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Downtown Rehabilitation Loans for W. 5th Street and Main Street (Plastic Center)Copyrighted May 18, 2020 City of Dubuque Consent Items # 11. ITEM TITLE: Downtown Rehabilitation Loans for W. 5th Street and Main Street Properties SUMMARY: City Manager recommending approval of a loan agreement between the City of Dubuque and Plastic Center, Inc. for residential and commercial improvements made at 426-428 W. 5th Street and 951-957 Main Street (Betty Jane Block). SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Approve ATTACHMENTS: Description Betty Jane Block Downtown Rehabilitation Loan-MVM Memo Staff Memo Loan Documents Type City Manager Memo Staff Memo Supporting Documentation Masterpiece on the Mississippi Dubuque bitil All-A.aia City 111111 2007.2012.2013 2017*2019 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Betty Jane Block - $300,000 Downtown Rehabilitation Loan Disbursement DATE: May 11, 2020 Economic Development Director Jill Connors recommends City Council approval of a loan agreement between the City of Dubuque and Plastic Center, Inc. for residential and commercial improvements made at 426-428 W. 5th Street and 951-957 Main Street (Betty Jane Block). The Downtown Rehabilitation Loan Program is a revolving loan fund. Due to the Loan Program's success when initially enacted, it was quickly oversubscribed — with several projects agreeing to accept disbursement of the funds at a later date. The project at the addresses listed above were completed between 2013 and 2015. The loan fund now has funds available to disburse the funds committed in the February 7, 2011 Development Agreement with Plastic Center, Inc. The $300,000 loan has a commitment that includes forgiveness of $2,000 for each residential unit created, as well as full time jobs that were created within two years of certificate of completion of the commercial spaces, and maintenance of those jobs for a minimum of three consecutive years. The amount to be forgiven at this time is $30,000 ($22,000 for 11 apartments and $8,000 for 4 jobs at 965 Main). I concur with the recommendation and respectfully request Mayor and City Council approval. Michael 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 Masterpiece on the Mississippi Dubuque bittd AII•America City N• IK: '.I i]7(: I liM7Lil` 1 1p 2007*2012*2013 2017*2019 Economic Development Department 1300 Main Street Dubuque, Iowa 52001-4763 Office (563) 589-4393 TTY (563) 690-6678 http://www.cityofdubuque.org TO: Michael C. Van Milligen, City Manager FROM: Jill M. Connors, Economic Development Director SUBJECT: Betty Jane Block — $300,000 Downtown Rehabilitation Loan Disbursement DATE: May 10, 2020 INTRODUCTION This memorandum presents a loan agreement between the City and Plastic Center, Inc. for residential and commercial improvements made at 426-428 W. 5th Street and 951- 957 Main Street (Betty Jane Block) and asks for your concurrence and eventual signature on the loan agreement. BACKGROUND In a Development Agreement between the City of Dubuque and Plastic Center, Inc. dated February 7, 2011, the City committed to providing — among other incentives — a $300,000 loan. This commitment includes forgiveness of $2,000 for each residential unit created, as well as full time jobs that were created within two years of certificate of completion of the commercial spaces, and maintenance of those jobs for a minimum of three consecutive years. DISCUSSION The Downtown Rehabilitation Loan Program is a revolving loan fund. Due to the Loan Program's success when initially enacted, it was quickly oversubscribed — with several projects agreeing to accept disbursement of the funds at a later date — many of them quite a number of years after the completion of the project. The project at the addresses listed above were completed between 2013 and 2015. The loan fund now has funds available to disburse the funds committed in the Development Agreement. Building Services staff have provided certificates of occupancy for each of the residential and commercial properties. Tony Pfohl of Plastic Center, Inc. has provided job certification forms for the commercial properties. The City will loan three hundred thousand dollars ($300,000) to Plastic Center, Inc. Having conferred with our Legal staff, we agree that the amount to be forgiven at this time is $30,000 ($22,000 for 11 apartments and $8,000 for 4 jobs at 965 Main). Senior Counsel Barry Lindahl has reviewed and approved the contents of the loan documents. The term of the loan is twenty (20) years. Interest on the loan is three percent (3.0%) per annum. Monthly interest payments are due and payable the first sixty (60) months of the loan. Monthly interest and principal payments, amortized over a fifteen -year period, are due and payable beginning the sixty-first (61) month of the loan. The entire balance of the loan, including interest and principal, is due and payable not later than the 240th month of the loan. At the time of the initial disbursement of loan funds, Plastic Center, Inc. will execute the Promissory Note in the form attached hereto as Exhibit A payable to the order of the City in the principal amount of three hundred thousand dollars ($300,000) and the Mortgage, attached as Exhibit B. RECOMMENDATION/ ACTION STEP I recommend entering into the attached loan agreement with Plastic Center, Inc. 2 CITY OF DUBUQUE, IOWA DOWNTOWN REHABILITATION LOAN PROGRAM LOAN AGREEMENT NUMBER: DRLP # 1 - 20 This AGREEMENT, dated as of the /01 day of , 2020, is entered into by and between the CITY OF DUBUQUE, IOWA, a municipal corpora ' n organized and existing under the laws of the State of Iowa (hereinafter referred to as the "City") and Plastic Center, Inc (hereinafter referred to as the "Owner"). WITNESSETH: Whereas, a Development Agreement with Plastic Center, Inc. was approved by the Dubuque City Council on February 7, 2011 by Resolution No. 41-11 to provide a $300,000 Downtown Rehabilitation Loan for the project. Whereas, the Owner's properties of 426-428 W. 5th Street and 951-957 Main Street, Dubuque, Iowa, (hereinafter referred to as the "Buildings") are located within the boundaries of the Greater Downtown Urban Renewal District most recently established by Resolution No. 405-19 on November 18, 2019; and Whereas, the goals and objectives of the Greater Downtown Urban Renewal Plan (the "Plan") provide for the creation of the financial incentives needed to eliminate conditions of blight through a program of voluntary or compulsory repair and rehabilitation of buildings and to retain or create employment and/or housing opportunities within the District; and Whereas, the City desires to assist the Owner in its efforts to bring said Buildings into compliance with local codes and ordinances, to eliminate certain conditions of physical decay, and to retain or create employment and/or housing opportunities within the District; and Whereas, without the assistance of the Loan Program, the Owner would be unable to operate the Buildings to their fullest capacity, thereby threatening local employment and/or housing opportunities. NOW THEREFORE, in consideration of the premises and respective covenants, agreements and representations hereinafter set forth, the parties agree as follows: 1. SOURCE OF FUNDS. City is prepared to provide financial assistance to qualified parties through the use of tax increment financing under Chapter 403 of the Iowa Code, and has allocated funds sufficient to carry out its obligations under this Agreement. 