Enterprise Zone_Community Housing Initiatives I & IITHE CITY OF
Dui
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
Dubuque
band
AI -America City
r
2007 • 2012 • 2013
SUBJECT: Housing Enterprise Zone Program Agreement Numbers 14-HEZ-075 and
14-HEZ-097 for Community Housing Initiatives, Inc., dated March 12,
2014
DATE: May 29, 2014
Economic Development Director Maurice Jones recommends City Council approval of
two Housing Enterprise Zone Program Agreements by and among the Iowa Economic
Development Authority, the City and Community Housing Initiatives, Inc. for scattered
sites in Enterprise Zones 1-A and 2-A.
Community Housing Initiatives, Inc. has estimated a capital investment of approximately
$1,800,000 within the Enterprise Zone. This agreement will provide State of Iowa
financial benefits to a local housing developer making a substantial investment in our
downtown. There is no commitment within the agreement of any further City
assistance.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
7.-
Mic ael C. Van Milligen
bc./1144 0.4
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
katil
All -America City
1111
2007 • 2012 •2013
Economic Development Department
50 West 13th Street
Dubuque, Iowa 52001-4864
Office (563) 589-4393
TTY (563) 690-6678
http://www.cityofdubuque.org
TO: Michael Van Miliigen, City Manager
FROM: Maurice Jones, Economic Development Director
SUBJECT: Housing Enterprise Zone Program Agreement Numbers 14-HEZ-075 and
14-HEZ-097 for Community Housing Initiatives, Inc. dated March 12, 2014
DATE: May 27, 2014
INTRODUCTION
This memorandum presents for City Council approval two Housing Enterprise Zone
Program Agreements by and among the Iowa Economic Development Authority (IEDA),
the City and Community Housing Initiatives, Inc. The City Council is requested to adopt
a resolution approving the agreement.
BACKGROUND
On December 19, 2013, the City Enterprise Zone Commission approved two
applications to IEDA on behalf of Community Housing Initiatives, Inc. for Housing
Enterprise Zone benefits related to the redevelopment of scattered sites in Enterprise
Zones 1-A and 2-A. IEDA approved the application on December 19, 2013.
DISCUSSION
Attached to this memorandum is a resolution that provides for the approval of the
agreements for Housing Enterprise Zone benefits for Community Housing Initiatives,
Inc. The resolution authorizes and directs the Mayor to execute the agreements on
behalf of the City. The agreements outline the State benefits that will accrue to
Community Housing Initiatives, Inc. based on their role as developer of the housing
projects. The projects will provide a total of 18 new affordable housing units in the
downtown area.
Community Housing Initiatives, Inc. has estimated a capital investment of approximately
$1,800,000 within the Enterprise Zone. This agreement will provide State of Iowa
financial benefits to a local housing developer making a substantial investment in our
downtown. There is no commitment within the agreement of any further City
assistance.
RECOMMENDATION/ ACTION STEP
I recommend that the City Council approve the proposed Housing Enterprise Zone
Program Agreement for Community Housing Initiatives, Inc. for scattered sites in
Enterprise Zones 1-A and 2-A by adopting the attached resolution.
RESOLUTION NO. 161-14
APPROVING A HOUSING ENTERPRISE ZONE PROGRAM AGREEMENT BY AND
AMONG THE IOWA ECONOMIC DEVELOPMENT AUTHORITY, THE CITY OF
DUBUQUE AND COMMUNITY HOUSING INITIATIVES, INC.
Whereas, the City of Dubuque has established two Enterprise Zones and an Enterprise
Zone Commission; and
Whereas, the Enterprise Zone Commission on December 19, 2013 approved two
applications of Community Housing Initiatives, Inc. for Housing Enterprise Zone benefits;
and
Whereas, the applications were sent to the Iowa Economic Development Authority for
consideration and approval; and
Whereas, Community Housing Initiatives, Inc.'s applications were approved by the Iowa
Economic Development Authority on March 12, 2014; and
Whereas, the Iowa Economic Development Authority has prepared and submitted for
City Council approval two agreements relating to Housing Enterprise Zone benefits for
Community Housing Initiatives, Inc., a copy of which are attached hereto and by this
reference made a part hereof; and
Whereas, the City Council finds that the proposed agreement is acceptable and
necessary to the growth and development of the city.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the Iowa Economic Development Authority Housing Enterprise Zone
Program Agreement, Numbers 14-HEZ-075 and 14-HEZ-097 is hereby approved.
Section 2. That the Mayor is hereby authorized and directed to execute the Agreement
on behalf of the City of Dubuque and forward the executed copy to the Iowa Economic
Development Authority for its approval.
Passed, approved and adopted this 2nd day of June, 2014.
Attest:
D. Buol, Mayor
IOWA ECONOMIC DEVELOPMENT AUTHORITY
200 East Grand Avenue 1 Des Moines, Iowa 50309 USA 1 Phone: 515.725.3000
iowaeconomicdevelopment.com
May 22, 2014
Phil Wagner
City of Dubuque
50 W. 13th Street, Second Floor
Dubuque, IA 52001
RE: Housing Enterprise Zone Program Agreement # 14-HEZ-097
Dear Mr. Wagner:
economic development
Enclosed is the Housing Enterprise Zone Program Agreement for Community Housing
Initiatives, Inc. This agreement must be signed by representatives from the business,
City of Dubuque, and the Iowa Economic Development Authority in order for Community
Housing Initiatives, Inc. to receive Enterprise Zone benefits.
Please have an official of the City of Dubuque and an official of Community Housing
Initiatives, Inc., review it, sign it, and send the agreement to me. When all the
necessary signatures have been obtained, I will send you a copy of the executed
agreement for your files. If you have any questions about the agreement, please do not
hesitate to contact me. For questions on your actual project please contact me at
515.725.3128.
