McGraw-Hill Companies_Assignment of Development AgreementIOWA Efcr`bMIC DEVELOPMENT AUTHORITY
200 East Grand Avenue 1 Des Moines, Iowa 50309 USA 1 Phone: 515.725.3000
iowaeconomicdevelopment.com
December 11, 2017
Mr. Matthew Klaskin, Real Estate Services Manager
McGraw-Hill Education
2 Penn Plaza, 20th Floor
New York, NY 10121
RE:
Notice of Full Default
Contract Number P0506M00834
Funding Agreement 06 -EZ -029
Dear Mr. Klaskin:
i 1ECE ..D
I )WA
economic development
17 DEC 114 PM I:42
City Dark's s Office
e.tklfiid1Returihi Receipt Request
NOTICE OF DEFAULT -
UNABLE TO CURE
Based on review of the 2017 Annual Status Report, IEDA has determined that an Event of
Default has occurred due to the failure by McGraw Hill Higher Education•Division to maintain the
job creation requirements of the above -referenced Contract.
The business was required to create 24 full-time equivalent (FTE) qualified jobs above a base
employment of 276. The 2017 Annual Status Report showed 279 total FTE jobs.
Since the business is unable to cure this default, the company will be required to fully repay the
tax credit benefits per 5.3(a)(iv) of the EZ Funding Agreement. A copy of this Notice will be.
provided to the Iowa Department of Revenue (IDR) since it is the state agency authorized to
collect tax credit benefits that have been claimed. The method,'amount and schedule of
repayment will be determined by the IDR.
Should you have any questions, please feel free to contact Lisa Connell at 515-348-6163 or
lisa.connell@iowaeda.com.
Sincerely,
Jennifer Klein
Gener; Counsel
cc: IEDA Accounting File
IEDA Compliance File
Mayor Roy D. Buol, City of Dubuque
Jennifer Tilkes, Iowa Department of Revenue
Governor Kim Reynolds 1 Lt. Governor Adam Gregg 1 Director Debi V. Durham
Masterpiece on the Mississippi
Dubuque
All- America City
II 111!
2012
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: The McGraw -Hill Companies, Inc. Assignment of Development Agreement
DATE: November 27, 2012
The City entered into a Development Agreement with McGraw -Hill Companies, Inc. on
June 19, 2006. Pursuant to the Development Agreement, McGraw -Hill constructed a
building and occupies that building in conjunction with its education products operations.
McGraw -Hill Companies, Inc. has formed a wholly -owned subsidiary, McGraw -Hill
Education, LLC, to which it intends to transfer all its education products activities. That
includes the operations in Dubuque.
Attorney Mark A. Engel, representing the McGraw -Hill Companies, Inc. requests that
the City consent to an assignment of the Development Agreement from the McGraw -Hill
Companies, Inc. to McGraw -Hill Education, LLC.
City Attorney Barry Lindahl recommends City Council approval of the assignment of the
Development Agreement.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
kr,„709,,,
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
THE CITY OF
DUB E MEMORANDUM
Masterpiece on the Mississippi
BARRY LINDAHL
CITY ATTORNEY
To: Michael C. Van Milligen
City Manager
DATE: November 26, 2012
RE: The McGraw -Hill Companies, Inc. Assignment of Development Agreement
The City entered into a Development Agreement with McGraw -Hill Companies, Inc. on
June 19, 2006. Pursuant to the Development Agreement, McGraw -Hill constructed a
building and occupies that building in conjunction with its education products operations.
McGraw -Hill Companies, Inc. has formed a wholly -owned subsidiary, McGraw -Hill
Education, LLC, to which it intends to transfer all its education products activities. That
includes the operations in Dubuque.
Attached is a letter dated November 26, 2012 from Attorney Mark A. Engel,
representing the McGraw -Hill Companies, Inc. Mr. Engel is requesting that the City
consent to an assignment of the Development Agreement from the McGraw -Hill
Companies, Inc. to McGraw -Hill Education, LLC. Section 13.6 of the Development
Agreement allows an assignment of the Development Agreement upon the written
consent of the City.
A copy of the Assignment Agreement is also attached. Pursuant to the Assignment
Agreement, McGraw -Hill Education, LLC assumes all rights, benefits, and obligations
set forth in the Development Agreement.
I have prepared a resolution consenting to the assignment of the Development
Agreement.
I recommend that the resolution be submitted to the Mayor and City Council for
consideration and approval.
BAL:tls
cc: Dave Heiar, Economic Development Director
Mark A. Engel, Esq.
F: \USERS \Laserfiche Legal \McGraw Hill \MVM_AssignmentOfDA_112612.doc
OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA
SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001 -6944
TELEPHONE (563) 583 -4113 / FAX (563) 583 -1040 / EMAIL balesq @cityofdubuque.org
Bricker & Eckler
ATTORNEYS AT LAW
COLUMBUS I CLEVELAND
CINCINNATI - DAYTON
BRICKER & ECKLER LLP
9277 Centre Pointe Drive
Suite 100
West Chester, Ohio 45069 -4891
MAIN: 513.870.6700
FAX: 513.870.6699
www.bricker.com
info @bricker.com
Mark A. Engel
513.870.6565
mengel @bricker.com
5903601v1
November 26, 2012
Via Electronic Mail
Barry Lindahl, Esq.
City Attorney
City Hall
50 West 13th Street
Dubuque, IA 52001
Re: The McGraw -Hill Companies, Inc.
Assignment of Development Agreement
Dear Mr. Lindahl:
The McGraw -Hill Companies, Inc. is the recipient of an economic
development grant from the City of Dubuque with respect to its development of an
office building in the City. The agreement is dated June 19, 2006. McGraw -Hill
constructed the building and occupies it in conjunction with its education products
operations.
The McGraw -Hill Companies, Inc. has formed a wholly -owned limited
liability company, McGraw -Hill Education LLC, to which it intends to transfer all
its education products activities. The operations in Dubuque are among those
proposed to be transferred to McGraw -Hill Education, Inc. McGraw -Hill Education
will continue to operate the facility after the transfer.
Sections 13.6 of the agreement permits an assignment of the agreement by
The McGraw -Hill Companies, Inc. upon the written consent of the City. We are
requesting that the City consent to the assignment of the Agreement to, and the
acceptance of the obligations by, McGraw -Hill Education LLC.
When we spoke by telephone, you instructed me to send you a letter
describing the transaction, together with a copy of any assignment agreement
between the parties. You indicated the matter would then be placed on the city
council agenda for consideration at its next meeting. Enclosed is a copy of the
Assignment Agreement, pursuant to which McGraw -Hill Education, Inc. agrees to
accept the assignment and to be responsible for all obligations under the Agreement.
Please let me know if you need any additional information. If nothing
further is needed, please see that this is placed on the agenda for the next city
council meeting.
cc: Margaret A. DeWald
David G. Baker
Sincerely,
7)latk" ji. Eng-et/AL
Mark A. Engel
Preparer: Barry A. Lindahl, Esq. Suite 330, Harbor View Place, 300 Main Street, Dubuque, IA 52001 (563) 583 -4113
RESOLUTION NO. 336 -12
CONSENTING TO THE ASSIGNMENT OF THE DEVELOPMENT AGREEMENT
BETWEEN THE CITY OF DUBUQUE, IOWA AND MCGRAW -HILL COMPANIES, INC.
TO MCGRAW -HILL EDUCATION, LLC
Whereas, the City of Dubuque entered into a Development Agreement. with
McGraw Hill Companies, Inc. dated June 19, 2006; and
Whereas, the Development Agreement required, among other things, that
McGraw Hill Companies, Inc. construct and operate a facility in the city of Dubuque on
Part of Lot 1 of Riverwalk Sixth Addition in the City of Dubuque, Iowa, according to the
recorded plat thereof; and
Whereas, McGraw -Hill Companies, Inc. has constructed the facility and operates
the facility in the city of Dubuque; and
Whereas, McGraw -Hill Companies, Inc. now desires to assign its rights and
responsibilities under the Development Agreement to a wholly -owned subsidiary,
McGraw -Hill Education, LLC, to which it intends to transfer its facility and operations in
the city of Dubuque; and
Whereas, Section 13.6 of the Development Agreement requires the consent of
the City to any such assignment; and
Whereas, the City Council of the City of Dubuque finds that the City of Dubuque
should consent to the assignment, a copy of which Assignment Agreement is attached
hereto.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. The City of Dubuque hereby consents to the Assignment Agreement,
a copy of which is attached hereto.
Passed, approved and adopted this 3rd day of Decmeber , 2012.
