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Linseed Oil, LLC - Collateral Assignments to Merrimac and Betty BuildingCopyright 2014 City of Dubuque Consent Items # 17. ITEM TITLE: Linseed Oil, LLC - Collateral Assignments to Merrimac and Betty Building, LLC SUMMARY: City Manager recommending approval of collateral assignments of both the Development Agreement and the Community Development Block Grant (CDBG) Subrecipient Agreement for the Linseed Oil Building project to Dubuque Bank & Trust. RESOLUTION Approving Collateral Assignment of Development Agreement and Collateral Assignment of Subrecipient Agreement related to rehabilitation of the former Linseed Oil Building SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt Resolution(s) ATTACHMENTS : Description Type ❑ Linseed Oil Building Collateral Assignments -MVM Memo City Manager Memo ❑ Staff Memo Staff Memo ❑ Original Development Agreement Supporting Documentation E Original Subrecipient Agreement Supporting Documentation ❑ DA Assignment to Betty Building Supporting Documentation ❑ Subrecipient Agreement Assigned to Merrimac Supporting Documentation E Subrecipient Agreement Assignment to DB&T Supporting Documentation E Assignment of Development Agreement and Grant Payments-DB&T Supporting Documentation ❑ Resolution of Assignment Resolutions THE CITY OF Dui Masterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Collateral Assignment of Development Agreement and CDBG Subrecipient Agreement for Linseed Oil Building DATE: October 16, 2014 Dubuque band AI -America City r 2007 • 2012 • 2013 Economic Development Director Maurice Jones recommends City Council approval of collateral assignments of both the Development Agreement and the Community Development Block Grant (CDBG) Subrecipient Agreement for the Linseed Oil Building project to Dubuque Bank & Trust. I concur with the recommendation and respectfully request Mayor and City Council approval. lAil-t44 ., Mic ael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Manager Maurice Jones, Economic Development Director THE CITY OF Dui Masterpiece on the Mississippi Dubuque teal All -America City 1111 111' 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: Collateral Assignment of Development Agreement and CDBG Subrecipient Agreement for Linseed Oil Building DATE: October 16, 2014 INTRODUCTION The purpose of this memorandum is to request City Council approval of collateral Assignments of both the Development Agreement and the CDBG Subrecipient Agreement for the Linseed Oil Building project to Dubuque Bank & Trust. BACKGROUND Attached to this Memorandum are two collateral assignment documents related to the rehabilitation of the former Linseed Oil building located at 151 East 9th Street in Dubuque and a resolution approving the assignments. This building is owned by Wiimac Property Company. DISCUSSION Wiimac has created several special purpose entities to facilitate the use of federal and state historic tax credits and other development programs in the rehabilitation project. These entities include Merrimac Restoration, Inc., Betty Building, LLC and Carmac Management, Inc. These entities are owned by the McNamara family, as is Wiimac Property Company. The City Council recently approved an assignment of the Development Agreement from Wiimac to Betty Building, LLC and the Subrecipient Agreement (related to CDBG funds) from Wiimac to Merrimac Restoration, Inc. The McNamaras are working with Dubuque Bank & Trust Co. (DB&T) to obtain loan funds to assist in the rehabilitation. As a part of the required loan document package, DB&T has requested that Merrimac sign a collateral Assignment of the Subrecipient Agreement to DB&T and that Betty Building, LLC sign a collateral Assignment of the Development Agreement to the bank. Both of these Assignments require that the City join in the Assignments. The purpose of the collateral Assignments is to allow the bank to step into the shoes of the McNamara entities in the event of a default under the loan documents. In short, if such a default occurred, DB&T could then acquire the property through enforcement of its rights under the loan documents and then would have the same rights as the McNamara entities under the Development Agreement and the Subrecipient Agreement. In this fashion, the bank would be in position to either complete the project or transfer the real estate and the rights under the agreements (with City approval) to a buyer that would finish the project. Therefore, approval of the proposed Assignments not only facilitates the McNamara's efforts to complete the project but helps ensure the project would be completed by a third party in the unlikely event of a default under the loan documents. RECOMMENDATION/ ACTION STEP Based on the critical need for downtown housing and the City's goal to assist in redeveloping the Millwork District, I recommend the City Council adopt the attached resolution approving the Assignment of the Development Agreement to Dubuque Bank & Trust and also approving the Assignment of the Subrecipient Agreement to Dubuque Bank & Trust. 2 RESOLUTION NO. 328-14 APPROVING COLLATERAL ASSIGNMENT OF DEVELOPMENT AGREEMENT AND COLLATERAL ASSIGNMENT OF SUBRECIPIENT AGREEMENT RELATED TO REHABILITATION OF THE FORMER LINSEED OIL BUILDING Whereas, the former Linseed Oil Building located at 151 East 9th Street in Dubuque, Iowa (the Building) is owned by Wilmac Property Company (Wilmac); and Whereas, Wilmac and the City of Dubuque (City) have entered into a Development Agreement for the rehabilitation of the Building; and Whereas, Wilmac and the City have also entered into a Subrecipient Agreement which provides for Community Development Block Grant (CDBG) funding for the rehabilitation of the Building; and Whereas, Wilmac has created several special purpose entities to facilitate the use of federal and state historic tax credits and other development programs in the rehabilitation project, to wit, Merrimac Restoration, Inc. (Merrimac), Betty Building, LLC (Betty) and Carmac Management, Inc., all of which are owned by the McNamara family, as is Wilmac Property Company; and Whereas, the City Council has approved an assignment of the Development Agreement from Wilmac to Betty Building, LLC and the Subrecipient Agreement from Wilmac to Merrimac Restoration, Inc.; and Whereas, Merrimac and Betty will enter into a loan agreement with Dubuque Bank & Trust Co. (DB&T) for additional funding for the Building and DB&T has requested that Merrimac sign a collateral Assignment of the Subrecipient Agreement to DB&T and that Betty Building, LLC sign a collateral Assignment of the Development Agreement to DB&T (the Assignments), which Assignments require that City join in the Assignments; and Whereas, the City Council finds that the Assignments should be approved. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF DUBUQUE, IOWA AS FOLLOWS: Section 1. The Assignment of the Subrecipient Agreement and Assignment of the Development Agreement attached hereto are hereby approved. Section 2. The Mayor is authorized and directed to sign the Assignment of the Subrecipient Agreement and Assignment of the Development Agreement on behalf of the City of Dubuque. 101614ba1 Passed, approved and adopted this 20th day of 0; oG r, 2914. Attest: Kevin Firnstahl, City er 2 Roy D. ol, Mayor ASSIGNMENT OF SUBRECIPIENT AGREEMENT This Assignment is effective as of October f'' 2014, by MERRIMAC RESTORATION, INC., an Iowa corporation ("Merrimac") in favor of DUBUQUE BANK AND TRUST, an Iowa state banking corporation ("Lender"). WHEREAS, in connection with the construction of certain improvements to the real property located at 151 E 9th Street, Dubuque, Iowa (the "Property"), the City of Dubuque, Iowa (the "City") and Wilmac Property Company ("Wilmac") entered into a Subrecipient Agreement for Community Development Block Grant Housing Disaster recovery Fund Contract dated September 15, 2014 (the "Subrecipient Agreement"), pursuant to which the City agreed to provide to Wilmac certain funds as a forgivable loan (the "CDBG Proceeds"). WHEREAS, Wilmac assigned all of its rights and obligations under the Subrecipient Agreement to Merrimac pursuant to an Assignment of Subrecipient Agreement dated October 6, 2014 (the "Assignment"), a copy of the Subrecipient Agreement and the Assignment are attached hereto as Exhibit A. WHEREAS, Merrimac entered into a Term Loan Agreement with Carmac Management, Inc., an Iowa corporation ("Carmac"), pursuant to which Merrimac loaned the CDBG Proceeds to Cailuac. WHEREAS, Carmac used the CDBG Proceeds to make a capital contribution to Betty Building, LLC, an Iowa limited liability company ("Borrower"). WHEREAS, Lender extended certain financial accommodations to Borrower pursuant to a Construction Loan Agreement and other agreements dated October , 2014 (collectively, the "Loan Documents"), WHEREAS, as a condition to extending the financial accommodations, Lender has required the execution of this Assignment. ACCORDINGLY, in consideration of the foregoing, the parties agree as follows: 1. Merrimac hereby grants, assigns, transfers and set over unto Lender all of Merrimac's right, title and interest in and to the Subrecipient Agreement. City hereby consents to such assignment, subject to the terms of this Assignment. 2. Merrimac and City agree that Lender does not assume any of the rights or obligations of Merrimac under or with respect to the Subrecipient Agreement unless and until Lender shall have given City written notice that it has affirmatively exercised its right to assume the rights and obligations of Merrimac under the Subrecipient Agreement following the occurrence of a default or Event of Default in connection with or under any of the Loan Documents. If Lender does not assume the rights and obligations of Merrimac under or with respect to the Subrecipient Agreement, Lender shall have no liability whatsoever for the performance of any of such obligations. Lender may, in its absolute discretion, reassign its right, title and interest in the Subrecipient Agreement upon notice to City but without any requirement for Merrimac's consent. 3. Merrimac and City represent and warrant to Lender that (i) except for the Assignment, there have been no prior assignments of the Subrecipient Agreement, (ii) the Subrecipient Agreement is a valid, enforceable agreement, (iii) no party is in default thereunder, (iv) the Subrecipient Agreement has not been waived, amended or terminated, and (v) all covenants, conditions and agreements have been perfoimed as required therein, except those not due to be performed until after the date hereof. Merrimac and City agree that no material change in the terms thereof shall be valid without the written approval of Lender, which approval shall not be unreasonably withheld. Merrimac and City shall not assign, sell, pledge, mortgage or otherwise transfer or encumber its respective interest in the Subrecipient Agreement so long as this Assignment is in effect. 4. Merrimac hereby irrevocably constitutes and appoints Lender as its attorney-in-fact to demand, receive, and enforce Merrimac's rights with respect to the Subrecipient Agreement, to receive funds under the Subrecipient Agreement and give appropriate receipts, releases and satisfactions for and on behalf of and in the name of Merrimac or, at the option of Lender in the name of Lender, with the same force and effect as Merrimac could do if this Assignment had not been made. 5. City will give Lender prompt written notice of any default by Merrimac under the Subrecipient Agreement. City will not terminate the Subrecipient Agreement on account of any default of Merrimac without providing Lender with prior written notice of such default. Even if City terminates the Subrecipient Agreement, City nonetheless shall provide Lender with thirty (30) days prior written notice in order for Lender to elect to cure the default and assume Merrimac's obligations under the Subrecipient Agreement. If Lender so elects, City agrees not to terminate the Subrecipient Agreement so long as the defaults of Merrimac thereunder are cured by Lender within a reasonable time. However nothing herein shall require Lender to cure any default of Merrimac under the Subrecipient Agreement. 6. This Assignment shall constitute a perfected, absolute and present assignment provided that, notwithstanding anything in this Agreement to the contrary, Lender shall have no right under this Assignment to receive funds thereunder or enforce the provisions of the Subrecipient Agreement until an Event of Default shall occur in connection with or under the Loan Documents. Upon the occurrence of any Event of Default, Lender may, without affecting any of its rights or remedies against Merrimac under any other instrument, document or agreement, exercise its rights under this Assignment, as Merrimac's attorney-in-fact in any manner permitted by Iaw, and in addition, Lender shall have the right to exercise and enforce any or all rights and remedies available after default to a secured party under the Uniform Commercial Code, as adopted in the State of Iowa. If notice to Merrimac of any intended disposition of the collateral or any other intended action is required by law in a particular instance, such notice shall be deemed commercially reasonable if given at least ten (10) days prior to the date of intended disposition or other action. 7. Merrimac agrees to pay all costs and expenses (including without limitation all attorneys' fees and witness fees) which Lender may incur in exercising any of its rights under this Assignment. 