Merchants Hotel and Union Cigar Store Offers to Buy
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CITY OF DUBUQUE, IOWA
MEMORANDUM
February 26, 1999
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT:
Offers to Buy - Merchants Hotel and Union Cigar Store
Community and Economic Development Director Jim Burke is recommending City
Council approval of offers to buy the Merchants Hotel (302 Main Street) for
$20,000, and the Union Cigar Store (332-338 Main Street) for $60,000. Both
offers are contingent on receiving Historic Preservation Commission permission to
demolish them. The Mayor and City Council were actively involved in these
negotiations.
Since 1993, neighborhood property owners and businesses, Dubuque Main Street,
Ltd., and the City have been working in partnership to foster the revitalization of
the Old Main District. A reinvestment strategy was adopted in 1994. The
adjoining urban renewal district was expanded to include the area so that tax
increment financing could be utilized. An intensive code inspection program was
initiated with the support of property owners. A loan and grant program for
building rehab was established and recapitalized. Overhead wires were removed
along the District's freeway frontage. A marketing plan was prepared and designs
are being prepared for gateway improvements to the area.
In response, owners and businesses have invested in their properties and are
participating in the development of additional projects for Old Main. The Cinema X,
which was identified as a major blighting influence, has been closed and a new
owner has renovated the building for retail and residential use.
Despite these efforts, a key intersection - Third and Main Streets - remains in
blighted condition. The buildings on three of the four corners have been vacant for
a number of years. The deteriorated condition of the former Merchants Hotel
building and its partial occupancy by an adult bookstore has been identified as a
major deterrent to further investment in surrounding buildings. And without a
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cooperative, investment-oriented owner, our code enforcement efforts have only
succeeded in making this condition a bit safer.
Clearly, the solution to this problem, as in the case of the Cinema X building, is to
get the property into the hands of an owner who is willing and able to improve this
space. With this in mind, staff have negotiated the terms of a purchase of the
Merchant's with the trustees of the former owner's estate. We have also
presented to the Chamber of Commerce site committee a concept for relocating to
the Merchant's site.
The Chamber has agreed that this location would be good for their offices and the
Welcome Center. However, based on their evaluation, they would have to remove
the existing building and construct a new building to meet their needs. They have
also determined that they would need an access for vehicles from Main Street to
the City's proposed parking ramp to the east. This would require that the former
Union Cigar Store adjoining the Merchant's also be acquired and removed.
Attached is a concept drawing of the Chamber's proposal.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
/1' ~ .'
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Mic ael C. Van Milligen
MCVM/j
Attachment
cc: Barry Lindahl, Corporation Counsel
Tim Moerman, Assistant City Manager
Jim Burke, Community and Economic Development Director
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CITY OF DUBUQUE, IOWA
MEMORANDUM
February 25, 1999
TO:
M~chael ~~ Milligen, City Manager
!.T~~~vB1~~ c'~~unity and Economic Development Director
I
',J
Offers to Buy - Merchants Hotel and Union Cigar Store
FROM:
SUBJ:
INTRODUCTION
This memorandum presents for City Council approval two offers to buy real estate for
redevelopment. The properties include the former Merchants Hotel (304 Main Street) and the
former Union Cigar Store (332-338 Main Street).
BACKGROUND
Since 1993, neighborhood property owners and businesses, Dubuque Main Street, Ltd., and the
City have been working in partnership to foster the revitalization of the Old Main District. A
reinvestment strategy was adopted in 1994. The adjoining urban renewal district was expanded
to include the area so that tax increment financing could be utilized. An intensive code
inspection program was initiated with the support of property owners. A loan and grant program
for building rehab was established and recapitalized. Overhead wires were removed along the
District's freeway frontage. A marketing plan was prepared. And designs are being prepared for
gateway improvements to the area.
In response, owners and businesses have invested in their properties and are participating in the
development of additional projects for Old Main. The Cinema X which was identified as a major
blighting influence has been closed and a new owner has renovated the building for retail and
residential use.
