Dubuque Initiatives Termination of Development for Roshek Building Copyrighted
December 2, 2019
City of Dubuque Consent Items # 18.
ITEM TITLE: Dubuque Initiatives Termination of Development
Agreement
SUMMARY: City Manager recommending approval of a resolution
terminating the DevelopmentAgreement between the City
of Dubuque and Dubuque Initiatives regarding the
redevelopment of the Roshek Building at 700 Locust
Street.
RESOLUTION Approving the Termination of the
Development Agreement by and Between the City of
Dubuque, lowaand Dubuque Initiatives
SUGGESTED DISPOSITION: Suggested Disposition: Receiveand File;Adopt
Resolution(s)
ATTACHMENTS:
Description Type
Dubuque Initiati�s Termination of De�lopment City Manager Memo
Agreement-MVM Memo
Staff Memo Staff Memo
TerminationAgreement Supporting Documentation
Resolution of Approval 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: Termination of Development Agreement Between the City of Dubuque and
Dubuque Initiatives
DATE: November 26, 2019
Economic Development Director Jill Connors recommends City Council approval of a
resolution terminating the Development Agreement between the City of Dubuque and
Dubuque Initiatives regarding the redevelopment of the Roshek Building at 700 Locust
Street.
Recently, Heartland Financial USA, Inc., and Cottingham & Butler, Inc., both local
companies with a history of rapid expansion, brought a formal proposal to Dubuque
Initiatives to purchase the Roshek Building in order to accommodate this growth. The
two companies have collectively created a new entity, Roshek Property, LLC, which
proposes to acquire the property.
City staff have negotiated a Development Agreement with Heartland Financial USA,
Inc., Cottingham & Butler, Inc., and Roshek Property, LLC. In addition, Dubuque
Initiatives has negotiated a purchase agreement with Roshek Property, LLC for the
purchase of the Roshek Building.
The Development Agreement commits the companies to the addition of jobs and an
investment of approximately $2,850,000 in building improvements. The City has
committed to assigning the remaining TIF rebates to the companies.
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 � 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: Termination of Development Agreement Between the City of Dubuque and
Dubuque Initiatives
DATE: November 22, 2019
INTRODUCTION
The purpose of this memorandum is to request that the City Council adopt a resolution
terminating the Development Agreement between the City of Dubuque and Dubuque
Initiatives regarding the redevelopment of the Roshek Building at 700 Locust Street.
BACKGROUND
On February 17, 2009, the City of Dubuque entered into a Development Agreement with
Dubuque Initiatives for the redevelopment of the Roshek Building at 700 Locust Street.
The purpose of the Development Agreement was to incentivize the redevelopment of
the historic landmark building and promote job creation within the City, in particular the
attraction of 1,300jobs from International Business Machines Corporation (IBM).
The Development Agreement required and provided for the following:
1. Dubuque Initiatives committed to minimum improvements of approximately $39
Million to rehabilitate, construct and improve approximately 255,000 square feet
of office/retail space in the building.
2. Dubuque Initiatives would receive 20 years of Tax Increment Finance (TIF)
rebates, with the last scheduled payment to be made May 1, 2030.
3. The City provided $35,000 in Downtown Rehabilitation Grants to Dubuque
Initiatives to assist with the exterior improvements to the building.
4. The City provided Dubuque Initiatives with a loan guarantee not to exceed
$25,000,000 for financing the minimum improvements.
The redevelopment of the Roshek Building has been completed and the building has
been redeveloped into a thriving commercial property. The initial motivation to improve
the Roshek Building was to welcome and assist with the attraction of 1 ,300 jobs from
IBM onto five floors of the building. IBM met those obligations within the first two years
of occupying the building. Over time the number of jobs in the building from IBM has
slowly decreased. However, the improved building has attracted other employers to the
building, with those numbers more or less off-setting the decreases in the IBM
employee census. The building currently holds 1 ,053 employees.
The loan guarantee from the City was released ahead of schedule, and Dubuque
Initiatives has continued to pay down the remainder of the loan.
DISCUSSION
Recently, Heartland Financial USA, Inc., and Cottingham & Butler, Inc., both local
companies with a history of rapid expansion, brought a formal proposal to Dubuque
Initiatives to purchase the Roshek Building in order to accommodate this growth. The
two companies have collectively created a new entity, Roshek Property, LLC , which
proposes to acquire the property.