Sincere)
co
Jeremy : • cock
Project Manager
Enclosure
Cc: (w/o enclosure) Doug LaBounty, Community Housing Initiatives, Inc..
File
Governor Terry E. Branstad 1 Lt. Governor Kim Reynolds 1 Director Debi V. Durham
IOWA ECONOMIC DEVELOPMENT AUTHORITY
HOUSING ENTERPRISE ZONE PROGRAM AGREEMENT
EZ AGREEMENT NUMBER:
APPLICATION APPROVAL DATE:
AGREEMENT EFFECTIVE DATE:
14-HEZ-097
March. 12, 2014
•March 12, 2014
ENTERPRISE ZONE NAME: Dubuque EZ -2A located in Dubuque County
ZONE 8XPIRATION DATE: November 15, 2017
THIS ENTERPRISE ZONE AGREEMENT is made by and among the Iowa Economic Development Authority,
200 East Grand Avenue, Des Moines, Iowa 50309 ("Authority" or "IEDA"), City of Dubuque, 50 W. 13th Street,
Second Floor, Dubuque, IA 52001, ("Community") and Community Housing Initiatives, Inc., 500 East Locust
Street, Suite 500, Des Moines, IA 50309, ("Housing Business").
WHEREAS, the purpose of the Enterprise Zone Program is to promote new economic development in
economically distressed areas; and
WHEREAS, the Community has designated and the Authority has certified the Enterprise Zone identified
above; and
WHEREAS, eligible housing businesses with projects located in a certified Enterprise Zone are authorized
under this program to receive certain tax incentives and assistance; and
WHEREAS, the Enterprise Zone Commission responsible for the above -identified Zone has recommended
approval and the Authority has found the Housing Business' application to be consistent with the Act's eligibility
requirements; and
NOW THEREFORE, in consideration of the mutual promises contained in this Agreement and other good
and valuable consideration, it is agreed as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall apply:
1.1 "Act" means 2005 Iowa Code sections 15E.191 through 15E.196 as amended by 2005 Iowa Acts,
House File 857 and House File 882.
1.2 "Administrative Rules" means 261 Iowa Administrative Code, chapter 59.
1.3 "Agreement Effective Date" means the date this Agreement becomes effective andtheHousing
Business is authorized to receive program benefits.
1.4 "Agreement Expiration Date" means the date this Agreement ceases to be in force and effect. This
Agreement shall remain in effect until IEDA receives written verification that all 9 units have been certified for
occupancy.
1.5 "Application Approval Date" means the date, as identified above, on which the Director or Director's
designee of the IEDA approved the Housing Business' Enterprise Zone application.
1.6 'Board" means the I EDA Board.
1.7 "Commission"or "Enterprise Zone Commission" means the Enterprise Zone commission
established by the Community responsible for the certified Enterprise Zone.
HEZ Format revised 3/2008; Form reference 11/2013
EZ Agreement # 14-HEZ-097
Page 2
1.8 "IDR" means the Iowa Department of Revenue.
1.9 "Enterprise Zone" means the site within the Community certified by the Board for the purpose of
attracting private investment.
1.10 'Project" means the activity, or set of activities, described in this Agreement and the Enterprise
Zone application approved by IEDA.
1.11 "Project Completion" means the date of completion of construction or if this Project involves
rehabilitation, the date all improvements included in the Project are completed.
ARTICLE II
ENTERPRISE ZONE BENEFITS
2.1 Benefits. The following Enterprise Zone benefits authorized by the Act and IEDA administrative
rules are available to the Housing Business under this Agreement:
(a) investment Tax Credit. The Housing Business may claim an investment tax credit up to a
maximum of 10 percent of the new investment which is directly related to the building or rehabilitating of the units
stated in Article IV, Section 4.1 of this. Agreement. -
New investment which is directly related to the building or rehabilitating units includes the following costs:
land, surveying, architectural services, building permits, inspections, interest on the construction loan, building
materials, roofing, plumbing materials, electrical materials, amounts paid to subcontractors for labor and materials
provided, concrete, labor, landscaping, appliances normally provided with a new home, heating and cooling
equipment, millwork, drywall and drywall materials, nails, bolts, screws, and floor coverings. New investment does
not include the machinery, equipment, hand or power tools necessary to build or rehabilitate homes.
The new investment that may be used to compute the tax credit shall not exceed the new investment used
for the first one hundred forty thousand dollars of value for each unit. In determining the tax credit, new investment
financed through federal, state, and local government tax credits, grants, and forgivable loans shall not be included.
The tax credit may be used to reduce tax liabilities imposed under Iowa Code chapter 422, Division II,
Division III or Division V or under Iowa Code chapter 432. Any credit in excess of the tax liability for the tax year
may be credited to the tax liability for the following seven years or until depleted, whichever occurs earlier. If the
business is a partnership, subchapter S corporation, limited liability company, or estate or trust electing to have the
income taxed directly to the individual, an individual may claim the tax credit allowed. The amount claimed by the
individual shall be based upon the pro -rata share -of the individual's earnings of the partnership, subchapter S
corporation, limited liability company, or estate or trust.
Transferable replacement tax credit certificates may be issued by the Authority to projects as described in
Iowa Administrative Code 59.8(2)a.(8) and Iowa Administrative Code 59.8(2)a.(9):
(i) Approved housing development projects using low-income housing tax credits authorized under
Section 42 of the Internal Revenue Code and as described in Iowa Administrative Code
59.8(2)a.(8).