Attest:
Kevin : Firnstahl, CI y
STATE OF IOWA
COUNTY OF DUBUQUE
SS
Roy D. Buol, Mayor
On this a day of ,2012, before me a Notary Public in and
for said County, personally appeared Roy D. Buol and Kevin S. Firnstahl to me
personally known, who being duly sworn, did say that they are the Mayor and City
Clerk, respectively of the City of Dubuque, Iowa, a Municipal Corporation, created and
existing under the laws of the State of Iowa, and that the seal affixed to the foregoing
instrument is the seal of said Municipal Corporation, and that said instrument was
signed and sealed on behalf of said Municipal Corporation by authority and resolution of
its City Council and said Mayor and City Clerk acknowledged said instrument to be the
free act and deed of said Municipal Corporation by it voluntarily executed.
H L. a LEMON
commission Number 719986
My Commission Expires
ai
QJil,;11C1
Notary Public in and for Dubuque County, Iowa
F: \USERS \Laserfiche Legal \McGraw Hill\ ResolutionApprovingAssignmentOfDA _112612.doc
ASSIGNMENT AGREEMENT
This Assignment Agreement is made and effective this .7bt'' day of Noamibsr2012, by and between
The McGraw -Hill Companies, Inc., a New York Corporation ( "Assignor "), and McGraw -Hill
Education, LLC, a Delaware limited liability corporation ("Assignee;" together with Assignor,
the "Parties ").
WHEREAS, Assignor has caused Assignee to be formed as a wholly -owned subsidiary of
Assignor; and
WHEREAS, Assignor has, or will cause to be, transferred to Assignee the assets of its higher
education products operations; and
WHEREAS, among the assets that Assignor has, or will cause to be, transferred to Assignee is a
parcel of real property and improvements, known as part of Lot 1 of Riverwalk Sixth Addition in
the City of Dubuque, Dubuque County, Iowa, according to the recorded Plat thereof, subject to
easements and restrictions of record (the "Property "); and
WHEREAS, the development of the Property by Assignor was the subject of a Development
Agreement between the City of Dubuque, Iowa and Assignor, dated June 19, 2006, as amended
by agreement in December 2008 (the "Development Agreement "); and
WHEREAS, pursuant to Sections 13.7 and 19.2 of the Development Agreement, Assignor may
assign the Development Agreement and its obligations to the Assignee, provided that the other
party to the Development Agreement consents in writing to such assignment; and
WHEREAS, the Property was also subject to a Master Contract between Assignor and the Iowa
Department of Economic Development, Contract Number P0506M00834, effective December
14, 2006, and as amended by agreement effective October 16, 2008 (the "Master Contract "); and
WHEREAS, pursuant to Sections 8.9, 8.17(a) and (b), and 10.13, the Property and the Master
Contract may be assigned by Assignor with the written consent of the Iowa Department of
Economic Development; and
WHEREAS, Assignor wishes to assign to Assignee, and Assignee wishes to accept from
Assignor, both the Development Agreement and the Master Contract.
NOW THEREFORE, in consideration of the promises and mutual obligations of the Parties:
1. Assignor hereby assigns both the Development Agreement and the Master
Contract, both as amended, including all rights, benefits and obligations relating
to them, to Assignee.
2. Assignee hereby accepts the assignment of both the Development Agreement and
the Master Contract, both as amended, from Assignor, and assumes all rights,
benefits, and obligations set forth in both of them.
5315263v1
3. The Parties agree to cooperate with seeking the written consent of the City of
Dubuque with respect to the assignment of the Development Agreement, and the
written consent of the Iowa Department of Economic Development with respect
to the assignment of the Master Contract.
IN WITNESS WHEREOF, the Parties have caused this Assignment Agreement to be executed
by their duly- authorized representatives to be effective as of the date and year set forth in the
first paragraph of this Assignment Agreement.
THE McGRAW -HILL COMPANIES, INC. McGRAW -HILL EDUCATION, LLC
5315263v1
Name: Pa1 r! C K ►A ( Q rl a
DEVELOPMENT AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
THE MCGRAW -HILL COMPANIES, INC.
his Develo • ► ent £ • reement (Agreement), dated for reference purposes
the /9'day of /� , 2006 between the City of Dubuque, Iowa, a
municipality (C' , acting under authorization of Iowa Code Chapter 403, as
amended (Urban Renewal Act), and The McGraw -Hill Companies, Inc., a New
York corporation, with its principal place of business at New York, NY (McGraw -
Hill).
SECTION 1. RECITALS. In furtherance of the objectives of the Urban
Renewal Act, City has undertaken an Urban Renewal project to advance the
community's ongoing economic development efforts, specifically, McGraw -Hill
desires to construct an office building (the Project) in the Port of Dubuque,
Dubuque, Iowa (the Project Area) as shown on the Site Plan, Exhibit B attached
hereto and incorporated herein by reference. As of the date of this Agreement
there has been prepared and approved by City an Urban Renewal Plan for the
Project Area consisting of the Urban Renewal Plan for the Port of Dubuque
Economic Development District, approved by City Council of City on April 19,
2004, and as subsequently amended through and including the date hereof,
(attached as Exhibit A)(the Urban Renewal Plan). A copy of the Urban Renewal
Plan, as constituted on the date of this Agreement and in the form attached
hereto, has been recorded among the land records in the office of the Recorder
of Dubuque County, Iowa.
1.1. McGraw -Hill has determined that it requires a new office building to
maintain and expand its operations and employment, which office building
McGraw -Hill represents will be a regional office facility for a multistate business,
and is prepared to cause the Project to be constructed in the Project Area.
McGraw -Hill has requested that City sell to McGraw -Hill that portion of the
following- described real estate consisting of 2.015 acres depicted on the drawing
attached as Exhibit B and by this reference made a part hereof:
Part of Lot 1 of Riverwalk Sixth Addition in the City of
Dubuque, Iowa, according to the recorded Plat thereof, subject
to easements and restrictions of record a shown on Exhibit B
together with all easements, tenements, hereditaments, and appurtenances
belonging thereto (the Property) so that McGraw -Hill may develop the Property,
located in the Project Area, for the construction, use and occupancy of an office
1
building with appurtenant uses which City has determined and represented to
McGraw -Hill is in accordance with the uses specified in the Urban Renewal Plan
and in accordance with this Agreement.
The parties agree to amend Exhibit B upon determination of the exact location
and extent of the Property and legal description.
1.2. City believes that the development of the Property pursuant to this
Agreement, and the fulfillment generally of this Agreement, are in the vital and
best interests of City and in accord with the public purposes and provisions of the
applicable federal, state and local laws and the requirements under which the
Project has been undertaken and is being assisted.
Therefore, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as
follows below.
SECTION 2. CONVEYANCE OF PROPERTY TO MCGRAW -HILL.
2.1. Purchase Price. The purchase price for the Property (the Purchase
Price) shall be the sum of Four Hundred Thirty - FiveThousand , Six Hundred &
00/100 Dollars ($435,600.00) per acre, which shall be due and payable by
McGraw -Hill in immediately available funds in favor of City, on June 30, 2006, or
on such other date as the parties may mutually agree (the Closing Date).
2.2. Title to Be Delivered. City agrees to convey good and marketable fee
simple title in Property to McGraw-Hill subject only to easements, restrictions,
conditions and covenants of record as of the date hereof to the extent not
objected to by McGraw - Hill as set forth in this Agreement, and to the conditions
subsequent set forth in Section 4, below:
(1) City, at its sole cost and expense, shall deliver to McGraw -Hill an
abstract of title to the Property continued through the date of this
Agreement reflecting merchantable title in City in conformity with this
Agreement, applicable State law and the Title Standards of the Iowa State
Bar Association and sufficient for a title company selected by McGraw -Hill
to issue, at McGraw - Hill's expense, an ALTA form owner's and lender's
policy of title insurance in form and substance satisfactory to McGraw -Hill.
The abstract shall be delivered together with full copies of any and all
encumbrances and matters of record applicable to the Property, and such
abstract shall become the property of McGraw-Hill when the Purchase
Price is paid in full in the manner as aforesaid.