8. Subject to the aforesaid limitation on further assignment by Merrimac and City, this Assignment shall be binding upon Merrimac and City, and their respective successors and assigns, and shall inure to the benefit of Lender, its participating lenders, successors and assigns. 9. This Assignment can be waived, modified, amended, terminated or discharged only explicitly in a writing signed by the parties, except that this Assignment shall terminate upon payment in full of all amounts due pursuant to the Loan Documents. A waiver signed by the parties shall be effective only in a specific instance and for the specific purpose given. Mere delay or failure to act shall not preclude the exercise or enforcement of any of Lender's rights or remedies hereunder. All rights and remedies of Lender shall be cumulative and may be exercised singularly or concurrently, at Lender's option, and the exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the exercise of enforcement of any other. This Assignment contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements, discussions and understandings. IN WITNESS WHEREOF, this Assignment of Subrecipient Agreement has been executed as of the day and year first above written. MERRIMAC RESTORATION, INC. By Its CITY OF DUBU *► UE Roy D 4 uo1, Mayor The State of Iowa, by its Department of Economic Development, hereby consents to the above assignment. STATE OF IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT By Its 9608259v 1 -3- EXHIBIT A SUBRECIPIENT AGREEMENT AND ASSIGNMENT ASSIGNMENT OF SUBRECIPIENT AGREEMENT This Assignment of Subrecipient Agreement is entered into thi" day of October, 2014 by and between Wilmac Property Company, an Iowa business corporation, ("Wilmac") Merrimac Restoration, Inc., an Iowa business corporation ("Merrimac") and the City of Dubuque, Iowa ("City"). RECITALS A. City and Wilmac entered into a Subrecipient Agreement for Community Development Block Grant Housing Disaster Recovery Fund Contract dated September 15, 2014 (the "Subrecipient Agreement"); B. Pursuant to the terms of the Subrecipient Agreement City shall provide to Wilmac certain funds as a forgivable loan, subject to the requirements and restrictions of that Subrecipient Agreement. The funds are made available through the State of Iowa, by its Department of Economic Development; C. In order to facilitate the use of the funds and to best accommodate other funding sources for the contemplated project Wilmac desires to assign all of its rights and obligations under the Subrecipient Agreement to Merrimac and Merrimac desires to accept such rights and obligations; D. The parties desire to set forth their agreement regarding such assignment in writing. Therefore, in consideration of the mutual terms and covenants herein, the parties agree as follows: AGREEMENT 1. Assignment. Wilmac does hereby assign, transfer and convey to Merrimac each and every right and obligation of Wilmac in and under the Subrecipient Agreement. 2. Acceptance. Merrimac does hereby accept all rights and obligations of Wilmac under the Subrecipient Agreement and agrees to be bound by such agreement and to be responsible for every obligation of the Subrecipient thereunder. 3. Consent. A. City does hereby consent to the assignment as set forth herein and releases Wilmac from any obligations that accrue under the terms of the Subrecipient Agreement after the date hereof. B. State of Iowa, by its Department of Economic Development , hereby consents to the assignment as set forth herein. ASSIGNMENT OF DEVELOPMENT AGREEMENT This Assignment of Development Agreement is entered into thiseday of October, 2014 by and between Wilmac Property Company, an Iowa business corporation, ("Wilmac") Betty Building, LLC, an Iowa limited liability company ("Betty") and the City of Dubuque, Iowa ("City"). RECITALS A. City and Wilmac entered into a Development Agreement dated March 7, 2013 (the "Development Agreement"); B. Pursuant to the terms of the Development Agreement Wilmac was to provide certain improvements to real estate owned by Wilmac, such property locally known as 151 East 9th St, Dubuque, Iowa and legally described as: City Lot 379 and the South 15 feet of City Lot 380 in Dubuque, Iowa (the "Property"). Subject to the requirements and restrictions of that Development Agreement City agreed to take certain actions to aid in the rehabilitation of the Property. C. In order to facilitate rehabilitation of the Property, and in particular to accommodate the use of historic tax credits, the Property will be or has been deeded to Betty. As such Wilmac desires to assign all of its rights and obligations under the Development Agreement to Betty and Betty desires to accept such rights and obligations; D. The parties desire to set forth their agreement regarding such assignment in writing. Therefore, in consideration of the mutual terms and covenants herein, the parties agree as follows: AGREEMENT 1. Assignment. Wilmac does hereby assign, transfer and convey to Betty each and every right and obligation of Wilmac in and under the Development Agreement. 2. Acceptance. Betty does hereby accept all rights and obligations of Wilmac under the Development Agreement and agrees to be bound by such agreement and to be responsible for every obligation of Developer thereunder. 3. Consent. City does hereby consent to the assignment as set forth herein and releases Wilmac from any obligations that accrue under the terms of the Development Agreement after the date hereof. 4. Miscellaneous. This agreement is binding upon the parties hereto and their successors ASSIGNMENT OF DEVELOPMENT AGREEMENT AND GRANT PAYMENTS THIS ASSIGNMENT OF DEVELOPMENT AGREEMENT AND GRANT PAYMENTS, is made.. and entered into effective as of October e), 2014, by and among the CITY OF DUBUQUE, an Iowa municipal corporation ("City"), BETTY BUILDING, LLC, an Iowa limited liability company ("Owner"), and DUBUQUE BANK AND TRUST COMPANY, an Iowa state banking corporation ("Lender"). WITNES SETH: WHEREAS, City and Wilmac Property Company ("Developer") entered into that certain Development Agreement dated as of March 11, 2013 (the "Development Agreement"), pertaining to the real property located in the Dubuque, Iowa, legally described on Exhibit A attached hereto and hereby made a part hereof (the "Project"), a copy of the Development Agreement is attached hereto as Exhibit B. WHEREAS, pursuant to the Development Agreement and subject to the terms and conditions of the Development Agreement, City agreed to pay Developer certain financial incentives described in Section 3 of the Development Agreement (collectively, the "Grant Payments"). WHEREAS, on or about October 16, 2014, Developer assigned the Development Agreement and the right to the Grant Payments to Owner. WHEREAS, Owner and Lender have entered into or will enter into that certain Construction Loan Agreement (the "Loan Agreement") for the purpose of funding a loan to be made by Lender to Owner to finance the construction of certain improvements to the Project. WHEREAS, Lender has required, as an express condition to extending the loan pursuant to the terms of the Loan Agreement, that Owner assign all of its rights under the Development Agreement and the Grant Payments to Lender to secure the obligations of Owner under the Loan Agreement and that City consent to such assignment. NOW THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Owner hereby assigns to Lender all of its right, title and interest under and pursuant to the Development Agreement and the Grant Payments to secure Owner's obligations under the terms of the Loan Agreement and the documents related thereto. To perfect Lender's security interest in the Grant Payments, Owner consents to Lender filing a UCC financing statement with respect to the Grant Payments. 2. Owner hereby represents and warrants that (a) there have been no prior assignments of the Development Agreement or the Grant Payments, (b) the Development Agreement and the Grant Payments are valid and enforceable, (c) neither City nor Owner is in default thereunder, and (d) to date, all covenants, conditions and agreements have been performed as required therein, except those not to be performed until after the date hereof. Owner agrees not to sell, assign, pledge, mortgage or otherwise transfer or encumber its interest in the Development Agreement or the Grant Payments as long as this Assignment is in effect. Owner hereby irrevocably constitutes and appoints Lender as its attorney-in-fact to demand, receive and enforce Owner's rights with respect to the Development Agreement and/or the Grant Payments for and on behalf of and in the name of Owner or, at the option of Lender, in the name of the Lender, with the same force and effect as Owner could do if this Assignment had not been made. 3. This Assignment shall constitute a perfected, absolute and present assignment, provided that Lender shall have no right under this Assignment to enforce the provisions of the Development Agreement or the Grant Payments, or to collect any funds payable to Owner pursuant to the Grant Payments, or to exercise any rights or remedies under this Assignment until a default or event of default under the Loan Agreement or any other documents related thereto shall occur or be continuing. Owner hereby indemnifies and holds City harmless from and against any claims or liabilities arising or purporting to arise from City acting at the direction of Lender as provided herein. 4. Upon the occurrence of a default or event of default under the Loan Agreement or any other documents related thereto, Lender may (but without obligation), without affecting any of its rights or remedies against Owner under any other instrument, document or agreement, exercise its rights under this Assignment as Owner's attorney-in-fact in any manner pelliiitted by law and in addition Lender shall have the right to exercise and enforce any and all rights and remedies available after default to a secured party under the Uniform Commercial Code as adopted in the State of Iowa. If notice to Owner of any intended disposition of collateral or of any intended action as required by law in any particular instance, such notice shall be deemed commercially reasonable if given at least ten (10) days prior to the intended disposition or other action. 5. City hereby consents and agrees to the terms and conditions of this Assignment; provided, however, this consent shall not limit any of City's rights or remedies under the Development Agreement. City further represents and warrants to Lender that (a) the Development Agreement is a valid and enforceable agreement of City, (b) to the knowledge of the undersigned, neither City nor Owner is in default thereunder, (c) to date, all covenants, conditions and agreements have been performed as required therein, except those not to be performed until after the date hereof, (d) by proper notice (if required) and proper action, City has authorized the assignment of the Development Agreement and the Grant Payments as provided herein, and (e) City has transferred the Grant Payments to Lender on the registration records for the Grant Payments maintained by City, if any. 6. City and Owner agree that no change or amendment shall be made to the terms of the Development Agreement or to the Grant Payments without the prior written consent of Lender. -2 7. City agrees that: (a) City will provide Lender with written notice of any default or breach by Owner under the Development Agreement (the "Notice"); (b) for a period of sixty (60) days after Lender receives the Notice, Lender shall have the right, but not the obligation, to cure such default or breach; and (c) if Lender timely cures said default or breach, City will not exercise any remedies under the Development Agreement as a result of said default or breach. 8. This Assignment can be waived, modified, amended, terminated or discharged only explicitly in a writing signed by Lender. A waiver by Lender shall be effective only in a specific instance and for the specific purpose given. Mere delay or failure to act shall not preclude the exercise or enforcement of any of Lender's rights or remedies hereunder. All rights and remedies of Lender shall be cumulative and shall be exercised singularly or concurrently, at Lender's option, and any exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any other. 9. Lender hereby acknowledges that the Grant Payments, when owed subject to the terms and conditions of the Development Agreement, will be a special, limited revenue obligation and not a general obligation of City and is payable by City only from the sources and subject to the qualifications stated or referenced therein. Neither the full faith and credit nor the taxing powers of City are pledged to the payment of the Grant Payments and no property or other assets of City, except the Developer Tax Increments (as defined in the Development Agreement) is or will be a source of payment of the Grant Payments. 