Hotel Julien - Downtown Rehabilitation Loan Subordination Agreement Copyright 2014
City of Dubuque Consent Items # 9.
ITEM TITLE: Hotel Julien - Downtown Rehabilitation Loan Subordination
SUMMARY: City Manager recommending approval of a loan agreement
with HJD Landlord, LLC, and a subordination agreement
with American Trust& Savings Bank concerning a
Downtown Rehabilitation Loan for the Hotel Julien. It is
further recommended that the Mayor be authorized to
execute the loan agreement as well as the letter of consent
and subordination agreement.
RESOLUTION Approving a Loan Agreement and Mortgage
between the City of Dubuque and HJD Landlord, LLC and a
Subordination Agreement by and among HJD Landlord,
LLC, the City of Dubuque and American Trust and Savings
Bank
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt
Resolution(s)
ATTACHMENTS:
Description Type
Hotel Julien-Downtown Rehabilitation Loan and City Manager Memo
Subordination Agreement-MVM Memo
Staff Memo Staff Memo
Executed Development Agreement- Hotel Julien Supporting Documentation
Executed lstAmendment- Hotel Julien Supporting Documentation
Rehab Loan Agreement Supporting Documentation
Mortgage Supporting Documentation
Promissory Note Supporting Documentation
Subordination Agreement Supporting Documentation
Letter of Consent Supporting Documentation
Resolution of Approval Resolutions
THE CITY OF Dubuque
UBE I
erica .i
Masterpiece on the Mississippi 2007-2012-2013
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Hotel Julien — Downtown Rehabilitation Loan and Subordination
Agreement
DATE: February 26, 2016
Economic Development Director Maurice Jones recommends City Council approval of a
loan agreement with HJD Landlord, LLC, and a subordination agreement with American
Trust & Savings Bank concerning a $600,000 Downtown Rehabilitation Loan for the
Hotel Julien. Due to the business's financing with American Trust & Savings Bank, the
$600,000 Loan will need to take a second position to that mortgage. It is further
recommended that the Mayor be authorized to execute the loan agreement as well as
the letter of consent and subordination agreement.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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
Dubuque Economic Development Department
THE CITY OF 50 West 13th Street
AII-AwftlitY Dubuque,Iowa 52001-4864
DUB3 &kE1 I Office(563)589-4393
TTY(563)690-6678
® http://www.cityofdubuque.org
Masterpiece on the Mississippi 200.2012.2013
TO: Michael Van Milligen, City Manager
FROM: Maurice Jones, Economic Development Director
SUBJECT: Hotel Julien — Downtown Rehabilitation Loan and Subordination
Agreement
DATE: February 22, 2016
INTRODUCTION
The purpose of this memorandum is to request approval for the attached loan
agreement with HJD Landlord, LLC, and a subordination agreement with American
Trust & Savings Bank concerning a $600,000 Downtown Rehabilitation Loan for the
Hotel Julien.
BACKGROUND
In the Development Agreement (DA) between the City and HJD Landlord, LLC (the
Business) dated April 21, 2008, section 3 provides for a $600,000 Downtown
Rehabilitation Loan (the Loan), a portion of which can be forgiven based on the number
of jobs created and maintained between March 30, 2011 and March 30, 2014.
DISCUSSION
Due to the Business's financing with American Trust & Savings Bank, the $600,000
Loan will need to take a second position to that mortgage. I believe the risk of taking
second position is very low, as the Hotel Julien has proved to be a thriving business in
our downtown, and American Trust has confirmed that HJD Landlord, LLC has made all
loan payments related to its Hotel Julien renovation loan in a timely manner with no past
due payments.
Also note that as the Business has created and maintained a number of jobs in the
timeframe prescribed in the Development Agreement, a portion of the loan will be
forgiven per the Development Agreement ($2,000 per full time equivalent job).
RECOMMENDATION/ ACTION STEP
I recommend approving the attached resolution, authorizing the Mayor to execute the
loan agreement as well as the letter of consent and subordination agreement.
DEVELOPMENT AGREEMENT
BY AND AMONG
THE CITY OF DUBUQUE, IOWA,
HJD LANDLORD, LLC,
AND
HJD MANAGER, LLC
THIS DEVELOPMENT AGREEMENT, dated for reference purposes the 21stdayof
April , 2008, is made and entered into by and among the City of Dubuque, Iowa
(City), HJD Landlord, LLC (Developer), and HJD Manager, LLC. (Employer).
WHEREAS, Developer is or will be, the owner of the following described real estate
(the Property):
TRACT
Lots 5, 6, 7, 195, 196 and 196a, in the City of Dubuque, Iowa, according to the
United States Commissioners' Map of the Town of Dubuque, Iowa.
TRACT 11
The Southerly 40 feet of Lot 194 in Town (now City) of Dubuque, Iowa, according
to the United States Commissioners' Map of the Survey of said Town of
Dubuque.
TRACT I I I
The Northerly 24 feet of Lot 194 in the City of Dubuque, Iowa, according to the
United States Commissioners' Map of the Survey of the Town of Dubuque, Iowa.
TRACT IV
Lot 193 in City of Dubuque, Iowa, according to the United States Commissioners
Map thereof.