(ii) Approved housing development projects located in a brownfield site as defined in section 15.291 or
housing development projects located in a blighted area as defined in section 403.17 and as
described in Iowa Administrative Code 59.8(2)a.(9). The Authority shall not issue more than three
million dollars worth of transferable tax credits for housing developments that are located in a
brownfield site as defined in section 15.291 or housing developments located in a blighted area as
defined in section 403.17 in a calendar year. The Authority shall not issue more than one million
five hundred thousand dollars in tax credit certificates for transfer to any one eligible housing
Format revised 10/2005
EZ Agreement # 14-HEZ-097
Page 3
business assisted in a brownfield site as defined in section 291 or in a blighted area as defined in
section 403.17.
(b) Refund Of Sales, Service And Use Taxes Paid To Contractors Or Subcontractors. The Housing
Business is eligible for a refund of sales, service and use taxes paid by an eligible business, including an eligible
business acting as a contractor or subcontractor as authorized in Iowa Code section 15.331A.
(1) The Housing Business may apply fora refund of the sales and use taxes paid under Iowa Code
chapters 422 and 423 for gas, electricity, water or sewer utility services, goods, wares, or
merchandise, or on services rendered, furnished, or performed to or for a contractor or
subcontractor and used in the fulfillment of a written contract relating to the construction or
rehabilitation of the units within the Enterprise Zone.
(ii) Taxes attributable to intangible property and furniture and furnishings shall not be refunded.
To receive a refund of the sales, service and use taxes paid to contractors or subcontractors, the Housing
Business must, within one year after Project Completion, make an application to the IDR.
2.2 Duration Of Benefits. The Enterprise Zone designation shall remain in effect for ten years following
the date of certification. Any state incentives orassistancethat may be conferred must be conferred before the
designation expires. However, the benefits of the incentive or assistance may continue beyond the expiration of .
the Enterprise Zone designation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUSINESS
To induce the Authority and the Community to authorize Enterprise Zone benefits referred to in this
Agreement, the Housing Business represents, covenants and warrants that:
3.1 Authority. The Housing Business is a corporation duly organized and validly existing under the
laws of its state of incorporation and is in good standing, and has complied with all applicable laws of the State of
Iowa. The Housing Business is duly authorized and empowered to execute and deliver this Agreement. All action
on the Housing Business' part (e.g. where required, appropriate resolution of its Board of Directors) for the
execution and delivery of this Agreement, has been effectively taken.
3.2 Business Information. All written financial statements and related materials concerning the
Housing Business and the Project provided to the Authority and the Community are true and correct in all material
respects and completely and accurately represent the subject matter thereof as of the effective date of the
statements and related materials, and no material adverse change has occurred since that date.
3.3 Application. The contents of the application the Housing Business submitted to the Authority for
Enterprise Zone program benefits (Attachment A) is a complete and accurate representation of the Housing
Business and the Project as of the date of submission and there has been no material adverse change in the
organization, operation, business prospects, fixed properties or key personnel of the Housing Business since the
date the Housing Business submitted its application to the Authority. The application and any requested changes
must be approved in writing by the local enterprise zone commission prior to acceptance by the Authority.
3.4 Claims And Proceedings. There are no actions, lawsuits or proceedings pending or, to the
knowledge of the Housing Business, threatened against the Housing Business affecting in any manner whatsoever
its rights to execute this Agreement or to otherwise comply with the obligations of the Housing Business contained
under this Agreement. There are no actions, lawsuits or proceedings at law or in equity, or before any
governmental or administrative authority pending or, to the knowledge of the ,Housing Business, threatened against
the Housing Business or affecting the Housing Business' ability to proceed with the Project.
3.5 Permits. All necessary permits have been issued or will be applied for in a timely manner with
reasonable expectation that they will be issued.
Format revised 10/2005
EZ Agreement # 14-HEZ-097
Page 4
ARTICLE IV
CONDITIONS TO RECEIPT OF ENTERPRISE ZONE BENEFITS
The Enterprise Zone Benefits authorized under Article II of this Agreement are available to the Housing
Business provided the Housing Business, (and where applicable, the Community) satisfies each of the following
conditions:
4.1 Build or Rehabilitate. The Housing Business must rehabilitate (rehab) 9 single family units in the
Dubuque EZ -2A Enterprise Zone.
4.2 Modest Homes. The single-family homes and dwelling units which are rehabilitated or constructed
by the Housing Business shall be modest homes or units, but shall include the necessary amenities. When
completed and made available for occupancy, the single-family homes and .dwelling units shall meet the United
Sates Authority of Housing and Urban Development's housing quality standards and local safety standards.
4.3 Completed within Two Years. The Housing Business shall complete its building or rehabilitation
within two years from the time the Housing Business begins construction or rehabilitation of the units described in
Section 4.1.
4.4 Records And Accounts. The Housing Business shall maintain information, books, records,
documents and other evidence concerning the Project, in sufficient detail to permit the Authority and the
Community to assess compliance with the terms of this Agreement. The Housing Business shall retain the
aforementioned records for a period of three (3) years from the Agreement Expiration Date.
4.5 Access To Records/Inspections. The Housing Business shall, upon prior reasonable notice and at
any time (during normal business hours), permit the Community and its representatives and the Authority, its
representatives or the State Auditor to examine, audit and/or copy:
(i) any plans and work details pertaining to the Project,
(ii) all of the Housing Business' books, records and accounts relating to the Project, and
(iii) all other documentation or materials related to this Agreement.
The Housing Business shall provide proper facilities for making such examination and/or inspection.
Records of the Housing Business furnished to the Authority in connection with this Project are subject to the
provisions of Iowa Code chapter 22 and administrative rules adopted by the Authority -concerning public records
and requests for confidential treatment of records.