2. LOAN TERMS. City agrees to loan to Owner on the terms and conditions set forth herein the amount of three hundred thousand dollars ($300,000) that shall consist of the Loan Program funds, if and only if such funds are available. Payments shall be based on work completed and expenses encumbered. The term of the loan shall be twenty (20) years. Interest on the loan shall be three percent (3.0%) per annum. Monthly interest payments shall become due and payable the first sixty (60) months of the loan. Monthly interest and principal payments, amortized over a fifteen -year period, shall become due and payable beginning the sixty-first (61) month of the loan. The entire balance of the loan, including interest and principal, shall become due and payable not later than the 240th month of the loan. At the time of the initial disbursement of loan funds to Owner, Owner shall execute the Promissory Note in the form attached hereto as Exhibit A payable to the order of the City in the principal amount of three hundred thousand dollars ($300,000) and the Mortgage, attached as Exhibit B. 1 3. DISBURSEMENT AND USE OF LOAN FUNDS. Loan funds shall be disbursed to Owner by City for Qualifying Project Expenses, defined in Paragraph 27(c), for amounts not in excess of the total sum of $300,000 nor more than ninety percent (90%) of the total project cost. Owner shall furnish to City written requests for disbursement of loan funds. Such request shall be accompanied by a statement of Owner's Qualifying Project Expenses and appropriate documentation of such expenses. It is expressly understood that all funds advanced under this Agreement shall be used by Owner only for the purpose of paying the Qualifying Project Expenses set forth in such written requests. Owner shall substantially complete the Project, defined in Paragraph 27(b), in accordance with the terms of this Agreement, on or before July 31, 2012. City shall not be obligated to pay any funds not drawn by Owner as of said date and any undrawn funds as of such date shall be credited against the balance due on the Promissory Note. 4. SECURITY. The loan shall be secured by at least a Second Mortgage on the Building, a copy of which is attached as Exhibit B. The value of the Building shall at no time be less than the unpaid balance of any First Mortgage plus the unpaid balance of the City's mortgage. 5. AVAILABLE INCENTIVES. Up to the full amount of the loan shall be forgiven by the City as an incentive for the creation of new employment and/or housing opportunities. The amount of the loan to be forgiven shall be determined sixty (60) months from the completion of the improvements and a new amortization schedule shall be prepared. The base employment number to be used to calculate the Employment Incentive has been determined to be zero (0) FTE employees for the Buildings. The amount of the loan forgiven shall be as follows: (a) Two thousand dollars ($2,000) shall be forgiven for each new FTE position created and maintained by the Owner or his/her tenant. (b) To qualify, the Owner must document the following: (1) The job represents a FTE position as defined herein Paragraph 27(d); (2) The job was created between February 20, 2015 and February 20, 2018 for 965 Main Street; between November 14, 2016 and November 14, 2019 for 955 Main Street; and between October 30, 2017 and October 30, 2020 for 951 Main Street; (3) The job has been maintained by the Owner or his/her tenant for a period of not less than thirty-six (36) months; (4) The job is a paid position; and (5) The job has been created by the Owner or another entity located in the Buildings and is for employment in a business located in the Buildings. (c) Two thousand dollars ($2,000) may be forgiven for each new housing unit created. A new housing unit shall be defined as one of the following: (1) The creation of a housing unit where one did not previously exist; or (2) An existing housing unit which has been unlicensed and unoccupied for a period of not Tess than five years. 7. STATUS OF OWNER. Owner represents that it is a an organization duly organized and existing under the laws of the State of Iowa; that it is authorized to borrow under this Agreement, to execute and deliver the note and otherwise perform the obligations of this Agreement; that it has authority and power to own its property and conduct its business as it is currently carried on; that the performance of its obligations under this Agreement and the issuance of any note under it will not conflict with any 2 provision of law, the Articles of Incorporation or the Bylaws of Corporation, or any agreement binding on it. Owner also represents, except as disclosed in writing to City, that it is not a party to any pending or threatened litigation or to any proceeding or action for the assessment or collection of additional taxes, and that it knows of no known contingent liabilities not provided for or disclosed in the financial statement provided City which would affect the ability of the Owner to repay this loan. 8. FINANCIAL CONDITION OF OWNER. Owner has delivered to City a statement of Owner's financial condition as of the date of application for financial assistance which fairly represents the financial condition of Owner as of the date stated, all in accordance with generally accepted accounting principles consistently applied, and that the statements still correctly reflect the financial condition and status of its operations as of the date of this Agreement. 9. TITLE OF OWNER. Subject to the liabilities reflected on Owner's financial statement as well as those incurred in relation to this Project, Owner represents that it has good and marketable title, free of any mortgage, pledge, lien, security interest, encumbrance, or charge to all those assets reflected on the financial statement and to assets since acquired. Taxes not due or payable or otherwise delinquent are excepted. 