(2) McGraw -Hill shall have until the Closing Date to render objections
to title, including any easements or other encumbrances not satisfactory to
2
McGraw -Hill, in writing to City. McGraw -Hill agrees, however, to review
the Abstract promptly following McGraw - Hill's receipt of McGraw - Hill's
land survey and the Abstract and to promptly provide City with any
objections to title identified therein. Nothing herein shall be deemed to
limit McGraw - Hill's rights to raise new title objections with respect to
matters revealed in any subsequent title examinations and surveys and
which were not identified in the Abstract provided by City. City shall
promptly exercise its best efforts to have such title objections removed or
satisfied and shall advise McGraw -Hill of intended action within ten (10)
days of such action. If City shall fail to have such objections removed as
of Closing, or any extension thereof consented to by McGraw -Hill,
McGraw -Hill may, at its sole discretion, either (1) terminate this Agreement
without any liability on its part, and any sums previously paid to City by
McGraw -Hill (or paid into escrow for City's benefit) shall be returned to
McGraw -Hill with interest, or (2) take title subject to such objections. City
agrees to use its best reasonable efforts to promptly satisfy any such
objections. City acknowledges that McGraw -Hill needs to acquire the
Property and commence construction as provided in Section 10.3, in order
to meet construction and delivery deadlines, and City agrees to exercise
its best reasonable efforts to facilitate completion of City's duties
hereunder in order to accommodate a Closing before such date.
2.3. Rights of Inspection, Testing and Review. McGraw -Hill, its counsel,
accountants, agents and other representatives, shall have full and continuing
access to the Property and all parts thereof, upon reasonable notice to City.
McGraw -Hill and its agents and representatives shall also have the right to enter
upon the Property at any time after the execution and delivery hereof for any
purpose whatsoever, including inspecting, surveying, engineering, test boring,
performance of environmental tests and such other work as McGraw -Hill shall
consider appropriate, provided that McGraw -Hill shall hold City harmless and
fully indemnify City against any damage, claim, liability or cause of action arising
from or caused by the actions of McGraw -Hill, its agents, or representatives upon
the Property (except for any damage, claim, liability or cause of action arising
from conditions existing prior to any such entry upon the Property), and shall
have the further right to make such inquiries of governmental agencies and utility
companies, etc. and to make such feasibility studies and analyses as it considers
appropriate.
Notwithstanding the foregoing, McGraw -Hill acknowledges that the Property will
be the site of a part of the America's River Festival from June 5 through June 12,
2006, and McGraw -Hill agrees that it will not have access to the Property during
such period without the prior consent of City.
(1) Environmental Investigation. McGraw -Hill shall have the right to
inspect the Property prior to the Closing Date and to take whatever tests
3
or perform such examination, as McGraw -Hill shall deem appropriate, at
its own risk and its sole cost and expense, to evaluate the environmental
condition of the Property and allow City to make the environmental
determinations required herein. Prior notice of such activity by McGraw -
Hill shall be provided to City and written results of such activity shall be
shared with City. McGraw —Hill shall not disclose the information from the
investigation or the report of the investigation to any party other than City
without the prior consent of City except as required by law, and except
that to the extent that such information is necessary to McGraw- Hill's
architects, engineers, surveyors, and contractors, provided, however, that
prior to disclosure to any such person, McGraw -Hill shall require such
person to execute a confidentiality agreement, in a form acceptable to
City, in which such persons agrees not to disclose such information to any
other person.
(2) Remediation. Prior to Closing, if City determines, after
consideration of the advice of its environmental consultant and /or the
advice of state or federal environmental regulatory agencies, that the
concentrations of Hazardous Substances on the Property require removal
and /or remediation (Remediation) prior to construction of the Minimum
Improvements and notifies McGraw -Hill of its determination, then
McGraw -Hill shall retain, at its sole cost and expense, an environmental
consultant to prepare a plan (Environmental Remediation Plan) for the
removal and /or remediation of the identified Hazardous Substances as
required by law and /or applicable environmental agency or agencies. The
Environmental Remediation Plan shall provide for the removal and /or
remediation of the identified Hazardous Substances to a level sufficient to
allow construction of the Minimum Improvements. The Environmental
Remediation Plan shall include an estimate of the total costs of conducting
the removal and /or remediation (Remediation Costs) to allow such
construction. The estimate of costs shall be based, on the cost of local
contractors, provided local contractors are qualified and available to
perform such work. The estimate of costs shall not include internal staff
costs to City. In lieu of preparing the Environmental Remediation Plan,
McGraw -Hill, in its sole discretion, may elect to terminate this Agreement
upon thirty (30) days written notice to City, without any further obligation
on the part of McGraw -Hill or City.
(3) Cap on Remediation Costs for City. If after submitting a
Remediation Plan to City, it is reasonably determined by the City Council
of City, based upon the recommendation by its environmental consultant,
that the Remediation Costs necessary to allow construction of the
Minimum Improvements will exceed two times Purchase Price, then City
shall have the option to terminate this Agreement within thirty days after
receiving the Environmental Remediation Plan or thirty days after receipt
4
of state or federal environmental agency approval, if such approval is
required or sought by City, whichever date occurs later. If it is reasonably
determined by the City Council that the Remediation Costs necessary to
allow construction of the Minimum Improvements will not exceed two
times the Purchase Price, then City agrees to share the costs of such
removal and /or remediation with McGraw -Hill as follows:
(i) City shall pay the first $100,000 of the Remediation Costs;
(ii) The difference between $100,000 and two times the
Purchase Price shall be shared by the parties as follows:
(a) City: 43.5 %;
(b) McGraw -Hill: 56.5 %.
City's total share of the Remediation Costs shall not exceed the
Purchase Price.
McGraw -Hill shall be solely responsible for the remainder of the
Remediation Costs and any other removal and /or remediation required by
this Agreement, law or any governmental agency. Unless McGraw -Hill
has elected to terminate this Agreement as provided in Sec. 2.3(2),
McGraw —Hill shall proceed to design and implement the removal or
remediation pursuant to the Environmental Remediation Plan in a timely
manner. McGraw -Hill hereby releases City, its officers, agents and
employee from and shall protect, defend, and hold harmless City, its
officers, agents and employees, from any claim, demand, suit, action or
other proceedings whatsoever by McGraw -Hill arising from the condition
of the 'Property and any hazardous substance in or on the Property.
(4) Release of Reports and Data. McGraw -Hill shall promptly provide
City with a copy of all environmental consulting or engineering reports,
separate laboratory analysis reports, and other material information and
data received by McGraw -Hill regarding the environmental condition of the
Property, or which are otherwise received or generated pursuant to this
Agreement.
(5) Definitions. For the purposes of this Agreement, the following
definitions shall apply:
(i) "Environmental Law" means any and all federal, state and /or
local laws, regulations and legal requirements pertaining to (i) the
protection of health, safety and the indoor and outdoor
environment, (ii) the conservation, management or use of natural
resources and wildlife, (iii) the protection, access to or use of
surface water and groundwater, (iv) the management, manufacture,
possession, presence, use, generation, transportation, treatment)
storage, disposal, Release, threatened Release, abatement,
5
removal, remediation or handling of, or exposure to, any Hazardous
Substance or (v) pollution (including, without limitation, any Release
to air, land, surface water and groundwater), and includes, without
limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the
Superfund Amendment and Reauthorization Act of 1986, 42 USC
9601 et seq; the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and the
Hazardous and Solid Waste Amendments of 1984, 42 USC 6901 et
seq.; the Federal Water Pollution Control Act, as amended by the
Clean Water Act of 1977, 33 USC 1251 et seq.; the Clean Air Act of
1966, as amended, 41 USC 7401 et seq.; the Toxic Substances
Control Act of 1976, 15 USC 2601 et seq.; the Hazardous
Substances Transportation Act, 49 USC App. 1801 et seq.; the
Occupational Safety and Health Act of 1970, as amended, 29 USC
651 et seq.; the Oil Pollution Act of 1990, 33 USC 2701 et seq.; the
Emergency Planning and Community Right -to -Know Act of 1986,
42 USC 11001 et seq.; the National Environmental Policy Act of
1969, 42 USC 4321 et seq.; the Safe Drinking Water Act of 1974,
as amended, 42 USC 300(f) et seq.; Chapter 455B of the Iowa
Code; any similar, implementing or successor law to any of the
foregoing and any amendment, rule, regulation, order or directive
issued thereunder.
(ii) "Hazardous Substance" or "Hazardous Substances" means any
hazardous or toxic substance, material or waste, which is or
becomes regulated by any local government, the State of Iowa or
the United States Government. It includes, without limitation, any
material or substance that is (i) defined as a "hazardous substance"
or "hazardous waste" under Chapter 455B, Iowa Code, (ii)
petroleum and petroleum products, (iii) asbestos containing
materials in any form or condition, (iv) designated as a "hazardous
substance" pursuant to Section 311 of the Federal Water Pollution
Control Act (33 U.S.C. § 1321), (v) defined as a "hazardous waste
pursuant to § 1004 of the Federal Resource Conservation and
Recovery Act, 42 U.S.C. §6901 et seq., (vi) defined as a
"hazardous substance" pursuant to § 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, U.S.0 §
9601 et seq., or (vii) defined as a "regulated substance" pursuant to
Subchapter IX, Solid Waste Disposal Act (Regulation of
Underground Storage Tanks), 42 U.S.C. § 6991 et seq.] The term
"Hazardous Substance" shall not include any air emissions
discharged into the atmosphere as allowed by a duly issued permit
from the applicable governmental agency.
