Vessel Systems Expansion DICW_Development AgreementMEMORANDUM
May 23, 2003
TO:The Honorable Mayor and City Council Members
FROM:Michael C. Van Milligen, City Manager
SUBJECT:Approval of Development Agreement with Vessel Systems, Inc. for the
Sale and Development of Property in the Dubuque Industrial Center West
Economic DevelOpment Director Bill Baum recommends City Council approval of a
Development Ag~"eement with Vessel Systems, Inc. for the sale and development of
property in the DUbuque. Industrial. Center West.th The company plans to relocate its
current manufacturing operations from East 7 Street, where they lease space from
Morrison Brotherls. The key elements of the agreement include:
1) The purchase price for the 4.91 acres is $191,490 and represents a 50% discount on
the land value.
2) The property will be conveyed by Special Warranty Deed that allows a reversion of
the property to the City if the company does not perform in the construction of the
Minimum Improvements (building and site construction) within a prescribed
timeframe. Construction is anticipated to begin immediately after closing and be
complete before the end of the year.
3) The comp any must construct a building of not less than 31,000 square feet costing
not less th an $1 million.
4) The comp any must retain 24 existing jobs and create 25 new jobs within the first 36
months of operation. The 49 jobs must be retained for 2 additional years after the
initial 36 n onths. The average hourly wage for new jobs will be $13.85/hour, with
new Jobs r anging from $11.1 O/hour to $14.25/hour and several salaried positions in
the $25-32,000/year range. The company also provides health and dental insurance
benefits meeting State CEBA requirements.
5) An Economic Development Grant not to exceed $140,000 is also provided to the
company. This is an up-front TIF grant to be repaid over a 10-year period by the
new taxesI generated by the property.
Vessel Systemsi in operation locally for 10 years, has outgrown its older, leased facility.
A new facility, specifically designed for their large-scale production operation, will
provide a more efficient layout and better utilization of space. Energy efficiencies and
reduced production schedules will increase the company's bottom line. The company
currently operates one shift but could accommodate a second shift in the new facility.
Michael C. Van Milligen
I concur with the recommendation and respectfully request Mayor and City Council
approval.
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
William Baum, Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
May 22, 2003
TO:Michael Van Milligen, City Manager
FROM:William Baum, Economic Development Director
SUBJECT:Approval of Development Agreement with Vessel Systems, Inc. for the
Sale and Development of Property in the Dubuque Industrial Center
West
INTRODUCTION
This memorandum presents for City Council consideration a Resolution approving the
Development Agreement for the disposition of Lots 7 and 8 Dubuque Industrial Center West
2na Addition by Special Warranty Deed to Vessel Systems, Inc. A public hearing on the
disposition of this property has been set for June 2, 2003.
BACKGROUND
On May 19, 2003, the City Council was presented with the attached memorandum
recommending that a public hearing be set for June 2nd on the proposed disposition of the
above-described property to Vessel Systems, Inc. The Council received the memorandum
and set the matter for hearing.
DISCUSSION
Attached to this memorandum is a resolution that approves a Development Agreement with
Vessel Systems, Inc. and authorizes execution of the Agreement. The company plans to
relocate their operation and create 25 new jobs in the City's west-side industrial park. The
company is currently occupying leased space on East 7th Street.
The Development Agreement establishes the terms of the sale of the Dubuque Industrial
Center West property. The key elements of the agreement include the following:
1)The purchase price for the 4.91 acres is $191,490 and represents a 50% discount on
the land value.
2)The property will be conveyed by Special Warranty Deed that allows a reversion of
the property to the City if the company does not perform in the construction of the
Minimum Improvements (building and site construction) within a prescribed
timeframe. Construction is anticipated to begin immediately after closing and be
complete before the end of the year.
3)The company must construct a building of not less than 31,000 square feet costing
not less than $1 million.
4) The company must retain 24 existing jobs and create 25 new jobs within the first 36
months of operation. The 49 jobs must be retained for 2 additional years after the
initial 36 months. The average hourly wage for new jobs will be $13.85/hour, with
new jobs ranging from $11.10/hour to $14.25/hour and several salaried positions in
the $25-32,000/year range. The company also provides health and dental insurance
benefits meeting State CEBA requirements.
5)An Economic Development Grant not to exceed $140,000 is also provided to the
company. This is an up-front TIF grant to be repaid over a 10-year period by the
new taxes generated by the property.
Additional terms and conditions of the disposition of the property are included within the
attached Development Agreement.
RECOMMENDATION
I recommend that the City Council approve the Development Agreement with Vessel
Systems, Inc. for the sale and development of property in the Dubuque Industrial Center
West. This action supports the Council's objectives to assist a local business expand its
operations and employment opportunities within the City.
ACTION STEP
The action step for the City Council is to adopt the attached Resolution.
F:\USERS~Pmyhre\WPDOCS\LOANDOC\vessels\final.dispo,rnemo.r[f
Prepared by: Pamela Myhre City Hall, 50 W. 13th Street Dubuque, IA 52001
RESOLUTION NO, 191-03
563-589-4213
RESOLUTION APPROVING A DEVELOPMENT AGREEMENT PROVIDING FOR
THE SALE AND PRIVATE DEVELOPMENT OF LOTS 7 AND 8 DUBUQUE
INDUSTRIAL CENTER WEST 2ND ADDITION IN THE CITY OF DUBUQUE, IOWA,
TO VESSEL SYSTEMS, INC.
Whereas, this Council, by Resolution No. 166 - 03 dated May 19, 2003, declared its intent to
enter nto a Deve opment Agreement with Vessel Syst.ems, Inc. for the sale and development of
Lots 7 and 8 of the Dubuque Industrial Center West 2"° Addition in the Cry of Dubuque, Iowa, as
shown on the attached plat (the Property); and
Whereas, pursuant to published notice, a public headng was held on the proposed
dis. position on June 2, 2003, at 6:30 p.m. at the Carnegie-Stout Public Library Auditorium, 360 W.
11 "' Street, Dubuque, Iowa; and
Whereas, it is the determination of this Council that approval of the DeveloPment
Agreement for the sale to and development of the property by Vessel Systems, Inc. according to
the terms and conditions set out in the attached Development Agreement is in the public interest of
the citizens of the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the attached Development Agreement by and between the City of Dubuque
and Vessel Systems, Inc. and the sale of the Property to Vessel Systems, Inc. is hereby approved.
Section 2. That the Mayor is hereby authorized and directed to execute the Development
Agreement on behalf of the City and City Clerk is authorized and directed to attest to his signature.
Section 3. That the Mayor and City Clerk are hereby authorized and directed to execute
and deliver a Special Warranty Deed for the Property as provided in the Development Agreement.
Section 4. That the City Manager is authorized to take such actions as are necessary to
comply with the terms of the Development Agreement as herein approved.
Passed, approved and adopted this 2nd day of June, 2003.