4.6 Notice Of Proceedings. The Housing Business shall promptly notify the Community and IEDA of
the initiation of any claims, lawsuits, bankruptcy proceedings or other proceedings brought against the Housing
Business which would adversely impact the Project.
4.7 Reports; Community Monitoring/Reporting.
(a) The Housing Business shall prepare, sign and submit the following reports:
Report Due Date
Annual Certification January 30
The Housing Business shall, for the length of its designation as an Enterprise Zone business, certify
annually to the Community and the Authority its compliance with the requirements of the Act. The Housing
Business shall use the form provided by the Authority for its annual certification. Documentation of compliance with
the conditions detailed in Article IV shall be included with the annual certification.
Format revised 10/2005
EZ Agreement # 14-HEZ-097
Page 5
4.8 Notice Of Business Changes. The Housing Business shall provide prompt advance notice to the
Community and the Authority of any proposed change in the Housing Business ownership, structure or control
which would materially and directly affect the Project.
ARTICLE V
DEFAULT AND REPAYMENT
5.1 Events Of Default. Enterprise Zone benefits described in Article II are only available to the Housing
Business to the extent the Housing Business satisfies the conditions described in Article IV. Any of the following
shall constitute an Event of Default under this Agreement:
(a) Material Misrepresentation. If at any time any representation, warranty or statement made or
furnished to the Authority or the Community by, or on behalf of, the Housing Business in connection with this
Agreement shall be determined by the Authority to be incorrect, false, misleading or erroneous in any material
respect when made or furnished.
(b) Breach Of Agreement. If there is a failure of the Housing Business to comply with any of the
covenants, terms or conditions contained in this Agreement.
(c) Relocation Or Abandonment. If there is an abandonment of the Project and the Housing Business
fails to renew the Project within the Enterprise Zone within 30 days. If the relocation or abandonment is due to a
natural disaster (e.g. flood, tornado), the Housing Business shall have 120 days to renew the Project within the
Enterprise Zone.
(d) Insolvency Or Bankruptcy. If the Housing Business becomes insolvent or bankrupt, or admits in
writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors, or the
Housing Business applies for or consents to the appointment of a trustee or receiver for the Housing Business or
for the major part of its property; or if a trustee or receiver is appointed for the Housing Business or for all or a
substantial part of the assets of the Housing Business and the order of such appointment is not discharged,
vacated or stayed within sixty (60) days after such appointment; or if bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceedings or other proceedings for relief under any bankruptcy or similar law or laws for
the relief of debtors, are instituted by or against the Housing Business and, if instituted against the Housing
Business, is consented to, or, if contested by the Housing Business is not dismissed by the adverse parties or by
an order, decree or judgment within sixty (60) days after such institution.
5.2 Notice Of Default.
(a) From Authority. If, through the annual certification report or other means, the Authority has reason
to believe the Housing Business is in default of the terms of this Agreement, the Authority will issue a written notice
of default to the Housing Business, setting forth the nature of the default in reasonable specificity, and providing
therein a reasonable period of time, which shall not be less than 30 days from the date of the notice of default, in
which the Housing Business shall have an opportunity to cure, provided that cure is possible and feasible. A copy
of any Notice of Default will also be provided to the Community and IDR.
(b) From Community. If, through monitoring, auditing or other means, the Community has reason to
believe the Housing Business is in default of the terms of this Agreement, the Community will issue a written notice
of default to the Housing Business, setting forth the nature of the default in reasonable specificity, and providing
therein a reasonable period of time,_which shall not be less than 30 days from the date of the notice of default, in
which the Housing Business shall have an opportunity to cure, provided that cure is possible and feasible. A copy
of any Notice of Default will also be provided to the Authority and IDR.
Format revised 10/2005
EZ Agreement # 14-HEZ-097
Page 6
5.3 Repayment; Loss of Benefits.
(a) Failure to meet/maintain requirements. If the Housing Business fails in any year to meet or.
maintain any one of the requirements of the Act, the Housing Business shall repay the value of the incentives
received for each year during which it was not in compliance.
(b) IDR recovery. Once it has been established, through the Housing Business' annual certification,
monitoring, audit or otherwise, that the Housing Business is required to repay all or a portion of the incentives
received, the IDR shall collect the amount owed. IDR has the authority, pursuant to the Act, to recover the value of
state taxes or incentives provided under the Act. The value of state incentives provided under the Act includes
applicable interest and penalties.
ARTICLE VI
GENERAL TERMS AND PROVISIONS
6.1 Compliance With Laws And Regulations. The Housing Business shall comply with all applicable
State and federal laws, rules (including the administrative rules adopted by the Authority for the Enterprise Zone
Program - 261 Iowa Administrative Code, chapter 59), ordinances, regulations and orders.
6.2 Termination. This Agreement may be terminated by the Authority or the Community: (a) in the
event of an unremedied material Event of Default by the Housing Business under Article V of this Agreement; or (b)
by mutual agreement of all parties.
6.3 Survival Of Agreement. If any portion of this Agreement is held to be invalid or unenforceable, the
remainder shall be valid and enforceable.
6.4 Governing Law. This Agreement shall be interpreted in accordance with the law of the State of
Iowa, and any action relating to this Agreement shall only be commenced in the Iowa District Court for Polk County
or the United States District Court for the Southern District of Iowa.
