Morrison Bros. First Amendment to Development AgreementMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: First Amendment to Development Agreement with Morrison Bros.
Company
DATE: July 12, 2011
Economic Development Director Dave Heiar recommends City Council approval of the
First Amendment to the Development Agreement with Morrison Bros. Company to
provide for a one year extension of the job creation period to June 1, 2012.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Mi aelC. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
Dubuque
All - America City
1 '
2007
Masterpiece on the Mississippi
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director �` -
SUBJECT: First Amendment to Development Agreement with Morrison Bros.
Company
DATE: July 7, 2011
INTRODUCTION
This memorandum is to summarize the First Amendment to the Development
Agreement with Morrison Bros. Company.
Dubuque
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2007
BACKGROUND
City staff worked with the Greater Dubuque Development Corporation and Morrison
Bros. Company on an expansion at the East Seventh Street Facility. Morrison Bros.
Company expanded its manufacturing, engineering, and research and development
functions.
Morrison Bros. has over 1200 products used in the "petroleum marketing sector"
including motor fueling, aviation, agriculture, bulk handling and transportation, backup
power generation, and numerous industrial applications. Recent R &D focus has been
on biofuels and related equipment for alternate energy. Morrison Bros. also makes
products for fuel and water military applications, and ground water testing.
Morrison Bros. applied and received approval of Enterprise Zone benefits for the
project. The State committed to providing an investment tax credit, sales and use tax
rebate, and a research and development tax credit. A CEBA award was also approved
by the Iowa Dept. of Economic Development totaling $40,000.
The City entered into a development agreement with Morrison Bros. Company on
October 6, 2008 to expand their East 7 Street facility at a cost estimated at
$3,825,000. The business committed to retain 88 positions and create an additional 10
positions within three years. For this commitment, the company received 8 years of Tax
Increment Financing.
DISCUSSION
On July 5, 2011, the Company submitted a letter to the City requesting an extension of
the time needed to create the new jobs for the company. Below is an excerpt from the
letter stating the reasoning behind the request for an extension of time;
"Due to general economic circumstances that have hit our industry and
nation, we are seeking an extension for this deadline for at least one year.
Our business is just now beginning to show some recovery and we should
have a better outcome for growth in the months ahead."
The business is seeking a one year extension of the job creation time frame to June 1,
2012 (see attached letter).
The company has complied with the other requirements of the Development
Agreement, except for the job creation element.
Due to the fact that we are experiencing the worst recession since the Great
Depression, I would encourage the City Council to approve an amendment to this
Development Agreement, allowing this small locally grown company the opportunity to
expand more readily as the national economy improves.
RECOMMENDATION /ACTION STEP
I am recommending City council approval of the attached resolution approving the First
Amendment to the Development Agreement with Morrison Bros. Company to provide
for a one year extension of the job creation period.
F: \USERS \Econ Dev \Morrison Bros\20110707 Morrison Bros First Amend Memo.docx
Prepared /Return to: David Heiar, Economic Development, 50 W. 13 Street, Dubuque, IA 52001 (563) 589 -4393
RESOLUTION NO 221 -11
RESOLUTION APPROVING THE FIRST AMENDMENT TO THE MORRISON BROS.
COMPANY DEVELOPMENT AGREEMENT
Whereas, a Development Agreement (the Agreement), dated October 6, 2008,
was entered into by and between the City of Dubuque, a municipal corporation of the
State of Iowa (City). and Morrison Bros. Company an Iowa corporation with its principal
place of business in Dubuque, Iowa (Developer); and
Whereas, City and Morrison Bros. Company now desire to amend the
Development Agreement as set forth attached First Amendment.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the First Amendment of the Morrison Bros. Company
Development Agreement is hereby approved.
Section 2. That the Mayor is hereby authorized and directed to execute said
First Amendment on behalf of the City of Dubuque and the City Clerk is authorized and
directed to attest to his signature.
Section 3. That the City Manager is authorized to take such actions as are
necessary to implement the terms of the First Amendment as herein approved.
Passed, approved and adopted this 18 day of July, 2011.
Kevin S. Firnst
hl, Acting City Clerk
F: \USERS \Econ Dev \Morrison Bros\20110711_Res approving first DA amendment Morrison.doc
Roy D. Buol, Mayor
u
Tuesday, July 5, 2011
David Heiar
Economic Development Director
City of Dubuque
50 W 13th St
Dubuque, IA 52001 -4805
Dear David,
This letter is in response to your letter to Morrison Bros Co dated June 1, 2011 regarding the job certification
requirement in the development agreement dated October 6, 2008 between the City of Dubuque and Morrison
Bros Co. Due to general economic circumstances that have hit our industry and nation, we are seeking an ex-
tension for this deadline for at least one year. Our business is just now beginning to show some recovery and we
should have a better outcome for growth in the months ahead.
We appreciate your consideration in this matter.
Sincerely,
Charlie Glab
President
cc. Dan McDonald, GDDC
MORRISON BROS CO
570 E7th St
Dubuque, IA 52001
T 563- 587 -2129
M 563- 543 -1990
cglab @me.com
FIRST AMENDMENT
TO
DEVELOPMENT AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA,
AND
MORRISON BROS. COMPANY
This First Amendment to Development Agreement, dated for reference
purposes the 18"' day of July, 2011, is made and entered into by and between the
City of Dubuque, Iowa (City), Morrison Bros. Company, an Iowa corporation with
its principal place of business in Dubuque, Iowa (Developer).
Whereas City and Developer previously entered into a Development
Agreement dated the 6 of October 2008 (the Development Agreement); and
Whereas the Development Agreement provides in Section 4.1 that the
Employer shall create ten (10) full -time equivalent employees (FTE) prior to June
1, 2011; and
Whereas, the Development Agreement provides in Section 4.2 that
Employer shall certify to the City the number of full -time equivalent employees by
June 1, 2012 and such certification shall be provided not later than July 1, 2012;
and
Whereas due to the severe economic recession, City and Developer have
agreed to amend the Development Agreement to extend the date for the creation
of ten (10) full -time equivalent employees to June 1, 2012; and
Whereas City and Developer have agreed to amend the Development
Agreement to change the certification date for the creation of ten (10) full -time
equivalent employees to July 1, 2012 with such certificate provided not later than
August 1, 2012; and
Whereas the parties desire to amend the Development Agreement to set
forth such amendment in writing.
THEREFORE, in consideration of the mutual terms and covenants
contained herein, the parties agree as follows:
1. Section 4.1 of the Development Agreement is hereby amended to
read as follows:
1
4.1 Job Creation. Developer shall create ten (10) full -time equivalent
jobs in Dubuque, Iowa prior to June 1, 2012, and shall maintain those jobs
during the term of this Agreement. It is agreed by the parties that Developer
has eighty -eight (88) full -time equivalent positions in Dubuque, Iowa as of
June 1, 2008. In the event that any certificate provided to City under Section
4.2 hereof discloses that Developer does not as of that date have at least
98 employees as provided hereinabove, the semi - annual Economic
Development Grants for such year under Section 3.2 shall be reduced by
the percentage that the number of such positions bears to the total number
of positions required to be created and maintained (98 jobs) by this Section
4.1. (For example, if Developer has 90 jobs, the semi- annual Economic
Development Grants would be 91.83% (90/98 employees) of the available
Developer Tax Increment received by City). The reduction of the semi-
annual Economic Development Grants shall be City's sole remedy for the
failure of Developer to meet the job creation requirements of this
subsection 4.1.
2. Section 4.2 of the Development Agreement is hereby amended to
read as follows:
4.2 Certification. To assist City in monitoring the performance of
Developer hereunder, Developer shall certify as of July 1, 2012, and July 1
of each year thereafter during the term of this Agreement, by a duly
authorized officer of Developer to City in a form acceptable to City (a) the
number of full -time equivalent jobs maintained by Developer during the
prior year in Dubuque, Iowa, and (b) to the effect that such officer has
re- examined the terms and provisions of this Agreement and that at the
date of such certificate, and during the preceding twelve (12) months,
Developer is not or was not in default in the fulfillment of any of the material
terms and conditions of this Agreement and that no Event of Default (or
event which, with the lapse of time or the giving of notice, or both, would
become an Event of Default) is occurring or has occurred as of the date of
such certificate or during such period, or if the signer is aware of any such
default, event or Event of Default, said officer shall disclose in such
statement the nature thereof, its period of existence and what action, if any,
has been taken or is proposed to be taken with respect thereto. Such
certificate shall be provided not later than August 1, 2012, and by August 1
of each year thereafter during the term of this Agreement.
3. Except as modified herein, the Development Agreement shall
remain in full force and effect.
2
CITY OF DUBUQUE, IOWA
By:
Roy D. uol, Mayor
evin S. Fir stahl
Acting City Clerk
F: \USERS \Econ Dev \Morrison Bros \20110712_ 1st Amendment to Morrison Bros DA.doc
3
MORRISON BROS. COMPANY
Charlie D. Glab, President