City staff have negotiated a Development Agreement with Heartland Financial USA,
Inc., Cottingham & Butler, Inc., and Roshek Property, LLC. In addition, Dubuque
Initiatives has negotiated a purchase agreement with Roshek Property, LLC for the
purchase of the Roshek Building.
The Development Agreement commits the companies to the addition of jobs and an
investment of approximately $2,850,000 in building improvements. The City has
committed to assigning the remaining TIF rebates to the companies.
Based on the property taxes Dubuque Initiatives will be obligated to pay as the owner of
the Roshek Building prior to the sale of the property, the Tax Increment Rebates
scheduled for May 2020 and November 2020 will be preserved for Dubuque Initiatives
in the Termination of Development Agreement. The remainder of the TIF rebates
originally committed in the Development Agreement to Dubuque Initiatives will be
assigned to Roshek Property, LLC in the new Development Agreement by and among
the City, Roshek Property, LLC, Cottingham & Butler, Inc., and Heartland Financial
USA, Inc. to continue to incentivize property investment and job creation.
RECOMMENDATION/ ACTION STEP
I recommend that the City Council adopt the resolution approving the Termination of
Development Agreement between the City of Dubuque and Dubuque Initiatives.
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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. 413-19
APPROVING THE TERMINATION OF THE DEVELOPMENT AGREEMENT BY AND
BETWEEN THE CITY OF DUBUQUE, IOWA AND DUBUQUE INITIATIVES
Whereas, the City of Dubuque and Dubuque Initiatives entered into a Development
Agreement dated for reference purposes the 17th day of February, 2009 (the
Development Agreement) for Initiatives property at 700 Locust Street, legally described
as follows:
A parcel of land marked "Public Square" on the United States Commissioners' Plat
of the Survey of the Town of Dubuque, Iowa and numbered as Lots 141, 142, and
143a, on the various wall maps of the City of Dubuque, Iowa; and, City Lots 143,
144 and 145, in the City of Dubuque, Iowa, according to the plat thereof in Book of
Plats 34, page 353, records of Dubuque County, Iowa, also described as follows:
Part of the United States Commissioners' Government Plat of the Original
Town, now City, of Dubuque, in Dubuque County, Iowa, described as
follows: Beginning at the southwesterly corner of Lot 141, originally
designated as the southwesterly corner of the "Public Square",being also
the intersection of the east line of Locust Street and the north line of West
Seventh Street; thence North 22 degrees 30 minutes West along the east
line of Locust Street to the northwesterly corner of Lot 145, being also the
intersection of the east line of Locust Street and the southerly line of West
Eighth Street; thence northeasterly along the northerly line of Lot 145 to the
northeasterly corner of Lot 145, being also the intersection of the south line
of West Eighth Street and the west line of the thirty foot alley East of Locust
Street; thence southeasterly along the west line of said thirty foot alley to
the southeasterly corner of Lot 141, originally designated as the
southeasterly corner of the "Public Square", being also the intersection of
the west line of the thirty foot alley and the north line of West Seventh Street;
thence South 67 degrees 30 minutes 'West to the point of beginning,
according to the Plat thereof recorded as Instrument No. 1798-77, records
of Dubuque County, Iowa.
; and
Whereas, City and Initiatives now desire to terminate the Development Agreement
on the terms and conditions set forth in the Termination of Development Agreement
Between the City of Dubuque, Iowa and Dubuque Initiatives.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
112619ba1
Section 1. The Termination of Development Agreement Between the City of
Dubuque, Iowa and Dubuque Initiatives is hereby approved.
Section 2. The Mayor is hereby authorized and directed to sign the Termination
of Development Agreement on behalf of the City of Dubuque.
Section 3. The City Manager is authorized to take such actions- as are
necessary to comply with the terms of the Termination of Development Agreement as
herein approved.
Passed, approved and adopted this 2nd day of December, 2019.
Attest:
Trish L. Gleason, Assistant City Clerk
Roy DD: uol, Mayor
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TERMINATION
OF
DEVELOPMENT AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
DUBUQUE INITIATIVES
This Termination Agreement, dated for reference purposes th e, day of °
2019, is made and entered into by and between the City of Dubuque, Iowa (City) and
Dubuque Initiatives (Initiatives).
