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Iowa Finance Authority_Loan Agreement_Workforce Housing Rental, Millwork DistrictMasterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Application for Workforce Housing Funding DATE: June 15, 2010 Dubuque kiltd AN- America City 1110! 2007 Over the past several months, City staff, the Greater Dubuque Development Corporation, and others have met with representatives of the Iowa Finance Authority (IFA) and the Iowa Department of Economic Development (IDED) to stress the City's critical need for rental workforce housing. IFA and IDED staff have traveled to Dubuque to see, first hand, the City's housing needs and potential opportunities, particularly in the Historic Millwork District, to address this workforce housing need. Housing has become a significant issue in Dubuque since IBM has decided to locate their 1,300 employee Global Service Delivery Center. A lack of rental housing has caused trouble for new residents to find a place to live. In June 2010, the Greater Dubuque Development Corporation (GDDC) discovered approximately 170 vacant rental units, or about at 2% vacancy rate within Dubuque. A study was conducted for IFA in November 2009 to determine the additional need for housing within Dubuque. The study showed an additional 556 housing units are needed in the area, noting the most desirable units being in the downtown core area. The Historic Millwork District would be a large scale project able to fulfill much of the needed demand for rental housing. Even prior to the IBM announcement, the City had studies that indicated a need for additional downtown housing. The consultants who prepared the Master Plans for the Port of Dubuque, the Downtown and the Historic Millwork District emphasized the need for downtown housing. A solution is needed soon for this housing shortage because other companies in Dubuque are also starting to increase their employment numbers and need to hire employees as routine vacancies occur. Companies have started to see challenges in recruiting a qualified workforce because housing is unavailable in the area. The Millwork District property owners are positioned to act quickly on their projects, if financing can be secured to fill current proforma gaps. This loan program from IFA would provide additional funding for these projects. The IFA created a pool of funds to establish a low- interest loan program to assist in the creation of workforce housing. The City Council approved an application for these funds at the May 17th meeting. The IFA Board has approved the City's application and has submitted a loan agreement for the City of Dubuque. Major elements of the proposed loan agreement are as follows: • $4.5 million to establish a local revolving loan fund to assist redevelopment of the Historic Millwork District for workforce housing. • The loan has an upfront commitment fee of .5% payable from the first draw of funds. • Loan terms: 20 -year loan first 10 years interest only at 3 %; second 10 years principal and interest at 3 %, 20 -year amortization. • Dubuque loan pool would be loaned to Historic Millwork District developers on terms negotiated by the City. Loan repayments can be used by the City to make additional loans during the 20 -year term. • At least 50% of the completed units developed with loan proceeds will be rented to families whose annual income is no more than 120% of the area median income (today that equates to $52,560). • The IFA loan would be secured by the full faith and credit of the City's general obligation bonding authority. • The loan can be repaid at any time without penalty. It should be noted that there is always some risk to the City when providing a loan guarantee. The City has previously accepted grants and /or loans to assist local projects, but not on this scale. The City previously agreed to a $500,000 loan from the IFA to assist the White Street condominium project. This was also a loan to the City, which in turn $250,000 was loaned to the developer. The City also assisted the Dubuque County Historical Society with the National Mississippi River Museum expansion project. The federal government committed $5 million of National Scenic Bylaws /SAFETEA -LU funding toward this expansion. The City was required to provide this funding upfront and was reimbursed by the federal government. In the event of a default, the City was obligated to repay the grant. The intent of this loan pool is to loan funds to Millwork District projects that have all other necessary financing in place to complete the projects. Conventional financing commitments from financial institutions, commitments for tax credits, and other financial commitments will need to be realized before closing a deal with any local developer from the revolving loan pool. While the City will negotiate for some collateral on the loan, it is known that this will not be a 100% first mortgage. Economic Development Director Dave Heiar is recommending approval of the loan agreement with the Iowa Finance Authority. I concur with the recommendation and respectfully request Mayor and City Council approval. Michael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager David J. Heiar, Economic Development Director Masterpiece on the Mississippi TO: Michael Van Milligen, City Manager FROM: David J. Heiar, Economic Development Direct SUBJECT: Application for Workforce Housing Funding DATE: June 15, 2010 Dubuque AFAmmiaCity 2007 INTRODUCTION On May 27, 2010, the Iowa Finance Authority (IFA) approved the City's request for a $4.5 million loan to assist workforce housing projects in the Historic Millwork District. The City must hold a public hearing prior to signing a loan agreement. BACKGROUND Over the past several months, City staff and many of our partners have met with representatives of the IFA and the Iowa Department of Economic Development (IDED) to stress the City's critical need for rental workforce housing. On a couple of occasions, IFA and IDED staff have traveled to Dubuque to see, first hand, our housing needs and potential opportunities, particularly in the Historic Millwork District, to address this workforce housing need. Housing has become a significant issue in Dubuque since IBM has decided to locate their 1,300 employee Global Service Delivery Center. A lack of rental housing has caused trouble for new residents to find a place to live. In June 2010, the Greater Dubuque Development Corporation (GDDC) discovered approximately 170 vacant rental units, or about a 2% vacancy rate within Dubuque. A study was conducted for IFA in November 2009 to determine the additional need for housing within Dubuque. The study showed an additional 556 housing units are needed in the area, noting the most desirable units being in the downtown core area. The Millwork District would be a large scale project able to fulfill much of the needed demand for rental housing. Even prior to the IBM announcement, the City had studies that indicated a need for additional downtown housing. The consultants who prepared the Master Plans for the Port of Dubuque, the Downtown and the Historic Millwork District emphasized the need for downtown housing. A solution is needed soon for this housing shortage because other companies in Dubuque are also starting to increase their employment numbers. Companies have started to see challenges in recruiting a qualified workforce because housing is unavailable in the area. The Millwork District property owners are positioned to act quickly on their projects, if financing can be secured to fill current proforma gaps. This loan program from IFA would provide additional funding for these projects. DISCUSSION The IFA created a pool of funds to establish a low- interest loan program to assist in the creation of workforce housing. The City Council approved an application for these funds at the May 17 meeting. The IFA Board has approved the City's application and has submitted a loan agreement for the City of Dubuque. The City Council set a public hearing on this loan for June 21, 2010. Major elements of the proposed loan agreement are as follows: • $4.5 million to establish a local revolving loan fund to assist redevelopment of the Historic Millwork District for workforce housing. • The loan has an upfront commitment fee of .5% payable from first draw of funds. • Loan terms: 20 year loan first 10 years interest only at 3 %; second 10 years principal and interest at 3 %, 20 year amortization. • Dubuque loan pool would be loaned to Millwork developers on terms negotiated by the City. Loan repayments can be used by the City to make additional loans during the 20 year term. • At least 50% of the completed units developed with loan proceeds will be rented to families whose annual income is no more than 120% of the area median income (today that equates to $52,560). • The IFA loan would be secured by the full faith and credit of the City's general obligation bonding authority. • The loan can be repaid at any time without penalty. The proposed loan agreement is attached. It should be noted that there is always some risk to the City when providing a loan guarantee. The City has previously accepted grants and /or loans to assist local projects, but not on this scale. The City previously agreed to a $500,000 loan from the IFA to assist the White Street condominium project. This was also a loan to the City, which in turn $250,000 was loaned to the developer. The City also assisted the Dubuque County Historical Society with the National Mississippi River Museum expansion project. The federal government committed $5 million of National Scenic Bylaws /SAFETEA -LU funding toward this expansion. The City was required to provide this funding upfront and was reimbursed by the federal government. In the event of a default, the City was obligated to repay the grant. The intent of this loan pool is to loan funds to Millwork District projects that have all other necessary financing in place to complete the projects. Conventional financing commitments from financial institutions, commitments for tax credits, and other financial commitments will need to be realized before closing a deal with any local developer from our revolving loan pool. While the City will negotiate for some collateral on the loan, it is known that this will not be a 100% first mortgage. RECOMMENDATION /ACTION STEP To request that the City Council approve the attached proceedings prepared by Bill Noth, of Ahlers & Cooney, P.C. approving a $4.5 million loan with IFA to establish a local revolving loan fund to create workforce housing in the Historic Millwork District. Attachment F:\USERS\Econ Dev \IFA Workforce Housing\20100615 IFA Approve City Request Memo public hearing.doc RESOLUTION NO 212 -10 A RESOLUTION APPROVING A LOAN AGREEMENT WITH THE IOWA FINANCE AUTHORITY (IFA) ON BEHALF OF THE CITY OF DUBUQUE TO ESTABLISH A LOCAL REVOLVING LOAN FUND FOR WORKFORCE AND MARKET RATE HOUSING IN THE HISTORIC MILLWORK DISTRICT. Whereas, the City has been working with the Iowa Finance Authority to create a state pool of funding to address the shortage of workforce housing; and Whereas, the Iowa Finance Authority has established a pool of funds to establish a low interest loan program to assist in the creation of workforce housing; and Whereas, the low interest loan program would provide funds to assist Millwork District projects in creating workforce (120% of area median income and below) and market rate housing; and Whereas, the City of Dubuque, Iowa is eligible for funding from the Iowa Finance Authority. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the loan agreement to establish a local revolving loan fund for workforce housing is hereby accepted and approved. Section 2. That the Mayor is hereby authorized to execute, on behalf of the City Council of the City of Dubuque, Iowa, the attached loan agreement with the Iowa Finance Authority. Att -st• Passed, approved, and adopted this 21 day of J eanne Schneider, City Clerk , (.9 F: \USERS \Econ Dev \IFA Workforce Housing\20100615 Resolution Approve IFA Funding public hearing.doc Roy D. Buol, Mayor IOWA FINANCE AUTHORITY WORKFORCE HOUSING ASSISTANCE LOAN FUND PROGRAM LOAN AGREEMENT between IOWA FINANCE AUTHORITY Dated as of and CITY OF DUBUQUE, IOWA This Table of Contents is not a part of this Loan Agreement and is only for convenience of reference. ARTICLE I - AMOUNT AND TERMS OF THE LOAN SECTION 1.01 The Loan SECTION 1.02 Making the Loan SECTION 1.03 Loan Repayment Installments SECTION 1.04 Prepayments SECTION 1.05 Time and Place of Payments SECTION 1.06 Payment on Non - Business Days SECTION 1.07 Use of Loan Repayments SECTION 1.08 [Reserved] SECTION 1.09 [Reserved] ARTICLE II - CONDITIONS OF LENDING SECTION2.01 SECTION 2.02 ARTICLE III - REPRESENTATIONS, COVENANTS AND WARRANTIES SECTION 3.01 Representatives and Warranties of the Borrower SECTION 3.02 [Reserved] SECTION 3.03 [Reserved] ARTICLE IV - EVENTS OF DEFAULT SECTION 4.01 SECTION 4.02 Events of Default Remedies of the Authority ARTICLE V - MISCELLANEOUS TABLE OF CONTENTS Conditions Precedent to the Loan Further Conditions Precedent to the Loan SECTION 5.01 Waivers, Consents SECTION 5.02 Notices, Etc. SECTION 5.03 No Waiver; Remedies SECTION 5.04 Indemnity; Fees and Expenses SECTION 5.05 Binding Effect; Governing Law SECTION 5.06 Assignments SECTION 5.07 Counterparts SECTION 5.08 Severability SECTION 5.09 Amendments, Changes and Modifications SECTION 5.10 Term of the Agreement SECTION5.11 [Reserved] LIST OF EXHIBITS EXHIBIT A EXHIBIT B EXHIBIT C EXHIBIT D EXHIBIT E Loan Data Promissory Note Addresses for Notices and Demands Payment Request Form Expected Loan Repayment Schedule This LOAN AGREEMENT, dated as of the day of , 2010, between the IOWA FINANCE AUTHORITY (the "Authority ") and the CITY OF DUBUQUE, IOWA (the "Borrower"). WITNESSETH: "WHEREAS, the Authority is a public instrumentality and agency of the State of Iowa authorized and empowered by the provisions of Chapter 16 of the Code of Iowa, as amended (the "Act ") to assist in the financing and development of decent, safe, and affordable housing; and WHEREAS, the Workforce Housing Assistance Loan Fund Program (the "Program ") has been created by the Authority to provide a flexible program of financial assistance in the form of low- interest loans for rehabilitation of existing buildings to provide workforce housing in needed areas; and WHEREAS, the Borrower desires to borrow monies from the Authority in order to finance a portion of the costs of the Project described in Exhibit A attached hereto (the "Project "); and WHEREAS, the Borrower has applied for and, pursuant to a Resolution adopted by the Board of the Authority on , 2010, received approval from the Authority for funding of the Project through the Program. NOW THEREFORE, in consideration of the mutual covenants hereinafter contained, the Borrower and the Authority hereby covenant and agree as follows: ARTICLE I AMOUNT AND TERMS OF THE LOAN SECTION 1.01. The Loan. The Authority agrees, upon the terms and conditions hereinafter set forth, to make a Loan to the Borrower under the Program in an amount not to exceed the Principal Amount shown in Exhibit A hereto in order to finance a portion of the costs of the Project (the "Loan "). The obligation of the Borrower hereunder to repay the Loan shall be evidenced by a promissory note of the Borrower to the Authority, in the form attached hereto as Exhibit B (the "Note "), which Note is by this reference incorporated herein as though set out in full. The Borrower's obligation to repay the Loan and interest thereon shall constitute a general obligation of the Borrower. 1 SECTION 1.02. Making the Loan. Upon fulfillment of the applicable conditions set forth in Article II, the Authority will make the Loan available to the Borrower. Disbursements of loan proceeds may be made by the Authority to the Borrower, upon the receipt and approval by the Authority, in its sole discretion, of a written payment request from the Borrower, in the form set out in Exhibit D attached hereto. SECTION L03. Loan Repayment Installments. (a) Until the principal of and interest on the Note shall have been fully paid the Borrower shall pay directly to the Authority, as a repayment installment of the Loan, a sum equal to the principal (whether at maturity or upon acceleration) and interest due on the Note, as provided in the Note. The anticipated Loan repayment schedule is attached hereto as Exhibit E. (b) In the event the Borrower should fail to make any of the payments required hereunder, beyond any applicable notice and cure periods, the item or installment so in default shall continue as an obligation of the Borrower until the amount in default shall have been fully paid, and such amount shall bear interest at the Default Rate (as defined in the Note). SECTION 1.04. Prepayments. The outstanding principal of the Loan may be prepaid at any time without penalty. Any prepayment shall be applied against the installments due under the Note, and, unless otherwise provided for in the Note, in inverse order of principal maturity with no abatement or reduction in the amount of installments otherwise required to be paid under the Note. SECTION 1.05. Time and Place of Payments. The Borrower shall make each payment under this Agreement and the Note not later than the day when due in immediately available funds consisting of lawful money of the United States of America to the Authority at its address set forth in Exhibit C hereto. SECTION 1.06. Payment on Non - Business Days. Whenever any payment to be made hereunder or under the Note shall be stated to be due on a Saturday, Sunday or a public holiday or the equivalent for banks generally under the laws of the State of Iowa (any other day being a "Business Day "), such payment may be made on the next succeeding Business Day together with interest in respect of such extension. 2 SECTION 1.07. Use of Loan Repayments. Borrower may establish repayment terms and collateral and security requirements for the loan(s) to be made by Borrower with the Loan proceeds to the developer(s) of the Project, including tax credit entities formed to provide Project - related funding ('Developers ") as Borrower determines to be appropriate and consistent with the terms of this Agreement. Borrower shall use the principal and interest payments received from the initial Project Developers to pay interest on the Note as it becomes due, and then may use all remaining loan payment amounts as described in Exhibit A. Borrower shall have no obligation to escrow any loan repayment amounts for purposes of paying the principal of the Note at maturity. Borrower shall establish appropriate reporting and compliance measures to ensure that the restrictive covenants are complied with. Borrower shall report to the Authority annually on July 1 of each year as to the projects funded in whole or in part with Loan proceeds, the total number of units in each such project and the number of units in each such project that are leased to tenants whose annual income at the commencement of the lease is at or below one hundred twenty percent (120 %) of the area median income. SECTION 1.08. [Reserved] SECTION 1.09. [Reserved] ARTICLE II CONDITIONS OF LENDING SECTION 2.01. Conditions Precedent to the Loan. The obligation and agreement of the Authority to make the Loan is subject to the following conditions precedent. The Authority shall have received on or before the date of the Loan the following, in form and substance satisfactory to the Authority: (a) The Note executed by the Borrower; (b) Evidence that the Borrower has complied with any and all Special Conditions set forth in Exhibit A required to be satisfied prior to Loan closing; (c) A legal opinion of counsel to the Borrower to the effect that: (i) the Borrower is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the resolution authorizing this Agreement and the Note; (ii) this 3 Agreement and the Note have been duly authorized, executed and delivered by the Borrower