Dbq Screw Products assign Devel. Agree
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MEMORANDUM
August 3, 2006
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Dubuque Screw Products, Inc.
The Development Agreement between the City of Dubuque and Dubuque Screw Products,
Inc., approved by the City Council on June 19, 2006, provides, in Section 4.10, as follows:
Notwithstanding the foregoing, Developer desires to exchange other property of like
kind and qualifying use within the meaning of Section 1031 of the Internal Revenue
Code of 1986, as amended and the regulations promulgated thereunder, fee title in
the Property. Developer expressly reserves the right to assign its rights, but not its
obligations, hereunder to a Qualified Intermediary as provided in I.R.C. Regulation
1.1031(k)-1(g)(4) on or before the Closing Date, subject to the approval of City which
approval shall not be unreasonably withheld.
Attorney James Goodman is requesting on behalf of Dubuque Screw Products, Inc. that the
City Council approve the attached Assignment which allows Dubuque Screw Products, Inc. to
assign its right to acquire the property that is the subject of the Development Agreement to
Beck Construction, Inc. The City will convey the property to Beck Construction, Inc. and Beck
Construction, Inc. will construct the building on the property. Dubuque Screw Products, Inc. will
purchase the building from Beck Construction, Inc.
The Assignment has been reviewed and approved by City Attorney Barry Lindahl.
I concur with the recommendation and respectfully request Mayor and City Council approval.
MCVM/ksf
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Dave Heiar, Economic Development Director
E. Marshall Thomas, 1907-1989
Francis J. O'Connor, 1916--1990
ATTORNEYS AT lAW
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.WWW.octhoma.daw.com
August 3, 2006
Mr. Michael Van Milligen
Second floor of City Hall
50 W. 13th Street
Dubuque, IA 52001
"I
Ms. Jeanne Schneider
First floor of City Hall
50 W. 13th Street
Dubuque, IA 52001
RE: Dubuque Screw Products, Inc.
Dear Mr. Van Milligan and Ms. Schneider:
Dubuque Screw Products, Inc. and the City of Dubuque have entered into a Development Agreement for
the purchase of a lot and certain improvements and other requirements at Lot One (I) of Lot Five (5) of
Dubuque Industrial Center West 5th Addition in Dubuque. Dubuque Screw Products, Inc. will be selling its
existing location as part of a like kind exchange. A like kind exchange will allow Dubuque Screw Products,
Inc. to defer the taxable gain on the sale of its existing property. Beck Construction, Inc. has agreed to
construct Dubuque Screw Products, Inc.'s new facility. To facilitate the like kind exchange, Beck
Construction, Inc. will be purchasing the lot that is subject to the Development Agreement. Dubuque Screw
Products, Inc. and Beck Construction, Inc. will be entering into an assignment of the Development
Agreement, subject to the City's approval. The assignment assigns from Dubuque Screw Products, Inc. all
of its rights, interests and title, but not its obligations, to Beck Construction, Inc. The Development
Agreement contemplates a like kind exchange transaction with the City's approval, that will not be
unreasonably withheld.
Enclosed is a proposed Assignment for approval.
James E. Goodman, Jr.
ext. 247 I jgoodman@octhomaslaw.com
Dubuque Building I 700 Locust Street, Suite 200 P.O. Box 599 I Dubuque, Iowa 52004:0599 ] Phone 563.557.8400 I Fax 563.556.1867
JOHN C. O'CONNOR CHAD C. UlTOi * ]AMES E. GOODMAN, ]R. * KERRIE L. UEDTKEt CHRISTOPHER C. FRy
BRENDAN T. QUANN RICHARD K. WHITfY DAVIN C. CURTISS *t PETER D. ARLINC**t EMILY E. REINERS
A. ]OHN ARENZ t:J: STEPHEN c. KRUMPE *t PAUL]. SICWARTH t JOSHUA P. WEIDEMANN THOMAS S. COWNS, OF COUNSEL
AU attorneys licensed in Iowa I * Also licensed in lllinois I t Also licensed in Wiscrmsin I * Also licensed in Minnesota
:j: Certified in Civil Trial Advocacy by NatiDnal Board of Trial Advocacy
Mr. Michael Van Milligen
Ms. Jeanne Schneider
August 3, 2006
Page 2
O'CONNOR & THOMAS, P.C.
If you have any questions, please let us know.
Sincerely,
O'CONNOR & THOMAS, P.C.
Enclosure
/7
ASSIGNMENT OF BUYER'S DEVELOPMENT AGREEMENT
THIS AGREEMENT is entered into by and between Beck Construction, Inc. (hereinafter
called Assignee) and DUBUQUE SCREW PRODUCTS, INC. (hereinafter called Assignor).
WITNESSETH:
WHEREAS, Assignor, as Buyer, entered into that certain Development Agreement with the
City of Dubuque (hereinafter called "Development Agreement"), a copy of which is attached hereto
as Exhibit A and is incorporated herein by this reference; and
WHEREAS, Developer expressly reserved the right to assign its rights, but not its
obligations, in the Development Agreement to a Qualified Intermediary as provided in LR.C.
Regulation 1.103 I (k)-1(g)(4) on or before the Closing Date, subject to the approval of the City of
Dubuque; and
WHEREAS, Assignor and Assignee have executed an Agreement in which Assignee has
agreed to purchase the Real Estate identified in the Development Agreement and convey it to
Assignor.
NOW, THEREFORE, the parties agree:
(1) Assignor hereby assigns to Assignee Assignor's rights Ill, but not Assignor's
obligations, under the Development Agreement attached as Exhibit A.
(2) Assignee hereby assumes Assignor's rights in, but not Assignor's obligations, under
the Development Agreement to purchase its interest in the Real Estate from the City of Dubuque as
stated in the Development Agreement.
(3) Assignor hereby requests and directs the City of Dubuque to deed directly to Assignee
its interest in the Real Estate subject to the Development Agreement.
IN WITNESS WHEREOF, the parties have executed this agreement as their free and
voluntary act and deed.
Dated this
day of August, 2006.
DUBUQUE SCREW PRODUCTS, INC.,
ASSIGNOR
BECK CONSTRUCTION, INC.
ASSIGNEE
Michael R. Scherr, President
By:
Mike Beck, President
By:
APPROVAL OF ASSIGNMENT BY
CITY OF DUBUQUE, IOWA
By:
Roy D. Buol, Mayor
By:
Jeanne Schneider, City Clerk
DBQ Screw Products-Assig ofBuyer.wpd