TRACT V
Lots A, B, C and D of Julien Hotel Plaza in the City of Dubuque, Iowa, according
to the recorded Plat thereof.
TRACT VI
Lot 195A and Lot 197A in the City of Dubuque, Iowa, according to the United
States Commissioners Map thereof.
TRACT VII
A parcel of land located in the North 60 feet of Lot 745; the South 40 feet of the
North 100 feet of Lot 745 and the North 111 feet of the South 157 feet of Lot 745
in the City of Dubuque, Iowa, as described in Patent, Instrument No. 9801-91
and Patent, Instrument No. 7684-92, records of Dubuque County, Iowa.
TRACT VIII
South 22' of City Lot 8, Dubuque, Iowa.
All the above property generally located at 200 Main Street in the City of Dubuque; 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
041408adj
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
(the Julien Hotel) located on the Property; and
WHEREAS, Employer will operate the Julien Hotel as 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 Iowa Code Section 403.6(1), and in conformance with the
Urban Renewal Plan for the Project Area adopted on December 17, 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 and Employer 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
1.1 Representations and Warranties of City. In order to induce Developer and Employer
to enter into this Agreement, City hereby represents and warrants to Developer and
Employer 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 and Employer
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.
2
(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.
1.2 Representations and Warranties of Developer and Employer. Developer and
Employer make the following representations and warranties:
(1) Developer and Employer are Limited Liability Companies 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 business as now
conducted and as presently proposed to be conducted, and to enter into and
perform their obligations under the Agreement.
(2) This Agreement has been duly authorized, executed and delivered by
Developer and Employer 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 Employer 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 Employer'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 Employer or any
contractual restriction, evidence of indebtedness, agreement or instrument of
whatever nature to which either Developer or Employer 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 or Employer in any court or before any arbitrator or before or by
any governmental body in which there is a reasonable possibility of an adverse
3
decision which could materially adversely affect the business, financial position or
result of operations of Developer or Employer or which affects the validity of the
Agreement or Developer's or Employer's ability to perform its obligations under this
Agreement.
(5) Developer and Employer 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 Employer 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.
1.3 Closing. The closing shall take place on the Closing Date which shall be the 14th
day of May, 2008, or such other date as the parties shall agree but in no event shall the
Closing Date be later than the 31St day of May, 2008. 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 Employer under this Agreement are
subject to fulfillment, on or before the Closing Date, of the following conditions:
(1) Developer, Employer 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 Employer's counsel shall issue a legal opinion to the City
confirming the representations contained herein, in form of Exhibit B, attached
hereto.
(4) Developer or Employer shall have the right to terminate this Agreement at
any time prior to the consummation of the closing on the Closing Date if Developer
4
or Employer determines in its 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 Employer such other documents as may be required by this Agreement, all
in a form satisfactory to Developer and Employer.
SECTION 2. DEVELOPMENT ACTIVITIES
2.1 Required Minimum Improvements. Developer shall make a total capital
investment of approximately $20,000,000.00 in building improvements, equipment,
furniture and fixtures in the Property (the Minimum Improvements). It is anticipated that
the Minimum Improvements are to include a swimming pool, spa, retail boutiques,
restaurant/bar, updated conference and ballrooms and approximately 130 upscale
rooms/suites. The renovation shall restore a large portion of the exterior of the building
to the original building facade.
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.
2.4 Timing of Improvements. Developer hereby agrees that construction of the
Minimum Improvements on the Property shall have been commenced by June 1, 2008,
and shall be substantially completed by June 30, 2009. 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
5
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 200 Main Street
(1) City hereby commits to a $600,000 low interest loan, $10,000 fagade 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 fagade and historically significant
elements of the interior with remodeling of the remainder of the interior for use as a
full service hotel. 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.
Developer'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 Developer 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
Developer. Developer 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 Developer shall fail to have such objections removed as
of the closing, 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 (b) proceed to closing subject to such objections. Developer agrees to
use its best reasonable efforts to promptly satisfy any such objections. The loan
shall be secured by a mortgage (which mortgage shall be subordinate to any other
financing of Developer in connection with the Property)and corporate guarantees in
a form acceptable to City. Funding for this program is anticipated in FY 2021.
A rebate of the loan equal to two thousand dollars ($2,000) may be forgiven for
each new full-time job or full-time equivalent created by Employer after March 30,
2008 and prior to March 30, 2011 and maintained by Employer for a period of not
less than three years after March 30, 2011. The amount of the loan to be forgiven
shall be determined by City on March 30, 2014 based on documented evidence of
job creation and retention.
(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 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
6
offset documented front or rear fagade renovations to eliminate inappropriate
additions or alterations and restore the fagade to its historic appearance, or to
rehabilitate the fagade 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
thirty(30) consecutive semi-annual payments(such payments being referred to collectively
as the Economic Development Grants) to Developer:
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
November 1, 2019 May 1, 2020
November 1, 2020 May 1, 2021
November 1, 2021 May 1, 2022
November 1, 2022 May 1, 2023
November 1, 2023 May 1, 2024
November 1, 2024 May 1, 2025
November 1, 2025 May 1, 2026
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 Property above the assessment of January 1, 2007
($1,555,800). 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, 2010 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
7
as regular property taxes.
