Port of DBQ Brewery DevelopmentC~ I ~
THE CITY OF
DUB ~ E
~-~~
MEMORANDUM
January 10, 2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Port of Dubuque Brewery Development, LLC
City Attorney Barry Lindahl is recommending approval of a request from Dubuque Star
Brewery Development, LLC to assign the Development Agreement and the Lease with
the City of Dubuque to DB&T as security for its financing.
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
f
BARRY A. LINDAHL
CITY ATTORNEY
MEMO
To: Michael C. Van Milligen
City Manager
DATE: December 28, 2006
RE: Port of Dubuque Brewery Development, LLC
Port of Dubuque Brewery Development, LLC (DBD) is financing the work being done on
the Dubuque Star Brewery with Dubuque Bank & Trust Company (DB&T). DB&T is
requesting that DBD assign the Development Agreement and the Lease with the City to
DB&T as security for its financing.
The Assignment of Development Agreement allows DB&T to take over and assume the
Development Agreement and to perForm all acts necessary and proper in the event of a
default by DBD on its financing obligations.
The Assignment of Lease Agreement allows DB&T, in the event of a default, to take the
following actions: 1) remove all personal property of DBD that is pledged as collateral
for the loans from DB&T; 2) sell such personal property; 3) transfer and assign the
Lease and DBD's rights in it to a party satisfactory to DB&T and the City and upon
assignment, the obligations of the Lease become binding on such transferees. The
Assignment of Lease also subordinates any liens the City may have on the personal
property of DBD that is or may be security for loans from DB&T to DB&T's right under
the Assignment of the Lease.
I recommend that the Assignment of Development Agreement and Assignment of Lease
Agreement be submitted to the City Council for consideration and approval.
Attachment
cc: Brian Kane
OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA
SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944
TELEPHONE (563) 583-4113 /FAX (563) 583-1040 / EMAIL balesq@cityofdubuque.org
Brian ]. Kane
l,es b'. Rcddick*
D- PGn[ Dxakc**
Bead ]. I Ieying
"Todd l.. Stevenson'
Kevin 1'. Deeny
John D. Freund
Bracilev B. Kane
,VI admitted in Iowa
`Also admitted in Illinois
*`ellsu admitted in Wisconsin
December 27, 2006
Barry A. Lindahl, Esq.
Corporation Counsel
300 Main St., Ste. 330
Harbor View Place
Dubuque, IA 52001
Re: Port of Dubuque Brewery Development, LLC
Dear Barry:
Phone (563) 582-7980
I~acsimde: (563) 582-5312
I•: mail: BKanc@kanenorbvlaw.com
Enclosed please find an Assignment ofDevelopment Agreement and an Assignment ofLease
Agreement which Dubuque Bank and Trust Company requires for financing purposes with respect
to the Brewery Development Project. The agreements allow DB&T to step into the developer's
shoes in the event there is a default under the DB&T financing.
We ask that you obtain appropriate City signatures on these documents and return them to
us so that we may provide them to the Bank.
If you have any questions, please do not hesitate to contact us.
Best Regards,
KANE, NORBY & REDDI~K, P.C.
By:
BJK: sa
KANE, NORBY & REDDICK, P.C.
A"rI'ORN 6;YS
2100 r1SBURY ROAll, tiUI'1'F; 2
UUBUQUb:, ]A 520013069
Of Counsck
Gary K. Norby
Brian J.
Encs.
Prepared by Jeffrey L. Walters, 2080 Southpark Court, Dubuque, IA 52003 (563) 582-2926
ASSIGNMENT OF DEVELOPMENT AGREEMENT
THIS AGREEMENT is entered into this _ day of , 2006, between
PORT OF DUBUQUE BREWERY DEVELOPMENT; LLC ("DBD"), an Iowa limited liability
company, CITY OF DUBUQUE, IOWA ("City") and DUBUQUE BANK & TRUST
COMPANY ("DB&T").