10. CONDITIONS OF BORROWING. On the date on which any sum is to be borrowed, Owner, in addition to the Note, shall deliver to City such other papers and documents as may be required to comply with the conditions of this Agreement, as counsel for City may reasonably request. Owner shall be required at the Closing Date defined herein Paragraph 27(a) to comply, or establish compliance, as follows: (a) That the representations and warranties of Owner are correct on the Closing Date; (b) That Owner has fully complied with the covenants and agreements to the extent required before the Closing Date; (c) That no default or event which might mature into a default has occurred or continues to the Closing Date; (d) That no litigation or proceeding is pending against Owner which would materially affect the assets of Owner, taking into account the entire assets and overall business of Owner; (e) That there has been no material adverse change in the financial condition of Owner from that shown by the financial statement delivered to City under paragraph 8; f) That no fire or casualty has occurred in any building or to any inventories or property of Owner that might substantially, adversely affect the conduct of its business. 11. SPECIAL CONDITIONS. Owner agrees to comply with the following requirements established by the City for the Loan Program: (a) All exterior work must coincide with the historic character of the building. 12. COVENANTS OF OWNER. Owner covenants that it will: (a) Correct code deficiencies in accordance with all applicable building and fire codes within the scope of the project. (b) Provide for the repair and rehabilitation of the Building in accordance with all applicable building, zoning, fire and housing codes. (c) Substantially complete the Project on or before July 31, 2012. 3 (d) Maintain at all times insurance to the extent and against such hazards and liabilities as are in keeping with the current insurance program of Owner, set forth in Exhibit C attached hereto and entitled "Certificate of Insurance". Said certification shall be renewed on an annual basis and provided to City within thirty (30) days of the anniversary date of this Agreement. (e) Pay when due all taxes, assessments and other liabilities, except those contested in good faith where notice of such contest has been given to the City. (f) (g) Not create or permit to exist any other pledge, security interest, lien or other encumbrance on the security for this Agreement provided in Paragraph 4 above and the Note provided pursuant to this Loan Agreement without written consent of City. Give prompt notice in writing to City of any adverse development, financial or otherwise, which would materially affect its business, properties or affairs, or the ability of Owner to perform its obligations under this Agreement or the Note executed pursuant to the terms of this Agreement. (h) Use loan funds only for purposes authorized herein. (i) Pay all recording and filing fees, mortgage taxes, documentary stamps, and any other taxes payable in connection with this transaction. 13. DEFAULT. Owner shall be in default upon the occurrence of any of the following events: (a) Owner fails to pay any installment of principal or interest on any note (whether to City or any other public or private lender) when due or within thirty (30) days thereafter; (b) Owner becomes insolvent or admits in writing its inability to pay its debts as they mature; or applies for, consents to or acquiesces in the appointment of a trustee or receiver for any of its property; or in the absence of an application for consent or acquiescence, a trustee or receiver is appointed for it or a substantial part of its property and is not discharged within ten (10) days; or it otherwise commits an act of bankruptcy; or any bankruptcy, reorganization, debt arrangement or other proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding is instituted by or against it and if instituted is consented to or acquiesced in by it or remains for ten days undismissed; (c) Owner fails in the performance of any of the terms and conditions of this Agreement and such non-performance continues for ten (10) days after written notice thereof from City or from the holder of a note; (d) Any warranty made by Owner is untrue in any material respect, or any schedule, statement, report, notice or writing furnished by Owner to City is untrue in any material respect on the date as of which the facts set forth are stated or certified, provided any such error is not the result of unintentional errors which are capable of correction without prejudice to the City; (e) Any government board, agency, department, commission or public or private lender takes possession or control of any substantial part of any property of Owner. 14. ACCELERATION AT OPTION OF CITY. If any event of default occurs, City may, after ten days' written notice of default to Owner, declare Note immediately due and payable, at which time all unpaid principal and interest shall immediately become due and payable. City shall promptly advise Owner in writing of any acceleration under this paragraph, but the failure to do so shall not impair the effect of such declaration. 4 15. MAINTENANCE OF RECORDS AND RIGHT TO INSPECT. Owner shall keep and maintain books, records and other documents relating directly to the receipt and disbursement of loan funds; and any duly authorized independent accounting representative of City shall at all reasonable times have access to and the right to inspect, copy, audit and examine all such books and other documents of Owner pertaining to the project until the completion of all close out procedures respecting City's loan and the final settlement and conclusion of all issues arising out of said loan. 16. ADDRESS. Owner's principal business address is: Plastic Center, Inc. Attn: L. Anthony Pfohl 200 Main Street Dubuque, IA 52001 Owner shall promptly give City written notice of any further change in its principal office address. City's address is: City Manager City Hall 50 West 13th Street Dubuque, Iowa 52001 17. LIMITATION OF CITY'S LIABILITY FOR PROJECT ACTIVITIES. City shall not be liable to Owner, or to any party, for the completion of, or the failure to complete, any activities which are part of the Project, except as may be specifically provided in this Agreement or other written agreements between City and Owner or any of Owner's affiliates or subsidiaries. Owner agrees to indemnify, hold harmless and defend City from any such claims. 18. CONFLICT OF INTEREST. Owner certifies that to its knowledge 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 inside information with regard to the Project, has nor shall have any interest, direct or indirect, in any contract or subcontract, or in any activity, or benefit therefrom, which is part of this Project at any time during or for one year after such person's tenure. 