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Engine House #1 LLC_Development Agreement_Hearingo Masterpiece on the Mississippi LLC DATE: May 31, 2011 Dubuque kitiZA AO-America City 1111 r 2007 TO: Michael Van Milligen, City Manager FROM: David J. Heiar, Economic Development Director SUBJECT: Resolution approving a Development Agreement with Engine House #1, INTRODUCTION This memorandum recommends to City Council to approve the attached resolution approving a development agreement between the City of Dubuque and Engine House #1, LLC., to sell and rehabilitate the Engine House #1 building (18 Street) which formerly housed the Housing Department offices. BACKGROUND The Housing Department moved into their new offices at the Federal Building in 2008 and since that time their former offices on 18 Street have remained vacant. The Housing Department released an RFP for ideas on re- utilization of the facility. The Crescent Community Health Center and the Head Start program expressed an interest in leasing portions of the building. The building will need to be renovated to accommodate these tenants. The goal is to historically rehabilitate the building using historic tax credits as one of the revenue sources. To facilitate additional funding from the State and Federal Historic Tax Credit (HTC) programs, the building must be controlled by an entity eligible to receive HTCs. DISCUSSION Leaving the building vacant is detrimental to this neighborhood. The proposed services that will be provided by both the Community Health Center and the Head Start program will greatly enhance the quality of life for this neighborhood. Substantial rehabilitation of this building will provide many benefits to this neighborhood. The City is ineligible for HTCs and must turn long -term control over to a separate entity. Dubuque Initiatives has agreed to rehabilitate the property through a subsidiary company, Engine House #1, LLC. The project is pursuing HTCs because there is a desire to rehabilitate the building to its historic condition much like it appeared when it was a fire station. This historic renovation will add some cost to the project which can be offset by receiving HTCs. It is anticipated that this rehabilitation project will also serve as a potential stimulus to enhance the renovation of other buildings in this area. Major elements of the proposed Development Agreement are as follows: • City will sell the building to Engine House #1, LLC. for $1. • City will provide a zero percent interest loan for the rehabilitation expenditures. The initial loan will be for $1,550,000 and could be up to $1,700,000. • Engine House #1, LLC. will receive 15 years of Tax Increment Financing. • Engine House #1 is committing to using the loan proceeds to rehabilitate the building according to the U.S. Department of the Interior Secretary's Standards for Rehabilitation. • The building will be leased to the Community Health Center and the Head Start program. • The City will have separate agreements for service with the Community Health Center and the Head Start program (Operation New View) to help accommodate the services they will provide to the neighborhood. • Any net proceeds of tax credits, any developer fee, and net rent received for the project will be used to pay down the City's loan to the project. Additional terms and conditions of the sale of the property are included within the attached development agreement. Funding for the estimated $1,550,000 loan (potentially to $1,700,000) loan will be provided by $874,000 in DRA distribution funds, $13,000 from a grant from the Office of Energy Independence, $606,409 in short-term GO borrowing for a Federal and State Historic Tax Credit bridge loan, and the remaining $207,000 will be paid for through funds received from a recent land sale to Faley Properties, LLC in the Dubuque Industrial Center West. The Development Agreement requires the Developer to repay the Loan with receipts from the sale or rebate of Historic Tax Credits, Developer Fee, and net rent proceeds from the tenants. The following is a chart describing the sources of repayment of the loan to Engine House #1: Amount Date Action Received Balance Outstanding 6/1/2011 Project Commencement $ 1,550,000 2/1/2012 Receipt of Federal HTCs $ 372,000 $ 1,178,000 3/1/2012 Receipt of Developer Fee $ 225,000 $ 953,000 5/1/2013 Est. Receipt of State HTCs $ 411,329 $ 541,671 * - the $541,671 will be paid through rents received from the tenants of the building over the terms of the leases * RECOMMENDATION I recommend that the City Council approve the attached resolution approving a development agreement with Engine House #1, LLC for the sale of the Former Housing Department Building for the purpose of rehabilitating the building for the Community Health Center and a Head Start center. ■ ACTION STEP The action step for the City Council is to adopt the attached Resolution approving a development agreement with Engine House #1, LLC. F: \USERS\Econ Dev \18th Street Fire Station \DA\20110531 Memo approving Engine House DA.docx Iowa Department of Cultural Affairs State Historical Society of Iowa Sow Site inventory For C tanuation Sheet Page 1 Hose Station Number One /Engine House Number One Name of Property 1805 Central Avenue Address • Site Number 31 -03246 Related District Number Dubuque County Dubuque City 7. Narrative Description: This two -story brick firehouse is the oldest surviving former firehouse in the city. The building is a double front and originally had two sets of double doors on its front. These have been infilled with windows. The facade has a high main floor height and this is underscored by a prominent beltcourse that runs below the upper floor windows. The windows are square cut which is unusual for this period and they may be replacements, as the sash certainly are. A second beltcourse of projecting`brick marks the parapet wall base. The parapet is divided into two parts. The lower half consists of a corbelled brick line that traces semi - elliptical "eyebrows" above each of the upper windows. • The upper half of the pediment consists of a frieze of elongated corbelled brick columns or arches. The east side wall is plain with two bands of windows which are vertically alligned. The base of a siren tower remains on the northeast corner of the rooftop. Eighteenth Street Engine House (Dubuque of Today) 8. Narrative Statement of Significance: Hose Station Number One is the oldest surviving and most substantial of the city's fire houses. J. K. Graves, noted local benefactor, built the station and the 1884 Sanborn Map identifies the building as J. K. Graves' Fire Engine House. By 1894 the building is listed as Hose House No. 1 with hose cart and steamer fire wagon. There was a two -story stable across the rear of the plan. As of 1925 -34 the building was called Engine House Number 1. The station was already the oldest in Dubuque in 1934. Opened in Janaury 1884, it housed one of the first paid fire companies in Dubuque. The first fire station in Dubuque, at Locust and 4 streets, predated this building by just a few years, but it was demolished in 1934. The house's first company was headed by Captain Mike Ettel and seven men (Telegraph Herald, January 4, 1934). 9. 10. Major Bibliographical References: Bruce Kriviskey, Dubuque, Iowa -- Architectural Survey 1978/1979, Atlas of City Wide and District Survey Maps, Dubuque; n.p., c.1979 "Engine House at Eighteenth Street Fifty Years Old," Telegraph Herald, January 4, 1934. Iowa Department of Cultural Affairs State Historical Society of Iowa Iowa Site inv e1t4ry Form Continuation Sheet Page 2 Hose Station Number One /Engine House Number One • . Name of Property 1805 Central Avenue Address 1925,1934 City Directories , 11 Additional Documentation: Maps: Photographs: Legal Description: Sub City Ltos 438, 439 and part of 676, E. 120 of Lot 8, Lots 9 and 10 Site Number 31 -03246 Related District Number Dubuque County Dubuque City Sanborn Hre Msurance Maps 1884 111111111111111311111113111111111111111111111111 z o J 1/ fr; yw ..e.W.VSNORSTS 1909 1805 Centrll Avenue 0 0 1 I tZ fiA'r r7IRRAi S771770Y in-eptvoi cowern nied Correreresd /Zoo kgr? Wares 9 -.6fortr 1.94W 8 1891- 1950 llllll lllll Eitra. a/P- CIORIT FRcraey • rci:e Centra._ Avanus HsJe'rnig (S)u'icrrg Photo #1 — Front (South) and East Facade GCE Cents Avenue- 0 co] r o o�ng building Photo #2 - If ew of north (a and Bast facades and parrkoncg 0®i: 1805 Oc n ta Avenue - O ©H hg Building Photo # 3 - View ae [l©©k]ing south from front of :1805 Centra0 Avenue 1803 Cents Photo #4 - View of Ieok]ng northwest a -OSS o orTterrsect'on ®' 'i e Street and Central Avenue Masterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Resolution Approving a Development Agreement with Engine House #1 LLC DATE: June 1, 2011 Dubuque katil AN- Ameticacity 2007 The Fiscal Year 2012 budget includes funds to renovate the former Housing offices on 18 Street. This project is intended to restore the historic character of the original use of the building as a Fire Station, making it an architectural anchor for the neighborhood. The building would be leased to Operation New View for Head Start classes on the first floor and to the Crescent Community Health Center for a health education center on the second floor. The Crescent Community Health Center would contribute $251,502 to the renovation project from a federal grant they received. These two significant programs would help anchor this neighborhood. The Housing Department moved into their new offices at the Federal Building in 2008 and since that time their former offices on 18 Street have remained vacant. Leaving the building vacant is detrimental to this neighborhood. The building will need to be renovated to accommodate new tenants. The goal is to historically rehabilitate the building using historic tax credits as one of the revenue sources. To facilitate additional funding from the State and Federal Historic Tax Credit programs, the building must be controlled by an entity eligible to receive Historic Tax Credits. The City is ineligible for Historic Tax Credits and must turn long -term control over to a separate entity. Dubuque Initiatives has agreed to rehabilitate the property through a subsidiary company, Engine House #1, LLC. The project is pursuing Historic Tax Credits because there is a desire to rehabilitate the building to its historic condition much like it appeared when it was a fire station. This historic renovation will add some cost to the project which can be offset by receiving Historic Tax Credits. It is anticipated that this rehabilitation project will also serve as a potential stimulus to enhance the renovation of other buildings in this area. That investment in other buildings is being supported and encouraged by the recently formed Washington Neighborhood Development Corporation. Major elements of the proposed Development Agreement are as follows: • City will sell the building to Engine House #1, LLC. for $1. • City will provide a zero percent interest loan for the rehabilitation expenditures. The initial loan will be for $1,550,000 and could be up to $1,700,000. • Engine House #1, LLC. will receive 15 years of Tax Increment Financing. • Engine House #1 is committing to using the loan proceeds to rehabilitate the building according to the U.S. Department of the Interior Secretary's Standards for Rehabilitation. • The building will be leased to the Community Health Center and the Head Start program. • The City will have separate agreements for service with the Community Health Center and the Head Start program (Operation New View) to help accommodate the services they will provide to the neighborhood. • Any net proceeds of tax credits, any developer fee, and net rent received for the project will be used to pay down the City's loan to the project. Funding for the estimated $1,550,000 loan will be provided by $874,000 in DRA distribution funds, $13,000 from a grant from the Office of Energy Independence, $606,409 in short-term GO borrowing for a Federal and State Historic Tax Credit bridge loan, and the remaining $207,000 will be paid for through funds received from a recent land sale to Faley Properties, LLC in the Dubuque Industrial Center West. The Development Agreement requires the Developer to repay the Loan with receipts from the sale or rebate of Historic Tax Credits, Developer Fee, and net rent proceeds from the tenants. In the first few years most of the debt will be repaid with approximately $541,000 in long -term debt repaid through tenant lease payments. Without the partnership with Dubuque Initiatives and their ability to access federal and state historic tax credits, the City could not afford to do this project. Economic Development Director Dave Heiar is recommending approval of the Development Agreement. concur with the recommendation and respectfully request Mayor and City Council approval. MCVM:jh Attachment Michael C. Van Milligen cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager David J. Heiar, Economic Development Director APPROVING (1)THE DISPOSAL OF AN INTEREST IN REAL PROPERTY OWNED BY THE CITY OF DUBUQUE BY SALE BETWEEN THE CITY OF DUBUQUE, IOWA AND ENGINE HOUSE #1, LLC, AN IOWA LIMITED LIABILITY COMPANY AND (2) APPROVAL OF A DEVELOPMENT AGREEMENT WITH ENGINE HOUSE #1, LLC TO REHABILITATE 1805 CENTRAL AVENUE RESOLUTION NO. 185-11 Whereas, the City of Dubuque, Iowa (City) is the owner of the real property legally described as follows: Lot 1 of Engine House No. 1 Subdivision in the City of Dubuque, Dubuque County, Iowa (the "Property "), according to the recorded Plat thereof, subject to easements and restrictions of record; and Whereas, Engine House #1, LLC plans to renovate the Property to be used by the Crescent Community Health Center and the Head Start program; and WHEREAS, on June 6, 2011, the City Council pursuant to notice published as required by law held a public hearing on its intent to dispose of the foregoing interest in real property and overruled all objections thereto; Whereas, the City Council believes it is in the best interest of the City of Dubuque to approve the Development Agreement. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The Development Agreement between the City and Engine House #1, LLC is hereby approved and the Mayor is authorized to execute said Development Agreement on behalf of the City of Dubuque. Section 2. The City Manager is authorized to execute any of the loans, incentives specified in the Development Agreement. Kevin S. Firn Passed, approved and adopted this 6 th day of June, 2011. F: \USERS \Econ Dev \18th Street Fire Station \DA\20110606 Reso Approving Engine House DA.doc Roy D. Buol, Mayor DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF DUBUQUE, IOWA AND ENGINE HOUSE #1, LLC THIS DEVELOPMENT AGREEMENT (Agreement) dated for reference purposes the 6th day of June , 2011, is made and entered into by and between the City of Dubuque, Iowa (City), and Engine House #1, LLC (Developer). WHEREAS, City has owned Lot 1 of Engine House No. 1 Subdivision in the City of Dubuque, Dubuque County, Iowa (The Property) for many years, originally functioning as a fire station, but most recently has been vacant for several years, and City does not have the resources to appropriately redevelop the building, and WHEREAS, City desires for this property to be an architectural and programmatic asset and anchor for the neighborhood, and WHEREAS, City has requested that Developer assist in the redevelopment and preservation of this historic property, and WHEREAS, Developer has access to local, state, and federal resources ,that is currently unavailable to City, and WHEREAS, Developer has requested that City sell to Developer the Propertywith any easements and appurtenant servient estates; and WHEREAS, the Property is located in an area that is anticipated to soon be in the Greater Downtown Urban Renewal District (the District) as a blighted area (the Project Area) defined by Iowa Code Chapter 403 (the Urban Renewal Law); and WHEREAS, Developer will rehabilitate the building in accordance with the U.S. Secretary of the Interior Standards for Historic Preservation; and WHEREAS, Developer will make an additional capital investment in building improvements, equipment, furniture and fixtures in the Property (Project); and WHEREAS, the Property is historically significant and it is in the City's best interest to preserve the Property; and WHEREAS, Developer has agreed to lease the Property to organizations that will provide needed services to the neighborhood, and WHEREAS, City expects to approve the purchase of services from the Community Health Center and the Head Start program that will be located on the Property, and 033111_1bal WHEREAS, pursuant to Iowa Code Section 403.6(1), and in conformance with the Urban Renewal Plan for the Project Area adopted on May 18, 1967 and last amended on May 2, 2011, City has the authority to enter into contracts and agreements to implement the Urban Renewal Plan, as amended; and WHEREAS, the Dubuque City Council believes it is in the best interests of the City to encourage Developer in the development of the Property by providing certain incentives as set forth herein. NOW, THEREFORE, the parties to this Development Agreement, in consideration of the promises, covenants and agreements made by each other, do hereby agree as follows: SECTION 1. CONVEYANCE OF PROPERTY TO DEVELOPER 1.1 Purchase Price. The purchase price for the Property (the Purchase Price) shall be the sum of One Dollar ($1.00). 1.2 Title to Be Delivered. City agrees to convey good and marketable fee simple title in the Property to Developer subject only to easements, restrictions, conditions and covenants of record as of the Closing Date to the extent not objected to by Developer as set forth in this Agreement, and to the conditions subsequent set forth in Section 5.3, below: (1) City, at its sole cost and expense, shall deliver to Developer within no more than (14) days after the Effective Date, an abstract of title to the Property continued through the date of this Agreement reflecting merchantable title in City in conformity with this Agreement and applicable state law. The abstract shall be delivered together with full copies of any and all encumbrances and matters of record applicable to the Property, and such abstract shall become the property of Developer at Closing. (2) Developer shall have until the Closing Date to render objections to title, including any easements or other encumbrances not satisfactory to Developer, in writing to City. Developer agrees, however, to review the abstract (the Abstract) promptly following Developer's receipt of the Final Plat and the Abstract and to promptly provide City with any objections to title identified therein. Nothing herein shall be deemed to limit Developer's rights to raise new title objections with respect to matters revealed in any subsequent title examinations and surveys and which were not identified in the Abstract provided by City. City shall promptly exercise its best efforts to have such title objections removed or satisfied and shall advise Developer of its intended action within ten (10) days after receipt of Developer's written objections thereto. If City shall fail to have such objections removed as of the Closing Date, or any extension thereof consented to by Developer, Developer may, at its sole discretion, either 2 (a) terminate this Agreement without any liability on its part, or (b) take title subject to such objections. City agrees to use its best efforts to promptly satisfy any such objections. 1.3 Rights of Inspection, Testing and Review. Developer, its counsel, accountants, agents and other representatives, shall have full and continuing access to the Property and all parts thereof, upon reasonable notice to City. Developer and its agents and representatives shall also have the right to enter upon Property at any time after the execution and delivery hereof for any purpose whatsoever, including, but not limited to, inspecting, surveying, engineering, test boring, and performing environmental tests, provided that Developer shall hold City harmless and fully indemnify City against any damage, claim, liability or cause of action arising from or caused by the actions of Developer, its agents, or representatives upon the Property (except for any damage, claim, liability or cause of action arising from conditions existing prior to any such entry upon the Property), and shall have the further right to make such inquiries of governmental agencies and utility companies, etc. and to make such feasibility studies and analyses as it considers appropriate. 1.4 Representations, Warranties and Covenants of City. In order to induce Developer to enter into this Agreement and purchase the Property, City hereby represents, warrants and covenants, as the case may be, to Developer that: (1) There is no action, suit or proceeding pending, or to the best of City's knowledge, threatened against City which might result in any adverse change in the Property being conveyed or the possession, use or enjoyment thereof by Developer, including, but not limited to, any action in condemnation, eminent domain or public taking. (2) No ordinance or hearing is now or before any local governmental body that either contemplates or authorizes any public improvements or special tax levies, the cost of which may be assessed against the Property. To the best of City's knowledge, there are no plans for special assessments affecting the Property which will result in any charge or lien be levied or assessed against the Property. (3) All leases, contracts, licenses, and permits between City and third parties in connection with the maintenance, use, and operation of the Property have been provided to Developer and City has provided true and correct copies of all such documents to Developer, and there are no defaults thereunder, nor any event that, with either or both the giving of notice or passage of time, would become a default thereunder. (4) City has good and marketable fee simple title interest in the Property. (5) There are no notices, orders, suits, judgments or other proceedings relating to fire, building, zoning, air pollution, health violations or other matters that have not 3 been corrected. City has notified Developer in writing of any past notices, orders, suits, judgments or other proceedings relating to fire, building, zoning, air pollution or health violations as they relate to the Property of which it has actual notice. The Property is in material compliance with all applicable zoning, fire, building, and health statutes, ordinances, and regulations. (6) Payment has been made for all labor or materials that have been furnished to the Property or will be made prior to the Closing Date so that no lien for labor performed or materials furnished can be asserted against the Property. (7) The Property will, as of the Closing Date, be free and clear of all liens, security interests, and encumbrances objected to by Developer in accordance with the terms of this Agreement. (8) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement do not and shall not result in any material breach of any terms or conditions of any mortgage, bond, indenture, agreement, contract, license, or other instrument or obligation to which City is a party or by which either City or the Property being conveyed are bound, nor shall the execution, delivery and performance of this Agreement violate any statute, regulation, judgment, writ, injunction or decree of any court threatened or entered in a proceeding or action in which City may be bound or to which either City or the Property being conveyed may be subject. (9) City has duly obtained all necessary approvals and consents for its execution, delivery and performance of this Agreement, and has full power and authority to execute, deliver and perform its obligations under this Agreement. City's attorney shall issue a legal opinion to Developer at time of Closing confirming the representation contained herein, in the form attached hereto as Exhibit B. (10) The Property is free and clear of any occupants. (11) City represents and warrants that any fees or other compensation which may be owed to a broker engaged directly or indirectly by City in connection with the purchase and sale contemplated in this Agreement are the sole responsibility and obligation of City and that City will indemnify Developer and hold Developer harmless from any and all claims asserted by any broker engaged directly or indirectly by City for any fees or other compensation related to the subject matter of this Agreement. (12) City shall exercise its best efforts to assist Developer in the development process. (13) City shall exercise its best efforts to resolve any disputes arising during the development process in a reasonable and prompt fashion. 4 (14) With respect to the period during which City has owned or occupied the Property, and to City's knowledge after reasonable investigation with respect to the time before City owned or occupied the Property, no person or entity has caused or permitted materials to be stored, deposited, treated, recycled, or disposed of on, under or at the Property, which materials, if known to be present, would require cleanup, removal or some other remedial action under environmental laws. 1.5 Conditions to Closing. The Closing of the transaction contemplated by this Agreement and all the obligations of Developer under this Agreement are subject to fulfillment, on or before the Closing Date, of the following conditions: (1) The representations and warranties made by City in Section 1.4 shall be correct as of the Closing Date with the same force and effect as if such representations were made at such time. At the Closing, City shall deliver a certificate to that effect in the form of Exhibit C. (2) Title to the Property shall be in the condition warranted in Section 1.4. (3) Developer having obtained any and all necessary governmental approvals, including without limitations approval of zoning, subdivision or platting which might be necessary or desirable in connection with the sale, transfer and development of the Property. Any conditions imposed as a part of the zoning, platting or subdivision must be satisfactory to Developer respectively, in its sole opinion. City shall cooperate with Developer in attempting to obtain any such approvals and shall execute any documents necessary for this purpose, provided that Developer will pay normal and customary fees of the City in connection therewith. In connection therewith, City agrees (a) to review all of Developer's plans and specifications for the project and to either reject or approve the same in a prompt and timely fashion; (b) to issue a written notification to Developer, following City's approval of same, indicating that City has approved such plans and specifications, and that the same are in compliance with the Urban Renewal Plan, this Agreement and any other applicable City or affiliated agency requirements, with the understanding that Developer and its lenders shall have the right to rely upon the same in proceeding with the project; (c) to identify in writing within ten (10) working days of submission of said plans and specifications, any and all permits, approvals and consents that are legally required for the acquisition of the Property by Developer, and the construction, use and occupancy of the project with the intent and understanding that Developer and their respective lenders and attorneys will rely upon same in establishing their agreement and time frames for construction, use and occupancy, lending on the project and issuing legal opinions in connection therewith; and (d) to cooperate fully with Developer to streamline and facilitate the obtaining of such permits, approvals and consents. (4) City, having given all required notices to or obtaining prior approval, consent or permission of any federal, state, municipal or local governmental agency, body, 5 board or official to the sale of the Property; and consummation of the Closing by City shall be deemed a representation and warranty that it has obtained the same. (5) Developer and City shall be in material compliance with all the terms and provisions of this Agreement. (6) Developer shall have the right to terminate this Agreement at anytime prior to the consummation of the Closing on the Closing Date if Developer determines in its sole discretion that conditions necessary for the successful completion of the Project contemplated herein have not been satisfied in its sole and unfettered discretion. Upon the giving of notice of termination by such terminating party to the other parties to this Agreement, this Agreement shall be deemed null and void. (7) Receipt by City of an opinion of counsel to Developer in the form attached here as Exhibit H or other form that is reasonably acceptable to City. (8) The covenants made by City in Section 1.4 shall be completed or addressed in a manner that is acceptable to Developer in its sole discretion. 