Simmons Pet Food, Inc.: Subordination of Consent Rights Under Development Agreement, Payment Direction and Estoppel Certificate_HearingCity of Dubuque
City Council Meeting
Public Hearings # 1.
Copyrighted
August 2, 2021
ITEM TITLE: Simmons Pet Food, Inc.: Subordination of Consent Rights Under
Development Agreement, Payment Direction and Estoppel Certificate
SUMMARY: Proof of publication on notice of public hearing to consider City Council
approval of the subordination of Consent Rights under the Development
Agreement with Simmons Pet Food, Inc., and City Manager
recommending approval.
RESOLUTION Disposing of an interest in real property by
Subordination of Consent Rights under Development Agreement,
Payment Direction and Estoppel Certificate with Simmons Pet Foods,
I nc.
SUGGESTED Suggested Disposition: Receive and File; Adopt Resolution(s)
DISPOSITION:
ATTACHMENTS:
Description Type
Simmons Pet Food Subordination of Consent Right
Under Development Agreement-MVM Memo
Simmons Pet Food Inc Memo
Simmons Pet Food Inc Resolution Disposing of Real
Estate
Dubuque Subordination of Consent Right under
Development Agreement
City Manager Memo
Staff Memo
Resolutions
Supporting Documentation
Dubuque
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TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Simmons Pet Food, Inc.: Subordination of Consent Rights Under
Development Agreement, Payment Direction and Estoppel Certificate
DATE: July 29, 2021
City Attorney Crenna Brumwell recommends City Council approval of the subordination
of Consent Rights under the Development Agreement with Simmons Pet Food, Inc.
Simmons Pet Food, Inc.'s lenders have made or are contemplating a loan to Simmons
evidenced by a Credit Agreement secured by, among other security, a certain Real
Property Mortgage and Assignment of Leases and Rents (the Mortgage) encumbering
Lot 4.
Simmons has asked the City to subordinate the City's consent rights under Section 6.10
to the Mortgage pursuant to the Subordination of Consent Rights Under Development
Agreement, Payment Direction and Estoppel Certificate.
The Subordination of Consent Rights does not waive the City's rights to exercise any of
the City's default rights in the Amended and Restated Development Agreement. With
respect to the City's rights under the Amended and Restated Development Agreement,
the City will remain in the same security position it would be in as if it had not agreed to
the Subordination of Consent Rights, but subject to the priority of Simmons' existing
secured debt.
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
THE CITY OF
DUB E
Masterpiece on the Mississippi
CRENNA M. BRUMWELL, ESQ.
CITY ATTORNEY
To: Michael C. Van Milligen
City Manager
DATE: July 28, 2021
Dubuque
ui•�rede� ah
2007.2012
2013.2017
RE: Simmons Pet Food, Inc.: Subordination of Consent Rights Under
Development Agreement, Payment Direction and Estoppel Certificate
The Amended and Restated Development Agreement between the City and Simmons
Pet Foods, Inc. (Simmons) provides in Section 6.10 as follows:
6.10 Transferability. During the Term of this Agreement, this Agreement
may not be assigned and the Property and any portion of the Property may
not be sold or otherwise transferred by Developer without the prior written
consent of City in City's sole discretion. City has no obligation to consent to
any assignment or sale.
The "Property" referred to is the former Flexsteel Industries, Inc. site as well the two lots
sold by the City to Simmons.
Simmons has asked the City to subordinate the City's consent rights under Section 6.10
to Simmons' Credit Agreement, Mortgage and other Loan Documents (the Simmons'
Documents) pursuant to the attached Subordination of Consent Rights Under
Development Agreement, Payment Direction and Estoppel Certificate.
Because the Simmons' Documents include confidential and proprietary financial
information related to many of the Simmons' properties, Senior Counsel Barry Lindahl
and I have reviewed the Simmons' Documents pursuant to a confidentiality agreement.
The Simmons' Documents will not be included as an agenda item.
The Simmons' Documents provide that upon default by Simmons, Simmons' lenders may
take certain actions with respect to secured property, such as the Property subject to the
Amended and Restated Development Agreement, including foreclosing the lender's
mortgages, requesting the appointment of a receiver, and selling Simmons' secured
property, including the Dubuque Property. These are standard mortgage terms. Section
6.10 of the Amended and Restated Development Agreement would require the City of
05032021BAL
OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA
SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944
TELEPHONE (563) 589-4381 / FAX (563) 583-1040 / EMAIL cbrumwel@cityofdubuque.org
Dubuque to consent to any such actions. The Subordination of Consent Rights would
waive the requirement of such consent for the Dubuque Property.