10. This Assignment shall be governed by and construed in accordance with the laws of the State of Iowa. [signature pages follow] IN WITNESS WHEREOF, the parties hereto have made and entered into this Assignment of Development Agreement and Grant Payments as of the day and year first above written. CITY OF DU QUE IOWA By STATE OF IOWA ) ) ss. COUNTY OF DUBUQUE ) Roy : uol, Mayor The foregoing instrument was acknowledged before me this '" day of October, 2014, by Roy D. Buol, the Mayor of the City of Dubuque, an Iowa municipal corporation, for and on behalf of said municipal corporation. -4 Nota Public r KEVIN S. FIRNSTAHL COMMISSION NO.745295 MY COMMISSION EXPIRES IN WITNESS WHEREOF, the parties hereto have made and entered into this Assignment of Development Agreement and Grant Payments as of the day and year first above written. STATE OF IOWA ) ss. COUNTY OF DUBUQUE BETTY BUILDING, LLC By: Carmac Management, Inc. Its: Managing Member By Patrick McNamara Vice President The foregoing instrument was acknowledged before me this day of October, 2014, by Patrick McNamara, the Vice President of Carmac Management, Inc., an Iowa corporation, the Managing Member of Betty Building, LLC, an Iowa limited liability company, for and on behalf of said limited liability company. Notary Public 5 IN WITNESS WHEREOF, the parties hereto have made and entered into this Assignment of Development Agreement and Grant Payments as of the day and year first above written. DUBUQUE BANK AND TRUST COMPANY By Its STATE OF IOWA ) ) ss. COUNTY OF DUBUQUE ) The foregoing instrument was acknowledged before me this day of October, 2014, by , the of Dubuque Bank and Trust Company, an Iowa state banking corporation, for and on behalf of said banking corporation. 9609061v1 6 Notary Public EXHIBIT A LEGAL DESCRIPTION Lot 379 and the Southerly 15 feet of Lot 380 in the City of Dubuque, Iowa, according to the United States Commissioner's Map of the Town of Dubuque, Iowa EXHIBIT B DEVELOPMENT AGREEMENT 8 DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF DUBUQUE, IOWA AND WILMAC PROPERTY COMPANY rTHIS DEVELOPMENT AGREEMENT (Agreement) dated for reference purposes the j-in day of 1�'tr �, v c6j , 2013 is made and entered into by and between the City o Dubuque, Iowa (City), and Wilmac Property Company (Developer). WHEREAS, Developer is the owner of the real estate locally known as 151 East 9m Street, Dubuque, Iowa and legally described as follows (the Property): CITY LOT LOT 379 & S 15' OF CITY LOT 380 ; and WHEREAS, the Property is located in the Greater Downtown Urban Renewal District (the District) which has been so designated by City Council Resolution 271.12 as a slum and blighted area (the Project Area) defined by Iowa Code Chapter 403 (the Urban Renewal Law); and WHEREAS, Developer has undertaken the redevelopment of a three-story building located on the Property and will be operating the same during the term of this Agreement; and WHEREAS, Developer will make an additional capital investment in building improvements, equipment, furniture and fixtures in the Property (the Project); and WHEREAS, the Property is historically significant and it is in the City's best interest to preserve the Property; and WHEREAS, pursuant to Iowa Code Section 403.6(1), and in conformance with the Urban Renewal Plan for the Project Area adopted on May 18, 1967 and last amended on October 1, 2012, City has the authority to enter into contracts and agreements to implement the Urban Renewal Plan, as amended; and WHEREAS, the Dubuque City Council believes it is in the best interests of the City to encourage Developer in the development of the Property by providing certain incentives as set forth herein. NOW, THEREFORE, the parties to this Development Agreement, in consideration of the promises, covenants and agreements made by each other, do hereby agree as follows: SECTION 1. REPRESENTATIONS AND WARRANTIES 022613ba1 1.1 Representations and Warranties of Citv. In order to induce Developer to enter into this Agreement, City hereby represents and warrants to Developer that to the best of City's knowledge: (1) City has duly obtained all necessary approvals and consents for its execution, delivery and performance of this Agreement and that it has full power and authority to execute, deliver and perform its obligations under this Agreement. City's attorney shall issue a legal opinion to Developer at the time of closing confirming the representations contained herein, in the form attached hereto as Exhibit A. (2) City shall exercise its best efforts to cooperate with Developer in the development process, (3) City shall exercise its best efforts to resolve any disputes arising during the development process in a reasonable and prompt fashion. (4) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement are not prevented by, limited by, in conflict with, or result in a violation or breach of, the terms, conditions or provisions of the charter of City, any evidence of indebtedness, agreement or instrument of whatever nature to which City is now a party or by which it or its property is bound, or constitute a default under any of the foregoing. (5) There are no actions, suits or proceedings pending or threatened against or affecting City in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the financial position or operations of City or which affects the validity of the Agreement or City's ability to perform its obligations under this Agreement. (6) No ordinance or hearing is now before any local governmental body that either contemplates or authorizes any public improvements or special tax levies, the cost of which may be assessed against the Property. To the best of City's knowledge, there are no plans or efforts by any government agency to widen, modify, or re -align any street or highway providing access to the Property and there are no pending or intended public improvements or special assessments affecting the Property which will result in any charge or lien be levied or assessed against the Property. (7) The representations and warranties contained in this article shall be correct in all respells on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of the Closing Date. (6) As of the date of this Agreement there has been prepared and approved by City an Urban Renewal Plan for the Project Area consisting of the Urban Renewal 2 Plan for the Greater Downtown Urban Renewal Plan, most recently approved by City Council of City on October 1, 2012, and as subsequently amended through and including the date hereof, attached as Exhibit E (the Urban Renewal Plan). A copy of the Urban Renewal Plan, as constituted on the date of this Agreement and in the form attached hereto, has been recorded among the land records in the office of the Recorder of Dubuque County, Iowa. 1.2 Representations and Warranties of Developer. The Developer makes the following representations and warranties: (1) Developer is, a S -corporation duly organized and validly existing under the laws of the State of Iowa, and has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as presently proposed to be conducted, and to enter into and perform its obligations under this Agreement. (2) This Agreement has been duly authorized, executed and delivered by Developer and, assuming due authorization, execution and delivery by City, is in full force and effect and, is a valid and legally binding instrument of Developer enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally. Developer's counsel shall issue a legal opinion to City, at the time of closing, confirming the representations contained herein, in the form attached hereto as Exhibit:B. (3) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement are not prevented by, limited by, in conflict with, or result in a violation or breach of, the terms, conditions or provisions of the articles of incorporation or the bylaws of Developer or any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which Developer is now a party or by which it or its property is bound, or constitute a default under any of the foregoing. (4) There are no actions, suits or proceedings pending or threatened against or affecting Developer in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, financial position or result of operations of Developer or which affects the validity of the Agreement or Develnner's ahiiity to perform its obligations under this Agreement. (5) Developer will perform its obligations under this Agreement in accordance with the material terms of this Agreement, the Urban Renewal Plan and all local, state and federal laws and regulations. (6) Developer will use its best efforts to obtain, or cause to be obtained, in a timely manner, all material requirements of all applicable local, state, and federal laws and regulations which must be obtained or met. (7) Developer has firm commitments for permanent financing for the Project in an amount sufficient, together with equity commitments, to successfully complete the requirements of this Agreement and shall provide evidence thereof to City prior to the Closing Date, 1.3 Closing, The closing shall take place on the Closing Date which shall be the 15th day of June, 2013, or such other date as the parties shall agree in writing but in no event shall the Closing Date be later than the 1st day of August, 2013. Consummation of the closing shall be deemed an agreement of the parties to this Agreement that the conditions of closing shall have been satisfied or waived. 1.4 Conditions to Closing. The closing of the transaction contemplated by this Agreement and all the obligations of Developer under this Agreement are subject to fulfillment, on or before the Closing Date, of the following conditions; (1) The representations and warranties made by City in Section 1.1 shall be correct as of the Closing Date with the same force and effect as if such representations were made at such time. At the closing, City shall deliver a certificate to that effect in the form of Exhibit C. (2) Developer shall have the right to terminate this Agreement at any time prior to the consummation of the closing on the Closing Date if Developer determines in its sole discretion that conditions necessary for the successful completion of the Project contemplated herein have not been satisfied in Developer's sole discretion. Upon the giving of notice of termination by Developer to City, this Agreement shall be deemed null and void. (3) Developer and City shall be in material compliance with all the terms and provisions of this Agreement. (4) Developer shall have furnished City with evidence, in a form satisfactory to City (such as a letter of commitment from a bank or other lending institution), that Developer has firm financial commitments in an amount sufficient, together with equity commitments, to complete the Minimum Improvements (as defined herein) in conformance with the Construction Plans (as defined herein), or City shall have received such other evidence of Developer's financial ability as City in its reasonable judgment City requires. (5) Developer's counsel shall issue a legal opinion to City confirming the representations contained herein in the form attached hereto as Exhibit B. 1.5 City's Obligations at Closing. At or prior to the Closing Date, City shall deliver to Developer such other documents as may be required by this Agreement, all in a form satisfactory to Developer. 4 SECTION 2. DEVELOPMENT ACTIVITIES 2.1 Required Minimum Improvements. Developer will make a capital investment of approximately Four Million Dollars ($4,000,000.00) to improve the Property (the Minimum Improvements). The Minimum Improvements include creating sixteen (16) apartments for market -rate and Rental housing using Historic Tax Credits. 2.2 [This section intentionally left blank] 2,3 Plans for Construction of Minimum Improvements. Plans and specifications with respect to the development of the Property and the construction of the Minimum Improvements thereon (the Construction Plans) shall be in conformity with Urban Renewal Plan, this Agreement, and all applicable state and local laws and regulations, including but not limited to any covenants, conditions, restrictions, reservations, easements, liens and charges, recorded in the records of Dubuque County, Iowa. Developer shall submit to City, for approval by City, plans, drawings, specifications, and related documents with respect to the improvements to be constructed by Developer on the Property. All work with respect to the Minimum Improvements shall be in substantial conformity with the Construction Plans approved by City. 2,4 Timing of Improvements. Developer hereby agrees that construction of the Minimum Improvements on the Property shall be commenced within thirty (30) days after the Closing Date, and shall be substantially completed by December 31, 2014. The time for the performance of these obligations shall be suspended due to unavoidable delays meaning delays, outside the control of the party claiming its occurrence in good faith, which are the direct result of strikes, other labor troubles, unusual shortages of materials or labor, unusually severe or prolonged bad weather, acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action or by the exercise of reasonable discretion directly results in delays, or acts of any federal, state or local government which directly result in extraordinary delays. The time for performance of such obligations shall be extended only for the period of such delay. 2.5 Certificate of Completion. Promptly following the request of Developer upon completion of the Minimum Improvements, City's City Manager shall furnish Developer with an appropriate instrument so certifying. Such certification (the Certificate of Completion) shall be in the form attached as Exhibit J and shall be a conclusive determination of the satisfaction of Developer's obligations to make the Minimum Improvements under this Agreement and completion of the Minimum Improvements by Developer as required by this Agreement. SECTION 3. CITY PARTICIPATION 3.1 Financial Incentives. The financial incentives set forth in this Section 3 are full and complete and cannot be modified except by amendment to this Agreement, City is under no obligation to approve any such amendment. 