Despite these efforts, a key intersection- Third and Main Streets- remains in a blighted condition.
The buildings on three of the four corners have been vacant for a number of years. The
deteriorated condition of the former Merchants Hotel building and its partial occupancy by an
adult bookstore has been identified as a major deterrent to further investment in surrounding
buildings. And without a cooperative, investment-oriented owner, our code enforcement efforts
have only succeeded in making this condition a bit safer.
Clearly, the solution to this problem, as in the case of the Cinema X building, is to get the
property into the hands of an owner who is willing and able to improve this space. With this in
mind, staff have negotiated the terms of a purchase of the Merchant's with the trustees of the
former owner's estate. We have also presented to the Chamber of Commerce site committee a
concept for relocating to the Merchant's site.
The Chamber has agreed that this location would be good for their offices and the Welcome
Center. However, based on their evaluation, they would have to remove the exiting building and
construct a new building to meet their needs. They have also determined that they would need an
access for vehicles from Main Street to the City's proposed parking ramp to the east. This would
require that the former Union Cigar Store adjoining the Merchant's also be acquired and
removed. Attached is a concept drawing of the Chamber's proposal.
DISCUSSION
Attached to this memorandum are two Offer to Buy and Acceptance agreements which have
been negotiated with the owners of the former Merchants Hotel building and former Union Cigar
Store building. The most significant provisions of these agreements include:
Merchants Hotel Property.
1) Price. The purchase price is $20,000.00 cash.
2) Possession. A deed for the property will be delivered to the City at such time as all conditions
of the offer are met.
3) Other Provisions.
City's offer is conditioned upon the following:
(1) Termination of all existing leases after City notifies Seller that all other
contingencies have been satisfied;
(2) The City obtaining an acceptable purchase agreement with the owner of the
adjoining property owner to the north (Union Cigar Store Building);
(3) The City obtaining a Certificate of Economic Hardship which would permit the
demolition of the building; and
(4) Approval of the Offer by the City Council.
Union Cigar Store Property.
1) Price. The purchase price is $60,000.00 cash.
2) Possession. A deed for the property will be delivered to the City at such time as all conditions
of the offer are met.
3) Other Provisions.
City's offer is conditioned upon the following:
(1 ) Termination of all existing leases after City notifies Seller that all other
contingencies have been satisfied;
(2) The City obtaining an acceptable purchase agreement with the owner ofthe
adjoining property owner to the south (Merchants Hotel Building);
(3) The City obtaining a Certificate of Economic Hardship which would permit the
demolition of the building;
(4) Approval of the Offer by the City Council;
(5) City has until March 23 to remove all contingencies; and
(6) Closing and settlement shall occur within 30 days of the removal of all
contingencies.
RECOMMENDATION
I recommend that the City Council approve the attached Offer to Buy and Acceptance
agreements. The proposed purchases will facilitate the redevelopment of a significant comer in
the Downtown Area. Reinvestment in the Downtown, and in particular in the Old Main District,
is a top priority for the City Council.
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OFFER TO BUY REAL ESTATE AND ACCEPTANCE
TO: Bette K. Dolan, Seller:
1. REAL ESTATE DESCRIPTION. The Buyer offers to buy real estate in Dubuque County,
Iowa, known as 332-338 Main Street and described as follows:
City Lot 10 in the City of Dubuque, Iowa
with any easements and appurtenant servient estates, but subject to the following: a. any zoning
and other ordinances; b. any covenants of record; c. any easements of record for public utilities,
roads and highways designated the Real Estate; provided Buyer, on possession, is permitted to
make the following use of the Real Estate for any purpose permitted by law.
2. PRICE. The purchase price shall be $50,000.00, payable at DUbuque County, Iowa, as
follows: Payable $1,000.00 upon acceptance of this Offer, balance of $49,000.00 in cash at closing.
