Loading...
Weaver Castle, LLC Development Agreement_InitiateTHE CITY OF Dui 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: Development Agreement with Weaver Castle, LLC to redevelop property at 407 -409 Loras Boulevard DATE: January 16, 2013 Economic Development Director Dave Heiar recommends the City Council set a public hearing on February 4, 2013, to approve a Development Agreement with Weaver Castle, LLC to redevelop the property located at 407 -409 Loras Boulevard into four apartments. The key elements of the Development Agreement are: 1) The project will receive $40,000 in incentives through the Downtown Housing Incentive Program. 2) Facade, Design and Planning grants totaling up to $35,000 will be utilized with this project. 3) Weaver Castle, LLC must redevelop 407 -409 Loras Blvd at a cost of approximately $250,000 by no later than December 31, 2013. I concur with the recommendation and respectfully request Mayor and City Council approval. Michael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Manager David J. Heiar, Economic Development Director Masterpiece on the Mississippi Dubuque katil All- America City 1 2007 TO: Michael Van Milligen, City Manager FROM: David J. Heiar, Economic Development Director SUBJECT: Development Agreement with Weaver Castle, LLC to redevelop property at 407 -409 Loras Blvd DATE: January 8, 2013 INTRODUCTION This memorandum presents for City Council to set a public hearing on February 4, 2013 on entering into a Development Agreement for the property located at 407 -409 Loras Blvd. BACKGROUND The Bluff /Locust area has been identified as a pocket neighborhood in need of reinvestment. The City Council expanded the Downtown Urban Renewal District to include this neighborhood in hopes of encouraging reinvestment in this area. The FY 2014 budget also included funds to expand traditional downtown incentives to this neighborhood. The duplex at 407 -409 Loras is on the edge of this targeted neighborhood and was acquired by Gary and Chris Stelpflug in early 2012. This building, at the corner of Loras and Bluff, has set empty for several years. The Stelpflug's have previously completed a couple of rehabilitation projects in other communities but this is their first project in Dubuque (Chris grew up in Dubuque, and one of their son's is currently a student at Loras). The Stelpflug's originally planned to do a nice renovation of the duplex. However, after meeting with City Staff, they did additional research and have decided to do a historic renovation with the help of Federal and State Historic tax credits. They have also contracted with Gary Carner, a local contractor who has overseen the rehabilitation of the Franklin (Central Alternative) School project, to take the lead on this restoration project. The Stelpflug's created a limited liability corporation to own the project, called Weaver Castle, LLC. City staff has worked with Weaver Castle, LLC to formulate a funding package to redevelop the property located at 407 -409 Loras Blvd. Weaver Castle, LLC plans to invest $300,000 in redeveloping the vacant building into 4 apartments within the building. DISCUSSION The proposed Development Agreement provides for several incentives to encourage redevelopment of the property. The Development Agreement requires the redevelopment of the property located at 407 -409 Loras Blvd into four (4) apartments. The key elements of the Development Agreement include the following: 1) The project will receive $40,000 in incentives through the Downtown Housing Incentive Program. 2) Facade, Design and Planning grants totaling up to $35,000 will be utilized with this project. 3) Weaver Castle, LLC must redevelop 407 -409 Loras Blvd at a cost of approximately $250,000 by no later than December 31, 2013. Additional terms and conditions of the disposition of the property are included within the attached Development Agreement. Since the property is located in the West 11th Street Urban Revitalization District and would qualify for property tax abatements for 10 years, no TIF rebate is being proposed for this project. RECOMMENDATION /ACTION STEP I recommend the City Council adopts the attached resolution to set a public hearing on the attached Development Agreement with Weaver Castle LLC. F: \USERS \Econ Dev \Stelpflug Properies \Weaver Castle LLC \20130116 Weaver Castle - Stelpflug Public Hearing Memo DA.doc Prepared by /Return to: David Heiar. 50 W. 13th Street, Dubuque IA 52001, 563 589 -4393 RESOLUTION NO. 22 -13 FIXING THE DATE FOR A PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA ON THE PROPOSED ISSUANCE OF URBAN RENEWAL TAX INCREMENT REVENUE OBLIGATIONS AND THE EXECUTION OF A DEVELOPMENT AGREEMENT RELATING THERETO WITH WEAVER CASTLE, LLC, AND PROVIDING FOR THE PUBLICATION OF NOTICE THEREOF Whereas, City and Weaver Castle, LLC have entered into a Development Agreement, subject to the approval of the City Council, a copy of which is now on file at the Office of the City Clerk, City Hall, 13th and Central Avenue, Dubuque, Iowa; and Whereas, the City Council has tentatively determined that it would be in the best interests of the City to approve the Development Agreement, with Weaver Castle, LLC; and Whereas, it is deemed necessary and advisable that City should authorize Urban Renewal Tax Increment Revenue obligations, as provided by Chapter 403 of the Code of Iowa, and to enter into the Development Agreement relating thereto for the purpose of carrying out the rehabilitation of property located at 407 -409 Loras Blvd as hereinafter described; and Whereas, before said obligations may be approved, Chapter 403 of the Code of Iowa requires that the City Clerk publish a notice of the proposal and of the time and place of the meeting at which the City Council proposes to take action thereon and at which meeting the City Council shall receive oral and /or written objections from any resident or property owner of said City to such proposed action. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The City Clerk is hereby authorized and directed to cause this Resolution and a notice to be published as prescribed by Iowa Code Section 403.9 of a public hearing on the City's intent authorize Urban Renewal Tax Increment Revenue obligations, to be held on the 4th day of February, 2013, at 6:30 o'clock p.m. in the City Council Chambers at the Historic Federal Building, 350 W. 6th St., Dubuque, Iowa. Section 2. The City Council will meet at said time and place for the purpose of taking action on the matter of authorizing Urban Renewal Tax Increment Revenue obligations and the execution of the Development Agreement relating thereto with Weaver Castle, LLC, the proceeds of which obligations will be used to carry out certain of the special financing activities described in the Greater Downtown Urban Renewal District, consisting of the funding of economic developments grants to Weaver Castle, LLC pursuant to the Development Agreement under the terms and conditions of said West 11th Street Urban Revitalization District Plan. It is expected that the aggregate amount of the Tax Increment Revenue obligations is approximately $75,000. Section 3. The Clerk is hereby directed to cause at least one publication to be made of a notice of said meeting, in a newspaper, printed wholly in the English language, published at least once weekly, and having general circulation in said City, said publication to be not less than four days nor more than twenty days before the date of said meeting on the issuance of said obligations. Section 4. That the notice of the proposed action to issue said obligations shall be in substantially the form attached hereto. Attest: Passed, approved and adopted this 22th day of January, 2013. Kevin irnstahl, City Cle'"'� Roy D /JBuol, Mayor F: \USERS \Econ Dev \Stelpflug Properies \Weaver Castle LLC120130108 Weaver Castle DA Resolution setting Public Hearing.doc NOTICE OF A PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA, ON THE MATTER OF THE PROPOSED AUTHORIZATION OF URBAN RENEWAL TAX INCREMENT REVENUE OBLIGATIONS AND THE EXECUTION OF A DEVELOPMENT AGREEMENT RELATING THERETO WITH THE WEAVER CASTLE, LLC PUBLIC NOTICE is hereby given that the City Council of the City of Dubuque, Iowa, will hold a public hearing on the 4th day of February, 2013, at 6:30 p.m. in the City Council Chambers at the Historic Federal Building, 350 W. 6th St., Dubuque, Iowa, at which meeting the City Council proposes to take action for the authorization of Urban Renewal Tax Increment Revenue obligations and the execution of a Development Agreement relating thereto with Weaver Castle, LLC, for the rehabilitation of property located at 407- 409 Loras Blvd in order to carry out certain of the special financing activities in the Greater Downtown Urban Renewal District, consisting of the funding of economic development grants to Weaver Castle, LLC, pursuant to a Development Agreement entered into with Weaver Castle, LLC under the terms and conditions of said agreement. It is expected that the aggregate amount of the Tax Increment Revenue obligations is approximately $75,000. At the meeting, the City Council will receive oral and written objections from any resident or property owner of said City to the above action. After all objections have been received and considered, the City Council may at this meeting or at any adjournment thereof, the approval of the Development Agreement, and authorization of such Tax Increment Revenue obligations or will abandon the proposal. By order of the City Council said hearing and appeals there from shall be held in accordance with and governed by the provisions of Section 403.9 of the Code of Iowa. This notice is given by order of the City Council of the City of Dubuque, Iowa, as provided by Chapter 403 of the Code of Iowa. Dated this 22nd day of February, 2013. Kevin Firnstahl City Clerk of Dubuque, Iowa F: \USERS \Econ Dev \Stelpflug Properies \Weaver Castle LLC\20130108 Weaver Castle DA Resolution setting Public Hearing.doc DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF DUBUQUE, IOWA AND WEAVER CASTLE LLC THIS DEVELOPMENT AGREEMENT (Agreement) dated for reference purposesthe day of 2013 is made and entered into by and between the City of Dubuque, Iowa (City), and Weaver Castle LLC (Developer). WHEREAS, Developer is the owner of the real estate locally known as 407 -409 Loras Blvd., Dubuque, Iowa and legally described as follows(the Property): Lot 1 of Lot 2 of Lot 2, Lot 1 of Lot 2, and Lot 2 of Lot 2 of Lot 2, all of Subdivision of Out Lot 667 in the City of Dubuque, Iowa, according to the recorded Plats thereof. WHEREAS, the Property is located in the Greater Downtown Urban Renewal District (the District) which has been so designated by City Council Resolution 271 -12 as a slum and blighted area (the Project Area) defined by Iowa Code Chapter 403 (the Urban Renewal Law); and WHEREAS, Developer has undertaken the redevelopment of a three -story building located on the Property and will be operating the same during the term of this Agreement; and WHEREAS, Developer will make an additional capital investment in building improvements, equipment, furniture and fixtures in the Property (the Project); and WHEREAS, the Property is historically significant and it is in the City's best interest to preserve the Property; and WHEREAS, pursuant to Iowa Code Section 403.6(1), and in conformance with the Urban Renewal Plan for the Project Area adopted on May 18, 1967 and last amended on October 1, 2012, City has the authority to enter into contracts and agreements to implement the Urban Renewal Plan, as amended; and WHEREAS, the Dubuque City Council believes it is in the best interests of the City to encourage Developer in the development of the Property by providing certain incentives as set forth herein. NOW, THEREFORE, the parties to this Development Agreement, in consideration of the promises, covenants and agreements made by each other, do hereby agree as follows: SECTION 1. REPRESENTATIONS AND WARRANTIES 1.1 Representations and Warranties of City. In order to induce Developer to enter into this Agreement, City hereby represents and warrants to Developer that to the best of City's knowledge: (1) 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 Developer at the time of closing confirming the representations contained herein, in the form attached hereto as Exhibit A. (2) City shall exercise its best efforts to cooperate with Developer in the development process. (3) City shall exercise its best efforts to resolve any disputes arising during the development process in a reasonable and prompt fashion. (4) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement are not prevented by, limited by, in conflict with, or result in a violation or breach of, the terms, conditions or provisions of the charter of City, any evidence of indebtedness, agreement or instrument of whatever nature to which City is now a party or by which it or its property is bound, or constitute a default under any of the foregoing. (5) There are no actions, suits or proceedings pending or threatened against or affecting City in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the financial position or operations of City or which affects the validity of the Agreement or City's ability to perform its obligations under this Agreement. (6) No ordinance or hearing is now before any local governmental body that either contemplates or authorizes any public improvements or special tax levies, the cost of which may be assessed against the Property. To the best of City's knowledge, there are no plans or efforts by any government agency to widen, modify, or re -align any street or highway providing access to the Property and there are no pending or intended public improvements or special assessments affecting the Property which will result in any charge or lien be levied or assessed against the Property. (7) The representations and warranties contained in this article shall be correct in all respects on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of the Closing Date. 2 (8) 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 Greater Downtown Urban Renewal Plan, most recently approved by City Council of City on October 1, 2012, and as subsequently amended through and including the date hereof, attached as Exhibit E (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. 1.2 Representations and Warranties of Developer. The Developer makes the following representations and warranties: (1) Developer is a limited liability company duly organized and validly existing under the laws of the State of Iowa, and has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as presently proposed to be conducted, and to enter into and perform its obligations under this Agreement. (2) This Agreement has been duly authorized, executed and delivered by Developer and, assuming due authorization, execution and delivery by City, is in full force and effect and is a valid and legally binding instrument of Developer enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally. Developer's counsel shall issue a legal opinion to City, at the time of closing, confirming the representations contained herein, in the form attached hereto as Exhibit B. (3) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement are not prevented by, limited by, in conflict with, or result in a violation or breach of, the terms, conditions or provisions of the articles of incorporation or the bylaws of Developer or any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which Developer is now a party or by which it or its property is bound, or constitute a default under any of the foregoing. (4) There are no actions, suits or proceedings pending or threatened against or affecting Developer in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, financial position or result of operations of Developer or which affects the validity of the Agreement or Developer's ability to perform its obligations under this Agreement. (5) Developer will perform its obligations under this Agreement in accordance with the material terms of this Agreement, the Urban Renewal Plan and all local, state and federal laws and regulations. 3 (6) Developer will use its best efforts to obtain, or cause to be obtained, in a timely manner, all material requirements of all applicable local, state, and federal laws and regulations which must be obtained or met. (7) Developer has firm commitments for permanent financing for the Project in an amount sufficient, together with equity commitments, to successfully complete the requirements of this Agreement and shall provide evidence thereof to City prior to the Closing Date. 1.3 Closing. The closing shall take place on the Closing Date which shall be the 25th day of February, 2013, or such other date as the parties shall agree in writing but in no event shall the Closing Date be later than the 13th day of April, 2013. 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. 1.4 Conditions to Closing. The closing of the transaction contemplated by this Agreement and all the obligations of Developer under this Agreement are subject to fulfillment, on or before the Closing Date, of the following conditions: (1) The representations and warranties made by City in Section 1.1 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 to that effect in the form of Exhibit C. (2) Developer shall have the right to terminate this Agreement at any time prior to the consummation of the closing on the Closing Date if Developer determines in its sole discretion that conditions necessary for the successful completion of the Project contemplated herein have not been satisfied in Developer's sole discretion. Upon the giving of notice of termination by Developer to City, this Agreement shall be deemed null and void. (3) Developer and City shall be in material compliance with all the terms and provisions of this Agreement. (4) Developer 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 Developer has firm financial commitments in an amount sufficient, together with equity commitments, to complete the Minimum Improvements (as defined herein) in conformance with the Construction Plans (as defined herein), or City shall have received such other evidence of Developer's financial ability as City in its reasonable judgment City requires. (5) Developer's counsel shall issue a legal opinion to City confirming the representations contained herein in the form attached hereto as Exhibit B. 4 1.5 City's Obligations at Closing. At or prior to the Closing Date, City shall deliver to Developer such other documents as may be required by this Agreement, all in a form satisfactory to Developer. SECTION 2. DEVELOPMENT ACTIVITIES 2.1 Required Minimum Improvements. Developer will make a capital investment of not less than Three Hundred Thousand Dollars ($300,000.00) to improve the Property (the Minimum Improvements). The Minimum Improvements include creating four (4) apartments for market -rate rental using Historic Tax Credits. 