Conlon Johnson_Sedgewick 1st AmendmentTHE CITY OF DUBUQUE
Masterpiece on the Mississippi
MEMORANDUM
May 17, 2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Amendment to the Conlon Johnson (Sedgwick) Development Agreement
Economic Development Director Dave Heiar is recommending an amendment to the
Conlon Johnson Development Agreement.
A summary of the changes are as follows:
1. The building size increased from 22,000 square feet to 28,000 square feet.
2. The building value increased from $2,750,000 to $3,300,000.
3. The number of full time jobs increased from 75 to 110.
4. The TIF rebate increased from 82% to 88%.
5. The repayment of the acquisition grant in the case of a default changes from
$2,014.00 to $1,373.42 for each job not created.
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
David J. Heiar, Economic Development Director
THE CITY OF DUBUQUE
Masterpiece on the Mississippi
MEMORANDUM
May 15, 2007
TO: Michael C. Van Milligen, City Manager
FROM: David J. Heair, Economic Development Director
SUBJECT: Amendment to the Conlon Johnson
BACKGROUND
Since the or:g;nal Conlon Johnson Development Agreemen lch has
changed. Employment at Sedgwick, the major tenant in the building, continues to grow
at a rapid pace. The origins! building provided 18,000 sq ft of leased space for
Sedgwick. The remaining 4,000 sq ft is the home for Straka Johnson Architects, p.C.
prior to this construction project being complete, Sedgwick asked the Developer far an
additional 6,000 sq ft of space. In the original Development Agreement, Sedgwick
pledged the creation of 75 jobs. The company now plans to have 110 full time
employees. The projected building value has gone from $2,750,000 to $3,300,000.
Based on the percentage of the building utilized by Sedgwick, the original development
agreement provided for an 82% TIF rebate. With the building addition, 88% of the
building will be leased by Sedgwick.
A summary of the changes to the attached development agreement are as follows:
1. The building size increased from 22,000 sn ft to 28,000 sa ft.
2. The building value increased fror9~ $2,750,000 to $3,300,000.
3. The number of full time jobs increased from 75 to 110.
4. The TIF rebate increased from 82% to 88%.
5. The repayment of the acquisition grant in the case of a default changes
from $2.014.00 to $1,373.42 for each job not created.
R C M N®.41'IN
That the City Council approve the first amendment to the Conlon Johnson Development
Agreement.
THE CITY OF
DUB E
Masterpiece on the Mississippi
MEMORANDUM
May 17, 2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Amendment to the Conlon Johnson (Sedgwick) Development Agreement
Economic Development Director Dave Heiar is recommending an amendment to the
Conlon Johnson Development Agreement.
A summary of the changes are as follows:
1. The building size increased from 22,000 square feet to 28,000 square feet.
2. The building value increased from $2,750,000 to $3,300,000.
3. The number of full time jobs increased from 75 to 110.
4. The TIF rebate increased from 82% to 88%.
5. The repayment of the acquisition grant in the case of a default changes from
$2,014.00 to $1,373.42 for each job not created.
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
David J. Heiar, Economic Development Director
THE CITY OF
DUB E MEMORANDUM
Masterpiece on the Mississippi
May 15, 2007
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director ~
SUBJECT: Amendment to the Conlon Johnson (Sedgwick) Development Agreement
INTRODUCTION
This memorandum presents for City Council adoption an amendment to the Conlon
Johnson Development Agreement approved on August 21, 2006.
BACKGROUND/DISCUSSION
Since the original Conlon Johnson Development Agreement was approved, much has
changed. Employment at Sedgwick, the major tenant in the building, continues to grow
at a rapid pace. The original building provided 18,000 sq ft of leased space for
Sedgwick. The remaining 4,000 sq ft is the home for Straka Johnson Architects, P.C.
Prior to this construction project being complete, Sedgwick asked the Developer for an
additional 6,000 sq ft of space. In the original Development Agreement, Sedgwick
pledged the creation of 75 jobs. The company now plans to have 110 full time
employees. The projected building value has gone from $2,750,000 to $3,300,000.