(iii) "Release" means any spilling, migrating, seeping, leaking,
pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing of any Hazardous
Substance into the indoor or outdoor environment, including,
without limitation, the abandonment or discarding of barrels, drums,
containers, tanks and other receptacles containing or previously
containing any Hazardous Substance and including without
limitation the migration of any Hazardous Substance onto the
Property from an adjacent property.
SECTION 3. REPRESENTATIONS OF CITY. In order to induce McGraw -Hill
to enter into this Agreement and purchase the Property, City hereby represents
and warrants to McGraw -Hill, that to the best of City's knowledge:
3.1. No action in condemnation, eminent domain or public taking proceedings
are now pending or contemplated against the Property ;
3.2. No ordinance or hearing is pending or contemplated before any local
governmental body which either contemplates or authorizes any public
improvements or special tax levies, the cost of which may be assessed against
Property;
3.3. City has good and marketable fee simple title interest to the Property;
3.4. There are no notices, orders, suits, judgments or other proceedings
relating to fire, building, zoning, air pollution, health violations or other matters
that have not been corrected. City has notified McGraw -Hill in writing of any past
notices, orders, suits, judgments or other proceedings relating to fire, building,
zoning, air pollution or health violations as they relate to the Property of which it
has actual notice;
3.5. The Property will as of the date of closing be free and clear of all liens,
security interests, and encumbrances;
3.6. City has duly obtained all necessary approvals and consents for its
execution, delivery and performance of this Agreement, and that it has full power
and authority to execute, deliver and perform its obligations under this
Agreement. City's attorney shall issue a legal opinion to McGraw -Hill at the time
of closing confirming the representation contained herein, in form and substance
attached hereto as Exhibit C;
3.7. All City utilities necessary for the development and use of the Property as
an office building center adjoin the Property, and McGraw -Hill shall have the right
to tie into and use said utilities;
7
3.8. The Property is free and clear of any occupants, and no party has a lease
to or other occupancy or contract right in the Property which shall in anyway be
binding upon the Property or McGraw -Hill;
3.9. City shall exercise its best efforts to cooperate with McGraw -Hill in the
development process;
3.10. City shall exercise its best efforts to resolve any disputes arising during
the development process in a reasonable and prompt fashion;
3.11. With respect to the period during which City has owned or occupied the
Property, and to City's knowledge after reasonable investigation with respect to
the time before City owned or occupied the Property, no person or entity has
caused or permitted materials to be stored, deposited, treated, recycled, or
disposed of on, under or at the Property other than as described in the
environmental reports that City has provided to McGraw - Hill, which materials, if
known to be present, would require cleanup, removal or some other remedial
action under environmental laws;
3.12. There are no fees or other charges payable by McGraw -Hill for City
utilities serving the Property, as result of utility hook -ups, other than the fees for
connecting to and installing meters with regard to such utilities; and
3.13. The property is properly zoned for the office building described in this
Agreement.
SECTION 4. CONDITIONS TO CLOSING. The closing of the transaction
contemplated by this Agreement and all the obligations of McGraw -Hill under
this Agreement are subject to fulfillment, on or before the Closing Date, of the
following conditions:
4.1. The representations and warranties made by City in Section 3 shall be
correct as of the Closing Date with the same force and effect as if such
representations were made at such time. At the closing, City shall deliver a
certificate, in the form of Exhibit D, to that effect;
4.2. Title to the Property shall be in the condition warranted in Section 3.3;
4.3. McGraw -Hill has obtained any and all necessary governmental approvals,
including without limitations approval of zoning, subdivision or platting which
might be necessary or desirable in connection with the sale and transfer and
development of the Property. Any conditions imposed as a part of the zoning,
platting or subdivision must be satisfactory to McGraw -Hill, in its sole opinion.
City shall cooperate with McGraw -Hill in attempting to obtain any such approvals
and shall execute any documents necessary for this purpose, provided that City
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shall bear no expense in connection therewith. In connection therewith, City
agrees (1) to review all of McGraw - Hill's plans and specifications for the project
and to either reject or approve the same in a prompt and timely fashion; (2) to
issue a written notification to McGraw -Hill, following City's approval of same,
indicating that City has approved such plans and specifications, and that the
same are in compliance with the Urban Renewal Plan and the Port of Dubuque
Master Plan including the Design Standards, this Agreement and any other
applicable City or affiliated agency requirements, with the understanding that
McGraw -Hill and its lenders shall have the right to rely upon the same in
proceeding with the project; (3) to identify in writing as soon as practicable after
submission of said plans and specifications, any and all permits, approvals and
consents that are legally required for the acquisition of the Property by McGraw -
Hill, and the construction, use and occupancy of the project with the intent and
understanding that McGraw -Hill and its lenders and attorneys will rely upon same
in establishing their agreement and time frames for construction, use and
occupancy, lending on the project and issuing legal opinions in connection
therewith; and (d) to cooperate fully with McGraw -Hill to facilitate the obtaining of
such permits, approvals and consents;
4.4. City has completed all required notice to or prior approval, consent or
permission of any federal, state or municipal or local governmental agency, body,
board or official to the sale of the Property; and consummation of the closing by
City shall be deemed a representation and warranty that it has obtained the
same;
4.5. McGraw -Hill shall be in material compliance with all the terms and
provisions of this Agreement;
4.6. McGraw -Hill shall have furnished City with evidence, in a form satisfactory
to City (such as a letter of commitment from a bank or other lending institution),
that McGraw -Hill has firm financial commitments in an amount sufficient, together
with equity commitments, to complete Minimum Improvements (as defined
herein) in conformance with Construction Plans (as defined herein), or City shall
have received such other evidence of such party's financial ability as in the
reasonable judgment of City is required;
4.7. Receipt of an opinion of counsel to McGraw -Hill in the form attached
hereto as Exhibit E; and
4.8. McGraw -Hill shall have the right to terminate this Agreement at anytime
prior to the consummation of the closing on the Closing Date if McGraw -Hill
determines in its sole discretion that conditions necessary for the successful
completion of the Project have not been satisfied to the full satisfaction of
McGraw -Hill in its sole and unfettered discretion. Upon the giving of notice of
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termination by McGraw -Hill to City to this Agreement, this Agreement shall be
deemed null and void.
SECTION 5. CLOSING. The closing of the purchase and sale of the Property
shall take place on the Closing Date. Exclusive possession of the Property shall
be delivered on the Closing Date, in its current condition and in compliance with
this Agreement, including City's representations and warranties regarding the
Property. Consummation of the Closing shall be deemed an agreement of the
parties to this Agreement that the conditions of closing shall have been satisfied
or waived.
SECTION 6. CITY'S OBLIGATIONS AT CLOSING. At or prior to the Closing
Date, City shall:
6.1. Deliver to McGraw -Hill City's duly recordable Special Warranty Deed to
the Property, in the form attached hereto as Exhibit F (Deed), conveying to
McGraw -Hill marketable fee simple title to the Property and all rights appurtenant
thereto, including appurtenant easements, subject only to easements,
restrictions, conditions and covenants of record as of the date hereof and not
objected to by McGraw -Hill as set forth in this Agreement, and to the conditions
subsequent set forth in this Agreement;
6.2. Deliver to McGraw -Hill the Abstract of Title to the Property;
6.3. Deliver to McGraw -Hill such other documents as may be required by this
Agreement, all in a form satisfactory to McGraw -Hill; and
6.4. Deliver to McGraw -Hill an affidavit sufficient in form and content to permit
the title insurance company to issue owner's and lender's policies of title
insurance without the standard pre - printed exceptions (except the survey
exception) in the form attached hereto as Exhibit G.
SECTION 7. DELIVERY OF PURCHASE PRICE: OBLIGATIONS AT
CLOSING. At closing, and subject to the terms, conditions, and provisions
hereof and the performance by City of its obligations as set forth herein,
McGraw -Hill shall pay the Purchase Price to City pursuant to Section 2.1 hereof,
but subject to McGraw -Hill receiving a partially offsetting credit pursuant to
Section 11, below.
SECTION 8. CLOSING COSTS. The following costs and expenses shall be
paid in connection with the closing:
8.1. City shall pay:
The transfer fee imposed on the conveyance, if any.
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All special assessments whether levied, pending or assessed, if any;
City's attorney's fees;
City's broker and /or real estate commissions and fees, if any; and
The cost of recording the satisfaction of any existing mortgage and any
other document necessary to make title marketable.