6.5 Modification. This Agreement may only be modified by a written document signed by all Parties.
6.6 Notices. Whenever this Agreement requires or permits any notice or written request by one party
to another, it shall be in writing, enclosed in an envelope, addressed to the party to be notified at the address
heretofore stated (or at such other address as may have been designated by written notice), properly stamped,
sealed and deposited in the United States Mail. Any such notice given hereunder shall be deemed delivered upon
the earlier of actual receipt or three (3) business days after posting. The Authority may rely on the addresses of the
Housing Business and Community set forth heretofore, as modified from time to time, as being the addresses of the
Community and Housing Business.
6.7 Waivers. No waiver by a party of any Event of Default hereunder shall operate as a waiver of any
other Event of Default or of the same Event of Default on any future occasion. No delay on the part of a party in
exercising any right or remedy hereunder shall operate as a waiver thereof. No single or partial exercise of any
right or remedy by a party shall preclude future exercise thereof or the exercise of any other right or remedy.
6.8 Headings. The headings in this Agreement are intended solely for convenience of reference and
shall be given no effect in the construction and interpretation of this Agreement.
6.9 Integration.. This Agreement contains the entire understanding between the Community, Housing
Business and the Authority and any representations that may have been made before or after the signing of this
Agreement, which are not contained herein, are nonbinding, void and of no effect. None of the parties have relied
on any such prior representation in entering into this Agreement.
6.10 Counterparts. 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,
Format revised 10/2005
EZ Agreement # 14-HEZ-097
Page 7
6.11 Document Incorporated By Reference. The following document is hereby incorporated by
reference:
(a) Attachment A, "Housing Business' Enterprise Zone Application." Due to its size, Attachment A will
not be attached to this Agreement, but will be kept on file at the Iowa Economic Development
Authority. It shall, nevertheless, be considered an incorporated element of this Agreement.
6.12 Order Of Priority. In the event of a conflict between documents of this Agreement, the following
order of priority shall govern:
(a) Articles 1 through 6 herein.
(b) Attachment A, "Housing Business' Enterprise Zone Application."
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date
first stated:
FOR THE COMMUNITY: FOR IEDA:
City of Du; uque
Signatur
D
Roy D. Buol, Mayor
Type or Print Name, Title
FORTH S IN_ SINESS:
C mu i Hous n Initi..tives c
(sa g Inc.
J
Signature
(—a/� cx oursl" re -5 ��
Type Print Name,�tle
Deborah V. Durham, Director
Format revised 10/2005
ATTACHMENT A
Housing Business' Enterprise Zone Application
Due to its size, Attachment A will not be attached to this Agreement, but will be kept on file at the Iowa Economic
Development Authority. It shall, nevertheless, be considered an incorporated element of this Agreement.
HEZ Format revised 3/2008; Form reference 11/2013
IOWA ECONOMIC DEVELOPMENT AUTHORITY
200 East Grand Avenue 1 Des Moines, Iowa 50309 USA 1 Phone: 515.725.3000
iowaeconomicdevelopment.com
May 22, 2014
Phil Wagner
City of Dubuque
50 W. 13th Street, Second Floor
Dubuque, IA 52001
RE: Housing Enterprise Zone Program Agreement # 14-HEZ-075
Dear Mr. Wagner:
is )WA
economic development
Enclosed is the Housing Enterprise Zone Program Agreement for Community Housing
Initiatives, Inc. This agreement must be signed by representatives from the business,
City of Dubuque, and the Iowa Economic Development Authority in order for Community
Housing Initiatives, Inc. to receive Enterprise Zone benefits.
Please have an official of the City of Dubuque and an official of Community Housing
Initiatives, Inc., review it, sign it, and send the agreement to me. When all the
necessary signatures have been obtained, I_will send you a copy of the executed
agreement for your files. If you have any questions about the agreement, please do not
hesitate to contact me. For questions on your actual project please contact me at
515.725.3128.
incerely,
Jeremy Babcock
Project Marnaer
Enclosure
Cc: (w/o enclosure) Doug LaBounty, Community Housing Initiatives, Inc.
File
Governor Terry E. Branstad 1 Lt. Governor Kim Reynolds 1 Director Debi V. Durham
IOWA ECONOMIC DEVELOPMENT AUTHORITY
HOUSING ENTERPRISE ZONE PROGRAM AGREEMENT
EZ AGREEMENT NUMBER:
APPLICATION APPROVAL DATE:
AGREEMENT EFFECTIVE DATE:
14-HEZ-075
March 12, 2014
March 12, 2014
ENTERPRISE ZONE NAME: Dubuque EZ -1A located in Dubuque County
ZONE EXPIRATION DATE: November 15, 2017
THIS ENTERPRISE ZONE AGREEMENT is made by and among the Iowa Economic Development Authority,
200 East Grand Avenue, Des Moines, Iowa 50309 ("Authority" or "IEDA"), City of Dubuque, 50 W. 13th Street,
Second Floor, Dubuque, IA 52001, ("Community") and Community Housing Initiatives, Inc., 500 East Locust
Street, Suite 500, Des Moines, IA 50309, ("Housing Business").
WHEREAS, the purpose of the Enterprise Zone Program is to promote new economic development in
economically distressed areas; and
WHEREAS, the Community has designated and the Authority has certified the Enterprise Zone identified
above; and
WHEREAS,eligible housing businesses with projects located in a certified Enterprise Zone are authorized
under this program to receive certain tax incentives and assistance; and
WHEREAS, the Enterprise Zone Commission responsible for the above -identified Zone has recommended
approval and the Authority has found the Housing Business' application to be consistent with the Act's eligibility
requirements; and
NOW THEREFORE, in consideration of the mutual promises contained in this Agreement and other good
and valuable consideration, it is agreed as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall apply:
1.1 "Act" means 2005 Iowa Code sections 15E.191 through 15E.196 as amended by 2005 Iowa Acts,
House File 857 and House File 882.
