Cottingham & Butler Amended Development Agreement_800 MainTHE CITY OF ^~~
DUB E
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MEMORANDUM
September 25, 2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Amended and Restated Development Agreement for the Cottingham &
Butler Security Building
Economic Development Director Dave Heiar is recommending approval of the Amended
and Restated Development Agreement for Cottingham & Butler, Inc. to support their
rehabilitation of the Security Building at 800 Main Street.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
;~ .
`ti ~ ~ ~., ,
Mic ael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
THE CITY OF
SUB ~- E MEMORANDUM
Mr~ster~iece on t1~e Misszssip~r~
September 24, 2007
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
..
SUBJECT: Amendment and Restated Development Agreement for the
Cottingham & Butler Security Building
INTRODUCTION
This memorandum presents for City Council consideration a Resolution approving a
Amended and Restated Development Agreement for Cottingham & Butler, Inc. to
support their rehabilitation of the Security Building at 800 Main Street.
BACKGROUND
On August 6, 2007, the City Council approved a Development Agreement with
Cottingham & Butler, Inc. outlining an incentive package for the rehabilitation of the
Security Building located at 800 Main Street. Cottingham & Butler has committed to
retaining 306 jobs and creating 90 new jobs in the building.
The Development Agreement includes a Downtown Rehabilitation Loan/Grant to
encourage private investment and rehabilitation efforts in the City's Greater Downtown
Urban Renewal District. The loan/grant program, capitalized with funds available
through the City's tax increment financing district, provides for a maximum of $300,000
in attractive low-interest loan monies. The program is unique in that grants of up to
$10,000 are available to offset necessary predevelopment costs. A facade grant is also
available of up to $10,000. The program also includes a forgivable loan element
whereby qualifying applicants may have up to the full amount of the loan forgiven as an
incentive for the creation of new employment and housing opportunities in the district.
A 10-year 100% tax rebate has been offered to the company to assist in their downtown
renovation project. The rebate is a form of tax increment financing without issuing a tax
increment finance bond to loan monies to the company upfront. As the company pays
its future tax obligation on the new improvements, the City will rebate 100% of tax
increment over the existing base valuation of $2,369,600.00, not to exceed the tax
increment revenues paid by the Developer.
DISCUSSION
After the original Development Agreement was approved by the City Council, the City
discovered that Cottingham & Butler is not the owner of the building. The building is
owned by Security Investments, LLC, which is a subsidiary company that also needs to
be a party in the Agreement. The Agreement has been amended to include Security
Investments, LLC as the Owner and Cottingham & Butler as the Developer.
The closing date has also been changed in the agreement. The original date was
October 1, 2007 and that has been rescheduled to December 1, 2007.
RECOMMENDATION
I recommend that the City Council adopt the attached Resolution approving an
Amended and Restated Development Agreement for Cottingham & Butler, Inc. and
Security Investments, LLC.
ACTION STEP
The action step for the City Council is to adopt the attached Resolution.
F:\USERS\DHeiar\Cottingham & Butler\20070925 Amended DA memo.doc
Prepared by: David Heier, Econ Dev Director, 50 W 13"' St, Dubuque, IA 52001 (563) 589-4393
Retum to: Jeanne F. Schneider, City Clerk, 50 West 13'h Street, Dubuque IA 52001
RESOLUTION NO. 494-07
A RESOLUTION APPROVING AN AMENDED AND RESTATED
DEVELOPMENT AGREEMENT FOR COTTINGHAM ~ BUTLER'S SECURITY
BUILDING PROJECT.
Whereas, the City of Dubuque, Iowa, has and existing development agreement
with Cottingham & Butler, Inc. outlining an incentive package for the rehabilitation of
the Security Building; and
Whereas, Security Investments, LLC, is the owner of the building and needs to
be a party in the agreement; and
Whereas, Cottingham & Butler, Inc. will be the developer for the rehabilitation;
and
Whereas, it is the determination of this Council that approval of the Development
Agreement for the rehabilitation of the Property by Cottingham & Butler, Inc. according
to the terms and conditions set out in the Development Agreement is in the public
interest of the City of Dubuque.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the Amended and Restated Development Agreement with
Cottingham & Butler, Inc. and Security Investments, LLC, is hereby accepted and
approved.