WHEREAS, DBD is a party in the Development Agreement with City for the
development of undertaking an urban renewal project in the City of Dubuque, Iowa, said
Agreement dated the date of , 2006, and DB&T is the Lender,
loaning funds to DBD secured by a mortgage loan and other secured instruments, on the
business premises.
WHEREAS, DB&T, as a condition of granting the aforesaid mortgage loan, has
required the execution of this Assignment of Development Agreement of the business
premises by DBD.
NOW THEREFORE, in order to further secure the payment of the indebtedness of
DBD to DB&T and inconsideration of the making of the loan represented by the aforesaid
note secured thereby, and in further consideration of the sum of One Dollar paid by DBD
to DB&T, the receipt of which is hereby acknowledged, DBD does hereby sell, assign,
transfer, and set over unto DB&T all rights under the Development Agreement dated
a copy of which is attached as Exhibit "A".
1. In furtherance of the foregoing Assignment, DBD hereby authorizes DB&T by its
employees or agents, at its option, to enter upon the leased premises, to take over and
assume the Development Agreement and to pertorm all acts necessary and proper and
to expend such sums out of the income of the leased premises as may be needful in
connection therewith, in the same manner and to the same extent as DBD theretofore
might do, including the rightto effect new Development Agreements, to cancel orsurrender
existing Development Agreements, to alter or amend the terms of existing Development
Agreements, to renew existing Development Agreements, DBD hereby release all claims
against DB&T arising out of such acts excepting the liability of DB&T to account as
hereinafter set forth, except negligent and willful misconduct of DB&T.
Page 1 of 4
2. It is not the intention of the parties hereto that any entry by DB&T upon the leased
premises under the terms of this instrument shall constitute DB&T a "mortgagee in
possession" in contemplation of law, except at the option of DB&T.
3. This assignment shall remain in full force and effect as long as the mortgage debt
to DB&T remains unpaid in whole or in part.
4. The provisions of this instrument shall be binding upon DBD and its legal
representatives, successors or assigns and upon DB&T and its successors or assigns.
The word "DBD" shall be construed to mean any one or more persons or parties who are
holders of the legal title or equity of redemption to or in the aforesaid mortgage premises.
The word "note" shall be construed to mean the instrument, whether note or bond, given
to evidence the indebtedness held by DB&T against the leased premises; and the word
"mortgage" shall be construed to mean the instrument securing the said indebtedness,
owned and held by DB&T, whether such instrument be mortgage, loan deed, trust deed,
vendor's lien or otherwise.
5. The City of Dubuque hereby consents to the Assignment of Development
Agreement between DBD and DB&T.
It is understood and agreed that a full and complete release of the aforesaid
mortgage shall operate as a full and complete release of all DB&T's rights and interest
hereunder, and that after said mortgage has been fully released this instrument shall be
void and of no further effect.
IN WITNESS WHEREOF, all parties have executed this agreement the day and
year first above stated.
PORT OF DUBUQUE BREWERY
DEVELOPMENT,LLC
Briggs,
A. ICukseti~(i, Vice President
DUBUQUE BANK & TRUST COMPANY,
By ~~ ~L ~o
Its
By
Its
Page 2 of 4
CITY OF DUBUQUE
Roy D. Buol
BY.
Jeanne F. Schneider, City Clerk
STATE OF IOWA )
)SS:
COUNTY OF DUBUQUE )
On this _ day of , 2006, before me, a Notary Public in and for the said
State, personally appeared Wayne A. Briggs, to me personally known, who being by me duly sworn did say
he is a member of said limited liability company, that no seal has been procured by the said limited liability
company and that said instrument was signed on behalf of the said limited liability company by authority of
its managers and the said Wayne A. Briggs, acknowledged the execution of said instrument to be the
voluntary act and deed of said limited liability company by him voluntarily executed.