5 3,2 Economic Development Grants to Developer. For and in consideration of Developer's obligations hereunder, and in furtherance of the goals and objectives of the urban renewal plan for the Project Area and the Urban Renewal Law, City agrees, subject to Developer being and remaining in compliance with the terms of this Agreement, to make twenty (20) consecutive semi-annual payments (such payments being referred to collectively as the Economic Development Grants) to Developer: November 1, 2015 November 1, 2016 November 1, 2017 November 1, 2018 November 1, 2019 November 1, 2020 November 1, 2021 November 1, 2022 November 1, 2023 November 1, 2024 May 1, 2016 May 1, 2017 May 1, 2018 May 1, 2019 May 1, 2020 May 1, 2021 May 1, 2022 May 1, 2023 May 1, 2024 May 1, 2025 pursuant to Iowa Code Section 403.9 of the Urban Renewal Law, in amounts equal to a portion of the tax increment revenues collected by City under Iowa Code Section 403,19 (without regard to any averaging that may otherwise be utilized under Iowa Code Section 403,19 and excluding any interest that may accrue thereon prior to payment to Developer) during the preceding six-month period in respect of the Minimum Improvements constructed by Developer (the Developer Tax Increments), For purposes of calculating the amount of the Economic Development Grants provided in this Section, the Developer Tax Increments shall be only those tax increment revenues collected by City in respect of the increase in the assessed value of the Properly above the assessment of January 1, 2012 ($79,970.00). The Developer Tax Increments shall not include (i) any property taxes collected for the payment of bonds and interest of each taxing district, (ii) any taxes for the regular and voter -approved physical plant and equipment levy, (iii) the remaining actual amount of tax increment revenues collected by City in respect of the valuations of the Property prior to January 1, 2012 and (iv) any other portion required to be excluded by Iowa law, and thus such incremental taxes will not include all amounts paid by Developer as regular property taxes. 3,3 To fund the Economic Development Grants, City shall certify to the County prior to December 1, 2014, its request for the available Developer Tax Increments resulting from the assessments imposed by the County as of January 1 of that year and each year thereafter until and including January 1, 2024, to be collected by City as taxes are paid during the following fiscal year and which shall thereafter be disbursed to the Developer on November 1 and May 1 of that fiscal year. (Example: if City so certifies in December, 2014, the Economic Development Grants in respect thereof would be paid to the Developer on November 1, 2015, and May 1, 2016.) 3.4 The Economic Development Grants shall be payable from and secured solely and only by the Developer Tax Increments paid to City that, upon receipt, shall be deposited and held in a special account created for such purpose and designated as the Linseed Oil 6 PaintWorks TIF Account of City. City hereby covenants and agrees to maintain its TIF ordinance in force during the term hereof and to apply the incremental taxes collected in respect of the Minimum Improvements and allocated to the Linseed Oil Paint Works TIF Account to pay the Economic Development Grants, as and to the extent set forth in Section 3.2 hereof. The Economic Development Grants shall not be payable in any manner by other tax increments revenues, or by general taxation or from any other City funds. City makes no representation with respect to the amounts that may be paid to Developer as the Economic Development Grants in any one year and under no circumstances shall City in any manner be liable to Developer so long as City timely applies the Developer Tax Increments actually collected and held in the Linseed Oil Paint Works TIF Account (regardless of the amounts thereof) to the payment of the Economic Development Grants to Developer as and to the extent described in this Section. 3.5 City shall be free to use any and all tax increment revenues collected in respect of other properties within the Project Area and the remaining actual amount of the property taxes paid by Developer to City, or any available Developer Tax Increments resulting from the termination of the annual Economic Development Grants under Section 3.2 hereof, for any purpose for which such tax increment revenues may lawfully be used pursuant to the provisions of the Urban Renewal Law, and City shall have no obligations to Developer with respect to the use thereof. Downtown Housing Incentive. (1) City agrees to provide to Developer on the terms and conditions set forth in the Downtown Housing Incentive Program attached hereto as Exhibit F, a grant in the amount of One Hundred Sixty Thousand Dollars ($160,000.00) (the Grant). (2) Grant funds will not be disbursed to Developer until City has issued a Certificate of Occupancy for the Project. The Grant shall be paid in Ten Thousand Dollar ($10,000.00) payments for each apartment that receives a Certificate of Occupancy up to a maximum of sixteen apartments. Prior to the disbursement of any funds, Developer shall provide evidence satisfactory to City that the Minimum Improvements have been completed in accordance with the Plans and other documentation submitted to City with the Downtown Housing Assistance application. 3.7 Planning and Design Grant. City agrees to provide a matching (1:1) grant not to exceed Ten Thousand Dollars ($10,000) to reimburse Developer for documented predevelopment costs, architectural and engineering fees and other authorized soft costs associated with the rehabilitation of the Property on the terms and conditions set forth in Exhibit G. Prior to the release of any grant funds, City must determine to its satisfaction that the Project is substantially complete and meets the conditions of this Agreement. 3.8 Facade Grant. City agrees to provide a matching (1:1) grant not to exceed Ten Thousand Dollars ($10,000) to reimburse Developer for documented costs for front or rear facade renovations to the Property to eliminate inappropriate additions or alterations and to restore the facade to its historic appearance, or to rehabilitate the facade to include new windows, paint, signage, awnings, etc., to improve the overall appearance of the Property, and the costs of landscaping or screening with fencing or retaining walls if such landscaping or screening improves the Property adjacent to the public right-of-way, on the terms and conditions set forth in Exhibit H. 3.9 Financial Consultant Grant. City agrees to provide a grant not to exceed Fifteen Thousand Dollars ($15,000) at a rate of $0.50 for each $1.00 of costs incurred to reimburse Developer for documented costs related to hiring a financial consultant to evaluate the Project's feasibility on the terms and conditions set forth in Exhibit I. Such funds will be disbursed only on completion of the Minimum Improvements, documentation of costs and an inspection of the completed Project, 3,10. Written requests for payment of grant funds must be submitted to the Economic Development Department together with all required documentation, SECTION 4, COVENANTS OF DEVELOPER 4.1 The Minimum Improvements shall conform to the U.S. Secretary of the Interior's Standards for Rehabilitation, 4.2 [This section intentionally left blank,] 4.3 Books and Records. During the term of this Agreement, Developer shall keep at all times and make available to City upon reasonable request proper books of record and account in which full, true and correct entries will be made of all dealings and transactions of or in relation to the business and affairs of Developer in accordance with generally accepted accounting principles consistently applied throughout the period involved, and Developer shall provide reasonable protection against loss or damage to such books of record and account. 4.4 Real Property Taxes. Developer shall pay or cause to be paid, when due, all real property taxes and assessments payable with respect to all and any parts of the Property unless Developer's obligations have been assumed by another person pursuant to the provisions of this Agreement. 4.5 No Other Exemptions. During the term of this Agreement, Developer agrees not to apply for any state or local property tax exemptions which are available with respect to the Development Property or the Minimum Improvements located thereon that may now be, or hereafter become, available under state law or city ordinance during the term of this Agreement, including those that arise under Iowa Code Chapters 404 and 421, as amended. 4.6 Insurance Requirements. (1) Developer shall provide and maintain or cause to be maintained at all times during the process of constructing the Minimum Improvements and at its sole cost and expense builder's risk insurance, written on a Completed Value Form in an 8 amount equal to one hundred percent (100%) of the building (including Minimum Improvements) replacement value when construction is completed. Coverage shall include the "special perils" form and developer shall furnish City with proof of insurance in the form of a certificate of insurance. (2) Upon completion of construction of the Minimum Improvements and up to the Termination Date, Developer shall maintain, or cause to be maintained, at its cost and expense property insurance against loss and/or damage to the building (including the Minimum Improvements) under an insurance policy written with the "special perils" form and in an amount not less than the full insurable replacement value of the building (including the Minimum Improvements). Developer shall furnish to City proof of insurance in the form of a certificate of insurance. (3) The term "replacement value" shall mean the actual replacement cost of the building with Minimum Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be reasonably determined from time to time at the request of City, but not more frequently than once every three (3) years. (4) Developer shall notify City immediately in the case of damage exceeding $50,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. Net proceeds of any such insurance (Net Proceeds), shall be paid directly to Developer as its interests may appear, and Developer shall forthwith repair, reconstruct and restore the Minimum Improvements to substantially the same or an improved condition or value as they existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, Developer shall apply the Net Proceeds of any insurance relating to such damage received by Developer to the payment or reimbursement of the costs thereof, subject, however, to the terms of any mortgage encumbering title to the Property (as its interests may appear). Developer shall complete the repair, reconstruction and restoration of Minimum Improvements whether or not the Net Proceeds of insurance received by Developer for such purposes are sufficient. 4.7 Preservation of Property. During the term of this Agreement, Developer shall maintain, preserve and _ keep, or cause others to maintain, preserve and keep, the Minimum Improvements in good repair and working order, ordinary wear and tear accepted, and from time to time shall make all necessary repairs, replacements, renewals and additions. 4.8 Non -Discrimination. In carrying out the project, Developer shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, sexual orientation, gender identity, national origin, age or disability. 4.9 Conflict of Interest. Developer agrees that no member, officer or employee of City, or its designees or agents, nor any consultant or member of the governing body of City, and no other public official of City who exercises or has exercised any functions or responsibilities with respect to the project during his or her tenure, or who is in a position to participate in a decision-making process or gain insider information with regard to the project, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the project, or in any activity, or benefit therefrom, which is part of this project at any time during or after such person's tenure, In connection with this obligation, Developer shall have the right to rely upon the representations of any party with whom it does business and shall not be obligated to perform any further examination into such party's background. 4,10 Non -Transferability. Until such time as the Minimum Improvements are complete (as certified by City under Section 2.5), this Agreement may not be assigned by Developer nor may the Property be transferred by Developer to another party, Thereafter, with the prior written consent of City, which shall not be unreasonably withheld, Developer shall have the right to assign this Agreement, and upon assumption of the Agreement by the assignee, Developer shall no longer be responsible for its obligations under this Agreement. 4.11 No change in Tax Classification. Developer agrees that it will not take any action to change, or otherwise allow, the classification of the Property for property tax purposes to become other than commercial property and to be taxed as such under Iowa law, This restriction shall terminate upon the termination of this Agreement. However, Developer may apply for a reclassification of the Property in the event Iowa law is modified to allow a building containing four apartments within one building to be classified as residential for property tax purposes. 