Section 2. That the Mayor is hereby authorized to execute, on behalf of the
City Council of the City of Dubuque, Iowa, the attached Amended and Restated
Development Agreement with Cottingham & Butler, Inc. and Security Investments, LLC.
Section 3. That the City Manager is hereby authorized to execute, on behalf
of the City Council of the City of Dubuque, Iowa, all necessary loan documents and is
further authorized to disburse loan funds from the Downtown Rehabilitation Loan/Grant
Program, in accordance with the terms and conditions of the executed agreement.
Passed, approved and adopted this 1st day of October, 2007.
Roy D. Buol, Mayor
Attest
Jeanne F. Schneider, City Clerk
F:IUSERS~DHeiar~Cottingham & Butler120070924 Amended DA Resolution.doc
AMENDED AND RESTATED
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF DUBUQUE, IOWA,
COTTINGHAM ~ BUTLER, INC.,
AND
SECURITY INVESTMENTS, LLC
THIS AMENDED AN REST TED DEVELOPMENT AGREEMENT, dated for
reference purposes the 1st day of October, 2007, is made and entered into by and
between the City of Dubuque, Iowa (City), Cottingham & Butler, Inc. (Developer), and
Security Investments, LLC, an Iowa Limited Liability Company.
Whereas, City and Developer entered into a Development Agreement dated for
references purposes the 20th day of July, 2007; and
Whereas, the Development Agreement incorrectly named Developer as owner of
the Property describe therein; and
Whereas, Security Investments, LLC, an Iowa Limited Liability Company (Owner) is
the correct owner of the following described real estate:
Lot 29, Lot 30, and the South 1/3 of Lot 31 in the City of Dubuque, Iowa, according
to the United States Commissioners Map of the Town of Dubuque, Iowa
located at 800 Main in the City of Dubuque, and Owner desires to be a party to the
Development Agreement; and
WHEREAS, the Property is located in the Greater Downtown Urban Renewal District
(the District) which has been so designated by City Council Resolution 26-07 as a slum and
blight area (the Project Area) defined by Iowa Code Chapter 403 (the Urban Renewal
Law); and
WHEREAS, Developer has undertaken the redevelopment of an occupied building
located on the Property and is 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; and
WHEREAS, pursuant to lows Code Section 403.6(1), and in conformance with the
Urban Renewal Plan for the Project Area adopted on February 20, 2007, City has the
authority to enter into contracts and agreements to implement the Urban Renewal Plan;
and `
WHEREAS, the City Council of City believe it is in the best interests of the City to
encourage Developer in the development of the Property by providing certain incentives as
092507ba1
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
1.1 Representations and Warranties of City. 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.
This Agreement, upon execution and delivery by the City (assuming due
authorization, execution and delivery by the Developer), is a valid and legally
binding instrument of City, 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) 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 ins#rument 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.
1.2 Representations and Warranties of Developer and Owner. The Developer makes
the following representations and warranties:
(1) Developer is an Iowa corporation and Owner is an Iowa limited liability
091907balver2 2
company and Developer and Owner both are duly organized and validly existing
under the laws of the State of Iowa, and have all requisite power and authority to
own and operate their properties, to carry on their businesses as now conducted
and as presently proposed to be conducted, and to enter into and perform its
obligations under the Agreement.
(2) This Agreement has been duly authorized, executed and delivered by
Developer and Owner and, assuming due authorization, execution and delivery by
the City, is in full force and effect and is a valid and legally binding instrument of
Developer and Owner 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 and Owner's counsel shall issue a
legal opinion to the City, at time of closing, confirming the representations contained
herein, in form and substance reasonably satisfactory to City.