19. NONDISCRIMINATION. In carrying out the Project, Owner shall not discriminate against any employee or applicant for employment or tenancy because of race, religion, color, sex, sexual orientation, gender identity, national origin, age or disability. Owner shall post in a conspicuous place, available to employees and applicants for employment, notices to be provided by City setting forth the provisions of this nondiscrimination clause. Owner shall state that all qualified applicants will receive consideration for employment without regard to race, religion, color, sex, sexual orientation, gender identity, national origin, age or disability. 20. DISCLAIMER OF RELATIONSHIPS. Nothing contained in this Agreement between the parties, nor any act of City or Owner shall be deemed or construed by any of the parties, or by any third persons, to create any relationship of third party beneficiary, principal or agent, limited or general partnership, or joint venture. 21. NOTICE. Any notice, if mailed by United States certified mail, shall be deemed given when mailed, postage prepaid, addressed to the other party at its address shown above, or at any other address subsequently designated by either party to the other. 22. SUCCESSORS AND ASSIGNS. All covenants, representations, warranties and agreements herein set forth shall be binding upon Owner, and its legal representatives, successors and 5 assigns. This Agreement may not be assigned by City or Owner, without the express written consent of the other party. 23. LEGALITY. If any provision of this Agreement shall, for any reason,be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, but this Agreement shall be construed as if such invalid or unenforceable provision had never been contained herein. 24. GOVERNING LAW. This Agreement and all rights and duties hereunder, including but not limited to all matters of construction, validity and performance shall be governed by the laws of the State of Iowa. 25. SURVIVAL OF REPRESENTATIONS. All representations or warranties of Owner shall survive the execution and delivery of this Agreement and any note executed and delivered under it, and no -investigation by City nor any closing shall affect the representations or warranties or the right of City to rely on and enforce them. 26. DELAY. No delay on the part of City or the holder of any note in the exercise of any right shall operate as a waiver, nor shall any single or partial exercise of any right preclude other or additional exercise of any right. 27. DEFINITIONS. (a) "Closing Date" shall mean the date on which this Agreement is executed by the parties. (b) "Project" shall mean the rehabilitation project of Owner's properties at 426-428 W. 5th Street and 951-957 Main Street, Dubuque, Iowa, identified in Owner's application for financial assistance. Said application is on file in the office of the Economic Development Department, 50 West 13th Street, Dubuque, Iowa 52001. (c) "Qualifying Project Expenses" shall mean those expenditures or expenses incurred by Owner during and for the Project and identified in the Owner's application for financial assistance, whether paid to third parties or incurred as wage expense, fringe benefit expense or other costs of Owner's employees, agents and contractors. (d) "Full -Time Job Equivalent (FTE)" shall equal a total of forty hours of labor per workweek. Such hours may be accrued by single individuals or divided among two or more individuals. (e) "New housing unit" shall mean either a housing unit created where one did not previously exist, or an existing housing unit which has been unlicensed and unoccupied for a period of not less than five years. Dated this 'day of i / , 2020. CITY OF DUB JQUE, IOWA y��jBuol, Mayor ATTEST: Keg.rnstahl, City Clerk 6 PLASTIC CENTER, INC. By: L. Anttr'ony Pfohl Title Dote G Loan Number: Fund Source: $300,000 City of Dubuque, Iowa PROMISSORY NOTE EXHIBIT A Date: , 2020 DRLP # 1 - 20 Downtown Rehabilitation Loan Program (TIF) FOR VALUE RECEIVED, the undersigned, Plastic Center, Inc. 200 Main Street, Dubuque, Iowa, promises to pay to the order of the City of Dubuque, Iowa, 50 W. 13th Street, Dubuque, Iowa, 52001, or at such place as it may direct, the sum of THREE HUNDRED THOUSAND DOLLARS ($300,000), together with interest at the rate of 3 % per annum, upon the unpaid balance, in monthly interest only payments for the first sixty (60) months of the loan and monthly principal and interest payments, amortized over an additional one hundred - eighty (180) months, beginning in the sixty-first month of the loan, on the 1st day of each month beginning after the final disbursement of the loan proceeds and continuing on the 1st day of each month until paid in full. The entire outstanding principal balance and interest, if not sooner paid, shall be paid in full on the 1st day of the two hundred -fortieth (240) month after final disbursement of the loan proceeds. If a default occurs under this Promissory Note or any of the other agreements between the undersigned and the holder and is not cured within TEN (10) DAYS after written notice to the undersigned, then the holder may, as its right and option, declare immediately due and payable the principal balance of this Promissory Note and interest accrued hereon. The undersigned further agrees to pay all costs of collection, including reasonable attorneys' fees. The City of Dubuque may at any time renew this Promissory Note or extend its maturity date for any period and release any security for, or any party to this Promissory Note, all without notice to or consent of and without releasing any maker, accommodation maker, endorser or guarantor from any liability on the Promissory Note. Presentment or other demand for payment, notice of dishonor and protest are hereby waived by the undersigned and each endorser and guarantor. This Promissory Note is subject to the Loan Agreement of same date by and between the undersigned and the City of Dubuque (including but not limited to a reduction in the principal amount of this Promissory Note as authorized by paragraph 5 of said Loan Agreement) and any default under said Loan Agreement is a default under this Promissory Note. Signed, Plastic Center, Inc. -C164 6 L. Anthony PLO' Title EXHIBIT B Prepared by: Jill M. Connors City Hall 50 W. 13th Street Dubuque, Iowa 52001 Phone: 563-583-4213 Return to: same MORTGAGE THIS MORTGAGE is made between Plastic Center, Inc ("Mortgagor") and City of Dubuque, Iowa ("Mortgagee"). [ ] If this box is checked, this Mortgage is a Purchase Money Mortgage as defined in the Iowa Code. 1. Grant of Mortgage and Security Interest. Mortgagor hereby sell, convey and mortgage unto Mortgagee, and grant a security interest to Mortgagee in the following described property: a. Land and Buildings. All of Mortgagors' right, title and interest in and to the following described real estate situated in Dubuque County, Iowa (the "Land"); TRACT I S 1/2 OF CITY LOT 47, in the City of Dubuque, Iowa, according to the United States Commissioners' Map