Loading...
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 2 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