(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 organization or the operating agreement of Developer or Owner or any
contractual restriction, evidence of indebtedness, agreement or instrument of
whatever nature to which Developer or Owner are now a party or by which they or
their property are bound, or constitutes a default under any of the foregoing.
(4) There are no actions, suits or proceedings pending or threatened against or
affecting Developer or Owner 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 Owner or which affects the validity of the
Agreement or Developer's or Owner's ability to perform their obligations under this
Agreement.
(5) Developer and Owner will perform their 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 and Owner will use their 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.
091907balver2 3
1.3 Closing. The closing shall take place on the Closing Date which shall be the 1 st day
of December, 2007, or such other date as the parties shall agree. 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 and Owner under this Agreement are
subject to fulfillment, on or before the Closing Date, of the following conditions:
(1) Developer, Owner and City shall be in material compliance with all the terms
and provisions of this Agreement.
(2) Developer shall have furnished City with evidence, in a form satisfactory to
City (such as a letter from a corporate official that Developer has sufficient funds, or
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 such party's financial ability as in the reasonable
judgment of City is required.
(3) Developer's and Owner's counsel shall issue a legal opinion to the City
confirming the representations contained herein, inform and substance reasonably
satisfactory to City.
(4) Developer or Owner shall have the right to terminate this Agreement at any
time prior to the consummation of the closing on the Closing Date if Developer or
Owner determines in their sole discretion that conditions necessary for the
successful completion of the Project contemplated herein have not been satisfied to
the full satisfaction of such party in such party's sole and unfettered discretion.
Upon the giving of notice of termination by such terminating party to the other
parties to this Agreement, this Agreement shall be deemed null and void.
1.5 City's Obligations at Closing. At or prior to the Closing Date, City shall deliver to
Developer and Owner such other documents as may be required by this Agreement, all in
a form satisfactory to Developer and Owner.
SECTION 2. DEVELOPMENT ACTIVITIES
2.1 Required Minimum Improvements. Developer shall make an additional capital
investment of $4,000,000.00 in building improvements, equipment, furniture and fixtures in
the Property at 800 Main Street (the Minimum Improvements).
2.2 [This section intentionally left blank]
091907balver2 4
2.3 Plans for Construction of Minimum Improvements. Plans and specifications with
respect to the development of 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.
2.4 Timing of Improvements. Developer hereby agrees that construction of the
Minimum Improvements on the Property shall have been commenced by July 1, 2006, and
shall be substantially completed by June 30, 2008. The time frames 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 shall furnish Developer with an appropriate
instrument so certifying. Such certification (the Certificate of Completion) shall be in
recordable form and shall be a conclusive determination of the satisfaction and termination
of the agreements and covenants in this Agreement.
SECTION 3. CITY PARTICIPATION
3.1 Downtown Rehab Loan/Grant for Property at 800 Main Street.
(1) City hereby commits to a $300,000 low interest loan, $10,000 facade grant,
and a $10,000 design grant through the Downtown Rehabilitation Loan/Grant
Program for the Property at 800 Main Street. The project is to be completed in
accordance with the regulations set forth for the City of Dubuque Downtown
Rehabilitation Loan/Grant Program. The loan is for twenty years at 3% interest and
is intended for Historic renovation of the exterior facade and historically significant
elements of the interior with remodeling of the remainder of the interior for use as
commercial/residential space. Monthly interest only payments shall be required for
the first sixty (60) months of the loan. Monthly principal and interest payments,
amortized over an additional fifteen (15) year period, shall begin the sixty-first month
of the loan. Owner's counsel shall not less than thirty (30) days prior to closing on
the loan provide City with an opinion of title showing merchantable title in Owner to
the satisfaction of City. City shall have until the closing to render objections to title,
including any easements or other encumbrances not satisfactory to City, in writing to
Owner. Owner shall promptly exercise its best efforts to have such title objections
removed or satisfied and shall advise City of intended action within ten (10) days of
such action. If Owner shall fail to have such objections removed as of the closing,
09 ] 907balver2 5
or any extension thereof consented to by City, City may, at its sole discretion, either
(a) terminate its obligation under this Section 3.1 without liability on its part, or
proceed to closing subject to such objections. Owner agrees to use its best
reasonable efforts to promptly satisfy any such objections. The loan shall be
secured by a mortgage and corporate guarantees in a form acceptable to City.