of the Town of Dubuque, Iowa. TRACT II N 1/2 CITY LOT 48 in the Dubuque, Iowa, according to the United States Commissioners' Map of the Survey of said Town of Dubuque. TRACT III S 1/2 OF CITY LOT 48in the City of Dubuque, Iowa, according to the United States Commissioners' Map of the Survey of the Town of Dubuque, Iowa. TRACT IV E 62.5' OF W 170' OF CITY LOT 614in City of Dubuque, Iowa, according to the United States Commissioners Map thereof. b. Personal Property. All fixtures and other personal property integrally belonging to, or hereafter becoming an integral part of the Land or Buildings, whether attached or detached, including but not limited to, light fixtures, shades, rods, blinds, Venetian blinds, awnings, storm windows, screens, linoleum, water softeners, automatic heating and air- conditioning equipment and all proceeds, products, increase, issue, accessions, attachments, accessories, parts, additions, repairs. replacements and substitutes of, to, and for the foregoing (the "Personal Property"). c. Revenues and Income. All rents, issues, profits, leases, condemnation awards and insurance proceeds now or hereafter arising from the ownership, occupancy or use of the Land, Buildings and Personal Property, or any part thereof (the "Revenues and Income"). TO HAVE AND TO HOLD the Land, Buildings, Personal Property and Revenues and Income (collectively called the "Mortgaged Property"), together with all privileges, hereditaments thereunto now or hereafter belonging, or in any way appertaining and the products and proceeds thereof, unto Mortgagee, its successors and assigns. 2. Obligations. This Mortgage secures the following (hereinafter collectively referred to as the "Obligations"): a. The payment of the loan made by Mortgagee to Plastic Center, Inc evidenced by a promissory note dated 2019 in the principal amount of $300,000.00, any renewals, extensions, modifications or refinancing thereof and any promissory notes issued in substitution therefor; and b. All other obligations of Mortgagors to Mortgagee, now existing or hereafter arising, whether direct or indirect, contingent or absolute and whether as maker or surety, including, but not limited to, future advances and amounts advanced and expenses incurred by Mortgagee pursuant to this Mortgage. 3. Representations and Warranties of Mortgagors. Mortgagors represent, warrant and covenant to Mortgagee that (i) Mortgagors hold clear title to the Mortgaged Property and title in fee simple in the Land; (ii) Mortgagors have the right, power and authority to execute this Mortgage and to mortgage, and grant a security interest in the Mortgaged Property; (iii) the Mortgaged Property is free and clear of all liens and encumbrances, except for real estate taxes not yet delinquent and except as otherwise stated in subparagraph la. herein; (iv) Mortgagors will warrant and defend title to the Mortgaged Property and the lien and priority of this Mortgage against all claims and demands of all persons, whether now existing or hereafter arising; and (v) all buildings and improvements now or hereafter located on the Land are, or will be, located entirely within the boundaries of the Land. 4. Payment and Performance of the Obligations. Mortgagors will pay all amounts payable under the Obligations in accordance with the terms of the Obligations when and as due and will timely perform all other obligations of Mortgagors under the Obligations. The provisions of the Obligations are hereby incorporated by reference into this Mortgage as if fully set forth herein. 5. Taxes. Mortgagors shall pay each installment of all taxes and special assessments of every kind, now or hereafter levied against the Mortgaged Property before the same become delinquent, without notice or demand, and shall deliver to Mortgagee proof of such payment within fifteen (15) days after the date in which such tax or assessment becomes delinquent. 6. Liens. Mortgagors shall not create, incur or suffer to exist any lien, encumbrance, security interest or charge on the Mortgaged Property or any part thereof which might or could be held to be equal or prior to the lien of this Mortgage, other than the lien of current real estate taxes and installments of special assessments with respect to which no penalty is yet payable. Mortgagors shall pay, when due, the claims of all persons supplying labor or materials to or in connection with the Mortgaged Property. 7. Compliance with Laws. Mortgagors shall comply with all present and future statutes, laws, rules, orders, regulations and ordinances affecting the Mortgaged Property, any part thereof or the use thereof. 8. Permitted Contests. Mortgagors shall not be required to (i) pay any tax, assessment or other charge referred to in paragraph 5 hereof, (ii) discharge or remove any lien, encumbrance or charge referred to in paragraph 6 hereof, or (iii) comply with any statute, law, rule, regulation or ordinance referred to in paragraph 7 hereof, so long as mortgagors shall contest, in good faith, the existence, amount or the validity thereof, the amount of damages caused thereby or the extent of Mortgagors' liability therefor, by appropriate proceedings which shall operate during the pendency thereof to prevent (A) the collection of, or other realization upon the tax, assessment, charge or lien, encumbrances or charge so contested, (B) the sale, forfeiture or loss of the Mortgaged Property or any part thereof, and (C) any interference with the use or occupancy of the Mortgaged Property or any part thereof. Mortgagors shall give prompt written notice to Mortgagee of the commencement of any contest referred to in this paragraph 8. 9. Care of Property. Mortgagors shall take good care of the Mortgaged Property; shall keep the Buildings and Personal Property now or later placed upon the Mortgaged Property in good and reasonable repair and shall not injure, destroy or remove either the Buildings or Personal Property during the term of this Mortgage. Mortgagors shall not make any material alteration to the Mortgaged Property without the prior written consent of Mortgagee. 