1.6 Closing. The Closing of the purchase and sale shall take place on the Closing Date. Exclusive possession of the Property shall be delivered on the Closing Date, in its current condition and in compliance with this Agreement, including City's representations and warranties regarding the same. Consummation of the Closing shall be deemed an agreement of the parties to this Agreement that the conditions of Closing have been satisfied or waived except those by which their terms survive the Closing. 1.7 City's Obligations at Closing. At or prior to the Closing Date, City shall: (1) Deliver to Developer City's duly recordable Special Warranty Deed to the Property (in the form attached hereto as Exhibit E (Deed)) and appropriate resolutions of the City Council conveying to Developer marketable fee simple title to the Property and all rights appurtenant thereto, subject only to easements, restrictions, conditions and covenants of record as of the date hereof and not objected to by Developer as set forth in this Agreement, and to the conditions subsequent set forth in Section 5.3 below. (2) Deliver to Developer the Abstract to the Property in accordance with Section 1.2(1). (3) Deliver to Developer such other documents as may be required by this Agreement, all in a form satisfactory to Developer. 1.8 Delivery of Purchase Price; Obligations At Closing. At Closing, and subject to the terms, conditions, and provisions hereof and the performance by City of its obligations as set forth herein, Developer shall pay the Purchase Price to City pursuant to Section 1.1 hereof. 6 1.9 Closing Costs. The following costs and expenses shall be paid in connection with the Closing: (1) City shall pay: (a) The transfer fee, if any, imposed on the conveyance. (b) A pro -rata portion of all taxes, if any, as provided in Section 1.10. (c) All special assessments, if any, whether levied, pending or assessed. (d) City's attorney's fees, if any. (e) City's broker and/or real estate commissions and fees, if any. (f) The cost of recording the satisfaction of any existing mortgage and any other document necessary to make title marketable. (2) Developer shall pay the following costs in connection with the Closing: (a) The recording fee necessary to record the Deed. (b) Developer's attorney's fees. (c) Developer's broker and/or real estate commissions and fees, if any. (d) A pro -rata portion of all taxes as provided in Section 1.10. 1.10 Real Estate Taxes. City shall pay all real estate taxes and installments of special assessments for all calendar years that end prior to the year in which the Closing Date occurs. Real estate taxes and installments of special assessments for the calendar year in which the Closing Date occurs shall be prorated between City and Developer to the Closing Date on the basis of a 366 -day calendar year. Developer shall pay or cause to be paid all real estate taxes and installments of special assessments due in subsequent calendar years. Any proration of real estate taxes on the Property shall be based upon such taxes for the calendar year currently payable notwithstanding when they may have been first levied or assessed. 1.11 Representations and Warranties of Developer. The Developer makes the following representations and warranties: (1) Developer is a limited liability company duly organized and validly existing under the laws of the State of Iowa, and has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as 7 presently proposed to be conducted, and to enter into and perform its obligations under the Agreement. (2) This Agreement has been duly authorized, executed and delivered by Developer and, assuming due authorization, execution and delivery by the City, is in full force and effect and is a valid and legally binding instrument of Developer enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally. Developer's counsel shall issue a legal opinion to the City, at time of closing, confirming the representations contained herein, in the form attached hereto as Exhibit B. (3) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement are not prevented by, limited by, in conflict with, or result in a violation or breach of, the terms, conditions or provisions of the articles of incorporation or the bylaws of Developer or any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which Developer is now a party or by which it or its property is bound, or constitute a default under any of the foregoing. (4) There are no actions, suits or proceedings pending or threatened against or affecting Developer in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, financial position or result of operations of Developer or which affects the validity of the Agreement or Developer's ability to perform its obligations under this Agreement. (5) Developer will perform its obligations under this Agreement in accordance with the material terms of this Agreement, the Urban Renewal Plan and all local, State and federal laws and regulations. (6) Developer will use its best efforts to obtain, or cause to be obtained, in a timely manner, all material requirements of all applicable local, state, and federal laws and regulations which must be obtained or met. SECTION 2. DEVELOPMENT ACTIVITIES 2.1 Required Minimum Improvements. Developer will make a capital investment of not Tess than One Million Five Hundred Fifty Thousand Dollars ($1,550,000.00) to acquire and improve the Property (the Minimum Improvements). These Minimum Improvements preliminarily include creating office space for the Crescent Community Health Center and an early childhood facility for Head Start. 2.2 [This section intentionally left blank] 8 2.3 Plans for Construction of Minimum Improvements. Plans and specifications with respect to the development of the Property and the construction of the Minimum Improvements thereon (the Construction Plans) shall be in conformity with Urban Renewal Pian, this Agreement, and all applicable state and local laws and regulations, including but not limited to any covenants, conditions, restrictions, reservations, easements, liens and charges, recorded in the records of Dubuque County, Iowa. Developer shall submit to City, for approval by City, plans, drawings, specifications, and related documents with respect to the improvements to be constructed by Developer on the Property. All work with respect to the Minimum Improvements shall be in substantial conformity with the Construction Plans approved by City. 2.4 Timing of Improvements. Developer hereby agrees that construction of the Minimum Improvements on the Property shall be commenced within thirty (30) days after the Closing Date, and shall be substantially completed by December 31, 2011. The time frames for the performance of these obligations shall be suspended due to unavoidable delays meaning delays, outside the control of the party claiming its occurrence in good faith, which are the direct result of strikes, other labor troubles, unusual shortages of materials or labor, unusually severe or prolonged bad weather, acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action or by the exercise of reasonable discretion directly results in delays, or acts of any federal, state or local government which directly result in extraordinary delays. The time for performance of such obligations shall be extended only for the period of such delay. 2.5 Certificate of Completion. Promptly following the request of Developer upon completion of the Minimum Improvements, City shall furnish Developer with an appropriate instrument so certifying. Such certification (the Certificate of Completion) shall be in recordable form and shall be a conclusive determination of the satisfaction of Developer's obligations to make the Minimum Improvements under this Agreement and completion of the Minimum Improvements by Developer as required by this Agreement. SECTION 3. CITY PARTICIPATION 3.1 Rehabilitation Loan. (1) Subject to the conditions set forth in this section, City hereby agrees to make a construction/operating loan to Developer with an initial draw of $1,550,000 (the "Initial Draw") and a maximum principal amount (including the Initial Draw) not to exceed $1,700,000 (the "Loan"). The Loan shall be at zero percent interest and shall have a term of twenty (20) years. Monthly principal payments shall begin on the day of , 2018 and shall be amortized over a ten (10) year period commencing on such date. Developer may draw additional sums from the Loan but only for documented operational needs for which no other Developer funds are available to pay, if such draws are approved by the City Manager, and upon receipt of reasonable documentation 9 of the operational need for such funds and such other information as the City Manager may reasonably request. Any additional loan funds drawn by Developer in excess of the Initial Draw shall be added to the Loan balance and also amortized over ten (10) years commencing , 2018. (2) The Loan shall be made under the terms of a loan agreement between City and Developer, and shall be secured by a mortgage on the Property in a form acceptable to City. City will enter into the loan agreement at the time funds are available as determined by City and Developer is in compliance with this Agreement and there has been no Event of Default, as described in Section 5. (3) The Loan shall be used for construction of the Minimum Improvements, and for no other purpose. 3.2 Economic Development Grant to Developer. For and in consideration of Developer's obligations hereunder, and in furtherance of the goals and objectives of the urban renewal plan for the Project Area and the Urban Renewal Law, City agrees, subject to Developer being and remaining in compliance with the terms of this Agreement, to make thirty (30) consecutive semi-annual payments (such payments being referred to collectively as the Economic Development Grants) to Developer: November 1, 2012 November 1, 2013 November 1, 2014 November 1, 2015 November 1, 2016 November 1, 2017 November 1, 2018 November 1, 2019 November 1, 2020 November 1, 2021 November 1, 2022 November 1, 2023 November 1, 2024 November 1, 2025 November 1, 2026 May 1,2013 May 1,2014 May 1,2015 May 1,2016 May 1,2017 May 1,2018 May 1,2019 May 1, 2020 May 1, 2021 May 1, 2022 May 1, 2023 May 1, 2024 May 1, 2025 May 1, 2026 May 1, 2027 pursuant to Iowa Code Section 403.9 of the Urban Renewal Law, in amounts equal to a portion of the tax increment revenues collected by City under Iowa Code Section 403.19 (without regard to any averaging that may otherwise be utilized under Iowa Code Section 403.19 and excluding any interest that may accrue thereon prior to payment to Developer) during the preceding six-month period in respect of the Minimum Improvements constructed by Developer (the Developer Tax Increments). For purposes of calculating the amount of the Economic Development Grants provided in this Section, the Developer Tax Increments shall be only those tax increment revenues collected by City in respect of the 10 increase in the assessed value of the Property above the assessment of January 1, 2010 ($0). The Developer Tax Increments shall not include (i) any property taxes collected for the payment of bonds and interest of each taxing district, (ii) any taxes for the regular and voter-approved physical plant and equipment levy, and (iii) any other portion required to be excluded by Iowa law, and thus such incremental taxes will not include all amounts paid by Developer as regular property taxes. 3.3 To fund the Economic Development Grants, City shall certify to the County prior to December 1, 2011, its request for the available Developer Tax Increments resulting from the assessments imposed by the County as of January 1 of that year and each year thereafter until and including January 1, 2025, to be collected by City as taxes are paid during the following fiscal year and which shall thereafter be disbursed to the Developer on November 1 and May 1 of that fiscal year. (Example: if City so certifies in December, 2011, the Economic. Development Grants in respect thereof would be paid to the Developer on November 1, 2012, and May 1, 2013.) 