2.2 [This section intentionally left blank] 2.3 Plans for Construction of Minimum Improvements. Plans and specifications with respect to the development of the Property and the construction of the Minimum Improvements thereon (the Construction Plans) shall be in conformity with Urban Renewal Plan, this Agreement, and all applicable state and local laws and regulations, including but not limited to any covenants, conditions, restrictions, reservations, easements, liens and charges, recorded in the records of Dubuque County, Iowa. Developer shall submit to City, for approval by City, plans, drawings, specifications, and related documents with respect to the improvements to be constructed by Developer on the Property. All work with respect to the Minimum Improvements shall be in substantial conformity with the Construction Plans approved by City. 2.4 Timing of Improvements. Developer hereby agrees that construction of the Minimum Improvements on the Property shall be commenced within thirty (30) days after the Closing Date, and shall be substantially completed by December 31, 2013. The time 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. 2.5 Certificate of Completion. Promptly following the request of Developer upon completion of the Minimum Improvements, City shall furnish Developer with an appropriate instrument so certifying. Such certification (the Certificate of Completion) shall be in recordable form and shall be a conclusive determination of the satisfaction of Developer's obligations to make the Minimum Improvements under this Agreement and completion of the Minimum Improvements by Developer as required by this Agreement. SECTION 3. CITY PARTICIPATION 5 3.1 Financial Incentives. The financial incentives set forth in this Section 3 are full and complete and cannot be modified except by amendment to this Agreement. City is under no obligation to approve any such amendment. 3.2 Downtown Housing Incentive. (1) City agrees to provide to Developer on the terms and conditions set forth in the Downtown Housing Incentive Program attached hereto as Exhibit F, a grant in the amount of Forty Thousand Dollars ($40,000.00) (the Grant). (2) Grant funds will not be disbursed to Developer until City has issued a Certificate of Occupancy for the Project. The Grant shall be paid in Ten Thousand Dollar ($10,000.00) payments for each apartment that receives a Certificate of Occupancy up to a maximum of four apartments. Prior to the disbursement of any funds, Developer shall provide evidence satisfactory to City that the Minimum Improvements have been completed in accordance with the Plans and other documentation submitted to City with the Downtown Housing Assistance application. 3.3 The Property is located in the West 11th Street Urban Revitalization District and Developer is eligible for property tax abatements on the Minimum Improvements for a period of up to 10 years. Developer must apply for such abatement by February 1st of the assessment year for which the abatement is first claimed, but not later than the year in which all the Minimum Improvements are first assessed for taxation. The application for abatement must contain, at a minimum, the following: a) The nature of the Minimum Improvements; b) The cost of the Minimum Improvement; c) The actual or estimated date of completion; and d) The exemption option to be applied. 3.4 Design Grant. City agrees to provide a matching (1:1) grant not to exceed ten thousand dollars ($10,000) to reimburse Developer for documented predevelopment costs, architectural and engineering fees and other authorized soft costs associated with the rehabilitation of the Property. Prior to the release of any grant funds, City must determine to its satisfaction that the Project is substantially complete and meets the conditions of this Agreement. 3.5 Facade Grant. City agrees to provide a matching (1:1) grant not to exceed ten thousand dollars ($10,000) to reimburse Developer for documented costs for front or rear facade renovations to the Property to eliminate inappropriate additions or alterations and to restore the facade to its historic appearance, or to rehabilitate the facade to include new windows, paint, signage, awnings, etc. to improve the overall appearance of the Property, and the costs of landscaping or screening with fencing or retaining walls if such landscaping or screening improves the Property adjacent to the public right -of -way. 6 3.6 Financial Consultant Grant. City agrees to provide a grant not to exceed fifteen thousand dollars ($15,000) to reimburse Developer for documented costs related to hiring a financial consultant to evaluate the Project's feasibility. Such funds will be disbursed only on completion of the Minimum Improvements, documentation of costs and an inspection of the completed Project at a rate of $.50 for each $1.00 of costs incurred. 3.7. Written requests for payment of grant funds must be submitted to the Economic Development Department together with all required documentation. SECTION 4. COVENANTS OF DEVELOPER 4.1 The Minimum Improvements shall conform to the U.S. Secretary of the Interior's Standards for Rehabilitation. 4.2 [This section intentionally left blank.] 4.3 Books and Records. During the term of this Agreement, Developer shall keep at all times and make available to City upon reasonable request 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 Developer in accordance with generally accepted accounting principles consistently applied throughout the period involved, and Developer shall provide reasonable protection against loss or damage to such books of record and account. 4.4 Real Property Taxes. Developer 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 unless Developer's obligations have been assumed by another person pursuant to the provisions of this Agreement. 4.5 No Other Exemptions. During the term of this Agreement, Developer agrees not to apply for any state or local property tax exemptions which are available with respect to the Development Property or the Minimum Improvements located thereon that may now be, or hereafter become, available under state law or city ordinance during the term of this Agreement, including those that arise under Iowa Code Chapters 404 and 427, as amended. 