Terrance M. Duggan, Mayor
Attest:
Jeanne F. Schneider, City Clerk
F:\USERS~Pmyhre\WPDOCS\LOANDOC\vessels\finaldispo.res.doc
FINAL PLAT
DUBUQUE INDUSTRIAL CENTER WEST 2ND ADDITION
tN THE CITY OF DUBUQUE, IOWA
TOTAL AREA SUR1/EYED: 57.181 ACRES
SURVEYED FOR
MEMORANDUM
May 14, 2003
TO:The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Expansion of Vessel Systems, Inc. at the Dubuque Industrial Center West
City staff has worked with the Greater Dubuque Development Corporation and Vessel
Systems on an expansion at the west-side industrial park. The company plans to
relocate its current manufacturing operations from East 7th Street, where they lease
space from MorriSon Bros. They have committed to retaining their current 24
manufacturing jobs and will add 25 new jobs over the next three years. The company
manufactures large steel pressurized tanks for various industries, including food
processing and water treatment.
The proposed Development Agreement provides for several incentives to encourage
the relocation and expansion. An Acquisition Grant will reduce the asking price of the
land from $78,000 per acre to $39,000 per acre. The company has also requested tax
increment financing (TIF) to assist in their $1.5 million project. This would be in the form
of an up-front TIF grant, estimated to be $140,000, based on the value of the improved
property. AS the company pays its future tax obligation on the new improvements, the
TIF bond is paid offover a 10-year period.
Economic DevelOpment Director Bill Baum recommends that the City Council set a
'public hearing for June 2, 2003, on the disposition of Lots 7 and 8 in Dubuque Industrial
Center West 2nd Addition to Vessel Systems Inc. for the purpose of constructing a
31,000 square foot manufacturing facility.
1 concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachmeni
cc: Barry Lindahl, Corporation Counsel
Cindy steinhauser, Assistant City Manager
William Baum, Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
May 12, 2003
TO:Michael Van Milligen, City Manager
FROM:William Baum, Economic Development Director
SUBJECT:Expansion of Vessel Systems, Inc. at the Dubuque Industrial Center
West
INTRODUCTION
This memoranddm presents for City Council consideration a Resolution initiating
disposition of approximately 5 acres identified on the attached exhibit to Vessel
Systems, Inc., who will be constructing a 31,000 square foot industrial facility in the
Dubuque Industrial Center West. The attached Resolution sets a public hearing on the
disposition of this property for June 2, 2003.
BACKGROUND
City staff has worked with the Greater Dubuque Development Corporation and Vessel
Systems on an expansion at the west-side industrial park. The company plans to
relocate its current manufacturing operations from East 7th Street where they lease
space from Morrison Bros. They have committed to retaining their current 24
manufacturing jobs and will add 25 new jobs over the next 3 years. The company
manufactures large steel pressurized tanks for various industries including food
processing and water treatment.
DISCUSSION
Vessel Systems; in operation locally for 10 years, has outgrown its older, leased facility.
A new facility, specifically designed for their large-scale production operation, will
provide a more efficient layout and better utilization of space. Energy efficiencies and
reduced production schedules will increase the company's bottom line. The company
currently operates one shift but could accommodate a second shift in the new facility.
The proposed Development Agreement provides for several incentives to encourage
the relocation and expansion. An Acquisition Grant will reduce the asking price of the
land from $78,000 per acre to $39,000 per acre. The company has also requested tax
increment financing (-rlF) to assist in their $1.5 million project. This would be in the form
of an up-front TIF grant, estimated to be $140,000 based on the value of the improved
property. As the company pays its future tax obligation on the new improvements, the
TIF bond is paidl off over a 10-year period.
The attached Development Agreement establishes the terms of the sale of the property
to Vessel Systems. The key elements of the agreement include the following:
1) The purchase price is $78,000 per acre for Lots 7 and 8, Dubuque Industrial
Center West 2nd Addition. An Acquisition Grant to the developer reduces the
cost to $39,000 per acre.
2) The property will be conveyed on or before July 15, 2003.
3)The company must construct a building of not less than 31,000 square feet
costing not less than $1,000,000.
4)Vessel Systems Inc. must retain 24 existing jobs and create 25 new jobs within
the first 36 months of operation. The 49 jobs must be retained for 2 additional
years after the initial 36 months. The average hourly wage for new jobs will be
$13.85/hour.
5)The company will receive an up-front TIF grant to be repaid over a 1 O-year
period by the new tax increment generated by the property.
6) The City Will apply for a CEBA loan/forgivable loan on behalf of the company for
$125,000. The City's match for the CEBA will be the Acquisition Grant and TIF
grant proposed in the Development Agreement.
Additional terms and conditions of the disposition of the property are included within the
attached Development Agreement.
RECOMMENDATION
I recommend that the City Council set forpublic hearing the disposition of Lots 7 and 8
in the Dubuque Industrial Center West 2na Addition to Vessel Systems, Inc. for the
purpose of constructing a 31,000 square foot manufacturing facility. This action
supports the Council's objectives to assist a local business expand its operations and
create new jobs.
ACTION STEP
The action step for the City Council is to adopt the attached Resolution.
attachments
F:\USERS~Pmyhre\wpDOcs\LOANDOC\vessels~dlspo.mem.doc
RESOLUTION NO.
RESOLUTION OF INTENT TO DISPOSE OF LOTS 7 AND 8 IN THE
DUBUQUE INDUSTRIAL CENTER WEST 2ND ADDITION BY SALE TO
VESSEL SYSTEMS, INC.
WHEREAS, the City of Dubuque, Iowa (City) is the owner of Lots 7 and 8 in the
Dubuque Industrial Center West 2nd Addition (the Property), as shown on the Exhibit
attached hereto consisting of approximately 5 acres, more or less; and
WHEREAS, City and Vessel Systems, Inc. have entered into a Development
Agreement, subject to the approval of the City Council, a copy of which is on file at the
Office of the City Clerk, City Hall, 50 W. 13th Street, Dubuque, Iowa pursuant to which
City will sell the Property to Vessel Systems, Inc.; and
WHEREAS, the City Council has tentatively determined that it would be in the
best interests of the City to approve the Development Agreement, including conveyance
of the Property to Vessel Systems, Inc.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1 ~ The City of Dubuque intends to dispose of its interest in the foregoing-
described Propelrty to Vessel Systems, Inc:
Section 2~ The City Clerk is hereby authorized and directed to cause this
Resolution and a notice to be published as prescribed by Iowa Code Section 364.7 of a
public hearing on City's intent to dispose of the foregoing-described Property, to be held
' on the 2nd day of June 2003 at 6:30 p.m. at the Carnegie-Stout Public Library
Auditorium, 360 W. 11th Street, Dubuque, Iowa.
Passed, approved and adopted this 19th day of May 2003.
