Dubuque Stamping & Manufacturing_First Amendment to Development AgreementMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
Dubuque
AUmericaCity
11111!
2007
SUBJECT: First Amendment to Development Agreement with Dubuque Stamping &
Manufacturing, Inc. and R & S Realty, LLC
DATE: August 10, 2011
Economic Development Director Dave Heiar is recommending an amendment to the
Development Agreement with Dubuque Stamping & Manufacturing, Inc. and R & S
Realty, LLC.
The City entered into a development agreement with Dubuque Stamping &
Manufacturing, Inc. and R & S Realty, LLC on March 2, 2009 to expand their Jackson
Street facility at a cost estimated at $3,000,000. The business committed to retain 161
positions and create an additional 10 positions within three years. For this commitment,
the company received 10 years of Tax Increment Financing.
On July 28, 2011, the Company submitted a letter to the City requesting an extension of
the time needed to create the new jobs for the company. The business is seeking a one
year extension of the job creation time frame to May 1, 2012.
The company has complied with the other requirements of the Development
Agreement, including the $3 million expansion investment, except for the job creation
element.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
MicKael 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
SUBJECT: First Amendment to Development Agreement with Dubuque Stamping &
Manufacturing, Inc. and R & S Realty, LLC
DATE: August 2, 2011
Dubuque
had
111-AmalraeltY
1111 If
2007
INTRODUCTION
This memorandum is to summarize the First Amendment to the Development
Agreement with Dubuque Stamp & Manufacturing, Inc. and R & S Realty, LLC.
BACKGROUND
City staff worked with the Greater Dubuque Development Corporation and Dubuque
Stamp on an expansion at the Jackson Street Facility. Dubuque Stamp expanded its
manufacturing functions. They committed to retaining the current 161 positions, and
adding at least 10 new jobs at the facility.
Dubuque Stamping & Manufacturing, Inc. has been in continuous operation at it's
present location since July, 1948. It began as a division of Toledo Stamping, Toledo,
Ohio and was under that ownership until it was sold in the mid 1970's to Bendix
Corpporation /Allied Signal Corp. It was a division of those companies until 1984 at
which time it was sold to Paul Britt, a long time employee. It was owned by Paul and
Bernilda Britt until June 1, 1995 when it was sold to David W. Spahn and Larry H. &
Cynthia A. Richey, employees of the firm and native Dubuquers. The Spahn and
Richey families continue to own and operate the firm.
The company provides a wide variety of metal stampings to over 100 customers,
including many world class companies such as Deere & Co., Caterpillar, Dana Corp.,
J.I. Case, Eaton Corp., Williamsburg Mfg. (Williamsburg, Iowa), Skyjack, Mfg.
(Emmetsburg, Iowa), TriMark Corp. (New Hampton, Iowa), Arvin Sango, Navistar, Mi-
T-M Corp. (Peosta, Iowa), Uniparts Olsen, Inc (Davenport, Iowa), and Trausch Industies
(Audobon, Iowa).
Dubuque Stamp applied for and received approval of Enterprise Zone benefits for the
project.
The City entered into a development agreement with Dubuque Stamping &
Manufacturing, Inc. and R & S Realty, LLC on March 2, 2009 to expand their Jackson
Street facility at a cost estimated at $3,000,000. The business committed to retain 161
positions and create an additional 10 positions within three years. For this commitment,
the company received 10 years of Tax Increment Financing.
DISCUSSION
On July 28, 2011, the Company submitted a letter to the City requesting an extension of
the time needed to create the new jobs for the company. The business is seeking a one
year extension of the job creation time frame to May 1, 2012 (see attached letter).
The company has complied with the other requirements of the Development
Agreement, including the $3 million expansion investment, 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 Dubuque Stamping & Manufacturing,
Inc. and R & S Realty, LLC to provide for a one year extension of the job creation
period.