3. REAL ESTATE TAXES. Seller shall pay all real estate taxes for all fiscal years which
end prior to date of possession. Real estate taxes for the fiscal year in which date of possession
occurs shall be prorated between Seller and Buyer to date of possession on the basis of a 365 day
calendar year. Buyer shall pay all real estate taxes due in subsequent fiscal years.
4. SPECIAL ASSESSMENTS. Seller shall pay all special assessments which shall be a lien
upon the Real Estate as of the date of closing.
5. RISK OF LOSS AND INSURANCE. Risk of loss prior to Seller's delivery of possession
of the Real Estate to Buyer shall be upon Seller and Seller shall maintain adequate insurance.
6. CARE AND MAINTENANCE. The Real Estate shall be preserved in its present condition
and delivered intact at the time possession is delivered to Buyer, provided, however, if there is loss
or destruction of all or any part of the Real Estate from causes covered by the insurance
maintained by Seller, Buyer agrees to accept such damaged or destroyed Real Estate together with
such insurance proceeds in lieu of the Real Estate in its present condition and Seller shall not be
required to repair or replace same.
7. POSSESSION. If Buyer timely performs all obligati&ns, possession of the Real Estate
shall be delivered to Buyer upon satisfaction of the contingencies contained in 16. Other Provisions,
with any adjustments of rent, insurance, and interest to be made as of the date of transfer of
possession.
8. FIXTURES. All property that integrally belongs to or is part of the Real Estate, whether
attached or detached, such as light fixtures, shades, rods, blinds, awnings, windows, storm doors,
screens, plumbing fixtures, water heaters, water softeners, automatic heating equipment, air
conditioning equipment, wall to wall carpeting, built-in items and electrical service cable, outside
television towers and antenna, fencing, gates and landscaping shall be considered a part of Real
Estate and included in the sale.
9. USE OF PURCHASE PRICE. At time of settlement, funds of the purchase price may
be used to pay taxes and other liens and to acquire outstanding interests, if any, of others.
10. ABSTRACT AND TITLE. Seller, at its expense, shall promptly obtain an abstract of
title to the Real Estate continued through the date of acceptance of this offer, and deliver it to Buyer
for examination. It shall show merchantable title in Seller in conformity with this agreement, Iowa
law and Title Standards of the Iowa State Bar Association. The abstract shall become the property
of the Buyer when the purchase price is paid in full. Seller shall pay the costs of any additional
abstracting and title work due to any act or omission of Seller, including transfers by or the death
of Seller or its assignees.
11. DEED. Upon payment of the purchase price, Seller shall convey the Real Estate to
Buyer or its assignees, by warranty deed, free and clear of all liens, restrictions, and encumbrances
except as provided in 1 a. through 1 .c. Any general warranties of title shall extend only to the time
of acceptance of this offer, with special warranties as to acts of Seller continuing up to time of
delivery of the deed.
12. TIME IS OF THE ESSENCE. Time is of the essence in this contract.
13. REMEDIES OF THE PARTIES
a. If Buyer fails to timely perform this contract, Seller may forfeit it as provided in the Iowa
Code, and all payments made shall be forfeited or, at Seller's option, upon thirty days written notice
of intention to accelerate the payment of the entire balance because of such failure (during which
thirty days such failure is not corrected) Seller may declare the entire balance immediately due and
payable. Thereafter this contract may be foreclosed in equity and Buyer have the right to have all
payments credited to Buyer in the foreclosure.
b. Buyer and Seller also are entitled to utilize any and all other remedies or actions at law
or in equity available to them and shall be entitled to obtain judgment for costs and attorney fees
as permitted by law.
14. CONTRACT BINDING ON SUCCESSORS IN INTEREST. This contract shall apply
to and bind the successors in interest of the parties.
15. TIME FOR ACCEPTANCE. If this offer is not accepted by Seller by or before 5:00
p.m. on Friday, October 23, 1998, it shall become void and all payments shall be repaid to the
Buyer.