3.4 The Economic Development Grants shall be payable from and secured solely and only by the Developer Tax Increments paid to City that, upon receipt, shall be deposited and held in a special account created for such purpose and designated as the Engine House #1 TIF Account of City. City hereby covenants and agrees to maintain its TIF ordinance in force during the term hereof and to apply the incremental taxes collected in respect of the Minimum Improvements and allocated to the Engine House #1 TIF Account to pay the Economic Development Grants, as and to the extent set forth in Section 3.2 hereof. The Economic Development Grants shall not be payable in any manner by other tax increments revenues, or by general taxation or from any other City funds. City makes no representation with respect to the amounts that may be paid to Developer as the Economic Development Grants in any one year and under no circumstances shall City in any manner be liable to Developer so long as City timely applies the Developer Tax Increments actually collected and held in the Engine House #1 TIF Account (regardless of the amounts thereof) to the payment of the Economic Development Grants to Developer as and to the extent described in this Section. 3.5 City shall be free to use any and all tax increment revenues collected in respect of other properties within the Project Area and the remaining actual amount of the property taxes paid by Developer to City, or any available Developer Tax Increments resulting from the termination of the annual Economic Development Grants under Section 3.2 hereof, for any purpose for which such tax increment revenues may lawfully be used pursuant to the provisions of the Urban Renewal Law, and City shall have no obligations to Developer with respect to the use thereof. 3.6 City shall endeavor to reach agreement on terms of Purchase of Service contracts with the Community Health Center and Head Start to provide services on the Property. The contracts will be for 15 years or as long as the Community Health Center and Head Start must pay rent to use the Property. Assignment of such contracts is subject to prior approval by City. 11 SECTION 4. COVENANTS OF DEVELOPER 4.1 The Minimum Improvements shall conform to the U.S. Secretary of the Interior's Standards for Rehabilitation. [4.2 This section intentionally left blank.] 4.3 Books and Records. During the term of this Agreement, Developer shall keep at all times and make available to City upon reasonable request proper books of record and account in which full, true and correct entries will be made of all dealings and transactions of or in relation to the business and affairs of Developer in accordance with generally accepted accounting principles consistently applied throughout the period involved, and Developer shall provide reasonable protection against loss or damage to such books of record and account. 4.4 Real Property Taxes. Developer shall pay or cause to be paid, when due, all real property taxes and assessments payable with respect to all and any parts of the Property unless Developer's obligations have been assumed by another person pursuant to the provisions of this Agreement. 4.5 No Other Exemptions. During the term of this Agreement, Developer agrees not to apply for any state or local property tax exemptions which are available with respect to the Development Property or the Minimum Improvements located thereon that may now be, or hereafter become, available under state law or city ordinance during the term of this Agreement, including those that arise under Iowa Code Chapters 404 and 427, as amended. 4.6 Insurance Requirements. (1) Developer shall provide and maintain or cause to be maintained at all times during the process of constructing the Minimum Improvements and at its sole cost and expense all risk builder's risk insurance, written on a Completed Value Form in an amount equal to one hundred percent (100%) of the building (including Minimum Improvements) replacement value when construction is completed. Developer shall furnish City with proof of insurance in the form of a certificate of insurance. (2) Upon completion of construction of the Minimum Improvements and up to the Termination Date, Developer shall maintain, or cause to be maintained, at its cost and expense property insurance against loss and/or damage to the building (including the Minimum Improvements) all risk property insurance and in an amount not Tess than the full insurable replacement value of the building (including the Minimum Improvements). Developer shall furnish to City proof of insurance in the form of a certificate of insurance. (3) The term "replacement value" shall mean the actual replacement cost of the building with Minimum Improvements (excluding foundation and excavation costs 12 and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be reasonably determined from time to time at the request of City, but not more frequently than once every three (3) years. (4) Developer shall notify City immediately in the case of damage exceeding $50,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. Net proceeds of any such insurance (Net Proceeds), shall be paid directly to Developer as its interests may appear, and Developer shall forthwith repair, reconstruct and restore the Minimum Improvements to substantially the same or an improved condition or value as they existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, Developer shall apply the Net Proceeds of any insurance relating to such damage received by Developer to the payment or reimbursement of the costs thereof, subject, however, to the terms of any mortgage encumbering title to the Property (as its interests may appear). Developer shall complete the repair, reconstruction and restoration of Minimum Improvements whether or not the Net Proceeds of insurance received by Developer for such purposes are sufficient. 4.7 Preservation of Property. During the term of this Agreement, Developer shall maintain, preserve and keep, or cause others to maintain, preserve and keep, the Minimum Improvements in good repair and working order, ordinary wear and tear accepted, and from time to time shall make all necessary repairs, replacements, renewals and additions. 4.8 Non -Discrimination. In carrying out the project, Developer shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, sexual orientation, gender identity, national origin, age or disability. 4.9 Conflict of Interest. Developer agrees that no member, officer or employee of City, or its designees or agents, nor any consultant or member of the governing body of City, and no other public official of City who exercises or has exercised any functions or responsibilities with respect to the project during his or her tenure, or who is in a position to participate in a decision-making process or gain insider information with regard to the project, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the project, or in any activity, or benefit therefrom, which is part of this project at any time during or after such person's tenure. In connection with this obligation, Developer shall have the right to rely upon the representations of any party with whom it does business and shall not be obligated to perform any further examination into such party's background. 4.10 Non -Transferability. Until such time as the Minimum Improvements are complete (as certified by City under Section 2.5), this Agreement may not be assigned by Developer nor may the Property be transferred by Developer to another party. Thereafter, with the prior written consent of City, which shall not be unreasonably withheld, Developer shall have the right to assign this Agreement, and upon assumption of the Agreement by the 13 assignee, Developer shall no longer be responsible for its obligations under this Agreement. Notwithstanding the foregoing, Developer shall have the right to lease a portion or all of the property to Engine House #1 MT, LLC (Master Tenant), and Master Tenant may enter into sublease agreements with Crescent Community Health Center and Head Start for portions of the rehabilitated property. 4.11 No change in Tax Classification. Developer agrees that it will not take any action to change, or otherwise allow, the classification of the Property for property tax purposes to become other than commercial property and to be taxed as such under Iowa law. 4.12 Restrictions on Use. Developer agrees for itself, and its successors and assigns, and every successor in interest to the Property or any part thereof that they, and their respective successors and assigns, shall: (1) Devote the Property to, and only to and in accordance with, the uses specified in the Urban Renewal Plan (and City represents and agrees that use of the Property as an office and day care, is in full compliance with the Urban Renewal Plan) (however, Developer shall not have any liability to City to the extent that a successor in interest shall breach this covenant and City shall seek enforcement of this covenant directly against the party in breach of same); and (2) Not discriminate upon the basis of race, religion, color, sex, sexual orientation, gender identity, national origin, age or disability in the sale, lease, rental, use or occupancy of the Property or any improvements erected or to be erected thereon, or any part thereof (however, Developer shall not have any liability to City to the extent that a successor in interest shall breach this covenant and City shall seek enforcement of this covenant directly against the party in breach of same). 4.13 Compliance with Laws. Developer shall comply with all laws, rules and regulations relating to its businesses, other than laws, rules and regulations the failure to comply with or the sanctions and penalties resulting therefrom, would not have a material adverse effect on the business, property, operations, financial or otherwise, of Developer. 4.14 Proceeds from Tax Credits and Developer Fee. Proceeds from the sale of any tax credits or developer fees received by Developer from the rehabilitation of the Property Tess any associated costs to acquire, maintain or sell the credits shall be applied by Developer to the Loan. 4.15 Rent Proceeds. Net rents received from the lease of the Property shall be applied by Developer to repayment of the Loan. SECTION 5. EVENTS OF DEFAULT AND REMEDIES 14 5.1 Events of Default Defined. The following shall be Events of Default under this Agreement and the term Event of Default shall mean, whenever it is used in this Agreement, any one or more of the following events: (1) Failure by Developer to pay or cause to be paid, before delinquency, all real property taxes assessed with respect to the Minimum Improvements and the Property. (2) Failure by Developer to cause the construction of the Minimum Improvements to be commenced and completed pursuant to the terms, conditions and limitations of this Agreement. (3) Transfer of any interest by Developer of the Minimum Improvements in violation of the provisions of this Agreement prior to the issuance of the final Certificate of Completion. (4) Failure by Developer or City to substantially observe or perform any other material covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement. 5.2. Remedies on Default by Developer. Whenever any Event of Default referred to in Section 5.1 of this Agreement occurs and is continuing, City, as specified below, may take any one or more of the following actions after the giving of written notice by City to Developer of the Event of Default, but only if the Event of Default has not been cured within sixty (60) days following such notice, or if the Event of Default cannot be cured within sixty (60) days and Developer does not provide assurances to City that the Event of Default will be cured as soon as reasonably possible thereafter: (1) City may suspend its performance under this Agreement until it receives assurances from the Developer deemed adequate by City, that the Developer will cure its default and continue its performance under this Agreement; (2) City may cancel and rescind this Agreement; (3) City shall be entitled to recover from Developer the sum of all amounts expended by City in connection with the funding of the Downtown Rehab Loan/Grant and Economic Development Grant to Developer and City may take any action, including any legal action it deems necessary, to recover such amounts from the Developer; (4) City may withhold the Certificate of Completion; or (5) City may take any action, including legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. 15 5.3 Re -vesting Title in City Upon Happening of Event Subsequent to Conveyance to Developer. In the event that, subsequent to conveyance of the Property to Developer by City, and prior to receipt by Developer of the Certificate of Completion, but subject to the terms of any mortgage granted by Developer to secure a loan obtained by Developer from the City or a commercial lender or other financial institution to fund the acquisition of Property or construction of the Minimum Improvements (if any, First Mortgage), an Event of Default under Section 5.1 of this Agreement occurs and is not cured within the times specified in Section 5.2, then City shall have the right to re-enter and take possession of the Property and any portion of the Minimum Improvements thereon and to terminate (and re -vest in City pursuant to the provisions of this Section 5.3 subject only to any superior rights in any holder of the First Mortgage) the estate conveyed by City to Developer, it being the intent of this provision, together with other provisions of this Agreement, that the conveyance of the Property to Developer shall be made upon the condition that (and the Deed shall contain a condition subsequent to the effect that), in the event of default under Section 5.1 on the part of Developer and failure on the part of Developer to cure such default within the period and in the manner stated herein, City may declare a termination in favor of City of the title and of all Developer's rights and interests in and to Property conveyed to Developer, and that such title and all rights and interests of Developer, and any assigns or successors in interests of Developer, and any assigns or successors in interest to and in Property, shall revert to City (subject to the provisions of Section 5.3 of this Agreement), but only if the events stated in Section 5.1 of this Agreement have not been cured within the time period provided above, or, if the events cannot be cured within such time periods, Developer does not provide assurance to City, reasonably satisfactory to City, that the events will be cured as soon as reasonably possible. 