1.2 "Administrative Rules" means 261 Iowa Administrative Code, chapter 59.
1.3 "Agreement Effective Date" means the date this Agreement becomes effective and the Housing
Business is authorized to receive program benefits.
1.4 "Agreement Expiration Date means the date this Agreement ceases to be in force and effect. This
Agreement shall remain in effect until IEDA receives written verification that all 9 units have been certified for
occupancy.
1.5 "Application Approval Date" means the date, as identified above, on which the Director or Director's
designee of the IEDA approved the Housing Business' Enterprise Zone application.
1:6 "Board" means the IEDA Board.
1.7 "Commission"or "Enterprise Zone Commission" means the Enterprise Zone commission
established by the Community responsible for the certified Enterprise Zone.
HEZ Format revised 3/2008; Form reference 11/2013
EZ Agreement # 14-HEZ-075
Page 2
1.8 "IDR" means the Iowa Department of Revenue.
1.9 "Enterprise Zone" means the site within the Community certified by the Board for the purpose of
attracting private investment.
1.10. "Project" means the activity, or set of activities, described in this Agreement and the Enterprise
Zone application approved by IEDA.
1.11 "Project Completion" means the date of completion of construction or if this Project involves
rehabilitation, the date all improvements included in the Project are completed.
ARTICLE II
ENTERPRISE ZONE BENEFITS
2.1 Benefits. The following Enterprise Zone benefits authorized by the Act and IEDA administrative
rules are available to the Housing Business under this Agreement:
(a) Investment Tax Credit. The Housing Business may claim an investment tax credit up to a
maximum of 10 percent of the new investment which is directly related to the building or rehabilitating of the units
stated in Article IV, Section 4.1 of this Agreement.
New investment which is directly related to the building or rehabilitating units includes the following costs:
land, surveying, architectural services, building permits, inspections, interest on the construction loan, building
materials, roofing, plumbing materials, electrical materials, amounts paid to subcontractors for labor and materials
provided, concrete, labor, landscaping, appliances normally provided with a new home, heating and cooling
equipment, millwork, drywall and drywall materials, nails, bolts, screws, and floor coverings. New investment does
not include the machinery, equipment, hand or power tools necessary to build or rehabilitate homes.
The new investment that may be used to compute the tax credit shall not exceed the new investment used
for the first one hundred forty thousand dollars of value for each unit. In determining the tax credit, new investment
financed through federal, state, and local government tax credits, grants, and forgivable loans shall not be included.
The tax credit may be used to reduce tax liabilities imposed under Iowa Code chapter 422, Division II,
Division III or Division V or under Iowa Code chapter 432. Any credit in excess of the tax liability for the tax year
may be credited to the tax liability for the following seven years or until depleted, whichever occurs earlier. If the
business is a partnership, subchapter S corporation, limited liability company, or estate or trust electing to have the
income taxed directly to the individual, an individual may claim the tax credit allowed. The amount claimed by the
individual shall be based upon the pro -rata share of the individual's earnings of the partnership, subchapter S
corporation, limited liability company, or estate or trust.
Transferable replacement tax credit certificates may be issued by the Authority to projects as described in
Iowa Administrative Code 59.8(2)a.(8) and Iowa Administrative Code 59.8(2)a.(9):
(i) Approved housing development projects using low-income housing tax credits authorized under
Section 42 of the Internal Revenue Code and as described in Iowa Administrative Code
59.8(2)a.(8).
(ii) Approved housing development projects located in a brownfield site as defined in section 15.291 or
housing development projects located in a blighted area as defined in section 403.17 and as
described in Iowa Administrative Code 59.8(2)a.(9). The Authority shall not issue more than three
million dollars worth of transferable tax credits for housing developments that are located in a
brownfield site as defined in section 15.291 or housing developments located in a blighted area as
defined in section 403.17 in a calendar year. The Authority shall not issue more than one million
five hundred thousand dollars in tax credit certificates for transfer to any one eligible housing
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business assisted in a brownfield site as defined in section 291 or in a blighted area as defined in
section 403.17.
(b) Refund Of Sales, Service And Use Taxes Paid To Contractors Or Subcontractors. The Housing
Business is eligible for a refund of sales, service and use taxes paid by an eligible business, including an eligible
business acting as a contractor or subcontractor as authorized in Iowa Code section 15.331A.
(i) The Housing Business may apply for a refund of the sales and use taxes paid under Iowa Code
chapters 422 and 423 for gas, electricity, water or sewer utility services, goods, wares, or
merchandise, or on services rendered, furnished, or performed to or for a contractor or
subcontractor and used in the fulfillment of a written contract relating to the construction or
rehabilitation of the units within the Enterprise Zone.
(ii) Taxes attributable to intangible property and furniture and furnishings shall not be refunded.
To receive a refund of the sales, service and use taxes paid to contractors or subcontractors, the Housing
Business must, within one year after Project Completion, make an application to the IDR.
2.2 Duration Of Benefits. The Enterprise Zone designation shall remain in effect for ten years following
the date of certification. Any state incentives or assistance that may be conferred must be conferred before the
designation expires. However, the benefits of the incentive or assistance may continue beyond the expiration of
the Enterprise Zone designation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUSINESS
To induce the Authority and the Community to authorize Enterprise Zone benefits referred to in this
Agreement, the Housing Business represents, covenants and warrants that:
3.1 Authority. The Housing Business is a corporation duly organized and validly existing under the
laws of its state of incorporation and is in good standing, and has complied with all applicable laws of the State of
Iowa. The Housing Business is duly authorized and empowered to execute and deliver this Agreement. All action
on the Housing Business' part (e.g. where required, appropriate resolution of its Board of Directors) for the
execution and delivery of this Agreement, has been effectively taken.