3.3 To fund the Economic Development Grants, City shall certify to the County prior to
December 1, 2009, 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, 2025, 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, 2010,
the Economic Development Grants in respect thereof would be paid to the Developer on
November 1, 2011, and May 1, 2012.)
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 Julien Hotel
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 Julien Hotel 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 Julien Hotel 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 Developerwith
respect to the use thereof.
3.6 Hotel/Motel Tax Marketing Funds. Upon completion of the renovation project which
Developer represents will be on or before July 1, 2009, City will provide 100% of the
incremental increase from calendar year 2007 in its share of Hotel/Motel tax revenue for
the Julien Hotel for three full years after the date of completion to assist Developer in
marketing the Julien Hotel. The funds will be transferred to the Convention and Visitors
Bureau to exclusively market the Julien Hotel.
SECTION 4. COVENANTS OF DEVELOPER OR EMPLOYER
4.1 Job Creation.
8
(1) Employer shall create fifty-seven (57) full-time equivalent (FTE) positions
(2080 hours per year) employees in Dubuque, Iowa after March 2008 and within
three years of the date of the Development Agreement, and shall maintain those
jobs during the Term of this Agreement. City acknowledges that Employer has
existing employees and all persons now or hereafter employed by Employer shall
count against the sixty-nine (69)full-time employee requirement described herein. It
is agreed by the parties that Employer has 12 FTE employees in Dubuque, Iowa, as
of March 2008.
(2) In the event that the certificate provided to City under Paragraph 9 hereof on
January 1, 2011, discloses that Employer does not as of that date have at least
sixty-nine (69) full-time equivalent employees as provided hereinabove, City shall
reduce the semi-annual Economic Development Grants. For the positions that
Employer 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 69 positions required to be created and maintained by
this Paragraph.
(3) For purposes of this Agreement, the jobs created by Employer shall include
any jobs created or persons employed at the Property by (i) HJD Landlord, LLC, (ii)
HJD Manager, LLC, (iii) tenant's located within the Property or (iv) affiliates,
subsidiaries, contractors or subcontractors of such subcontractors of HJD Landlord,
LLC, HJD Manager, LLC or any tenant of the Property as long as such jobs are
associated withat business operated at the Property. Job creation and job retention
requirements of this Section 4.1 may be satisfied by any or all of such entities.
4.2 Certification. To assist City in monitoring the performance of Employer hereunder,
three (3)years from the date of this Agreement, and again each year thereafter during the
term of this Agreement, a duly authorized officer of Employer shall certify to City (a) the
number of full time equivalent jobs employed at Property, and (b) to the effect 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, Employer 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. Such certificate shall be provided not later than January 1, 2011, and on
January 1 of each year thereafter during the term of this Agreement.
4.3 Books and Records. During the term of this Agreement, Developer and Employer
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 and Employer in
9
accordance with generally accepted accounting principles consistently applied throughout
the period involved, and Developer and Employer 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 and Employer
agrees not to apply for any state or local property tax exemptions which are available with
respect to the 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) 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 a property policy written on a replacement cost basis.
Coverage shall include the "special perils" form.
(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 sole
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). .
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) City shall be named as mortgagee under such property policies and
Developer shall provide City with the mortgagee's copy of such coverage.
(4) Developer 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 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
10
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 or Employer shall not
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 Employer 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 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 and
Employer shall have the right to rely upon the representations of any party with whom A
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
nor may the Property be transferred by Developer to another party without the prior written
consent of City, which shall not be unreasonably withheld. Thereafter, 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 Restrictions on Use. Developer agrees for itself, and its 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 a hotel, is in full compliance with the Urban Renewal Plan)
11
(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, 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).
4.12 Compliance with Laws. Developer and Employer 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
and Employer.
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, Employer 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 or Employer. 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) and Employer 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
12
Employer 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 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 or Employer 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 Employer, or to enforce performance and
13
observance of any obligation, agreement, or covenant of City under this Agreement.
Developer or Employer may suspend their performance under this Agreement until they
receive assurances from City, deemed adequate by Developer or Employer, 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: HJD Landlord, LLC
Tony Pfohl
290 Main Street
P.O. Box 267
Dubuque, IA 52004-0267
Phone: (563)583-3526
Fax: (563)583-3537
With copy to: Drake & Freund, P.C.
D. Flint Drake
2477 John F. Kennedy Road, Ste. 203
Dubuque, IA 52002
Phone: (563)582-2000
Fax: (563)583-5225
If to Employer: HJD Manager, LLC
Tony Pfohl
290 Main Street
P.O. Box 267
Dubuque, IA 52004-0267
Phone: (563)583-3526
Fax: (563)583-3537
With copy to: Drake & Freund, P.C.
D. Flint Drake
2477 John F. Kennedy Road, Ste. 203
Dubuque, IA 52002
Phone: (563)582-2000
Fax: (563)583-5225
If to City: City Manager
50 W. 13th Street
Dubuque, Iowa 52001
14
Phone: (563) 589-4110
Fax: (563) 589-4149
With copy to: City Attorney
City Hall
50 W. 13t" 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 Employer 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, 2026 (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.
