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Subordination of Mortage to 40 Main, LLC_Initiate Copyrig hted December 7, 2020 City of Dubuque Items to be set for Public Hearing # 1. City Council Meeting ITEM TITLE: Proposed Resolution of Issues with 40 Main, LLC, 44 Main, LLC and 210 Jones, LLC SUM MARY: City Manager recommending City Council set a public hearing on the 40 Main, LLC Subordination Agreement for December 21, 2020. RESOLUTION Setting a Public Hearing on the Subordination of a Mortgage granted by the City of Dubuque to 40 Main, LLC SUGGESTED Receive and File; Adopt Resolution(s), Set Public Hearing for DISPOSITION: December21, 2020Suggested Disposition: ATTACHMENTS: Description Type 40 Main LLC, 44 Main LLC, 210 Jones-MVM Memo City Manager Memo Staff Memo Staff Memo Resolution Setting Public Hearing Subordination Resolutions Agreement- 40 Main LLC Notice of Public Hearing - 40 Main LLC Supporting Documentation Quit Claim Deed - 40 Main LLC Supporting Documentation Resolution Approving Second Amendment- 210 Jones Supporting Documentation LLC Second Amendment- 210 Jones LLC Supporting Documentation Release and Waiver Undisbursed Grants & Loans- 40 Supporting Documentation Main LLC and 44 Main LLC Dubuque THE CITY OF � ui-Aseria cih DuB E , . � . , � II � Maste iece on tj2e Mississi i zoo�•zoiz•zois YP pp zoi�*zoi9 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Proposed Resolution of Issues with 40 Main, LLC, 44 Main, LLC and 210 Jones, LLC DATE: December 3, 2020 Senior Counsel Barry Lindahl recommends the City Council set a public hearing on the 40 Main, LLC Subordination Agreement for December 21, 2020. I concur with the recommendation and respectfully request Mayor and City Council approval. � Mic ael C. Van Milligen MCVM:jh Attachment cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Barry Lindahl, Senior Counsel Dubuque THE CITY OF � All•Ameriea Cify Du B E ���w���K�,���. � � � � ��� Maste iece on the Mississi i z°°'`z°lZ=Z°13 �P pp Zoi�*zoi9 BARRY A. LINDAHL, ESQ. SENIOR COUNSEL MEMO To: Michael C. Van Milligen City Manager DaTE: December 3, 2020 RE: Proposed Resolution of Issues with 40 Main, LLC, 44 Main, LLC and 210 Jones, LLC The City has Development Agreements with 40 Main, LLC, 44 Main, LLC and 210 Jones, LLC. The parties have reached a tentative agreement to resolve several issues under the Development Agreements. 210 Jones, LLC Parkinq Lot. The 210 Jones, LLC Development Agreement requires a number of Improvements to the building at 210 Jones Street and the construction of a parking lot and related improvements on Jones Street. The improvements to the building have been completed. The Developer has asked for an extension of time to complete the parking lot. The attached Second Amendment to Development Agreement extends the completion date to September 1, 2021. Subject to the other elements of this proposed resolution, I recommend that the Second Amendment to Development Agreement be submitted to the City Council for approval. 40 Main, LLC Real Estate Contract. In 2009, the City sold property to 40 Main, LLC for parking areas around the building at 40 Main Street. The balance of the contract of $157,583.00 was due November 1, 2015. 40 Main, LLC has agreed to pay the balance due to the City at this time. Once the City receives the payment, the attached Quit Claim Deed can be signed and delivered to 40 Main, LLC. 40 Main, LLC and 44 Main, LLC Grants and Loans. The Development Agreements provide for several grants and loans to the Developers of the two projects. Only one grant remains to be disbursed to 44 Main, LLC. Subject to the other elements of this proposed resolution, the Developers have agreed to waive that grant and release the City from all further grant or loan obligations under the Development Agreements. OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944 TE�EPHONE (563)583-4113/FAx (563)583-1040/EMai� balesq@cityofdubuque.org 40 Main, LLC Subordination Aqreement. One of the grants to 40 Main, LLC was for $900,000. The balance of the loan is around $242,000. The City has a mortgage for that grant. The Developer's payments on that loan are current. 