4.6 Insurance Requirements. (1) Developer shall provide and maintain or cause to be maintained at all times during the process of constructing the Minimum Improvements and at its sole cost and expense builder's risk insurance, written on a Completed Value Form in an amount equal to one hundred percent (100 %) of the building (including Minimum Improvements) replacement value when construction is completed. Coverage shall include the "special perils" form and developer shall furnish City with proof of insurance in the form of a certificate of insurance. 7 (2) Upon completion of construction of the Minimum Improvements and up to the Termination Date, Developer shall maintain, or cause to be maintained, at its cost and expense property insurance against loss and /or damage to the building (including the Minimum Improvements) under an insurance policy written with the "special perils" form and in an amount not less than the full insurable replacement value of the building (including the Minimum Improvements). Developer shall furnish to City proof of insurance in the form of a certificate of insurance. (3) The term "replacement value" shall mean the actual replacement cost of the building with Minimum Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be reasonably determined from time to time at the request of City, but not more frequently than once every three (3) years. (4) Developer shall notify City immediately in the case of damage exceeding $50,000 in amount to, or destruction of, the 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 Developer as its interests may appear, and Developer 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, Developer shall apply the Net Proceeds of any insurance relating to such damage received by Developer 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). Developer shall complete the repair, reconstruction and restoration of Minimum Improvements whether or not the Net Proceeds of insurance received by Developer for such purposes are sufficient. 4.7 Preservation of Property. During the term of this Agreement, Developer 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. 4.8 Non - Discrimination. In carrying out the project, Developer shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, sexual orientation, gender identity, national origin, age or disability. 4.9 Conflict of Interest. Developer 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 8 tenure. In connection with this obligation, Developer 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. 4.10 Non - Transferability. Until such time as the Minimum Improvements are complete (as certified by City under Section 2.5), this Agreement may not be assigned by Developer nor may the Property be transferred by Developer to another party. Thereafter, with the prior written consent of City, which shall not be unreasonably withheld, Developer shall have the right to assign this Agreement, and upon assumption of the Agreement by the assignee, Developer shall no longer be responsible for its obligations under this Agreement. 4.11 No change in Tax Classification. Developer agrees that it will not take any action to change, or otherwise allow, the classification of the Property for property tax purposes to become other than commercial property and to be taxed as such under Iowa law. This restriction shall terminate upon the termination of this Agreement. Developer may have the Property reclassified in the event the State of Iowa laws are modified to allow a building containing four apartments within one building to be classified as residential for property tax purposes. 4.12 Restrictions on Use. Developer agrees for itself, and its successors and assigns, and every successor in interest to the Property or any part thereof, for the duration of this Agreement, 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 agrees that use of the Property as a restaurant and upper -story housing, is in full compliance with the Urban Renewal Plan) (however, Developer 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, sexual orientation, national origin, age 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, Developer 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). 4.13 Compliance with Laws. Developer shall comply with all laws, rules and regulations relating to its businesses, other than laws, rules and regulations the failure to comply with or the sanctions and penalties resulting therefrom, would not have a material adverse effect on the business, property, operations, financial or otherwise, of Developer. SECTION 5. EVENTS OF DEFAULT AND REMEDIES 9 5.1 Events of Default Defined. 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: (1) Failure by Developer to pay or cause to be paid, before delinquency, all real property taxes assessed with respect to the Minimum Improvements and the Property. (2) Failure by Developer to cause the construction of the Minimum Improvements to be commenced and completed pursuant to the terms, conditions and limitations of this Agreement. (3) Transfer of any interest by Developer of the Minimum Improvements in violation of the provisions of this Agreement prior to the issuance of the final Certificate of Completion. (4) Failure by Developer 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. 5.2. Remedies on Default by Developer. Whenever any Event of Default referred to in Section 5.1 of this Agreement 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 Developer (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 Developer does not provide assurances to City that the Event of Default will be cured as soon as reasonably possible thereafter: (1) City may suspend its performance under this Agreement until it receives assurances from the Developer deemed adequate by City, that the Developer will cure its default and continue its performance under this Agreement; (2) Until the Closing Date, City may cancel and rescind this Agreement; (3) Until issuance of the Certificate of Completion, City shall be entitled to recover from Developer the sum of all amounts expended by City in connection with the funding of the Downtown Rehab Loan /Grant and Economic Development Grant to Developer and City may take any action, including any legal action it deems necessary, to recover such amounts from the Developer; (4) City may withhold the Certificate of Completion; or (5) City 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. 