16. OTHER PROVISIONS.
(A) Termination of Leases. Upon satisfaction of all other conditions set forth herein and
prior to possession by Buyer, Seller shall terminate all existing leases.
(B) Contingent Purchase. This Offer is contingent upon the Buyer obtaining an acceptable
purchase agreement with the owner of the adjoining property to the south.
(C) Approval for Demolition. This Offer is contingent upon the Buyer obtaining a Certificate
of Economic Hardship from the City of Dubuque Historic Preservation Commission which
would permit the demolition of the building on the Real Estate.
(D) City Council Approval. This Offer is contingent upon approval by the City Council of the
City of Dubuque, Iowa.
Dated: October 16, 1998
By:
Micha
~~-~~
By:4z6, ~/2~~
THIS OFFER IS JmCE;;:PfE:e
Bette K. Dolan, SELLER
~o Carbon Needed
, ADDENDUM - DBR 1
COUNTER OFFER
Dated:
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Time:
made by '-rA e (11);j 1 /JtAb{ty-~
dated /0/ / ~ 19, ~ , the following Counter Offer is hereby submitted:
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rB11 (' 11Y\~'Y\f)e-n~ {o be- Y&rl1dV~~ (if! af f:x60Y0
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OTHER TERMS: All other terms to remain the same,
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NOTE: This cou.t::hOffer shall expire unless, prior to ~: 00 --p-- ' m, on the
day of Oc: ~ 19:iK..- , buyer(s) shall accept this CoJnter Offer by:
(1) Signing the Acceptance of Counter Offer below; and
(2) Delivering a copy of the signed Acceptance of Counter Offer to owner(s) or owner(s)' listing agent.
Owner(s) reserve the right to withdraw this Counter Offer, before its expiration, by written notice delivered to
buyer(s) or buyer(s)' agent prior to buyer(s)' compliance with paragraphs (1) and (2) above.
(~7dZi ~ f)/~
Seller's Signature
d7ti-
Seller's Signature
---------------------------------------------------------------------------------------------------------------------------------------
ACCEPTANCE OF COUNTER OFFER
The undersigned buyer(s) accept the above Counter Offer this
19_,at _.m.
day of
Buyer
Buyer
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RECEIPT
The undersigned owner(s) or owner(s)' listing agent acknowledges receipt of a copy of the above accepted Counter
Offer this day of ,19 _. at _ .m,
Owner (or Listing Agent)
Signature of Listing Agent creates a binding contract.
Owner (or Listing Agent)
Addendum ONE-Dubuque Board of Realtors 1993
OFFER TO BUY REAL ESTATE AND ACCEPTANCE
TO: William Hos Estate, Seller:
1. REAL ESTATE DESCRIPTION. The Buyer offers to buy real estate in Dubuque
County, Iowa, known as the Merchant's Hotel property and described as follows:
City Lot 9 in the City of Dubuque, Iowa
with any easements and appurtenant servient estates, but subject to the following: a. any
zoning and other ordinances; b. any covenants of record; c. any easements of record for
public utilities, roads and highways designated the Real Estate; provided Buyer, on
possession, is permitted to make the following use of the Real Estate for any purpose
permitted by law.
2. PRICE. The purchase price shall be $ 20,000.00, payable at Dubuque County,
Iowa, as follows: Payable $1,000.00 upon acceptance of this Offer, balance of $19,000.00
in cash at closing.
3. REAL ESTATE TAXES. Seller shall pay any unpaid real estate taxes payable
for Fiscal Year 1997-98 and prior years. Real estate taxes for Fiscal Year 1998-99 shall
be prorated to the date of closing. Any proration of real estate taxes on the Real Estate
shall be based upon such taxes for the year currently payable unless the parties state
otherwise.
4. SPECIAL ASSESSMENTS. Seller shall pay all special assessments which shall
be a lien upon the Real Estate as of the date of closing.
5. RiSK OF LOSS AND INSURANCE. Risk of loss prior to Seiler's delivery of
possession of the Real Estate to Buyer shall be upon Seller and Seller shall maintain
adequate insurance.
