Bee Branch Right-of-Way AcquisitionTHE COF Dubuque
hAnd
DtUB E All- AmericaCity
1 1
Masterpiece on the Mississippi
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Acquisition of Bee Branch ROW
DATE: July 2, 2010
Economic Development Director Dave Heiar and Economic Development Assistant
Director Aaron DeJong are recommending approval of a term sheet that would be the
basis of a revised Development Agreement with Highway 151/61 development group,
so that the City may acquire additional right -of -way through the former Pack site for the
Bee Brach Creek Restoration Project. The revised Development Agreement would then
be on the July 19, 2010 City Council Agenda for final consideration.
In June of 2006, the City Council approved a Development Agreement with Highway
151/61 which included acquisition of property for the proposed Bee Branch project. At
that time, the agreement was based on conceptual plans for this drainage project. The
City now has a final design for the Bee Branch which actually requires more area than
originally anticipated. The Development Agreement refers to 3.3 acres more or less,
but the final design will require up to 4.2 acres of land.
Another part of the Development Agreement allowed the Highway 151/61 group to
obtain the remainder of the City's property south of 16 Street. At the time the
Development Agreement was approved, it was anticipated that this site would be
approximately 2 acres of developable property. Based on final design, this parcel will
actually have about 1.7 acres remaining for development. The Highway 151/61 group
has decided that this smaller parcel, with an irregular space, and somewhat limited
access points, is no longer of value to them. They have proposed selling their interest
in this property back to the City in return for the additional ROW the City needs for the
Bee Branch project.
The stated land offer in the Development Agreement would be terminated and replaced
with the following:
• Highway 151/61 would sell land (both north and south of 16 Street) anticipated
to be between 3.9 and 4.2 acres to the City at $10.81 sq.ft.
• City retains land south of 16 Street which had been optioned to Highway 151/61
(approximately 1.7 acre site after Bee Branch Creek development).
• City pays $1,036,728 at closing.
• City cooperates with Highway 151/61 to obtain charitable contribution for the
remainder of the purchase price.
• The 1.7 acre site south of 16 Street is subject to restrictive covenants
prohibiting:
• Convenience store with gas sales;
• gas stations;
• pharmacy (i.e., sales of prescription medications and drugs); and
• quick service restaurants with ice cream, ice milk, frozen custard, frozen
yogurt or similar such product provided that the average for the brand of
restaurant proposed has ice cream sales that are 20% or more of total
sales for the average restaurant for that brand.
• The City shall be responsible for filling in the abandoned Bee Branch site.
• The City will receive a construction easement over the westerly portion of the
former Pack site.
• Economic Development Grants may be exercised by Developer with respect to
new development on the real estate that is first assessed for property tax
purposes before January 1, 2015 (The original Development Agreement had
stated an ending date of January 1, 2013).
• The closing date shall be July 20, 2010.
In return the Developer will waive any extension of Economic Development Grants
pursuant to Section 3.3(2) of the Development Agreement resulting from failure to
complete the Bee Branch by December 31, 2009.
Highway 151/61 has been working with a certain unnamed developer for the
area, and if that developer relocates to this development site, whoever is
responsible for improvements to 16 Street is eligible for Economic Development
Grants associated with this specific project for years 16 -20.
The revised terms are approved by the City Council on July 6, the terms would
be incorporated into a revised Development Agreement to be acted upon by the
Council on July 19, with closing on the acquisition of property scheduled for July
20 th .
151/61 remains responsible for 16th Street improvements, as required by a new
traffic study (not paid for by City); provided, however, that such 16th Street
improvements shall be confined to those improvements reasonably necessary to
service 151/61's development as described in the new traffic study and as
agreed to by Developer and approved by the City Council. In the event that the
improvements described in the new study are not approved by the City Council,
or if approved, are not agreed to by 151/61 within 60 days after such approval,
151/61 shall remain responsible for the improvements required by the existing
traffic study.
concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM:lw
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David Heiar, Economic Development Director
THE COF Dubuque
DUtB All- America city
Masterpiece on the Mississippi
2007
TO: Michael C. Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
Aaron M. DeJong, Asst. Economic Development Director
SUBJECT: Acquisition of Bee Branch ROW Az—
DATE: July 2, 2010
PURPOSE
This memorandum provides the proposed terms for acquisition of additional right of way
for the Bee Branch project across the Highway 151/61 (former Dubuque Pack) site.
BACKGROUND /DISCUSSION
In June of 2006, the City Council approved a Development Agreement with Highway
151/61 which included acquisition of property for the proposed Bee Branch project. At
that time, the agreement was based on conceptual plans for this drainage project. The
City now has a final design for the Bee Branch which actually requires more area than
originally anticipated. The Development Agreement refers to 3.3 acres more or less,
but the final design will require up to 4.2 acres of land.
Another part of the Development Agreement allowed the Highway 151/61 group to
obtain the remainder of the City's property south of 16 Street. At the time the
Development Agreement was approved, it was anticipated that this site would be
approximately 2 acres of developable property. Based on final design, this parcel will
actually have about 1.7 acres remaining for development. The Highway 151/61 group
has decided that this smaller parcel, with an irregular space, and somewhat limited
access points, is no longer of value to them. They have proposed selling their interest
in this property back to the City in return for the additional ROW the City needs for the
Bee Branch project.
Over the past several months, City staff has been in discussions with the Highway
151/61 ownership group to finalize the exact area that will be impacted by this project.
An attached drawing helps to depict the changes of the area needed as ROW for the
drainage project.
Based on the time delays associated with the Bee Branch project, there are other time
frames stated in the Development Agreement that will also need to be amended.
The Developer (Highway 151/61) has proposed the amendments to the Development
Agreement based on the attached Term Sheet.
The stated land offer in the Development Agreement would be terminated and replaced
with the following:
• Highway 151/61 would sell land (both north and south of 16 Street) anticipated
to be between 3.9 and 4.2 acres to the City at $10.81 sq.ft.
• City retains land south of 16 Street which had been optioned to Highway 151/61
(approximately 1.7 acre site after Bee Branch Creek development).
• City pays $1,036,728 at closing.
• City cooperates with Highway 151/61 to obtain charitable contribution for the
remainder of the purchase price.
• The 1.7 acre site south of 16 Street is subject to restrictive covenants
prohibiting:
• Convenience store with gas sales;
• gas stations;
• pharmacy (i.e., sales of prescription medications and drugs); and
• quick service restaurants with ice cream, ice milk, frozen custard, frozen
yogurt or similar such product provided that the average for the brand of
restaurant proposed has ice cream sales that are 20% or more of total
sales for the average restaurant for that brand.
• The City shall be responsible for filling in the abandoned Bee Branch site.
• The City will receive a construction easement over the westerly portion of the
former Pack site.
• Economic Development Grants may be exercised by Developer with respect to
new development on the real estate that is first assessed for property tax
purposes before January 1, 2015 (The original Development Agreement had
stated an ending date of January 1, 2013).
• The closing date shall be July 20, 2010.
In return the Developer will waive any extension of Economic Development Grants
pursuant to Section 3.3(2) of the Development Agreement resulting from failure to
complete the Bee Branch by December 31, 2009.
• Highway 151/61 has been working with a certain unnamed developer for the
area, and if that developer relocates to this development site, whoever is
responsible for improvements to 16 Street is eligible for Economic Development
Grants associated with this specific project for years 16 -20.
• The revised terms are approved by the City Council on July 6, the terms would
be incorporated into a revised Development Agreement to be acted upon by the
Council on July 19, with closing on the acquisition of property scheduled for July
20 th .
• 151/61 remains responsible for 16th Street improvements, as required by a new
traffic study (not paid for by City); provided, however, that such 16th Street
improvements shall be confined to those improvements reasonably necessary to
service 151/61's development as described in the new traffic study and as
agreed to by Developer and approved by the City Council. In the event that the
improvements described in the new study are not approved by the City Council,
or if approved, are not agreed to by 151/61 within 60 days after such approval,
151/61 shall remain responsible for the improvements required by the existing
traffic study.
Timing is of the essence for the City, due to other elements associated with the Bee
Branch Restoration project.
• The City currently has received bids on this project. On August 23, 2010 these
bids expire. If awarded by this date, this phase of the project is anticipated to be
functional in 2011.
• The City intends to make an application for I -Jobs funding from the State of Iowa
which is due August 3, 2010. This will be the third application for these funds as
the first two applications were denied on the basis that the City was not prepared
to begin the project immediately. The total ask in this application will be $5.6
million.
RECOMMENDATION /ACTION STEP
That the City Council approve the attached Term Sheet and authorize City staff to work
with the Highway 151/61 Development group to prepare a revised Development
Agreement for future Council consideration.
Attachments
F: \USERS \Econ Dev \HWY 151 & 61\20100701 Memo to Council Acquisition of Bee Branch ROW.doc
TERM SHEET
City of Dubuque ( "City ") /Highway 151 & 61 Development, LLC ( "151/61 ")
The parties agree upon the following business - terms:
A. Due to the new configuration of the Bee Branch, the parties shall
terminate the prior Offer to Buy Real Estate and Acceptance with
respect to the Bee Branch Real Estate and enter into a new Offer to
Buy Real Estate as described below.
B. The new Offer to Buy Real Estate and Acceptance shall provide
that the City purchases from Highway 151 & 61: (i) the land north
of 16th Street to be used for construction of Bee Branch (i.e. final
configuration of land anticipated to be between 3.9 and 4.2 acres to
be valued at $10.81 per square foot); (ii) the lots owned by 151/61
south of 16th Street (the "South Lots ") valued at $10,81 per square
foot; and (iii) and the City shall also purchase Highway 151 & 61's
option rights in that certain land south of 16th (i.e. the option rights
to that certain approximately 2.76 acre parcel herein referred to as
the "Option Right"). The total purchase price under the Offer to
Buy Real Estate and Acceptance shall be the sum of: (i) the total
number of acres acquired north of 16th Street multiplied by $10.81
per square foot, plus (ii) the total number of acres of the South Lots
multiplied by $10.81 per square foot, plus (iii) the appraised
amount of the Option Right property, payable as follows:
$1,036,728.00 in cash at closing;
ii. The remaining balance of the purchase price to be
donated by Highway 151 & 61 to City for charitable
purposes. The City shall cooperate in connection
with the charitable contribution as provided in the
definitive Offer to Buy Real Estate and Acceptance
by acknowledging receipt of a gift of the property
on the appropriate Internal Revenue Service form;
and
The property conveyed (including the Option Right
property) will be subject to restrictive covenants which will
be placed of record at closing prohibiting the following
upon all such property:
• convenience store with gas sales;
• gas station;
• pharmacy (i.e., sales of prescription
medications and drugs); and
quick service restaurants with ice cream, ice
milk, frozen custard, frozen yogurt or
similar such products (hereinafter "ice
cream ") provided that the average for the
brand of restaurant proposed has ice cream
sales that are 20% or more of total sales for
the average restaurant for that brand.
The closing of the transactions under the new Offer to Buy Real Estate and
Acceptance shall occur on July 20, 2010, subject to any platting or abstracting
that the City desires which shall be done by City at City's expense..
C. 151 /61 remains responsible for 16th Street improvements, as
required by a new traffic study (not paid for by City); provided,
however, that such 16th Street improvements shall be confined to
those improvements reasonably necessary to service 151/6 l's
development as described in the new traffic study and as agreed to by Developer
and approved by the City Council. In the event that the improvements described
in the new study are not approved by the City Council, or if approved, are not
agreed to by 151/61 within 60 days after such approval, 151/61 shall remain
responsible for the improvements required by the existing traffic study.
D. The City shall be responsible for filling in the old /existing Bee Branch
(at City's expense) within 6 months after commencement of the use of
the new Bee Branch. Hwy 151/61 shall grant the City a temporary
construction easement in connection with construction of the Bee
Branch. The temporary construction easement shall extend from the
Bee Branch Real Estate to 20 feet past the existing Bee Branch line and
such temporary easement shall terminate upon completion of the Bee
Branch construction on the Bee Branch Real Estate.
E. The City and Highway 151 & 61 shall amend the Development
Agreement dated June 5, 2006 to provide that Economic
Development Grants may be exercised by Developer with respect
to new development on the real estate that is first assessed for
property tax purposes after the Effective Date of the Development
Agreement and before January 1, 2015. Furthermore, from the
Effective Date until January 1, 2015, Developer shall have the
ability to identify the particular tax parcels upon which minimum
improvements will be constructed for purposes of creation of the
project account. In addition to the 10 years of economic
development payments currently provided in the Development
Agreement, if one certain unnamed developer with whom the
parties are currently discussing development, becomes part of the
development, and if they receive economic development payments
for years 11 through 15, Developer or the party responsible for the
16 Street improvements shall receive 5 additional years worth of
economic development grants with respect to the parcel for the
unnamed developer and related minimum improvements, which
grants shall be for years 16 through 20 after the commencement of
the first economic development grant. Developer will waive any
extension of Economic Development Grants pursuant to Section
3.3(2) of the Development Agreement resulting from failure to
complete the Bee Branch by December 31, 2009.
F. The foregoing is subject to approval by the City Council of City
and any necessary approval of the members and managers of
151/61 and is further subject to being reduced to a definitive
contract by and between the parties by no later than the 15th
day of July, 2010 in order to be on the July 19, 2010 City
Council agenda.
By:
G: \WPDOCS \MARY\Brad \Hwy 151 &61 -SB -Term Sheet - CLEAN 7-2.rtf
HIGHWAY 151 & 61 DE ELOPMENT, LLC
Riverview Plaza, LLC executes this Term Sheet with respect to any real estate described herein
which is subject to an offer to Buy Real Estate and Acceptance between Highway 151 & 61
Development, LLC and Riverview Plaza.
RIVER. IEW PLAZA, LL
By:
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