Cottingham & Butler Ins. First Amendment to DA & DT Rehab LoanMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
Dubuque
hitd
All-America City
11
2007
SUBJECT: First Amendment to the Amended and Restated Development Agreement
with Cottingham & Butler, Inc. and Security Investments, LLC
DATE: July 13, 2011
Economic Development Director Dave Heiar recommends City Council approval of the
First Amendment to the Amended and Restated Development Agreement and an
amendment to the Downtown Rehabilitation Loan Agreement, both with Cottingham &
Butler, Inc. and Security Investments, LLC.
Based on the current economic conditions, as well as increased capital investment and
the company's offer to prepay their loan, Dave Heiar recommends that the City Council
amend the incentive agreements with Cottingham & Butler to allow two additional years
for the company to create the 90 new jobs they pledged in the original agreement.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Mi hael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
Masterpiece on the Mississippi
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director L,
DATE: July 12, 2011
Dubuque
hArld
Ai4mericacnr
11111 !
2007
SUBJECT: First Amendment to the Amended and Restated Development Agreement
with Cottingham & Butler, Inc. and Security Investments, LLC
INTRODUCTION
This memorandum presents for City Council consideration Resolutions approving the
First Amendment to the Amended and Restated Development Agreement and an
amendment to the Downtown Rehabilitation Loan Agreement both with Cottingham &
Butler, Inc. and Security Investments, LLC.
BACKGROUND
In July 2007, the City Council approved a Development Agreement with Cottingham &
Butler, Inc. outlining an incentive package for the rehabilitation of the Security Building
located at 800 Main Street. Cottingham & Butler had committed to retaining 306 jobs
and creating 90 new jobs in the building.
The Development Agreement included a Downtown Rehabilitation Loan /Grant to
encourage private investment and rehabilitation efforts in the City's Greater Downtown
Urban Renewal District. The loan /grant program provided a $300,000 low- interest loan.
A 10 -year 100% tax rebate was provided to the company to assist in their downtown
renovation project. The rebate is a form of tax increment financing without issuing a tax
increment finance bond to loan monies to the company upfront. As the company pays
its tax obligation on the new improvements, the City agreed to rebate 100% of tax
increment over the existing base valuation of $2,369,600.00, not to exceed the tax
increment revenues paid by the Developer if the company created 90 new jobs.
Key items in the Development Agreement included:
• Cottingham & Butler was to invest $4,000,000 to rejuvenate a cornerstone
building in Downtown Dubuque.
• City committed to a $300,000 Downtown Rehabilitation Loan, a $10,000
Design Grant, and a $10,000 Facade Grant. The project retains 306 jobs
and creates 90 new jobs in the downtown area.
• The company received a 10 -year TIF in the form of a 100% yearly tax
rebate on increased property taxes but not to exceed the tax increment
revenues paid by the Developer. Failure to maintain the 306 jobs and
create 90 jobs associated with this project will result in a pro -rated
reduction of the TIF rebate.
DISCUSSION
Due to the nature and extent of the historic building renovation, the project was delayed
somewhat beyond the expected completion date. However, Cottingham & Butler's total
capital investment exceeded $11 million, far greater than the agreed upon $4 million
minimum investment. Moreover, given the depth and the extent of the economic
downturn, Cottingham & Butler added only 22 new jobs during the three year period.
Now that the economy has turned around, the company expects to resume its planned
expansion.
Given that background, Cottingham & Butler asks the City of Dubuque to consider
amending the Agreement as follows:
• In Section 3.1, extend the rebate period to "within five years of the execution of
the loan documents" rather than three years. This would basically extend the
time to create the new jobs through 12/31/2012. The company would provide
the required documentation in January, 2013, enabling the City to determine the
amount of the loan to be forgiven. In January, 2013, Cottingham & Butler would
then pay the remaining loan principal, in full, to the City, rather than over the
additional fifteen years as outlined in the Agreement. Cottingham & Butler also
agrees to maintain the newly created jobs. To that end, the company would also
report to the City the number of jobs as of 12/31/2014. If the number of jobs
decreases between 12/31/2012 and 12/31/2014, Cottingham & Butler would
repay the City $2,000 per job lost up to the amount of the loan that was forgiven.