Notary Public In and for the State of Iowa
STATE OF IOWA )
)SS:
COUNTY OF DUBUQUE )
On this _ day of , 2006, before me, a Notary Public in and for the said
State, personally appeared Thomas A. Luksetich, to me personally known, who being by me duly sworn did
say he is a member of said limited liability company, that no seal has been procured by the said limited liability
company and that said instrument was signed on behalf of the said limited liability company by authority of
its managers and the said Thomas A. Luksetich, acknowledged the execution of said instrument to be the
voluntary act and deed of said limited liability company by him voluntarily executed.
Notary Public In and for the State of Iowa
STATE OF IOWA )
COUNTY OF DUBUQUE ) ss:
On this _ day of , 2006, before me, the undersigned, a
Notary Public in and for the State of Iowa, personally appeared
to me personally known, who being by me duly
sworn, did say that they are the and
respectively, of DUBUQUE BANK & TRUST COMPANY,
with place of business in Dubuque, Iowa, a national banking association executing the
within and foregoing instrument; that the seal affixed thereto is the seal of the association;
that said instrument was signed on behalf of the association by authority of its Board of
Directors; and the said and as such
officers acknowledged the execution of the foregoing instrument to be the voluntary act
and deed of the association, by it and by them voluntarily executed.
Notary Public in and for
State of Iowa
Page 3 of 4
STATE OF IOWA, DUBUQUE COUNTY) ss:
On this _ day of , 2006, before me, the undersigned, a Notary Public in and for
the State of Iowa, personally appeared Roy D. Buol and Jeanne F. Schneider, to me personally known, who,
being by me duly sworn, did say that they are the Mayor and Ciry Clerk, respectively, of the City of Dubuque,
Iowa, executing the within and foregoing instrument, that no seal has been procured by the City; that said
instrument was signed on behalf of the Ciry by authority of the City Council; and that Roy D. Buol and Jeanne
F. Schneider, as Mayor and City Clerk, acknowledged the execution of the foregoing instrument to be the
voluntary act and deed of the City, by it and by them voluntarily executed.
Notary Public, State of Iowa
S:\wp\CASES\DBRT -Port of Dubuque Brewery Development, LLC\ASSignment of Development Agreement.wpd
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Prepared by: Jeffrey L. Walters, 2080 Southpark Court, Dubuque, IA 52003 (563) 582-2926
SPACE ABOVE THIS LINE
FOR RECORDER
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE
READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO
OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY
BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY
ANOTHER WRITTEN AGREEMENT.
Re: LOCATED IN LOT 2 OF RIVERWALK 5T" ADDITION IN THE CITY OF DUBUQUE,
IOWA.
ASSIGNMENT OF LEASE AGREEMENT
This Assignment of Lease Agreement ("Agreement") is effective 2006,
among PORT OF DUBUQUE BREWERY DEVELOPMENT, LLC„ an Iowa limited liability
company, Lessee, ("Borrower"), CITY OF DUBUQUE, Iowa ("Lessor') and DUBUQUE BANK 8r
TRUST COMPANY ("Bank").
Recitals. Borrower has leased from Lessor certain real property pursuant to a Lease
Agreement dated July 1, 2006 (the "Lease"). The Bank has authorized the making a loan
to the Borrower by virtue of a Loan Agreement executed by the Borrower and the Bank of
even date ("Loan"). The Loan is for the benefit of both Borrower and Lessor insofar as
funds from the Loan will be used for the benefit of the business conducted on the leased
premises. In consideration of the promises contained in this Agreement, and of the
disbursement of part or all of the Loan by Bank, Borrower, with the consent of Lessor, upon
an uncured default under the Loan Agreement assigns to Bank the lease referred to above
during the remainder of its term, including all extensions and renewals. Upon payment of
the loan in full, Bank shall provide to Borrower and to City in recordable form a cancellation
of this Assignment.