ATTEST:
Jeanne F. Schneider
City Clerk
F:\USERS~Prnyhre\WPDOCS%OANDOC\vesseis~dispo.res.doc
Terrance M. Duggan
Mayor
I�WA
OFFICIAL NOTICE
NOTICE is hereby giVen
that the City ObUnbilof
-
Dubuque,lOwa, will con-
duct a .06b.liahearing at a
Meetingto ,cornenehce; at
6:30_120., On the 2nd day
of June, 2003, in the Public
Library Auditorium, 360
West llth. to: consider
disposing of the • City'S,
interest in tots 7:and 8 in
Dubuque Induitrial Center
West 2nd Addition to
vessel Systems,
(Copy •:' :„of supporting
documents are on fife in
the City. Clerk's Office and
:may be viewed during
working hours.)
Written Comments re-
garding disposal of Said'
property may be submit-
tedt to' the City, , Clerk's
Offibe on or before time of
'public hearing.
At said time and place of
public hearing, ;all inter-
ested citizen's and ,parties
Will be given an opportu-
nity ,to be heard for or ,
; against disposing of said
property. hearing
Any r; ?Visual; or r
impaired persons needing
special assistance " or:
perSons, with special ac-
ceesibility:. :needs should
contact the - City Clerk's;
Office at (563) 5894120 or
TDD ',(563) 69046676 • at:
least Ma hours Prior:to:The •
Published by order or the
City Council given on the
19th day of May, 2002. '
/s/J9dtine F. Schneider,
CMG, City Clerk
it 5/23
STATE OF IOWA {SS:
DUBUQUE COUNTY
CERTIFICATION OF PUBLICATION
I, Sherri A. Yutzy, a Billing Clerk for Woodward Communications, Inc., an Iowa
corporation, publisher of the Telegraph Herald,a newspaper of general circulation
published in the City of Dubuque, County of Dubuque and State of Iowa; hereby
certify that the attached notice was published in said newspaper on the following
dates: May 23, 2003, and for which the charge is $12.05.
Subscribed to before]. e, a Notary Public in and for Dubuque County, Iowa,
,20 o .
this (23,42 _ day of
Notary Public in and for Dubuque County, Iowa.
K. WESTERMEYER
r
o- mission Number 154885
16
tly Comm. Exp. FEB. 1, 2005
DEVELOPMENT AGREEMENT
AGREEMENT, made on or as of the "042
day of , 2003 ("Effective
Date"), by and between the City of Dubuque, Iowa, a municipality ("City"), established
pursuant to the Code of Iowa of the State of Iowa and acting under authorization of
Chapter 403 of the Code of Iowa, as amended ("Urban Renewal Act"), Vessel Systems,
Inc. an Iowa corporation with its principal place of business at Dubuque, Iowa
("Developer").
WITNESSETH:
WHEREAS, in furtherance of the objectives of the Urban Renewal Act, City has
undertaken an Urban Renewal project ("Project") to advance the community's ongoing
economic development efforts; and
WHEREAS, Project is located within the Dubuque Industrial Center Economic
Development District ("Project Area"); and
WHEREAS, as of the date of this Agreement there has been prepared and
approved by City an Urban Renewal Plan for the Project Area consisting of the Urban
Renewal Plan for the Dubuque Industrial Center Economic Development District, approved
by City Council of City on May 2, 1988, and as subsequently amended through and
including the date hereof, (as amended, attached hereto as Exhibit A)("Urban Renewal
Plan"); and
WHEREAS, a copy of the Urban Renewal Plan, as constituted on the date of this
Agreement and in the form attached hereto, has been recorded among the land records in
the office of the Recorder of Dubuque County, Iowa; and
WHEREAS, Developer has determined that it requires new manufacturing space to
maintain and expand its operations and employment in the Project Area; and
WHEREAS, Developer has requested that City sell to Developer approximately five
(5) acres, more or less, legally described as Lot 7 and 8 Dubuque Industrial Center West
2"d Addition identified on Exhibit B, attached, in the City of Dubuque, Dubuque County,
Iowa, together with all easements, tenements, hereditaments, and appurtenances
belonging thereto ("Property"), so that Developer may develop said Property, located in the
Project Area, for the construction, use and occupancy of an industrial manufacturing
building with appurtenant uses which the City has determined and represented to
Developer is in accordance with the uses specified in the Urban Renewal Plan and in
accordance with this Agreement; and
WHEREAS, City believes that the development of 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
federal, state and local laws and the requirements under which the Project has been
undertaken and is being assisted.
2
NOW THEREFORE, in consideration of the premises and the mutual obligations of
the parties hereto, each of them does hereby covenant and agree with the other as follows:
SECTION 1. CONVEYANCE OF PROPERTY TO DEVELOPER
1.1 Purchase Price. The purchase price for Property ("Purchase Price") shall be the
sum of Seventy -Eight Thousand Dollars ($78,000.00) per acre, which shall be due and
payable by Developer in immediately available funds in favor of City, on or before July 15,
2003, or on such other date as the parties may mutually agree ("Closing Date").
1.2 Title to Be Delivered. City agrees to convey good and marketable fee simple title in
Property to Developer subject only to easements, restrictions, conditions and covenants of
record as of the date hereof to the extent not objected to by Developer as set forth in this
Agreement, and to the conditions subsequent set forth in Section 5.3, below:
(1) City, at its sole cost and expense, shall deliver to Developer an abstract of
title to Property continued through the date of this Agreement reflecting
merchantable title in City in conformity with this Agreement, applicable State law.
The abstract shall be delivered together with full copies of any and all
encumbrances and matters of record applicable to the Property, and such abstract
shall become the property of Developer when Purchase Price is paid in full in the
manner as aforesaid.
(2) Developer shall have until time of Closing to render objections to title,
including any easements or other encumbrances not satisfactory to Developer, in
writing to City. Developer agrees, however, to review the Abstract promptly
following Developer's receipt of Developer's land survey and the Abstract and to
promptly provide City with any objections to title identified therein. Nothing herein
shall be deemed to limit Developer's rights to raise new title objections with respect
to matters revealed in any subsequent title examinations and surveys and which
were not identified in the Abstract provided by the City. City shall promptly exercise
its best efforts to have such title objections removed or satisfied and shall advise
Developer of intended action within ten (10) days of such action. If City shall fail to
have such objections removed as of Closing, or any extension thereof consented to
by Developer, Developer may, at its sole discretion, either (a) terminate this
Agreement without any liability on its part, and any sums previously paid to City by
Developer (or paid into escrow for City's benefit) shall be returned to Developer with
interest, or (b) take title subject to such objections. City agrees to use its best
reasonable efforts to promptly satisfy any such objections.
1.3 Rights of Inspection. Testing and Review. Developer, its counsel, accountants,
agents and other representatives, shall have full and continuing access to Property and all
parts thereof, upon reasonable notice to City. Developer and its agent and representatives
shall also have the right to enter upon Property at any time after the execution and delivery
hereof for any purpose whatsoever, including inspecting, surveying, engineering, test
boring, performance of environmental tests, provided that Developer shall hold City
harmless and fully indemnify City against any damage, claim, liability or cause of action
arising from or caused by the actions of Developer, its agents, or representatives upon
3
Property (except for any damage, claim, liability or cause of action arising from conditions
existing prior to any such entry upon the Property), and shall have the further right to make
such inquiries of governmental agencies and utility companies, etc. and to make such
feasibility studies and analyses as it considers appropriate.