6.5.1 Memorandum of Development Agreement. Developer 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.
6.6 Entire Agreement. This Agreement constitutes the entire agreement between the
parties and supersedes any prior understandings or oral or written agreements
between the parties respecting the within subject matter. In entering into this
Agreement, neither party has relied on any representations by the other party
outside of this Agreement.
15
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 and
Employer has caused this Agreement to be duly executed on or as of the first above
written.
CITY OF DU UQUE, IOWA HJD LANDLORD, LLC
UC
By By
Roy D. 001 L. Anthony Pfohl
Mayor Managing Member
Attest:
-�' HJD MANAGER, LLC
6J,6anne F. Schneider
City Clerk
By
(City Sea[) L. Anthony Pfohl
Member
STATE OF IOWA )
SS
COUNTY OF DUBUQUE )
On this 21St day of April 2008, before me the undersigned, a Notary
Public in and for the said County 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 them voluntarily executed.
*¢0Ai 8 KEVIN S. FIRNSTAHL
c
COMMISSION NO.745295
No ry Public MY COMMISSION EXPIRES
,ow► 2112110
1( b r sacI X3 uolrl ssluurlp:) W VMO,
STATE OF IOWA ) 4�£Z 'ON uo}sniuwa:)
SS Two-(vas ir1lt+�oN �• �Y
salsa[a��auuy Tw
COUNTY OF DUBUQUE )
On this _ day of x) 2008, before me the undersigned, a Notary
16
Public in and for the State of Iowa, personally appeared L. Anthony Pfohl,to me personally
known, who, being by me duly sworn, did say that he is the Managing Member of HJD
Landlord, LLC and the Manager or HJD Manager, LLC the corporations executing the
instrument to which this is attached and that as said Managing Member of HJD Landlord,
LLC and the Manager or HJD Manager, LLC 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.
pA(
nunette Jones
Nofartal Seal- IOWA
Conanission No. 7348 0
Notary Public �J '°W" M CO1ttlfdSsfott EX fres �
F:\USERS\DHeiar\Julien Inn\Julien Development Agreement.doc
17
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, HJD Landlord, LLC, and HJD Manager, LLC was made
regarding the following described premises:
TRACT
Lots 5, 6, 7, 195, 196 and 196a, in the City of Dubuque, Iowa, according to the
United States Commissioners' Map of the Town of Dubuque, Iowa.
TRACT II
The Southerly 40 feet of Lot 194 in Town (now City) of Dubuque, Iowa, according
to the United States Commissioners' Map of the Survey of said Town of
Dubuque.
TRACT III
The Northerly 24 feet of Lot 194 in the City of Dubuque, Iowa, according to the
United States Commissioners' Map of the Survey of the Town of Dubuque, Iowa,
TRACT IV
Lot 193 in City of Dubuque, Iowa, according to the United States Commissioners
Map thereof.
TRACT V
Lots A, B, C and D of Julien Hotel Plaza in the City of Dubuque, Iowa, according
to the recorded Plat thereof.
TRACT VI
Lot 195A and Lot 197A in the City of Dubuque, Iowa, according to the United
States Commissioners Map thereof.
TRACT VII
A parcel of land located in the North 60 feet of Lot 745; the South 40 feet of the
North 100 feet of Lot 745 and the North 111 feet of the South 157 feet of Lot 745
in the City of Dubuque, Iowa, as described in Patent, Instrument No. 9801-91
and Patent, Instrument No. 7684-92, records of Dubuque County, Iowa.
TRACT VIII
South 22' of City Lot 8, Dubuque, Iowa.
18
The Development Agreement is dated for reference purposes the day of
, 20_, 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 , 20_.
CITY OF DUBUQUE, IOWA
By:
Roy D. Buol, Mayor
By:
Jeanne F. Schneider, City Clerk
19
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 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 voluntarily executed.
Notary Public, State of Iowa
20
EXHIBIT B
OPINION OF DEVELOPER'S COUNSEL
21
Mayor and City Councilmembers
City Hall
13t and Central Avenue
Dubuque IA 52001
Re: Development Agreement Among the City of Dubuque, Iowa HJD Landlord, LLC, and
HJD Manager, LLC
Dear Mayor and City Councilmembers
We have acted as counsel for HJD Landlord, LLC, (Developer) and HJD Manager,
LLC (Employer) 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 , 20_.
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 and Employer are a limited liability companies organized and
existing under the laws'of the State of Iowa and has full power and authority to execute,
deliver and perform in full Development Agreement. The Development Agreement has
been duly and validly authorized, executed and delivered by Developer and Employer and,
assuming due authorization, execution and delivery by City, is in full force and effect and is
valid and legally binding instrument of Developer and Employer 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. The execution, delivery and performance by Developer or Employer 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 or Employer is a
party or by which Developer's property is bound or subject.
3. There are no actions, suits or proceedings pending or threatened against or
affecting Developer or Employer 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 Employer or which in any manner raises any
questions affecting the validity of the Agreement or the Developer's or Employer's ability to
22
perform Developer's or Employer's obligations thereunder.