Based on the percentage of the building utilized by Sedgwick, the original development
agreement provided for an 82%TIF rebate. With the building addition, 88% of the
building will be leased by Sedgwick.
A summary of the changes to the attached development agreement are as follows:
1. The building size increased from 22,000 sq ft to 28,000 sq ft.
2. The building value increased from $2,750,000 to $3,300,000.
3. The number of full time jobs increased from 75 to 110.
4. The TIF rebate increased from 82% to 88%.
5. The repayment of the acquisition grant in the case of a default changes
from $2,014.00 to $1,373.42 for each job not created.
RECOMMENDATION
That the City Council approve the first amendment to the Conlon Johnson Development
Agreement.
F:\USERS\DHeiarlConlon Johnson ArchitectsWmendment to the Conlon Johnson DA memo.doc
This Amendment to Development Agreement is entered into this day of
2007, by and between the City of Dubuque, Iowa, a municipality (City),.
established pursuant to the Iowa Code and acting. under authorization of Iowa Code
Chapter. 403, as amended (Urban Renewal Act), and Conlon Johnson .Development,
LLC, with its principal place of business at Dubuque, Iowa (Developer).
RECITALS
A. City and Developer previously entered into a Development Agreement dated
on or about the 21 St day of August, 2006 ("The Development Agreement");
B. Pursuant to the terms of The Development. Agreement, Developer acquired
from the City property legally described as: dot 4 of Block 1 of Dubuque
Technology Park, in the City of Dubuque, Iowa, according to the plat thereof,
and Lot 1 of Dubuque Technology Park Rlo. 2 in the City of Dubuque, Iowa,
together with all easements, tenements, hereditaments and appurtenances
belonging thereto (the "Property");
C. The Development Agreement contemplated that the Developer would
construct a home office space for the occupancy of Straka-Johnson
Architects, P.C. to maintain and expand its multi-state business operations
and further construct and lease a regional office building to Sedgwick Claims
Management Services, Inc. ("Sedgwick"), amulti-state claims management
firm;
D. Subsequent to Developer's purchase of the Property as .provided in the
Development Agreement, Sedgwick and Developer reached an agreement to
expand Sedgwick's portion of the project;
E. The parties desire to amend the Development Agreement to accommodate
the expansion-plans-of-Sedgwick-and-desire to set forth-such-amendment -in - ---
writing,
THEREFORE, in consideration of the mutual terms and covenants contained
herein, the parties agree as ioiiows:
1
1. Amendments. The Development Agreement is hereby amended in the
following particulars:
(a) .The last paragraph of Section 2.1 is hereby stricken from the agreement
and the following shall be inserted into the Development Agreement in lieu
thereof:
"The Developer hereby agrees to construct on the North part of the
Property an office facility- of not less than 28,000 square feet of floor
space along with the necessary site work as contemplated in the
Development Agreement at a cost of approximately $3,300,000.00."
(b) Paragraph 3.2 of the Development Agreement is hereby amended by
striking each reference to 82% and replacing such references with 88%
and striking each reference to 18% and replacing. such references with
12%;
(c) Paragraph 4.1 shall be revised by striking such provision and the following
shall be inserted into the Development Agreement in lieu thereof:
"Developer shall ensure that Sedgwick or a different occupant of the north
portion of the property employs one hundred ten (110} tali-time positions
(2080 hours per- year) in Dubuque, Iowa at all. times during the Term of
this Agreement. In the event that any certificate provided to City under
Section 4.2 hereof .discloses that Developer does not as of that date have
at least one hundred ten (110) positions as provided hereinabove,
Developer shall pay to City, promptly upon written demand therefore, an
amount equal to $1,373.42 ($151,076.00 divided by 110 positions) for
each position less than one hundred ten (110) positions reflected on the
certificate. In addition, for the positions that Developer fails to provide for
any year during -the Term of this Agreement, the semi-annual Economic
Development Grants for such year under Section 3.2 shall be reduced by
the percentage that the number of such positions bears to the total
number of positions required by this Section 4.1."
2
2. Affect on Balance of Development Agreement. Except as modified herein, the
Development Agreement shall contin!~e to govern the. rights and obligations of City and.
Developer with respect to the Development Agreement and the project contemplated
thereby.