10. Insurance. a. Risks to be Insured. Mortgagors, at their sole cost and expense, shall maintain insurance on the Buildings and other improvements now existing or hereafter erected on the Land and on the Personal Property included in the Mortgaged Property against loss by fire, extended coverage perils and such other hazards as Mortgagee may from time to time require, such insurance to have a "Replacement Cost" endorsement attached thereto, with the amount of the insurance at least equal to the balance of the Obligations. Such insurance shall name Mortgagee as a loss payee. At Mortgagors' option, such policy may have a coinsurance clause of not less than 90% of replacement cost provided the policy contains an appropriate form of cost escalation endorsement. Mortgagors will at their sole cost and expense, from time to time, and at any time at the request of Mortgagee, provide Mortgagee with evidence satisfactory to Mortgagee of the replacement cost of Mortgaged Property. Mortgagors will maintain such other insurance as Mortgagee may reasonably require. b, Policy Provisions. All insurance policies and renewals thereof maintained by Mortgagors pursuant to this Mortgage shall be written by an insurance carrier satisfactory to Mortgagee, contain a mortgagee clause in favor of and in form acceptable to Mortgagee, contain an agreement of the insurer that it will not amend, modify or cancel the policy except after thirty (30) days prior written notice to Mortgagee, and be reasonably satisfactory to Mortgagee in all other respects. c. Delivery of Policy or Certificate. If requested by Mortgagee, Mortgagors will deliver to Mortgagee original policies satisfactory to Mortgagee evidencing the insurance which is required under this Mortgage, and Mortgagors shall promptly furnish to Mortgagee all renewal notices and, upon request of Mortgagee, evidence of payment thereof. At least ten (10) days prior to the expiration date of a required policy, Mortgagors shall deliver to Mortgagee a renewal policy in form satisfactory to Mortgagee. d. Assignment of Policy. If the Mortgaged Property is sold at a foreclosure sale or if Mortgagee shall acquire title to the Mortgaged Property, Mortgagee shall have all of the right, title and interest of Mortgagors in and to any insurance policies required hereunder, and the unearned premiums thereon, and in and to the proceeds thereof resulting from any damage to the Mortgaged Property prior to such sale or acquisition. e. Notice of Damage or Destruction; Adjusting Loss. If the Mortgaged Property or any part thereof shall be damaged or destroyed by fire or other casualty, Mortgagors will, within five (5) calendar days after the occurrence of such damage or destruction, give written notice thereof to the insurance carrier and to Mortgagee and will not adjust any damage or loss which is estimated by Mortgagors in good faith to exceed $25,000 unless Mortgagee shall have joined in or concurred with such adjustment; but if there has been no adjustment of any such damage or loss within four (4) months from the date of occurrence thereof and if an Event of Default shall exist at the end of such four (4) month period or at any time thereafter, Mortgagee may alone make proof of loss, adjust and compromise any claim under the policies, and appear in and prosecute any action arising from such policies. In connection therewith, Mortgagors do hereby irrevocably authorize, empower and appoint Mortgagee as attorney -in -fact for Mortgagor (which appointment is coupled with an interest) to do any and all of the foregoing in the name and on behalf of Mortgagors. f. Application of Insurance Proceeds. All sums paid under any insurance policy required by this Mortgage shall be paid to Mortgagee, which shall, at its option, apply the same (after first deducting therefrom Mortgagee's expenses incurred in collecting the same including but not limited to reasonable attorney's fees) to the reduction of the Obligations or to the payment of the restoration, repair, replacement or rebuilding of Mortgaged Property that is damaged or destroyed in such manner as Mortgagee shall determine and secondly to the reduction of the Obligations. Any application of insurance proceeds to principal of the Obligations shall not extend or postpone the due date of the installments payable under the Obligations or change the amount of such installments. g. Reimbursement of Mortgagee's Expenses. Mortgagors shall promptly reimburse Mortgagee upon demand for all of Mortgagee's expenses incurred in connection with the collection of the insurance proceeds, including but not limited to reasonable attorneys fees, and all such expenses shall be additional amounts secured by this Mortgage. 11. Inspection. Mortgagee, and its agents, shall have the right at all reasonable times, to enter upon the Mortgaged Property for the purpose of inspecting the Mortgaged Property or any part thereof. Mortgagee shall, however, have no duty to make such inspection. Any inspection of the Mortgaged Property by Mortgagee shall be entirely for its benefit and Mortgagors shall in no way rely or claim reliance thereon. 12. Protection of Mortgagee's Security. Subject to the rights of Mortgagors under paragraph 8 hereof, if Mortgagors fail to perform any of the covenants and agreements contained in this Mortgage or if any action or proceeding is commenced which affects the Mortgaged Property or the interest of the Mortgagee therein, or the title thereto, then Mortgagee, at Mortgagee's option, may perform such covenants and agreements, defend against or investigate such action or proceeding, and take such other action as Mortgagee deems necessary to protect Mortgagee's interest. Any amounts or expenses disbursed or incurred by Mortgagee In good faith pursuant to this paragraph 12 with interest thereon at the rate of 10% per annum, shall become an Obligation of Mortgagors secured by this Mortgage. Such amounts advanced or disbursed by Mortgagee hereunder shall be immediately due and payable by Mortgagors unless Mortgagors and Mortgagee agree in writing to other terms of repayment. Mortgagee shall, at its option, be subrogated to the lien of any mortgage or other lien discharged in whole or in part by the Obligations or by Mortgagee under the provisions hereof, and any such subrogation rights shall be additional and cumulative security for this Mortgage. Nothing contained in this paragraph shall require Mortgagee to incur any expense or do any act hereunder, and Mortgagee shall not be liable to Mortgagors for any damage or claims arising out of action taken by Mortgagee pursuant to this paragraph. 13. Condemnation. Mortgagors shall give Mortgagee prompt notice of any action, actual or threatened, in condemnation or eminent domain and hereby assign, transfer and set over to Mortgagee the entire proceeds of any award or claim for damages for all or any part of the Mortgaged Property taken or damaged under the power of eminent domain or condemnation. Mortgagee is hereby authorized to intervene in any such action in the names of Mortgagors, to compromise and settle any such action or claim, and to collect and receive from the condemning authorities and give proper receipts and acquittances for such proceeds. Any expenses incurred by Mortgagee in intervening in such action or compromising and settling such action or claim, or collecting such proceeds shall be reimbursed to Mortgagee first out of the proceeds. The remaining proceeds or any part thereof shall be applied to reduction of that portion of the Obligations then most remotely to be paid, whether due or not, or to the restoration or repair of the Mortgaged Property, the choice of application to be solely at the discretion of Mortgagee. 