40 Main, LLC and 44 Main, LLC are refinancing their other debt to be one mortgage to MidWest One. 40 Main, LLC has requested that the City subordinate the City's mortgage to its new mortgage to MidWest One Bank. A June 9, 2020 appraisal of the leased fee interest in the property at 40-48 Main Street which will be owned by 40 Main, LLC concluded that the market value is $5,300,000. The new MidWest One mortgage will be in the amount of$4,071,622.05. The effect of the proposed subordination agreement is that the City's mortgage will no longer have priority over the MidWest One mortgage. In summary, I recommend the following: 1. Submit the attached Second Amendment to 210 Jones, LLC Development Agreement to the City Council for consideration and approval. 2. Subject to receipt of $157,583.00 for the Real Estate Contract, adopt the attached resolution approving the delivery of the Quit Claim Deed to 40 Main, LLC. 3. Receive and file the release of all undisbursed grants and loans under the Development Agreements for 40 Main, LLC and 44 Main, LLC. 4. Adopt the attached resolution setting a public hearing on the 40 Main, LLC Subordination Agreement. BAL:tIs cc: Crenna M. Brumwell, City Attorney Jill Connors, Economic Development Director F:\Users\Laserfiche Legal\40 Main, LLC(Property Acquisition)\MVM_ProposedResolutionOflssues40Main44Main210Jones_120220.docx 2 Prepared by Barry A. Lindal, Esq. 300 Main St., Ste. 330 Dubuque IA 52001-6944 563-583-4113 Return to Adrienne N., Breitfelder, City Clerk, 50 W. 13th St., Dubuque, IA 52001, (563) 589-4100 RESOLUTION NO. 355-20 SETTING A PUBLIC HEARING ON THE SUBORDINATION OF A MORTGAGE GRANTED BY THE CITY OF DUBUQUE TO 40 MAIN, LLC WHEREAS, the City of Dubuque (City) and 40 Main, LLC have entered into a Development Agreement dated the 15th day of January, 2009, as amended; and WHEREAS, pursuant to the Development Agreement, 40 Main, LLC granted to City a Second Mortgage dated the 7th day of August, 2009, recorded August 25, 2009 as Instrument No. 2009-00016569 (the City Mortgage; and WHEREAS, 40 Main LLC, has requested that City subordinate the City Mortgage to the mortgage granted by 40 Main, LLC to Midwest One Bank (the Midwest One Mortgage), pursuant to the Subordination Agreement in a form acceptable to the City Attorney, on the following described real estate: Lots 16 and 17 in the Subdivision of the west half of Block 1, in Dubuque Harbor Company's Addition, in the City of Dubuque, Iowa, according to the recorded plat -thereof - - ; and WHEREAS, the City Council finds that it is in the interests of the City of Dubuque to approve the Subordination Agreement and that a public hearing should be set on the proposed Subordination Agreement NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The it is the intent of the City Council to execute the Subordination Agreement with Midwest One Bank regarding the above -referenced real estate. Section 2. The City Clerk is hereby authorized and directed to cause this Resolution and a notice to be published as prescribed by Iowa Code Section 364.7 of a public hearing on the City's intent to dispose of an interest in the foregoing -described Property, to be held on the 21st day of December, 2020 at 6:30 p.m. Section 3. Due to the ongoing COVID-19 pandemic, the City Council will meet virtually through GoToMeeting. The official agenda will be posted on Friday, December 18, 2020 and will contain location, listening, viewing, and public input options. The City Council agenda can be accessed at https://cityofdubugue.novusagenda.com/Agenda Public/. Passed, approved, and adopted this 7th day of December 2020. //," �, 4 " / Roy D. BIPIGII Mayor Attest: aA5119-,f�� A A46� ��'2 Adrienne Breitfelder, City Clerk Doc ID: 010648360007 Type: GEN Kind: RESOLUTION Recorded: 12/28/2020 at 03:52:31 PM Fee Amt: $37.00 Paqe 1 of 7 Dubuque County Iowa John Murphy Recorder File202O-0002O724 RECORDER'S COVER SHEET CITY OF DUBUQUE RESOLUTION NO. 355-20 Preparer Information: City of Dubuque, Iowa, 1300 Main Street, Dubuque, Iowa 52001 Phone: (563) 583-4113 Taxpayer Information: City of Dubuque, Iowa, 50 West 13th Street, Dubuque, IA 52001 Return Document To: Adrienne N. Breitfelder, City of Dubuque City Clerk, 50 West 13th Street, Dubuque, IA 52001 Legal Description: Lots 16 and 17 in the Subdivision of the west half of Block 1, in Dubuque Harbor Company's Addition, in the City of Dubuque, Iowa, according to the recorded plat thereof Grantors: The City of Dubuque, Iowa Grantees: 40 Main, LLC and MidwestOne Bank 700 DPQ GIv Clerk. Prepared by Barry A. Linda], Esq. 300 Main St Ste 330 Dubuque IA 52001-6944 563-583-4113 Return to Adrienne N., Breitfelder, City Clerk, 50 W. 131h St., Dubuque, IA 52001, (563) 589-4100 RESOLUTION NO. 355-20 SETTING A PUBLIC HEARING ON THE SUBORDINATION OF A MORTGAGE GRANTED BY THE CITY OF DUBUQUE TO 40 MAIN, LLC WHEREAS, the City of Dubuque (City) and 40 Main, LLC have entered into a Development Agreement dated the 15th day of January, 2009, as amended; and WHEREAS, pursuant to the Development Agreement, 40 Main, LLC granted to City a Second Mortgage dated the 7th day of August, 2009, recorded August 25, 2009 as Instrument No. 2009-00016569 (the City Mortgage; and WHEREAS, 40 Main LLC, has requested that City subordinate the City Mortgage to the mortgage granted by 40 Main, LLC to Midwest One Bank (the Midwest One Mortgage), pursuant to the Subordination Agreement in a form acceptable to the City Attorney, on the following described real estate: Lots 16 and 17 in the Subdivision of the west half of Block 1 I, 'in Dubuque Harbor Company's'Addition, in the City of Dubuque, Iowa, according to the recorded pat th-ereof -----------__... -- -..--- — - - ; and WHEREAS, the City Council finds that it is in the interests of the City of Dubuque to approve the Subordination Agreement and that a public hearing should be set on the proposed Subordination Agreement NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The it is the intent of the City Council to execute the Subordination Agreement with Midwest One Bank regarding the above -referenced real estate. Section 2. The City Clerk is hereby authorized and directed to cause this Resolution and a notice to be published as prescribed by Iowa Code Section 364.7 of a public hearing on the City's intent to dispose of an interest in the foregoing -described Property, to be held on the 21 st day of December, 2020 at 6:30 p.m. Section 3. Due to the ongoing COVID-19 pandemic, the City Council will meet virtually through GoToMeeting. The official agenda will be posted on Friday, December 18, 2020 and will contain location, listening, viewing, and public input options. The City Council agenda can be accessed at https:Hcitvofdubuque.novusagenda.com/Agenda Public/. Passed, approved., and adopted this 711 day of December 2020. Roy D. B 1, Mayor Attest: f /�- A44/a Adrienne Breitfelder, City Clerk CERTIFICATE of the CITY CLERK STATE OF IOWA ) SS: COUNTY OF DUBUQUE ) I, Adrienne N. Breitfelder, City Clerk, do hereby certify that I am the duly appointed, qualified, City Clerk of the City of Dubuque, Iowa, in the County aforesaid, and as such City Clerk, I have in my possession or have access to the records of the proceedings of the City Council. I do further state that the hereto attached Resolution No. 355-20 and associated Certificate of Publication is a true and correct copy of the original. In Testimony Whereof, I hereunto set my hand and official seal of the City of Dubuque, Iowa. Dated at .Dubuque, Iowa, on this 22nd day of December, 2020. 04�"' 11)7, 644k, Adrienne N. Breitfelder, City Clerk STATE OF IOWA SS: DUBUQUE COUNTY CERTIFICATE OF PUBLICATION I, Kathy Goetzinger, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher of the Telegraph Herald, a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper on the following dates: 12/16/2020 and for which the charge is 62.51 Subscribed to before me, a Notary ublic in and for Dubuque County, Iowa, this 16th day of December, 2020 Qo� 4� Notauiublic in and for Dubuq e County, Iowa. s-'" off JAP+ET K, PAP Cormrml slon Pdurm6er 19�9�669 My Cc=. Exp. DEC 11, 2022 Ad text : CITY OF DUBUQUE, IOWA OFFICIAL NOTICE PUBLIC NOTICE is hereby given that the City Council of the City of Dubuque, Iowa, will hold a public hearing on the 21st day of December, 2020, at 6:30 p.m. Due to the ongoing COVID-19 pandemic, the City Council will meet virtually through GoToMeeting. The official agenda will be posted on Friday, December 18, 2020 and will contain listening, viewing, and public input options. The City Council agenda can be accessed at https://cityofdubuque.novusage,nda,com/Agen daPublic/ or by contacting the City Clerk's Office at 563-589-4100, ctyclerk@cityofdubuque.org. At said meeting the City Council proposes to take action on the approval of a Subordination Agreement, subordinating a Second Mortgage and Security Agreement, granted by City to 40 Main, LLC, to Midwest One. Copies of supporting documents for the public hearing are on file in the City Clerk's Office, City Hall, 50 W. 13th St., Dubuque, Iowa, and may be viewed during normal working hours. Agendas can be accessed at https://www.cityofdubuque.org/Agendas. Written comments regarding the above public hearing should be submitted to the City Clerk's Office, 50 W. 13th St., Dubuque, IA 52001, ctyclerk@cityofdubuque.org, on or before said time of public hearing. At said time and place of public hearings all interested citizens and parties will be given an opportunity to be heard for or against said proposal. Individuals with limited English proficiency, vision, hearing or speech impairments or requiring special assistance should contact the City Clerk's Office at (563) 589-4100, TDD/TTY (563) 690-6678, ctyclerk@cityofdrnbuque.org as soon as feasible. Deaf or hard -of -hearing individuals can use Relay Iowa by dialing 711 or (800) 735-2942. Published by order of the City Council given. on the 7th day of December 2020, Adrienne N. Breitfelder, City Clerk RESOLUTION NO, 355-20 SETTING A PUBLIC HEARING ON THE SUBORDINATION OF. A MORTGAGE GRA-NTED BY THE CITY OF DUBUQUE TO 40 MAIN, LLC WHEREAS, the City of Dubuque (City) and 40 Main, LLC have entered into a Development Agreement dated the 15th day of January, 2009, as amended; and WHEREAS, pursuant to the Development Agreement, 40 Main, LLC granted to City a Second Mortgage dated the 7th day of August, 2009, recorded August 25, 2009 as Instrument No. 2009-00016569 (the City Mortgage; and WHEREAS, 40 Main LLC, has requested that City subordinate the City Mortgage to the mortgage granted by 40 Main, LLC to Midwest One Bank (the Midwest One Mortgage), pursuant to the Subordination Agreement in a form acceptable to the City Attorney, on the following described real estate: Lots 16 and 17 in the Subdivision of the west half of Block 1, in Dubuque Harbor Companys Addition, in the City of Dubuque, Iowa, according to the recorded plat thereof and WHEREAS, the City Council finds that it is in the interests of the City of Dubuque to approve the Subordination Agreement and that a public hearing should be set on the proposed Subordination Agreement NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1."The it is the intent of the City Council to execute the Subordination Agreement with Midwest One Bank regarding the above -referenced real estate. Section 2. "The City Clerk is hereby authorized and directed to cause this Resolution and a notice to be published as prescribed by Iowa Code Section 3643 of a public hearing on the Citys intent to dispose of an interest in the foregoing -described Property, to be held on the 21st day of December, 2020 of 6:30 p.m. Section 3. "Due to the ongoing COVID-19 pandemic, the City Council will meet virtually through GoToMeeting. The official agenda will be posted on Friday, December 18, 2020 and will contain location, listening, viewing, and public input options. The City Council agenda can be accessed at https://cityofdubuslue.novusagenda.conVAgenda Public/. Passed, approved, and adopted this 7th day of December 2020. Roy D. Buol, Mayor Attest: Adrienne N. Breitfelder It 12/16 CITY OF DUBUQUE, IOWA OFFICIAL NOTICE PUBLIC NOTICE is hereby given that the City Council of the City of Dubuque, lowa, will hold a public hearing on the 21St day of December, 2020, at 6:30 p.m. Due to the ongoing COVID-19 pandemic, the City Council will meet virtually through GoToMeeting. The official agenda will be posted on Friday, December 18, 2020 and will contain listening, viewing, and public input options. The City Council agenda can be accessed at https://cityofdubuque.novusagenda.com/AgendaPublic/ or by contacting the City Clerk's Office at 563-589-4100, ctyclerk@cityofdubuque.org. At said meeting the City Council proposes to take action on the approval of a Subordination Agreement, subordinating a Second Mortgage and Security Agreement, granted by City to 40 Main, LLC, to Midwest One. Copies of supporting documents for the public hearing are on file in the City Clerk's Office, City Hall, 50 W. 13t" St., Dubuque, lowa, and may be viewed during normal working hours. Agendas can be accessed at https://www.cityofdubuque.org/Agendas. Written comments regarding the above public hearing should be submitted to the City Clerk's Office, 50 W. 13t" St., Dubuque, IA 52001, ctyclerk cityofdubuque.orq, on or before said time of public hearing. At said time and place of public hearings all interested citizens and parties will be given an opportunity to be heard for or against said proposal. Individuals with limited English proficiency, vision, hearing or speech impairments or requiring special assistance should contact the City Clerk's Office at (563) 589-4100, TDD/TTY (563) 690-6678, ctyclerk cityofdubuque.orq as soon as feasible. Deaf or hard- of-hearing individuals can use Relay lowa by dialing 711 or (800) 735-2942. Published by order of the City Council given on the day of December, 2020. Adrienne N. Breitfelder, City Clerk Prepared by: Barry A. Lindahl, Esq. 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113 Return to: Barry A. Lindahl, Esq. 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113 Tax statement to: 40 Main, LLC Attn: Chris Miller 3211 North Cedar Court Dubuque, IA 52003 QUIT CLAIM DEED For the consideration of One Dollar and other valuable consideration, the City of Dubuque, lowa does hereby Quit Claim to 40 Main, LLC, all its right, title, interest, estate, claim and demand in the following described real estate in Dubuque County, lowa: Lot 1 of 10A, Lot 1 of 12A and Lot 1 of 17A all in the West Half of Block 1 and Lot 1 of 1A in the West Half of Block 10 all in Dubuque Harbor Company's Addition, in the City of Dubuque, Dubuque County, lowa Exempt: lowa Code § 428A.2(6) Deed in which a political subdivision of the state of lowa is the grantor Dated: , 2020 CITY OF DUBUQUE, IOWA Roy D. Buol, Mayor Attest: Adrienne Breitfelder, City Clerk 112320ba1 STATE OF IOWA, DUBUQUE COUNTY, ss: On this day of , 2020, before me a Notary Public in and for said County and said State, personally appeared Roy D. Buol and Adrienne Breitfelder to me personally known, who, being by me duly sworn, did say that they are the Mayor and City Clerk respectively, of the City of Dubuque, lowa; that said instrument was signed on behalf of said City of Dubuque by authority of Resolution No. -20 and that the said Roy D. Buol and Adrienne Breitfelder as such officers, acknowledged the execution of said instrument to be the voluntary act and deed of said municipal corporation, by