Very truly yours,
F:\USERS\DHeiar\Julien Inn\Fischer Companies Julien Inn Development Agreement.doc
23
CERTIFICATE OF CITY CLERK
STATE OF IOWA )
COUNTY OF DUBUQUE )
I, Kevin S. Firnstahl, do hereby certify that I am the duly appointed, qualified, Assistant
City Clerk of the City of Dubuque, Iowa, in the County aforesaid, and as such Assistant
Clerk I have in my possession or have access to the records of the proceedings of the
City Council. I do further state that the hereto attached Resolution No. 122-08 is a
correct copy of the original Resolution No. 122-08 approved and adopted by the City
Council of the City of Dubuque, Iowa, at a session held by said Council on the 21st day
of April, 2008.
In Testimony Whereof, I hereunto set my hand and official seal of the City of Dubuque,
Iowa.
Dated at Dubuque, Iowa, on this 22nd day of April, 2008.
Kein S. Firnstahl
Assistant City Clerk
(SEAL)
Prepared/Return to: David Heiar, Economic Development,50 W 13th Street, Dubuque, IA 52001 (563)589-4393
RESOLUTION NO. 122-08
A RESOLUTION APPROVING A DEVELOPMENT AGREEMENT FOR THE
HOTEL JULIEN PROJECT
Whereas, the City of Dubuque, Iowa, has a Memorandum of Understanding with
The Fischer Companies outlining an incentive package for the rehabilitation of the Hotel
Julien; and
Whereas, the City of Dubuque, Iowa, has created a Downtown Rehabilitation
Loan/Grant Program for the purpose of stimulating reinvestment in the Greater
Downtown Urban Renewal District; and
Whereas, the City of Dubuque, Iowa is encouraging the use of this loan/grant
program to finance code compliance activities and to spur job creation activities; and
Whereas, the loan application from HJD Landlord, LLC and HJD Manager, LLC
meets the requirements of this program; and
Whereas, it is the determination of this Council that approval of the Development
Agreement for the rehabilitation of the Property by HJD Landlord, LLC and HJD
Manager, LLC 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 Development Agreement with HJD Landlord, LLC and
HJD Manager, 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 Development Agreement with
HJD Landlord, LLC and HJD Manager, 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 21St day of April, 2008.
U
Roy D. Buol, Mayor
Attes
anne F. Schneider, City Clerk
FAUSERS\DHeiar\Julien Inn\Julien DA Res.doc
FIRST AMENDMENT
TO
DEVELOPMENT AGREEMENT
BETWEEN
THE CITY OF DUBUQUE
AND HJD LANDLORD, LLC AND HJD MANAGER, LLC
Whereas City and Developer previously entered into a Development Agreement
dated the 21St of April, 2008 (the Development Agreement); and
Whereas the Development Agreement (Section 2.1) provides for minimum
investment of approximately $20,000,000.00 in building improvements, equipment,
furniture and fixtures in the Property to include a swimming pool, spa, retail boutiques,
restaurant/bar, updated conference and ballrooms and approximately 130 upscale
rooms/suites.
Whereas City and Developer have agreed to amend the Development
Agreement to revise the completion date and timing on marketing funds; and
Whereas the parties desire to amend the Development Agreement to set forth
such amendment in writing.
THEREFORE, in consideration of the mutual terms and covenants contained
herein, the parties agree as follows:
1. Section 2.4. Section 2.4 is hereby amended by changing to substantially
completed date to September 30, 2009.
2. Section 3.6. Section 3.6 is hereby amended by striking such provision and in
lieu thereof placing the following:
3.6 Hotel/Motel Tax Marketing Funds. Upon completion of the
renovation project which Developer represents will be on or before
September 30, 2009, City will provide 100% of the incremental
increase from calendar year 2007 in its share of Hotel/Motel tax
revenue for the Julien Hotel for three full years after the date of
completion to assist Developer in marketing the Julien Hotel. The
funds will be transferred to the Convention and Visitors Bureau to
exclusively market the Julien Hotel. In fiscal year 2009-10, the City will
advance $30,000 to the Convention and Visitor's Bureau to initiate this
marketing campaign. This cash advance will be reimbursed to the City
prior to remitting other tax revenues as described to the Convention
and Visitors Bureau.
3. Except as modified herein, the Development Agreement shall remain in full
force and effect.
CITY OF DU QUE, IOWA HJD LANDLORD, LLC
By:_Y By:
Roy D. u; 1, Mayor L. Anth y Pfohl
Managing Member
_ HJD MANAGER, LLC
BY: / �� By:
eanne F. Schneider, City Clerk L. Antho Pfoh
Member
CITY OF DUBUQUE, IOWA
DOWNTOWN REHABILITATION LOAN PROGRAM
LOAN AGREEMENT
NUMBER: DRLP # 1 - 16
This AGREEMENT, dated as of the day of , 2016, is entered into by and
between the CITY OF DUBUQUE, IOWA, a municipal corporation organized and existing under the laws
of the State of Iowa (hereinafter referred to as the "City") and HJD Landlord, LLC (hereinafter referred to
as the "Owner").
WITNESSETH:
Whereas, a Development Agreement with HJD Landlord, LLC was approved by the Dubuque City
Council on April 21, 2008 by Resolution No. 122-08 to provide a $600,000 Downtown Rehabilitation Loan
for the project.