14. Fixture Filing. From the date of its recording, this Mortgage shall be effective as a financing statement fled as a fixture filing with respect to the Personal Property and for this purpose the name and address of the debtor is the name and address of Mortgagors as set forth in paragraph 20 herein and the name and address of the secured party is the name and address of the Mortgagee as set forth in paragraph 20 herein. 15. Events of Default. Each of the following occurrences shall constitute an event of default hereunder ("Event of Default"): a. Mortgagors shall default in the due observance or performance of or breach its agreement contained in paragraph 4 hereof or shall default in the due observance or performance of or breach any other covenant, condition or agreement on its part to be observed or performed pursuant to the terms of this Mortgage. b. Mortgagors shall make an assignment for the benefits of its creditors, or a petition shall be filed by or against Mortgagors under the United States Bankruptcy Code or Mortgagors shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of a material part of its properties or of the Mortgaged Property or shall not, within thirty (30) days after the appointment of a trustee, receiver or liquidator of any material part of its properties or of the Mortgaged Property, have such appointment vacated. c. Ajudgment, writ or warrant of attachment or execution, or similar process shall be entered and become a lien on or be issued or levied against the Mortgaged Property or any part thereof which is not released, vacated or fully bonded within thirty (30) days after its entry, issue or levy. d. An event of default, however defined, shall occur under any other mortgage, assignment or other security document constituting a lien on the Mortgaged Property or any part thereof. 16. Acceleration; Foreclosure. Upon the occurrence of any Event of Default and at any time thereafter while such Event of Default exists, Mortgagee may, at its option, after such notice as may be required by law, exercise one or more of the following rights and remedies (and any other rights and remedies available to it): a. Mortgagee may declare immediately due and payable all Obligations secured by this Mortgage, and the same shall thereupon be immediately due and payable, without further notice or demand. b. Mortgagee shall have and may exercise with respect to the Personal Property, all the rights and remedies accorded upon default to a secured party under the Iowa Uniform Commercial Code. If notice to Mortgagors of intended disposition of such property is required by law in a particular instance, such notice shall be deemed commercially reasonable if given to Mortgagors at least ten (10) days prior to the date of intended disposition. c. Mortgagee may (and is hereby authorized and empowered to) foreclose this Mortgage in accordance with the law of the State of Iowa, and at any time after the commencement of an action in foreclosure, or during the period of redemption, the court having jurisdiction of the case shall at the request of Mortgagee appoint a receiver to take immediate possession of the Mortgaged Property and of the Revenues and Income accruing there from, and to rent or cultivate the same as he may deem best for the interest of all parties concerned, and such receiver shall be liable to account to Mortgagors only for the net profits, after application of rents, issues and profits upon the costs and expenses of the receivership and foreclosure and upon the Obligations. 17. Redemption. It is agreed that if this Mortgage covers less than ten (10) acres of land, and in the event of the foreclosure of this Mortgage and sale of the property by sheriffs sale in such foreclosure proceedings, the time of one year for redemption from said sale provided by the statues of the State of Iowa shall be reduced to six (6) months provided the Mortgagee, in such action files an election to waive any deficiency judgment against Mortgagors which may arise out of the foreclosure proceedings; all to be consistent with the provisions of Chapter 628 of the Iowa Code. If the redemption period is so reduced, for the first three (3) months after sale such right of redemption shall be exclusive to the Mortgagor, and the time periods in Sections 628.5, 628.15 and 628.16 of the Iowa Code shall be reduced to four (4) months. It is further agreed that the period of redemption after a foreclosure of this Mortgage shall be reduced to sixty (60) days if all of the three following contingencies develop: (1) The real estate is less than ten (10) acres in size; (2) the Court finds affirmatively that the said real estate has been abandoned by the owners and those persons personally liable under this Mortgage at the time of such foreclosure; and (3) Mortgagee in such action files an election to waive any deficiency judgment against Mortgagors or their successors in interest in such action. If the redemption period is so reduced, Mortgagors or their successors in interest or the owner shall have the exclusive right to redeem for the first thirty (30) days after such sale, and the time provided for redemption by creditors as provided in Sections 628.5, 628.15 and 628.16 of the Iowa Code shall be reduced to forty (40) days. Entry of appearance by pleading or docket entry by or on behalf of Mortgagors shall be a presumption that the property is not abandoned. Any such redemption period shall be consistent with all of the provisions of Chapter 628 of the Iowa Code. This paragraph shall not be construed to limit or otherwise affect any other redemption provisions contained in Chapter 628 of the Iowa Code. 18. Attorneys' Fees. Mortgagors shall pay on demand all costs and expenses incurred by Mortgagee in enforcing or protecting its rights and remedies hereunder, including, but not limited to, reasonable attorneys' fees and legal expenses. 19. Forbearance not a Waiver, Rights and Remedies Cumulative. No delay by Mortgagee in exercising any right or remedy provided herein or otherwise afforded by law or equity shall be deemed a waiver of or preclude the exercise of such right or remedy, and no waiver by Mortgagee of any particular provisions of this Mortgage shall be deemed effective unless in writing signed by Mortgagee. All such rights and remedies provided for herein or which Mortgagee or the holder of the Obligations may have otherwise, at law or in equity, shall be distinct, separate and cumulative and may be exercised concurrently, independently or successively in any order whatsoever, and as often as the occasion therefor arises. 20. Notices. All notices required to be given hereunder shall be in writing and deemed given when personally delivered or deposited in the United States mail, postage prepaid, sent certified or registered, addressed as follows: a. If to Mortgagors, Plastic Center, Inc, Attn: L. Anthony Pfohl, 200 Main Street, Dubuque, lowa 52001 b. If to Mortgagee, to: Economic Development Department; City Hall; 50 West 13th St., Dubuque, Iowa 52001 or to such other address or person as hereafter designated in writing by the applicable party in the manner provided in this paragraph for the giving of notices. 21. Severability. In the event any portion of this Mortgage shall, for any reason, be held to be invalid, illegal or unenforceable in whole or in part, the remaining provisions shall not be affected thereby and shall continue to be valid and enforceable and if, for any reason, a court finds that any provision of this Mortgage is invalid, illegal, or unenforceable as written, but that by limiting such provision it would become valid, legal and enforceable then such provision shall be deemed to be written, construed and enforced as so limited. 22. Further Assurances. At any time and from time to time until payment in full of the Obligations, Mortgagors will, at the request of Mortgagee, promptly execute and deliver to Mortgagee such additional instruments as may be reasonably required to further evidence the lien of this Mortgage and to further protect the security interest of Mortgagee with respect to the Mortgaged Property, including, but not limited to, additional security agreements, financing statements and continuation statements. Any expenses incurred by Mortgagee in connection with the recordation of any such Instruments shall become additional Obligations of Mortgagors secured by this Mortgage. Such amounts shall be immediately due and payable by Mortgagors to Mortgagee. 23. Successors and Assigns bound; Number; Gender; Agents; Captions. The rights, covenants and agreements contained herein shall be binding upon and inure to the benefit of the respective legal representatives, successors and assigns of the parties. Words and phrases contained herein, including acknowledgment hereof, shall be construed as in the singular or plural number, and as masculine, feminine or neuter gender according to the contexts. The captions and headings of the paragraphs of this Mortgage are for convenience only and are not to be used to interpret or define the provisions hereof. 24. Governing Law. This Mortgage shall be governed by and construed in accordance with the laws of the State of Iowa. 25. Release of Rights of Dower, Homestead and Distributive Share. Each of the undersigned hereby relinquishes all rights of dower, homestead and distributive share in and to the Mortgaged Property and waives all rights of exemption as to any of the Mortgaged Property. 26. Acknowledgment of Receipt of Copies of Debt Instrument. Mortgagors hereby acknowledge the receipt of a copy of this Mortgage together with a copy of each promissory note secured hereby. 27. Additional Provisions. Dated:2020. Plastic Center, Inc, Mortgagor I UNDERSTAND THAT HOMESTEAD PROPERTY IS IN MANY CASES PROTECTED FROM THE CLAIMS OF CREDITORS AND EXEMPT FROM JUDICIAL SALE; AND THAT BY SIGNING THIS MORTGAGE, I VOLUNTARILY GIVE UP MY RIGHT TO THIS PROTECTION FOR THIS MORTGAGED PROPERTY( T� H SPECS IO CLAIMS BASED UPON THIS MORTGAGE. Dated: 5t L, I STATE OF IOWA ss: COUNTY OF DUBUQUE On this 4 day of - , 2020, before me, the undersigned, a Notary Public, personally appeared L. Anthony Pfohl, to me known to be the identical per on named in and who executed the foregoing instrument, and acknowledged that they executed the same as their voluntary act and deed. Atittette Jottes Notarial Sent - IOWA COntlitISStOII No. 734390 COlfliitiSS)Ott Expires _leI9hUit Prepared by/Return to: Jill Connors, City of Dubuque, 50 W. 13th Street, Dubuque, IA 52001 (563) 589-4393 CERTIFICATE OF COMPLETION WHEREAS, the City of Dubuque, Iowa, a municipal corporation (City), has entered into a Downtown Rehabilitation Loan Program Loan Agreement Number: DRLP #1-20, dated May 18th, 2020 (the Agreement), by and between City, and Plastic Center, Inc. (Owner), which grants incentive to Owner with respect to certain real property located within the Greater Downtown Urban Renewal District of City and as more particularly described as follows - TRACT I S 1/2 OF CITY LOT 47, in the City of Dubuque, Iowa, according to the United States Commissioners' Map of the Town of Dubuque, Iowa. TRACT II N 1/2 CITY LOT 48 in the Dubuque, Iowa, according to the United States Commissioners' Map of the Survey of said Town of Dubuque. TRACT III S 1/2 OF CITY LOT 48in the City of Dubuque, Iowa, according to the United States Commissioners' Map of the Survey of the Town of Dubuque, Iowa. TRACT IV E 62.5' OF W 170' OF CITY LOT 614in City of Dubuque, Iowa, according to the United States Commissioners Map thereof. locally known as 951-957 Main Street and WHEREAS, said Agreement provided for a Three Hundred Thousand Dollar 111620bal ($300,000) Loan with certain conditions and commitments with respect to forgiveness of the Loan, if Owner constructs new housing units (as defined therein), and if Owner creates new full-time jobs (as defined therein) in accordance with the Agreement; and WHEREAS, Owner has to the present date performed said conditions and commitments insofar as they relate to the forgiveness of the Loan in a manner deemed sufficient by City to permit the execution and recording of this certification, as follows Owner has previously certified that Owner has created eleven (11) new housing units and four (4) new full-time jobs resulting in the forgiveness of Thirty Thousand Dollars ($30,000) on June 151h, 2020-land Owner has now certified that Owner has created an additional nine (9) new full-time jobs resulting in the forgiveness of Eighteen Thousand Dollars ($18,000) on November 20th, 2020. NOW, THEREFORE, pursuant to the Agreement, this is to certify with respect to the conditions and commitments of forgiveness to the satisfaction of City, such conditions and commitments have been satisfied. The Recorder of Dubuque County is hereby authorized to accept for recording and to record the filing of this instrument, to be a conclusive determination of the satisfaction of the covenants and conditions as set forth in said Agreement, and that the Agreement shall otherwise remain in full force and effect. (SEAL) CITY OF DUBUQUE, IOWA By: M chael C. Van Milligen, City Manager STATE OF IOWA ) ) SS COUNTY OF DUBUQUE ) On this day ofLt,,g, 2020, before me, the undersigned, a notary public in and for the State of Iowa, personally appeared Michael C. Van Milligen and acknowledged the execution of the instrument to be his/her voluntary act and deed. 1A Jul% � I" TRACEY L. STECKLEfhf Notary Publi, i ` and for �"•, '. CorrDubuque CO t m ssion Number 716016 q y, Iowa My Comm Exp. �__l� 2