McGraw HIll Expand, P. of Dbq
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MEMORANDUM
June 1, 2006
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Expansion of McGraw-Hili Companies, Inc. in the Port of Dubuque
Economic Development Director Dave Heiar is recommending that a public hearing be
set for June 19, 2006, to consider a Development Agreement with McGraw-Hili
Companies, Inc., including a 1.99 acre land sale in the Port of Dubuque for construction
of a 135,000 square foot office complex.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
AI ~./hL
MiChael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
THE CITY Of'
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MEMORANDUM
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June 5, 2006
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Directo~~
SUBJECT: Expansion of McGraw Hill Companies, Inc. in the Port of Dubuque
INTRODUCTION
This memorandum presents for City Council consideration a resolution initiating
disposition of approximately 1.99 acres identified on the attached exhibit to McGraw Hill
Companies, Inc., who will be constructing a 135,000 sq. ft. office complex in the Port of
Dubuque. The attached resolution sets a public hearing on the disposition of this
property to McGraw Hill Companies, Inc.
BACKGROUND
City staff has worked with Greater Dubuque Development Corporation and McGraw Hill
Companies, Inc. on an expansion at the Port of Dubuque. The company plans to
relocate its current operation from Kerper Boulevard. They have committed to retaining
the current 276 full time positions and 113 part time positions, and adding at lease 24
full time positions and 5 part time positions.
DISCUSSION
The proposed Development Agreement provides for several incentives to encourage
the expansion. An Acquisition Grant reduces the asking price of the land from
$435,600/acre to $217,800/acre.
A 1 O-year tax rebate has been offered to the company to assist in their expansion and
relocation. The rebate is a form of tax increment financing without issuing a tax
increment finance bond to loan monies to the company upfront. As the company pays
its future tax obligation on the new improvements, the City will rebate 100% (minus debt
service and the School District Physical Plant and Equipment Levy) of the new TIF
increment for 10 years.
The attached Development Agreement establishes the terms of the sale of the property
to McGraw Hill Companies, Inc. The key elements of the agreement include the
following:
1. The purchase price is $435,600 per acre for 1.99 acres. An Acquisition Grant
to the developer reduces the cost to $217,800 per acre.
2. The property will be conveyed on or before July 28, 2006.
3. The company must construct a building of approximately 135,000 sq. ft.,
costing approximately $18 million within 18 months of closing.
4. Should the site require environmental remediation, the costs will be shared as
follows;
City shall pay the first $100,000 of the remediation costs;
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-Hili: 56.5%.
City's total share of the remediation costs shall not exceed the purchase
price. McGraw-Hili shall be solely responsible for the remainder of the
remediation costs.
5. McGraw Hill Companies; Inc. must retain 276 existing full time positions and
113 part time positions. They must also create 24 full time positions and 5
part time positions. All of these positions must be retained for 7 additional
years after the initial 36 months.
6. The company will receive a 10 year TIF in the form of a yearly tax rebate on
the value of the assessable improvements.
7. The City will retain ownership and maintain the parking lot, but McGraw Hill
will pay for the construction of the parking lot improvements, estimated to cost
$1 million. In return, McGraw Hill employees will be allowed to use the lot
from 6 a.m. to 5 p.m. on work days. The City will be able to utilize the unused
stalls at any time, and the entire lot after 5 p.m. on week days in addition to
weekends and holidays. McGraw Hill can receive special authorization from
the City for their employees to use the parking areas at busy times beyond
these stated limitations.
Additional terms and conditions of the disposition of the property are included within the
attached Development Agreement.
RECOMMENDATION
I recommend that the City Council set for public hearing the disposition of the Port of
Dubuque property to McGraw Hill Companies, Inc. for the purpose of constructing a
135,000 sq. ft. office complex. This action supports the Council's objectives to assist a
local business expand its operations and create new jobs.
ACTION STEP
The action step for the City Council is to adopt the attached resolution.
F:\USERS\DHeiar\Memos to MVM\Expansion of McGraw Hill Companies in the Port of Dubuque.doc
Prepared by: Barry A. Lindahl, Esq. 300 Main Street Suite 330, Dubuque IA 52001 563583-4113
Return to: Barry A. Lindahl, Esq. 300 Main Street Suite 330, Dubuque IA 52001 563583-4113
RESOLUTION NO. 217-06
INTENT TO DISPOSE OF AN INTEREST IN CITY OF DUBUQUE REAL ESTATE
AND
FIXING THE DATE FOR A PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA ON THE PROPOSED AUTHORIZATION OF URBAN
RENEWAL TAX INCREMENT REVENUE OBLIGATIONS AND THE EXECUTION OF
A DEVELOPMENT AGREEMENT RELATING THERETO WITH MCGRAW HILL
COMPANIES, INC., AND PROVIDING FOR THE PUBLICATION OF NOTICE
THEREOF
Whereas, the City of Dubuque, Iowa (City) is the owner of the following real property
(the Property);
Lot 1 of Riverwalk 6th Addition in the City of Dubuque, Iowa
And
Whereas, City, McGraw Hill Companies, Inc. 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, pursuant to
which City will convey a part of the Property to McGraw Hill Companies, Inc. as shown on
Exhibit A attached hereto; and
Whereas, the City Council has tentatively determined that it would be in the best
interests of the City to approve the Development Agreement, including the conveyance of
the part of the Property to McGraw Hill Companies, Inc.; and
Whereas, it is deemed necessary and advisable that City should authorize Urban
Renewal Tax Increment Revenue obligations, as authorized by Chapter 403 of the
Code of Iowa, and to enter into the Development Agreement relating thereto for the
purpose of carrying out an Urban Renewal Plan 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 andlor 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 of Dubuque intends to dispose of its interest in the foregoing-
described Property by Deed to McGraw Hill Companies, Inc,
Section 2, The City Clerk is hereby authorized and directed to cause this
Resolution and a notice to be published as prescribed by Iowa Code Section 364,7 of a
public hearing on the City's intent to dispose of the foregoing-described Property, to be
held on the 19th day of June, 2006, at 6:30 o'clock p,m, in the Auditorium of the Carnegie-
Stout Public Library in Dubuque, Iowa, 11th & Locust, Dubuque, Iowa,
Section 3, The City Council will also meet at said time and place for the
purpose of taking action on the matter of the authorization of Urban Renewal Tax
Increment Revenue obligations and the execution of the Development Agreement
relating thereto with McGraw Hill Companies, Inc" the proceeds of which obligations will
be used to carry out certain of the special financing activities described in the Urban
Renewal Plan for the Greater Downtown Economic Development District, consisting of
the funding of economic developments grants to McGraw Hill Companies, Inc, pursuant
to the Development Agreement under the terms and conditions of said Urban Renewal
Plan, It is expected that the aggregate amount of the Tax Increment Revenue
obligations will be $6,300,000 more or less,
Section 4, 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 5, That the notice of the proposed action to issue said obligations
shall be in substantially the form attached hereto,
Passed, approved and adopted this 5th day of June, 2006,
Ann E. Michalski, Mayor Pro-Tern
Attest: Jeanne F, Schneider, City Clerk
EXHIBIT A
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