• In Section 3.2, change the dates of the Economic Development Grants by
deleting November 1, 2009 and May 1, 2010 and adding November 1, 2019 and
May 1, 2020. This reflects the fact that the Agreement was for 10 full years of
TIF rebates. Because the project was delayed by roughly a year, the building
was not re- assessed until 2010. As such, Cottingham & Butler made no
additional tax payments made prior to May 1, 2010.
• In Section 4.1, change the paragraph to calculate job creation and retention as of
12/31/2012, which basically adds two additional years to create the new jobs
(consistent with the forgivable loan provision) before potentially reducing the
Economic Development Grants of Section 3.2.
In essence, Cottingham & Butler is asking for a two -year extension on the job creation
obligations of the agreement based upon the unforeseen economic downtown. In
return, Cottingham & Butler points to its capital investment that was $7 million greater
than the agreed upon minimum and its willingness to accelerate re- payment of the
downtown rehabilitation loan.
2
RECOMMENDATION
Based on the current economic conditions, as well as increased capital investment and
the company's offer to prepay their loan, I recommend that the City Council amend the
incentive agreements with Cottingham & Butler to allow two additional years for the
company to create the 90 new jobs they pledged in the original agreement.
ACTION STEP
The action step for the City Council is to adopt the attached Resolutions approving
amendments to the Development Agreement and to the Downtown Rehabilitation Loan
contract.
F: \USERS\Econ Dev \Cottingham & Butler\201107123 1st Amend to DA Council Memo.docx
3
Prepared /Return to: David Heiar, Economic Development, 50 W. 13t Street, Dubuque, IA 52001 (563) 589 -4393
RESOLUTION APPROVING THE FIRST AMENDMENT TO THE AMENDED AND
RESTATED DEVELOPMENT AGREEMENT BETWEEN AND AMONG THE CITY OF
DUBUQUE, IOWA, COTTINGHAM & BUTLER, INC. AND SECURITY INVESTMENTS,
LLC
RESOLUTION NO 222 -11
Whereas, an Amended and Restated Development Agreement (the Agreement),
dated October 1, 2007, was entered into by and between the City of Dubuque, a
municipal corporation of the State of Iowa (City), Cottingham & Butler, Inc. (Developer)
and Security Investments, LLC, an Iowa Limited Liability Company; and
Whereas, City, Cottingham & Butler, Inc. and Security Investments, LLC now
desire to amend the Amended and Restated Development Agreement as set forth in the
attached First Amendment.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY.
OF DUBUQUE, IOWA:
Section 1. That the First Amendment to the AMENDED AND RESTATED
DEVELOPMENT AGREEMENT between and among the City of Dubuque, Iowa,
Cottingham & Butler, Inc. and Security Investments, LLC 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.
Attest:
Passed, approved and adopted this 18 day of July, 2(}11.
Kevin S. Firnstah , Acting City Cler
F: \USERS \Econ Dev \Cottingham & Butler\20110707_Res approving first DA amendment Cottingham & Butl_1.docx
Roy D. Buol, Mayor
FIRST AMENDMENT
TO
AMENDED AND RESTATED
DEVELOPMENT AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA,
COTTINGHAM & BUTLER, INC.
AND
SECURITY INVESTMENTS, LLC
This First Amendment to the Amended and Restated 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), Cottingham & Butler,
(Developer) and Security Investments, LLC (Property Owner), an Iowa Limited
Liability Company.
