Gavilon Grain_Assignment of Gypsum Storage and Handling AgreementMasterpiece on the Mississippi
Dubuque
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AI- America City
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2007 • 2012 • 2013
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Assignment of Gypsum Storage and Handling Agreement to Gavilon
Grain, LLC
DATE: November 14, 2013
In July 2012, the City entered into a Gypsum Storage and Handling Agreement with
Beneficial Reuse Management, LLC. The Agreement outlined terms for the storage,
loading, and off - loading of the company's gypsum product at the City's Salt Site, off of
Kerper Boulevard near the Peosta Channel. One month earlier, the City entered into a
Handling Agreement with Gavilon Grain, LLC for the loading and off - loading of all
materials at the site. The City's revenue for loading and off - loading the gypsum
amounts to the same amount paid to Gavilon Grain for the service.
Economic Development Director Maurice Jones recommends City Council approval of
the Assignment of the Gypsum Storage and Handling Agreement from the City of
Dubuque to Gavilon Grain. The current agreement is between the City and Beneficial
Reuse Management, LLC.
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
Maurice Jones, Economic Development Director
THE CITY OF
Dui
Masterpiece on the Mississippi
Dubuque
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All- America City
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DATE: November 8, 2013
TO: Michael Van Milligen, City Manager
FROM: Maurice Jones, Economic Development Director
SUBJECT: Assignment of Gypsum Storage and Handling Agreement to
Gavilon Grain, LLC
INTRODUCTION
This memorandum provides for City Council consideration an Assignment of a
Gypsum Storage and Handling Agreement from the City of Dubuque to Gavilon
Grain. The current agreement is between the City and Beneficial Reuse
Management, LLC.
BACKGROUND
In July 2012, the City entered into a Gypsum Storage and Handling Agreement
with Beneficial Reuse Management, LLC. The Agreement outlined terms for the
storage, loading, and off - loading of the company's gypsum product at the City's
Salt Site, off of Kerper Boulevard near the Peosta Channel. One month earlier,
the City entered into a Handling Agreement with Gavilon Grain, LLC for the
loading and off - loading of all materials at the site. The City's revenue for loading
and off - loading the gypsum amount to the same amount paid to Gavilon Grain for
the service.
This City's agreement with Beneficial Reuse Management extends through
December 31, 2014. The agreement with Gavilon Grain expired in July 2013. In
September 2013, Gavilon Grain began a 25 -year lease for operations at the
nearly 10 -acre Salt Site where the company could determine storage, loading,
and off - loading fees for those looking to use the pad.
DISCUSSION
Since Gavilon Grain has the rights to the site, and has a working relationship with
Beneficial Reuse Management as their product handler, City staff has proposed
an assignment of the Gypsum Storage and Handling Agreement to Gavilon
Grain, LLC. The Assignment Agreement would allow the City to transfer all
rights, title and interest held in the original agreement to Gavilon Grain, including
any storage fees that may be due from Beneficial Reuse Management.
Additionally, Gavilon will assume all remaining obligations of the agreement.
The attached Assignment Agreement has been prepared by the Legal
Department. It has been approved and signed by Gavilon Grain. Beneficial
Reuse Management has also consented to the arrangement, as evidenced by
their letter included as Exhibit 1 in the Assignment.
RECOMMENDATION
I recommend that the City Council execute the Assignment of Gypsum Storage
and Handling Agreement between the City of Dubuque and Gavilon Grain, LLC.
ACTION STEP
The action step is for the City Council to adopt the attached resolution.
F: \USERS \Econ Dev \Gypsoil \20131108 Beneficial assignment to Gavilon memo.docx
Preparer: Phil Wagner, Assistant Economic Development Director, 50. West 13'h Street, Dubuque IA 52001 (563) 589 -4393
RESOLUTION NO. 321 -13
APPROVING THE ASSIGNMENT OF GYPSUM STORAGE AND HANDLING
AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND GAVILON GRAIN,
LLC.
