First Supply Terminate Devel. Agree
D~~%duE
~~~
MEMORANDUM
October 30,2006
-.:.
~
L ,-
~ )'
.
I;
TO:
The Honorable Mayor and City Council Members
-
,
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: First Supply LLC Termination of Development Agreement
On August 21, 2006, the City Council approved a Development Agreement with First
Supply, LLC for the sale of five acres of land in the Dubuque Industrial Center. Within
the past couple of weeks, First Supply, LLC contacted City staff to indicate they no
longer wish to purchase land because the bids for construction were substantially above
the anticipated construction costs.
Economic Development Director Dave Heiar recommends City Council approval of First
Supply, LLC's request to terminate the proposed land sale.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
(1l1l~llf
Midiael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
.J
-' / ,
.-
,
. "
TH. E CITY OF (__~.. ~=~'\
[, ---~ . -1-------
JLJBUQUE
~<k~
MEMORANDUM
October 30,2006
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director ~ 0y1J
SUBJECT: First Supply LLC Termination of Development ~reement
INTRODUCTION
On August 21, 2006, the City Council approved a Development Agreement with First
Supply, LLC for the sale of 5 acres of land in the Dubuque Industrial Center. There were
no jobs pledged with this development project and there were no incentives promised
by the City of Dubuque.
BACKGROUND
Within the past couple of weeks, First Supply, LLC contacted City staff to indicate they
no longer wish to purchase land. The company has spent nearly $20,000 evaluating the
proposed site and developing a site/building plan. The City also spent approximately
$1,500 to subdivide the property and prepare a plat. Unfortunately, the bids for
construction were substantially above the anticipated construction costs. Therefore,
First Supply intends to continue to lease rather than to build and own a facility_ First
Supply is definitely interested in expanding their Dubuque operation and is currently
negotiating a lease for the Theisen Supply building which will be vacated by January
2007. City Attorney Barry Lindahl has prepared a recordable termination agreement
(attached) .
RECOMMENDATION
Based on our desire to clear the title of the 5 acre parcel scheduled for sale to First
Supply, LLC, I am recommending that the City Council approve this request to terminate
the proposed land sale to First Supply, LLC. On future Development Agreements, the
City will require a $5,000 down payment to offset any out of pocket costs to the City.
ACTION STEP
I am requesting the City Council approve the attached Termination Agreement.
Cc: Barry Lindahl
Barry A. Lindahl, Esq.
Corporation Counsel
Suite 330, Harbor View Place
300 Main Street
Dubuque, Iowa 52001-6944
(563) 5834113 office
(563) 583-1040 fax
balesq@cityofdubuque.org
Dt:;B~E
~~~
October 26, 2006
Paul G. Hoffman, Esq.
Michael Best & Friedrich LLP
Two Riverwood Place, Suite 200
VVaukesha, VV153188-1174
RE: First Supply LLC
Dear Paul:
Enclosed for your signature is the Termination Agreement and Release revised per your
October 26, 2006 discussion with Economic Development Director Dave Heiar.
Although the Termination Agreement does not address the costs that the City of
Dubuque incurred during the process of implementing the Development Agreement in
good faith, the City would appreciate being reimbursed for these costs, which are as
follows:
1. IIW Engineers & Surveyors, P.C.
2. Dubuque County Abstract & Title Co.
$1,115.75
$ 375.00
Please sign and return the Termination Agreement to me as soon as possible. I will
forward a copy of the Agreement to you for your records after it has been approved by
the City Council.
Very sincerely,
.
~{'~/~
Barry A. Lindahl, Esq.
City Attorney
BAUls
Enclosure
cc: Michael C. Van Milligen, City Manager
.--Dave Heiar, Economic Development Director
Service
People
Integrity
Responsibility
Innovation
Teamwork
10126/2006
N:\CUENn056026\0056\F0263954.1
TERMINATION AGREEMENT AND RELEASE
This Termination Agreement and Release ("Termination"), is made by and between the
City of Dubuque, Iowa, an Iowa municipal corporation ("City"), and First Supply LLC, a Wisconsin
limited liability company ("First Supply"), as of the date of final signature below.
RECITALS
A. City and First Supply are the parties in interest in and to a Development Agreement
dated August 21,2006 ("Agreement").
B. The Agreement contemplates First Supply's purchase from City and subsequent
development of certain property located in the Dubuque Industrial Center Economic Development
District being developed by City.
C. The Agreement contains certain conditions to First Supply's performance thereunder,
which conditions have not been satisfied, and First Supply and City are now joining in this
Termination to confirm the prior termination of the Agreement and each party's mutual release ofthe
other from further obligations thereunder.
TERMINATION
NOW, THEREFORE, City and First Supply agree as follows:
1. By Letter of Termination dated October 13, 2006 ("Letter"), First Supply exercised its
rights under the Agreement to terminate same.
2. City and First Supply are joining in this Termination for the purpose of confirming and
ratifying the termination effect by the Letter and further, to confirm that each has released the other
from further obligations under the Agreement and/or in any way arising from the Agreement. This
Termination also memorializes that First Supply has no further interest in the property subject of the
Agreement.
This Termination is made as of the date of final signature hereto.
FIRST SUPPLY:
FIRST SUPPLY LLC
By:
David S. Prahler, Vice President
Date: October _' 2006
'0126/2006
N:\CUENno58026\OO56\F0263954.1
CITY:
CITY OF DUBUQUE, IOWA
By:
Roy D. Buol, Mayor
Date: October _' 2006
By:
Jeanne F. Schneider, City Clerk
Date: October _' 2006
ACKNOWLEDGMENTS
STATE OF WISCONSIN )
)SS.
COUNTY OF )
This instrument was acknowledged before me this _ day of October, 2006, by David S.
Prahler, as the Vice President of First Supply LLC, to me known to be the person who executed the
foregoing instrument in such capacity and acknowledged the same.
Name:
Notary Public, Wisconsin
My Commission:
STATE OF IOWA )
) SS.
COUNTY OF DUBUQUE )
On this _ day of October, 2006, before me a Notary Public in and for said County,
personally appeared Roy D. Buol and Jeanne F. Schneider to me personally known, who being duly
swom, 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.
Name:
Notary Public, State of Iowa
2