and constitute valid and binding general obligations of Borrower, enforceable in accordance with their terms, subject to customary exceptions relating to bankruptcy and similar laws affecting creditors' rights and the exercise of judicial discretion; and (iii) all taxable property in the territory of the Borrower is subject to ad valorem taxation without limitation as to rate or amount to pay the Note; and (iv) taxes have been levied for the payment of the Note and the Borrower is required by law to include in its annual tax levy the principal and interest coming due on the Note to the extent the necessary funds are not provided from other sources; and (d) Such other certificates, opinions, documents, and instruments which the Authority may reasonably request. SECTION 2.02. Further Conditions Precedent to the Loan. The obligation of the Authority to make the Loan shall be subject to the further conditions precedent that on the date of the Loan the following statements shall be true and the Authority shall have received a certificate signed by the Borrower, dated the date of the Loan, stating, among other things, that: (a) The representations and warranties contained in Section 3.01 of this Agreement, the covenants contained in Section 3.02 of this Agreement, and all representations and certifications contained in the Application are correct on and as of the date of the Loan as though made on and as of such date; and (b) No event has occurred and is continuing, or would result from the Loan, which constitutes an Event of Default but for the requirement that notice be given or time elapse, or both. SECTION 2.03 Condition Subsequent to the Loan. The parties hereby agree that if Borrower has not made a draw under this Agreement within six (6) months of the date first set forth above, the Authority may, in its sole discretion, at any time thereafter prior to a draw being disbursed, terminate this Agreement upon written notice to Borrower. 4 ARTICLE III REPRESENTATIONS, COVENANTS AND WARRANTIES SECTION 3.01. Representations and Warranties of the Borrower. The Borrower represents and warrants as follows: (a) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Borrower of this Agreement and the Note and other documents and agreements required to be delivered by the Borrower pursuant to this Agreement; (b) This Agreement and the Note (which evidences the obligation of the Borrower hereunder) and other documents and agreements required by this Agreement when delivered hereunder are and will be legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance laws or other laws affecting the rights of creditors generally, and to general principles of equity; (c) Neither the execution, delivery or performance of this Agreement or the Note, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement conflicts with or results in a breach of any of the terms, conditions or provisions of any restriction in any organizational document or any agreement or instrument to which the Borrower is now a party or by which the Borrower is bound, or constitutes a default under any of the foregoing, or results in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of the property or assets of the Borrower under the terms of any instrument or agreement, other than as may be created or imposed to secure the Borrower's repayment of the Loan as provided in this Agreement; (d) The obligation of the Borrower hereunder, as evidenced by the Note, when delivered hereunder is and will be a legal, valid and binding general obligation of the Borrower under Iowa law; (e) There is no litigation or proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower affecting in any manner whatsoever the right of the Borrower to execute this Agreement or the other agreements required to be executed by the Borrower under this Agreement, or the ability of the Borrower to make the payments required hereunder and under the Note or to otherwise comply with Borrower's obligations contained herein or therein; 5 (f) The Borrower agrees that the Authority shall have no responsibility nor incur any expense for maintenance or preservation of the Project or for the payment of any taxes, assessments or other governmental charges assessed or levied with respect to the Project; (g) The certifications and representations of the Borrower and other information contained in the Application were true and correct as of the date made and are true and correct on the date hereof, except as information in the Application may have been amended with the written approval of the Authority; (h) There has been no adverse change since the date of the Application in the financial condition, organization, operation, business prospects, fixed assets, or key personnel of the Borrower; (i) No portion of the Loan proceeds shall be used for any political activity or to further the election or defeat of any candidate for public office; (j) No payment of any bonus or commission has been made by the Borrower for the purpose of obtaining approval of the Application, or has or will be made for the purpose of obtaining approval of applications for additional assistance, or any other approval or concurrence of the Authority required under this Agreement; and (k) No officer, member, or employee of the Authority and no members of its board, and no other public official of the governing body of the locality or localities in which the Project is situated who exercises any functions or responsibilities in the review or approval of the undertaking or carrying out of this Project, has participated in any decisions relating to this Agreement which affect his or her personal interest or the interest of any corporation, partnership, or association in which he or she is directly or indirectly interested or has any personal or financial interest, direct or indirect, in this Agreement or the proceeds of the Loan. SECTION 3.02. Covenants of the Borrower The Borrower hereby covenants that during the term of the Loan, it shall: (a) Provide the Authority with its annual audited financial statements no more than 180 days after fiscal year end; and (b) Inform the Authority of all changes in the Borrower's credit rating within five (5) business days of the Borrower becoming aware of such change. SECTION 3.03. [Reserved] 6 ARTICLE IV EVENTS OF DEFAULT SECTION 4.01. Events of Default. Any of the following events shall constitute an "Event of Default" hereunder: (a) Any representation or warranty made by the Borrower under or in connection with this Agreement shall prove to have been incorrect in any material respect when made; or (b) The Borrower shall fail to pay any installment of principal of the Loan under this Agreement and the Note within thirty (30) days after it is due; or (c) The Borrower shall fail to pay any installment of interest on the Loan under this Agreement and the Note within thirty (30) days after it is due; or (d) The Borrower shall fail to perform or observe any other term, covenant, or agreement contained in this Agreement and any such failure shall remain unremedied for thirty (30) days after written notice thereof shall have been given to the Borrower by the Authority, or such longer period of time specified in such written notice as the Authority reasonably determines necessary to correct such default; or (e) [Reserved] (f) The Borrower shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of all or a substantial part of the Borrower's property, (ii) admit in writing the Borrower's inability, or be generally unable, to pay the Borrower's debts as they become due, (iii) make a general assignment for the benefit of the Borrower's creditors, (iv) commence a voluntary case under the Federal Bankruptcy Laws (as now or hereafter in effect), (v) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts, (vi) acquiesce in writing to, or fail to controvert in a timely or appropriate manner, any petition filed against the Borrower in an involuntary case under such bankruptcy laws, or (vii) take any action for the purpose of effecting any of the foregoing; (g) A case or other proceeding shall be commenced, without the application or consent of the Borrower, in any court of competent jurisdiction, seeking the liquidation, reorganization, dissolution, winding up, or composition or readjustment of debts, of the Borrower, the appointment of a trustee, receiver, custodian, liquidator or the like of the Borrower or of all or any substantial part of its assets, or any similar action with respect 7 to the Borrower under any laws relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts, and such case or proceeding (other than an involuntary case under the Federal Bankruptcy Laws) shall continue undismissed, or unstayed and in effect, for a period of sixty (60) days, or in an involuntary case under the Federal Bankruptcy Laws (as now or hereinafter in effect) an order for relief against the Borrower shall be entered. (h) Borrower's credit rating is downgraded to below BBB- or Borrower's ratings are withdrawn; or (i) Borrower defaults on an outstanding bond or other obligation. SECTION 4.02. Remedies of the Authority. If any Event of Default referred to above has occurred, the Authority or its agent may: (a) By notice to the Borrower declare the Loan, all interest thereon and all other amounts payable under the Note and this Agreement to be forthwith due and payable, whereupon the Loan, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; (b) Make no further Advances under this Agreement and the Note; and (c) Take whatever action necessary to collect the payments and other amounts then due and thereafter to become due or to enforce performance and observance of any obligation, agreement or covenant of the Borrower under this Agreement. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Upon the occurrence of an Event of Default and at any time thereafter, the Authority or its agent may, at its option, exercise any and all of the rights and remedies available to it. 8 ARTICLE V MISCELLANEOUS SECTION 5.01. Waivers, Consents. No waiver by the Authority of any default hereunder, nor consent to any departure by the Borrower from the provisions of this Agreement, shall in any event be effective unless the same shall be in writing and signed by the Authority and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given, and shall not operate as a waiver or consent with respect to any other default or departure or the same default or departure on a future occasion. SECTION 5.02. Notices, Etc. All notices and other communications provided for hereunder shall be in writing (including facsimile communication) and mailed or delivered to the persons and addresses set forth in Exhibit C hereto, or, as to each party, at such other address as shall be designated by such party in a written notice to the other parties. All such notices and communications shall, when mailed, be effective when deposited in the mails, addressed as aforesaid. SECTION 5.03. No Waiver; Remedies. No failure on the part of the Authority to exercise, and no delay in exercising, any right under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise of any right under this Agreement preclude any other or further exercise thereof or the exercise of any other right. The remedies provided in this Agreement are cumulative and not exclusive of any remedies provided at equity or by law. SECTION 5.04. Indemnity, Fees and Expenses. (a) The Borrower will indemnify and save harmless the Authority and its officers and employees from and against any and all losses, by it or them while it or they are acting in good faith to carry out the transactions contemplated by this Agreement or to safeguard its or their interests or ascertain, determine or carry out its or their obligations under this Agreement, or any law or contract applicable to said transaction. (b) The Borrower will upon demand pay to the Authority the amount of any and all reasonable expenses, including the reasonable fees and expenses of the Authority's attorneys and of any experts and agents, which the Authority may incur in connection with (i) the exercise or enforcement of any of the rights of the Authority hereunder or under the Note, (ii) the failure by the Borrower to perform or observe any of 9 the provisions hereof, (iii) the collection of payments due under this Agreement and the Note, and (iv) any other reasonable expenses of the Authority related to the Project or this financing (including reasonable attorneys' fees) which are not otherwise expressly required to be paid by the Borrower under the terms of this Agreement. (c) The Borrower agrees to pay all appraisal fees, survey fees, recording fees, license and permit fees, insurance premiums, taxes, charges, and assessments in connection with the Project. It is the intention of the parties that the Authority shall not incur pecuniary liability by reason of (i) the terms of this Agreement, (ii) the undertakings required of the Authority hereunder, (iii) the performance of any act required of it by this Agreement or (iv) the performance of any act requested of it by the Borrower. Accordingly, if the Authority (including any person at any time employed by or serving as an officer or a member of the Authority, such persons hereinafter included in all references to the Authority in this Section) should incur any such pecuniary liability, then in such event the Borrower shall indemnify and hold harmless the Authority against all claims by or on behalf of any person, firm or corporation, arising out of the same, and all costs and expenses incurred in connection with any such claim or in connection with any action or proceeding brought thereon. The Borrower releases the Authority from, agrees that the Authority shall not be liable for, and agrees to indemnify and hold the Authority harmless from, (i) any liability for any loss or damage to property or any injury to, or death of, any person that may be occasioned by any cause whatsoever pertaining to the Project, or (ii) any liabilities, losses or damages, or claims therefore, arising out of the failure, or claimed failure of the Borrower to comply with its covenants contained in this Agreement, including, in each such case, any attorneys' fees. The Borrower agrees to indemnify and hold the Authority harmless to the fullest extent permitted by law from any losses, costs, charges, expenses (including attorneys' fees), judgments and liabilities incurred by it or them, as the case may be, in connection with any action, suit or proceeding instituted or threatened in connection with the transaction contemplated by this Agreement. The obligation of the Borrower under this Section shall survive the termination of this Agreement. SECTION 5.05. Binding Effect; Governing Law. This Agreement shall be binding upon and inure to the benefit of the Borrower and the Authority and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Authority. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Iowa. 10 SECTION 5.06. Assignments. This Agreement may not be assigned by the Borrower without the prior written consent of the Authority. SECTION 5.07. Counterparts. This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original, and such counterparts shall together constitute one and the same instrument. SECTION 5.08. Severability. If any provision of this Agreement shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative, or unenforceable to any extent whatever. SECTION 5.09. Amendments, Changes and Modifications. This Agreement may not be effectively amended, changed, modified, altered or terminated without the written consent of the authorized representatives of the parties hereto. The Executive Director of the Authority, or his designee, is the authorized representative of the Authority. The Authorized Representative of the Borrower is as specified in Exhibit A. SECTION 5.10. Term of the Agreement. This Agreement shall be in full force and effect from the date hereof and shall continue in effect so long as the Note is outstanding and unpaid. SECTION 5.11. [Reserved]. IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. 11 Attest: By: (SEAL) eanne Schneider Title: City Clerk By: By. CITY OF DUBUQUE, IOWA Name:oy D. Buol Title: Mayor IOWA FINANCE AUTHORITY Joseph O'Hern, Executive Director 12 EXHIBIT A LOAN DATA Project Number and Name: Loan No. WF- 2010 -001; City of Dubuque Millwork District Housing Building Project Name of Borrower: City of Dubuque, Iowa Date of Authority's Approval of Application: May 27, 2010 Date of Loan Agreement: , 2010 Interest Rate: 10 years interest only at 3.00 %; 10 years Principal & Interest at 3.00% - 20 year amortization Commitment Fee: 0.5% (payable from first draw of funds) Loan Term: expiring June 1,2030 Principal Amount of Note and Loan: $4,500,000 Authorized Representative of Borrower: Roy D. Buol, Mayor, City of Dubuque Servicer (if applicable): None Description of Project: Loan funds will be used by the Borrower to make loans to one or more housing project developers, including tax credit entities formed to provide project - related funding ( "Developers "), to assist in the purchase and rehabilitation of long- vacant and historic buildings for residential and commercial use in the Greater Downtown Urban Renewal Area ( "GDURA ") of the City of Dubuque, Iowa. Funds may be drawn down as needed. Borrower shall use the principal and interest payments received from Project Developers to pay interest on the Note as it becomes due, and then may use any remaining loan payment amounts received by Borrower for the purpose of making additional loans to other housing project Developers for projects within the GDURA. Not less than fifty percent (50 %) of the completed units developed with Loan proceeds (calculated by square footage) will be rented to families whose annual income is no more than 120% of the area median income. With the written approval of the Authority, Borrower may use any such remaining loan payment amounts received by Borrower to make housing loans on other terms and conditions, which may include a requirement permitting fewer than fifty percent (50 %) of the units be rented to families whose annual income is no more than 120% of the area median income, or for projects located in other A -1 geographic areas. Borrower shall establish appropriate reporting requirements and compliance measures to ensure that project owners and managers comply with the restrictive covenants. Borrower shall report to the Authority annually on July 1 of each year as to the projects funded in whole or in part with Loan proceeds, the total number of units in each such project and the number of units in each such project that are leased to tenants whose annual income at the commencement of the lease is at or below one hundred twenty percent (120 %) of the area median income. EXHIBIT B Workforce Housing Assistance Loan No. WF- 2010 -001 Dated: , 2010 Fixed Interest Rate: 10 years int. only @ 3.00 %; 10 years P & I @ 3.00% Maturity Date: June 1, 2030 Principal Amount: $4,500,000 PROMISSORY NOTE FOR VALUE RECEIVED the undersigned, City of Dubuque, Iowa, whose address is 50 West 13th Street, Dubuque, Iowa, 52001 (the "Borrower") unconditionally promises to pay to the order of the Iowa Finance Authority (the "Authority "), or its assigns, at its principal place of business, located at 2015 Grand Avenue, Des Moines, Iowa 50312, or at such other place as may be designated in writing from time to time by the holder of this Note, the principal sum of Four Million Five Hundred Thousand and 00/100 Dollars ($4,500,000), or so much thereof as has been advanced to the Borrower, together with interest to maturity at the rate of three percent (3 %) per annum on the balance remaining from time to time unpaid; and, after either maturity or default, and beyond any applicable notice and cure periods set forth herein or in the Loan Agreement (described below) at the rate of ten percent (10 %) per annum (the "Default Rate "); said principal and interest to be paid as follows: Interest