Whereas, the City of Dubuque, Iowa entered into a Gypsum Storage and Handling
Agreement with Beneficial Reuse Management, LLC on July 31, 2012 for use of the
City's Salt Site; and
Whereas, the City also entered into a long -term lease with Gavilon Grain, LLC on
August 5, 2013, for operations on the same site; and
Whereas, Gavilon Grain, LLC has requested an assignment of the Gypsum Storage
and Handling Agreement with Beneficial Reuse Management, LLC from the City of
Dubuque to align with their lease; and
Whereas, Beneficial Reuse Management has consented to the Assignment; and
Whereas, the City Council of the City of Dubuque finds that the City of Dubuque
should consent to the Assignment.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. The City of Dubuque hereby approves the Assignment of Gypsum
Storage and Handling Agreement, a copy of which is attached hereto.
Section 2. The Mayor is authorized and directed to sign the Assignment of Gypsum
Storage and Handling Agreement on behalf of the City of Dubuque.
Passed, approved and adopted this 18th day of November, 201
Attest:
Key' Firnstahl, City erk
0�0
Roy D. Buol, Mayor
ASSIGNMENT OF
GYPSUM STORAGE AND HANDLING AGREEMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
GAVILON GRAIN, LLC
This Assignment of Gypsum Storage and Handling Agreement (Assignment) is
dated for reference purposes the/day of November, 2013, by and between the City
of Dubuque, Iowa (Assignor) and Gavilon Grain, LLC (Assignee).
Whereas, Assignor entered into a Gypsum Storage and Handling Agreement
with Beneficial Reuse Management, LLC (Storage Agreement), dated July 21, 2012;
and
Whereas, pursuant to the Storage Agreement, Beneficial was to pay Assignor for
the unloading of agricultural gypsum /calcium sulfate (Product) from barges, the storage
of Product at Assignor's facility located at Purina Drive, Dubuque, Iowa (Facility), and
the reloading of Product onto trucks for transfer from the Facility; and
Whereas, Assignor has leased the Facility to Assignee; and
Whereas, Assignor and Assignee have agreed for Assignee to carry out the
remaining terms and obligations of the Storage Agreement with Beneficial since
Assignee is the primary lessor of the Facility.
Now, therefore, the parties agree:
1. Subject to the approval of the City of Dubuque City Council, Assignor
hereby assigns, transfers and sets over to Assignee all rights, title and
interest held by Assignor in the Storage Agreement.
2. Assignee hereby assumes and agrees to perform all the remaining
obligations of Assignor under the Storage Agreement.
3. Assignee will collect storage fees from Beneficial for all Product as of
January 1, 2013, as well as collect any other fees owed to the Assignor as
contemplated in the lease.
4. Pursuant to the terms of the Storage Agreement, Beneficial is aware of
and has consented to this Assignment. Beneficial's letter of consent is
attached as Exhibit 1.
5. Assignor and Assignee hereby request the City of Dubuque City Council
to approve this Assignment of the Storage Agreement from Assignor to
Assignee.
CITY OF DUBUQUE, IOWA
ASSIGNOR
By:
Roy D. Buol, ayor
Attest:
Kevin - Firnstahl, Ci Clerkr
2
GAVILON GRAIN, LLC
ASSIGNEE
By:
EXHIBIT 1
BENEFICIAL REUSE MANAGEMENT, LLC
CONSENT TO ASSIGNMENT
3
November 8, 2013
Mike Van Milligen, City Manager
City of Dubuque
50 West 13th Street
Dubuque, Iowa 52001
Dear Mr. Van Milligen:
This letter shall serve as the consent of Beneficial Reuse Management, LLC to the assignment of the
Gypsum Storage and Handling Agreement with our company from the City of Dubuque to Gavilon Grain,
LLC. We understand all rights, title, interest, and obligations previously held by the City of Dubuque
under the Agreement will be transferred to Gavilon Grain. Additionally, we understand that the City of
Dubuque will no longer invoice Beneficial Reuse Management for the use of the site.
Sincerely,
Jason Sparks, Director of Operations
Beneficial Reuse Management, LLC