CARich Properties - Loan Agreement for 278 W. 17th Street Copyrighted
August 3, 2020
City of Dubuque Consent Items # 8.
City Council Meeting
ITEM TITLE: CARich Properties - LoanAgreement 278 W. 17th St
SUM MARY: City Manager recommending approval of a Loan Agreement with CARich
Properties, LLC to redevelop property at 278 W. 17th Street.
RESOLUTION Approving a Loan Agreement between the City of
Dubuque, lowa and CARich Properties, LLC
SUGGESTED Suggested Disposition: Receive and File;Adopt Resolution(s)
DISPOSITION:
ATTACHMENTS:
Description Type
CARich Properties Loan Agreement for 278 W. 17th City Manager Memo
Street-MVM Memo
Staff Memo Staff Memo
Loan Documents Supporting Documentation
Resolution of Approval Resolutions
Dubuque
THE CITY OF �
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TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Approval of Loan Agreement between the City of Dubuque and CARich
Properties, LLC to redevelop Property at 278 W. 17th Street
DATE: July 28, 2020
Economic Development Director Jill Connors recommends City Council approval of a
$120,000 Loan Agreement with CARich Properties, LLC to redevelop property at 278
W. 17t" Street.
The City and CARich Properties, LLC entered into a Development Agreement dated
May 20, 2019, for the creation of a 30-unit residential complex affordable to
low/moderate income residents and renovating the building at 278 W 17th Street.
The work includes remediating past water intrusion hazards, adding energy efficient
upgrades, drainage systems, heating/cooling systems, flooring, bathrooms, and kitchen
improvements, replacing all windows throughout the building, adding new roof, gutters,
and downspouts, new entry doors and transoms, and re-grading the front area of the
building with new landscaping.
In the Development Agreement, the City committed to providing, among other
incentives, a $120,000 loan.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
v
Mic ael C. Van Milligen
MCVM:jh
Attachment
cc: Crenna Brumwell, City Attorney
Teri Goodmann, Assistant City Manager
Cori Burbach, Assistant City Manager
Jill M. Connors, Economic Development Director
Dubuque Economic Development
Department
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All•America Eity Dubuque,lowa 52001-4763
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TO: Michael C. Van Milligen, City Manager
FROM: Jill M. Connors, Economic Development Director
SUBJECT: Approval of Loan Agreement between the City of Dubuque and
CARich Properties, LLC to Redevelop Property at 278 W. 17t" Street
DATE: June 25, 2020
INTRODUCTION
This memorandum presents for City Council consideration and action the attached
resolution approving a Loan Agreement between the City of Dubuque and CARich
Properties, LLC.
BACKGROUND
The City and CARich Properties, LLC entered into a Development Agreement dated
May 20, 2019 for the creation of a 30-unit residential complex affordable to
low/moderate income residents and renovating the building at 278 W 17th Street.
The work includes remediating past water intrusion hazards, adding energy efficient
upgrades, drainage systems, heating/cooling systems, flooring, bathrooms, and kitchen
improvements, replacing all windows throughout the building, adding new roof, gutters,
and downspouts, new entry doors and transoms, and re-grading the front area of the
building with new landscaping.
DISCUSSION
In the Development Agreement, the City committed to providing, among other
incentives, a $120,000 loan. Attached is the proposed Loan Agreement. The term of the
loan is ten (10) years. Interest on the loan is zero percent (0.0%) per annum. Monthly
interest and principal payments, amortized over one hundred twenty (120) months, will
be paid beginning on the 1 st day of the first month after the final disbursement of the
loan proceeds and continuing on the 1 st 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
1 st day of the one hundred twentieth (120th) month after final disbursement of the loan
proceeds.
At the time of the initial disbursement of loan funds, CARich Properties, LLC 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 One Hundred Twenty Thousand Dollars
($120,000) and the Mortgage, attached as Exhibit B.
RECOMMENDATION/ ACTION STEP
I recommend the resolution be adopted approving the Loan Agreement with CARich
Properties, LLC for the purpose of incentivizing the creation of quality, affordable
residential units in our downtown.
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Prepared by: Jill Connors, Economic Development, 50 W. 13th Street, Dubuque IA 52001, 563 589-4393
Return to: Jill Connors, Economic Development, 50 W. 13th Street, Dubuque IA 52001, 563 589-4393
RESOLUTION NO. 231-20
APPROVING A LOAN AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND
CARICH PROPERTIES, LLC.