only payments at the rate of one percent (3.00 %) per annum shall be made on June 1 and December 1 each year, commencing December 1, 2010, and continuing through December 1, 2020; thereafter, beginning on June 1, 2021, principal and interest payments at the rate of three percent (3.00 %) per annum, based on a twenty (20) year level debt service amortization from June 1, 2021, shall be made on June 1 and December 1 of each year through maturity, at which time all outstanding principal and interest shall be repaid, all as set forth on the payment schedule attached hereto and made a part hereof. Interest on this Note shall be calculated on the basis of a 360 -day year with twelve 30 -day months. This Promissory Note is the Note referred to in, and is entitled to the benefits and subject to the provisions of, and is evidence of the obligation of the Borrower to make payments under the Loan Agreement dated , 2010 (the "Loan Agreement "), between the Borrower and the Authority. The Loan Agreement, among other things, contains provisions for acceleration of the maturity hereof upon the B -1 happening of certain stated Events of Default and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. The obligation to repay the debt evidenced by this Note shall constitute a general obligation of the Borrower. The Borrower shall have the right to prepay the debt evidenced by this Note without penalty and without the prior written approval of the Authority. If default be made in the payment of any sums due under this Note or (ii) Borrower is dissolved or there is a transfer of any ownership interest in the Borrower without first obtaining the written consent of the holder, then holder may, at its option, without further notice or demand, except as may otherwise be specifically provided for in the Loan Agreement or by the Laws of the State of Iowa, declare the unpaid principal and accrued interest on this Note at once due and payable, foreclose all liens securing payment of this Note, pursue any and all other rights, remedies, and recourses available to holder under this Note, the Loan Agreement or pursue any combination of the foregoing, all such remedies under this Note and under the Loan Agreement being cumulative. Holder shall have the right, if holder so elects, to rescind any acceleration in payment of this Note for default, in which event this Note shall be construed, interpreted and enforced in the same manner as if holder had never elected to declare the unpaid principal balance and accrued interest of this Note at once due and payable. The Borrower shall pay all costs of collection and the expense(s) of holder for having to invoke such remedial action(s) as may be necessary to enforce the terms of this Note, including a reasonable attorney's fee, whether or not any action shall be instituted to collect or enforce this Note. Time is of the essence of this Note. Failure to exercise any of the foregoing options upon the happening of one or more of the events of default provided in this Note or in the Loan Agreement shall not constitute a waiver of the right to exercise the same or any other option at any subsequent time in respect to the same or any other event, and no single or partial exercise of any right or remedy shall preclude other or further exercise of the same or any other right or remedy. The holder of this Note shall have no duty to exercise any or all of the rights and remedies provided for, or contemplated in, this Note. The acceptance by holder of any payment under this Note that is less than payment in full of all amounts due and payable at the time of such payment shall not constitute a waiver of the right to exercise any of the foregoing options at that time or at any subsequent time, or nullify any prior exercise of any such option without the express written consent of the holder. Borrower and any endorsers or guarantors of this Note, severally waive presentment and demand for payment, notice of intent to accelerate maturity, notice of B -2 acceleration of maturity, protest or notice of protest, and non - payment, bringing to suit and diligence in taking any action to collect any sums owing under this Note or in proceeding against any of the right and properties securing payment of this Note, and consent to any and all renewals, extensions or modifications which might be made by the holder hereof as to the time of payment of this Note from time to time, and further agree that the security for this Note or any portion hereof may from time to time be modified or released in whole or in part without affecting the liability of any party liable for the payment of this Note. ATTEST: Bv: This Note is to be construed according to the laws of the State of Iowa. Should any provision or term hereof be or become in violation of any law, rule or regulation, whether local, state or federal, such provision shall be deemed automatically amended to conform, to the extent possible without total waiver of such provision, to such law, and all other provisions hereof shall remain in full force and effect. As used herein, the terms Borrower and Authority shall be deemed to include their respective grantees, heirs, legal representative, successors and assigns, whether voluntary by action of the parties or involuntary by operation of law, and the term holder shall be deemed to include the Authority as well as any future holder or holders of this Note. IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT. Signed as of the , day of to due authority. By: ame: Jeanne Schneider Title: City Clerk B -3 CITY OF DUBUS , IOWA , 2010, pursuant Name: ' oy D. Buol Title: ayor, City of Dubuque Authority: Borrower: EXHIBIT C ADDRESSES FOR NOTICES AND DEMANDS Iowa Finance Authority Attn.: Workforce Housing Assistance Loan Fund Program 2015 Grand Avenue Des Moines, Iowa 50312 City of Dubuque, Iowa Attn: City Manager 50 West 13th Street Dubuque, Iowa 52001 Borrower Name and Address: For Loan Number: IT IS HEREBY CERTIFIED THAT: Date: EXHIBIT D PAYMENT REQUEST FORM City of Dubuque, Iowa Attn: City Manager 50 West 13th Street Dubuque, Iowa 52001 Pursuant to, and in accordance with, the provisions of the Loan Agreement dated , 2010 (the "Agreement "), between the Iowa Finance Authority (the "Authority "), and City of Dubuque, Iowa (the "Borrower"), the Authority is hereby requested to pay to the Borrower the sum of $ which amount is to be used as set forth in the Agreement. (a) None of the items for which disbursement is requested has formed the basis for any disbursement heretofore made under the Agreement; (b) The obligation with respect to which this disbursement is being requested has been properly incurred in accordance with the Agreement with respect to the Project (as defined in the Agreement) and is a proper charge under the Agreement; and (c) No Event of Default is continuing under the Agreement. AUTHORIZED BORROWER REPRESENTATIVE Payment Beginning Ending Date Balance Interest Principal Balance Payment Beginning Ending Date Balance Interest Principal Balance EXHIBIT E 12/01/10 06/01/11 12/01/11 06/01/12 12/01/12 06/01/13 12/01/13 06/01/14 12/01/14 06/01/15 12/01/15 06/01/16 12/01/16 06/01/17 12/01/17 06/01/18 12/01/18 06/01/19 12/01/19 06/01/20 12/01/20 06/01/21 12/01/21 06/01/22 12/01/22 06/01/23 12/01/23 06/01/24 12/01/24 06/01/25 12/01/25 06/01/26 12/01/26 06/01/27 12/01/27 06/01/28 12/01/28 06/01/29 12/01/29 06/01/30 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,417,078.04 $ 4,332,912.25 $ 4,247,483.97 $ 4,160,774.27 $ 4,072,763.92 $ 3,983,433.42 $ 3,892,762.96 $ 3,800,732.44 $ 3, 707, 321.47 $ 3,612,509.33 $ 3,516,275.01 $ 3,418,597.18 $ 3,319,454.18 $ 3,218,824.03 $ 3,116,684.43 $ 3,013,012.74 $ 2,907,785.97 $ 2,800,980.80 $ 2,692,573.55 $ 2,582,540.19 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 67,500.00 $ 66,256.17 $ 64,993.68 $ 63,712.26 $ 62,411.61 $ 61,091.46 $ 59,751.50 $ 58,391.44 $ 57,010.99 $ 55,609.82 $ 54,187.64 $ 52,744.13 $ 51,278.96 $ 49,791.81 $ 48,282.36 $ 46,750.27 $ 45,195.19 $ 43,616.79 $ 42,014.71 $ 40,388.60 $ 38,738.10 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ 4,500,000.00 $ $ 4,500,000.00 $ $ 4,500,000.00 $ $ 4,500,000.00 $ 82,921.96 $ 4,417,078.04 $ 84,165.79 $ 4, 332, 912.25 $ 85,428.28 $ 4,247,483.97 $ 86,709.70 $ 4,160,774.27 $ 88,010.35 $ 4,072,763.92 $ 89,330.50 $ 3,983,433.42 $ 90,670.46 $ 3,892,762.96 $ 92,030.52 $ 3,800,732.44 $ 93,410.97 $ 3,707,321.47 $ 94,812.14 $ 3,612,509.33 $ 96,234.32 $ 3,516,275.01 $ 97,677.83 $ 3,418,597.18 $ 99,143.00 $ 3,319,454.18 $ 100,630.15 $ 3,218,824.03 $ 102,139.60 $ 3,116,684.43 $ 103,671.69 $ 3,013,012.74 $ 105,226.77 $ 2,907,785.97 $ 106,805.17 $ 2,800,980.80 $ 108,407.25 $ 2,692,573.55 $ 110,033.36 $ 2,582,540.19 $ 2,582,540.19 $ CLOSING CERTIFICATE OF BORROWER The undersigned, City of Dubuque, Iowa (the "Borrower "), in connection with a loan to the Borrower in the amount of $4,500,000 (the "Loan ") by the Iowa Finance Authority (the "Authority ") under the Authority's Workforce Housing Assistance Loan Fund Program (the "Program ") hereby certifies as follows: 1. All defined terms used herein shall have the respective meanings contained in the Loan Agreement dated as of , 2010 (the "Loan Agreement "), between the Borrower and the Authority pursuant to which the Loan to the Borrower is to be made. 2. The Borrower is duly organized, legally existing and in good standing under the laws of the State of Iowa; is duly licensed or qualified in the State of Iowa and in all other states and jurisdictions wherein the nature of the business transacted by the Borrower or the nature of the property owned or leased by it makes such licensing or qualification necessary; and has full right, power and authority to conduct the business in which it is now engaged and to enter into the Loan Agreement, the Loan made pursuant thereto, and to execute such other documents and take such other action necessary for the consummation of the transactions contemplated thereby. 