10 5.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to City 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. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 5.4 No Implied Waiver. 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. 5.5 Agreement to Pay Attorneys' Fees and Expenses. 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 shall be entitled to recover reasonable attorneys' fees and costs 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 that may be awarded. 5.6 Remedies on Default by City. If City defaults in the performance of this Agreement, Developer may take any action, including legal, equitable or administrative action that may appear necessary or desirable to collect any payments due under this Agreement, to recover expenses of Developer, or to enforce performance and observance of any obligation, agreement, or covenant of City under this Agreement. Developer may suspend their performance under this Agreement until they receive assurances from City, deemed adequate by Developer, that City will cure its default and continue its performance under this Agreement. SECTION 6. GENERAL TERMS AND PROVISIONS 6.1 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 Developer: With copy to: Weaver Castle, LLC Attn: Gary Stelpflug 7693 Pigeon River Road Lancaster, WI 53813 Attorney A. John Arenz O'Connor & Thomas, P.C. 700 Locust Street, Suite 200 11 If to City: With copy to: Dubuque, IA 52001 City Manager 50 W. 13th Street Dubuque, Iowa 52001 Phone: (563) 589 -4110 Fax: (563) 589 -4149 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. 6.2 Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of City and Developer and their respective successors and assigns. 6.3 Termination Date. This Agreement and the rights and obligations of the parties hereunder shall terminate on December 31, 2023 (the Termination Date). 6.4. 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. 6.5 Memorandum of Development Agreement. Developer shall promptly record a Memorandum of Development Agreement in the form attached hereto as Exhibit D in the office of the Recorder of Dubuque County, Iowa. Developer shall pay the costs for so recording. IN WITNESS WHEREOF, City has caused this Agreement to be duly executed in its name and behalf by its Mayor and attested to by its City Clerk and Developer has caused this Agreement to be duly executed on or as of the first above written. CITY OF DUBUQUE, IOWA WEAVER CASTLE LLC. By By Roy D. Buol Gary Stelpflug, Manager Mayor Attest: Kevin S. Firnstahl City Clerk 12 (City Seal) STATE OF IOWA COUNTY OF DUBUQUE ) ) ) SS On this day of 20 before me the undersigned, a Notary Public in and for the said County and State, personally appeared Roy D. Buol and Kevin S. Firnstahl, to me personally known, who, being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of the City of Dubuque, Iowa, a municipal corporation executing the instrument to which this is attached; that the seal affixed hereto is the seal of said municipal corporation; that said instrument was signed and sealed on behalf of the City of Dubuque, Iowa, by authority of its City Council; and that said Mayor and City Clerk acknowledged the execution of said instrument to be the voluntary act and deed of said City, by it and by them voluntarily executed. Notary Public STATE OF IOWA COUNTY OF DUBUQUE ) ) ) SS On this day of 20 before me the undersigned, a Notary Public in and for the State of Iowa, personally appeared Gary Stelpflug, to me personally known, who, being by me duly sworn, did say that he is Manager of Weaver Castle LLC. the limited liability company executing the instrument to which this is attached and that as said Manager of Weaver Castle LLC. acknowledged the execution of said instrument to be the voluntary act and deed of said company, by it and by him voluntarily executed. Notary Public 13 EXHIBIT A — EXHIBIT B — EXHIBIT C EXHIBIT D EXHIBIT E — EXHIBIT F — LIST OF EXHIBITS City Attorney's Certificate Opinion of Developer's Counsel — City Certificate — Memorandum of Development Agreement Urban Renewal Plan Downtown Housing Incentive Program 14 EXHIBIT A CITY ATTORNEY'S CERTIFICATE 15 BARRY A. LINDAHL, ESQ. CITY ATTORNEY RE: Dear (DATE) THE CITY OF DUB I have acted as counsel for the City of Dubuque, Iowa, in connection with the execution and delivery of a certain Development Agreement between (Developer) and the City of Dubuque, Iowa (City) dated for reference purposes the day of , 20_ The City has duly obtained all necessary approvals and consents for its execution, delivery and performance of this Agreement and has full power and authority to execute, deliver and perform its obligations under this Agreement, and to the best of my knowledge, the representations of the City Manager in his letter dated the day of , 20_, are correct. BAL:tls 16 Very sincerely, Barry A. Lindahl, Esq. City Attorney EXHIBIT B OPINION OF DEVELOPER'S COUNSEL 17 Mayor and City Councilmembers City Hall 13th and Central Avenue Dubuque IA 52001 Re: Development Agreement Between the City of Dubuque, Iowa and Dear Mayor and City Councilmembers: We have acted as counsel for , in connection with the execution and delivery of a certain Development Agreement (Development Agreement) between Developer and the City of Dubuque, Iowa (City) dated for reference purposes the day of , 2013. We have examined the original certified copy, or copies otherwise identified to our satisfaction as being true copies, of the Development Agreement and such other documents and records as we have deemed relevant and necessary as a basis for the opinions set forth herein. Based on the pertinent law, the foregoing examination and such other inquiries as we have deemed appropriate, we are of the opinion that: 1. Developer is a limited liability company organized and existing under the laws ofthe State of Iowa and has full power and authority to execute, deliver and perform in full the Development Agreement. The Development Agreement has been duly and validly authorized, executed and delivered by Developer and, assuming due authorization, execution and delivery by City, is in full force and effect and is a valid and legally binding instrument of Developer enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally. 2. To our actual knowledge with no duty to inquire, the execution, delivery and performance by Developer of the Development Agreement and the carrying out ofthe terms thereof, will not result in violation of any provision of, or in default under, the articles of incorporation and bylaws of Developer, any indenture, mortgage, deed of trust, indebtedness, agreement, judgment, decree, order, statute, rule, regulation or restriction to which Developer is a party or by which Developer's property is bound or subject. 