WHEREAS, the City of Dubuque (City) and CARich Properties, LLC (Developer)
previously entered into a Development Agreement dated May 20, 2019, as amended by
the First Amendment dated May 18, 2020, and the Second Amendment dated August 3,
2020 for the redevelopment of 278 W. 17th Street in the City of Dubuque, Iowa (the
Project); and
WEHREAS, the Development Agreement as amended provides for a Downtown
Rehabilitation Loan.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA THAT:
Section 1. The Loan Agreement by and between the City of Dubuque and CARich
Properties, LLC., a copy of which is attached hereto, is hereby approved.
Section 2. The Mayor is hereby authorized and directed to execute the Loan
Agreement on behalf of the City of Dubuque and the City Clerk is authorized and directed
to attest to his signature.
Section 3. The City Manager is authorized to take such actions as are necessary
to comply with the terms of the Loan Agreement as herein approved.
Passed, approved and adopted this 3rd day of August 2020.
Roy Buol, Mayor
Attest:
Kevi S. Firnstahl, City lerk
072320ba1
CITY OF DUBUQUE, IOWA
DOWNTOWN REHABILITATION LOAN PROGRAM
LOAN AGREEMENT
NUMBER: DRLP #2 - 20
T is Loan Agreement (the Agreement), dated for reference purposes the
day of , 2020, is entered into by and between the CITY OF DUBUQUE, IOWA,
a municipal corporation organized and existing under the laws of the State of Iowa ("City")
and CARICH Properties, LLC ("Owner").
WITNESSETH:
Whereas, Owner's property at 278 W. 17th Street, Dubuque, Iowa, legally
described as follows:
The Middle One -fifth of Out Lot 473; Lot 1 of Lot 2 of the North Two -fifths of
Out Lot 473; Lot 2 of Lot 2 of the North Two -fifths of Out Lot 473; Lot 1 of Lot 1
of Lot 1 of the North Two -fifths of Out Lot 473; Lot 2 of Lot 1 of Lot 1 of the
North Two -fifths of Out Lot 473; Lot 1 of Lot 2 of Lot 1 of the North Two -fifths
of Out Lot 473; and Lot 2 of Lot 2 of Lot 1 of the North Two -fifths of Out Lot
473; Subject to right of way for foot passage as described in Warranty Deed
recorded in Book 119TL page 346, and subject to Easement filed January 30,
1981 as Instrument #583-81, records of Dubuque County, Iowa, and Lot 2 of
Lot 6 of Out Lot 671; Lot 1 of Lot 6 of Out Lot 671; and The East One-half of
Lot 2 of Lot 1 of Lot 4 of Out Lot 671; all in the City of Dubuque, Iowa, according
to the recorded plats of said respective Subdivisions. (Out Lots in the City of
Dubuque, Iowa are also sometimes known, called and described as City Lots
and/or as Town Lots in the City of Dubuque, Iowa)
(the "Property") is located within the boundaries of the Greater Downtown Urban Renewal
District (the "District") most recently established by Resolution No. 154-20 on May 18,
2020; and
Whereas, the Development Agreement with CARICH Properties, LLC, approved
by the City Council on May 20, 2019, provides for a $120,000 Downtown Rehabilitation
Loan for the improvement of the building on the Property (the "Building") from the
Downtown Rehabilitation Loan Program (the "Project"); 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 Owner in its efforts to bring the Building into
compliance with local codes and ordinances, to eliminate certain conditions of physical
062220ba1
decay, and to retain or create employment and/or housing opportunities within the District;
and
Whereas, without the assistance of the Downtown Rehabilitation Loan Program,
Owner would be unable to operate the Building to its 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:
SECTION 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.
SECTION 2. LOAN TERMS.
2.1 City agrees to ban to Owner on the terms and conditions set forth herein One
Hundred Twenty Thousand Dollars ($120,000) ("the Loan") which will consist of Loan
Program funds, if and only if such funds are available. Loan funds shall be distributed on
the Closing Date.
2.2 The term of the Loan shall be ten (10) years. Interest on the Loan shall be zero
percent (0.0%) per annum. Monthly payments, amortized over a ten-year period, shall
be due and payable beginning on the 1st day of the first month after the final disbursement
of the Loan proceeds and on the 1st day of each month thereafter 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 one hundred twentieth (120th) month after final disbursement of the
Loan funds.
