Notary Public in and for �ns, ��c, a copy o,
which is now on file at I
Dubuqu CO ty, Iowa, the Office of the City,.; This notice is giVen by
;7 Cl�rk Gitya Hali :50 W;1 order of Yhe City Coun
,� � � 13th St�eet�Dubuque,'� �cil� of .the City„ of '!
lowa, providing for tlie� .Dubuque,'lowa as pro I �
this da Of 20 , issuance of,additional
y , �;uidec�by Chapter 403 ofi_ ���
�'� economic development ;the`Code of lowa?, ; ' 'il
0� gra,nts(Urban Renewal , Cbpies of supportmg '
Tax-Increment Revenue-1 �•,documents;for the pub �
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'�' � � C�rant_Obligation�� de-:, `lic hear]n�s`are�qn�fiile �.
, scribetl`Eherem in order � an the City Clerk's Of- ji
� � ' ' �' � to carry out the i�ur- i �fice; City Hall, 50� W. .
Nota Public in and for Dubu ue Coun TOW2. poses and ob�ectives of 13th St., Dubuque, �
� � �� � the" Urbarl�,Ren'ewal.� lov�ia, �and may;,be ��. ��
Plan for the Dutiuque v.iewed during normal j
�� industrial Cent�n; Eco- � ;working Hours. I+
nomic Develpprrient ` Writfen eomments;re-� ��
Distriat,���consisYing of � ��garding�tHe a6o,ve'pub- �
� the funding of econom- ' ,�lic hearirjgs� rnay�be �
ic development grants `submittetl.to the City �
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^ � 52q01 on or before I �
of the Urban Renewal � said time of putilic '
QW MyGo�nini5�ionL.K�7.� .�,,, Plan for the Dubuque i hearing. At said time
Industrial Center'Eco- , and place:of,.public,;� I�
nomic Development hearings all interested : �
District.The additional citizens and parties i �
amounY of the Urban � will be given an oppor ,i VI.
ReneuvalTaxlncrement f iunity fo be lieard"for,`i �j
Reuenue:Grant Obiiga- � or against,said propos-,j j!
tions shall,not exceed al. �
� $198b3. _ , Individuals with'limit � �
At tlie meeting,;the I ed English profici0ncy, �
� City ,Council will� re=�i �uision,, heanng�, ,�br_� �
ceive oral and written speech' impairrnent5`�
objections from any i requiring special as'sis-.,
resitlent 'or property tance, shquld contact i
owner of=said City to the,City.Clerk's Office'�
the above action.After at(563y 589-4100,TbD'�
all objections have i (563)690-6678, cty. '
� beell r2CCived 3YId Con=I clerkC�cityofdubuque:org ; H
sidered,the City Coun-1 as soon as feasible.'in- ' Po
cil may'af this meeting dividuals;with deaf or' �
or at any ad�ournment hard of-hearing indi-
thereof,authonze such vitluals can use Relay,
issuance of the addi-' lowa by dialing 711 or I �
tional Urban ReneWal (800)735-2942, "
Tax.increment Revenue,� Published by ortler of 1
� Gran� 'O,bligations'=�or� �the,City°Council given���l �
abandon the proposal. on the 7th day of Octo- �
By or`der`,,af the City ber 2019.
Council 's`di�hearing Kevi,n S.Firnstahl,
and appeals therettom� ' CMC,Gity Clerk �
shall be held in accor- it 10/25``
dance with and gov-
erned by the provisions �,
of Section'403.9 of#he '. �
Code of lowa. �