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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