3.2 Business Information. All written financial statements and related materials concerning the
Housing Business and the Project provided to the Authority and the Community are true and correct in all material
respects and completely and accurately represent the subject matter thereof as of the effective date of the
statements and related materials, and no material adversechange has occurred since that date.
3.3 Application. The contents of the application the Housing Business submitted to the Authority for
Enterprise Zone program benefits (Attachment A) is a complete and accurate representation of the Housing
Business and the Project as of the date of submission and there has been no material adverse change in the
organization, operation, business prospects, fixed properties or key personnel of the Housing Business since the
date the Housing Business submitted its application to the Authority. The application and any requested changes
must be approved in writing by the local enterprise zone commission prior to acceptance by the Authority.
3.4 Claims And Proceedings. There are no actions, lawsuits or proceedings pending or, to the
knowledge of the Housing Business, threatened against the Housing Business affecting in any manner whatsoever
its rights to execute this Agreement or to otherwise comply with the obligations of the Housing Business contained
under this Agreement. There are no actions, .lawsuits or proceedings at law or in equity, or before any
governmental or administrative authority pending or, to the knowledge of the Housing Business, threatened against
the Housing Business or affecting the Housing Business' ability to proceed with the Project.
3.5 Permits. AH necessary permits have been issued or will be applied for in a timely manner with
reasonable expectation that they will be issued.
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ARTICLE IV
CONDITIONS TO RECEIPT OF ENTERPRISE ZONE BENEFITS
The Enterprise Zone Benefits authorized under Article II of this Agreement are available to the Housing
Business provided the Housing Business, (and where applicable, the Community) satisfies each of the following
conditions:
4.1 Build or Rehabilitate. The Housing Business must rehabilitate (rehab) 9 single family units in the
Dubuque EZ -1A Enterprise Zone.
4.2 Modest Homes. The single-family homes and dwelling units which are rehabilitated or constructed
by the Housing Business shall be modest homes or units, but shall include the necessary amenities. When
completed and made available for occupancy, the single-family homes and dwelling units shall meet the United
Sates Authority of Housing and Urban Development's housing quality standards and local safety standards.
4.3 Completed within Two Years. The Housing Business shall complete its building or rehabilitation
within two years from the time the Housing Business begins construction or rehabilitation of the units described in
Section 4.1.
4.4 Records And Accounts. The Housing Business shall maintain information, books, records,
documents and other evidence concerning the Project, in sufficient detail to permit the Authority and the
Community to assess compliance with the terms of this Agreement. The Housing Business shall retain the
aforementioned records for a period of three (3) years from the Agreement Expiration Date.
4.5 Access To Records/Inspections. The Housing Business shall, upon prior reasonable notice and at
any time (during normal business hours), permit the Community and its representatives and the Authority, its
representatives or the State Auditor to examine, audit and/or copy:
(i) any plans and work details pertaining to the Project,
(ii) all of the Housing Business' books, records and accounts relating to the Project, and
(iii) all other documentation or materials related to this Agreement.
The Housing Business shall provide proper facilities for making such examination and/or inspection.
Records of the Housing Business furnished to the Authority in connection with this Project are subject to the
provisions of Iowa Code chapter 22 and administrative rules adopted by the Authority concerning public records
and requests for confidential treatment of records.
4.6 Notice Of Proceedings. The Housing Business shall promptly notify the Community and IEDA of
the initiation of any claims, lawsuits, bankruptcy proceedings or other proceedings brought against the Housing
Business which would adversely impact the Project.
4.7 Reports; Community Monitoring/Reporting.
(a) The Housing Business shall prepare, sign and submit the following reports:
Report Due Date
Annual Certification January 30
The Housing Business shall, for the length of its designation as an Enterprise Zone business, certify
annually to the Community and the Authority its compliance with the requirements of the Act. The Housing
Business shall use the form provided by the Authority for its annual certification. Documentation of compliance with
the conditions detailed in Article IV shall be included with the annual certification.
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4.8 Notice Of Business Changes. The Housing Business shall provide prompt advance notice to the
Community and the Authority of any proposed change in the Housing Business ownership, structure or control
which would materially and directly affect the Project.
ARTICLE V
DEFAULT AND REPAYMENT
5.1 Events Of Default. Enterprise Zone benefits described in Article II are only available to the Housing
Business to the extent the Housing Business satisfies the conditions described in Article IV. Any of the following
shall constitute an Event of Default under this Agreement:
(a) Material Misrepresentation. If at any time any representation, warranty or statement made or
furnished to the Authority or the Community by, or on behalf of, the Housing Business in connection with this
Agreement shall be determined by the Authority to be incorrect, false, misleading or erroneous in any material
respect when made or furnished.
(b) Breach Of Agreement. If there is a failure of the Housing Business to comply with any of the
covenants, terms or conditions contained in this Agreement.
(c) Relocation Or Abandonment. If there is an abandonment of the Project and the Housing Business
fails to renew the Project within the Enterprise Zone within 30 days. If the relocation or abandonment is due to a
natural disaster (e.g. flood, tornado), the Housing Business shall have 120 days to renew the Project within the
Enterprise Zone.