1.4 Representations of City. In order to induce Developer to enter into this Agreement
and purchase Property, City hereby represents and warrants to Developer that to the best
of City's knowledge:
(1) No action in condemnation, eminent domain or public taking proceedings are
now pending or contemplated against Property.
(2) No ordinance or hearing is now or before any local governmental body which
either contemplates or authorizes any public improvements or special tax levies, the
cost of which may be assessed against Property.
(3) City has good and marketable fee simple title interest to Property.
(4) There are no notices, orders, suits, judgments or other proceedings relating
to fire, building, zoning, air pollution, health violations or other matters that have not
been corrected. City has notified Developer in writing of any past notices, orders,
suits, judgments or other proceedings relating to fire, building, zoning, air pollution
or health violations as they relate to Property of which it has actual notice.
(5) Property will as of the date of closing be free and clear of all liens, security
interests, and encumbrances.
(6) City has duly obtained all necessary approvals and consents for its
execution, delivery and performance of this Agreement, and that it has full power
and authority to execute, deliver and perform its obligations under this Agreement.
The City's attorney shall issue a legal opinion to Developer at time of closing
confirming the representation contained herein, in form and substance reasonably
satisfactory to Developer.
(7) All utilities necessary for the development and use of the Property as an
industrial manufacturing facility adjoin the Property, and Developer shall have the
right to tie into said utilities
(8) The Property is free and clear of any occupants, and no party has a lease to
or other occupancy or contract right in the Property that shall in anyway be binding
upon the Property or Developer.
(9) City shall exercise its best efforts to cooperate with Developer in the
development process.
(10) City shall exercise its best efforts to resolve any disputes arising during the
development process in a reasonable and prompt fashion.
„
4
(11) With respect to the period during which City has owned or occupied the
Property, and to City's knowledge after reasonable investigation with respect to the
time before City owned or occupied the Property, no person or entity has caused or
permitted materials to be stored, deposited, treated, recycled, or disposed of on,
under or at the Property, which materials, if known to be present, would require
cleanup, removal or some other remedial action under environmental laws.
1.5 Conditions to Closing. The closing of the transaction contemplated by this
Agreement and all the obligations of Developer under this Agreement are subject to
fulfillment, on or before the Closing Date, of the following conditions:
(1) The representations and warranties made by City in Section 1.4 shall be
correct as of the Closing Date with the same force and effect as if such
representations were made at such time. At the closing, City shall deliver a
certificate to that effect.
(2) Title to Property shall be in the condition warranted in Section 1.4.
(3) Developer, in its sole and absolute discretion, having completed and
approved of any inspections done by Developer hereunder.
(4) Developer having obtained any and all necessary governmental approvals,
including without limitations approval of zoning, subdivision or platting which might
be necessary or desirable in connection with the sale and transfer and development
of Property. Any conditions imposed as a part of the zoning, platting or subdivision
must be satisfactory to Developer, in its sole opinion. City shall cooperate with
Developer in attempting to obtain any such approvals and shall execute any
documents necessary for this purpose, provided that City shall bear no expense in
connection therewith. In connection therewith, the City agrees (a) to review all of
Developer's plans and specifications for the project and to either reject or approve
the same in a prompt and timely fashion; (b) to issue a written notification to
Developer, following City's approval of same, indicating that the City has approved
such plans and specifications, and that the same are in compliance with the Urban
Renewal Plan, this Agreement and any other applicable City or affiliated agency
requirements, with the understanding that Developer and its lenders shall have the
right to rely upon the same in proceeding with the project; (c) to identify in writing
within ten (10) working days of submission of said plans and specifications, any and
all permits, approvals and consents that are legally required for the acquisition of
the Property by Developer, and the construction, use and occupancy of the project
with the intent and understanding that Developer and its lenders and attorneys will
rely upon same in establishing their agreement and time frames for construction,
use and occupancy, lending on the project and issuing legal opinions in connection
therewith; and (d) to cooperate fully with Developer to streamline and facilitate the
obtaining of such permits, approvals and consents.
(5) City having completed all required notice to or prior approval, consent or
permission of any federal, state or municipal or local governmental agency, body,
5
board or official to the sale of Property; and consummation of the closing by the City
shall be deemed a representation and warranty that it has obtained the same.
(6) Developer and City shall be in material compliance with all the terms and
provisions of this Agreement.
(7) Developer shall have furnished City with evidence, in a form satisfactory to
City (such as a letter of commitment from a bank or other lending institution), that
Developer has firm financial commitments in an amount sufficient, together with
equity commitments, to complete Minimum Improvements (as defined herein) in
conformance with Construction Plans (as defined herein), or City shall have
received such other evidence of such party's financial ability as in the reasonable
judgment of 'City is required.
(8) Receipt of an opinion of counsel to Developer in the form attached hereto as
Exhibit C. '
(9) Developer shall have the right to terminate this Agreement at anytime prior to
the consummation of the closing on the Closing Date if Developer determines in
their sole discretion that conditions necessary for the successful completion of the
project contemplated herein (the "Project" or "project") have not been satisfied to the
full satisfaction of such party in such party's sole and unfettered discretion. Upon
the giving of notice of termination by such terminating party to the other parties to
this Agreement, this Agreement shall be deemed null and void.
1.6 Closing. The closing of the purchase and sale shall take place on Closing Date.
Exclusive possession of Property shall be delivered on the Closing Date, in its current
condition and in compliance with this Agreement, including City's representations and
warranties regarding the same. Consummation of the Closing shall be deemed an
agreement of the parties to this Agreement that the conditions of closing shall have been
satisfied or waived.
1.7 Citv's Obligations at Closing. At or prior to Closing Date, City shall:
(1) Deliver to Developer City's duly recordable Special Warranty Deed to
Property (in the form attached hereto as Exhibit D ("Deed") conveying to Developer
marketable fee simple title to Property and all rights appurtenant thereto, subject
only to easements, restrictions, conditions and covenants of record as of the date
hereof and not objected to by Developer as set forth in this Agreement, and to the
conditions subsequent set forth in Section 5.3, below.
(2) Deliver to Developer the Abstract of Title to Property.
(3) Deliver to Developer such other documents as may be required by this
Agreement, all in a form satisfactory to Developer.
1.8 Delivery of Purchase Price: Obligations At Closing. At closing, and subject to the
terms, conditions, and provisions hereof and the performance by City of its obligations as
set forth herein, Developer shall pay the Purchase Price to City pursuant to Section 1.1
6
hereof, but subject to Developer receiving a partially offsetting credit pursuant to Section
3.1 below.
1.9 Closing Costs. The following costs and expenses shall be paid in connection with
the closing:
(1) City shall pay:
(a) The transfer fee imposed on the conveyance.
(b) A pro -rata portion of all taxes as provided in Section 1.10.
(c) All special assessments whether levied, pending or assessed.
(d) City's attorney's fees.
(e) City's broker and/or real estate commissions and fees, if any.