8.2. McGraw -Hill shall pay:
The documentary fee necessary to record the Deed;
McGraw - Hill's attorney's fees;
McGraw - Hill's broker and /or real estate commissions and fees, if any; and
All taxes as provided in Section 9.
SECTION 9. REAL PROPERTY TAXES. From and after the Closing Date,
McGraw -Hill shall pay or cause to be paid, when due, all real property taxes and
assessments payable with respect to all and any parts of the Property or the
Parking Property.
SECTION 10. DEVELOPMENT ACTIVITIES.
10.1. Required Minimum Improvements. McGraw -Hill hereby agrees to
construct on the Property a multi -story office building of approximately one
hundred thirty -five thousand square feet along with necessary site work as
contemplated in this Agreement at a cost of approximately eighteen million and
no /100 dollars ($18,000,000.00)(the Minimum Improvements).
10.2. Plans for Construction of Improvements. Plans and specifications with
respect to the development of the Property and the construction of the Minimum
Improvements thereon (Construction Plans) shall be in conformity with Urban
Renewal Plan, including the Port of Dubuque Master Plan Design Standards
(Port of Dubuque Design Standards), this Agreement, and all applicable state
and local laws and regulations. McGraw -Hill shall submit to City, for approval by
City, plans, drawings, specifications, and related documents with respect to the
Minimum Improvements to be constructed by McGraw -Hill on the Property. All
work with respect to the Minimum Improvements shall be in substantial
conformity with the Construction Plans approved by City.
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10.3. Timing of Improvements. McGraw -Hill hereby agrees that construction
of the Minimum Improvements on the Property shall commence not later than
sixty (60) days after the Closing Date and shall be substantially completed by not
later than eighteen (18) months after the Closing Date. The time frames for the
performance of these obligations shall be suspended due to unavoidable delays
meaning delays, outside the control of the party claiming its occurrence in good
faith, which are the direct result of strikes, other labor troubles, unusual
shortages of materials or labor, unusually severe or prolonged bad weather, acts
of God, fire or other casualty to the Minimum Improvements, litigation
commenced by third parties which, by injunction or other similar judicial action or
by the exercise of reasonable discretion directly results in delays, or acts of any
federal, state or local government which directly result in extraordinary delays.
The time for performance of such obligations shall be extended only for the
period of such delay.
10.4. Certificate of Completion. Promptly following the request of McGraw -Hill
upon completion of the Minimum Improvements, City shall furnish McGraw -Hill
with an appropriate instrument so certifying. Such certification (Certificate of
Completion) shall be in recordable form and shall be a conclusive determination
of the satisfaction and termination of the agreements and covenants in this
Agreement and in the Deed with respect to the obligations of McGraw -Hill to
construct the Minimum Improvements. The Certificate of Completion shall waive
all rights of revestment of title in City as provided in Section 16, and the
Certificate of Completion shall so state.
10.5. McGraw -Hill Lender's Cure Rights. The parties agree that if McGraw -
Hill shall fail to complete the Minimum Improvements as required by this
Agreement such that revestment of title may occur (or such that City would have
the option of exercising its revestment rights), then McGraw -Hill or McGraw - Hill's
Lender, if any, shall have the right, but not the obligation, to complete such
Minimum Improvements according to the terms and conditions in this Agreement.
10.6. City intends to construct a patio fronting on Bell Street and on 5th Street as
shown on Exhibit B (the Patio). City shall be solely responsible for the cost of
constructing and maintaining the Patio. City shall grant to McGraw -Hill such
easement over the Patio as may be necessary for the maintenance of the
Minimum Improvements, and McGraw -Hill shall have the right to the non-
exclusive use of the Patio at all times. The Patio shall not be constructed without
McGraw -Hill having first approved in writing the design of the Patio, which
consent shall not be unreasonably withheld.
SECTION 11. CITY PARTICIPATION.
11.1. Acquisition Grant to McGraw -Hill. For and in consideration of McGraw -
Hill's obligations hereunder to construct the Minimum Improvements as provided
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herein, City agrees to make an Acquisition Grant to McGraw -Hill on the Closing
Date, or such other date as the parties shall mutually agree upon in writing, in the
amount of Two Hundred SeventeenThousand, Eight Hundred & 00/100 Dollars
($217,800.00.00) per acre (rounded to the nearest 1 /100th acre). The parties
agree that the Acquisition Grant shall be payable in the form of a credit favoring
McGraw -Hill at time of closing with the effect of directly offsetting a portion of the
Purchase Price obligation of McGraw -Hill.
11.2. Economic Development Grants to McGraw -Hill.
(1) For and in consideration of McGraw - Hill'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
the McGraw -Hill 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 the McGraw -Hill, commencing November 1, 2008, and
continuing until May 1, 2018, pursuant to Section 403.9 of the Urban
Renewal Law, in amounts equal to the actual amount of tax increment
revenues collected by City under Section 403.19 (without regard to any
averaging that may otherwise be utilized under Section 403.19 and
excluding any interest that may accrue thereon prior to payment to the
McGraw - Hill) during the preceding six -month period in respect of the
Minimum Improvements constructed by McGraw -Hill (the McGraw -Hill Tax
Increments). In the event that McGraw -Hill is required to pay real property
taxes on the Parking Property under Section 9, such payments shall also
be deemed tax increment revenues under this Section 11.2. McGraw -Hill
recognizes and agrees that the Economic Development Grants shall be
paid solely and only from the incremental taxes collected by City in
respect to the Minimum Improvements, which does not include property
taxes collected for the payment of bonds and interest of each taxing
district, and taxes for the regular and voter - approved physical plant and
equipment levy, and any other portion required to be excluded by Iowa
law, and thus such incremental taxes will not include all amounts paid by
McGraw -Hill as regular property taxes.
(2) To fund the Economic Development Grants, City shall certify to the
County prior to December 1 of each year, commencing December 1,
2007, its request for the available McGraw -Hill Tax Increments resulting
from the assessments imposed by the County as of January 1 of the
following year, to be collected by City as taxes are paid during the
following fiscal year and which shall thereafter be disbursed to McGraw -
Hill on November 1 and May 1 of that fiscal year. (Example: if City so
certifies in December, 2007, the Economic Development Grants in respect
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thereof would be paid to the McGraw -Hill on November 1, 2008, and May
1, 2009.)
(3) The Economic Development Grants shall be payable from and
secured solely and only by the McGraw -Hill Tax lncrements which, upon
receipt, shall be deposited and held in a special account created for such
purpose and designated as the "McGraw -Hill 11 TIF Account" of City. City
hereby covenants and agrees to maintain its TIF ordinance in force during
the term hereof and to apply the incremental taxes collected in respect of
the Minimum Improvements and allocated to the McGraw -Hill II TIF
Account to pay the Economic Development Grants, as and to the extent
set forth in Section 11.2 hereof. The Economic Development Grants shall
not be payable in any manner by other tax increments revenues or by
general taxation or from any other City funds. City makes no
representation with respect to the amounts that may be paid to McGraw -
Hill as the Economic Development Grants in any one year and under no
circumstances shall City in any manner be liable to McGraw -Hill so long
as City timely applies the McGraw -Hill Tax Increments actually collected
and held in the McGraw -Hill 11 TIF Account (regardless of the amounts
thereof) to the payment of the Economic Development Grants to McGraw -
Hill as and to the extent described in this Section 11.2.
(4) City shall be free to use any and all tax increment revenues
collected in respect to other properties within the Project Area, or any of
the available McGraw -Hill Tax lncrements resulting from the termination of
the annual Economic Development Grants under Section 11.2 hereof, for
any purpose for which such tax increment revenues may lawfully be used
pursuant to the provisions of the Urban Renewal Law, and City shall have
no obligations to McGraw -Hill with respect to the use thereof.
SECTION 12. PARKING. City owns the real estate (the Parking Property)
which adjoins the Property shown on Exhibit B and is intended for use for parking
purposes. In connection therewith, the parties agree as follows:
12.1. Construction of Improvements by McGraw -Hill. Within the time frames
set forth in Section 10.3, McGraw -Hill shall, at its sole expense, complete the
grading, paving, landscaping including islands, and lighting the Parking Property
according to plans and specifications approved by City and consistent with City
standards including the Port of Dubuque Design Standards. The Parking
Property shall be divided into Lot A and Lot B as set out on Exhibit B. McGraw -
Hill shall be responsible for obtaining of all necessary permits, and shall be
responsible for and pay for the cost of drainage and storm water improvements
required by City standards and state and federal law for the development of the
Parking Property. City shall pay only those costs pre- approved by City for
transportation and disposal of fill required to be removed from the Parking
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Property as a result of construction by McGraw -Hill of the improvements
contemplated by this Section 12. McGraw -Hill shall use all reasonable efforts in
its design and improvement of the Parking Property to limit the need to remove
fill from the Parking Property. The City shall be provided with prompt notice of the
believed need to remove fill from the Parking Property so as to allow City to
make arrangements for sampling and analysis of such fill, and McGraw -Hill shall
allow such activities by City. City shall not be responsible for bringing any new fill
to the Parking Property. In addition, City shall not be responsible for
transportation and disposal of fill placed on the Parking Property by McGraw -Hill,
its employees, agents or contractors.