3. All of the proceeds of the Loan will be used for the purpose of financing a portion of the costs of the Project as set forth in Exhibit A to the Loan Agreement. 4. The execution and delivery by the Borrower of the Loan Agreement and the Borrower's Promissory Note described therein (the "Note" and, together with the Loan Agreement, the "Loan Documents ") will not result in any breach of any of the terms, conditions, or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Borrower pursuant to any indenture, loan agreement, or other instrument to which the Borrower is a party or by which the Borrower may be bound, nor will such action result in any violation of the provisions of the partnership agreement of the Borrower. 5. The obligation of the Borrower, as evidenced by the Note, when delivered is and will be a legal, valid and binding general obligation of the Borrower under Iowa law. 6. The Borrower is not in default in the payment of the principal of or interest on any of its indebtedness for borrowed money, and to the best knowledge of the undersigned, is not in default under any instrument or agreement under and subject to which any indebtedness for borrowed money has been issued, and, to the best knowledge of the undersigned, no event has occurred and is continuing under the provisions of any such instrument or agreement which with the lapse of time or the giving of notice, or both, would constitute an event of default thereunder. 7. All financial statements of the Borrower heretofore presented to the Authority, if any, are correct and complete and fairly present the financial condition of the Borrower as of the dates indicated and the results of the operations of the Borrower for the periods specified. There has been no material change in the condition of the Borrower, financial or otherwise, from that set forth in the aforesaid financial statements since the dates thereof. 8. There are no actions, suits or proceedings pending or to the knowledge of the Borrower threatened against or affecting the Borrower at law or in equity or before any federal, state or local governmental authority or agency challenging the validity of any of the Loan Documents, seeking to enjoin the performance of the obligations of the Borrower thereunder or challenging the acquisition, construction, improving and equipping or operation of the Project, or which, if adversely determined, would result in any material adverse change in the business, properties or assets or in the condition, financial or otherwise, of the Borrower that have not been disclosed to the Authority. 9.. No event has occurred and is continuing, or would result from the transaction contemplated by the Loan Documents, which constitutes an Event of Default under the Loan Agreement or which would constitute such an Event of Default but for the requirement that notice be given or time elapse or both. 10. The representations, certifications and warranties on the part of the Borrower appearing on the Application were correct on the date of the Application's submission to the Authority and the description of the Project set forth in the Application, the Loan Agreement and exhibits to the Loan Agreement, including the listing of all components and equipment which comprise the Project and their costs and purposes, and the representations, certifications, warranties and covenants on the part of the Borrower contained in the Loan Agreement are correct on and as of the date hereof as though made on this date, 11. The Borrower has satisfied all conditions precedent to the Loan as set forth in Section 2.01 of the Loan Agreement. 12. The undersigned, on behalf of the Borrower, have examined executed counterparts of the Loan Agreement and all other Loan Documents, and the Borrower agrees to pay all sums owing under the Note and the Loan Agreement in accordance with the provisions of the Note and the Loan Agreement. 13. The Mayor and City Clerk of the City of Dubuque, whose signatures appear below have on the date or dates of the execution of the Loan Documents, and are on the date hereof, the duly qualified Mayor and City Clerk of Dubuque, and the signatures appearing below and on the Loan Documents are the genuine signature of such Mayor and City Clerk. The Mayor and City Clerk of the City of Dubuque, whose signatures appear below have heretofore been empowered to act on behalf of the Borrower in the execution of the Loan Agreement and the Note or to execute any other instrument or take any other action necessary for the consummation of the transaction contemplated in the Loan Agreement. IN WITNESS WHEREOF, the u signature this day of (Seal, if any) Attest: Bv: %I° ame: Jeanne Schneider Title: City Clerk By: Error! This property is only valid for ODMA documents. /MSWord ersigned has hereunto affixed his official , 2010. CITY OF DUBUQUE, IOWA Name: (boy D. Buol Title: Mayor, City of Dubuque (This Notice to be posted) NOTICE AND CALL OF PUBLIC MEETING Governmental Body: The City Council of the City of Dubuque, Iowa. Date of Meeting: June 21, 2010. Time of Meeting: 6:30 o'clock P.M. Place of Meeting: Historic Federal Building, 350 West 6th Street, Dubuque, Iowa. PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental body will meet at the date, time and place above set out. The tentative agenda for the meeting is as follows: Loan Agreement with the Iowa Finance Authority. • Public hearing on the authorization of a Loan Agreement. • Resolution instituting proceedings to take additional action. Such additional matters as are set forth on the additional 14 page(s) attached hereto. This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of Iowa, and the local rules of the governmental body. City Clerk, City of Dubuque, State of Iowa The City Council of the City of Dubuque, State of Iowa, met in regular session, in the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at 6:30 o'clock P.M., on the above date. There were present Mayor Roy D. Buol, in the chair, and the following named Council Members: Karla Braig, Joyce Connors, Ric Jones, Kevin Lynch, David Resnick, Dirk Voetberg Absent: None June 22, 2010 The Mayor announced that this was the time and place for the public hearing and meeting on the matter of the authorization of a Loan Agreement with the Iowa Finance Authority in order to provide funds to pay costs of the funding of workforce housing assistance loans to private developers constructing improvements and rehabilitating historic buildings for residential and commercial use in the Greater Downtown Urban Renewal Area, an essential corporate purpose, and that notice of the proposed action by the Council to institute proceedings for the authorization of the Loan Agreement had been published pursuant to the provisions of Sections 384.24A and 384.25 of the City Code of Iowa, as amended. The Mayor then asked the Clerk whether any written objections had been filed by any City resident or property owner to the proposal. The Clerk advised the Mayor and the Council that no written objections had been filed. The Mayor then called for oral objections to the proposal and none were made. Whereupon, the Mayor declared the time for receiving oral and written objections to be closed. (Attach here a summary of objections received or made, if any) The Council then considered the proposed action and the extent of objections thereto. Whereupon, Council Member Connors introduced and delivered to the Clerk the Resolution hereinafter set out entitled "RESOLUTION INSTITUTING PROCEEDINGS TO TAKE ADDITIONAL ACTION FOR THE AUTHORIZATION OF A LOAN AGREEMENT WITH THE IOWA FINANCE AUTHORITY ", and moved: was, X that the Resolution be adopted. ❑ to ADJOURN and defer action on the Resolution and the proposal to institute proceedings for the authorization of a Loan Agreement to the meeting to be held at o'clock .M. on the day of , 2010, at this place. Council Member Voetberg seconded the motion. The roll was called and the vote AYES: Braig, Buol, Connors, Jones, Lynch, Resnick, Voetberg NAYS: None Whereupon, the Mayor declared the measure duly adopted. RESOLUTION NO. 210-10 RESOLUTION INSTITUTING PROCEEDINGS TO TAKE ADDITIONAL ACTION FOR THE AUTHORIZATION OF A LOAN AGREEMENT WITH THE IOWA FINANCE AUTHORITY WHEREAS, pursuant to notice published as required by law, this Council has held a public meeting and hearing upon the proposal to institute proceedings for the authorization of a Loan Agreement with the Iowa Finance Authority in the principal amount of $4,500,000 for the purpose of paying costs of the funding of workforce housing assistance loans to private developers constructing improvements and rehabilitating historic buildings for residential and commercial use in the Greater Downtown Urban Renewal Area, and has considered the extent of objections received from residents or property owners as to the proposal and, accordingly the following action is now considered to be in the best interests of the City and residents thereof: -3- NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, STATE OF IOWA: Section 1. That this Council does hereby institute proceedings and take additional action for the authorization of a Loan Agreement for the foregoing purpose. ATTEST: PASSED AND APPROVED this 21 day of June, 2010. ity Clerk STATE OF IOWA COUNTY OF DUBUQUE CERTIFICATE ) SS I, the undersigned City Clerk of the City of Dubuque, State of Iowa, do hereby certify that attached is a true and complete copy of the portion of the corporate records of the City showing proceedings of the City Council, and the same is a true and complete copy of the action taken by the Council with respect to the matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council (a copy of the face sheet of the agenda being attached hereto) pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty -four hours prior to the commencement of the meeting as required by law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective City offices as indicated therein, that no Council vacancy existed except as may be stated in the proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. 