2.3 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 One Hundred Twenty Thousand dollars ($120,000) and
the Mortgage, attached as Exhibit B.
SECTION 3. DISBURSEMENT AND USE OF LOAN FUNDS.
3.1 Loan funds shall be disbursed to Owner by City for Qualifying Project Expenses,
defined in Paragraph 25(c), for amounts not in excess of the total sum of $120,000 nor
more than ninety percent (90%) of the total Project cost.
3.2 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.
3.3 Owner shall substantially complete the Project, defined in Paragraph 25(b), in
accordance with the terms of this Agreement, on or before March 31, 2021. City shall not
be obligated to pay any funds not drawn by Owner as of said date and any undrawn funds
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as of such date shall be credited against the balance due on the Promissory Note.
SECTION 4. SECURITY. Owner represents that the Property is subject to a mortgage
dated the 7th day of June, 2018, by Owner to Fidelity Bank & Trust, recorded as Instrument
No. 2018-6262, Records of the Dubuque County Recorder in the principle amount of
$654,000.00, as modified by the Modification of Deed of Trust/Mortgage dated the 23rd
day of August, 2019, filed the 29th day of August, 2019 as Instrument No, 2019-00009999,
to secure the principle amount of $1,050,000.00 (the "First Mortgage"). The Loan shall be
secured by a Second Mortgage on the Property to the City of Dubuque, 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 Second mortgage.
SECTION 5. STATUS OF OWNER. Owner represents that it is a an organization duly
organized and existing under the laws of the State of Wisconsin; 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
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.
SECTION 6. 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.
SECTION 7. 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 and except as described in Section 4 of this Agreement. Taxes not
due or payable or otherwise delinquent are excepted.
SECTION 8. CONDITIONS OF BORROWING.
8.1 On the date on which any sum is to be borrowed, Owner, in addition to the Note
and Mortgage, 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.
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8.2 Owner shall be required at the Closing Date defined herein Paragraph 25(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 this
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.
SECTION 9. 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.
SECTION 10. 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 March 31, 2021.
(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
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contested in good faith where notice of such contest has been given to the City.
(f) 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 and the
Note and Mortgage provided pursuant to this Loan Agreement without written
consent of City.
(g) 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 and
Mortgage 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.
SECTION 11. 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
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of Owner.
SECTION 12. 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.
SECTION 13. 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.
SECTION 14. ADDRESS.
Owner's principal business address is:
CARICH Properties, LLC,
Attn: Chris Richard,
1118 Nealmar Road,
Platteville, WI 53818
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
SECTION 15. LIMITATION OF CITY'S LIABILITY FOR PROJECT ACTIVITIES. City
shall not be liable to Owner, or to any third 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.
SECTION 16. 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
6
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.
SECTION 17. 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.
SECTION 18. 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.
SECTION 19. 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.
SECTION 20. SUCCESSORS AND ASSIGNS. All covenants, representations,
warranties and agreements herein set forth shall be binding upon Owner, and its legal
representatives, successors and assigns. This Agreement may not be assigned by City
or Owner, without the express written consent of the other party.
SECTION 21. 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.
SECTION 22. 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.
SECTION 23. 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.
SECTION 24. 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.
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SECTION 25. DEFINITIONS.
(a) "Closing Date" shall mean the date identified in a Development Agreement
executed May 20, 2019, as amended.
(b) "Project" shall mean the rehabilitation project of Owner's properties at 278
W. 17th Street, Dubuque, Iowa, identified in a Development Agreement executed
May 20, 2019, as amended.
(c) "Qualifying Project Expenses" shall mean those expenditures or expenses
incurred by Owner during and for the Project and identified in a Development
Agreement executed May 20, 2019, as amended, whether paid to third parties or
incurred as wage expense, fringe benefit expense or other costs of Owner's
employees, agents and contractors.
2"
Dated thisday of
CITY OF DUB QUE, IOWA CARICH PROPERTIES,
Bv.
ta Zi„,/
Roy D/ Buol, Mayor
ATTEST:
Ke n S. Firr stahl,'City ` erk
By.
, 2020.