3. To our actual knowledge with no duty to inquire, there are no actions, suits or proceedings pending or threatened against or affecting Developer in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business (present or prospective), financial position or results of operations of Developer or which in any manner raises any questions affecting the validity ofthe Agreement or the Developer's ability to perform Developer's obligations thereunder. This opinion is rendered for the sole benefit of the City of Dubuque and no other party may rely on this opinion. 18 This opinion is rendered and valid as of the date of this letter and we have no duty to update this opinion for any matters which come to our knowledge after the date of this letter. Sincerely, 19 EXHIBIT C CITY CERTIFICATE 20 City Manager's Office 50 West 13th Street Dubuque, Iowa 52001 -4864 (563) 589 -4110 phone (563) 589 -4149 fax ctymgr @cityofdubuque.org Dear (DATE) THE CITY OF DUB F I am the City Manager of the City of Dubuque, Iowa and have acted in that capacity in connection with the execution and delivery of a certain Development Agreement between (Developer) and the City of Dubuque, Iowa (City) dated for reference purposes the day of , 20_. On behalf of the City of Dubuque, I hereby represent and warrant to Developer that: (1) 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 Developer at time of closing confirming the representation contained herein, in the form attached hereto as Exhibit B. (2) City shall exercise its best efforts to cooperate with Developer in the development process. (3) City shall exercise its best efforts to resolve any disputes arising during the development process in a reasonable and prompt fashion. (4) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement are not prevented by, limited by, in conflict with, or result in a violation or breach of, the terms, conditions or provisions of the charter of City, any evidence of indebtedness, agreement or instrument of whatever nature to which City is now a party or by which it or its property is bound, or constitute a default under any of the foregoing. (5) There are no actions, suits or proceedings pending or threatened against or affecting City in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the financial position or operations of City or which 21 affects the validity of the Agreement or City's ability to perform its obligations under this Agreement. (6) No ordinance or hearing is now or before any local governmental body that either contemplates or authorizes any public improvements or special tax levies, the cost of which may be assessed against the Property. To the best of City's knowledge, there are no plans or efforts by any government agency to widen, modify, or re -align any street or highway providing access to the Property and there are no pending or intended public improvements or special assessments affecting the Property which will result in any charge or lien be levied or assessed against the Property. (7) The representations and warranties contained in this article shall be correct in all respects on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of the Closing Date. MCVM:jh 22 Sincerely, Michael C. Van Milligen City Manager EXHIBIT D MEMORANDUM OF DEVELOPMENT AGREEMENT 23 Prepared by: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583 -4113 Return to: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583 -4113 MEMORANDUM OF DEVELOPMENT AGREEMENT A Development Agreement by and among the City of Dubuque, Iowa, an Iowa municipal corporation, of Dubuque, Iowa, and Weaver Castle LLC. was made regarding the following described premises: [INSERT LEGAL DESCRIPTION] The Development Agreement is dated for reference purposes the day of 2013, and contains covenants, conditions, and restrictions concerning the sale and use of said premises. This Memorandum of Development Agreement is recorded for the purpose of constructive notice. In the event of any conflict between the provisions of this Memorandum and the Development Agreement itself, executed by the parties, the terms and provisions of the Development Agreement shall prevail. A complete counterpart of the Development Agreement, together with any amendments thereto, is in the possession of the City of Dubuque and may be examined at its offices as above provided. Dated this day of 2013. CITY OF DUBUQUE, IOWA WEAVER CASTLE LLC. By By Roy D. Buol Gary Stelpflug, Manager Mayor Attest: Kevin S. Firnstahl City Clerk 24 STATE OF IOWA COUNTY OF DUBUQUE ) ) ) SS On this _day of 20 before me, a Notary Public in and for the State of Iowa, in and for said county, personally appeared Roy D. Buol and Kevin S. Firnstahl, to me personally known, who being by me duly sworn did say that they are the Mayor and City Clerk, respectively of the City of Dubuque, a Municipal Corporation, created and existing under the laws of the State of Iowa, and that the seal affixed to said 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. Notary Public, State of Iowa STATE OF IOWA COUNTY OF DUBUQUE ) ) ) SS On this day of 20 before me the undersigned, a Notary Public in and for the State of Iowa, personally appeared Gary Stelpflug, to me personally known, who, being by me duly sworn, did say that he is Manager of Weaver Castle LLC., the limited liability company executing the instrument to which this is attached and that as said Manager of Weaver Castle LLC., acknowledged the execution of said instrument to be the voluntary act and deed of said company, by it and by him voluntarily executed. Notary Public, State of Iowa 25 EXHIBIT E Urban Renewal Plan 26 Prepared by: Return to: Phil Wagner, City of Dubuque, 50 W. 13th Street, Dubuque, IA 52001 (563) 589 -4393 Kevin