(f) The cost of recording the satisfaction of any existing mortgage and
any other document necessary to make title marketable.
(2) Developer shall pay the following costs in connection with the closing:
(a) The documentary fee necessary to record the Deed.
(b) Developer's attorney's fees.
(c) Developer's broker and/or real estate commissions and fees, if any.
(d) A pro -rata portion of all taxes as provided in Section 1.10.
1.10 Real Estate Taxes. City shall pay all real estate taxes for all fiscal years which end
prior to Closing Date. Real estate taxes for the fiscal year in which Closing Date occurs
shall be prorated between City and Developer to Closing Date on the basis of a 365 -day
calendar year. Developer shall pay or cause to be paid all real estate taxes due in
subsequent fiscal years. Any proration of real estate taxes on Property shall be based
upon such taxes for the year currently payable.
SECTION 2. DEVELOPMENT ACTIVITIES
2.1 Required Minimum Improvements. City acknowledges that Developer is building an
industrial manufacturing facility on the Property. Specifically, Developer is charged with
constructing the structure of the building and certain internal systems thereto, and with
finishing the building including, without limitation, all interior improvements ("Minimum
Improvements"); all as more particularly depicted and described on the plans and
specifications to be delivered to and approved by the City as contemplated in this
Agreement. Developer hereby agrees to construct on the Property an industrial
manufacturing facility of not less than thirty-one thousand (31,000) square feet of floor
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space along with necessary sitework as contemplated in this Agreement at a cost of not
less than $1,000,000.
2.2 Plans for Construction of Minimum Improvements. Plans and specifications with
respect to the development of Property and the construction of Minimum Improvements
thereon ("Construction Plans") shall be in conformity with Urban Renewal Plan, this
Agreement, and all applicable State and local laws and regulations, including but not
limited to the Amended and Restated Declaration of Covenants, Conditions, Restrictions,
Reservations, Easements, Liens and Charges, recorded as Instrument No. 7990-02,
records of Dubuque County, Iowa. Developer shall submit to City, for approval by City,
plans, drawings, specifications, and related documents with respect to the improvements to
be constructed by Developer on the Property. All work with respect to the Minimum
Improvements shalrbe in substantial conformity with the Construction Plans approved by
City.
2.3 Timing of Improvements. Developer hereby agrees that construction of Minimum
Improvements on Property shall be commenced within three (3) months after Closing Date,
and shall be substantially completed by March 1, 2004. 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 extraordinary
delays. The time for performance of such obligations shall be extended only for the period
of such delay.
2.4 Certificate of Completion. Promptly following the request of Developer upon
completion of Minimum Improvements, City shall furnish Developer with an appropriate
instrument so certifying. Such certification ("Certificate of Completion") shall be in
recordable form and shall be a conclusive determination of the satisfaction and termination
of the agreements and covenants in this Agreement and in the Deed with respect to the
obligations of Developer to construct Minimum Improvements. The Certificate of
Completion shall waive all rights of revestment of title in City as provided in Section 5.3,
and the Certificate of Completion shall so state.
2.5 Developer's Lender's Cure Rights. The parties agree that if Developer shall fail to
complete the Minimum Improvements as required by this Agreement such that revestment
of title may occur (or such that the City would have the option of exercising its revestment
rights), then Developer's Lender shall have the right, but not the obligation, to complete
such Minimum Improvements.
SECTION 3. CITY PARTICIPATION
3.1 Acquisition Grant to Developer. For and in consideration of Developer's obligations
hereunder to construct Minimum Improvements, City agrees to make an Acquisition Grant
to Developer on the Closing Date, or such other date as the parties shall mutually agree
upon in writing, in the amount of One Hundred Ninety One Thousand Four Hundred Ninety
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Dollars ($191,490). The parties agree that the Acquisition Grant shall be payable in the
( form of a credit favoring Developer at time of Closing with the effect of directly offsetting a
portion of the purchase price obligation of Developer.
3.2 Economic Development Grant to Developer. For and in consideration of
Developer's obligations to undertake the employment commitments as provided herein,
City agrees (subject to the conditions set forth in this Section) to make an Economic
Development Grant to Developer on the Closing Date, or such other date as the parties
shall,mutually agree upon in writing. The Economic Development Grant shall be in the
total amount not to exceed One Hundred Forty Thousand Dollars ($140,000.00) and
shall be payable solely and only from the proceeds of the sale of urban renewal tax
increment revenue bonds or notes by City as described in Section 3.3 hereof, and not
from any other source.
3.3 Issuance of Notes. The Developer acknowledges and agrees that City intends
to finance all of its costs associated with Project (including the funding of the Economic
Development Grant to Developer) through the issuance of urban renewal tax increment
revenue bonds or notes to be issued by City under the provisions of Section 403.9 of
the Iowa Code, the Urban Renewal Act and this Section (such obligation being referred
to herein as Notes). Developer further acknowledges and agrees that it shall identify for
City a purchaser for the Notes. Developer further acknowledges and agrees that the
Notes shall be sold on such terms and conditions, bear such interest rates, mature at
such times and in such amounts as City, reasonably, shall determine to be acceptable
to it and shall be payable from and secured solely and only by a pledge of the tax
increment revenues collected by City in respect of the Property and the Minimum
Improvements located thereon for a period not to exceed ten (10) years or as City shall
otherwise determine. City shall have no obligation to fund any of its obligations
hereunder from any source other than the proceeds of the Notes. City's obligation to
issue the Notes and undertake its obligations hereunder shall be subject in all respects
oto unavoidable delays, the provisions of this Section, and to the satisfaction of all
conditions required (in the judgment of bond counsel for City) by Chapter 403 of the
Code of Iowa, as amended, with respect to the issuance of the Notes.
3.4 Limitations on Financial Undertakings of City. Notwithstanding any other
provisions of this Agreement, City shall have no obligation to Developer under this
Agreement to issue the Notes or to fund the Economic Development Grant to
Developer if any of the following conditions exist:
(1) City is unable to complete the sale of the Notes on such terms and
conditions as it shall deem reasonably acceptable to it in accordance with the
requirements of Section 3.3 above; or
(2) City is entitled (or, with the passage of time or giving of notice, or both,
would be entitled) under Section 5 of this Agreement to exercise any remedies
set forth therein as a result of any Event of Default; or
(3) There has been, or there occurs, a material change in the financing
commitments secured by Developer for construction and operation of Minimum
Improvements during the term hereof, which change(s) make it substantially
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more likely, in the reasonable judgment of City, that Developer will be unable to
fulfill its covenants and obligations under this Agreement.
3.5 Use of Tax Increments. Developer recognizes that City intends to utilize the tax
increment revenues collected in respect of Minimum Improvements to pay debt service
including without limitations the principal and accrued interest on the Notes. After the
payment of required debt service, City shall be free to use all tax increment revenues
collected in respect of Minimum Improvements or other properties within Project Area for
any purpose for which the tax increment revenues may lawfully be used pursuant to the
provisions of the Urban Renewal Act, and City shall have no obligation to Developer with
respect to use thereof.
SECTION 4. COVENANTS OF DEVELOPER
4.1 Job Creation. Developer shall maintain its existing twenty-four (24) employees in
Dubuque, Iowa, and shall create or cause to be created not less than twenty-five (25) new
full time equivalent (2080 hours per year) jobs by within three (3) years from the date of this
Agreement, and shall maintain those jobs for two (2) years thereafter. It is agreed by the
parties that Developer has a base employment in Dubuque, Iowa, of twenty-four (24)
existing full time equivalent jobs as of May 19, 2003, and that new job creation will be
calculated by subtracting this amount from Developer's actual total employment in
Dubuque, Iowa as of the dates established in Section 4.2. In the event that any certificate
provided to City under Section 4.2 hereof discloses that Developer has not created at least
twenty-five (25) FTE employees as provided hereinabove, Developer shall pay to City,
promptly upon written demand therefor, an amount equal to $3,908.00 per job not created.
4.2 Certification. To assist City in monitoring the performance of Developer hereunder,
three (3) years from the date of this Agreement, and again two (2) years thereafter, a duly
authorized officer of Developer shall certify to City (a) the number of full time equivalent
jobs employed at Property, and (b) to the effect that such officer has re-examined the
terms and provisions of this Agreement and that at the date of such certificate, and during
the preceding twelve (12) months, Developer is not or was not in default in the fulfillment of
any of the terms and conditions of this Agreement and that no Event of Default (or event
which, with the lapse of time or the giving of notice, or both, would become an Event of
Default) is occurring or has occurred as of the date of such certificate or during such
period, or if the signer is aware of any such default, event or Event of Default, said officer
shall disclose in such statement the nature thereof, its period of existence and what action,
if any, has been taken or is proposed to be taken with respect thereto. Such certificate
shall be provided not later than July 1, 2006, and on July 1, 2008.
4.3 Books and Records. Developer shall keep at all times proper books of record and
account in which full, true and correct entries will be made of all dealings and transactions
of or in relation to the business and affairs of Developer in accordance with generally
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accepted accounting principles -consistently applied throughout the period involved, and
Developer shall provide reasonable protection against loss or damage to such books of
record and account.
4.4 Execution of Assessment Agreement. Developer shall agree to, and with City
shall execute, as soon as the plans and specifications for Minimum Improvements are
prepared but no later than Closing Date, an Assessment Agreement substantially in the
form attached hereto as Exhibit E (Assessment Agreement) pursuant to the provisions
of Section 403.6(19) of the Code of Iowa specifying the Assessor's Minimum Actual
Value for Property end Minimum Improvements for calculation of real property taxes.
Specifically, Developer shall agree to a minimum actual value for Property and
Minimum Improvements that will result in a minimum actual value as of January 1, 2004
of not less than One Million Dollars ($1,000,000.00) (such minimum actual value at the
time applicable is herein referred to as the Assessor's Minimum Actual Value). Nothing
in the Assessment Agreement shall limit the discretion of the Assessor to assign an
actual value to Property in excess of such Assessor's Minimum Actual Value nor
prohibit Developer from seeking through the exercise of legal or administrative
remedies a reduction in such actual value for property tax purposes; provided, however,
that Developer shall not seek a reduction of such actual value below Assessor's
Minimum Actual Value in any year so long as Assessment Agreement shall remain in
effect. Assessment Agreement shall remain in effect until July 1, 2016 (the Termination
Date). Assessment Agreement shall be certified by the Assessor for City as provided in
Iowa Code Section 403.6(19) and shall be filed for record in the office of the County
Recorder of Dubuque County, and such filing shall constitute notice to any subsequent
encumbrancer or purchaser of Property (or part thereof), whether voluntary or
involuntary, and such Assessment Agreement shall be binding and enforceable in its
entirety against any such subsequent purchaser or encumbrancer.
4.5 Real Property Taxes. From and after the Closing Date, Developer 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 Property until Developer's obligations have been assumed by
any other person pursuant to the provisions of this Agreement.
4.6 Insurance Reauirements.
(1) Developer will provide and maintain or cause to be maintained at all times
during the process of constructing 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):
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(a) 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
when construction is completed;
(b) Commercial general liability insurance covering the Property and
operations (including operations of subcontractors), completed operations
and contractual liability insurance with limits of liability of not less than
$2,000,000 for each occurrence and in the aggregate (an umbrella or excess
liability policy may be used), bodily injury and property damage; and
(c) Statutory worker's compensation insurance coverage and employer's
liability insurance in the amount of $1,000,000.
(2) Upon completion of construction of Minimum Improvements and prior to the
Termination Date, Developer 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) insurance as follows:
(a) All risk property insurance against loss and/or damage to Minimum
Improvements under an insurance policy written in an amount not less than
the full insurable replacement value of Minimum Improvements. The term
"replacement value" shall mean the actual replacement cost of Minimum
Improvements (excluding foundation and excavation costs and costs of
underground flues, pipes, drains and other uninsurable items) and
equipment, and shall be determined from time to time at the request of City,
but not more frequently than once every three years.
(b) Commercial general liability insurance, in the minimum amount for
each occurrence and in aggregate of $2,000,000.00, bodily injury and
property damage.
(3) All insurance required by this Section shall be taken out and maintained in
responsible insurance companies selected by Developer that are authorized under
the laws of the State to assume the risks covered thereby. Developer will deposit
annually with City certificates of insurance or binders of the respective insurers
stating that such insurance is in force and effect. Unless otherwise provided in this
Section, each policy shall contain a provision that the insurer shall not cancel or
modify it without giving written notice to Developer and City at least thirty (30) days
before the cancellation or modification becomes effective. Developer shall furnish
City evidence satisfactory to City that the policy, has been renewed or replaced by
another policy conforming to the provisions of this Section, or that there is no
necessity therefor under the terms hereof. In lieu of separate policies, Developer
may maintain a single policy, or blanket or umbrella policies, or a combination
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thereof, which provide the total coverage required herein, in which event Developer
shall deposit with City a certificate or certificates of the respective insurers as to the
amount of coverage in force upon Minimum Improvements, provided, however, that
the specific limit shall not be impaired.
(4) Developer agrees to notify City immediately in the case of damage exceeding
$500,000.00 in amount to, or destruction of, Minimum Improvements or any portion
thereof resulting from fire or other casualty. Net proceeds of any such insurance
("Net Proceeds"), shall be paid directly to Developer as its interests may appear. If
the damage oto the Minimum Improvements is sufficiently extensive to cause the
lease for the Property to be terminated, Developer, at its option, may:
(a) Forthwith repair, reconstruct and restore Minimum Improvements 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, Developer will apply
the Net Proceeds of any insurance relating to such damage received by
Developer 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). Developer shall complete the repair,
reconstruction and restoration of Minimum Improvements whether or not the
Net Proceeds of insurance received by Developer for such Purposes are
sufficient; or
(b) Elect not to repair, reconstruct and restore Minimum Improvements.