12.2. Construction of Improvements by City. City shall install gates and
controls and underground services to those gates and controls to control access
to Lot B, so as to permit the types of uses set out below in this Section 12.4. The
installation of gates and controls and underground services to the gates and
control shall be substantially completed by eighteen (18) months after the
Closing Date. City shall have the right to install, at City's expense and during the
construction of the Parking Lot by McGraw -Hill or at such later date as City
determines, additional electrical service, water, staging, and tie downs.
12.3. Maintenance of Parking Property. Maintenance, repair and
replacement of the Parking Property shall be the sole responsibility and expense
of City, including but not limited to:
Snow removal on Parking Property and adjacent sidewalks completed by
7:00 a.m. and 3:00 p.m. each day;
Salting of Parking Property and adjacent sidewalks completed by 7:00
a.m. and 3:00 p.m. each day;
Maintenance of the lawn sprinkler system;
Replacing bushes, trees, etc., as needed;
Lighting maintenance;
Parking lot spring clean -up; and
Monthly parking lot sweeping during non - winter months.
12.4. Use of Parking Lots.
(1) Lot A shall consist of non - assigned spaces for McGraw - Hill's employees
at no cost to such employees for parking between the hours of 6:00 a.m. and
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5:00 p.m. or such later time for a specific day as the City Manager may upon
written request of McGraw -Hill agree, Monday through Sunday, fifty -two weeks
per year. Subject to Section 12.4(3), City shall have the right to allow parking in
Lot A by the public during such hours and at any other time. Notwithstanding the
foregoing, McGraw -Hill employees who have already parked in Lot A prior to
5:00 p.m. may remain parked in Lot A until their workday is completed except on
a day that City has notified McGraw -Hill in writing seven days in advance that
employees may not remain in Lot A after 5:00 p.m. on that day.
(2) Lot B shall consist of non - assigned spaces for McGraw - Hill's employees
at no cost to such employees for parking between the hours of 6:00 a.m. and
5:00 p.m. or such later time for a specific day as the City Manager may upon
written request of McGraw -Hill agree, Monday through Friday, fifty -two weeks per
year, except holidays. Subject to Section 12.4(3), City shall have the right to
allow parking in Lot B by the public during such hours and at any other time and
to use Lot B at any other time for such purposes as City determines appropriate.
Notwithstanding the foregoing, McGraw -Hill employees who have already parked
in Lot B prior to 5:00 p.m. may remain parked in Lot B until their workday is
completed except on a day that City has notified McGraw -Hill in writing seven
days in advance that employees may not remain in Lot B after 5:00 p.m. on that
day.
(3) It is the intent of the parties under Sections 12.4(1) and (2) that all
McGraw -Hill employees will be guaranteed a parking space, but not to exceed
the 513 spaces shown on the attached Site Plan, in Lot A or Lot B between the
hours of 6:00 a.m. and 5:00 p.m. Monday through Friday, fifty -two weeks per
year, except holidays, and public parking will be limited by City to effectuate such
guaranteed parking. In order to assure that City makes sufficient parking spaces
available to McGraw -Hill for its employees and to efficiently manage the lot,
McGraw -Hill will notify City upon its initial occupancy of the office building of the
average number of employees for the month who will work at the office building
between the hours of 6:00 a.m. and 5:00 p.m. Monday through Friday and
thereafter whenever there is any increase or decrease in the average monthly
number of such employees.
(4) For purposes of this paragraph, holidays shall mean New Years Day, ,
Memorial Day, 4th of July, Labor Day, Thanksgiving and Christmas Day, and the
following Monday when any of the foregoing named legal holidays fall on a
Sunday.
12.5. Parking Facility. If City constructs a parking structure in the Port of
Dubuque north of Third Street, upon completion of the parking structure, all rights
of McGraw -Hill and its employees as provided in Par. 12.4(2) shall transfer to the
parking structure and such parking rights shall be exclusive to the parking
structure. Such structure shall be constructed within 1,200 feet of the Property.
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If the parking structure is constructed on property that adjoins the Property, the
parking structure shall not be constructed without McGraw -Hill having first
approved in writing the design of the parking structure, which approval shall not
be unreasonably withheld. City shall provide temporary parking for McGraw - Hill's
employees during the construction of the parking structure in the Port of
Dubuque north of Third Street. Such temporary parking shall be with 1,200 feet
of the Property.
12.6. Indemnification. To the extent allowed by law, City shall hold McGraw -
Hill harmless and fully indemnify McGraw -Hill against any damage, claim, liability
or cause of action arising from or caused by the actions of City, its agents, or
representatives upon the Parking Property, including for any such damage,
claim, liability or cause of action arising from conditions on the Parking Property
existing prior to any such entry upon the Parking Property by McGraw -Hill
12.7. Survival. The provisions of this Section 12 shall survive the termination of
this Agreement.
SECTION 13. COVENANTS OF MCGRAW-HILL DURING CONSTRUCTION
OF THE PROJECT.
13.1. Insurance Requirements: McGraw -Hill shall provide and maintain or
cause to be maintained at all times during the process of constructing the
Minimum Improvements (and, from time to time at the request of City, furnish
City with proof of insurance in the form of a certificate of insurance for each
insurance policy):
(1) All risk builder's risk insurance, written on a Completed Value Form
in an amount equal to one hundred percent (100 %) of the replacement
value when construction is completed;
(2) Commercial general liability insurance as set forth in the attached
Insurance Schedule as such Insurance Schedule may from time to time be
amended by City.
13.2. McGraw -Hill shall notify City immediately in the case of damage
exceeding $500,000.00 in amount to, or destruction of, Minimum Improvements
or any portion thereof resulting from fire or other casualty. Net proceeds of any
such insurance (Net Proceeds), shall be paid directly to McGraw -Hill as its
interests may appear, and McGraw -Hill shall forthwith repair, reconstruct and
restore the Minimum Improvements to substantially the same or an improved
condition or value as they existed prior to the event causing such damage and, to
the extent necessary to accomplish such repair, reconstruction and restoration,
McGraw -Hill will apply the Net Proceeds of any insurance relating to such
17
damage received by McGraw -Hill to the payment or reimbursement of the costs
thereof, subject, however, to the terms of any mortgage encumbering title to the
Property (as its interests may appear). McGraw -Hill shall complete the repair,
reconstruction and restoration of Minimum improvements whether or not the Net
Proceeds of insurance received by McGraw -Hill for such Purposes are sufficient .
13.3. Preservation of Property. McGraw -Hill shall maintain, preserve and
keep, or cause others to maintain, preserve and keep, the Minimum
Improvements in good repair and working order, ordinary wear and tear
accepted, and from time to time shall make all necessary repairs, replacements,
renewals and additions.
13.4. Non - Discrimination. In carrying out the project, McGraw -Hill shall not
discriminate against any employee or applicant for employment because of race,
religion, color, sex, national origin, age, sexual orientation or disability.
13.5. Conflict of Interest. McGraw -Hill agrees that no member, officer or
employee of City, or its designees or agents, nor any consultant or member of
the governing body of City, and no other public official of City who exercises or
has exercised any functions or responsibilities with respect to the project during
his or her tenure, or who is in a position to participate in a decision - making
process or gain insider information with regard to the project, shall have any
interest, direct or indirect, in any contract or subcontract, or the proceeds thereof,
for work to be performed in connection with the project, or in any activity, or
benefit therefrom, which is part of this project at any time during or after such
person's tenure. In connection with this obligation, McGraw -Hill shall have the
right to rely upon the representations of any party with whom it does business
and shall not be obligated to perform any further examination into such party's
background.
13.6. Non - transferability. Until such time as Minimum Improvements are
complete (as certified by City under Section 10.4), this Agreement may not be
assigned by McGraw -Hill nor may the Property be transferred by McGraw -Hill to
another party without the prior written consent of City, which consent shall not be
unreasonably withheld. Thereafter, McGraw -Hill shall have the right to assign
this Agreement and upon assumption of all of the obligations in the Agreement
by the assignee, McGraw -Hill shall no longer be responsible for its obligations
under this Agreement.
13.7. Restrictions on Use. McGraw -Hill agrees for itself, its successors and
assigns, and every successor in interest to the Property or any part thereof that
they and their respective successors and assigns, shall:
(1) Devote the Property to, and only to and in accordance with, the
uses specified in the Urban Renewal Plan (and City represents and
18
agrees that use of the Property as an office building is in full compliance
with the Urban Renewal Plan) (however, McGraw -Hill shall not have any
liability to City to the extent that a successor in interest shall breach this
covenant and City shall seek enforcement of this covenant directly against
the party in breach of same); and
(2) Not discriminate upon the basis of race, religion, color, sex, national
origin, age, sexual orientation or disability in the sale, lease, rental, use or
occupancy of the Property or any improvements erected or to be erected
thereon, or any part thereof (however, McGraw -Hill shall not have any
liability to City to the extent that a successor in interest shall breach this
covenant and City shall seek enforcement of this covenant directly against
the party in breach of same).
13.8. Compliance with Laws. McGraw -Hill will comply with all laws, rules and
regulations relating to its businesses, other than laws, rules and regulations the
failure to comply with which or the sanctions and penalties resulting therefrom,
would not have a material adverse effect on the business, property, operations,
financial or otherwise, of McGraw -Hill.
SECTION 14. COVENANTS OF MCGRAW -HILL FOLLOWING
CONSTRUCTION OF THE PROJECT.
14.1 Job Creation. McGraw -Hill shall create twenty -four (24) full -time (1820
hours per year) positions and five (5)part-time (1300 hours per year) positions in
the Port of Dubuque, within three (3) years from the date of this Agreement, and
shall maintain those jobs during the Term of this Agreement. It is agreed by the
parties that McGraw -Hill will have two hundred seventy -six (276) full -time
positions and one hundred thirteen (113) part-time positions in the Port of
Dubuque, as of July 1, 2006. In the event that the certificate provided to City
under Section 14.2 hereof on July 1, 2016, discloses that McGraw -Hill does not
as of that date have at least three hundred (300) full -time and one hundred
eighteen (118) part-time positions as provided hereinabove, McGraw -Hill shall
pay to City, promptly upon written demand therefor, an amount equal to
$1037.00 per job not created ($217,800 per acre x 1.99 acres /418 positions to
be created and maintained in the Port of Dubuque). In addition, for the positions
that McGraw -Hill fails to create and maintain in the Port of Dubuque for any year
occurring after the third year during the Term of this Agreement, the semi - annual
Economic Development Grants for such year under Section 14.2 shall be
reduced by the percentage that the number of such positions bears to the total
number of positions (418) required to be created and maintained by this Section
14.1.
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14.2. Certification. To assist City in monitoring the performance of McGraw -
Hill hereunder, three (3) years from the date of this Agreement, and ever year
thereafter during the term of this Agreement, a duly authorized officer of
McGraw -Hill shall certify to City (1) the number of full -time equivalent positions
and part -time positions maintained in the Port of Dubuque, and the number of
full -time equivalent positions and part -time created in the Port of Dubuque, and
(2) to the effect that such officer has re- examined the terms and provisions of this
Agreement and that at the date of such certificate, and during the term of this
Agreement, McGraw -Hill 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 the term of this Agreement, 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. Such certificate shall be provided not
later than January 31, 2010, and on January 31, 2011, through January 31,
2018.
14.3. Books and Records. McGraw -Hill shall keep at all times proper books of
record and account in which full, true and correct entries will be made of all
dealings and transactions of or in relation to the business and affairs of McGraw -
Hill in accordance with generally accepted accounting principles consistently
applied throughout the period involved, and McGraw -Hill shall provide
reasonable protection against loss or damage to such books of record and
account.
14.4. Non - Discrimination. In carrying out the project, McGraw -Hill shall not
discriminate against any employee or applicant for employment because of race,
religion, color, sex, national origin, age, sexual orientation, or disability.
14.5. Compliance with Laws. McGraw -Hill will comply with all laws, rules and
regulations relating to its businesses, other than laws, rules and regulations the
failure to comply with which or the sanctions and penalties resulting therefrom,
would not have a material adverse effect on the business, property, operations,
financial or otherwise, of the McGraw -Hill.
SECTION 15. EVENTS OF DEFAULT. The following shall be "Events of
Default" under this Agreement and the term "Event of Default" shall mean,
whenever it is used in this Agreement, any one or more of the following events:
15.1. Failure by McGraw -Hill to pay or cause to be paid, before thirty days after
such payments are due, all real property taxes assessed with respect to the
Minimum Improvements and Property;
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15.2. Failure by McGraw -Hill to cause the construction of the Minimum
Improvements to be commenced and completed pursuant to the terms,
conditions and limitations of this Agreement;
15.3. Transfer of any interest by McGraw -Hill of Minimum Improvements in
violation of the provisions of this Agreement prior to the issuance of the final
Certificate of Completion; or
15.4. Failure by McGraw -Hill or City to substantially observe or perform any
other material covenant, condition, obligation or agreement on its part to be
observed or performed under this Agreement.
SECTION 16. REMEDIES ON DEFAULT BY MCGRAW - HILL. Whenever any
Event of Default referred to in Section 15, above, occurs and is continuing, City,
as specified below, may take any one or more of the following actions after the
giving of written notice by City to McGraw -Hill (and the holder of any mortgage
encumbering any interest in the Property of which City has been notified of in
writing) of the Event of Default, but only if the Event of Default has not been
cured within sixty (60) days following such notice, or if the Event of Default
cannot be cured within sixty (60) days and McGraw -Hill or if applicable, the
Mortgagee, does not provide assurances to City that the Event of Default will be
cured as soon as reasonably possible thereafter:
16.1. City may suspend its performance under this Agreement until it receives
assurances from McGraw -Hill deemed adequate by City, that McGraw -Hill will
cure its default and continue its performance under this Agreement;
16.2. Until the Closing, City may cancel and rescind this Agreement;
16.3. City shall be entitled to recover from McGraw -Hill the Acquisition Grant
and the sum of all amounts expended by City in connection with the funding of
the Acquisition Grant to McGraw -Hill, and City may take any action, including any
legal action it deems necessary, to recover such amounts from the defaulting
party;
16.4. City may withhold the Certificate of Completion; and
16.5. In the event that subsequent to conveyance of the Property to McGraw -
Hill by City and prior to receipt by McGraw -Hill of the Certificate of Completion,
but subject to the terms of the mortgage granted by McGraw -Hill to secure a loan
obtained by McGraw -Hill from a commercial lender or other financial institution to
fund the acquisition of the Property or construction of the Minimum
Improvements (First Mortgage) an Event of Default under Section 15 of this
Agreement occurs and is not cured within the times specified in Section 16, then
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City shall have the right to re -enter and take possession of the Property and any
portion of the Minimum Improvements thereon and to terminate (and revert in
City pursuant to the provisions of this Section 16 subject only to any superior
rights in any holder of the First Mortgage) the estate conveyed by City to
McGraw -Hill, it being the intent of this provision, together with other provisions of
this Agreement, that the conveyance of the Property to McGraw -Hill shall be
made upon the condition that (and the Deed shall contain a condition subsequent
to the effect that), in the event of default under Section 15 on the part of McGraw -
Hill and failure on the part of McGraw -Hill to cure such default within the period
and in the manner stated herein, City may declare a termination in favor of City of
the title and of all McGraw - Hill's rights and interests in and to the Property
conveyed to McGraw -Hill, and that such title and all rights and interests of
McGraw -Hill, and any assigns or successors in interests of McGraw -Hill, and any
assigns or successors in interest to and in Property, shall revert to City (subject
to the provisions of Section 16 of this Agreement), but only if the events stated in
Section 15 of this Agreement have not been cured within the time period
provided above, or, if the events cannot be cured within such time periods,
McGraw -Hill does not provide assurance to City, reasonably satisfactory to City,
that the events will be cured as soon as reasonably possible. Notwithstanding
the foregoing, however, City agrees to execute a Subordination Agreement in
favor of McGraw - Hill's first mortgage lender, in a form reasonably acceptable to
City and to McGraw - Hill's first mortgage lender.