Whereas, the Owner's property of 200 Main Street, Dubuque, Iowa, (hereinafter referred to as the
"Building") is located within the boundaries of the Greater Downtown Urban Renewal District most recently
established by Resolution No. 372-15 on October 19, 2015; and
Whereas, the goals and objectives of the Greater Downtown Urban Renewal Plan (the "Plan")
provide for the creation of the financial incentives needed to eliminate conditions of blight through a
program of voluntary or compulsory repair and rehabilitation of buildings and to retain or create
employment and/or housing opportunities within the District; and
Whereas, the City desires to assist the Owner in its efforts to bring said Building into compliance
with local codes and ordinances, to eliminate certain conditions of physical decay, and to retain or create
employment and/or housing opportunities within the District; and
Whereas, without the assistance of the Loan Program, the Owner would be unable to operate the
Building to its fullest capacity, thereby threatening local employment and/or housing opportunities.
NOW THEREFORE, in consideration of the premises and respective covenants, agreements and
representations hereinafter set forth, the parties agree as follows:
1. SOURCE OF FUNDS. City is prepared to provide financial assistance to qualified parties
through the use of tax increment financing under Chapter 403 of the Iowa Code, and has allocated funds
sufficient to carry out its obligations under this Agreement.
2. LOAN TERMS. City agrees to loan to Owner on the terms and conditions set forth herein
the amount of six hundred thousand dollars ($600,000) that shall consist of the Loan Program funds, if
and only if such funds are available. Payments shall be based on work completed and expenses
encumbered.
The term of the loan shall be twenty (20) years. Interest on the loan shall be three percent (3.0%)
per annum. Monthly interest payments shall become due and payable the first sixty (60) months of the
loan. Monthly interest and principal payments, amortized over a fifteen year period, shall become due and
payable beginning the sixty-first (61) month of the loan. The entire balance of the loan, including interest
and principal, shall become due and payable not later than the 240th month of the loan.
At the time of the initial disbursement of loan funds to Owner, Owner shall execute the Promissory
Note in the form attached hereto as Exhibit A payable to the order of the City in the principal amount of six
hundred thousand dollars ($600,000) and the Mortgage, attached as Exhibit B.
1
3. DISBURSEMENT AND USE OF LOAN FUNDS. Loan funds shall be disbursed to Owner
by City for Qualifying Project Expenses, defined in Paragraph 27(c), for amounts not in excess of the total
sum of $600,000 nor more than ninety percent (90%) of the total project cost.
Owner shall furnish to City written requests for disbursement of loan funds. Such request shall be
accompanied by a statement of Owner's Qualifying Project Expenses and appropriate documentation of
such expenses. It is expressly understood that all funds advanced under this,Agreement shall be used by
Owner only for the purpose of paying the Qualifying Project Expenses set forth in such written requests.
Owner shall substantially complete the Project, defined in Paragraph 27(b), in accordance with the
terms of this Agreement, on or before September 30, 2009. City shall not be obligated to pay any funds
not drawn by Owner as of said date and any undrawn funds as of such date shall be credited against the
balance due on the Promissory Note.
4. SECURITY. The loan shall be secured by at least a Second Mortgage on the Building, a
copy of which is attached as Exhibit B. The value of the Building shall at no time be Tess than the unpaid
balance of any First Mortgage plus the unpaid balance of the City's mortgage.
5. AVAILABLE INCENTIVES. Up to the full amount of the loan shall be forgiven by the City as
an incentive for the creation of new employment and/or housing opportunities. The amount of the loan to
be forgiven shall be determined sixty (60) months from the completion of the improvements and a new
amortization schedule shall be prepared. The base employment number to be used to calculate the
Employment Incentive has been determined to be twelve (12) FTE employees for the Building.
The amount of the loan forgiven shall be as follows:
(a) Two thousand dollars ($2,000) shall be forgiven for each new FTE position created and
maintained by the Owner or his/her tenant.
(b) To qualify, the Owner must document the following:
(1) The job represents a FTE position as defined herein Paragraph 27(d);
(2) The job was created between March 30, 2008 and March 30, 2011.
(3) The job has been maintained by the Owner or his/her tenant for a period of not less
than thirty-six (36) months (until March 30, 2014);
(4) The job is a paid position; and
(5) The job has been created by the Owner or another entity located in the Building and is
for employment in a business located in the Building.
(c) Two thousand dollars ($2,000) may be forgiven for each new housing unit created. A new
housing unit shall be defined as one of the following:
(1) The creation of a housing unit where one did not previously exist; or
(2) An existing housing unit which has been unlicensed and unoccupied for a period of
not less than five years.
7. STATUS OF OWNER. Owner represents that it is a Limited Liability Company duly
organized and existing under the laws of the State of Iowa; that it is authorized to borrow under this
Agreement, to execute and deliver the note and otherwise perform the obligations of this Agreement; that
it has authority and power to own its property and conduct its business as it is currently carried on; that the
performance of its obligations under this Agreement and the issuance of any note under it will not conflict
with any provision of law, the Articles of Incorporation or the Bylaws of Corporation, or any agreement
binding on it. Owner also represents, except as disclosed in writing to City, that it is not a party to any
2
pending or threatened litigation or to any proceeding or action for the assessment or collection of
additional taxes, and that it knows of no known contingent liabilities not provided for or disclosed in the
financial statement provided City which would affect the ability of the Owner to repay this loan.