4.12 Restrictions on Use. Developer agrees for itself, and its successors and assigns, and every successor in interest to the Property or any part thereof, for the duration of this Agreement, that they, and their respective successors and assigns, shall; (1) Devote the Property to, and only to and in accordance with, the uses specified in the Urban Renewal Plan (and City represents and agrees that use of the Property as a restaurant and upper -story housing, is in full compliance with the Urban Renewal Plan) (however, Developer shall not have any liability to City to the extent that a successor in interest shall breach this covenant and City shall seek enforcement of this covenant directly against the party in breach of same); and (2) Not discriminate upon the basis of race, religion, color, sex, sexual orientation, gender identity, national origin, age or disability in the sale, lease, rental, use or occupancy of the Property or any improvements erected or to be erected thereon, or any part thereof (however, Developer shall not have any liability to City to the extent that a successor in interest shall breach this covenant and City shall seek enforcement of this covenant directly against the party in breach of same). 4.13 Compliance with Laws. Developer shall comply with all laws, rules and regulations relating to its businesses, other than laws, rules and regulations the failure to comply with or the sanctions and penalties resulting therefrom, would not have a material adverse effect on the business, property, operations, financial or otherwise, of Developer. 10 SECTION 5. EVENTS OF DEFAULT AND REMEDIES 5.1 Events of Default Defined. The following shall be Events of Default under this Agreement and the term Event of Default shall mean, whenever it is used in this Agreement, any one or more of the following events: (1) Failure by Developer to pay or cause to be paid, before delinquency, all real property taxes assessed with respect to the Minimum Improvements and the Property. (2) Failure by Developer to cause the construction of the Minimum Improvements to be commenced and completed pursuant to the terms, conditions and limitations of this Agreement. (3) Transfer of any interest by Developer of the Minimum Improvements in violation of the provisions of this Agreement prior to the issuance of the final Certificate of Completion. (4) Failure by Developer or City to substantially observe or perform any other material covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement. 5.2. Remedies on Default by Developer. Whenever any Event of Default referred to in Section 5.1 of this Agreement occurs and is continuing, City, as specified below, may take any one or more of the following actions after the giving of written notice by City to Developer (and the holder of any mortgage encumbering any interest in the Property of which City has been notified of in writing) of the Event of Default, but only if the Event of Default has not been cured within sixty (60) days following such notice, or if the Event of Default cannot be cured within sixty (60) days and Developer does not provide assurances to City that the Event of Default will be cured as soon as reasonably possible thereafter: (1) City may suspend its performance under this Agreement until it receives assurances from the Developer deemed adequate by City, that the Developer will cure its default and continue its performance under this Agreement; (2) Until the Closing Date, City may cancel and rescind this Agreement; (3) Until issuance of the Certificate of Completion, City shall be entitled to recover from Developer the sum of all amounts expended by City in connection with the funding of the Downtown Rehab Loan/Grant and Economic Development Grant to Developer and City may take any action, including any legal action it deems necessary, to recover such amounts from the Developer; (4) City may withhold the Certificate of Completion; or 11 (5) City may take any action, including legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. 5.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to City is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 5.4 No Implied Waiver. In the event any agreement contained in this Agreement should be breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder: 5.5 Agreement to Pay Attorneys' Fees and Expenses. If any action at law or in equity, including an action for declaratory relief or arbitration, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' 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 that may be awarded. 5.6 Remedies on Default by City. If City defaults in the performance of this Agreement, Developer may take any action, including legal, equitable or administrative action that may appear necessary or desirable to collect any payments due under this Agreement, to recover expenses of Developer, or to enforce performance and observance of any obligation, agreement, or covenant of City under this Agreement. Developer may suspend their performance under this Agreement until they receive assurances from City, deemed adequate by Developer, that City will cure its default and continue its performance under, this Agreement. SECTION 6. GENERAL TERMS AND PROVISIONS 6.1 Notices and Demands. Whenever this Agreement requires or permits any notice or written request by one party to another, it shall be deemed to have been properly given if and when delivered in person or three (3) business days after having been deposited in any U.S. Postal Service and sent by registered or certified mail, postage prepaid, addressed as follows: If to Developer: Tim McNamara Wilmac Property Company 801 Jackson Street Dubuque, Iowa 52001 12 With copy to: Drake Law Firm, P.C. Flint Drake 2254 Flint Hill Dr Dubuque, IA 52003 if to City: City Manager 50 W. 13th Street Dubuque, Iowa 52001 Phone: (563) 589-4110 Fax: (563) 589-4149 With copy to: City Attorney City Hall 50 W. 13th Street Dubuque IA 52001 or at such other address with respect to either party, as that party may, from time to time designate in writing and forward to the other as provided in this Section. 6.2 Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of City and Developer and their respective successors and assigns. 6.3 Termination Date. This Agreement and the rights and obligations of the parties hereunder shall terminate on December 31, 2024 (the Termination Date). 6.4. Execution By Facsimile. The parties agree that this Agreement may be transmitted between them by facsimile machine. The parties intend that the faxed signatures constitute original signatures and that a faxed Agreement containing the signatures (original or faxed) of all the parties is binding on the parties. 6.5 Memorandum of Development Agreement. Developer shall promptly record a Memorandum of Development Agreement in the form attached hereto as Exhibit D in the, office of the Recorder of Dubuque County, Iowa. Developer shall pay the costs for so recording. IN WITNESS WHEREOF, City has caused this Agreement to be duly executed in its name and behalf by its Mayor and attested to by its City Clerk and Developer has caused this Agreement to be duly executed on or as of the first above written. CITY OF DUBUQUE, IOWA WILMAC PROPERTY COMPANY. By Roy D. al Mayor Attest: Kevi S. Firnstahl City Clerk 14 By !k/' Tim McNamara, Manager (City Seal) STATE OF IOWA ) ) SS COUNTY OF DUBUQUE ) On this 18th day of March 2013, before me the undersigned, a Notary Public in and for the said County and State, personally appeared Roy D. Buol and Kevin S. Fimstahl, 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, a municipal corporation executing the instrument to which this is attached; that the seal affixed hereto is the seal of said municipal corporation; that said instrument was signed and sealed on behalf of the City of Dubuque, Iowa, by authority of its City Council; and that said Mayor and City Clerk acknowledged the execution of said instrument to be the voluntary act and deed of said City, b it and by them voluntarily executed. Notary Pu STATE OF IOWA COUNTY OF DUBUQUE 1 ) SS } I. PAMELA J,McCARRO Commission NUObII , , ! p; , Mr Comm. Up h- ,-,261?;') On this tintday of Mfi RcH 2013 before me the undersigned, a Notary Public in and for the State of Iowa, personally appeared Tim McNamara, to me personally known, who, being by me duly sworn, did say that he is Manager of Wilmac Property Company the limited liability company executing the instrument to which this is attached and that as said Manager of Wilmac Property Company acknowledged the execution of said instrument to be the voluntary act and deed of said company, by it and by him voluntarily executed. 15 „OA J e i F rox• KIM GORDON Commissloe Number 755368 Mr Comm, Fe JO -334 EXHIBIT A EXHIBIT B EXHIBIT C EXHIBIT D EXHIBIT E EXHIBIT F EXHIBIT G EXHIBIT H EXHIBIT I EXHIBIT J LIST OF EXHIBITS City Attorney's Certificate Opinion of Developers Counsel City Certificate Memorandum of Development Agreement Urban Renewal Plan Downtown Housing Incentive Program Planning and Design Grant Program Facade Grant Program Financial Consultant Grant Program Certification of Completion EXHIBIT A CITY ATTORNEY'S CERTIFICATE BARRY A. LINDAHL, ESQ. CITY ATTORNEY (DATE) RE: Dear THE L IME I have acted as counsel for the City of Dubuque, Iowa, in connection with the execution and delivery of a certain Development Agreement between (Developer) and the City of Dubuque, Iowa (City) dated for reference purposes the _ day of , 20 . The City has duly obtained all necessary approvals and consents for its execution, delivery and performance of this Agreement and has full power and authority to execute, deliver and perform its obligations under this Agreement, and to the best of my knowledge, the representations of the City Manager in his letter dated the _ day of , 20 , are correct. BATA 18 Very sincerely, Barry A. Lindahl, Esq. City Attorney EXHIBIT B OPINION OF DEVELOPER'S COUNSEL Mayor and City Counei'members City Hall 13t and Central Avenue Dubuque IA 52001 Re: Development Agreement Between the City of Dubuque, Iowa and Dear Mayor and City Councilmembers: We have acted as counsel for , in connection with the execution and delivery of a certain Development Agreement (Development Agreement) between Developer and the City of Dubuque, Iowa (City) dated for reference purposes the _ day of 2013. We have examined the original certified copy, or copies otherwise identified to our satisfaction as being true copies, of the Development Agreement and such other documents and records as we have deemed relevant and necessary as a basis for the opinions set forth herein. Based on the pertinent law, the foregoing examination and such other inquiries as we have deemed appropriate, we are of the opinion that: 1. Developer is a limited liability company organized and existing under the laws of the State of Iowa and has full power and authority to execute, deliver and perform in full the Development Agreement, The Development Agreement has been duly and validly authorized, executed and delivered by Developer and, assuming due authorization, execution and delivery by City, is in full force and effect and is avalid and legally binding instrument of Developer enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally. 2. To our actual knowledge with no duty to inquire, the execution, delivery and performance by Developer of the Development Agreement and the carrying out of the terms thereof, will not result in violation of any provision of, or in default under, the articles of incorporation and bylaws of Developer, any indenture, mortgage, deed of trust, indebtedness, agreement, judgment, decree, order, statute, rule, regulation or restriction to which Developer is a party or by which Developer's property is bound or subject, 3. To our actual knowledge with no duty to inquire, there are no actions, suits or proceedings pending or threatened against or affecting Developer in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business (present or prospective), financial position or results of operations of Developer or which in any manner raises any questions affecting the validity of the Agreement or the Developer's ability to perform Developer's obligations thereunder. This opinion is rendered for the sole benefit of the City. of Dubuque and no other party may rely on this opinion. 