5.4 Resale of Reacquired Property; Disposition of Proceeds. Upon the re -vesting in City of title to the Property as provided in Section 5.3 of this Agreement, City shall, pursuant to its responsibility under law, use its best efforts, subject to any rights or interests in such property or resale granted to any holder of a First Mortgage, to resell the Property or part thereof as soon and in such manner as City shall find feasible and consistent with the objectives of such law and of the Urban Renewal Plan to a qualified and responsible party or parties (as determined by City in its sole discretion) who will assume the obligation of making or completing the Minimum Improvements or such other improvements in their stead as shall be satisfactory to City and in accordance with the uses specified for such the Property or part thereof in the Urban Renewal Plan. Subject to any rights or interests in such property or proceeds granted to any holder of a First Mortgage upon such resale of the Property the proceeds thereof shall be applied: (1) First, to pay and discharge the First Mortgage; (2) Second, to pay the principal and interest on mortgage(s) created on the Property, or any portion thereof, or any improvements thereon, previously acquiesced in by City pursuant to this Agreement. If more than one mortgage on the Property, or any portion thereof, or any improvements thereon, has been previously acquiesced in by City pursuant to this Agreement and insufficient proceeds of the resale exist to pay the principal of, and interest on, each such 16 mortgage in full, then such proceeds of the resale as are available shall be used to pay the principal of and interest on each such mortgage in their order of priority, or by mutual agreement of all contending parties, including Developer, or by operation of law; (3) Third, to reimburse City for all allocable costs and expenses incurred by City, including but not limited to salaries of personnel, in connection with the recapture, management and resale of the Property or part thereof (but less any income derived by City from the Property or part thereof in connection with such management); any payments made or necessary to be made to discharge any encumbrances or liens (except for mortgage(s) previously acquiesced in by City) existing on the Property or part thereof at the time of re -vesting of title thereto in City or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, default or acts of Developer, its successors or transferees (except with respect to such mortgage(s)), any expenditures made or obligations incurred with respect to the making or completion of the Minimum Improvements or any part thereof on the Property or part thereof, and any amounts otherwise owing to City (including water and sewer charges) by Developer and its successors or transferees; and (4) Fourth, to reimburse Developer up to the amount equal to (1) the sum of the Purchase Price paid to City for the Property and the cash actually invested by such party in making any of the Minimum Improvements on the Property, less (2) any gains or income withdrawn or made by Developer from this Agreement or the Property. 5.5 No Remedy Exclusive. No remedy herein conferred upon or reserved to City is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 5.6 No Implied Waiver. In the event any agreement contained in this Agreement should be breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. 5.7 Agreement to Pay Attorneys' Fees and Expenses. If any action at law or in equity, including an action for declaratory relief or arbitration, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs of litigation from the other party. Such fees and costs of litigation may be set by the court in the trial of such action or by the arbitrator, as the case may be, or may be enforced in a separate action brought for that purpose. Such fees and costs of litigation shall be in addition to any other relief that may be awarded. 17 5.8 Remedies on Default by City. If City defaults in the performance of this Agreement, Developer may take any action, including legal, equitable or administrative action that may appear necessary or desirable to collect any payments due under this Agreement, to recover expenses of Developer, or to enforce performance and observance of any obligation, agreement, or covenant of City under this Agreement. Developer may suspend their performance under this Agreement until they receive assurances from City, deemed adequate by Developer, that City will cure its default and continue its performance under this Agreement. SECTION 6. GENERAL TERMS AND PROVISIONS 6.1 Notices and Demands. Whenever this Agreement requires or permits any notice or written request by one party to another, it shall be deemed to have been properly given if and when delivered in person or three (3) business days after having been deposited in any U.S. Postal Service and sent by registered or certified mail, postage prepaid, addressed as follows: If to Developer: Engine House #1, LLC c/o Dubuque Initiatives Attn: Aaron DeJong P.O Box 1745 Dubuque, Iowa 52004-1745 With copy to: D. Flint Drake Drake Law Firm, P.C. 1005 Main Street, Suite 200 Dubuque, IA 52001 Phone: (563) 582-2000 Fax: (563) 583-5225 If to City: City Manager 50 W. 13th Street Dubuque, Iowa 52001 Phone: (563) 589-4110 Fax: (563) 589-4149 With copy to: City Attorney City Hall 50 W. 13th Street Dubuque IA 52001 Or at such other address with respect to either party as that party may, from time to time designate in writing and forward to the other as provided in this Section. 18 6.2 Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of City and Developer and their respective successors and assigns. 6.3 Termination Date. This Agreement and the rights and obligations of the parties hereunder shall terminate on June 1, 2027 (the Termination Date). 6.4. Execution By Facsimile. The parties agree that this Agreement may be transmitted between them by facsimile machine. The parties intend that the faxed signatures constitute original signatures and that a faxed Agreement containing the signatures (original or faxed) of all the parties is binding on the parties. 6.5 Memorandum of Development Agreement. Developer shall promptly record a Memorandum of Development Agreement in the form attached hereto as Exhibit D in the office of the Recorder of Dubuque County, Iowa. Developer shall pay the costs for so recording. IN WITNESS WHEREOF, City has caused this Agreement to be duly executed in its name and behalf by its Mayor and attested to by its City Clerk and Developer has caused this Agreement to be duly executed on or as of the first above written. 19 CITY OF DUB QUE, IOWA By /l t Roy D. 14of Mayor Attest: Kevin S. Firnstah Acting City Clerk 20 ENGINE HOUSE #1, LLC eve Bill Callahan, President of Dubuque Initiatives, Managing Member of Engine House #1, LLC (City Seal) STATE OF IOWA COUNTY OF DUBUQUE ) ) ) SS On this �`" day of 201/, before me the undersigned, a Notary Public in and for the said C unty and State, personally appeared Roy D. Buol and Kevin S. Firnstahl, to me personally known, who, being by me duly sworn, did say that they are the Mayor and Acting City Clerk, respectively, of the City of Dubuque, Iowa, a municipal corporation executing the instrument to which this is attached; that the seal affixed hereto is the seal of said municipal corporation; that said instrument was signed and sealed on behalf of the City of Dubuque, Iowa, by authority of its City Council; and that said Mayor and Acting City Clerk acknowledged the execution of said instrument to be the voluntary act and deed of said City, by it and by them voluntarily executed. otary Public STATE OF IOWA COUNTY OF DUBUQUE ) ) ) OW} SS E3FIENDA FUGLSANG Commission Number 745861 My Comm, Exp. MAR 19, 2013 On this (Thek-day of ` fu. -e_ 20j ,before me the undersigned, a Notary Public in and for the State of Iowa, personally appeared Bill Callahan, to me personally known, who, being by me duly sworn, did say that he is is the President of Dubuque Initiatives, managing member of Engine House #1, LLC, the limited liability company executing the instrument to which this is attached and that as said Manager of Engine House #1, LLC acknowledged the execution of said instrument to be the voluntary act and deed of said company, by it and by them voluntarily executed. Notary Public C 1 EllAtNOA 1=UOLSANG Commission Number 745861 My Comm. Exp. MAR 19, 2013 21 EXHIBIT A — EXHIBIT B — EXHIBIT C EXHIBIT D EXHIBIT E — LIST OF EXHIBITS City Attorney's Certificate Opinion of Developer's Counsel — City Certificate — Memorandum of Development Agreement Special Warranty Deed 22 EXHIBIT A CITY ATTORNEY'S CERTIFICATE 23 BARRY A. LINDAHL, ESQ. CITY ATTORNEY RE: Dear (DATE) 'IRE CITY OF � UB I have acted as counsel for the City of Dubuque, Iowa, in connection with the execution and delivery of a certain Development Agreement between (Developer) and the City of Dubuque, Iowa (City) dated for reference purposes the day of 20 The City has duly obtained all necessary approvals and consents for its execution, delivery and performance of this Agreement and has full power and authority to execute, deliver and perform its obligations under this Agreement, and to the best of my knowledge, the representations of the City Manager in his letter dated the day of , 20_, are correct. BAL:tls 24 Very sincerely, Barry A. Lindahl, Esq. City Attorney EXHIBIT B OPINION OF DEVELOPER'S COUNSEL 25 Mayor and City Councilmembers City Hall 13 and Central Avenue Dubuque IA 52001 Re: Development Agreement Between the City of Dubuque, Iowa and Dear Mayor and City Councilmembers: We have acted as counsel for , (Developer) in connection with the execution and delivery of a certain Development Agreement (Development Agreement) between Developer and the City of Dubuque, Iowa ( "City ") dated for reference purposes the day of , 20 . We have examined the original certified copy, or copies otherwise identified to our satisfaction as being true copies, of the Development Agreement and such other documents and records as we have deemed relevant and necessary as a basis for the opinions set forth herein. Based on the pertinent law, the foregoing examination and such other inquiries as we have deemed appropriate, we are of the opinion that: 1. Developer is a corporation organized and existing under the laws of the State of Illinois and has full power and authority to execute, deliver and perform in full Development Agreement. The Development Agreement has been duly and validly authorized, executed and delivered by Developer and, assuming due authorization, execution and delivery by City, is in full force and effect and is valid and legally binding instrument of Developer enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally. 2. The execution, delivery and performance by Developer of the Development Agreement and the carrying out of the terms thereof, will not result in violation of any provision of, or in default under, the articles of incorporation and bylaws of Developer, any indenture, mortgage, deed of trust, indebtedness, agreement, judgment, decree, order, statute, rule, regulation or restriction to which Developer is a party or by which Developer's property is bound or subject. 3. There are no actions, suits or proceedings pending or threatened against or affecting Developer in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business (present or prospective), financial position or results of operations of Developer or which in any manner raises any questions affecting the validity of the Agreement or the Developer's ability to perform Developer's obligations thereunder. Very truly yours, 26 EXHIBIT C CITY CERTIFICATE 27 City Manager's Office 50 West 13th Street Dubuque, Iowa 52001 -4864 (563) 589 -4110 phone (563) 589 -4149 fax ctymgr@cityofdubuquc.org Dear (DATE) THE CITY OF DUB Q I am the City Manager of the City of Dubuque, Iowa and have acted in that capacity in connection with the execution and delivery of a certain Development Agreement between (Developer) and the City of Dubuque, Iowa (City) dated for reference purposes the day of , 20 . On behalf of the City of Dubuque, I hereby represent and warrant to Developer that: (1) City has duly obtained all necessary approvals and consents for its execution, delivery and performance of this Agreement and that it has full power and authority to execute, deliver and perform its obligations under this Agreement. City's attorney shall issue a legal opinion to Developer at time of closing confirming the representation contained herein, in the form attached hereto as Exhibit B. (2) City shall exercise its best efforts to cooperate with Developer in the development process. (3) City shall exercise its best efforts to resolve any disputes arising during the development process in a reasonable and prompt fashion. (4) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement are not prevented by, limited by, in conflict with, or result in a violation or breach of, the terms, conditions or provisions of the charter of City, any evidence of indebtedness, agreement or instrument of whatever nature to which City is now a party or by which it or its property is bound, or constitute a default under any of the foregoing. (5) There are no actions, suits or proceedings pending or threatened against or affecting City in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could 28 MCVM:jh materially adversely affect the financial position or operations of City or which affects the validity