Whereas City, Developer and Property Owner previously entered into an
Amended and Restated Development Agreement dated the 1 of October 2007
(the Amended and Restated Development Agreement); and
Whereas, the Amended and Restated Development Agreement provides in
Section 3.1(1) that the Downtown Rehabilitation Loan is for twenty (20) years at 3%
interest; and
Whereas, the Amended and Restated Development Agreement provides a
rebate equal to two thousand dollars ($2,000) for each new full -time job or full -time
equivalent created after September 2006 and within three years of the execution of
the loan documents; and
Whereas, the Amended and Restated Development Agreement provides in
Section 3.2 for twenty (20) consecutive semi - annual Economic Development Grant
payments beginning November 1, 2009 and ending May 1, 2019; and
Whereas the Amended and Restated Development Agreement provides in
Section 4.1 that Developer shaii create ninety (90) full -time equivalent employees
(FTE) prior to September 30, 2009; and
Whereas, the Amended and Restated Development Agreement provides in
Section 4.2 that Developer shall certify to the City the number of full -time equivalent
employees by November 30, 2009 and such certification shall be provided not later
than November 30, 2009; and
Whereas, due to the severe economic recession, City, Developer and
Property Owner have agreed to amend the Amended and Restated Development
Agreement to provide in Section 3.1(1) that the Downtown Rehabilitation Loan is for
sixty -one (61) months at 3% interest; and
1
Whereas, City, Developer and Property Owner have agreed to amend the
Amended and Restated Development Agreement to provide a rebate equal to two
thousand dollars ($2,000) for each new full -time job or full -time equivalent created
after September 2006 and prior to December 31, 2012; and
Whereas, City, Developer and Property Owner have agreed to amend the
Amended and Restated Development Agreement to for provide twenty (20)
consecutive semi - annual Economic Development Grant payments beginning
November 1, 2010 and ending May 1, 2020; and
Whereas, City, Developer and Property Owner have agreed to amend the
Amended and Restated Development Agreement to extend the date for the
creation of 90 (90) full -time equivalent employees to December 31, 2012; and
Whereas, City, Developer and Property Owner have agreed to amend the
Amended and Restated Development Agreement to change the certification date
for the creation of ninety (90) full -time equivalent employees to December 31, 2012
with such certificate provided not later than January 31, 2013; and
Whereas the parties desire to amend the Amended and Restated
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 3.1(1) of the Amended and Restated Development
Agreement is hereby amended to read as follows:
3.1 Downtown Rehab Loan /Grant for Property at 800 Main Street.
(1) City hereby commits to a $300,000 low interest loan, $10,000 facade
grant, and a $10,000 design grant through the Downtown Rehabilitation
Loan /Grant Program for the Property at 800 Main Street. The project is to be
completed in accordance with the regulations set forth for the City of
Dubuque Downtown Rehabilitation Loan /Grant Program. The loan is for
sixty -one (61) months at 3% interest and is intended for Historic renovation
of the exterior facade and historically significant elements of the interior with
remodeling of the remainder of the interior for use as commercial /residential
space. Monthly interest only payments shall be required for the first sixty -one
(61) months of the loan. The principal of the loan, less any credits for job
creation, shall be due January 31, 2013.
A rebate equal to two thousand dollars ($2,000) may be forgiven for each
new full -time job or full -time equivalent created after September 2006 and
prior to December 31, 2012 and maintained by Developer for a period of not
less than two years (December 31, 2014). The amount of the loan to be
2
forgiven shall be determined by the City on December 31, 2012. If the new
jobs are not retained until December 31, 2014, the employer shall
immediately remit $2,000 per job for each job not retained, based on
documented evidence of job creation.
2. Section 3.2 of the Amended and Restated Development Agreement is
hereby amended to read as follows:
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 twenty (20)
consecutive semi - annual payments (such payments being referred to
collectively as the Economic Development Grants) to Developer:
November 1, 2010
November 1, 2011
November 1, 2012
November 1, 2013
November 1, 2014
November 1, 2015
November 1, 2016
November 1, 2017
November 1, 2018
November 1, 2019
May 1,2011
May 1,2012
May 1,2013
May 1,2014
May 1,2015
May 1,2016
May 1,2017
May 1,2018
May 1,2019
May 1, 2020
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 the City in respect of the increase in the assessed value of the
Property above the assessment of January 1, 2007 ($2,369,600). 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, (iii) the
remaining actual amount of tax increment revenues collected by the City in
respect of the valuations of the Property prior to January 1, 2008 and (iv)
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. Section 4.1 of the Amended and Restated Development Agreement is
hereby amended to read as follows:
4.1 Job Creation. Developer shall create ninety (90) full -time (2080 hours
per year) employees in Dubuque, Iowa after September 2006 and by
December 31, 2012, and shall maintain those jobs during the Term of this
Agreement. City acknowledges that Developer has existing employees and
all persons now or hereafter employed by Developer shall count against the
ninety (90) full -time employee requirement described herein. It is agreed by
the parties that Developer had 306 employees in Dubuque, Iowa, as of
September 30, 2006. In the event that the certificate provided to City under
Section 4.2 hereof on December 31, 2012, discloses that Developer does
not as of that date have at least Three Hundred Ninety -Six (396) full -time
employees as provided hereinabove, City shall reduce the semi - annual
Economic Development Grants. For the positions that Developer fails to
create and maintain for any year during the Term of this Agreement, 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 396 positions required to be created and maintained
by this Paragraph.
4. Section 4.2 of the Amended and Restated Development Agreement is
hereby amended to read as follows:
4.2 Certification. To assist City in monitoring the performance of
Developer hereunder, not later than January 31, 2013, and not later than
January 31 of each year thereafter during the term of this Agreement, a
duly authorized officer of Developer shall certify to City in a form acceptable
to City (a) the number of full time employees employed by Developer in
Dubuque, Iowa on December 31 of the year of the certification, and (b) a
statement 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 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.
5. Except as modified herein, the Amended and Restated Development
Agreement shall remain in full force and effect.
4
CITY OF DUBUQUE, IOWA
By:
Roy P . uol, Mayor
By:
Kevi S. Firnst
Acting City Clerk
5
COTTINGHAM & BUTLER, INC.
By:
J. n . Butler
Chief Executive Officer
SECURITY INVESTMENTS, LLC
By Cottingham & Butler, Inc.
Its e - ember
B
John E. Butler
Chief Executive Officer
F: \USERS \Econ Dev \Cottingham & Butler\20110707 - 1st Amendment to Cottingham & Butler DA_1.docx
Prepared /Return to: David Heiar, Economic Development, 50 W. 13 Street, Dubuque, IA 52001 (563) 589 -4393
RESOLUTION NO 223 -11
RESOLUTION APPROVING THE FIRST AMENDMENT TO DOWNTOWN
REHABILITATION LOAN PROGRAM LOAN AGREEMENT, NUMBER: DRLP #1 -07
BETWEEN THE CITY OF DUBUQUE, IOWA AND SECURITY INVESTMENTS, LLC
Whereas, a Downtown Rehabilitation Loan Program Agreement (the Agreement),
dated November 19, 2007, was entered into by and between the City of Dubuque, a
municipal corporation of the State of Iowa (City) and Security Investments, LLC, an
Iowa Limited Liability Company; and
Whereas, City and Security Investments, LLC now desire to amend the
Agreement as set forth in the attached First Amendment.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the First Amendment to the Downtown Rehabilitation Loan
Program Loan Agreement between the City of Dubuque and Security Investments, LLC,
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, 011.
,
Attest:
Roy D. Buol, Mayor
Kevin S. Firnstah , Acting City Cler
F: \USERS \Econ Dev \Cottingham & Butler \DRLP Security Building\20110707_Res approving first amendment DRLP Cottingham &
Butler_1.docx
FIRST AMENDMENT
TO
DOWNTOWN REHABILITATION LOAN PROGRAM
LOAN AGREEMENT, NUMBER: DRLP #1 -07
BETWEEN
THE CITY OF DUBUQUE, IOWA,
AND
SECURITY INVESTMENTS, LLC
This First Amendment to the Downtown Rehabilitation Loan Program Loan
Agreement, Number: DRLP #1 -07, dated for reference purposes the 18 day of
July, 2011, is made and entered into by and between the City of Dubuque, Iowa
(City), and Security Investments, LLC (Property Owner), an Iowa Limited Liability
Company.
Whereas, City and Property Owner previously entered into a Loan
Agreement dated the 19 of November, 2007 (the DRLP Loan Agreement); and
Whereas, the DRLP Loan Agreement provides in Section 5(b)(2) that to
qualify for a loan forgiveness, the Owner must document that the job was created
between the project completion date and twenty -four (24) months from the closing
date of the Loan Agreement; and
Whereas, the DRLP Loan Agreement provides in Section 5(b)(3) that to
qualify for a loan forgiveness, the Owner must document that the job has been
maintained by the Owner or his /her tenant for a period of not Tess than thirty -six
(36) months (until October 1, 2011); and
Whereas, due to the severe economic recession, City and Property Owner
have agreed to amend the DRLP Loan Agreement to provide in Section 5(b)(2) that
to qualify for a loan forgiveness, Property Owner must document that the job was
created between the project completion date and December 31, 2012; and
Whereas, City and Property Owner have agreed to amend the DRLP Loan
Agreement to provide in Section 5(b)(3) that to qualify for a loan forgiveness, the
Owner must document that the job has been maintained by Property Owner or
his /her tenant for a period of not less than twenty -four (24) months (until December
31, 2014); and
Whereas, in consideration for this time extension, Property Owner agrees to
reduce the loan term from 20 years to 5 years; and
Whereas the parties desire to amend the DRLP Loan 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
1. Section 5(b)(2) of the DRLP Loan Agreement is hereby amended to
read as follows:
(2) The job was created between the project completion date and
December 31, 2012.
2. Section 5(b)(2) of the DRLP Loan Agreement is hereby amended to
read as follows:
3. Section 2, Loan Terms, the second paragraph of the Loan Agreement
is hereby amendmend to read as follows:
4. Except as modified herein, the DRLP Loan Agreement shall remain in
full force and effect.
CITY OF DUBUQUE, IOWA
By:
By:
(3)
The job has been maintained by the Owner or his /her tenant
for a period of not Tess than twenty -four (24) months (until
December 31, 2014).
The term of the loan shall be for sixty -one (61) months. Interest on
the loan shall be three percent (3.0 %) per annum. Monthly interest
payments shall become due and payable the first sixty -one (61)
months of the loan. The entire balance of the loan, including interest
and principal, shall become due and payable not later than the 62
month of the loan.
Ke in S. Firn ahl
Acting City Clerk
2
SECURITY INVESTMENTS, LLC
By Cottingham & Butler, Inc.
Its sole member
By:
John utler
Chief Executive Officer
F: \USERS \Econ Dev \Cottingham & Butler \DRLP Security Building\20110707 -1st Amendment Cottingham & Butler DRLP_1.docx
John E. Butler, CPCU
David 0. Becker
Dean F. Fair, CPCU, ARM
John J. Ottavi, CPCU
Christopher D. Patrick, CPCU, ARM
Joseph L. Broderick, AIC
Mark K. Fitzjerrells, CPCU, ARM, AU, ARe
David J. Franson, CSP
John M. Link, CPCU
Richard V. McKay, CPCU
Jane L. Mueller, ARM
Larry J. Nedder
Bradley J. Plummer, CPCU
Steven J. Schill, CPCU
Timothy R. Alexander
Jeffrey K. Bair, AAI
Todd D. Bauer, AAI, AIS
Kim K. Beck, CIC, AAI
Loren L. Belcher
Timothy L Berns, CPA, CLFC
Jamie R. Bishop, GBA
Benjamin B. Butler
Susanne R. Chemerow, MBA
Sara G. Dickinson
Paul. J. Donovan, CIC, AAI, CRIS
Kay Elskamp, GBA
Kevin W. Felderman, GBA
Brad Feldott
Matt M. Ferris, AU, CPCU
Dean R. Gilkes, CEBS
Terrence D. Greenwood
James C. Hall, MD, FACOG
Rabecca J. Hennessey, AAI, API, AIS, CIC
Craig W. Herbst
James A. Hermsen, AIC
Patrick S. Heublein
Robert J. Hohmann
Chad M. Hoppenjan, CDS
Mark D. Kaczmarek
Steve J. Kapparos
Michael P. Kelly
Kara L. Kessler
Aaron P. Krogman, CIC
Vickie L. LaGrotta
Eric R. Larsen, CIC
Angie K. Long
Seth R. Maxwell
Wade 0. McAnelly, CIC
Tammy A. McClain, HIA, RHU
James R. Millar, Jr., CFP
Darin K. Mills, AAI, CIC
Matt R. Montgomery, CDS
Dan G. Morton
Matt Mowry, CSP
Matthew J. Murray, AAI, CIC
Linda M. Perry
Nicole J. Pfeiffer, SPHR
lohn M. Philips
Mark R. Boling, AAI, AU, MBA
iackie S. Running, GBA
'ulie M. Ross, CPCU, ARM, AIS, CIC
)ale J. Sabers, CSP
Porn J. Schroeder
<rista L. Sigman
ared M. Sigwarth, AAI, AU
lchard A. Sigwarth, CEBS, CQM
<evin E. Smith, CIC, AAI
Tandy K. Stelken
Daniel P. Unmacht, AIC, AIM, CPCU
amie L. Vaassen, AU, CIC
ohn B. Van Dyke
Icott A. Voellinger
2hristopher R. Vogel, CIC, AAI
im C. Wachtel
telly J. Wenzelman
ustin D. Wenzelman, MBA, CIC
ennifer D. Wolf, SPHR
4'WW. sisc0.coin
A e
Assurbc
G L O B A L
Dear Dave:
C
B
Mr. David Heiar
Economic Development Director
City of Dubuque
50 W. 13t Street
Dubuque, IA 52001
Cottingham & Butler
C &B Insurance 1 SISCO 1 HealthCorp 1 Safety Management
Established 1887
July 5, 2011
This note is a formal request for modifications to the July 20, 2007 Development
Agreement between the City of Dubuque and Cottingham & Butler, Inc. ( "Agreement ").