(1)--- -Upen- the- revesttn9 in City of title tothe-Property-as-provide d in
Section 16 of this Agreement, City may resell the Property, and if it elects
to do so, it shall, pursuant to its responsibility under law, use its best
efforts, subject to any rights or interests in such property or resale granted
to any holder of a First Mortgage, to resell the Property or part thereof as
soon and in such manner as City shall find feasible and consistent with the
objectives of such law and of the Urban Renewal Plan to a qualified and
responsible party or parties (as determined by City in its sole discretion)
who will assume the obligation of making or completing the Minimum
Improvements or such other improvements in their stead as shall be
satisfactory to City and in accordance with the uses specified for such
Property or part thereof in the Urban Renewal Plan. Subject to any rights
or interests in such property or proceeds granted to any holder of a First
Mortgage upon such resale of Property the proceeds thereof shall be
applied:
(1) First, to pay and discharge the First Mortgage;
(ii) Second, to pay the principal and interest on
mortgage(s) created on the Property, or any portion thereof,
or any improvements thereon, previously acquiesced in by
City pursuant to this Agreement. If more than one mortgage
on the Property, or any portion thereof, or any improvements
thereon, has been previously acquiesced in by City pursuant
to this Agreement and insufficient proceeds of the resale
exist to pay the principal of, and interest on, each such
mortgage in full, then such proceeds of the resale as are
available shall be used to pay the principal of and interest on
each such mortgage in their order of priority, or by mutual
agreement of all contending parties including McGraw -Hill,
or by operation of law;
(iii) Third, to reimburse City for all allocable costs and
expenses incurred by City, including but not limited to
salaries of personnel, in connection with the recapture,
management and resale of property or part thereof (but less
any income derived by City from the property or part thereof
in connection with such management); any payments made
or necessary to be made to discharge any encumbrances or
liens (except for mortgage(s) previously acquiesced in by
City) existing on the Property or part thereof at the time of
revesting of title thereto in City or to discharge or prevent
from attaching or bring made any subsequent encumbrances
or liens due to obligations, default or acts of McGraw -Hill, its
successors or transferees (except with respect to such
mortgage(s))any- expenditures -- made -or obliga
with respect to the making or completion of Minimum
Improvements or any part thereof on Property or part
thereof, and any amounts otherwise owing to City (including
water and sewer charges) by McGraw -Hill and its
successors or transferees; and
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(iv) Fourth, to reimburse McGraw -Hill up to the amount
equal to (1) the sum of the Purchase Price paid to City for
the Property and the cash actually invested by McGraw -Hill
in making any of the Minimum Improvements on Property,
less (2) any gains or income withdrawn or made by such
party from this Agreement or Property.
SECTION 17. REMEDIES ON DEFAULT BY CITY. If City defaults in the
performance of this Agreement, McGraw -Hill may take any action, including
legal, equitable or administrative action which may appear necessary or
desirable to collect any payments due under this Agreement, to recover
expenses of McGraw -Hill, or to enforce performance and observance of any
obligation, agreement, or covenant of City under this. Agreement. McGraw -Hill
may suspend its performance under this Agreement until it receive assurances
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from City, deemed adequate by McGraw -Hill, that City will cure its default and
continue its performance under this Agreement.
SECTION 18. REMEDIES GENERALLY.
18.1. A non - defaulting party may take any action, including legal, equitable or
administrative action, which may appear necessary or desirable to collect any
payments due under this Agreement or to enforce performance and observance
of any obligation, agreement, or covenant under this Agreement.
18.2. No remedy herein conferred upon or reserved to a party is intended to be
exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
under this Agreement or now or hereafter existing at law or in equity or by
statute.
18.3. In the event any agreement contained in this Agreement should be
breached by any party and thereafter waived by any other party, such waiver
shall be limited to the particular breach so waived and shall not be deemed to
waive any other concurrent, previous or subsequent breach hereunder.
18.4. If any action at law or in equity, including an action for declaratory relief or
arbitration, is brought to enforce or interpret the provisions of this Agreement, the
prevailing party -s- hall -be entitled to recoverreasulia-ble -
of litigation from the other party. Such fees and costs of litigation may be set by
the court in the trial of such action or by the arbitrator, as the case may be, or
may be enforced in a separate action brought for that purpose. Such fees and
costs of litigation shall be in addition to any other relief which may be awarded.
SECTION 19. GENERAL TERMS AND CONDITIONS.
19.1. Notices and Demands. Whenever this Agreement requires or permits
any notice or written request by one party to another, it shall be deemed to have
been properly given if and when delivered in person or three (3) business days
after having been deposited in any U.S. Postal Service and sent by registered or
certified mail, postage prepaid, addressed as follows:
If to McGraw -Hill:
Margaret A. DeWald
Director, West Region
Global Real Estate Services
The McGraw -Hill Companies
One Prudential Plaza
130 East Randolph Street
Chicago, IL 60601
Phone: (312) 233.6556
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With a copy to:
If to City:
Fax: (312) 233.6511
The McGraw -Hill Companies, Inc.
Attn.: Real Estate Manager
2 Pennsylvania Plaza, 22nd Floor
New York, NY 10121
The McGraw -Hill Companies; Inc.
Attn.: Legal Department
1221 Avenue of the Americas
New York, NY 10020
Wayne A. Norman, Jr., Esq.
800 Town Clock Plaza
P.O. Box 857
Dubuque, IA 52004 -0857
Phone: (563) 556 -6433
Fax: (563) 556 -7706
City Manager
City Hall
50 W. 13th Street
Dubuque, IA 52001
Phone: (563) 589 -411
Fax: (563) 589 -4149
With a copy to: City Attorney
City Hall
50 W. 13th Street
Dubuque, IA 52001
Or at such other address with respect to either party as that party may, from time
to time designate in writing and forward to the other as provided in this Section
19.1.
19.2. Binding Effect; Assignment. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of the parties.
Neither party shall assign any of its rights or obligations hereunder without the
prior written consent of the other party.
19.3. Termination Date. This Agreement and the rights and obligations of the
parties hereunder shall terminate on the 2nd day of May, 2018 (the Termination
Date).
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19.4. Applicable Law; Severability. This Agreement shall be subject to,
construed and enforced in accordance with the laws of the state of Iowa. If any
provision of this Agreement is held invalid under applicable Law, such invalidity
shall not affect any other provision of this Agreement that can be given effect
without the invalid provision, and to this end, the provisions hereof are severable.
19.5. Interpretation; Headings. Words and phrases herein shall be interpreted
and understood according to the context in which they are used. The headings
of the articles, sections, paragraphs and subdivisions of this Agreement are for
convenience of reference only, are not to be considered a part hereof and shall
not limit or expand or otherwise affect any of the terms hereof.
19.6. Entire Agreement; Counterparts; Remedies Cumulative. This
Agreement, including any Exhibits, all of which are incorporated by this
reference, and the documents executed and delivered pursuant hereto,
constitute the entire agreement between the parties, and may be amended only
by a writing signed by each party. All agreements, instruments and documents
referred to in this Agreement are by this reference made a part of this Agreement
for all purposes. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument. The parties shall
have, in addition to the rights and remedies provided by this Agreement, all those
allowed by all applicable laws, all of which shall be in extension of and not in
limitation- of-those- provided - hereunder.
19.7. Waivers. Except as herein expressly provided, no waiver by either party
of any breach of this Agreement, or of any warranty or representation hereunder,
shall be deemed to be a waiver by the same party of any other breach of any
kind or nature (whether preceding or succeeding the breach in question, and
whether or not of the same or similar nature).
(1) No acceptance by a party of payment or performance after any
such breach shall be deemed to be a waiver of any breach of this
Agreement or of any representation or warranty hereunder, whether or not
the party knows of the breach when it accepts such payment or
performance.
(2) No failure by a party to exercise any right it may have under this
Agreement or under law upon another party's default, and no delay in the
exercise of that right, shall prevent it from exercising the right whenever
the other party continues to be in default. No such failure or delay shall
operate as a waiver of any default or as a modification of the provisions of
this Agreement.
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19.8. Construction Against Drafter. It is acknowledged that each of the
parties have had substantial input individually, and by their attorneys, into the
drafting of this agreement. It is therefore agreed that the Agreement shall not be
construed for or against either of the parties based upon the identity of the drafter
of the final Agreement.
19.9. Execution By Facsimile. The parties agree that this Agreement may be
transmitted between them by facsimile machine. The parties intend that the
faxed signatures constitute original signatures and that a faxed Agreement
containing the signatures (original or faxed) of all the parties is binding on the
parties.
19.10. Memorandum of Development Agreement. McGraw -Hill shall
promptly record a Memorandum of Development Agreement in the form attached
hereto as Exhibit H in the office of the Recorder of Dubuque County, lowa.
McGraw -Hill shall pay the costs for so recording.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
SIGNATURE PAGE FOLLOWS.]
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CITY OF DUBUQUE, IOWA
By:
eanne Schneider, City Clerk
F:\USERS\blindahl\Agreements \McGraw Hill \McGraw Hill Port of
Dubuque\ DevelopmentAgreementMcGrawHillFinal061606jao .doc
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THE MCGRAW -HILL COMPANIES,
INC.
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