F: \USERS \Econ Dev \Dubuque Stamp\20110729 Dubuque Stamp First Amend Memo.docx
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Prepared /Return to: David Heiar, Economic Development, 50 W. 13 th Street, Dubuque, IA 52001 (563) 589 -4393
RESOLUTION NO 267 -11
RESOLUTION APPROVING THE FIRST AMENDMENT TO THE DUBUQUE
STAMPING & MANUFACTURING, INC. AND R & S REALTY, LLC DEVELOPMENT
AGREEMENT
Whereas, a Development Agreement (the Agreement), dated March 2, 2009,
was entered into by and between the City of Dubuque, a municipal corporation of the
State of Iowa (City), Dubuque Stamping & Manufacturing, Inc. (Developer) and R & S
Realty, LLC, an Iowa Limited Liability Company (Owner); and
Whereas, City, Dubuque Stamping & Manufacturing, Inc. and R & S Realty, LLC
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 Dubuque Stamping &
Manufacturing, Inc. and R & S Realty, LLC 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 15 day of August, 2011.
Ke n S. Firnst.hl, Acting CI y Clerk
F: \USERS \Econ Dev \Dubuque Stamp\20110729_Res approving first DA amendment Dubuque Stamp.doc
Roy D. Buol, Mayor
FIRST AMENDMENT
TO
DEVELOPMENT AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA,
DUBUQUE STAMPING & MANUFACTURING, INC.
AND
R & S REALTY, LLC
This First Amendment to Development Agreement, dated for reference
purposes the 15th day of August, 2011, is made and entered into by and between
the City of Dubuque, Iowa (City), Dubuque Stamping & Manufacturing, Inc.
(Developer) and R & S Realty, LLC, an Iowa Limited Liability Company (Owner).
Whereas City, Developer and Owner previously entered into a Development
Agreement dated the 2nd of March 2009 (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 May 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
July 1, 2011; and
Whereas due to the severe economic recession, City, Developer and Owner
have agreed to amend the Development Agreement to extend the date for the
creation of ten (10) full -time equivalent employees to May 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; 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 follc.ws:
1
4.1 Job Creation. Developer shall create ten (10) full -time (2080 hours
per year) positions in Dubuque, Iowa after May 2008 and prior to May 1,
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 ten (10) full -time
employee requirement described herein. It is agreed by the parties that
Developer has 161 employees in Dubuque, Iowa, as of May 1, 2008. In the
event that the certificate provided to City under Section 4.2 hereof on May 1,
2012, discloses that Developer does not as of that date have at least One
Hundred Seventy -One (171) 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 171 positions required
to be created and maintained by this Paragraph.
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, not later than July 1, 2012, and not later than July 1 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 May 1 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.
3. Except as modified herein, the Development Agreement shall remain in full
force and effect.
2
CITY OF D /- U , IOWA DUBUQUE STAMPING &
i
MA ► - URIN I C.
By:
Roy D.(:uol, Mayor ALl./
Da vi . Spahni' resident
By:
Kevin S. F' nstahl
Acting City Clerk
F: \USERS \Econ Dev \Dubuque Stamp\20110729_ 1st Amendment to Dubuque Stamp DA.doc
3
32nd & JACKSON STREETS
P.O. BOX 798
DUBUQUE, IOWA 52004 -0798
PHONE: (563) 583 -5716
FAX: (563) 556 -8729
www.dbqstamp.com
DUBUQUE
STAMPING & MANUFACTURING, INC.
July 28, 2011
Mr. David Heiar
The City of Dubuque
Economic Development Director
501 West 13th Street
Dubuque, Iowa 52001
Dear Mr. Heiar,
The purpose of this letter is to ask for a one year extension to the Development Agreement
dated March 2, 2009 which required that our full time job base reach 171 by May 1, 2011.
Currently our full time employment stands at 147. It is possible that we may reach the 171
employee threshold by one year from now.
Should you require any further information to act on this request, please let me know.
Sincerely,
President
Cc: Dan McDonald, GDDC