S. Firnstahl, City of Dubuque, 50 W. 13th Street, Dubuque, IA 52001 (563) 589 -4121 AMENDED and RESTATED URBAN RENEWAL PLAN Greater Downtown Urban Renewal District (A merger of the Downtown Dubuque, Ice Harbor, Kerper Boulevard, East 7th Street and Quebecor Urban Renewal Districts) City of Dubuque, Iowa This Amended and Restated Urban Renewal Plan for the Greater Downtown Urban Renewal District traces its beginnings to the merger of the Downtown Urban Renewal Area Project Number Iowa R -15, originally established by Resolution 123 -67 by the City Council of the City of Dubuque, Iowa on May 18, 1967 and subsequently amended and restated by Resolution 79 -71 on March 15, 1971, by Resolution 73 -74 on March 11, 1974, by Resolution 107 -82 on May 3, 1982, by Resolution 191 -84 on June 25, 1984, by Resolution 371 -93 on December 6, 1993, by Resolution 145 -94 on May 2, 1994, by Resolution 479 -97 on November 17, 1997, by Resolution 476 -98 on October 19, 1998 and by Resolution 187- 02 on April 1, 2002, with the Ice Harbor Urban Renewal District, originally established by Resolution 403 -89 of the City Council of the City of Dubuque, Iowa on December 18, 1989 and subsequently amended and restated by Resolution 241 -00 on June 5, 2000 and by Resolution 114 -02 on March 4, 2002. The Urban Renewal Plan for the Greater Downtown Urban Renewal District resulting from that merger was later amended by Resolution 170 -04 on April 19, 2004, by Resolution 391 -06 on August 21, 2006, by Resolution 108 -07 on February 20th, 2007, by Resolution 597 -07 on December 17, 2007, by Resolution 300 -08 on September 2, 2008, by Resolution 393 -09 on October 5, 2009, and by Resolution 26 -10 on July 19, 2010. On May 2, 2011 the Kerper Boulevard Industrial Park Economic Development District originally established by Resolution 274 -94 on August 15, 1994 and the East 7th Street Economic Development District, originally established by Resolution 144 -97 on April 7, 1997 were merged into and became part of the Greater Downtown Urban Renewal District, pursuant to Resolution 155 -11 approved on May 2, 2011. The Quebecor Economic Development District, originally established by Resolution 479 -02 on September 16, 2002, was merged into and became part of the Greater Downtown Urban Renewal District pursuant to Resolution approved on 2012. 27 EXHIBIT F DOWNTOWN HOUSING INCENTIVE PROGRAM 28 Economic Developm ent Department City Hall — Second Floor 50 West 13th Street Dubuque, Iowa 52001- 4864 (563) 589 -4393 Office (563) 589 -1733 Fax (563) 589 -6678 TDD Masterpiece on the Mississippi DOWNTOWN HOUSING INCENTIVE PROGRAM David J. Heiar Economic Development Director dh ei aracityofd ub uq ue. orq October 30, 2012 Phil Wagner Asst. Economic Development Director pwagn eracityofd ub uq ue.orq 50 West 13th Street Dubuque, IA 52001 563 -589 -4393 Proiects eligible to receive assistance from this established pool of funds must meet the following requirements: • The project must assist in the creation of new market -rate downtown rental and /or owner - occupied residential units within the Greater Downtown Urban Renewal District. • The project must be the rehabilitation of an existing structure. • Within the Washington Neighborhood, rental units must be located above a commercial component on the first floor of the building unless the project is rehabilitating or reusing a former church or school building. • Exterior alterations are subject to design review and approval. The Historic District Guidelines shall apply to projects located in Historic Preservation District. The Downtown Design Guidelines shall apply to all other project locations. Projects which conform to the applicable guidelines may be reviewed and approved by the City Planner. Projects that do not strictly conform to the applicable guidelines will be forwarded to the Historic Preservation Commission (HPC) for consideration. New construction or substantial rehabilitation projects may also be considered by the HPC. The process for review is at the discretion of the City Planner. Guidelines can be viewed and downloaded at http : //www.citvofdubuque.orgtdesian guidelines. • Any signs on the property that do not comply with City zoning regulations and design guidelines must be included in the design review and improved to comply with applicable City Codes. Submittal must include the design materials and colors that will be used on the sign face, how the sign will be displayed, and any lighting proposed. • Include detailed drawing of the proposed project. The plans should include dimensions and architectural details and label materials. Plans prepared by a design professional (e.g. architect or draftsperson) are strongly recommended. Applications without detailed drawings will not be considered complete and will not be accepted by the City. 29 • Deviation from an approved project plan may disqualify the project from the program. • Preference will be given to projects that also utilize Federal and /or State Historic Tax Credits. • No more than $10,000 in assistance will be considered per residential unit. • In general, no more than $750,000 will be provided to a single project. • No developer fee will be permitted until all city assistance is paid or satisfied in full. • The City will disperse awarded funds for the benefit of the project once the project is completed and a Certificate of Occupancy has been given for the housing units. • Each approved project will also be eligible to receive site - specific Tax Increment Financing (TIF) for up to a 10 year period, depending on the project type and scope. • A minimum of 2 new housing units must be created in the project. • Units smaller than 650 square feet will not be eligible for this project. • No residential units will be allowed to have a restriction of less than 80% of the median income. • No more than 65% of the units of any project can have a restriction of 80% of the median income. • A project that is funded by Low Income Tax Credits (LITC) is not eligible. • The owner(s) of the property must certify that all other property in the City of Dubuque in which the owner(s) has any interest, complies with all applicable City of Dubuque ordinances and regulations, including, but not limited to, housing, building, zoning, fire, health, and vacant and abandoned building regulations. 30