2010. (SEAL) WITNESS my hand and the seal of the City hereto affixed this 22 day of June, DCORNELL/ 657500.1 /MSWord \10422.107 ity Clerk, City of Dubuque, State of Iowa (This Notice to be posted) NOTICE AND CALL OF PUBLIC MEETING Governmental Body: The City Council of the City of Dubuque, Iowa. Date of Meeting: June 21, 2010. Time of Meeting: 6:30 o'clock P.M. Place of Meeting: Historic Federal Building, 350 West 6th Street, Dubuque, Iowa. PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental body will meet at the date, time and place above set out. The tentative agenda for the meeting is as follows: Loan Agreement with the Iowa Finance Authority • Resolution approving and authorizing a form of Loan Agreement. Such additional matters as are set forth on the additional 14 page(s) attached hereto. This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of Iowa, and the local rules of the' governmental body. ty Clerk, City of Dubuque, Iowa June 22, 2010 The City Council of the City of Dubuque, Iowa, met in regular session, in the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at 6:30 o'clock P.M., on the above date. There were present Mayor Roy D. Buol, in the chair, and the following named Council Members: Karla Braig, Joyce Connors, Ric Jones, Kevin Lynch, David Resnick, Dirk Voetberg Absent: None Council Member Connors introduced the following Resolution entitled "RESOLUTION APPROVING AND AUTHORIZING A FORM OF LOAN AGREEMENT AND AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SECURING THE PAYMENT OF A PROMISSORY NOTE OF THE CITY OF DUBUQUE, IOWA, AND PROVIDING FOR A METHOD OF PAYMENT OF SAID NOTE" and moved that it be adopted. Council Member Voetberg seconded the motion to adopt, and the roll being called thereon, the vote was as follows: AYES: Braig, Buol, Connors, Jones, Lynch, Resnick, Voetberg NAYS: None Whereupon, the Mayor declared said Resolution duly adopted as follows: RESOLUTION NO. 211-10 RESOLUTION APPROVING AND AUTHORIZING A FORM OF LOAN AGREEMENT AND AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SECURING THE PAYMENT OF A PROMISSORY NOTE OF THE CITY OF DUBUQUE, IOWA, AND PROVIDING FOR A METHOD OF PAYMENT OF SAID NOTE WHEREAS, the Issuer is duly incorporated, organized and exists under and by virtue of the laws and Constitution of the State of Iowa; and WHEREAS, the Issuer is in need of funds to pay costs of the funding of workforce housing assistance loans to private developers constructing improvements and rehabilitating historic buildings for residential and commercial use in the Greater Downtown Urban Renewal Area, an essential corporate purpose, and it is deemed necessary and advisable that a form of Loan Agreement with the Iowa Finance Authority in the principal amount of $4,500,000 be approved and authorized; and WHEREAS, pursuant to notice published as required by Sections 384.24A and 384.25 of said Code, this Council has held a public meeting and hearing upon the proposal to institute proceedings and is therefore now authorized to proceed with the issuance of the Loan Agreement. -2- NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. Definitions. The following terms shall have the following meanings in this Resolution unless the text expressly or by necessary implication requires otherwise: ❑ "Issuer" and "City" shall mean the City of Dubuque, State of Iowa. ❑ "Lender" shall mean the Iowa Finance Authority. ❑ "Loan Agreement" shall mean a Loan Agreement between the Issuer and the Lender in substantially the form attached to and approved by this Resolution. ❑ "Note Fund" shall mean the fund created in Section 4 of this Resolution. ❑ "Paying Agent" shall mean the City Treasurer, or such successor as may be approved by Issuer as provided herein and who shall carry out the duties prescribed herein as Issuer's agent to provide for the payment of principal of and interest on the Note as the same shall become due. ❑ "Project" shall mean the costs of the funding of workforce housing assistance loans to private developers constructing improvements and rehabilitating historic buildings for residential and commercial use in the Greater Downtown Urban Renewal Area. ❑ "Project Fund" shall mean the fund required to be established by this Resolution for the deposit of the proceeds of the Note. ❑ "Promissory Note" or "Note" shall mean the Promissory Note issued by the City to the Lender under the terms of the Loan Agreement in the aggregate amount of $4,500,000, authorized to be issued by this Resolution. ❑ "Registrar" shall mean the City Treasurer of Dubuque, Iowa, or such successor as may be approved by Issuer as provided herein and who shall carry out the duties prescribed herein with respect to maintaining a register of the owners of the Note. Unless otherwise specified, the Registrar shall also act as Transfer Agent for the Note. -.3- ❑ "Resolution" shall mean this resolution authorizing the Loan Agreement. ❑ "Treasurer" shall mean the City Treasurer or such other officer as shall succeed to the same duties and responsibilities with respect to the recording and payment of the Notes issued hereunder. Section 2. Loan Agreement. The form of Loan Agreement in substantially the form attached to this Resolution is hereby approved and is authorized to be executed and issued on behalf of the Issuer by the Mayor and attested by the City Clerk. Section 3. Levy and Certification of Annual Tax; Other Funds to be Used. (a) Levy of Annual Tax. That for the purpose of providing funds to pay the principal and interest of the Note hereinafter authorized to be issued, there is hereby levied for each future year the following direct annual tax on all of the taxable property in the City of Dubuque, State of Iowa, to -wit: FISCAL YEAR (JULY 1 TO JUNE 30) AMOUNT YEAR OF COLLECTION $135,000 2010/2011 $135,000 2011/2012 $135,000 2012/2013 $135,000 2013/2014 $135,000 2014/2015 $135,000 2015/2016 $135,000 2016/2017 $135,000 2017/2018 $135,000 2018/2019 $217,922 2019/2020 $300,844 2020/2021 $300,844 2021/2022 $300,844 2022/2023 $300,844 2023/2024 $300,844 2024/2025 $300,844 2025/2026 $300,844 2026/2027 $300,844 2027/2028 $300,844 2028/2029 $2,771,700 2029/2030 -4- (NOTE: For example the levy to be made and certified against the taxable valuations of January 1, 2009, will be collected during the fiscal year commencing July 1, 2010). (b) Resolution to be Filed With County Auditor. A certified copy of this Resolution shall be filed with the Auditor of Dubuque County, Iowa and the Auditor is hereby instructed in and for each of the years as provided, to levy and assess the tax hereby authorized in Section 3 of this Resolution, in like manner as other taxes are levied and assessed, and such taxes so levied in and for each of the years aforesaid be collected in like manner as other taxes of the City are collected, and when collected be used for the purpose of paying principal and interest on said Note issued in anticipation of the tax, and for no other purpose whatsoever. (c) Additional City Funds Available. Loan repayments received from borrowers of the Note proceeds shall be applied to abate the levy of taxes described herein. In addition, principal and interest coming due at anytime when the proceeds of said tax on hand shall be insufficient to pay the same shall be promptly paid when due from current funds of the City available for that purpose and reimbursement shall be made from such special fund in the amounts thus advanced. Section 4. Note Fund. Said tax shall be assessed and collected each year at the same time and in the same manner as, and in addition to, all other taxes in and for the City, and when collected they shall be converted into a special fund within the Debt Service Fund to be known as the "2010 GENERAL OBLIGATION PROMISSORY NOTE FUND" (the "Note Fund "), which is hereby pledged for and shall be used only for the payment of the principal of and interest on the Note hereinafter authorized to be issued; and also there shall be apportioned to said fund its proportion of taxes received by the City from property that is centrally assessed by the State of Iowa. Section 5. Application of Note Proceeds. Proceeds of the Note shall be credited to the Project Fund and expended therefrom for the purposes of the Project. Any amounts on hand in the Project Fund shall be available for the payment of the principal of or interest on the Note at any time that other funds shall be insufficient to the purpose, in which event such funds shall be repaid to the Project Fund at the earliest opportunity. Any balance on hand in the Project Fund and not immediately required for its purposes may be invested not inconsistent with limitations provided by law or this Resolution. -5- Section 6. Investments of Note Fund Proceeds. All moneys held in the Note Fund and the Project Fund, shall be invested in investments permitted by Chapter 12B, Code of Iowa, 2009, as amended, or deposited in financial institutions which are members of the Federal Deposit Insurance Corporation and the deposits in which are insured thereby and all such deposits exceeding the maximum amount insured from time to time by FDIC or its equivalent successor in any one financial institution shall be continuously secured in compliance with Chapter 12C of the Code of Iowa, 2009, as amended, or otherwise by a valid pledge of direct obligations of the United States Government having an equivalent market value. All such interim investments shall mature before the date on which the moneys are required for payment of principal of or interest on the Note as herein provided. Section 7. Note Details, Execution and Redemption. (a) Note Details. The Note shall be issued to evidence the obligations of the Issuer under the Loan Agreement pursuant to the provisions of Sections 384.24A, and 384.25 of the City Code of Iowa, as amended, for the aforesaid purpose. The Note shall be designated "$4,500,000 PROMISSORY NOTE ", be dated the date of delivery and bear interest from the date thereof, until payment