20 This opinion is rendered and valid as of the date of this letter and we have no duty to update this opinion for any matters which come to our knowledge after the date of this letter. City Manager's Office 911 West 1316 Street Dubuque, lona 32RJ1-1861 Ohl) 589.1110 phone (563) 589-11.19 fax rhingroa lyoklubugne.org Dear (DATE) IIIECI'IYUF F I am the City Manager of the City of Dubuque, Iowa and have acted in that capacity in connection with the execution and delivery of a certain Development Agreement between (Developer) and the City of Dubuque, Iowa (City) dated for reference purposes the _ day of , 20 . On behalf of the City of Dubuque, I hereby represent and warrant to Developer that: (1) City has duly obtained all necessary approvals and consents for its execution, delivery and performance of this Agreement and that it has full power and authority to execute, deliver and perform its obligations under this Agreement. City's attomey shall issue a legal opinion to Developer at time of closing confirming the representation contained herein, in the form attached hereto as Exhibit a (2) City shall exercise its best efforts to cooperate with Developer in the development process. (3) City shall exercise its best efforts to resolve any disputes arising during the development process in a reasonable and prompt fashion. (4) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement are not prevented by, limited by, in conflict with, or result in a violation or breach of, the terms, conditions or provisions of the charter of City, any evidence of indebtedness, agreement or instrument of whatever nature to which City is now a party or by which it or its property is bound, or constitute a default under any of the foregoing. (5) There are no actions, suits or proceedings pending or threatened against or affecting City in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the financial position or operations of City or which 23 affects the validity of the Agreement or City's ability to perform its obpigat,... this Agreement. (6) No ordinance or hearing is now or before any local governmental body that either contemplates or authorizes any public improvements or special tax levies, the cost of which may be assessed against the Property. To the best of City's knowledge, there are no plans or efforts by any government agency to widen, modify, or re -align any street or highway providing access to the Property and there are no pending or intended public improvements or special assessments affecting the Property which will result in any charge or lien be levied or assessed against the Property. (7) The representations and warranties contained in this article shall be cgrreot in all respects on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of the Closing Date. EXHIBIT D MEMORANDUM OF DEVELOPMENT AGREEMENT Prepared by: Barry A. Llndahl 300 Main Street Suite 330 Dubuque IA 52001563 583-0113 Return to: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001563 583.4113 MEMORANDUM OF DEVELOPMENT AGREEMENT A Development Agreement by and among the City of Dubuque, Iowa, an Iowa municipal corporation, of Dubuque, Iowa, and Wilmac Property Company was made regarding the following described premises; [INSERT LEGAL DESCRIPTION] The Development Agreement is dated for reference purposes the day of , 2013, and contains covenants, conditions, and restrictions concerning the sale and use of said premises. This Memorandum of Development Agreement is recorded for the purpose of constructive notice. In the event of any conflict between the provisions of this Memorandum and the Development Agreement itself, executed by the parties, the terms and provisions of the Development Agreement shall prevail. A complete counterpart of the Development Agreement, together with any amendments thereto, is in the possession of the City of Dubuque and may be examined at its offices as above provided. Dated this _ day of , 2013. CITY OF DUBUQUE, IOWA WI* PROPERTY COMPANY ( ,� By By Roy D. Buol Tim McNamara, Manager Mayor Attest. Kevin Si Firnstahl City Clerk 26 STATE OF IOWA ) SS COUNTY OF DUBUQUE On this _day of , 20 , before me, a Notary Public in and for the State of Iowa, in and for said county, personally appeared Roy D. Buol and Kevin S. Firnstahl, 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, a Municipal Corporation, created and existing under the laws of the State of Iowa, and that the seal affixed to said instrument is the seal of said Municipal Corporation and that said instrument was signed and sealed on behalf of said Municipal corporation by authority and resolution of its City Council and said Mayor and City Clerk acknowledged said instrument to be the free act and deed of said Municipal Corporation by it voluntarily executed. Notary Public, State of Iowa STATE OF IOWA ) COUNTY OF DUBUQUE ) SS On this THday of M RRCH 2Q before me the undersigned, a Notary Public in and for the State of Iowa, personally appeared Tim McNamara, to me personally known, who, being by me duly swom, did say that he is Manager of Wilmac Property Company, the limited liability company executing the instrument to which this is attached and that as said Manager of Wilmac Property Company, acknowledged the execution of said instrument to be the voluntary act and deed of said company, by it and by him voluntarily executed. 01 ■ ot. ry'' u IIc, State of Iowa 27 fw"sky' KIM GORDON CammissionNumber 75536 Co Prepared by: Phil Wagner, City of Dubuque, 50 W, 13th Street, Dubuque, IA 52301 (563) 5894393 Return to: Nevin S, Flrnetahl, City of Dubuque, 50 W. 13th Street, Dubuque, 'A 52001 (563) 569,4121 AMENDED and RESTATED URBAN RENEWAL PLAN Greater Downtown Urban Renewal District (A merger of the Downtown Dubuque, Ice Harbor, Kerper Boulevard, East 7th Street and Quebecor Urban Renewal Districts City of Dubuque, Iowa This Amended and Restated Urban Renewal Plan for the Greater Downtown Urban Renewal District traces its beginnings to the merger of the Downtown Urban Renewal Area Project Number Iowa R-15, originally established by Resolution 123-67 by the City Council of the City of Dubuque, Iowa on May 18, 1967 and subsequently amended and restated by Resolution 79.71 on March 151 1971, by Resolution 73-74 on March 11, 1974, by Resolution 107.82 on May 3, 19821 by Resolution 191.84 on June 25, 1984, by Resolution 371-93 on December 6, 1993, by Resolution 145-94 on May 2, 1994, by Resolution 479-97 on November 17, 1997, by Resolution 476-98 on October 19, 1998 and by Resolution 187- 02 on April 1, 2002, with the Ice Harbor Urban Renewal District, originally established by Resolution 403-89 of the City Council of the City of Dubuque, Iowa on December 18, 1989 and subsequently amended and restated by Resolution 241-00 on June 5, 2000 and by Resolution 114-02 on March 4, 2002. The Urban Renewal Plan for the Greater Downtown Urban Renewal District resulting from that merger was later amended by Resolution 170-04 on April 19, 2004, by Resolution 391-06 on August 21, 2006, by Resolution 108-07 on February 20th, 2007, by Resolution 597-07 on December 17, 2007, by Resolution 300-08 on September 2, 2008, by Resolution 393-09 on October 5, 2009, and by Resolution 26.10 on July 19, 2010. On May 2, 2011 the Kerper Boulevard Industrial Park Economic Development District originally established by Resolution 274-94 on August 151 1994 and the East 7th Street Economic Development District, originally established by Resolution 144-97 on April 7, 1997 were merged into and became part of the Greater Downtown Urban Renewal District, pursuant to Resolution 155-11 approved on May 2, 2011. The Quebecor Economic Development District, originally established by Resolution 479-02 on September 16, 2002, was merged into and became part of the Greater Downtown Urban Renewal District pursuant to Resolution 271-12 approved on October 1, 2012. 29 EXHIBIT F DOWNTOWN HOUSING INCENTIVE PROGRAM Economic Development Department City Hall — Second Floor 50 West 13° Street Dubuque, Iowa 52001- 4864 (563) 589-4393 Office (563) 589-1733 Fax (563) 589.6678 TDD THE CITY (JP DUB Masterpiece on the Mississippi DOWNTOWN HOUSING INCENTIVE PROGRAM October 30, 2012 David J. Heiar Phil Wagner Economic Development Director Asst. Economic Development Director dhe ar(a�cityofdubuque.org pwagneracityofdubuque.org 50 West 13th Street Dubuque, IA 52001 563.589.4393 Projects eligible to receive assistance from this established pool of funds must meet the following requirements: • The project must assist in the creation of new market -rale downtown rental androrowner- occupied residential units within the Greater Downtown Urban Renewal District. • The project must be the rehabilitation of an existing structure. • Within the Washington Neighborhood, rental units must be located above a commercial component on the first floor of the building unless the project is rehabilitating or reusing a former church or school building, • Exterior alterations are subject to design review and approval, The Historic District Guidelines shall apply to projects located in Historic Preservation District. The Downtown Design Guidelines shall apply to all other project locations. Projects which conform to the applicable guidelines may be reviewed and approved by the City Planner. Projects that do not strictly conform to the applicable guidelines will be forwarded to the Historic Preservation Commission (HPC) for consideration. New construction or substantial rehabilitation projects may also be considered by the HPG. The process for review is at the discretion of the City Planner. Guidelines can be viewed and downloaded at http:iiwww.cilyofdubuque.orgideggp guidelines. • Any signs on the property that do not comply with City zoning regulations and design guidelines must be included in the design review and improved to comply with applicable City Codes. Submittal must include the design materials and colors that will be used on the sign face, how the sign will be displayed, and any lighting proposed. • Include detailed drawing of the proposed project. The plans should include dimensions and architectural details and label materials. Plans prepared by a design professional (e.g. architect or draftsperson) are strongly recommended. Applications without detailed drawings will not be considered complete and will not be accepted by the City. 31 Deviation from an approved project plan may disqualify the project from the program. Preference will be given to projects that also utilize Federal and/or State Historic Tax Credits. No more than $10,000 in assistance will be considered per residential unit. In general, no more than $750,000 will be provided to a single project. No developer fee will be permitted until all city assistance is paid or satisfied in full. The City will disperse awarded funds for the benefit of the project once the project is completed and a Certificate of Occupancy has been given for the housing units. Each approved project will also be eligible to receive site-specific Tax Increment Financing (TIF) for up, to a 10 year period, depending on the project type and scope. A minimum of 2 new housing units must be created in the project. Units smaller than 650 square feet will not be eligible for this project. No residential units will be allowed to have a restriction of less than 80% of the median income. No more than 65% of the units of any project can have a restriction of 80% of the median income. A project that is funded by Low Income Tax Credits (LITC) is not eligible. The owner(s) of the property must certify that all other property in the City of Dubuque in which the owner(s) has any interest complies with all applicable City of Dubuque ordinances and regulations, including, but not limited to, housing, building, zoning, fire, health, and vacant and abandoned building regulations. 32 EXHIBIT G PLANNING AND DESIGN GRANT PROGRAM PLANNING AND DESIGN GRANT INFORMATION This program provides grants in the Greater Downtown Urban Renewal District for hiring architects, engineers or other professional services used prior to construction. Amount of Grant: 1;1 matching grant not to exceed ten thousand dollars ($10,000) per building may be awarded by the City to offset the actual pre -development costs. (Example: $8,500 in eligible project costs would receive $4,250 grant matched by $4,250 in private contribution; $20,000 or greater eligible project costs would receive the maximum $10,000 grant) Grant Specific Conditions: • Reimbursement is for architectural and engineering fees, feasibility studies, environmental assessments or other related soft costs, • Reimbursable expenditures must be documented. • Owner! developer fees are not permitted as reimbursable expenditures. • The grant shall not exceed ten percent (10%) of total project costs. • Grants will be dispersed upon completion of the project at a rate of $0.50 for each $1.00 of qualified costs. Approval Process: 1. Design review by the City Planning Department or the Historical Preservation Commission is required for exterior work on the project. 2, Grant applications will be reviewed by City staff and approved by the City Manager. 3, Funding will be dispersed upon staff review of documented expenditures and inspection of a completed project. 34 This program provides grants in the Greater Downtown Urban Renewal District for front or rear facade renovation to restore the facade to its historic appearance, or improve the overall appearance. Amount of Grant: 1:1 matching grant not to exceed ten thousand dollars ($10,000) shall be awarded by the City to qualifying projects based on total eligible project costs. (Example: $8,500 in eligible project costs would receive a $4,250 grant matched by $4,250 in private contribution; $20,000 or greater eligible project costs would receive the maximum $10,000 grant.) Grant Specific Conditions: Reimbursement is for labor and material costs associated with facade improvements, including, but not limited to rehabilitating or improving windows, paint, signage, or awnings to enhance overall appearance. Landscaping or screening with fencing or retaining walls may be a reimbursable expense if a determination is made that property is improved adjacent to public right-of-way. In order to receive reimbursement for repointing, a mortar analysis sample must be provided for each facade that will be repointed. The applicant must adhere to the results of that analysis in their rehabilitation work as part of their approved project plan. The City may request verification that the new mortar matches the results of the mortar analysis. Language from the National Park Service Technical Preservation Services Briefs may be attached as a condition for a building permit if the applicant chooses to perform repointing on the project. Reimbursable expenditures must be documented. Grants will be dispersed upon completion of work at a rate of $.50 for each $1.00 of qualified costs. Approval Process: 1. Design review by the City Planning Department or the Historical Preservation Commission is required for exterior work on the project. 2. Grant applications will be reviewed by City staff and approved by the City Manager. 