Title
F:\Users\tsteckle\Lindahl\CARich 278 W 17th Street\LoanAgreement_061820.docx
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Exhibit A Promissory Note
Exhibit B Mortgage
Exhibit C Insurance Schedule
LIST OF EXHIBITS
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EXHIBIT A
PROMISSORY NOTE
10
Loan Number:
Fund Source:
$120,000
City of Dubuque, Iowa
PROMISSORY NOTE
Date: ge)
DRLP # 2 - 20
Downtown Rehabilitation Loan Program (TIF)
EXHIBIT A
, 2020
FOR VALUE RECEIVED, the undersigned, CARICH Properties, LLC, 1118 Nealmar Road, Platteville, WI
53818, 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 ONE HUNDRED TWENTY THOUSAND DOLLARS ($120,000),
together with interest at the rate of 0 % per annum, upon the unpaid balance, in monthly payments,
amortized over one hundred twenty (120) months, beginning on the 1st day of the first month 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 one
hundred twentieth (120th) 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 and any default under said Loan Agreement is a default under this Promissory Note.
Title
11
EXHIBIT B
MORTGAGE
12
EXHIBIT B
Prepared by: Jill M. Connors City Hall, 50 W. 13th Street, Dubuque, Iowa 52001 Phone: 563-589-4213
Return to: Jill M. Connors City Hall, 50 W. 13th Street, Dubuque, Iowa 52001 Phone: 563-589-4213
MORTGAGE
THIS MORTGAGE is made between CARich Properties, LLC ("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");
The Middle One -fifth of Out Lot 473; Lot 1 of Lot 2 of the North Two -fifths of Out Lot 473; Lot 2 of Lot 2 of the North Two -fifths of Out
Lot 473; Lot 1 of Lot 1 of Lot 1 of the North Two -fifths of Out Lot 473; Lot 2 of Lot 1 of Lot 1 of the North Two -fifths of Out Lot 473; Lot
1 of Lot 2 of Lot 1 of the North Two -fifths of Out Lot 473; and Lot 2 of Lot 2 of Lot 1 of the North Two -fifths of Out Lot 473; Subject to
right of way for foot passage as described in Warranty Deed recorded in Book 119TL page 346, and subject to Easement filed January
30, 1981 as Instrument #583-81, records of Dubuque County, Iowa, and Lot 2 of Lot 6 of Out Lot 671; Lot 1 of Lot 6 of Out Lot 671;
and The East One-half of Lot 2 of Lot 1 of Lot 4 of Out Lot 671; all in the City of Dubuque, Iowa, according to the recorded plats of
said respective Subdivisions. (Out Lots in the City of Dubuque, Iowa are also sometimes known, called and described as City Lots
and/or as Town Lots in the City of Dubuque, Iowa)
Subject to a mortgage granted by Mortgagor to a Deed of Trust and Security Agreement to Fidelity Bank & Trust, dated the 7th day
of June, 2018, Instrument No, 2018-00006262, to secure the principle amount of $654,000.00, as modified by the Modification of
Deed of Trust/Mortgage dated the 23rd day of August, 2019, filed the 29th day of August, 2019 as Instrument No, 2019-00009999, to
secure the principle amount of $1,050,000.00.
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 CARich Properties, LLC evidenced by a promissory note dated
, 2020 in the principal amount of $120,000.00, any renewals, extensions, modifications or refinancing thereof
and any promissory notes issued in substitution therefor; and
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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 1 a. 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
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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 filed 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. A judgment, 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.
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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, CARICH Properties, LLC, Attn: Chris Richard, 1118 Nealmar Road, Platteville, WI 53818
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.
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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: °"`+01� 2020.
CARICH Pr erties, L .,C, 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 WITH RESPECT TO CLAIMS BASED UPON THIS MORTGAGE.
Dated: 5ta, lap
STATE OF IOWA
ss:
ELLA LAHEY
Notarial Seal - Iowa
Commission Number 743465
COUNTY
OF DUBUQUE SOWN.?
My Commission Expires Oct 19, 2021
amomirmirognipiergrougmerwoupqm
On thisc3. day of�y2�}i5ue\N.? , 2020, before me, the undersigned, a Notary Public, personally appeared Chris Richard, to me
known to be the identical person named in and who executed the foregoing instrument, and acknowledged that they executed the
same as their voluntary act and deed.
Notary Public
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EXHIBIT C
INSURANCE SCHEDULE
Owner shall provide insurance required by Section 4.6 of the Development Agreement.
18