In this event, Developer shall repay to City the unamortized portion of the
Acquisition Grant made by City to Developer pursuant to the provisions of
section 3.1, above. The "unamortized portion" of the Acquisition Grant shall
be calculated by dividing the total amount of the acquisition grant by one
hundred twenty (120) months, and then multiplying the resulting figure by the
number of months between the date that the damage occurred to the
Property and the 10th anniversary of the Effective Date.
4.7 Preservation of Property. During the term of this Agreement, Developer shall
maintain, preserve and keep, or cause others to maintain, preserve and keep, Minimum
Improvements in good repair and working order, ordinary wear and tear accepted, and
from time to time shall make all necessary repairs, replacements, renewals and additions.
Nothing in this Agreement, however, shall be deemed to alter any agreements between
Developer or any other party including, without limitation, any agreements between the
parties regarding the care and maintenance of the Property.
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4.8 Non -Discrimination. In carrying out the project, Developer shall not discriminate
against any employee or applicant for employment because of race, religion, color, sex,
national origin, age or disability.
4.9 Conflict of Interest. Developer agrees that no member, officer or employee of City,
or its designees or 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, shall have any interest, direct or indirect, in any contract or subcontract, or the
proceeds thereof, for work to be performed in connection with the project, or in any activity,
or benefit therefrom, which is part of this project at any time during or after such person's
tenure. In connection with this obligation, Developer shall have the right to rely upon the
representations of any party with whom it does business and shall not be obligated to
perform any further examination into such party's background.
4.10 Non-transferabilitv. Until such time as Minimum Improvements are complete (as
certified by City under Section 2.4), this Agreement may not be assigned by Developer nor
may Property be transferred by Developer to another party without the prior written consent
of City, which shall not be unreasonably withheld. Thereafter, Developer shall have the
right to assign this Agreement and upon assumption of the Agreement by the assignee,
Developer shall no longer be responsible for its obligations under this Agreement.
4.11 Restrictions on Use. Developer agrees for itself, and its successors and assigns,
and every successor in interest to Property or any part thereof that they, and their
respective successors and assigns, shall:
(1) Devote Property to, and only to and in accordance with, the uses specified in
the Urban Renewal Plan (and the City represents and agrees that use of the
Property as an industrial manufacturing center is in full compliance with the Urban
Renewal Plan) (however, Developer shall not have any liability to the City to the
extent that a successor in interest shall breach this covenant and the City shall seek
enforcement of this covenant directly against the party in breach of same); and
(2) Not discriminate upon the basis of race, religion, color, sex, national origin,
age or disability in the sale, lease, rental, use or occupancy of Property or any
improvements erected or to be erected thereon, or any part thereof (however,
Developer shall not have any liability to the City to the extent that a successor in
interest shall breach this covenant and the City shall seek enforcement of this
covenant directly against the party in breach of same).
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4.12 Release and Indemnification Covenants.
(1) Developer releases City and the governing body members, officers, agents,
servants and employees thereof (hereinafter, for purposes of this Section 4.12, the
"Indemnified Parties") from, covenants and agrees that the Indemnified Parties shall
not be liable for, and agrees to indemnify, defend and hold harmless the
Indemnified Parties against, any loss or damage to property or any injury to or death
of any person occurring at or about or resulting from any defect in Minimum
Improvements.
(2) Except for any gross negligence, willful misrepresentation or any willful or
wanton misconduct or any unlawful act of the Indemnified Parties, Developer agrees
to protect and defend the Indemnified Parties, now or forever, and further agrees to
hold the Indemnified Parties harmless, from any claim, demand, suit, action or other
proceedings whatsoever by any person or entity whatsoever arising or purportedly
arising from (1) any violation of any agreement or condition of this Agreement
(except with respect to any suit, action, demand or other proceeding brought by
Developer against City based on an alleged breach of any representation, warranty
or covenant of City under this Agreement and/or to enforce its rights under this
Agreement) or (2) the acquisition, construction, installation, ownership; and
operation of Minimum Improvements or (3) the condition of Property and any
hazardous substance or environmental contamination located in or on Property,
occurring after Developer takes possession of Property.
(3) The Indemnified Parties shall not be liable to Developer for any damage or
injury to the persons or property of Developer or its officers, agents, servants or
employees or any other person who may be on, in or about Minimum Improvements
due to any act of negligence of any person, other than any act of negligence on the
part of any such Indemnified Party or its officers, agents, servants or employees.
(4) AH covenants, stipulations, promises, agreements and obligations of City
contained herein shall be deemed to be the covenants, stipulations, promises,
agreements and obligations of City, and not of any governing body member, officer,
agent, servant or employee of City in the individual capacity thereof.
(5) The provisions of this Section 4.12 shall survive the termination of this
Agreement.
4.13 Compliance with Laws. Developer will comply with all laws, rules and regulations
relating to its businesses, other than laws, rules and regulations the failure to comply with
which or the sanctions and penalties resulting therefrom, would not have a material
adverse effect on the business, property, operations, financial or otherwise, of Developer.
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SECTION 5. EVENTS OF DEFAULT AND REMEDIES
5.1 Events of Default Defined. The following shall be "Events of Default" under this
Agreement and the term "Event of Default" shall mean, whenever it is used in this
Agreement, any one or more of the following events:
(1) Failure by Developer to pay or cause to be paid, before delinquency, all real
property taxes assessed with respect to Minimum Improvements and Property.
(2) Failure by Developer to cause the construction of Minimum Improvements to
be commenced and completed pursuant to the terms, conditions and limitations of
this Agreement.
(3) Transfer of any interest by Developer of Minimum Improvements in violation
of the provisions of this Agreement prior to the issuance of the final Certificate of
Completion.
(4) Failure by Developer or City to substantially observe or perform any other
material covenant, condition, obligation or agreement on its part to be observed or
performed under this Agreement.
5.2. Remedies on Default by Developer. Whenever any Event of Default referred to in
Section 5.1 of this Agreement 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
Developer (and the holder of any mortgage encumbering any interest in the Property of
which City has been notified of in writing) of the Event of Default, but only if the Event of
Default has not been cured within sixty (60) days following such notice, or if the Event of
Default cannot be cured within sixty (60) days and Developer 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 until it receives
assurances from the defaulting party deemed adequate by City, that the defaulting
party will cure its default and continue its performance under this Agreement;
(2) Until the Closing, City may cancel and rescind this Agreement;
(3) City shall be entitled to recover from the defaulting party the sum of all
amounts expended by City in connection with the funding of the Acquisition Grant to
Developer, and City may take any action, including any legal action it deems
necessary, to recover such amounts from the defaulting party;
(4) City may withhold the Certificate of Completion; or
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(5) The non -defaulting parties may take any action, including legal, equitable or
administrative action, which may appear necessary or desirable to collect any
payments due under this Agreement or to enforce performance and observance of
any obligation, agreement, or covenant under this Agreement.