3. Funding will be dispersed upon staff review of documented expenditures and inspection of a completed project. EXHIBIT FINANCIAL CONSULTANT GRANT PROGRAM FINANCIAL CONSULTANT GRANT INFORMATION This program provides grants in the Greater Downtown Urban Renewal District for hiring a financial consultant to analyze the feasibility of projects. Amount of Grant: 1:1 matching grant not to exceed fifteen thousand dollars ($15,000) shall be awarded to qualifying projects based on total eligible project costs. (Example: $8,500 in eligible project costs would receive a $4,250 grant matched by $4,250 in private contribution; $30,000 or greater eligible costs would receive the maximum $15,000 grant.) Grant Specific Conditions: • Reimbursement is for fees associated with hiring a professional financial consultant. • Reimbursable expenditures must be documented, • The grant shall not exceed ten percent (10%) of total project costs, • The rehabilitation project must be completed for the Financial Consultant Grant to be funded. • Grants will be dispersed upon completion of work at a rate of $.50 for each $1.00 of qualified costs. Approval Process; 1. Design review by the City Planning Department or the Historical Preservation Commission is required for exterior work on the project. 2. Grant applications will be reviewed by City staff and approved by the City Manager. 3. Funding will be dispersed upon staff review of documented expenditures and inspection of a completed project. 38 EXHIBIT J CERTIFICATE OF COMPLETION Prepared By: Return to: David J. Heiar 50 West 13th Street Dubuque, IA 52001 563-589-4393 David J. Heiar 50 West 13th Street Dubuque, IA 52001 563-589-4393 CERTIFICATE OF COMPLETION WHEREAS, the City of Dubuque, Iowa, a municipal corporation (the "Grantor"), has granted incentives to Wilmac Property Company (the "Grantee"), in accordance with a Development Agreement dated as of [Date] (the "Agreement"), and as amended by the First amendment to. Development Agreement, by and among the Grantor, and the Grantee (collectively, the "Agreement"), certain real property located within the Greater Downtown Urban Renewal District of the Grantor and as more particularly described as follows: CITY LOT LOT 379 & S 15' OF CITY_ LOT 380 WHEREAS, said Agreement incorporated and contained certain covenants and conditions with respect to the rehabilitation of the Development Property, and obligated the Grantee to construct certain Minimum Improvements (as defined therein) in accordance with the Agreement; and; WHEREAS, the Grantee has to the present date performed said covenants and conditions insofar as they relate to the construction of the Minimum improvements in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; and NOW, THEREFORE, pursuant to Section 2.5 of the Agreement, this is to certify that all covenants and conditions of. the Agreement with respect to the obligations of the Grantee, and its successors and assigns, to construct the Minimum Improvements on the Development Property have been completed and performed by the Grantee to the satisfaction of the Grantor and such covenants and conditions are hereby satisfied. The County Recorder of Dubuque County is hereby authorized to accept for recording and to record the filing of this instrument, to be a conclusive determination of the satisfaction of the covenants and conditions as set forth in said Agreement, and that the Agreement shall otherwise remain in full force and effect. On this day of , 2013, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared and acknowledged said execution of the instrument to be his/her voluntary act and deed. Notary Public in and for Dubuque County, Iowa VA SUBRECIPIENT AGREEMENT FOR COMMUNITY DEVELOPMENT BLOCK GRANT HOUSING DISASTER RECOVERY FUND CONTRACT BETWEEN THE CITY OF DUBUQUE, IOWA AND WILMAC PROPERTY COMPANY THIS Agreement ("the Agreement"), made and entered into this, day of 14 2014, by and between City of Dubuque, Iowa (City) and the Wilmac Property ompany (Subrecipient). WITNESSETH THAT: WHEREAS, City, at the request of Subrecipient, has applied to the Iowa Economic Development Authority (IEDA) for a grant of federal funds from the U.S. Department of Housing and Urban Development pursuant to the Contingency Appropriations Act of 2009, Title I of the Housing and Community Development Act of 1974 and Chapter 23 of the Administrative Code, as amended, to renovate the former Linseed. Oil and Paintworks Company Building, 901 Jackson St. (aka 151 East 9th St.)("the Building") into 16 residential units for workforce housing; and WHEREAS, City has been awarded a grant of funds in the amount of $2,248,890, subject to the condition that City rehabilitate the Building for persons or households whose incomes are at or below 80% of the area median income limits (LMI) by household size as established by HUD for Dubuque County , with 9 units of residential housing; and WHEREAS, the parties hereto desire to make a written agreement with respect to said funds and the implementation of the project to which they pertain. NOW, THEREFORE, the parties hereto have agreed to the terms and conditions as hereafter stated: SECTION 1. PROJECT AFFORDABILITY. The Wilmac Property Company project includes the creation of 16 apartments in the Building ("the Project"). No less than 9 of the rental units shall be occupied by persons or households whose incomes are at or below 80% of the area median income limits (LMI) by household size as established by HUD for Dubuque County. The following regulations are also part of this funding commitment: 1.1 Maximum (gross) rent limits on the CDBG Supplemental Funds assisted (affordable) rental units (by bedroom size) shall not exceed the most current HOME Program 65% rent limits. 1.2 Rental property owners of CDBG Supplemental funds assisted rental projects shall agree to a 10 -year period of affordability in terms of tenant income restrictions (limitations) and through affordable rent limitations (controls) on all CDBG 090514baI Supplemental funds assisted rental units (i.e., the affordable rental units) serving LMI tenants, maintaining the appropriate number of affordable rental units for the entire 10 - year period. 1.3 Long-term affordability requirements shall be secured through an agreement for covenants and restrictions that ride with the assisted rental property owner's land. 1.4 Throughout the period of affordability, assisted rental property owners shall ensure that the appropriate number of rental units remains affordable to, and are occupied by, income eligible and verified LMI tenants. All assisted rental units shall be subject to the maximum rent limitations (by bedroom size) applicable to all assisted rental units for the entire 10 -year period of affordability. Wilmac Property Company will need to identify who will be responsible for the long-term affordability requirements and oversight for all funded new construction multi -family (rental) projects. 1.5 Throughout the period of affordability, assisted rental property owners shall agree to periodic reporting requirements and compliance monitoring and/or inspections (for tenant incomes and rents on the affordable units, appropriate unit mix, property standards compliance, etc.). 1.6 The CDBG Supplemental funds subsidy amount provided must be secured as a mortgage lien on the assisted multi -family property. 1.7 The CDBG Supplemental funds forgivable loan may be recorded in junior position to the principal conventional loan (if there is one), but must be recorded in senior position to any and all other funding in the project. Additionally, recipients must maintain their assistance security agreements in the above -stated recording position throughout the 10 -year period. 1.8 Form of assistance — The form of financial assistance (CDBG funds) will be a 10 - year forgivable loan (non -receding), forgiven in full at the end of the 10 -year compliance period. If the assisted rental project is sold or transferred, or converted to an alternate (non-residential) use, during the 10 -year period following completion and acceptance, the entire amount of the CDBG forgivable loan shall be repaid. 1.9 Upon mutual agreement and consent between the IEDA and the originally assisted rental property owner; the assisted rental project may be sold or transferred, but, only if the new purchaser agrees to continue with the terms of the forgivable loan agreement and the agreement for covenants and restrictions, to complete the remainder of the10-year affordability period (tenant income and rent limitations on 9 of the rental units). SECTION 2. CONSTRUCTION CONTRACTS AND SERVICES. Subrecipient shall, for the purpose of constructing the Project, proceed forthwith to engage the services of an architect/engineer, adopt plans and specifications, and award construction contracts in accordance with the laws and regulations of the State of Iowa and of the United 2 States. SECTION 3. ADMINISTRATION. The administration of the CDBG Contract #08- DRH-212 ("the Grant Contract) and all transactions involving the expenditure of any of the grant funds within the scope of said contract shall be the sole prerogative of City carried out in such manner as it deems appropriate and consistent with Title I of the Housing and Community Development Act of 1974 and 261 --Chapter 23 of the Iowa Administrative Code. The East Central Intergovernmental Association (ECIA) is hereby named the administrator responsible for administering the Davis -Bacon Act and related federal compliance issues pursuant to a separate contract. SECTION 4. PROPERTY OWNERSHIP. Any and all improvements or property, real or personal, constructed, installed, or acquired pursuant to this Agreement shall be and remain the property of Subrecipient. If, from the date funds are first spent for the property until ten years after closeout of City's Grant Contract, the use or planned use of the property is proposed to be changed, then Subrecipient shall notify City of proposed change. City shall contact the IEDA for instructions on how to proceed. If Subrecipient proceeds with a use determined by the IEDA to be inconsistent with the use of CDBG funds, Subrecipient shall reimburse City and City will reimburse the IEDA the IEDA determined amount of funds. See Section 16. SECTION 5. PROPOSED PROJECT. Subrecipient shall grant access to the premises and Subrecipient's program records for City and its contractors to perform such required functions consistent with the Grant Contract as City shall deem appropriate. • The Borrower agrees to submit Semi-annual Status Reports to City by the seventh day of the month following the end of each semi-annual period as cited in the Grant Contract, in the manner prescribed by City. • The Borrower agrees to submit all information and documentation regarding project expenditures and employment as requested by City. • The Borrower agrees to at all times maintain proper documentation and books of account in a manner satisfactory to City. The Borrower agrees to provide to City an itemized schedule of project expenditures on a semi-annual basis. • The Borrower will furnish to City a financial operating statement on an annual basis no later than the sixtieth (60th) day following the expiration of the Borrower's fiscal year. • The Borrower hereby authorizes City or its agents to conduct an audit of the Borrower's books and records at City's discretion. SECTION 6. EXCESS COSTS. It is agreed that if the amount of the lowest 3 responsible bids received for the construction of the Project, plus the estimated cost of professional services and a reasonable reserve for contingencies exceeds the balance of grant funds and local funds available for the Project, all bids shall be rejected and the Project redesigned so as to keep the maximum cost of the Project less than the balance of grant and local funds. It is further agreed that if the construction of the Project results in contractual liability of City in an amount greater than the grant funds, Subrecipient shall be responsible for covering 100% of excess costs and hold City free of any contractual liability. SECTION 7. INDEMNIFICATION. Subrecipient shall hold City, ECIA, the State of Iowa and the Iowa Economic Development Authority and their officers and employees harmless from any and all claims, losses, damages or liability whatsoever resulting from or arising out of this Agreement or the Project to which it pertains. SECTION 8. UNALLOWABLE COSTS. If City determines at any time, whether through monitoring, audit, closeout procedures, or other means or process that Subrecipient has expended funds which are unallowable, Subrecipient will be notified of the questioned costs and given an opportunity to justify questioned costs prior to City's final determination of the disallowance of costs. If it is City's final determination that costs previously paid by City are unallowable under the terms of this Agreement, the expenditures will be disallowed and Subrecipient shall repay to City any and all disallowed costs. SECTION 9. EVENTS OF DEFAULT. The following shall constitute Events of Default under this Agreement: 9.1 Material Misrepresentation. If at any time any representation, warranty or statement made or furnished to City by, or on behalf of Subrecipient in connection with this Agreement or to induce City to make a grant to Subrecipient shall be determined by City to be incorrect, false, misleading or erroneous in any material respect when made or furnished and shall not have been remedied to City's satisfaction within thirty (30) days after written notice by City is given to Subrecipient. 