Funding for this program is anticipated in FY 2008.
A rebate equal to two thousand dollars ($2,000) may be forgiven for each new full-
time job orfull-time equivalent created after September 2006 and within three years
of the execution of the loan documents and maintained by Developer for a period of
not less than two years. The amount of the loan to be forgiven shall be determined
by the City on the fifth anniversary of the loan based on documented evidence of
job creation.
(2) A grant not to exceed ten thousand dollars ($10,000) will be available to
offset documented predevelopment costs, architectural and engineering fees and
other miscellaneous soft costs. A determination must be made by the City that the
project is substantially complete and satisfies the conditions of the loan prior to the
release of any grant monies.
(3) A grant not to exceed ten thousand dollars ($10,000) will be available to
offset documented front or rear facade renovations to eliminate inappropriate
additions or alterations and restore the facade to its historic appearance, or to
rehabilitate the facade to include new windows, paint, signage, awnings, etc. to
improve overall appearance. Landscaping or screening with fencing or retaining
walls may also be allowed, especially as it may improve property adjacent to the
public right-of-way.
3.2 Economic Development Grant 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, 2009 May 1, 2010
November 1, 2010 May 1, 2011
November 1, 2011 May 1, 2012
November 1, 2012 May 1, 2013
November 1, 2013 May 1, 2014
November 1, 2014 May 1, 2015
November 1, 2015 May 1, 2016
November 1, 2016 May 1, 2017
November 1, 2017 May 1, 2018
November 1, 2018 May 1, 2019
091907balver2 6
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 the City in respect of
the increase in the assessed value of the Property above the assessment of January 1,
2007 ($2,369,600). 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 the City in respect of the valuations of the
Property prior to January 1, 2008 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, 2008, 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, 2017, 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, 2008,
the Economic Development Grants in respect thereof would be paid to the Developer on
November 1, 2009, and May 1, 2010.)
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 Cottingham
& Butler Security Building 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 Cottingham &
Butler Security Building 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 Cottingham &
Butler Security Building 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
091907balver2 7
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 Developerwith
respect to the use thereof.
SECTION 4. COVENANTS OF DEVELOPER
4.1 Job Creation. Developer shall create ninety (90) full-time (2080 hours per year)
employees in Dubuque, Iowa after September 2006 and within three years of the execution
of the loan documents, and shall maintain those jobs during the Term of this Agreement.
City acknowledges that Developer has existing employees and all persons now or hereafter
employed by Developer shall count against the ninety (90) full-time employee requirement
described herein. It is agreed by the parties that Developer has 306 employees in
Dubuque, Iowa, as of September 30, 2006. In the event that the certificate provided to City
under Paragraph 9 hereof on September 30, 2009, discloses that Developer does not as of
that date have at least Three Hundred Ninety-Six (396) full-time employees as provided
hereinabove, City shall reduce the semi-annual Economic Development Grants. For the
positions that Developer fails to create and maintain for any year during the Term of this
Agreement, the semi-annual Economic Development Grants for such year under Section
3.2 shall be reduced by the percentage that the number of such positions bears to the total
number of 396 positions required to be created and maintained by this Paragraph.