8. FINANCIAL CONDITION OF OWNER. Owner has delivered to City a statement of Owner's
financial condition as of the date of application for financial assistance which fairly represents the financial
condition of Owner as of the date stated, all in accordance with generally accepted accounting principles
consistently applied, and that the statements still correctly reflect the financial condition and status of its
operations as of the date of this Agreement.
9. TITLE OF OWNER. Subject to the liabilities reflected on Owner's financial statement as well
as those incurred in relation to this Project, Owner represents that it has good and marketable title, free of
any mortgage, pledge, lien, security interest, encumbrance, or charge to all those assets reflected on the
financial statement and to assets since acquired. Taxes not due or payable or otherwise delinquent are
excepted.
10. CONDITIONS OF BORROWING. On the date on which any sum is to be borrowed, Owner,
in addition to the Note, shall deliver to City such other papers and documents as may be required to
comply with the conditions of this Agreement, as counsel for City may reasonably request.
Owner shall be required at the Closing Date defined herein Paragraph 27(a) to comply, or establish
compliance, as follows:
(a) That the representations and warranties of Owner are correct on the Closing Date;
(b) That Owner has fully complied with the covenants and agreements to the extent required
before the Closing Date;
(c) That no default or event which might mature into a default has occurred or continues to the
Closing Date;
(d) That no litigation or proceeding is pending against Owner which would materially affect the
assets of Owner, taking into account the entire assets and overall business of Owner;
(e) That there has been no material adverse change in the financial condition of Owner from
that shown by the financial statement delivered to City under paragraph 8;
f) That no fire or casualty has occurred in any building or to any inventories or property of
Owner that might substantially, adversely affect the conduct of its business.
11. SPECIAL CONDITIONS. Owner agrees to comply with the following requirements
established by the City for the Loan Program:
(a) All exterior work must coincide with the historic character of the building.
12. COVENANTS OF OWNER. Owner covenants that it will:
(a)
Correct code deficiencies in accordance with all applicable building and fire codes within the
scope of the project.
(b) Provide for the repair and rehabilitation of the Building in accordance with all applicable
building, zoning, fire and housing codes.
(c) Substantially complete the Project on or before September 30, 2009.
(d) Maintain at all times insurance to the extent and against such hazards and liabilities as are in
keeping with the current insurance program of Owner, set forth in Exhibit C attached hereto
and entitled "Certificate of Insurance". Said certification shall be renewed on an annual
basis and provided to City within thirty (30) days of the anniversary date of this Agreement.
(e) Pay when due all taxes, assessments and other liabilities, except those contested in good
faith where notice of such contest has been given to the City.
Not create or permit to exist any other pledge, security interest, lien or other encumbrance
on the security for this Agreement provided in Paragraph 4 above and the Note provided
pursuant to this Loan Agreement without written consent of City.
Give prompt notice in writing to City of any adverse development, financial or otherwise,
which would materially affect its business, properties or affairs, or the ability of Owner to
perform its obligations under this Agreement or the Note executed pursuant to the terms of
this Agreement.
(f)
(g)
(h) Use loan funds only for purposes authorized herein.
(i) Pay all recording and filing fees, mortgage taxes, documentary stamps, and any other taxes
payable in connection with this transaction.
13. DEFAULT. Owner shall be in default upon the occurrence of any of the following events:
(a) Owner fails to pay any installment of principal or interest on any note (whether to City or any
other public or private lender) when due or within thirty (30) days thereafter;
(b) Owner becomes insolvent or admits in writing its inability to pay its debts as they mature; or
applies for, consents to or acquiesces in the appointment of a trustee or receiver for any of
its property; or in the absence of an application for consent or acquiescence, a trustee or
receiver is appointed for it or a substantial part of its property and is not discharged within
ten (10) days; or it otherwise commits an act of bankruptcy; or any bankruptcy,
reorganization, debt arrangement or other proceeding under any bankruptcy or insolvency
law, or any dissolution or liquidation proceeding is instituted by or against it and if instituted is
consented to or acquiesced in by it or remains for ten days undismissed;
(c) Owner fails in the performance of any of the terms and conditions of this Agreement and
such non-performance continues for ten (10) days after written notice thereof from City or
from the holder of a note;
(d) Any warranty made by Owner is untrue in any material respect, or any schedule, statement,
report, notice or writing furnished by Owner to City is untrue in any material respect on the
date as of which the facts set forth are stated or certified, provided any such error is not the
result of unintentional errors which are capable of correction without prejudice to the City;
(e) Any government board, agency, department, commission or public or private lender takes
possession or control of any substantial part of any property of Owner.
14. ACCELERATION AT OPTION OF CITY. If any event of default occurs, City may, after ten
days written notice of default to Owner, declare Note immediately due and payable, at which time all
unpaid principal and interest shall immediately become due and payable. City shall promptly advise
Owner in writing of any acceleration under this paragraph, but the failure to do so shall not impair the
effect of such declaration.
15. MAINTENANCE OF RECORDS AND RIGHT TO INSPECT. Owner shall keep and
maintain books, records and other documents relating directly to the receipt and disbursement of loan
4
funds; and any duly authorized independent accounting representative of City shall at all reasonable times
have access to and the right to inspect, copy, audit and examine all such books and other documents of
Owner pertaining to the project until the completion of all close out procedures respecting City's loan and
the final settlement and conclusion of all issues arising out of said loan.