6. CARE AND MAINTENANCE. The Real Estate shall be preserved in its present
condition and delivered intact at the time possession is delivered to Buyer, provided,
however, if there is loss or destruction of all or any part of the Real Estate from causes
covered by the insurance maintained by Seller, Buyer agrees to accept such damaged or
destroyed Real Estate together with such insurance proceeds in lieu of the Real Estate in
its present condition and Seller shall not be required to repair or replace same.
7. POSSESSION. If Buyer timely performs all obligations, possession of the Real
Estate shall be delivered to Buyer on September 1, 1998, with any adjustments of rent,
insurance, and interest to be made as of the date of transfer of possession.
8. FIXTURES. All property that integrally belongs to or is part of the Real Estate,
whether attached or detached, such as light fixtures, shades, rods, blinds, awnings,
windows, storm doors, screens, plumbing fixtures, water heaters, water softeners,
automatic heating equipment, air conditioning equipment, wall to wall carpeting, built-in
items and electrical service cable, outside television towers and antenna, fencing, gates
and landscaping shall be considered a part of Real Estate and included in the sale.
9. USE OF PURCHASE PRICE. At time of settlement, funds of the purchase price
may be used to pay taxes and other liens and to acquire outstanding interests, if any, of
others.
10. ABSTRACT AND TITLE. Seller, at its expense, shall promptly obtain an
abstract of title to the Real Estate continued through the date of acceptance of this offer,
and deliver it to Buyer for examination. It shall show merchantable title in Seller in
conformity with this agreement, Iowa law and Title Standards of the Iowa State Bar
Association. The abstract shall become the property of the Buyer when the purchase price
is paid in full. Seller shall pay the costs of any additional abstracting and title work due to
any act or omission of Seller, including transfers by or the death of Seller or its assignees.
11. DEED. Upon payment of the purchase price, Seller shall convey the Real
Estate to Buyer or its assignees, by warranty deed, free and clear of all liens, restrictions,
and encumbrances except as provided in 1 a. through 1 .c. Any general warranties of title
shall extend only to the time of acceptance of this offer, with special warranties as to acts
of Seller continuing up to time of delivery of the deed.
12. TIME IS OF THE ESSENCE. Time is of the essence in this contract.
13. REMEDIES OF THE PARTIES
a. If Buyer fails to timely perform this contract, Seller may forfeit it as provided in the
Iowa Code, and all payments made shall be forfeited or, at Seller's option, upon thirty days
written notice of intention to accelerate the payment of the entire balance because of such
failure (during which thirty days such failure is not corrected) Seller may declare the entire
balance immediately due and payable. Thereafter this contract may be foreclosed in equity
and thehave the right to have all payments made returned to them.
b. Buyer and Seller also are entitled to utilize any and all other remedies or actions
at law or in equity available to them and shall be entitled to obtain judgment for costs and
attorney fees as permitted by law.
14. CONTRACT BINDING ON SUCCESSORS IN INTEREST. This contract shall
apply to and bind the successors in interest of the parties.
15. TIME FOR ACCEPTANCE. If this offer is not accepted by Seller at or before
5:00 p.m., on Monday, August 3, 1998, it shall become void and all payments shall be
repaid to the Buyer.
16. OTHER PROVISIONS.
//1
v/
(A) Termination of Leases. Upon satisfaction of all other conditions set forth herein
and prior to possession by Buyer, Seller shall terminate all existing leases.
./
V
(B) Contingent Purchase. This Offer is contingent upon the Buyer obtaining an
acceptable purchase agreement with the owner of the adjoining property to the
north.
(C) Approval for Demolition. This Offer is contingent upon the Buyer obtaining a
Certificate of Economic Hardship from the City of Dubuque Historic Preservation
Commission which would permit the demolition of the building on the Real Estate.
v
(D) City Council Approval. This Offer is contingent upon approval by the City
Council of the City of Dubuque, Iowa.