it and by them voluntarily executed. , Notary public 2 RESOLUTION -20 APPROVING THE SECOND AMENDMENT TO DEVELOPMENT AGREEEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND 210 JONES, LLC WHEREAS, City and (Developer) entered into a Development Agreement dated June 19, 2017 (the Agreement), as amended; and WHEREAS, the Agreement provides the construction of parking lot improvements; and WHEREAS, City and Developer desire to further amend the Agreement as set forth in the attached Second Amendment to Development Agreement; and WHEREAS, the City Council finds that it is in the best interests of the City of Dubuque to approve the Second Amendment. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The Second Amendment to Development Agreement is hereby approved. Section 2. The Mayor is authorized and directed to sign the Second Amendment on behalf of the City of Dubuque. Passed, approved and adopted this day of December, 2020. Roy D. Buol, Mayor Attest: Adrienne Breitfelder, City Clerk SECOND AMENDMENT TO DEVELOPMENT AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND 210 JONES, LLC This Second Amendment to Development Agreement, dated for reference purposes the day of , 2020, is made an entered into by and between the City of Dubuque, lowa City) and 40 Main, LLC (Developer). WHEREAS, City and Developer entered into a Development Agreement dated June 19, 2017), as amended; and WHEREAS, the Development Agreement provides for the construction of parking lot improvements; and WHEREAS, City and Developer desire to further amend the Development Agreement as set forth herein. NOW THEREFORE, in consideration of the mutual terms and covenants contained herein, City and Developer agree as follows: 1. Section 2.2(1)(a) of the Development Agreement is amended to read as follows: 2.2 Parking Lot. (1) Construction of Improvements. (a) Developer shall not later than May 2, 2021 commence construction of a twelve-stall public parking lot (the Parking Lot) as shown on Exhibit E, including all pavement markings, signage, and associated landscaping, lighting, and irrigation, which shall be subject to review and approval at the City's sole discretion (the Parking Improvements). Developer hereby agrees that construction of the Parking Improvements September 1, 2021. 2. All other terms and conditions of the Development Agreement shall remain in full force and effect. 112320ba1 CITY OF DUBUQUE, IOWA 210 JONES, LLC By: By: Roy D. Buol, Mayor Chris Miller, President F:\Users\Laserfiche Legal\210 Jones LLC-DISCO Bldg\Second AmendmentToDA 210 Jones_120220.docx 2 RELEASE AND WAIVER BY AND AMONG THE CITY OF DUBUQUE, IOWA, 40 MAIN, LLC AND 44 MAIN, LLC This Release and Waiver, dated for reference purposes the day of , 2020, is made an entered into by and among the City of Dubuque, lowa, 40 Main, LLC, and 44 Main, LLC. WHEREAS, the City of Dubuque has entered into Development Agreements with 40 Main, LLC and 44 Main, LLC for the development of projects described therein; and WHEREAS, the Development Agreements provide for several grants and loans to the Developers of the two projects; and WHEREAS, only one grant remains to be disbursed to 44 Main, LLC under the Development Agreement; and WHEREAS, for valuable consideration the Developers have agreed to waive that undistributed grant and to release the City from all further grant or loan obligations under the Development Agreements. NOW, THEREFORE, IT IS AGREED BY AND AMONG THE PARTIES AS FOLLOWS: 40 Main, LLC and 44 Main, LLC hereby waives all of their rights to any and all further grant or loan obligations under the Development Agreements and hereby release and fully discharge the City of Dubuque from any and all further grant or loan obligations under the Development Agreements with 40 Main, LLC and 44 Main, LLC. CITY OF DUBUQUE, IOWA 40 MAIN, LLC By: By: Michael C. Van Milligen Chris Miller, Partner City Manager 44 MAIN, LLC By: Chris Miller, Member