Page 1 of 5
2. Borrower and Lessor Further Covenant and Agree:
2.1. Borrower is not now in default in the performance of the Lease; Borrower and
Lessor will each perform the covenants and conditions required of it by the Lease
for the term of the loan and any extensions or renewals.
2.2. Borrower and/or Lessor will not modify or terminate the Lease without the prior
written consent of Bank which shall not unreasonably be withheld.
2.3. If Borrower defaults under the terms of the Lease, Lessor shall have the right to
terminate the Lease according to its terms. However, Lessor shall first give Bank
sixty (60) days' written notice of such default and the right, at the option of Bank,
during such period, to cure such default. During the sixty (60) day period, Lessor
will take no action to enforce its claim arising from such default without Bank's prior
written consent.
2.4. If Borrower defaults in the performance of any of its obligations under the Loans,
any renewals or extensions, or of any related agreement, then Bank, at its option,
may, without notice except as may be required under the Loan Agreement, using
such force as may be necessary, enter said leased premises and do any one or
more of the following: (1) Remove all personal property of Borrower that is pledged
as collateral for the Loans; (2) Sell such personal property; (3) Transfer and assign
the Lease and Borrower's rights in it to parties satisfactory to Bank and Lessor and
upon assignment the obligations of the Lease shall be binding on such transferees.
In the event that Bank undertakes the options provided in Subsections (1) or (2), it
shall have no obligation other than payment of rent accruing during the period of its
possession of the premises. In the event that Bank transfers the Lease as provided
in Subsection (3), Bank will cure all defaults in said Lease, and its sole other
obligation shall be the payment of rent which accrued prior to the transfer of said
Lease.
3. Subordination. Lessor subordinates any lien it has or may have on the personal property
of Borrower that is or may be security for the Loans to Bank's liens on Borrower's property,
and to Bank's rights underthis Agreement. This subordination shall be effective regardless
of whether or not the collateral constitutes fixtures. For the purposes of this Agreement,
the term "liens" specifically includes any Landlord's Lien under Chapter 570, Code of Iowa,
as amended, to which the Lessor may be entitled.
4. Warranty of Title. Lessor warrants that title to the leased premises is held by it in fee
simple and that it has full power and authority to enter into this Agreement.
5. Notices. All notices under this Agreement shall be in writing and shall be deemed
delivered if delivered in person, if sent by certified mail (postage prepaid, return receipt
requested), telegraph or facsimile, as follows:
Page 2 of 5
If to Bank: Dubuque Bank 8 Trust Company
1398 Central Avenue
Dubuque,lA 52001
If to Borrower: Port of Dubuque Brewery Development, LLC
C/O Mr. Wayne A. Briggs, President
137 Main Street, Suite 400
Dubuque,lA 52001
If to Lessor: City of Dubuque
City Hall
50 West 13`" Street
Dubuque,lA 52001
Attn.: City Manager
6. Applicable Law; Severability. ThisAgreement shall be subject to, construed and enforced
in accordance with the laws of the State of Iowa. If any provision of this Agreement is held
invalid under applicable Law, such invalidity shall not affect any other provision of this
Agreement that can be given effect without the invalid provision, and to this end, the
provisions hereof are severable.
Binding Effect; Assignment. This Agreement shall inure to the benefit of and be binding
upon the successors and permitted assigns of the parties. Neither Borrower nor Lessor
shall assign any of its rights or obligations hereunder without the prior written consent of
Bank.
8. Interpretation; Headings. Words and phrases herein shall be interpreted and understood
according to the context in which they are used. The headings in this Agreement are
intended solely for convenience of reference, and shall be given no effect in the
construction or interpretation of this Agreement.
9. Entire Agreement;Gounterparts; Remedies Cumulative. ThisAgreement, including any
Exhibits, all of which are incorporated by this reference, and the documents executed and
delivered pursuant hereto, constitute the entire agreement between the parties, and may
be amended only by a writing signed by each party. All agreements, instruments and
documents referred to in this Agreement are by this reference made a part of this
Agreement for all purposes. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which together
shall constitute but one and the same instrument. The parties shall have, in addition to the
rights and remedies provided by this Agreement, all those allowed by all applicable laws,
all of which shall be in extension of and not in limitation of those provided hereunder.
10. Waivers. Except as herein expressly provided, no waiver by either party of any breach of
this Agreement, or of any warranty or representation hereunder, shall be deemed to be a
waiver by the same party of any other breach of any kind or nature (whether preceding or
succeeding the breach in question, and whether or not of the same or similar nature).
Page 3 of 5
10.1. No acceptance by a party of payment or performance after any such breach shall
be deemed to be a waiver of any breach of this Agreement or of any representation
or warranty hereunder, whether or not the party knows of the breach when it
accepts such payment or performance.
10.2. No failure by a party to exercise any right it may have under this Agreement or
under law upon another party's default, and no delay in the exercise of that right,
shall prevent it from exercising the right whenever the other party continues to be
in default. No such failure or delay shall operate as a waiver of any default or as a
modification of the provisions of this Agreement.
11. Attorney's Fees. If any action at law or in equity, including an action for declaratory relief,
is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall
be entitled to recover reasonable attorney's 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 which may
be awarded.
Effective as of the date first written above.
Port of Dubuque Brewery
Develo»merN. LLC
By:
By:
A. Luksetich,
Dubuqu Bank 8 Tri t Co/'mpany
By. ~ ~~ ~~
ST E OF IOWA )
COUNTY OF DUBUQUE ) ss:
City of Dubuque
By
Roy D. Buol, Mayor
By
Jeanne F. Schneider, City Clerk
On this day of , 2006, before me, a Notary Public in and for the State of
Iowa, personally appeared Wayne A. Briggs, to me personally known, who being by me duly sworn did say
that he is the Managing Member of said limited liability company, that no seal has been procured by the said
limited liability company and that said instrument was signed on behalf of said limited liability company by
authority of its managers and the said Wayne A. Briggs acknowledged the execution of said instrument to be
the voluntary act and deed of said limited liability company, by it voluntarily executed.
Notary Public in and for
State of Iowa
Page 4 of 5
STATE OF IOWA )
)SS:
COUNTY OF DUBUQUE )
On this _ day of , 2006, before me, a Notary Public in and for the said
State, personally appeared Thomas A. Luksetich, to me personally known, who being by me duly sworn did
say he is a member of said limited liability company, that no seal has been procured by the said limited liability
company and that said instrument was signed on behalf of the said limited liability company by authority of
its managers and the said Thomas A. Luksetich, acknowledged the execution of said instrument to be the
voluntary act and deed of said limited liability company by him voluntarily executed.
Notary Public In and for the State of Iowa
STATE OF IOWA, DUBUQUE COUNTY) ss:
On this _ day of , 2006, before me, the undersigned, a Notary Public in and for
the State of Iowa, personally appeared Roy D. Buol and Jeanne F. Schneider, 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, executing the within and foregoing instrument, that no seal has been procured by the City; that said
instrumentwas signed on behalf of the City by authority of the City Council; and that Roy D. Buol and Jeanne
F. Schneider, as Mayor and City Clerk, acknowledged the execution of the foregoing instrument to be the
voluntary act and deed of the City, by it and by them voluntarily executed.
Notary Public, State of Iowa
STATE OF IOWA, DUBUQUE COUNTY) ss:
On this _day of , 2006, before me, the undersigned, a Notary Public in and for
the State of Iowa, personally appeared , to me personally known, who, being
by me duly sworn, did say that _ is a of Dubuque Bank & Trust Company
executing the within and foregoing instrument, that the seal which appears below is the seal of the
corporation; that said instrument was signed on behalf of the corporation by authority of its Board of
Directors; and that as acknowledged the execution of the
foregoing instrument to be the voluntary act and deed of the corporation, by it and by _ voluntarily
executed.
Notary Public, State of Iowa
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