4.2 Certification. To assist City in monitoring the performance of Developer hereunder,
not later than November 30, 2009, and not later than November 30 of each year thereafter
during the term of this Agreement, a duly authorized officer of Developer shall certify to City
in a form acceptable to City (a) the number of full time employees employed by Developer
in Dubuque, Iowa on September 30 of the year of the certification, and (b) a statement that
such officer has re-examined the terms and provisions of this Agreement and that at the
date of such certificate, and during the preceding twelve (12) months, Developer is not or
was not in default in the fulfillment of any of the terms and conditions of this Agreement
and that no Event of Default (or event which, with the lapse of time or the giving of notice,
or both, would become an Event of Default) is occurring or has occurred as of the date of
such certificate or during such period, or if the signer is aware of any such default, event or
Event of Default, said officer shall disclose in such statement the nature thereof, its period
of existence and what action, if any, has been taken or is proposed to be taken with
respect thereto.
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.
091907balver2 $
4.4 Real Property Taxes. Owner 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 Owner'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, Owner agrees not to
apply for any other 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 427, as
amended.
4.6 Insurance Requirements.
(1) Owner 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 a property policy written on a replacement cost basis.
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, Owner 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). Owner shall furnish to City
proof of insurance in the form of a certificate of insurance.
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.
(3) Owner shall notify City immediately in the case of damage exceeding
$500,000.00 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 Owner as its interests may
appear, and Owner 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, Owner shall apply the Net
Proceeds of any insurance relating to such damage received by Owner 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).
Owner shall complete the repair, reconstruction and restoration of Minimum
091907balver2 9
Improvements whether or not the Net Proceeds of insurance received by Ownerfor
such purposes are sufficient.
4.7 Preservation of Property. During the term of this Agreement, Owner 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, neither Developer nor Owner shall
discriminate against any employee or applicant for employment because of race, religion,
color, sex, sexual orientation, national origin, age or disability.
4.9 Conflict of Interest. Developer and Owner agree 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 adecision-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 and
Owner 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 2.4), this Agreement may not be assigned by Developer
or Owner nor may the Property be transferred by Owner to another party without the prior
written consent of City, which shall not be unreasonably withheld. Thereafter, Developer or
Owner shall have the right to assign this Agreement and upon assumption of the
Agreement by the assignee, Developer and Developer shall no longer be responsible for
their obligations under this Agreement.
4.11 Restrictions on Use. Developer and Owner agree for themselves, and their
successors and assigns, and every successor in interest to the Property or any part thereof
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 an office, is in full compliance with the Urban Renewal Plan)
(however, neither Developer nor Owner 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, national origin, age or disability in the sale, lease, rental, use or
091907balver2 10
occupancy of the Property or any improvements erected or to be erected thereon, or
any part thereof (however, neither Developer nor Owner 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).
4.12 Compliance with Laws. Developer and Owner 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 or
Owner.
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 Owner 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 or Owner 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, Owner, 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 or Owner does not provide
assurances to City that the Event of Default will be cured as soon as reasonably possible
thereafter:
091907balver2 11
(1) City may suspend its performance under this Agreement until it receives
assurances from the defaulting party deemed adequate by City, that the defaulting
party will cure its default and continue its performance under this Agreement;
(2) Until the Closing Date, City may cancel and rescind this Agreement;
(3) 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 to Developer, and City may take any action, including any legal action it
deems necessary, to recover such amounts from the defaulting party;
(4) City may withhold the Certificate of Completion; or
(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
its performance under this Agreement until it receives assurances from City, deemed
09 ] 907balver2 12
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: David O. Becker
Cottingham & Butler
300 Security Building
Dubuque, IA 52001
If to Owner: David O. Becker
Cottingham & Butler
300 Security Building
Dubuque, IA 52001
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, Developer, and Owner and their respective successors and assigns.
6.3 Termination Date. This Agreement and the rights and obligations of the parties
hereunder shall terminate on May 1, 2019 (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.
091907balver2 13
6.5 Memorandum of Development Agreement. City shall promptly record a
Memorandum of Development Agreement in the form attached hereto as Exhibit A
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 Agreementto be duly executed in its
name and behalf by its Mayor and attested to by its City Clerk and Developer and Owner
have caused this Agreement to be duly executed on or as of the first above written.