(d) Insolvency Or Bankruptcy. If the Housing Business becomes insolvent or bankrupt, or admits in
writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors, or the
Housing Business applies for or consents to the appointment of a trustee or receiver for the Housing Business or
for the major part of its property; or if a trustee or receiver is appointed for the Housing Business or for all or a
substantial part of the assets of the Housing Business and the order of such appointment is not discharged,
vacated or stayed within sixty (60) days after such appointment; or if bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceedings or other proceedings for relief under any bankruptcy or similar law or laws for
the relief of debtors, are instituted by or against the Housing Business and, if instituted against the Housing
Business, is consented to, or, if contested by the Housing Business is not dismissed by the adverse parties or by
an order, decree or judgment within sixty (60) days after such institution.
5.2 Notice Of Default.
(a) From Authority. If, through the annual certification report or other means, the Authority has reason
to believe the Housing Business is in default of the terms of this Agreement, the Authority will issue a written notice
of default to the Housing Business, setting forth the nature of the default in reasonable specificity, and providing
therein a reasonable period of time, Which shall not be less than 30 days from the date of the notice of default, in
which the Housing Business shall have an opportunity to cure, provided that cure is possible and feasible. A copy
of any Notice of Default will also be provided to the Community and IDR.
(b) From Community. If, through monitoring, auditing or other means, the Community has reason to
believe the Housing Business is in default of the terms of this Agreement, the Community will issue a written notice
of default to the Housing Business, setting forth the nature of the default in reasonable specificity, and providing
therein a reasonable period of time,_which shall not be less than 30 days from the date of the notice of default, in
which the Housing Business shall have an opportunity to cure, provided that cure is possible and feasible. A copy
of any Notice of Default will also be provided to the Authority and IDR.
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5.3 Repayment; Loss of Benefits.
(a) Failure to meet/maintain requirements. If the Housing Business fails in any year to meet or
maintain any one of the requirements of the Act, the Housing Business shall repay the value of the incentives
received for each year during which it was not in compliance.
(b) IDR recovery. Once it has been established, through the Housing Business' annual certification,
monitoring, audit or otherwise, that the Housing Business is required to repay all or a portion of the incentives
received, the IDR shall collect the amount owed. IDR has the authority, pursuant to the Act, to recover the value of
state taxes or incentives provided under the Act. The value of state incentives provided under the Act includes
applicable interest and penalties.
ARTICLE VI
GENERAL TERMS AND PROVISIONS
6.1 Compliance With Laws And Regulations. The Housing Business shall comply with all applicable
State and federal laws, rules (including the administrative rules adopted by the Authority for the Enterprise Zone
Program - 261 Iowa Administrative Code, chapter 59), ordinances, regulations and orders.
6.2 Termination. This Agreement may be terminated by the Authority or the Community: (a) in the
event of an unremedied material Event of Default by the Housing Business under Article V of this Agreement; or (b)
by mutual agreement of all parties.
6.3 Survival Of Agreement. If any portion of this Agreement is held to be invalid or unenforceable, the.
remainder shall be valid and enforceable.
6.4 Governing Law, This Agreement shall be interpreted in accordance with the law of the State of
Iowa, and any action relating to this Agreement shall only be commenced in the Iowa District Court for Polk County
or the United States District Court for the Southern District of Iowa.
6.5 Modification. This Agreement may only be modified by a written document signed by all Parties.
6.6 Notices. Whenever this Agreement requires or permits any notice or written request by one party
to another, it shall be in writing, enclosed in an envelope, addressed to the party to be notified at the address
heretofore stated (or at such other address as may have been designated by written notice), properly stamped,
sealed and deposited in the United States Mail. Any such notice given hereunder shall be deemed delivered upon
the earlier of actual receipt or three (3) business days after posting. The Authority may rely on the addresses of the
Housing Business and Community set forth heretofore, as modified from time to time, as being the addresses of the
Community and Housing Business.
6.7 Waivers. No waiver by a party of any Event of Default hereunder shall operate as a waiver of any
other Event of Default or of the same Event of Default on any future occasion. No delay on the part of a party in
exercising any right or remedy hereunder shall operate as a waiver thereof. No single or partial exercise of any
right or remedy by a party shall preclude future exercise thereof or the exercise of any other right or remedy.
6.8 Headings. The headings in this Agreement are intended solely for convenience of reference and
shall be given no effect in the construction and interpretation of this Agreement.
6.9 Integration. This Agreement contains the entire understanding between the Community, Housing
Business and the Authority and any representations that may have been made before or after the signing of this
Agreement, which are not contained herein, are nonbinding, void and of no effect. None of the parties have relied
on any such prior representation in entering into this Agreement.
6.10 Counterparts. 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.
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6.11
reference:
Document Incorporated By Reference. The following document is hereby incorporated by
(a) Attachment A, "Housing Business' Enterprise Zone. Application." Due to its size, Attachment A will
not be attached to this Agreement, but will be kept on file at the Iowa Economic Development
Authority. It shall, nevertheless, be considered an incorporated element of this Agreement.
6.12 Order Of Priority. In the event of a conflict between documents of this Agreement, the following
order of priority shall govern:
(a)
(b)
Articles 1 through 6 herein.
Attachment A, "Housing Business' Enterprise Zone Application."
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date
first stated:
FOR THE
City of Du
OMMUNITY:
que
/
Signature
Roy D. Buol, Mayor
Type or Print Name, Title
FOR THNI N� SINESS:
ity Hous'hg I ' iatives, Inc.
Signature
OL4Gi ISDunt } Vie 5 c/a -al --
Type A Print Name, ltle
FOR IEDA:
Deborah V. Durham, Director
Format revised 10/2005
ATTACHMENT A
Housing Business' Enterprise Zone Application
Due to its size, Attachment A will not be attached to this Agreement, but will be kept on file at the Iowa Economic
Development Authority. It shall, nevertheless, be considered an incorporated element of this Agreement.
HEZ Format revised 3/2008; Form reference 11/2013