thereof, at the office of the Paying Agent, said interest payable on December 1, 2010, and semiannually thereafter on the 1st day of June and December in each year until maturity at the rates hereinafter provided. The Note shall be executed by the manual signature of the Mayor and attested by the manual signature of the City Clerk, and impressed with the seal of the City and shall be fully registered as to both principal and interest as provided in this Resolution; principal, interest and premium, if any, shall be payable at the office of the Paying Agent by mailing of a check to the registered owner of the Note. The Note shall mature and bear interest as set forth therein. (b) Redemption. The Note may be called for redemption by the Issuer and paid before maturity on any date, from any funds regardless of source, in whole or from time to time in part, in any order of maturity and within an annual maturity by lot. The terms of redemption shall be par, plus accrued interest to date of call. Thirty day's notice of redemption shall be given by first class mail to the registered owner of the Note. Failure to give such notice by mail to any registered owner of the Note or any defect therein shall not affect the validity of any proceedings for the redemption of the Note. The Note or portions thereof called for redemption will cease to bear interest after the specified redemption date, provided funds for their redemption are on deposit at the place of payment. -6- Section 8. Registration of Note; Appointment of Registrar; Transfer; Ownership; Delivery; and Cancellation. (a) Registration. The ownership of the Note may be transferred only by the making of an entry upon the books kept for the registration and transfer of ownership of the Note, and in no other way. The Treasurer is hereby appointed as Registrar under the terms of this Resolution. Registrar shall maintain the books of the Issuer for the registration of ownership of the Note for the payment of principal of and interest on the Note as provided in this Resolution. The Note shall be negotiable as provided in Article 8 of the Uniform Commercial Code subject to the provisions for registration and transfer contained in the Notes and in this Resolution. (b) Transfer. The ownership of any Note may be transferred only upon the Registration Books kept for the registration and transfer of Note and only upon surrender thereof at the office of the Registrar together with an assignment duly executed by the holder or his duly authorized attorney in fact in such form as shall be satisfactory to the Registrar, along with the address and social security number or federal employer identification number of such transferee (or, if registration is to be made in the name of multiple individuals, of all such transferees). In the event that the address of the registered owner of a Note (other than a registered owner which is the nominee of the broker or dealer in question) is that of a broker or dealer, there must be disclosed on the Registration Books the information pertaining to the registered owner required above. Upon the transfer of any such Note, a new fully registered Note, of any denomination or denominations permitted by this Resolution in aggregate principal amount equal to the unmatured and unredeemed principal amount of such transferred fully registered Note, and bearing interest at the same rate and maturing on the same date or dates shall be delivered by the Registrar. (c) Registration of Transferred Note. In all cases of the transfer of the Note, the Registrar shall register, at the earliest practicable time, on the Registration Books, the Note, in accordance with the provisions of this Resolution. (d) Ownership. As to any Note, the person in whose name the ownership of the same shall be registered on the Registration Books of the Registrar shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of any such Note and the premium, if any, and interest thereon shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Note, including the interest thereon, to the extent of the sum or sums so paid. -8- (e) Cancellation. All Notes which have been redeemed shall not be reissued but shall be cancelled by the Registrar. All Notes which are cancelled by the Registrar shall be destroyed and a certificate of the destruction thereof shall be furnished promptly to the Issuer; provided that if the Issuer shall so direct, the Registrar shall forward the cancelled Notes to the Issuer. (f) Non - Presentment of Note. In the event any payment check representing payment of principal of or interest on the Note is returned to the Paying Agent or if any Note is not presented for payment of principal at the maturity or redemption date, if funds sufficient to pay such principal of or interest on Note shall have been made available to the Paying Agent for the benefit of the owner thereof, all liability of the Issuer to the owner thereof for such interest or payment of such Note shall forthwith cease, terminate and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the owner of such Note who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Resolution or on, or with respect to, such interest or Notes. The Paying Agent's obligation to hold such funds shall continue for a period equal to two years and six months following the date on which such interest or principal became due, whether at maturity, or at the date fixed for redemption thereof, or otherwise, at which time the Paying Agent, shall surrender any remaining funds so held to the Issuer, whereupon any claim under this Resolution by the Owners of such interest or Notes of whatever nature shall be made upon the Issuer. (g) Registration and Transfer Fees. The Registrar may furnish to each owner, at the Issuer's expense, one Note for each annual maturity. The Registrar shall furnish additional Notes in lesser denominations (but not less than the minimum denomination) to an owner who so requests. Section 9. Reissuance of Mutilated, Destroyed, Stolen or Lost Notes. In case any outstanding Note shall become mutilated or be destroyed, stolen or lost, the Issuer shall at the request of Registrar authenticate and deliver a new Note of like tenor and amount as the Note so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Note to Registrar, upon surrender of such mutilated Note, or in lieu of and substitution for the Note destroyed, stolen or lost, upon filing with the Registrar evidence satisfactory to the Registrar and Issuer that such Note has been destroyed, stolen or lost and proof of ownership thereof, and upon furnishing the Registrar and Issuer with satisfactory indemnity and complying with such other reasonable regulations as the Issuer or its agent may prescribe and paying such expenses as the Issuer may incur in connection therewith. -9- Section 10. Record Date. Payments of principal and interest, otherwise than upon full redemption, made in respect of any Note, shall be made to the registered holder thereof or to their designated Agent as the same appear on the books of the Registrar on the 15th day preceding the payment date. All such payments shall fully discharge the obligations of the Issuer in respect of such Note to the extent of the payments so made. Payment of principal shall only be made upon surrender of the Note to the Paying Agent. Section 11. Execution, Authentication and Delivery of the Note. The Mayor and Clerk shall execute and deliver the Note to the Registrar, who shall authenticate the Note and deliver the same to or upon order of the Lender. No Note shall be valid or obligatory for any purpose or shall be entitled to any right or benefit hereunder unless the Registrar shall duly endorse and execute on such Note a Certificate of Authentication substantially in the form of the Certificate herein set forth. Such Certificate upon any Note executed on behalf of the Issuer shall be conclusive evidence that the Note so authenticated has been duly issued under this Resolution and that the holder thereof is entitled to the benefits of this Resolution. Section 12. Right to Name Substitute Paying Agent or Registrar. Issuer reserves the right to name a substitute, successor Registrar or Paying Agent upon giving prompt written notice to each registered noteholder. Section 13. Form of Note. The Note shall be substantially in the form as set forth in the Loan Agreement. Section 14. Contract Between Issuer and Purchaser. This Resolution shall constitute, a contract between said City and the purchaser of the Note. Section 15. Severability Clause. If any section, paragraph, clause or provision of this Resolution be held invalid, such invalidity shall not affect any of the remaining provisions hereof, and this Resolution shall become effective immediately upon its passage and approval. Section 16. Repeal of Conflicting Resolutions or Ordinances. All ordinances and resolutions and parts of ordinances and resolutions in conflict herewith are hereby repealed. PASSED AND APPROVED this . /rat' day of /,, , 2010. ATTEST: Mayor 7 STATE OF IOWA COUNTY OF DUBUQUE I, the undersigned City Clerk of the City of Dubuque, State of Iowa, do hereby certify that attached is a true and complete copy of the portion of the corporate records of the City showing proceedings of the City Council, and the same is a true and complete copy of the action taken by the Council with respect to the matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council (a copy of the face sheet of the agenda being attached hereto) pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty -four hours prior to the commencement of the meeting as required by law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective City offices as indicated therein, that no Council vacancy existed except as may be stated in the proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. WITNESS my hand and the seal of the City hereto affixed this .,27 ej day of , 2010. (SEAL) DCORNELL/ 657495.1 /MS Word \10422.107 CERTIFICATE ) SS y Clerk, City of Dubuque, State of Iowa