Dated:
July 24, 1998
City Of~UbUquei lowa,:UYER 1 /
By: .. rk hll) fz~,,/>7Jv~
Michael Van Milligen, City Manag~~
THIS OFFER IS ACCEPTED
Subject to Buyers Acceptance of the attached Counter Offer.
:m ~
By
COUNTER OFFER
FROM:
William N. Hos Estate
TO:
City of Dubuque
RE:
Counter Offer to Offer to Buy Real Estate And Acceptance
dated 7/24/1998.
The following terms as submitted:
A. Paragraph" 5. Risk of Loss And Insurance" be stricken
and in lieu thereof the following inserted:
"5. Risk of Loss and Insurance.
All Risk of Loss subsequent to the date hereof to
be borne by Buyer.
B. Paragraph "6. Care and Maintenance." be striken and
in lieu thereof the following inserted:
"6. Care And Maintenance. The Real Estate shall be
preserved in its present condition and delivered intact at the time of
possession. Seller shall be allowed to remove non-fixture, personal
items as Seller desires, prior to date of possession."
C. Paragraph" 13. Remedies of The Parties";
be amended to read:
"13. Remedies of The Parties.
a. If Buyers fail to timely perform this contract,
Sellers may forfeit it as provided in the Iowa Code, and all payments
made shall be forfeited or, at Seller's option, upon thirty days written
notice of intention to accelerate the payment of the entire balance
because of such failure (during which thirty days such failure is not
corrected) Sellers may declare the entire balance immediately due and
payable. Thereafter this contract may be foreclosed in equity and the
Court may appoint a receiver.
b. If Sellers fail to timely perform this contract,
Buyers have the right to have all payments made returned to them.
c. Buyers and Sellers also are entitled to utilize
any and all other remedies or actions at law or in equity available to
them and shall be entitled to obtain judgment for costs and attorney
fees as permitted by law.
D. Paragraph" 16 Other Provisions" be amended as follows:
By eliminating contingencies "(A)"; "(B)" and "(C)";
and by amending contingency "( D)" to read:
Page 2 of Pages
"(D) 11 City Council Approved. This Offer is contingent
upon the approval by the City Council of the City of Dubuque, Iowa,
by August 18, 1998.
WILLIAM N. HOS ESTATE, SELLER
r~
The terms of the above Counter Offer are accepte~
SI10Ject to S::llei' Acceptance of tile attached Contingent Acceptancet::.unter Offer
CITY OF DUBUQUE, IOWA, BUYERS
By:
Michael Van Milligen, City Manager
CONTINGENT ACCEPTANCE COUNTER OFFER
FROM THE CITY OF DUBUQUE TO THE WILLIAM HOS ESTATE
The City of Dubuque accepts the counter offer of the William Hos Estate, Seller provided
that paragraph D. thereof shall read as follows:
D. Paragraph 16 OTHER PROVISIONS be amended as follows: By adding the
following sentence to subparagraph(A) therof: "Seller need not terminate the
existing leases until Buyer notifies Seller in writing that the contingencies
contained in paragraph 16(B), 16( C) and 16(D) have been satisfied."
DATED: Octoberj,{g'tb, 1998
By:
ACCEPTED:
By:
CONTINGENT ACCEPTANCE OF COUNTER OFFER
FROM CITY OF DUBUQUE, IOWA TO BETTE K. DOLAN
The City of Dubuque, Buyer, accepts the counter offer of Bette K. Dolan, Seller, dated
October 22, 1998, provided that:
1) Purchase price shall be $60,000.00,
2) Buyer shall have 120 days following Seller's acceptance of this contingent acceptance
counter offer to remove all contingencies, and
3) Closing and settlement shall occur within 30 days of the removal of all contingencies.
CrTY OF DUBUQUE, row A, Bu er
ichael Van Milligen, City Manager
If /Jt/C;;-
I I
By:
Date:
ACCEPTED:
By:
Bette K. Dolan, Seller
Date: