1690 Elm St - Metx - 3rd Amendment to DA Copyrighted
September 8, 2020
City of Dubuque Consent Items # 6.
City Council Meeting
ITEM TITLE: 1690 Elm St- Metx- 3rd Amendment to DA
SUM MARY: City Manager recommending approval of a Third Amendment to the
Development Agreement between the City of Dubuque and Metx, LLC
for the redevelopment of property at 1690 Elm Street that extends the
completion date of the minimum improvements to December 31, 2020.
RESOLUTION Approving the Third amendment to Development
Agreement between the City of Dubuque, lowa and Metx, LLC
SUGGESTED Suggested Disposition: Receive and File;Adopt Resolution(s)
DISPOSITION:
ATTACHMENTS:
Description Type
Mebc 3rd Amendment to Development Agreement for City Manager Memo
1690 Elm Street-MVM Memo
Staff Memo Staff Memo
3rd Amendment Supporting Documentation
Resolution Resolutions
Dubuque
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TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Third Amendment to Development Agreement between the City of
Dubuque and Metx, LLC to Redevelop Property at 1690 Elm Street
DATE: August 31, 2020
Economic Development Director Jill Connors recommends City Council approval of a
Third Amendment to the Development Agreement between the City of Dubuque and
Metx, LLC for the redevelopment of property at 1690 Elm Street. The Third Amendment
extends the completion date of the minimum improvements to December 31, 2020.
The redevelopment of 1690 Elm Street is approximately 75% complete. Crescent
Community Health Center now desires to lease additional space within the building to
meet increased community demand. A combination of this expansion and the ongoing
economic impact of the COVID-19 pandemic has led to a longer completion timeline.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Mic ael C. Van Milligen
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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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TO: Michael C. Van Milligen, City Manager
FROM: Jill M. Connors, Economic Development Director
SUBJECT: Third Amendment to Development Agreement between the City of
Dubuque and Metx, LLC to Redevelop Property at 1690 Elm Street
DATE: August 19, 2020
INTRODUCTION
This memorandum presents for City Council consideration and action the attached
resolution approving a Third Amendment to the Development Agreement between the
City of Dubuque and Metx, LLC.
BACKGROUND
On October 11, 2017 City Council approved a Development Agreement between the City
of Dubuque and Metx, LLC for the redevelopment of property at 1690 Elm Street. Prior to
this agreement, the property had been less than 30% occupied and in need of serious
repair. Metx, LLC purchased the building and several adjacent parcels in 2015 and 2016
with the intention to develop the properties as one project.
The initial plans for this building and adjacent properties were to create a medical
campus, including the Crescent Community Health Center, at a cost of at least $9
million, to be completed by June 1, 2019.
Presently, the building has provided the space necessary for the Health Center's
expansion, and the land sold by the City to Metx, LLC is being used for parking. Metx,
LLC also agreed to provide easements to the City for utilities and a proposed bike/hike
trail on portions of the property. This allows the City to continue its work of connecting
the northern portions of Heritage Trail along the Bee Branch to the more southern
portions of that trail, and to the trail along the Peosta Channel.
The Development Agreement provided for several incentives to encourage the $9
million redevelopment of the property. The key elements were as follows:
1. Fa�ade, Design & Planning, and Financial Consultant grants totaling up to a
maximum of$35,000; and
2. 10 years of Tax Increment Finance (TIF) rebates of property tax increases, plus
an additional tax rebate of$49,887.84 in year 11, which is the current value of
City properties deeded to the Developer.
Additional terms and conditions of the disposition of the property are included within the
Development Agreement. Public hearings were held for the final disposition of the City
owned real estate and to approve the tax increment financing obligations in the
Agreement.
In October of 2019, Metx, LLC requested the First Amendment to the Development
Agreement. The Development Agreement required the purchase price of$49,887.84 at
closing. After approval, it was determined that the purchase price could be paid from the
TIF funds received. Additionally, this amendment adjusted the completion date for the
minimum improvements from June 1, 2019 to June 1, 2020. The First Amendment was
approved on October 21, 2019.
In March of 2020, Metx, LLC conveyed there were timing issues related to the tax
credits for the project. Metx, LLC requested a Second Amendment to the Development
Agreement to extend the completion date of the minimum improvements to September
30, 2020. The Second Amendment was approved on March 16, 2020.
DISCUSSION
The redevelopment of 1690 Elm Street is approximately 75% complete. Crescent
Community Health Center now desires to lease additional space within the building to
meet increased community demand. A combination of this expansion and the ongoing
economic impact of the COVID-19 pandemic has led to a longer completion timeline.
Metx, LLC now requests a Third Amendment to the Development Agreement to extend
the completion date of the minimum improvements to December 31, 2020.
RECOMMENDATION/ ACTION STEP
I recommend that the City Council approve the Third Amendment to the Development
Agreement between the City of Dubuque and Metx, LLC for the redevelopment of 1690
Elm Street and adjacent property by adopting the attached Resolution.
2
THIRD AMENDMENT
TO
DEVELOPMENT AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
METX, LLC
This Amendment to Development Agreement, dated for reference purposes the
day of j , 2020, is made and entered into by and between the City
of Dubuque, IdCiva (City) and Metx, LLC (Developer).
Whereas, City and Developer previously entered into a Development Agreement
dated October 12, 2017 (the Development Agreement) for the redevelopment of the
property at 1690 Elm Street which required Developer to complete certain Minimum
Improvements as described therein; and
Whereas a First Amendment to Development Agreement, dated the 21st day of
October, 2019, revised sections of the agreement; and
Whereas a Second Amendment to Development Agreement, dated the 16th day of
March, 2020, was executed September 30, 2020; and
Whereas substantial work on the property which is the subject of the Development
Agreement has been performed to date, but the Minimum Improvements required by the
Development Agreement are not yet complete; and
Whereas, City and Developer have agreed to this Amendment to the Development
Agreement to modify the timing of the minimum improvements.
THEREFORE, in consideration of the mutual terms and covenants contained
herein, the parties agree as follows:
1. Section 2.3 of the Development Agreement is hereby amended to read as follows:
2.3 Timing of Minimum Improvements. Developer hereby agrees that
construction of the Minimum Improvements on the City Property and the Developer
Property shall be commenced within thirty (30) days after the Closing Date, and
shall be substantially completed by December 31, 2020. The time frames for the
performance of these obligations shall be suspended due to unavoidable delays
meaning delays, outside the control of the party claiming its occurrence in good
faith, which are the direct result of strikes, other labor troubles, unusual shortages
of materials or labor, unusually severe or prolonged bad weather, acts of God, fire
or other casualty to the Minimum Improvements, litigation commenced by third
parties which, by injunction or other similar judicial action or by the exercise of
reasonable discretion directly results in delays, or acts of any federal, state or local
government which directly result in extraordinary delays. The time for performance
of such obligations shall be extended only for the period of such delay.
2. The remaining provisions of the Development Agreement remain unchanged and
in force.
CITY OF DUBUQUE, IOWA METX, LLC
By:
By:
Roy C f Buol, Mayor
K- in B. Fir nstah1, City Clerk
By: -?S
Its:
Prepared by Jill Connors, Economic Development, 1300 Main St., Dubuque, IA 52001, 563-589-4393
Return to Kevin S. Firnstahl, City Clerk, City Hall, 50 W. 13th St., Dubuque, IA 52001 (563) 589-4100
RESOLUTION NO. 264-20
APPROVING THE THIRD AMENDMENT TO DEVELOPMENT AGREEMENT
BETWEEN THE CITY OF DUBUQUE, IOWA AND METX, LLC
WHEREAS, the City of Dubuque, Iowa (City) and Metx, LLC (Developer) entered into
a Development Agreement dated for reference purposes the 12th day of October, 2017,
as amended by First Amendment to Development Agreement dated the 21st day of
October, 2019 and by Second Amendment to Development Agreement dated the 16th of
March, 2020 and
WHEREAS, City and Developer desire to amend the Development Agreement as set
forth in the attached Third Amendment to Development Agreement; and
WHEREAS, the City Council believes it is in the best interests of the City of Dubuque
to approve the Second Amendment to Development Agreement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF DUBUQUE,
IOWA AS FOLLOWS:
Section 1. The City of Dubuque hereby approves the Third Amendment to
Development Agreement between the City of Dubuque and the Metx, LLC.
Section 2 The Mayor is authorized and directed to sign the Third Amendment to
Development Agreement on behalf of the City of Dubuque.
Passed, approved and adopted this 8th day of September 2020.
jio a
oy D. Buol, Mayor
Attest:
Ke 'in S. Firnsfahl, City Clerk