The Subordination of Consent Rights does not, however, waive the City's rights to
exercise any of the City's default rights in the Amended and Restated Development
Agreement. With respect to the City's rights under the Amended and Restated
Development Agreement, the City will remain in the same security position it would be in
as if it had not agreed to the Subordination of Consent Rights, but subject to the priority
of Simmons' existing secured debt.
The Subordination of Consent Rights also provides that in the event of a default under
the Simmons' Documents, the City will be required to make the Economic Development
Grants due to Simmons under the Amended and Restated Development Agreement to
the entity as directed by the Simmons' Documents.
Finally, the Subordination of Consent Rights requires the City to state that there is no
uncured default or breach by Simmons under the Amended and Restated Development
Agreement.
We approve the Subordination of Consent Rights Under Development Agreement,
Payment Direction and Estoppel Certificate and recommend that it be submitted to the
City Council for approval at the August 2, 2021 public hearing.
I
Prepared by Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113
RESOLUTION NO.275-21
DISPOSING OF AN INTEREST IN REAL PROPERTY BY SUBORDINATION OF
CONSENT RIGHTS UNDER DEVELOPMENT AGREEMENT, PAYMENT DIRECTION
AND ESTOPPEL CERTIFICATE WITH SIMMONS PET FOODS, INC.
WHEREAS, the City of Dubuque, Iowa (City) entered into an Amended and Restated
Development Agreement (the Agreement) with Simmons Pet Foods, Inc. (Simmons) for
the property legally described as follows:
Lot 5 and Lot 5A of Dubuque Industrial Center South First Addition in the
City of Dubuque, Iowa
(the Property); and
WHEREAS, the Agreement between City and Simmons provides in Section 6.10
as follows:
6.10 Transferability. During the Term of this Agreement, this Agreement
may not be assigned and the Property and any portion of the Property may
not be sold or otherwise transferred by Developer without the prior written
consent of City in City's sole discretion. City has no obligation to consent to
any assignment or sale.
; and
WHEREAS, Simmons has requested that City subordinate City's consent rights
under Section 6.10 to Simmons' lenders' Credit Agreement pursuant to the attached
Subordination of Consent Rights Under Development Agreement, Payment Direction
and Estoppel Certificate attached hereto.
WHEREAS, the City Council believes it is in the best interests of the City of Dubuque
to approve the Subordination of Consent Rights Under Development Agreement,
Payment Direction and Estoppel Certificate.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
07282021BAL
Section 1. The City Council hereby approves the Subordination of Consent Rights
Under Development Agreement, Payment Direction and Estoppel Certificate.
Section 2. The Mayor is hereby authorized and directed to sign the Subordination of
Consent Rights Under Development Agreement, Payment Direction and Estoppel
Certificate on behalf of the City of Dubuque.
Passed, approved and adopted this 2"d day of August, 3021.
VA
_W
Attest:
Adrienne N. Breitfelder, City Clerk
SUBORDINATION OF CONSENT RIGHTS UNDER DEVELOPMENT AGREEMENT,
PAYMENT DIRECTION AND ESTOPPEL CERTIFICATE
This Subordination of Consent Rights under Development Agreement, Payment
Direction and Estoppel Certificate (the "Agreement") is made this FX day of July, 2021, by
and between the City of Dubuque, Iowa, a municipality ("City") and Simmons Pet Food, Inc., an
Arkansas corporation ("Developer").
RECITALS
City and Flexsteel Industries, Inc. (predecessor in interest to Simmons Pet Food,
Inc.) are parties to that certain Development Agreement dated June 5, 2017 (as
amended, the "Development Agreement") pertaining to that certain real property
commonly known as 501 Seippel Road, Dubuque, Iowa and legally described on
Exhibit A hereto (the "Premises"). Capitalized terms set forth herein shall have
the meanings ascribed thereto in the Development Agreement.
II. Wells Fargo Bank, National Association, a national banking association, as
Administrative Agent ("Agent"), for certain Lenders (as such term is defined in
the Credit Agreement), have made or are contemplating a loan (the "Loan") to
Developer and certain affiliates thereof evidenced by a Credit Agreement (the
"Credit Agreement") secured by, among other security, a certain Real Property
Mortgage and Assignment of Leases and Rents (the "Mortgage") encumbering
the Premises.
IIl. Agent and Lenders are relying on this Agreement in making the Loan.
IV. NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the receipt and sufficiency of which are hereby acknowledged,
City and Developer hereby agree and covenant as follows.
AGREEMENTS
City acknowledges and agrees that the consent right (the "Consent Right") in favor
of the City arising under Section 6.10 (Transferability) of the Development
Agreement is and shall at all times be subject and subordinate in all respects to the
Mortgage and all renewals, modifications and extensions thereof. The City further
acknowledges and agrees that the Consent Right is inapplicable and of no force or
effect with respect to a foreclosure of the Mortgage, a deed -in -lieu thereof or the
exercise of any other remedies of Agent and/or Lenders under the Mortgage.
2. City and Developer hereby agree and acknowledge that Agent and Lenders shall not
be deemed to have assumed any of the obligations or liabilities of Developer under
the Development Agreement by reason of this Agreement and Developer further
agrees to indemnify, protect, defend and hold Agent and Lenders harmless from and
against any claims or demands in respect of the Development Agreement or by virtue
of this Agreement.
3. Upon notification from Agent to City that an event of default has occurred under the
Mortgage, City shall thereafter make all Economic Development Grants payments to
Agent or as otherwise directed by Agent. Upon receipt of such notice City shall make
all future payments of Economic Development Grants due Developer under the
Development Agreement to Agent (or at Agent's direction) until notified otherwise in
writing by Agent. Developer, by its execution of this Agreement hereby consents to
such direct payments to Agent (or at Agent's direction) and hereby release and
discharges City from all liability on account of such payments.
4. City agrees to copy Agent on any notice of Developer's default under the
Development Agreement.
5. Estoppel:
a. There are no amendments, supplements or modifications of any kind to the
Development Agreement except as set forth on Schedule I.
b. To the best of City's knowledge, no uncured default or breach by Developer
exists under- the Development Agreement.
6. This Agreement shall be binding upon the parties hereto, and their successors and
assigns. This agreement shall run with the land.
7. This Agreement shall be governed by the laws of the State of Iowa.
8. City and Developer acknowledge and agree that Agent and Lenders and their
respective successors and assigns shall be entitled to rely on the agreements and
certifications set forth herein in connection with the financing of the above referenced
Premises.
[Signature Page to Follow]
2
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
undersigned as ofAu9Us} 3 —
, 2021.
T
CITY OF DUBUnUE, IOWA
By:
Roy uol, Mayor
By: Lire f�• �/S
ptt6erS Firnstal>}, City Clerk
Adrienne N. Breitfelder
SIMMONS PET FOOD, INC., an Arkansas
corporation
By:
Name: Kerry L Hairston
Title: Senior e President of Finance and
Treasurer
Signature Page to Subordination of Consent Right
STATE OF ARKANSAS )
) SS
COUNTY OF BENTON )
On this day before me, a Notary Public, duly commissioned, qualified and
acting, personally appeared Kerry L. Hairston, who acknowledged him to be the Senior
Vice President of Finance and Treasurer of Simmons Pet Food, Inc., an Arkansas
corporation, and that he, as such officer, being authorized so do to, executed the
foregoing instrument for the purposes and consideration therein contained by signing
the naive of the corporation by him as such officer.
IN W TNESS WHEREOF, I hereunto set my hand and official seal this
day of , 2021.
My Commission Expires:
RENA ANN SASNETT
Notary Public - Arkansas
Benton County
Commission 8 12399563
My Commission Expires Aug 11]2024wo
Notary ublic
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Acknowledgement Page to Subordination of Consent Right
ACKNOWLEDGMENT
STATE OF ZCn ?m )
SS
COUNTY OF S{�,
On this day before me, a Notary Public, duly commissioned, qualified and acting,
personally appeared Roy D. Buol, who acknowledged him to be the Mayor of the City of
Dubuque, Iowa and that he, as such officer, being authorized so do to, executed the foregoing
instrument for the purposes and consideration therein contained by signing the name of the city
by him as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal this �;*rtA day of
2021.
TRISH L. GLEASON
Notary Public eg g Commission Number 719M
c ,yh, Commission Expires
My Commission Expires: I • 1 a
l0l•13•Q-3
ACKNOWLEDGMENT
STATE OF
SS
COUNTY OF
On this day N efore me, a Notary Public, duly commissioned, qualified and acting,
personally appeard,eHn inistatrl, who acknowledged Ir4to be the City Clerk of the City
of Dubuque, Iowa and that he; as such officer, being authorized so do to, executed the foregoing
instrument for the purposes and consideration therein contained by signing the name of the city
by Iii#n as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal this 3rA day of
2021.
Z#1�ASON -
Notary Public '� Commission Number 719966
My Commission Expires: My Commission Expires1 ,1 a
la•13•a3
*Adrienne N. Breitfelder
Acknowledgement Page to Subordination of Consent Right
EXHIBIT A
LEGAL DESCRIPTION
Lot 4 of the Final Plat of Dubuque Industrial Center South First Addition in the City of Dubuque,
Iowa, according to the recorded plat thereof, recorded February 13, 2014, as File Number 2014-
00001397.
