Adams C EDA Grant Dbq Ind WestMEMORANDUM
December 5, 2003
TO:
FROM:
SUBJECT:
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Economic Development Grant to the Adams Company
Economic Development Director Bill Baum is recommending the formal approval by the
City Council of the Agreement Re Economic Development Grant between the City of
Dubuque and the Adams Company concerning an Economic Development Grant to the
Company for the construction of its new facility in Dubuque Industrial Center West.
On October 20.2003, the City Council held a public hearing on the proposal to issue not
to exceed $500,000 in General Obligation Loan Notes to support The Adams Company
construction of the new facility. Following the required public hearing, the City Council
adopted a resolution authorizing and directing the City Clerk and Finance Officer to
proceed with the issuance of the notes and to take all actions necessary to permit the
completion of a loan to The Adams Company. The City Clerk and Finance Officer will be
soliciting bids from local lenders for the notes,-and on January 19, 2004, the City
Council will be asked to approve a loan agreement and note with the lender who
submits the best proposal to the City. At that meeting, the City will also complete the
proceedings for the Economic Development Grant.
Because of the delay in payment of the grant to the Company, The Adams Company's
attorney prepared the attached Agreement Re Economic Development Grant. The
terms and conditions of that agreement are the same as those in the Development
Agreement, except that the estimated cost of the new facility is $2,907,000, which is
$107,000 higher than the estimate in the Development Agreement. However, the
Agreement Re Economic Development Grant also reconfirms the prevision in the
Development Agreement that provides that the total of all payments to the Company for
the City's purchase of the Company property, the Economic Development Grant, and
the relocation costs will not exceed $3,500,000. The Agreement Re Economic
Development Grant also provides that on or before February 15, 2004, the City will pay
to the Company the estimated difference ($499,500) between the purchase price for the
Company property ($2,407,500) ane the cost of the construction of the new facility
($2,907,000).
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Micnael C. Van Millige~ -~
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
William J Baum, Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
December 2, 2003
TO:
FROM:
Michael Van Milligen, City Manager
William J. Baum, Economic Development Director~--~Z~-~ ~'
SUBJECT: Economic Development Grant to The Adams Company
INTRODUCTION
The attached resolution provides for the formal approval by the City Council of the
Agreement Re Economic Development Grant between the City of Dubuque and The
Adams Company concerning an Economic Development Grant to the Company for the
construction of its new facility in Dubuque Industrial Center West.
BACKGROUND
On May 19, 2003, the City Council approved a Development Agreement with The
Adams Company. The Development Agreement defined the terms and conditions of the
City's acquisition of property owned by the Adams Company in the Port of Dubuque, the
relocation of the Company, an acquisition grant to the Company for the purchase of City
owned property in Dubuque Industrial Center West, and an Economic Development
Grant to the Company to assist the Company in the construction of its new facility.
Under the terms of the Development Agreement, the amount of the Economic
Development Grant is the difference between the City's purchase price of the Adams
Company property, and the cost of the new facility The Adam's Company is
constructing in Dubuque Industrial Center West.
The Development Agreement required that the Economic Development Grant be paid to
the Company at the closing on the City's purchase of the Company's property, which
was held October 31, 2003. However, because the City had not completed the
proceedings for the sale of notes to fund the Grant, the Company agreed to a delay in
the payout of the Grant.
On October 20, 2003, the City Council held a public hearing on the proposal to issue not
to exceed $500,000 in General Obligation Loan Notes to support The Adams Company
construction of the new facility. Following the required public hearing, the City Council
adopted a resolution authorizing and directing the City Clerk and Finance Officer to
proceed with the issuance of the notes and to take all actions necessary to permit the
completion of a loan to The Adams Company. The City Clerk and Finance Officer will be
soliciting bids from local lenders for the notes, and on January 19, 2004, the City
Council will be asked to approve a loan agreement and note with the lender who
submits the best proposal to the City. At that meeting, the City will also complete the
proceedings for the Economic Development Grant.
DISCUSSION
Because of the delay in payment of the grant to the Company, The Adams Company's
attorney prepared the attached Agreement Re Economic Development Grant. The
terms and conditions of that agreement are the same as those in the Development
Agreement, except that the estimated cost of the new facility is $2,907,000, which is
$107,000 higher than the estimate in the Development Agreement. However, the
Agreement Re Economic Development Grant also reconfirms the prevision in the
Development Agreement that provides that the total of all payments to the Company for
the City's purchase of the Company property, the Economic Development Grant, and
the relocation costs will not exceed $3,500,000. The Agreement Re Economic
Development Grant also provides that on or before February 15, 2004, the City will pay
to the Company the estimated difference ($499,5001 between the purchase price for the
Company property ($2,407,500) and the cost of the construction of the new facility
($2,907,000).
Corporation Counsel Barry Lindahl has reviewed and approved the Agreement Re
Economic Development Grant.
RECOMMENDATION
The proposed Agreement Re Economic Development Grant is consistent with the
Development Agreement concerning the Economic Development Grant and the total of
all payments to The Adams Company. I recommend the City Council adopt the attached
resolution approving the Agreement Re Economic Development Grant
F:\USERS\~NBaum',EDA APPLICATION FOR ADAMS COMPANY~lemo on Adams Comp ED grant.doc
RESOLUTION NO. 526-03
RESOLUTION APPROVING AN AGREEMENT WITH THE ADAMS COMPANY
TO PROVIDE AN ECONOMIC DEVELOPMENT GRANT TO THE ADAMS
COMPANY PURSUANT TO THE DEVELOPMENT AGREEMENT BETVVEEN
THE CITY OF DUBUQUE AND THE ADAMS COMPANY
Whereas, on May 19, 2003 the City Council approved a Development Agreement with
The Adams Company, which provided among other things for the purchase by the City of
Dubuque of The Adams Company's property, the relocation of the company and the construction
of a new in Dubuque Industrial Center West; and
Whereas, in Paragraph 2(d) of the Development Agreement, the City agreed to provide
an Economic Development Grant to the Company on the closing date of the City's purchase of
the company's property, or such other date as the parties shall mutually agree upon in writing,
the purpose of which grant was to assist the Company with the construction of its new facility;
and
Whereas, the an Economic Development Grant was not provided at closing because the
cost of the construction of the Company's new facility had not been determined as of that date; and
Whereas, the total cost of the construction of the Company's new facility has now been
determined; and
Whereas, the Agreement Re Economic Development Grant, attached hereto, which has
been approved and executed by the Company, provides that the City and the Company agree that
the date of the disbursement of the Economic Development Grant to the Company by the City will be
on or before February 15, 2004;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the AGREEMENT RE ECONOMIC DEVELOPMENT GRANT, attached
hereto, is hereby approved.
Section 2. That the Mayor is hereby authorized and directed to execute the Agreement Re
Economic Development Agreement on behalf of the City of Dubuque, and the City Manager is
hereby authorized to take all such actions as are necessary to implement the Agreement.
Passed, approved, and adopted this 15th day of December, 2003,
Terrance M. Duggan, Mayor
Attesf;
Jeanne F. Schneider, City Clerk
F:\USERS\WBaurrflResolufion approving EDA pre app.doc
AGREEMENT
RE
ECONOMIC DEVELOPMENT GRANT
IT IS AGREED this 31st day of October, 2003 between The Adams Company
(Developer) and the City of Dubuque, Iowa (City).
RECITALS
The Developer and the City have proceeded to close parts of the Development
Agreement between the Developer and the City dated May 19, 2003 (Agreement).
Paragraph 2(d) of the Agreement calls for an Economic Development Grant (Grant) to
Developer. The parties have agreed to delay delivery of the Grant and wish to
memorialize their understanding with respect thereto.
THEREFORE IT IS AGREED:
1. Sale of Grant Notes. The City has not sold and issued the Grant Notes
and the parties waive the provisions of paragraph 2(d) of the Agreement which
provides:
"The Notes are to be issued and sold prior to the closing.
If the Notes are not issued and sold prior to the closing,
neither the City or Developer are obligated to perform
under this Agreement."
2. The Grant. The exact amount of the Grant to Developer will be equal
to the difference between the purchase price paid by the City for Developer's property
($2,407,500) and the cost of the relocated manufacturing facility on the property being
purchased by the Developer from the City pursuant to the Agreement. The current
estimate of the cost of the relocated facility is the sum of $2,907,500.00. The final
cost of the relocated facility will not be known until the relocated facility is
completed.
On or before February 15, 2004, the City will deliver to the Developer the
estimated difference between the purchase price of Developer's property and the cost
of the relocated facility. If, however, the "difference" is more or less than the final
cost of the relocated facility, the Developer and the City will adjust the amount of the
Grant. If the amount paid to the Developer on or before February 15, 2004 exceeds
the amount of the difference, Developer will refund the difference to City or
conversely if the amount of the Grant delivered to Developer is less than the actual
difference the City will pay the difference to the Developer.
Notwithstanding any other provision hereof, the total payment by the Ci.ty to
the Developer shall not exceed the sum of the $3,500,000 pursuant to paragraph 4 of
the Development Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
CITY OF DUBUQUE
By: Terrance M. Duggan, Mayor
It Authorized Representative
THE ADAMS COMPANY
By: John C. Hendry
President
President
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