5.3 Revesting Title in the Citv Upon Happening of Event Subsequent to Conveyance to
Developer. In the event that subsequent to conveyance of Property to Developer by City
and prior to receipt by Developer of the Certificate of Completion, but subject to the terms
of the mortgage granted by Developer to secure a loan obtained by Developer from a
commercial lender or other financial institution to fund the acquisition of Property or
construction of Minimum Improvements, ("First Mortgage") an Event of Default under
Section 5.1 of this Agreement occurs and is not cured within the times specified in Section
5.2, then City shall have the right to re-enter and take possession of Property and any
portion of Minimum Improvements thereon and to terminate (and revest in City pursuant to
the provisions of this Section 5.3 subject only to any superior rights in any holder of the
First Mortgage) the estate conveyed by the City to Developer, it being the intent of this
provision, together with other provisions of this Agreement, that the conveyance of
Property to Developer shall be made upon the condition that (and the Deed shall contain a
condition subsequent to the effect that), in the event of default under Section 5.1 on the
part of Developer and failure on the part of Developer to cure such default within the period
and in the manner stated herein, City may declare a termination in favor of City of the title
and of all Developer's rights and interests in and to Property conveyed to Developer, and
that such title and all rights and interests of Developer, and any assigns or successors in
interests of Developer, and any assigns or successors in interest to and in Property, shall
revert to City (subject to the provisions of Section 5.3 of this Agreement), but only if the
events stated in Section 5.1 of this Agreement have not been cured within the time period
provided above, or, if the events cannot be cured within such time periods, Developer does
not provide assurance to City, reasonably satisfactory to City, that the events will be cured
as soon as reasonably possible. Notwithstanding the foregoing, however, City agrees to
execute a Subordination Agreement in favor of Developer's first mortgage lender, in a form
reasonably acceptable to City and to Developer's first mortgage lender.
5.4. Resale of Reacquired Property: Disposition of Proceeds. Upon the revesting in City
of title to Property as provided in Section 5.3 of this Agreement, City shall, pursuant to its
responsibility under law, use its best efforts, subject to any rights or interests in such
property or resale granted to any holder of a First Mortgage, to resell Property or part
thereof as soon and in such manner as City shall find feasible and consistent with the
objectives of such law and of the Urban Renewal Plan to a qualified and responsible party
or parties (as determined by City in its sole discretion) who will assume the obligation of
making or completing Minimum Improvements or such other improvements in their stead
as shall be satisfactory to City and in accordance with the uses specified for such Property
or part thereof in the Urban Renewal Plan. Subject to any rights or interests in such
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property or proceeds granted to any holder of a First Mortgage upon such resale of
Property the proceeds thereof shall be applied:
(1) First, to pay and discharge the First Mortgage;
(2) Second, to pay the principal and interest on mortgage(s) created on Property,
or any portion thereof, or any improvements thereon, previously acquiesced in by
City pursuant to this Agreement. If more than, one mortgage on the Property, or any
portion thereof, or any improvements thereon, has been previously acquiesced in by
City pursuant to this Agreement and insufficient proceeds of the resale exist to pay
the principal of, and interest on, each such mortgage in full, then such proceeds of
the resale as are available shall be used to pay the principal of and interest on each
such mortgage in their order of priority, or by mutual agreement of all contending
parties including Developer, or by operation of law;
(3) Third, to reimburse City for all allocable costs and expenses incurred by City,
including but not limited to salaries of personnel, in connection with the recapture,
management and resale of property or part thereof (but less any income derived by
City from the property or part thereof in connection with such management); any
payments made or necessary to be made to discharge any encumbrances or liens
(except for mortgage(s) previously acquiesced in by the City) existing on Property or
part thereof at the time of revesting of title thereto in City or to discharge or prevent
from attaching or bring made any subsequent encumbrances or liens due to
obligations, default or acts of Developer, its successors or transferees (except with
respect to such mortgage(s)), any expenditures made or obligations incurred with
respect to the making or completion of Minimum Improvements or any part thereof
on Property or part thereof, and any amounts otherwise owing to City (including
water and sewer charges) by Developer and its successors or transferees; and
(4) Fourth, to reimburse Developer up to the amount equal to (1) the sum of the
Purchase Price paid to City for Property and the cash actually invested by such
party in making any of the Minimum Improvements on Property, less (2) any gains
or income withdrawn or made by such party from this Agreement or Property.
5.5. 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.
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5.6. No Implied Waiver. In the event any agreement contained in this Agreement should
be breached by any party and thereafter waived by any 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.
5.7. Agreement to Pay Attorneys' Fees and Expenses. If any action at law or in equity,
including an action for declaratory relief or arbitration, is brought to enforce or interpret the
provisions of this Agreement, the prevailing party shall be entitled to recover reasonable
attorney's fees and costs of litigation from the other party. Such fees and costs of litigation
may be set by the court in the trial of such action or by the arbitrator, as the case may be,
or may be enforced in a separate action brought for that purpose. Such fees and costs of
litigation shall be in addition to any other relief which may be awarded.
5.8 Remedies on Default by City. If City defaults in the performance of this Agreement,
Developer may take any action, including legal, equitable or administrative action which
may appear necessary or desirable to collect any payments due under this Agreement, to
recover expenses of Developer, or to enforce performance and observance of any
obligation, agreement, or covenant of City under this Agreement. Developer may suspend
their performance under this Agreement until they receive assurances from City, deemed
adequate by Developer, that City will cure its default and continue its performance under
this Agreement.
SECTION 6. GENERAL TERMS AND PROVISIONS
6.1 Notices and Demands. Whenever this Agreement requires or permits any notice or
written request by one party to another, it shall be deemed to have been properly given if
and when delivered in person or three (3) business days after having been deposited in
any U.S. Postal Service and sent by registered or certified mail, postage , prepaid,
addressed as follows:
(1) If to Developer:
Vessel Systems, Inc.
Dubuque, IA 52001
Phone:
Fax:
(2) If to City:
City Manager
50 W. 13th Street
Dubuque, IA 52001
Phone: (563) 589-4110
Fax: (563) 589-4149
19
Or at such other address with respect to either party as that party may, from time to
time designate in writing and forward to the other as provided in this Section.
6.2 Binding Effect. This Agreement shall be binding upon and shall inure to the benefit
of City and Developer and their respective successors and assigns.
6.3 Termination Date. This Agreement and the rights and obligations of the parties
hereunder shall terminate on July 1, 2016 (the "Termination Date").
6.4. Execution Bv, Facsimile. The parties agree that this Agreement may be transmitted
between them by facsimile machine. The parties intend that the faxed signatures
constitute original signatures and that a faxed Agreement containing the signatures
(original or faxed) of all the parties is binding on the parties.
IN WITNESS WHEREOF, City has caused this Agreement to be duly executed in its
name and behalf by its Mayor and attested to by its City Clerk and Developer has caused
this Agreement to be duly executeon or as of the first above written.
CITY OF DUBUQUE, IOWA
By:
Ter nce M. Duggan, May
anne F. Schneider, City Clerk
F:\USERS\Pmyh re\WPDOCS\LOAN DOCivessels\DevAg reed oc
VESSEL SYSTEMS, INC.