of the Agreement or City's ability to perform its obligations under this Agreement. (6) No ordinance or hearing is now or before any local governmental body that either contemplates or authorizes any public improvements or special tax levies, the cost of which may be assessed against the Property. To the best of City's knowledge, there are no plans or efforts by any government agency to widen, modify, or re -align any street or highway providing access to the Property and there are no pending or intended public improvements or special assessments affecting the Property which will result in any charge or lien be levied or assessed against the Property. (7) The representations and warranties contained in this article shall be correct in all respects on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of the Closing Date. 29 Sincerely, Michael C. Van Milligen City Manager EXHIBIT D MEMORANDUM OF DEVELOPMENT AGREEMENT 30 Prepared by: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583 -4113 Return to: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583 -4113 MEMORANDUM OF DEVELOPMENT AGREEMENT A Development Agreement by and among the City of Dubuque, Iowa, an Iowa municipal corporation, of Dubuque, Iowa, and Engine House #1, LLC was made regarding the following described premises: Lot 1 of Engine House No. 1 Subdivision in the City of Dubuque, Dubuque County, Iowa The Development Agreement is dated for reference purposes the day of , 2011, and contains covenants, conditions, and restrictions concerning the sale and use of said premises. This Memorandum of Development Agreement is recorded for the purpose of constructive notice. In the event of any conflict between the provisions of this Memorandum and the Development Agreement itself, executed by the parties, the terms and provisions of the Development Agreement shall prevail. A complete counterpart of the Development Agreement, together with any amendments thereto, is in the possession of the City of Dubuque and may be examined at its offices as above provided. Dated this day of , 2011. CITY OF DUBUQUE, IOWA ENGINE HOUSE #1, LLC By By Roy D. Buol Bill Callahan Mayor President of Dubuque Initiatives, Managing Member of Engine House #1, LLC 31 Attest: Jeanne F. Schneider City Clerk STATE OF IOWA COUNTY OF DUBUQUE On this day of , 20, before me, a Notary Public in and for the State of Iowa, in and for said county, personally appeared Roy D. Buol and Jeanne F. Schneider, to me personally known, who being by me duly sworn did say that they are the Mayor and City Clerk, respectively of the City of Dubuque, a Municipal Corporation, created and existing under the laws of the State of Iowa, and that the seal affixed to said instrument is the seal of said Municipal Corporation and that said instrument was signed and sealed on behalf of said Municipal corporation by authority and resolution of its City Council and said Mayor and City Clerk acknowledged said instrument to be the free act and deed of said Municipal Corporation by it voluntarily executed. Notary Public, State of Iowa STATE OF IOWA COUNTY OF DUBUQUE ) ) ) ) ) ) SS SS On this day of 20, before me the undersigned, a Notary Public in and for the State of Iowa, personally appeared Bill Callahan, to me personally known, who, being by me duly sworn, did say that he is is the President of Dubuque Initiatives, managing member of Engine House #1, LLC, the limited liability company executing the instrument to which this is attached and that as said Manager of Engine House #1, LLC acknowledged the execution of said instrument to be the voluntary act and deed of said company, by it and by them voluntarily executed. Notary Public, State of Iowa 32 EXHIBIT E SPECIAL WARRANTY DEED 33 OFFICIAL NOTICE .RESOLUTION NO. 137-11 RESOLUTION (1) AP- PROVING THE MINI- MUM REQUIRE- MENTS, COMPETI- TIVE CRITERIA,, AND OFFERING PROCE- DURES FOR THE DE- VELOPMENT OF CER- TAIN REAL PROPER- TY AND IMPROVE- MENTS IN THE PRO- POSED EXPANSION AREA OF THE GREAT- ER DOWNTOWN UR- BAN RENEWAL DIS- TRICT; (2) DETERMIN- ING THAT THE DE- VELOPMENT AGREE- MENT SUBMITTED BY ENGINE HOUSE #1, LLC SATISFIES THE OFFERING REQUIRE- MENTS WITH RE- SPECT TO THE REAL PROPERTY AND IM- PROVEMENTS AND DECLARING THE IN- TENT OF THE CITY COUNCIL TO AP- PROVE THE DEVEL- OPMENT AGREE- MENT WITH ENGINE HOUSE #1, LLC IN THE EVENT THAT NO COMPETING PRO- POSALS ARE SUBMIT- TED; AND (3) SOLIC- ITING COMPETING, PROPOSALS. Whereas, the City Council of Dubuque, Io- wa, is scheduled on May 2, 2011 to consider approval of an Amend- ed and Restated Urban Renewal Plan (the "Plan ") for the Greater Downtown Urban Re- newal District ( "the District ") described therein; and Whereas, the pro- posed Plan provides, among other things, for the disposition of properties for private development purposes as a proposed econom- ic development action; and Whereas, Engine House #1, LLC•( "Devel - oper") has submitted to the City a Develop- ment Agreement with a proposal for the pur- chase of certain real property and improve- ments hereinafter de- scribed and owned by the City of Dubuque, and for the renovation and rehabilitation of the building located on such - property as de- scribed therein (the "Development Agree- ment"), together with the request' that this property be made available for purchase as rapidly as possible; and Whereas, the real es- tate and building pro- posed to be purchased and developed is locat- ed on Lot 1 of Engine House No. 1 Subdivi- sion in the City of Du- buque, Dubuque Coun -• ty, Iowa (the "Proper- ty"), according to the recorded Plat thereof, subject to easements and restrictions of re- cord as shown on Ex- hibit B attached to the Development Agree- ment and attached hereto; and Whereas, the Devel- oper has tendered the Development Agree- ment with the City, and the same is on file in the City Clerk's office; and Whereas, the Proper- ty is located within an area that is proposed in the Plan to be in- cluded in the District and Whereas, the City Council therefore has determined to estab- lish reasonably com- petitive bidding proce- dures for the disposi- tion of the Property, in accordance with those prescribed in Iowa Code Chapter 403, s cifcally, Section 403 , I and to assure that • e City extends a full and fair opportunity 'to all developers interested in submitting propo';- . al, a sumimarY of sub- mission requirements a nd;• m i n iimu m.require- ments and co ' petitive criteria for the proper- ty offering is -included herein; and Whereas, to recognize both the firm pr posal for 'renovation of tife Property, as described above, and to give fell and gpppr anttI o other developpers intejr- ested, in `.submitting a proposal forthe use of the Property, this Section 1. That the re- al property and build- ing located on Lot 1 of Engine House No. 1 Subdivision in the City of Dubuque, Dubuque County, Iowa, accord- ing to the recorded • Plat thereof, subject to easements 'and restric- tions of record as de- scribed in Exhibit "B" attached to the Devel- opment Agreement and attached hereto, and being located gen- erally at 1805 Central Avenue (the "Proper- ty") shall'be offered for sale in accordance with the terms and conditions contained in this Resolution. Section 2. That it is hereby determined that in order to qualify for consideration for selection, any person must submit a propos- al which meets these minimum - - require- ments: - a) Contains an agree- ment to purchase the Property at not less than its fair market val- ue; b) Contains a commit- ment to develop and rehabilitate the Proper- ty for zoning uses cur- rently allowed on the Property; c) Sets out or pro- vides to the satisfac- tion of the City Council ' the experience of the principals and key staff who will be directly en- gaged in performance of the contract with the City, and their ex- perience in carrying out projects of similar scale and character, and d) Meets, at a mini- mum, the terms and conditions of the De- velopment Agreement submitted' by the De- veloper, including an agreement to'rehabili- tate and renovate the building on the Proper- ty into commercial of- fice space and space for an early childhood center at a total proj- ect cost of not less than $1,550,000, and to enter into leasing ar- rangements with non- profit tenants accepta- ble to the City for use of the renovated build- ing. i, . r. Section 3. That the Development Agree- ment by and between the City and the Devel, oiler be and is 'hereby approved as to form for the purposes here - inafter stated. Section 4. That for the purpose of defining the 'offering of the Proper- ty for. sale, said Devel- i opment Agreement shall be deemed to be illustrative of the terms generally acceptable to the City with respect' to:; a) Conveyance of the Property; b) Construction of Minimum" improve- , ments in a- tirilely man: -net c) Payment of Eco , nomic Development) Grants by City; d) Developer obliga- tions; and e) General terms and conditions. Each proposal should identify the proposed funding sources for fi- nancing the acquisition and rehabilitation of the Property, and in- clude a letter of com- mitment from a bank or other lending insti- tution or other evi- dence of the ;Proposers financial irabilityifo complete the project The City is un- der no obligation to ' provide financing to any purchaser of the Property: Section 5. That the .Development Agree- slirbetted by the :ID,evelePer'satisfies the req.uiremefits of the of- fering and, in the event that no other qualified tsubrrrrttfed•that the City Council intends to ac- cept and approve the Development Agree - - tent IN tale, of the 'Property. Section' 6. That it is hereby'. determined ,hrtit the Developer pos- se'sseV'tlie qualifica- s;�fanci'al,resour- idet alddiiilegal ability necessary to purchase ,the Property and to ;wag'e and - operate the Prdoperrty• tin the mannei; proposed by this offerinprin accord- ance with the Plan. Section 7. That the purchase price for the Property offered by the Developer is hereby found and determined to be the fair market' value of the interest being conveyed, in light of the particular restrictions upon, and the covenants, condi- tions and obligations being assumed bye the Developer under the Development Agree- ment. Section 8. That, the City Clerk shall receive and - retain for public examination the .at- tached Development Agreement submitted by the Developer and, in the event no other qualified proposals are timely submitted, shall resilbmit the Develop- ment Agreement to the City Council for'fi nal approval and exe- cution, upon expiration of the -notice herein- after prescribed. • Section 9. That this action of, the ,Cjty Council',- be- considered- to be and does hereby constitute notice to all concerned of the inten- tion..of this Council, in the event that no other qualified proposals are timely submitted, to accept the proposal of the Developer to .pur- chase the Property and to approve the Devel- opment Agreement by and between City and Developer. Section 1G. That the official notice of this offering and of the in- tent of the City, in the event no other quali- fied - proposals are timely submitted, to approve the Develop- ment Agreement, shall be a true copy of this Resolution, but without the attachments refer- red to herein, except Exhibit B. . Section 11. That the City Clerk is authorized and directed to secure immediate publication of said official notice in the Telegraph Herald,a newspaper having ra general circulation in the community, by publication of the text of this Resolution with- out attachments on or before the 22nd day of April, 2011. ' Section 12. That writ ten proposals' for the purchase of the Prop- erty will be received by the Cityy.Clerk at or be- fore 10:00 a.m.,;■day 25, 2011 it the Office' of I the City Clerk, located on the first floor at City Hall, Dubuque, Iowa 52001. Each proposal will be opened at the hour of 10:00 a.m. in City Hall, Dubuque, lo- wa on May 25, 2011. Said proposals will 'then be presented to the City Council at 6:30 p.m. on June 6, 2011, at a meeting to be held in the Council Chambers in the Historic Federal Building, Dubuque, Io- wa. _ Section 13. That such offering shall be in substantial conform- , ance with the provi- sions.::of Iowa Code Section 403.8, requiring reasonable competitive bidding procedures as are hereby prescribed, which methork is here- by determined to be the appropriate meth- od for making the Property available for sale. Section 14. That the required documents for the submission of a proposal shall be in substantial conformity with., the provisions of this Resolution. Section 15. That the City Clerk is hereby nominated and ap- pointed as the agent of the City of Dubuque, Iowa to receive' pro ' talProperty l at sale ,of, he e date and according to the procedure hereina- bove specified for re- ceipt of such proposals and to proceed' at such time to formally- ac- knowledge receipt of each of such proposals by noting the receipt of same in the Minutes of the Council; that the City Manager is hereby authorized and direct- ed to make preliminary analysis of each such proposal for .compli- ance with the mini- mum requirements es- tablished by this Goan cil hereinabove. For each proposal •tlatsat- isfies these require- ments, the City Council. shall judge , the strength of tfie'propos- al by such competitive factors and criteria as the Council shall,deter- mine to be appropriate, including but not limit- ed to the quality of the proposed, develop- ment, its architectural design and space amenities, the econom- ic feasibility of the pro- posed development, the financial assis- tance to be provided STATE OF IOWA {SS: DUBUQUE COUNTY CERTIFICATION OF PUBLICATION I, Suzanne Pike, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher of the Telegraph Herald,a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper on the following dates: April 22, 2011, and for which the charge is $155.44. Subscribed to before me, a Notary Public in and for Dubuque County, Iowa, ,20/7 . this a day of by the City under the proposal, the anticipat- ed uses of the renovat- ed Property, and the over -all impact of the completed develop- ment on the communi- ty and City residents, particularly those resi- dents living near the Property. The City Council shall then make the final evalua- tion and - selection of the proposals, and its determination shall be final and conclusive. Section 16. That in the event another qualified proposal is timely sub- mitted and accepted by the City, another and further notice shall be published of the in- tent of the City of Du- buque, Iowa, to enter into the resulting agreement, as required by law. Passed, approved and adopted this 18th day of April, 2011. Roy D. Buol Mayor Attest /s /Jeanne F. Schneider, CMC, City Clerk - 1t 4/22 v.