I'i
SCHEDULEI
AMENDMENTS AND MODIFICATIONS
Amended Memorandum of Development Agreement recorded on December 21, 2020, as File
Number 202000020396.
-7-
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:
07/23/2021
and for which the charge is 75.49
Subscribed to before me, a Notary Public i and for
Dubuque County, Iowa,
this 26th day of July, 2021
Notary IC
bl c in and for Dubuque ounty, Iowa.
JANTK. PAPE
umCommioN
sDE
11, 2
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Ad text : CITY OF DUBUQUE, IOWA
OFFICIAL NOTICE
PUBLIC NOTICE is hereby given that the Dubuque City Council
will conduct a public hearing on the 2nd day of August, 2021,
at 6:30 p.m., in the Historic Federal Building, 350 W. 6th
Street, 2nd floor, Dubuque, Iowa, at which meeting the City
Council proposes to approve the subordination of Consent
Rights under the Development Agreement with Simmons Pet Food,
Inc..
At the meeting, the City Council will receive in -person and
virtual comments from any resident or property owner of said
City to the above action. The official agenda will be posted
the Friday before the meeting and will contain public input
options. The City Council agenda can be accessed at
https://cityofdubuque.novusagenda.com/AgendaPublic/ or by
contacting the City Clerks Office at 563-589-4100,
ctyclerk@cityofdubuque.org. 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.
Written comments regarding the above public hearings may be
submitted to the City Clerks Office via email at
ctyclerk@cityofdubuque.org or by mail to City Clerks Office,
City Hall, 50 W. 13th St., Dubuque, IA 52001, before said
time of public hearing. At said time and place of public
hearings the City Council will receive any written comments
received by the City Clerks Office before said time of public
hearing.
Copies of supporting documents for the public hearings are
on file in the City Clerks Office and may be viewed Monday
through Friday between 8:00 a.m. and 5:00 p.m.
Individuals with limited English proficiency, vision,
hearing, or speech impairments requiring special assistance
should contact the City Clerks Office at (563) 589-4100, TDD
(563) 690-6678, ctyclerk@cityofdubuque.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 19th day
of July 2021.
Trish L. Gleason, Assistant City Clerk
RESOLUTION NO. 253-21
INTENT TO DISPOSE OF AN INTEREST IN REAL PROPERTY BY
SUBORDINATION OF CONSENT RIGHTS UNDER DEVELOPMENT AGREEMENT,
PAYMENT DIRECTION AND ESTOPPEL CERTIFICATE WITH SIMMONS PET
FOODS, INC.
WHEREAS, the City of Dubuque, Iowa (City) entered into an
Amended and Restated Development Agreement (the Agreement)
with Simmons Pet Foods, Inc. (Simmons) for the property
legally described as follows:
Lot 4, Lot 5 and Lot 5A of Dubuque Industrial Center South
First Addition in the City of Dubuque, Iowa
(the Property); and
WHEREAS, the Agreement between City and Simmons provides in
Section 6.10 as follows:
6.10"Transferability. During the Term of this Agreement,
this Agreement may not be assigned and the Property and any
portion of the Property may not be sold or otherwise
transferred by Developer without the prior written consent of
City in City's sole discretion. City has no obligation to
consent to any assignment or sale.
; and
WHEREAS, Simmons has requested that City subordinate City's
consent rights under Section 6.10 to Simmons Mortgage pursuant
to the attached Subordination of Consent Rights Under
Development Agreement, Payment Direction and Estoppel
Certificate attached hereto; and
WHEREAS, the Simmons' Mortgage and the Subordination of
Consent Rights Under Development Agreement, Payment Direction
and Estoppel Certificate have been reviewed and approved by
the City Attorneys Office; and
WHEREAS, the City Council of City believes it is in the best
interests of City to approve the Subordination of Consent
Rights Under Development Agreement, Payment Direction and
Estoppel Certificate.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF DUBUQUE, IOWA:
Section 1. The City Council of City, intends to dispose of
Citys interest in the foregoing -described real property
pursuant to the Subordination of Consent Rights Under
Development Agreement, Payment Direction and Estoppel
Certificate.
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 *364.7 of a public hearing on City's
intent to dispose of the foregoing -described real property, to
be held on the 2nd day of August, 2021, at 6:30 o'clock p.m.
in the City Council Chambers at the Historic Federal Building,
350 W. 6th Street, Dubuque, Iowa
Passed, approved and adopted this 19th day of July, 2021.
Roy D. Buol, Mayor
Attest: Trish L. Gleason,
Assistant City Clerk
It 7/23