9.2 Noncompliance. If there is a failure by Subrecipient to comply with any of the covenants, terms or conditions contained in this Agreement, and any such failure shall remain unremedied for thirty (30) days after written notice hereof shall have given by City. 9.3 Agreement Expiration Date. If the Project, in the sole judgment of City, is not completed on or before the Agreement Expiration Date. 9.4 Misspending. If Subrecipient expends Grant proceeds for purposes not described in the CDBG application, this Agreement, or as authorized by City. 9.5 The Borrower shall assign this Agreement to another party without prior written consent of City and IEDA. 4 9.6 Insurance. If loss, theft, damage or destruction of any substantial portion of the property of Subrecipient occurs for which there is either no insurance coverage or for which, in the opinion of City, there is insufficient insurance coverage. SECTION 10. NOTICE OF DEFAULT. City shall issue a written notice of default providing therein a fifteen (15) day period in which Subrecipient shall have an opportunity to cure, provided that cure is possible and feasible. SECTION 11. REMEDIES UPON DEFAULT. If, after opportunity to cure, the default remains, City shall have the right, in addition to any rights and remedies available to it to do one or both of the following: a. Exercise any remedy provided by law; b. Require immediate repayment of up to the full amount of funds disbursed to Subrecipient under this Agreement plus interest incurred at 6% rate. SECTION 12. MISCELLANEOUS. Neither party to this Agreement shall assign its rights and obligations hereunder without the prior written authorization of the other party. This Agreement shall be governed by the laws of the State of Iowa. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. The terms and conditions of this Agreement may be amended only by written instrument executed by both parties and, when necessary, with the concurrence of the State of Iowa, Department of Economic Development. Such amendments include any deviation from the recipient program schedule, or other terms and conditions provided for by the Iowa Economic Development Authority contract number 08-DRH-212 which is by this reference incorporated herein and made a part hereof of this Subrecipient agreement. SECTION 13. TERMINATION FOR CONVENIENCE. City or Subrecipient may terminate this Agreement when both parties agree that the continuation of the Project would not produce beneficial results commensurate with the future expenditure of funds. The parties shall agree upon the termination conditions, including the effective date and shall cancel as many outstanding obligations as possible. City shall allow full credit to Subrecipient for City share of the noncancellable obligations, properly incurred by Subrecipient prior to termination, subject to Iowa Economic Development Authority approval. SECTION 14. TERMINATION FOR CAUSE. City or Subrecipient, for legitimate and just cause, may terminate this Agreement upon ten (10) days written notice to the other. Each party shall be responsible for the liabilities they possess as a result of this Agreement and shall save and hold harmless each from further liability. 5 SECTION 15. LEGAL ENTITY. No separate legal entity is created by this Agreement. SECTION 16. REVERSION OF ASSETS. Up to and including the expiration date of this Agreement (10 years after the date of closeout of City's contract with IEDA), Subrecipient shall transfer immediately to City any CDBG funds on hand (excluding payments for accounts payable under the aforesaid project received prior to project closeout) and/or any account receivable attributable to the use of CDBG funds and/or any real property under Subrecipient's control that was acquired or improved in whole or part with CDBG funds and disposed of in a manner that results in Subrecipient being reimbursed in the amount of current market value of the property less any portion of the value attributable to expenditures on non-CDBG funds for acquisition of or improvement to the property. SECTION 17. FEDERAL LAWS. By virtue of the federal funding provided for under this Agreement, the parties hereto shall be bound by and adhere to all applicable federal laws, rules, policies, orders and directions, including, by way of specification, but not limited to the following: a. The requirements of Title VIII of the Civil Rights Act of 1968, 42 U.S.C. 3601-19 and implementing regulations; Executive Order 11063; Title VI of the Civil Rights Act of 1964 (42 U.S.C. 200d-1), and the Americans with Disabilities Act, as applicable (P.L. 101-336, 42 U.S.C. 12101-12213); and related Civil Rights and Equal Opportunity statutes; and regulations which supplement these laws and orders. b. The prohibitions against discrimination on the basis of age under the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and the prohibitions against discrimination against handicapped individuals under Section 504 of the Rehabilitation Act of 1973 (24 U.S.C. 794). c. The requirements of Executive Order 11246 and the regulations issued under the Order at 41 CFR Chapter 60. d. The requirements of Section 3 of the Housing and Urban Development Act of 1968, 12 U.S.C. 1701. e. The requirements of Executive Orders 11625, 12432, and 12138. Consistent with responsibilities under these Orders, the provider must make efforts to encourage the use of minority- and women -owned business enterprises in connection with activities funded under this part. f. The maintenance of books, records, documents and other such evidence pertaining to all costs and expenses incurred and revenues received under this Agreement to the extent and in such detail as will properly reflect all costs, direct and indirect, of labor, materials, and equipment, supplies, services, and other 6 costs and expenses of whatever nature, for which payment is claimed under their contract/subagreement as specified in 261 --Chapter 23, Iowa Administrative Code and OMB Circular A-102. g. At any time during normal business hours and as frequently as deemed necessary, the parties heretofore shall make available to the Iowa Economic Development Authority, the State Auditor, the General Accounting Office, and the Department of Housing and Urban Development, for their examination, all of its records pertaining to all matters covered by this Agreement and permit these agencies to audit, examine, make excerpts or transcripts from such records, contract, invoices, payrolls, personnel records, conditions of employment, and all other matters covered by this Agreement for five years after complete grant closeout and all other pending matters are closed. h. Subrecipient (Wilmac) agrees to include the provisions of Paragraphs (a) through (g) in every subcontract or purchase order unless excepted by rules, regulations, or orders of the Secretary of Labor issued pursuant to Section 204 of Executive Order No. 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The contractor (Wilmac) will take such action with respect to any subcontract or purchase order as the contracting agency (City) may direct as a means of enforcing such provisions including sanctions for noncompliance: Provided, however, that in the event Contractor (Wilmac) becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by contracting agency (City), the contractor (Wilmac) may request the United States to enter into such litigation to protect the interests of the United States. i. Certification regarding government -wide restriction on lobbying. Subrecipient certifies, to the best of his/her knowledge the belief that: 1. No federal appropriated funds have been paid or will be paid, by or on behalf of Subrecipient, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. 2. If any funds other than Federal appropriated funds have been paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee, or an employee of a Member of Congress in connection with this Federal contract, grant, loan or cooperative agreement, Subrecipient shall complete and submit Standard Form LLL, "Disclosure Form to Report 7 Federal Lobbying" in accordance with its instruction. 3. Subrecipient shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. 4. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. j. Political Activity. No portion of program funds shall be used for any partisan political activity or to further the election or defeat of any candidate for public office. Neither the program nor the funds provided therefore, nor the personnel employed in the administration of this Contract or its Funding Agreements, shall be in any way or to any extent, engaged in the conduct of political activities in contravention of The Hatch Act (5 U.S.C. 15). SECTION 18. OTHER REQUIREMENTS. In connection with the carrying out of this Agreement, Subrecipient agrees to comply with any and all rules and regulations of the IEDA and the US Department of Housing and Urban Development concerning third party contracts. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives. CITY OF DUBUQUE, IOWA GRANTEE By: Roy D. Buolf ayor ATTEST: Ke n S. Firnstahl, lerk 8 WILMAC POPERTY COMPANY SUBRECIPI ` NT ASSIGNMENT OF DEVELOPMENT AGREEMENT This Assignment of Development Agreement is entered into thise day of October, 2014 by and between Wilmac Property Company, an Iowa business corporation, ("Wilmac") Betty Building, LLC, an Iowa limited liability company ("Betty") and the City of Dubuque, Iowa ("City"). RECITALS A. City and Wilmac entered into a Development Agreement dated March 7, 2013 (the "Development Agreement"); B. Pursuant to the terms of the Development Agreement Wilmac was to provide certain improvements to real estate owned by Wilmac, such property locally known as 151 East 9th St., Dubuque, Iowa and legally described as: City Lot 379 and the South 15 feet of City Lot 380 in Dubuque, Iowa (the "Property"). Subject to the requirements and restrictions of that Development Agreement City agreed to take certain actions to aid in the rehabilitation of the Property. C. In order to facilitate rehabilitation of the Property, and in particular to accommodate the use of historic tax credits, the Property will be or has been deeded to Betty. As such Wilmac desires to assign all of its rights and obligations under the Development Agreement to Betty and Betty desires to accept such rights and obligations; D. The parties desire to set forth their agreement regarding such assignment in writing. Therefore, in consideration of the mutual terms and covenants herein, the parties agree as follows: AGREEMENT 1. Assignment. Wilmac does hereby assign, transfer and convey to Betty each and every right and obligation of Wilmac in and under the Development Agreement. 2. Acceptance. Betty does hereby accept all rights and obligations of Wilmac under the Development Agreement and agrees to be bound by such agreement and to be responsible for every obligation of Developer thereunder. 3. Consent. City does hereby consent to the assignment as set forth herein and releases Wilmac from any obligations that accrue under the terms of the Development Agreement after the date hereof. 4. Miscellaneous. This agreement is binding upon the parties hereto and their successors and permitted assigns and shall be governed by and construed under the laws of the state of Iowa. City of Dgquq e, io „ a II Roy D. ycluol, Mayor ASSIGNMENT OF SUBRECIPIENT AGREEMENT This Assignment of Subrecipient Agreement is entered into this day of October, 2014 by and between Wilmac Property Company, an Iowa business corporation, ("Wilmac") Merrimac Restoration, Inc., an Iowa business corporation ("Merrimac") and the City of Dubuque, Iowa ("City"). RECITALS A. City and Wilmac entered into a Subrecipient Agreement for Community Development Block Grant Housing Disaster Recovery Fund Contract dated September 15, 2014 (the "Subrecipient Agreement"); B. Pursuant to the terms of the Subrecipient Agreement City shall provide to Wilmac certain funds as a forgivable loan, subject to the requirements and restrictions of that Subrecipient Agreement. The funds are made available through the State of Iowa, by its Department of Economic Development; C. In order to facilitate the use of the funds and to best accommodate other funding sources for the contemplated project Wilmac desires to assign all of its rights and obligations under the Subrecipient Agreement to Merrimac and Merrimac desires to accept such rights and obligations; D. The parties desire to set forth their agreement regarding such assignment in writing. Therefore, in consideration of the mutual terms and covenants herein, the parties agree as follows: AGREEMENT 1. Assignment. Wilmac does hereby assign, transfer and convey to Merrimac each and every right and obligation of Wilmac in and under the Subrecipient Agreement. 2. Acceptance. Merrimac does hereby accept all rights and obligations of Wilmac under the Subrecipient Agreement and agrees to be bound by such agreement and to be responsible for every obligation of the Subrecipient thereunder. 3. Consent. A. City does hereby consent to the assignment as set forth herein and releases Wilmac from any obligations that accrue under the terms of the Subrecipient Agreement after the date hereof. B. State of Iowa, by its Department of Economic Development , hereby consents to the assignment as set forth herein. 4. Miscellaneous. This agreement is binding upon the parties hereto and their successors and permitted assigns and shall be governed by and construed under the laws of the state of Iowa. City ofD By: owa Roy D. uo1, Mayor l errimac-R,ctoifation, Inc. By: vOI Lu State of Iowa Department of Economic Development By: