Heartland Financial Memo UndersMEMORANDUM
TO:
FROM:
December 26, 2001
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
SUBJECT: Proposed Memorandum of Understanding with Heartland Financial USA
Heartland Financial USA, Inc. is a financial services company headquartered in
Dubuque. The company owns six banks which operate in Iowa, Illinois, Wisconsin and
New Mexico. The company has been exploring options for an expansion of
employment to provide support services to the network of banks. Dubuque has been
chosen as the site for the new expansion. The company plans to add 45 full-time
equivalent jobs over a five-year period.
Heartland Financial has expressed an interest in acquiring the Walsh Store properties
between 13th and 14th Streets and Central and Iowa Streets. The cost for the
acquisition and remodeling of the facilities to create a workable facility and enough
parking to serve that facility far exceeds projects at alternative locations.
In return for the substantial investment in the City's downtown and creation of a
significant amount of new jobs, Economic Development Director Bill Baum is
recommending approval of a Memorandum of Understanding for City assistance in this
project. The City assistance would include:
A $500,000 Community Development Block Grant forgivable loan to the
company;
Extension of the existing Downtown Urban Renewal District from 9th Street to 14th
Street, making Heartland Financial eligible for the existing Downtown
Rehabilitation Loan and Grant Program and ten years of property tax abatement
on this project; and
3. The company would also receive the benefits of the existing Enterprise Zone.
The size of the Walsh Store facilities makes it extremely unlikely that developers will be
attracted to a very expensive rehabilitation project at this facility. The north end of
downtown would not be well served if these buildings remained vacant, and in the long
term eventually became a blighting influence.
I concur with the recommendations and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Wrdliam J. Baum, Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
TO:
FROM:
SUBJECT:
Inc.
December 21, 2001
Michael Van Milligen, City Manager
William J. Baum, Economic Development Director
Proposed Memorandum of Understanding with Heartland Financial USA,
INTRODUCTION
The attached resolution provides for the approval of a Memorandum of Understanding
between the City and Heartland Financial USA, Inc. concerning the expansion of
Heartland Financial USA, Inc. in downtown Dubuque.
DISCUSSION
Heartland Financial USA, Inc. is a financial services company headquartered in
Dubuque. The company owns six banks (including Dubuque Bank and Trust), which
operate in Iowa, illinois, Wisconsin, and New Mexico. Subsidiaries of some of the
banks are engaged in small finance company operations and leasing.
The company has been exploring options for an expansion of employment to provide
support services to the network of banks. Dubuque has been chosen as the site for the
new expansion. The company has been reviewing sites at the Dubuque Technology
Center and Downtown in the City block housing the former Walsh Store. In order to
keep the current employment downtown, and encourage additional employment, an
incentive package has been offered to the company to expand Downtown, subject to
City Council approval. The company plans to add 45 full time equivalent jobs over a
five-year period, and invest approximately $4,000,000 in the expansion of the facilities.
The attached Memorandum of Understanding outlines the Company's plans, and details
the incentive package proposed by the City. The incentives include Enterprise Zone
benefits, a CDBG forgivable loan, a TIF Downtown Rehab Loan and Grant, and a
rebate of property taxes on new value added for a period of ten years.
The implementation of the Memorandum of Understanding will include the following
steps:
1. The preparation and approval of resolutions, plans and ordinance extending the
existing Downtown Urban Renewal District from 9th Street to 14th Street.
The preparation and approval of a $500,000 forgivable loan to the company.
CDBG program requires the company provide opportunity to Iow and moderate-
income persons for employment of at least 51% of the positions available. The
program also requires the City to provide relocation assistance to any business
being displaced by the project. In this case the City would offer, through CDBG,
to financially assist the existing Walsh True Value owner in the relocation of the
business to another site.
3. The preparation and approval of loan documents for the Downtown Rehab Loan
and Grant program.
The preparation and approval of an application for Enterprise Zone Benefits, and
the approval of a contract between the Iowa Department of Economic
Development, the Company, and the City Council.
RECOMMENDATION
I recommend the City Council review, discuss, and approve the Memorandum of
Understanding.
ACTION STEP
The requested action is for the City Council to adopt the attached resolution approving
the Memorandum of Understanding, and instructing the City Manager to prepare the
appropriate documents for City Council approval of the incentive package.
F:\USERS\WBaum\Memos to Mike - General~Memo from Bill Baum to Mike Van on Walsh deaF.doc
Resolution No. 8-02
A RESOLUTION APPROVING A MEMORANDUMIOF UNDERSTANDING
WITH HEARTLAND FINANCIAL USA INC. FOR .AN EXPANSION IN
DOWNTOWN DUBUQUE
Whereas, Heartland Financial USA Inc. is proposing to expand employment in
the City of Dubuque, and
Whereas, the City is encouraging the Company to expand its operations in
Downtown Dubuque, and
Whereas, a Memorandum of Understanding has been prepared for said
expansion,
NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF DUBUQUE,
IOWA, AS FOLLOWS:
Section 1. The attached Memorandum of Understanding is hereby approved.
Section 2. The City Manager is hereby directed to prepare documents necessary
to implement the Memorandum of Understanding
Passed, approved and adopted this 7th day of January 2002.
Terrance M. Duggan, Mayor
ATTEST:
Jeanne F. Schneider, City Clerk
F:\USERS\WBaum\Resolution on Hear[land financial.doc
January 7,2002
MEMORANDUM OF UNDERSTANDING
Whereas, Heartland Financial USA, Inc., a Dubuque based financial services company,
has determined that an expansion of its facilities in Dubuque is in the best interests of
the Company; and
Whereas, Heartland Financial USA, Inc. has investigated sites at the Dubuque
Technology Park and "downtown" Dubuque for said expansion; and
Whereas, the City of Dubuque is encouraging the Company to expand in downtown,
and is willing to discuss incentives for a "downtown" location; and
Whereas, the City of Dubuque and Heartland Financial USA, Inc. desire to enter into
further discussions concerning a location downtown, as a first step in the Company's
efforts to initiate the expansion, the parties propose the following:
Heartland Financial USA, Inc. (the Company) will acquire property, make
improvements and equip existing commercial buildings located on Central
Avenue and Iowa Street, between 13th and 14th Streets. The Company will
make a capital investment in land acquisition, building improvements, equipment,
furniture and fixtures of not less than $4,000,000.
The Company will maintain its existing employees in Dubuque, Iowa, and
proposes to create or cause to be created not less than twenty (20) new full time
equivalent (1820 hours per year) jobs within two (2) years and not less than forty-
five (45) jobs within five (5) years.
In consideration for the Company's intentions as described in Paragraphs 1. and
2., and as and incentive for expanding downtown, the City will provide the
following incentive package to the Company:
Enterprise Zone Benefits: Subject to the Company meeting the
requirements of the program, approval by the Dubuque Enterprise Zone
Commission and State of Iowa approval of the Company's application, the
City will execute a three party Enterprise Zone Agreement with the State
and the Company, pursuant to which the Company would be eligible for
benefits under the program. These benefits include a refund of sales and
use tax charged for materials in the renovation of the building, and an
Iowa State tax credit equal to 10% of the Company's investment in the
project.
CDBG loan. Subject to approval of loan documents, and appropriate loan
and security agreements, the City will provide a $500,000 Community
Development Block Grant (CDBG) forgivable loan to the Company.
Tax Increment Financing Downtown Rehab Loan and Grant: The City
Council will initiate process for the amendment of the existing Urban
Renewal District and Urban Renewal Plan to include the Company's
proposed property. If the amended Urban Renewal District and Urban
Renewal Plan is approved in accordance with the requirements of the
Urban Renewal Act (Chapter 403 of the Code of Iowa), and subject to a
written agreement executed between the Company and the City, the City
will provide a Planning and Design grant of $10,000 in 2002, and a
$260,000 rehabilitation loan and a $40,000 rehabilitation grant, both in
July of 2004.
Tax Increment Financinlq Rebate: Subject to City Council approval of all
the requirements of the Urban Renewal Act (Chapter 403 of the Code of
Iowa), and subject to a written agreement executed between the Company
and the City after the requirements have been met by the City, the City will
provide a ten year rebate of property taxes paid by the Company on the
incremental value added to the real estate as a result of the project.
The Company acknowledges that in order for the City to secure such incentives,
certain requirements are imposed upon the Company as specified in the
respective program regulations. The Company agrees to cooperate with the
City, the State of Iowa, and the United States Department of Housing and Urban
Development by providing the information and documents necessary for the
approval of loans and applications for financial assistance above.
Notwithstanding any other provision of this Memorandum of Understanding, the
City shall have no obligation to the Company under this Memorandum of
Understanding until and unless definitive agreements are entered into between
the Company and the City, and approved by the City Council and the Company's
appropriate officers.
2
Approved this 7th day of January 2002 by and between Heartland Financial USA, Inc.,
and the City of Dubuque, Iowa.
Heartland Financial USA, Inc.
City of Dubuque
Lynn B. Fuller, Chairman and CEO
Heartland Financial USA, Inc.
Terrance M. Duggan, Mayor
Attest:
Jeanne F. Schneider, City Clerk
F:\USERS\WBaum\Walsh store Heartland Financial\MEMO of UNDERSTANDING.doc
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