WHEREAS, City and Initiatives entered into a Development Agreement dated for
reference purposes the 17th day of February, 2009 (the Development Agreement) for
Initiatives property at 700 Locust Street (the Property), legally described as follows:
A parcel of land marked "Public Square" on the United States Commissioners' Plat
of the Survey of the Town of Dubuque, Iowa and numbered as Lots 141, 142, and
143a, on the various wall maps of the City of Dubuque, Iowa; and, City Lots 143,
144 and 145, in the City of Dubuque, Iowa, according to the plat thereof in Book of
Plats 34, page 353, records of Dubuque County, Iowa, also described as follows:
Part of the United States Commissioners' Government Plat of the Original
Town, now City, of Dubuque, in Dubuque County, Iowa, described as
follows: Beginning at the southwesterly corner of Lot 141, originally
designated as the southwesterly corner of the "Public Square", being also
the intersection of the east line of Locust Street and the north line of West
Seventh Street; thence North 22 degrees 30 minutes West along the east
line of Locust Street to the northwesterly corner of Lot 145, being also the
intersection of the east line of Locust Street and the southerly line of West
Eighth Street; thence northeasterly along the northerly line of Lot 145 to the
northeasterly corner of Lot 145, being also the intersection of the south line
of West Eighth Street and the west line of the thirty foot alley East of Locust
Street; thence southeasterly along the west line of said thirty foot alley to
the southeasterly corner of Lot 141, originally designated as the
southeasterly corner of the "Public Square", being also the intersection of
the west line of the thirty foot alley and the north line of West Seventh Street;
thence South 67 degrees 30 minutes West to the point of beginning,
according to the Plat thereof recorded as Instrument No. 1798-77, records
of Dubuque County, Iowa.
; and
WHEREAS, City and Initiatives now desire to terminate the Development
Agreement on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual covenants and agreements set
102919ba1
forth herein, City and Initiatives agree as follows:
Section 1. Section 3(1) of the Development Agreement is amended to read as
follows:
SECTION 3. CITY PARTICIPATION.
3.1. Economic Development Grant to Developer.
(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, to make twenty-one (21) consecutive
semi-annual payments (such payments being referred to collectively as the
Developer Economic Development Grants) to Developer on the applicable
payment dates later described in this Section; provided, however, that the
Developer Economic Development Grants shall terminate upon payment of the
balance of the Minimum Improvement Loan described in Section 3.3, including any
extensions or modifications thereof. The Developer Economic Development
Grants shall be payable as follows:
November 1, 2010
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, 2011
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
pursuant to Iowa Code Section 403.9 of the Urban Renewal Law, in amounts equal
to the portion of the tax increment revenues collected by City described below
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 Developer Minimum Improvements constructed by
Developer (the Developer Tax Increments). For purposes of calculating the
amount of the Developer Economic Development Grants provided in this Section,
the Developer Tax Increments shall be deemed to be equal in amount to a pro rata
share of those tax increment revenues collected by the City in respect of the
increase in the assessed value of the Property other than any part of the Property
leased by Employer above the assessment of January 1, 1967 (On such date the
entire Property was assessed for $567,000.00). The Developer Tax Increments
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shall not include (i) any property taxes collected for the payment of bonds and
interest of each taxing district, (ii) any taxes collected for the regular and voter -
approved physical plant and equipment levy, and (iii) 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. The assessed value of the
Property leased by Employer and the assessed value of the Property other than
the part of the Property leased by Employer on any assessment date shall be
allocated according to the percent that the part of the Property leased by Employer
bears to the total leasable space.
Section 2. Section 3.1 shall survive the termination of this Agreement.
Section 3. This Agreement is subject to and takes effect upon the closing of the
purchase of the Property by Roshek Property, LLC
Section 4. Subject to the foregoing, the Development Agreement is hereby
terminated.
CITY OF DUBUQUE, IOWA
By:
Roy' D
ATTEST:
ol, Mayor
DUBUQUE INITIATIVES
By:
ICU 1 ki.a d I (t V t -2Z (-44 A 12
Printed Name and Title
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