CITY OF DU QUE, IOWA
Roy D. Buol
Mayor
Attest
Jeanne F. Schneider
City Clerk
(City Seal)
STATE OF IOWA
COUNTY OF DUBUQUE
SS
COTTINGHAM & BUTLER INC.
By
John E. Butler
Chief Executive Officer
SECURITY INVESTMENTS, LLC
By Cottingham & Butler, Inc.
Its sole member
By
John E. Butler
Chief Executive Officer
On this 2nd day of Ocotber 007, before me the undersigned, a Notary
Public in and for the said Courity and State, personally appeared Roy D. Buol and Jeanne
F. Schneider, to me personally known, who, being by me duly sworn, did say that they are
the Mayor and City Clerk, respectively, of the City of Dubuque, Iowa, 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, by it and by tlyem voluntarily executed.
o • SUSAN M. WINTER
COMMISSION NO.~g~~~
MY COMM1SS10N EXp~RE3
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091907balver2 14
Notary Public
STATE OF IOWA
COUNTY OF DUBUQUE
SS
On this 21st day of September, 2007, before me the undersigned, a Notary
Public in and for the Stat of Iowa, personally appeared John E. Butler, to me personally
known, who, being by me duly sworn, did say that he is the Chief Executive Officer of
Cottingham & Butler, Inc. the corporation executing the instrument to which this is attached
and that as said Chief Executive Officer of Cottingham & Butler, Inc. acknowledged the
execution of said instrument to be the voluntary act and deed of said company, by it and by
him, an individual, voluntarily executed.
gFp1A~B~ BETTY COURTNEY
Corrr~iaaion Number 133513
Notary P II r fiY Comm. Exp. BOO k
STATE OF IOWA
COUNTY OF DUBUQUE
SS
On this 21st day of September, 2007, before me the undersigned, a Notary
Public in and for the State f Iowa, personally appeared John E. Butler, to me personally
known, who, being by me duly sworn, did say that he is the Chief Executive Officer of
Cottingham & Butler, Inc., the sole member of Security Investments, LLC, the company
executing the instrument to which this is attached and that as said Chief Executive Officer
acknowledged the execution of said instrument to be the voluntary act and deed of said
company, by it and by him/her, an individual, voluntarily executed.
.l_~"" a BETTY COURTNEY
~, Commlaelon Number 133598
Nota P IC ~~ r i!y Comm. Ez 'OO.3
ry p• l /o~
F:IUSERS\DHeiar\Cottingham & Butler\Cottingham & Butler Development Agreement.doc
091907balver2 15
Prepared by: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113
Return to: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113
EXHIBIT A
MEMORANDUM OF DEVELOPMENT AGREEMENT
A Development Agreement by and among the City of Dubuque, Iowa, an Iowa municipal
corporation, of Dubuque, Iowa, Cottingham & Butler Inc., and Security Investments, LLC,
was made regarding the following described premises:
Lot 29, Lot 30, and the South 1/3 of Lot 31 in the City of Dubuque, Iowa, according
to the United States Commissioners Map of the Town of Dubuque, Iowa; and
The Development Agreement is dated for reference purposes the 1st day of
October, 2007, 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 2nd day of October, 2007
CITY OF DU UQUE, IOWA
D.
By:
Roy D Buol, Mayor
~,
By:
Jeanne F. Schneider, City Clerk
091907balver2 16
STATE OF IOWA
COUNTY OF DUBUQUE
SS
On this 2nd day of October, 2007, before me, a Notary Public in and for the State of
Iowa, in and for said county, personally appeared Roy D. Buol and Jeanne F. Schneider, to
me personally known, who being by me duly sworn did say that they are the Mayor and
City Clerk, respectively of the City of Dubuque, 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 voluntari executed.
Not ry Public, State of Iowa
SUSAN M. WINTER
a~ ~± COMMISSION N0.193274
• MY COMMfSS10N EXPIAE3
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091907balver2 ~ 7