</' otary Public in and for ubuque County, Iowa. MARY . WESTEEME`i Commission Number 154 MY. Cc ". E1o, FEB.` Council should.by, this Resolution: 1) Set the fair market value of the real prop - erty•for uses in accord - ' ance with the Develop - ment Agreement; 2) Approve the mini- , Mum requirements and competitive criteria in- , cluded herein; 3) Approve as to form the Development Agreement on file in the City Clerk's office; 4). Set a e for re- peeipt of co ' ling pro- posals and the opening thereof; 5) Declare that the proposal-submitted by Developer satisfies the minimum requirements of the offering, and that In the-. event no ma propos- al submitted, that 't',ecity Council intends to approve such proposal and au- thorize the City Manag- er to sign the Develop- ment Agreement; and direct publication of poticeof said intent; :6) a 'eand direct pub' . , 06.0 a notice Yo; ,_*se any other perse'n (*the Opportu- nity to compete for purchase a"kthe Prop- erty andnprovements on the terms and con - ditionsset forth; herein; and (. 7)' Declare that in the event another qualified proposal' is timelfaFsub- niitted and accepted, another and future no- tice will be published on the intent of- the City' to enter into the resulting contract, as required bylaw; and Whereas, the City Council believes it is in the best interest of the City to act as expedi- tiously as possible. to sell the Property as set forth herein. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL 'OF THE CITY.•OF DUBUQUE, 10- Section 1. That the re- al property -and build- ing located on Lot 1 of Engine House No. I Subdivision in the City of Uubuq•Dubuque County 1fowa accord- ing "to, then recorded • Plat thereof subject to easementeand,,restric- tions et - pedord.,as de- scribed in Exhibit "B" attached to the- Devel- opment Agreement and attached hereto, and being located gen- erally at 1805' Central Avenue (the "Proper- ty") slrallzbe:offered for sale in ._accordance with 'the .terms and cond- iitions contained in this`ll lIution. Seafioir2. That it is hereby . determined thatiinlorder•to qualify for consideration for selection, any person must submit a propos- al which meets these minimum , require- ments: a) Contains an agree- ment to purchase the Property at not less . than its fair market val- ue; b) Contains a commit- ment to develop and rehabilitate the Proper- ty for zoning uses cur- rently allowed on the Property; c) Sets out or pro - vides to the satisfac- tion of the'Clty Council the experience of the principals and key staff who will be directly en- gaged in performance of the contract with the City, and their ex- perience in carrying out projects of similar scale and character; and d) Meets, at a mini- mum, the terms and conditions of the De- velopment Agreement submitted by the De- veloper, including an agreement to rehabili- tate and renovate the building on the Proper- ty into commercial of- fice space and space for an early childhood center at a total proj- ect cost of not less than $1,550,000, and to enter into leasing ar- rangements with non- profit tenants accepta- ble to the City for use of the renovated build- ing. Section 3. That the Development Agree- ment by and between the City and the Devel- oper be and is hereby approved as to form for the purposes here- inafter stated. Section 4. That for the purpose of defining the offering of the Proper- ty for sale, said Devel- opment Agreement shall be deemed to be illustrative of the terms ',generally acceptable to the 'City with respect to: +, a)':Conveyance of the Property; b) ''Construction of Minirnuhn " Improve- ments in a tirrhely man- ner, c) Payment of Eco- nomic Development Grants by City; OFFICIAL NOTICE RESOLUTION NO. 137-11 RESOLUTION. (1) AP- PROVING THE MINI- MUM REQUIRE- MENTS, COMPETI- TIVE CRITERIA, AND OFFERING PROCE- DURES FOR THE DE- VELOPMENT OF CER- TAIN REAL PROPER- TY AND IMPROVE- MENTS IN THE PRO- POSED EXPANSION AREA OF THE GREAT- ER DOWNTOWN UR- BAN RENEWAL DIS- TRICT; (2) DETERMIN- ING THAT THE . DE- VELOPMENT AGREE- MENT SUBMITTED BY ENGINE HOUSE #1, LLC SATISFIES THE OFFERING REQUIRE- MENTS WITH RE- SPECT TO THE REAL PROPERTY AND IM- PROVEMENTS AND DECLARING THE IN- TENT OF THE CITY COUNCIL TO AP- PROVE THE DEVEL- OPMENT AGREE- MENT WITH ENGINE - HOUSE #1, LLC IN THE EVENT THAT NO COMPETING PRO- POSALS ARE SUBMIT- TED; AND (3) SOLIC- ITING COMPETING PROPOSALS. Whereas, the City Council of Dubuque, Io- wa, is scheduled on May 2, 2011 to consider approval of an Amend- ed and Restated Urban Renewal Plan (the "Plan ") for the Greater Downtown Urban Re- newal District ( "the District ") described therein; and Whereas, the pro- posed Plan provides, among other things, for the disposition of properties for private development purposes as a proposed econom- ic development action; and Whereas, Engine House #1, LLC("Devel - oper") has submitted to the City a Develop- ment Agreement with a proposal for the pur- chase of certain real property and improve- ments hereinafter de- scribed and owned by the City of Dubuque, and for the renovation and rehabilitation of the building located on such - property as de- scribed therein (the "Development Agree- ment"), together with the request that this property be made available for purchase as rapidly as possible; and Whereas, the real es- tate and building pro- posed to be purchased and developed is locat- ed on Lot 1 of Engine House No. 1 Subdivi- sion in the City- of -Du- buque; Dubuque Coon- • ty, Iowa (the . "Proper- ty"), according- to ,the recorded Plat-thereof, subject to easem'ent's and restrictions of re- cord as shown on Ex- hibit B attached to the ance with the Plan. Sectioh 7. That the purchase price for the Property, offered-by the Developer is hereby found and determi,n ed to be the fax ma kat value of the interest being conveyed, in light of the particular restrictions upon, and the covenants, di- tions and oblj s being assumed' ` • . Developer' under e Development Agree- ment. - Section 8- That, the City Clerk shall receive and - retain for public examination the •.at- tached Development Agreement submitted by the Developer and, in the event no other qualified proposals are timely submitted, shall resubmit the Develop- ment Agreement to the City Council for' fi- nal approval and .exe- cution upon expiration of the notice. herein- after prescribed: • Section 9. That this action of, the " Cjty Council, be- consi'derecr to be and does hereby constitute notice to all concerned of the inten- tion,of this .Council, in the event that no other qualified proposals are timely submitted, to accept the proposal of the Developer to .pur- chase the Property and to approve the Devel- opment Agreement by and between City and Developer. Section 10. That the official notice of this offering and of the in- tent of the City, in the event no other quali- fied - proposals are timely submitted, to approve the Develop- ment Agreement, shall be a true copy of this Resolution, but without the attachments refer - red to herein, except Exhibit B. Section 11. That the City Clerk is authorized and directed to secure immediate publication of said official notice in the Telegraph Herald, a newspaper having a general circulation in the community, by publication of the text of this Resolution with- out attachments on or before the 22nd day of April, 2011. Section 12. That writ -' ten proposals for the purchase of the Prop- erty will be received by the City Clerk at or be- fore 10:00 a.m., May 25, 2011 in _the Office of the Citjr Clerk„ iota ted - on the first floor at City Hall, Dubuque, Iowa 52001. Each_, proposal will; be opened at the hdur of 10:00 a.rn. in City Hall, Dubuque, lo- wa on May 25, 201L Said proposals will then be presented to the :City Council at 6:30 p.m: ;on June 6, 2011, at a,meeting to beheld ill the Council Chambers in the Historic Federal Building, Dubuque, Io- wa: ; Section 13. That such offering shall be in substantial conform- ance with the provi- sions Iowa ,Code Section 403.8 „requiring reasonable competitive bidding procedures as are hereby prescribed, which methed!'is here- by determined to .be the, appropriate meth- od, for making the Property available for sale. Section 14. That the required documents for the submission of a proposal shall be in substantial conformity with, the provisions of this Resolution. - Section 15. That the - City Clerk is hereby nominated and ap, pointed as the agent of the City of 'Dubuque, - Iowa to receive bpre- posals for the sale of. the Property at tiie date and according to the procedure hereina - bove Specified for re- ceipt of such proposals and to proceed at such time to formally, ac- knowledge receipt of each of such proposals by noting the receipt of same in the Minutes of the Council; that the City Manager is hereby authorized and direct- ed to make preliminary analysis of each such proposal for compli- ance with the: mini- mum requirements es- tablished by this Coun- cil hereinabove. 'For' each proposal that sat- isfies these require- ments, the City Council shall judge - the strength of the propos- al by such competitive factors and criteria as the Council shall deter- mine to be appropriate, including but not limit- ed to the quality of the proposed, develop- ment, its architectural design and space amenities; the econom- ic feasibility of the pro - posed development, the - financial assis- tance to be provided STATE OF IOWA {SS: DUBUQUE COUNTY CERTIFICATION OF PUBLICATION I, Suzanne Pike, a Billing Clerk for Woodward Communications, Inc -, an Iowa corporation, publisher of the Telegraph Herald,a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper on the following dates: April 22, 2011, and for which the charge is $155.44. Pc. e Subscribed tobefore me, a Notary Public in and for Dubuque County, Iowa, this a7 day of by the City unn er the proposal, the anticipat- ed uses of the renovat- ed Property, and the over -all impact of the completed develop- ment on the communi- ty' and City residents, particularly those resi- dents living near the Property. The City Council shall then make the final evalua- tion and - selection of the proposals, and its determination shall be final and conclusive. Section 16. That in the event another qualified proposal is timely sub- mitted and accepted by the City, another and further notice shall be published of the in- tent of the City of Du- buque, Iowa, to enter into the resulting agreement, as required by law. Passed, approved and adopted this 18th day of April, 201L Roy D. Buol Mayor Attest: /s /Jeanne F. Schneider, CMC, City Clerk it 4/22 otary Public in and for ubuque County, Iowa. MARY Commission Number 154 CITY OF DUBUQUE, IOWA LOAN AGREEMENT DB&T COMMUNITY DEVELOPMENT CORP. This Agreement (the Agreement), dated as of they day of t�'�/ , 2012, is entered into by and between the CITY OF DUBUQUE, IOWA, a municipal corporation organized and existing under the laws of the State of Iowa (City) and DB&T Community Development Corp. (Owner). WITNESSETH: Whereas, a Development Agreement was entered into by and between City and Engine House #1, LLC on June 6, 2011; and Whereas, the Development Agreement was assigned by Engine House #1, LLC to Owner on August 15, 2011; and Whereas, pursuant to the Development Agreement Owner, acquired title to the property at 1805 Central Avenue, Dubuque, Iowa (the "Real Estate"), legally described as: Lot 1 of Engine House No. 1 Subdivision in the City of Dubuque, Iowa Whereas, the Real Estate is located within the boundaries of the Greater Downtown Urban Renewal District most recently established by Resolution No. 155-11 on May 2, 2011; and Whereas, there is located on the real estate a building (the "Building"); and Whereas, City desires to assist Owner in its efforts to rehabilitate said Building in a manner that qualifies the rehabilitation for State and Federal Historic Tax Credits (the "Project"); and Whereas, without this assistance, Owner would be unable to operate the Building to its fullest capacity, thereby threatening local employment and/or housing opportunities. NOW THEREFORE, in consideration of the premises and respective covenants, agreements and representations hereinafter set forth, the parties agree as follows: 1. SOURCE OF FUNDS. City has allocated funds in its Loan Program sufficient to carry out its obligations under this Agreement. 2. LOAN TERMS. City agrees to loan to Owner on the terms and conditions set forth herein One Million Seven Hundred Thousand Dollars ($1,700,000) which shall consist of the Loan Program funds, if and only if such funds are available (the "Loan"). Payments shall be based on work completed and expenses encumbered. The term of the Loan shall be twenty (20) years. Interest on the Loan shall be zero percent (0.0%) per annum. Monthly principal payments, amortized over a ten (10) year period, shall become due and payable beginning March 1, 2022. The entire balance of the Loan, including interest and principal, shall become due and payable not later than March 1, 2032. At the time of the initial disbursement of Loan funds to Owner, Owner shall execute a promissory note in the form attached hereto as Exhibit A (the "Note") payable to the order of City in the principal amount of one million seven hundred thousand dollars ($1,700,000) and a mortgage in the form attached hereto as Exhibit B (the "Mortgage"). 3. DISBURSEMENT AND USE OF LOAN FUNDS. Owner shall furnish to City written requests for disbursement of Loan funds. Such requests shall be accompanied by a statement of Owner's Qualifying Project Expenses and appropriate documentation of such expenses. It is expressly understood that all funds advanced under this Agreement shall be used by Owner only for the purpose of paying for Qualifying Project Expenses set forth in such written requests. Owner may draw additional sums from the Loan but only for documented operational needs for which no other Owner funds are available to pay, if such draws are approved by the City Manager, and upon receipt of reasonable documentation of the operational need for such funds and such other information as the City Manager may reasonably request. Any additional Loan funds drawn by Owner in excess of the Initial Draw shall be added to the Loan balance and also amortized over ten (10) years commencing December 1, 2021. 4. SECURITY. The Mortgage shall at all times be a first mortgage on the Real Estate. 5. STATUS OF OWNER. Owner represents that it is a Community Development Corporation duly organized and existing under the laws of the State of Iowa; that it is authorized to borrow under this Agreement, to execute and deliver the note and otherwise perform the obligations of this Agreement; that it has authority and power to own its property and conduct its business as it is currently carried on; that the performance of its obligations under this Agreement and the issuance of any note under it will not conflict with any provision of law, the Articles of Incorporation or the Bylaws of Corporation, or any agreement binding on it. Owner also represents, except as disclosed in writing to City, that it is not a party to any pending or threatened litigation or to any proceeding or action for the assessment or collection of additional taxes, and that it knows of no known contingent liabilities not provided for or disclosed in the financial statement provided to City which would affect the ability of Owner to repay this Loan. 6. FINANCIAL CONDITION OF OWNER. Owner has delivered to City a statement of Owner's financial condition as of the date of application for financial assistance which fairly represents the financial condition of Owner as of the date stated, all in accordance with generally accepted accounting principles consistently applied, and that the statements still correctly reflect the financial condition and status of its operations as of the date of this Agreement. 7. TITLE OF OWNER. Subject to the liabilities reflected on Owner's financial statement as well as those incurred in relation to this Project, Owner represents that it has good and marketable title, free of any mortgage, pledge, lien, security interest, encumbrance, or charge to all those assets reflected on the financial statement and to assets since acquired. Taxes not due or payable or otherwise delinquent are excepted. 8. CONDITIONS OF BORROWING. On the date on which any sum is to be borrowed, Owner, in addition to the Note, shall deliver to City such other papers and documents as may be required to comply with the conditions of this Agreement, as counsel for City may reasonably request. Owner shall be required at the Closing Date defined herein Paragraph 24(a) to comply, or establish compliance, as follows: (a) That the representations and warranties of Owner are correct on the Closing Date; (b) That Owner has fully complied with the covenants and agreements to the extent required before the Closing Date; (c) That no default or event which might mature into a default has occurred or continues to the Closing Date; (d) That no litigation or proceeding is pending against Owner which would materially affect the assets of Owner, taking into account the entire assets and overall business of Owner; (e) That there has been no material adverse change in the financial condition of Owner from that shown by_ the financial statement delivered to City_ under Paragraph 6; (f) That no fire or casualty has occurred in any building or to any inventories or property of Owner that might substantially, adversely affect the conduct of its business. 9. SPECIAL CONDITIONS. Owner agrees to comply with the following requirements established by City for the Loan Program: (a) All exterior work must coincide with the historic character of the Building. (b) The Building must be leased to the Crescent Community Health Center and Head Start. 12. COVENANTS OF OWNER. Owner covenants that it will: (a) Correct code deficiencies in accordance with all applicable building and fire codes within the scope of the project. (b) Provide for the repair and rehabilitation of the Building in accordance with all applicable building, zoning, fire and housing codes. (c) Substantially complete the Project on or before October 1, 2012. (d) Maintain at all times insurance to the extent and against such hazards and liabilities as are in keeping with the current insurance program of Owner, set forth in Exhibit C attached hereto and entitled "Certificate of Insurance". Such insurance shall include property and builder's risk insurance.. Said certification shall be renewed on an annual basis and provided to City within thirty (30) days of the anniversary date of this Agreement. (e) Pay when due all taxes, assessments and other liabilities, except those contested in good faith where notice of such contest has been given to City. (f) Not create or permit to exist any other pledge, security interest, lien or other encumbrance on the security for this Agreement provided in Paragraph 4 above, other than the Note and Mortgage provided pursuant to this Loan Agreement without written consent of City. (g) Give prompt notice in writing to City of any adverse development, financial or otherwise, which would materially affect its business, properties or affairs, or the ability of Owner to perform its obligations under this Agreement or the Note and Mortgage executed pursuant to the terms of this Agreement. (h) Use Loan funds only for purposes authorized herein. (i) Pay all recording and filing fees, mortgage taxes, documentary stamps, and any other taxes payable in connection with this transaction. 10. DEFAULT. Owner shall be in default upon the occurrence of any of the following events: (a) Owner fails to pay any installment of principal or interest on any note (whether to City or any other public or private lender) when due or within thirty (30) days thereafter; (b) Owner becomes insolvent or admits in writing its inability to pay its debts as they mature; or applies for, consents to or acquiesces in the appointment of a trustee or receiver for any of its property; or in the absence of an application for consent or acquiescence, a trustee or receiver is appointed for it or a substantial part of its property and is not discharged within ten (10) days; or, it otherwise commits an act of bankruptcy; or any bankruptcy, reorganization, debt arrangement or other proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding is instituted by or against it and if instituted is consented to or acquiesced in by it or remains for ten days undismissed; (c) Owner fails in the performance of any of the terms and conditions of this Agreement and such non-performance continues for ten (10) days after written notice thereof from City or from the holder of a note; (d) Any warranty made by Owner is untrue in any material respect, or any schedule, statement, report, notice or writing furnished by Owner to City is untrue in any material respect on the date as of which the facts set forth are stated or certified, provided any such error is not the result of unintentional errors which are capable of correction without prejudice to City; (e) Any government board, agency, department, commission or public or private lender takes possession or control of any substantial part of any property of Owner. 11. ACCELERATION AT OPTION OF CITY. If any event of default occurs, City may, after ten (10) days written notice of default to Owner, declare the Note immediately due and payable, at which time all unpaid principal and interest shall immediately become due and payable. City shall promptly advise Owner in writing of any acceleration under this paragraph, but the failure to do so shall not impair the effect of such declaration. 12. MAINTENANCE OF RECORDS AND RIGHT TO INSPECT. Owner shall keep and maintain books, records and other documents relating directly to the receipt and disbursement of Loan funds; and any duly authorized independent accounting representative of City shall at all reasonable times have access to and the right to inspect, copy, audit and examine all such books and other documents of Owner pertaining to the Project until the completion of all close out procedures respecting the Loan and the final settlement and conclusion of all issues arising out of the Loan. 13. ADDRESS. Owner's principal business address is: DB&T Community Development Corp Attn: Leo Hickie 1398 Central Avenue Dubuque, Iowa 52001 Owner shall promptly give City written notice of any further change in its principal office address. City's address is: City Manager City Hall 50 West 13th Street Dubuque, Iowa 52001 14. LIMITATION OF CITY'S LIABILITY FOR PROJECT ACTIVITIES. City shall not be liable to Owner, or to any party, for the completion of, or the failure to complete, any activities which are part of the Project, except as may be specifically provided in this Agreement or other written agreements between City and Owner or any of Owner's affiliates or subsidiaries. Owner agrees to indemnify, hold harmless and defend City from any such claims. 15. CONFLICT OF INTEREST. Owner certifies that to its knowledge no member, officer or employee of City, or its designees or agents, nor any consultant or member of the governing body of City, and no other public official of City who exercises or has exercised any functions or responsibilities with respect to the Project during his or her tenure, or who is in a position to participate in a decision making process or gain inside information with regard to the Project, has nor shall have any interest, direct or indirect, in any contract or subcontract, or in any activity, or benefit therefrom, which is part of this Project at any time during or for one year after such person's tenure. 16. NONDISCRIMINATION. In carrying out the Project, Owner shall not discriminate against any employee or applicant for employment or tenancy because of race, religion, color, sex, national origin, age, gender identity, sexual orientation, or disability. Owner shall post in a conspicuous place, available to employees and applicants for employment, notices to be provided by City setting forth the provisions of this nondiscrimination clause. Owner shall state that all qualified applicants will receive consideration for employment without regard to race, religion, color, sex, national origin, age, gender identity, sexual orientation, or disability. 17. DISCLAIMER OF RELATIONSHIPS. Nothing contained in this Agreement between the parties, nor any act of City or Owner shall be deemed or construed by any of the parties, or by any third persons, to create any relationship of third party beneficiary, principal or agent, limited or general partnership, or joint venture. 18. NOTICE. Any notice, if mailed by United States certified mail, shall be deemed given when mailed, postage prepaid, addressed to the other party at its address shown above, or at any other address subsequently designated by either party to the other. 19. SUCCESSORS AND ASSIGNS. All covenants, representations, warranties and agreements herein set forth shall be binding upon Owner, and its legal representatives, successors and assigns. This Agreement may not be assigned by City or Owner, without the express written consent of the other party. 20. LEGALITY. If any provision of this Agreement shall, for any reason, be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, but this Agreement shall be construed as if such invalid or unenforceable provision had never been contained herein. 21. GOVERNING LAW. This Agreement and all rights and duties hereunder, including but not limited to all matters of construction, validity and performance shall be governed by the laws of the State of Iowa. 22. SURVIVAL OF REPRESENTATIONS. All representations or warranties of Owner shall survive the execution and delivery of this Agreement and any note executed and delivered under it, and no investigation by City nor any closing shall affect the representations or warranties or the right of City to rely on and enforce them. 23. DELAY. No delay on the part of City or the holder of any note in the exercise of any right shall operate as a waiver, nor shall any single or partial exercise of any right preclude other or additional exercise of any right. 24. DEFINITIONS. (a) "Closing Date" shall mean the date on which this Agreement is executed by the parties. (b) "Project" shall mean the rehabilitation project of Owner's property at 1805 Central Avenue, Dubuque, Iowa. (c) "Qualifying Project Expenses" shall mean those expenditures or expenses incurred by Owner during and for the Project, whether paid to third parties or incurred as wage expense, fringe benefit expense or other costs of Owner's employees, agents and contractors. Dated this day of �'°°, , 2012. CITY OF DUBUQUE, IOWA Michael C. Van Milligen, City Manager DB&T COMMUNITY DEVELOPMENT CORP. r William H. Callahan FAUSERS\Econ Dev\Engine House 41\Loan to DB&T CDC\20120305 Engine House Loan Agreement.docx