The Agreement called for Cottingham & Butler to make a capital investment of at least $4
million in the Security Building and to add and retain ninety new jobs over a three -year
period. In return, the City of Dubuque agreed to provide financial incentives, including a
partially forgivable, $300,000 low- interest loan and 10 -years of TIF financing.
Due to the nature and extent of the historic building renovation, the project was delayed
somewhat beyond the expected completion date. However, Cottingham & Butler's total
capital investment exceeded $11 million, far greater than the agreed upon $4 million
minimum investment. Moreover, given the depth and the extent of the economic
downturn, Cottingham & Butler added only 22 new jobs during the three year period.
Now that the economy has turned around, the company expects to resume its planned
expansion.
Given that background, Cottingham & Butler asks the City of Dubuque to consider
amending the Agreement as follows:
• In Section 3.1, extend the rebate period to "within five years of the execution of
the loan documents" rather than three years. This would basically extend the
time to create the new jobs through 12/31/2012. The Company would provide
the required documentation in January, 2013, enabling the city to determine the
amount of the loan to be forgiven. In January, 2013, Cottingham & Butler
would then pay the remaining loan principal, in full, to the City, rather than over
the additional fifteen years as outlined in the Agreement. Cottingham & Butler
also agrees to maintain the newly created jobs. To that end, the company would
also report to the City the number of jobs as of 12/31/2014. If the number of
jobs decreases between 12/31/2012 and 12/31/2014, Cottingham & Butler would
repay the City $2,000 per job lost up to the amount of the loan that was forgiven.
C &B INSURANCE
800 Main Street
P.O. Box 28
Dubuque, IA 52004 -0028
(563) 587 -5000
(800) 793 -5235
Facs (563) 583 -7339
C &B CLAIMS SERVICES
800 Main Street
P.O. Box 28
Dubuque, IA 52004 -0028
(563) 587 -5000
(800) 793-5235
Facs (563) 587 -5200
SISCO (BENEFITS)
800 Main Street
P.O. Box 389
Dubuque, IA 52004 -0389
(563) 587 -5000
(800) 457-4726
Facs (563) 587 -5500
HEALTHCORP
800 Main Street
P.O. Box 1475
Dubuque, IA 52004 -1475
(563) 583 -5888
(800) 583 -5888
Facs (563) 583 -3510
SAFETY MANAGEMENT
800 Main Street
P.O. Box 28
Dubuque, IA 52004 -0028
(563) 587 -5000
(800) 793-5235
Facs (563) 587 -5514
Y
C
B
Cottingham & Butler
• In Section 3.2, change the dates of the Economic Development Grants by
deleting November 1, 2009 and May 1, 2010 and adding November 1, 2019 and
May 1, 2020. This reflects the fact that the agreement was for 10 full years of
TIF rebates. Because the project was delayed by roughly a year, the building
was not re- assessed until 2010. As such, C &B made no additional tax payments
made prior to May 1, 2010.
• In Section 4.1, change the paragraph to calculate job creation and retention as of
12/31/2012, which basically adds two additional years to create the new jobs
(consistent with the forgivable loan provision) before potentially reducing the
Economic Development Grants of Section 3.2.
In essence, Cottingham & Butler is asking for a two -year extension on the job creation
obligations of the agreement based upon the unforeseen economic downturn. In return,
Cottingham & Butler points to its capital investment that was $7 million greater than the
agreed upon minimum and its willingness to accelerate re- payment of the downtown
rehabilitation loan.
If you have any questions or would like to discuss in more detail, please feel free to
contact me at 587 -5103.
Regards,
I(AjL
David Bec er
President