16. ADDRESS. Owner's principal business address is:
HJD Landlord, LLC
Attn: L. Anthony Pfohl
200 Main Street
Dubuque, IA 52001
Owner shall promptly give City written notice of any further change in its principal office address.
City's address is:
City Manager
City Hall
50 West 13th Street
Dubuque, Iowa 52001
17. LIMITATION OF CITY'S LIABILITY FOR PROJECT ACTIVITIES. City shall not be liable to
Owner, or to any party, for the completion of, or the failure to complete, any activities which are part of the
Project, except as may be specifically provided in this Agreement or other written agreements between
City and Owner or any of Owner's affiliates or subsidiaries. Owner agrees to indemnify, hold harmless
and defend City from any such claims.
18. CONFLICT OF INTEREST. Owner certifies that to its knowledge 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 inside information with regard to the Project, has nor shall have any interest, direct or
indirect, in any contract or subcontract, or in any activity, or benefit therefrom, which is part of this Project
at any time during or for one year after such person's tenure.
19. NONDISCRIMINATION. In carrying out the Project, Owner shall not discriminate against
any employee or applicant for employment or tenancy because of race, religion, color, sex, sexual
orientation, gender identity, national origin, age or disability. Owner shall post in a conspicuous place,
available to employees and applicants for employment, notices to be provided by City setting forth the
provisions of this nondiscrimination clause. Owner shall state that all qualified applicants will receive
consideration for employment without regard to race, religion, color, sex, national origin, age or disability.
20. DISCLAIMER OF RELATIONSHIPS. Nothing contained in this Agreement between the
parties, nor any act of City or Owner shall be deemed or construed by any of the parties, or by any third
persons, to create any relationship of third party beneficiary, principal or agent, limited or general
partnership, or joint venture.
21. NOTICE. Any notice, if mailed by United States certified mail, shall be deemed given when
mailed, postage prepaid, addressed to the other party at its address shown above, or at any other address
subsequently designated by either party to the other.
22. SUCCESSORS AND ASSIGNS. All covenants, representations, warranties and
agreements herein set forth shall be binding upon Owner, and its legal representatives, successors and
assigns. This Agreement may not be assigned by City or Owner, without the express written consent of
the other party.
5
23. LEGALITY. If any provision of this Agreement shall, for any reason, be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, but this
Agreement shall be construed as if such invalid or unenforceable provision had never been contained
herein.
24. GOVERNING LAW. This Agreement and all rights and duties hereunder, including but not
limited to all matters of construction, validity and performance shall be governed by the laws of the State
of Iowa.
25. SURVIVAL OF REPRESENTATIONS. All representations or warranties of Owner shall
survive the execution and delivery of this Agreement and any note executed and delivered under it, and no
investigation by City nor any closing shall affect the representations or warranties or the right of City to rely
on and enforce them.
26. DELAY. No delay on the part of City or the holder of any note in the exercise of any right
shall operate as a waiver, nor shall any single or partial exercise of any right preclude other or additional
exercise of any right.
27. DEFINITIONS.
(a) "Closing Date" shall mean the date on which this Agreement is executed by the parties.
(b) "Project" shall mean the rehabilitation project of Owner's property at 200 Main Street,
Dubuque, Iowa, identified in Owner's application for financial assistance. Said application is
on file in the office of the Economic Development Department, 50 West 13th Street,
Dubuque, Iowa 52001.
(c) "Qualifying Project Expenses" shall mean those expenditures or expenses incurred by
Owner during and for the Project and identified in the Owner's application for financial
assistance, whether paid to third parties or incurred as wage expense, fringe benefit
expense or other costs of Owner's employees, agents and contractors.
(d) "Full -Time Job Equivalent (FTE)" shall equal a total of forty hours of labor per workweek.
Such hours may be accrued by single individuals or divided among two or more individuals.
(e) "New housing unit" shall mean either a housing unit created where one did not previously
exist, or an existing housing unit which has been unlicensed and unoccupied for a period of
not less than five years.
Dated this day of , 2016.
CITY OF DUB UE, IOWA
Roy D. Buol,ltayor
L. Anthony Pfohl
HJD Landlord, LLC
6
EXHIBIT B
Prepared bv: Jill M. Connors City Hall, 50 W. 13th Street, Dubuque, Iowa 52001 Phone: 563-583-4213
Return to: same
MORTGAGE
THIS MORTGAGE is made between HJD Landlord, LLC("Mortgagor")and City of Dubuque, Iowa("Mortgagee").
[ ]If this box is checked,this Mortgage is a Purchase Money Mortgage as defined in the Iowa Code.
1.Grant of Mortgage and Security Interest. Mortgagor hereby sell,convey and mortgage unto Mortgagee,and grant a
security interest to Mortgagee in the following described property:
a. Land and Buildings. All of Mortgagors'right,title and interest in and to the following described real estate situated in Dubuque
County, Iowa(the"Land");
TRACT
Lots 5,6,7, 195, 196 and 196a,in the City of Dubuque, Iowa,according to the United States Commissioners' Map of the Town of
Dubuque, Iowa.
TRACT II
The Southerly 40 feet of Lot 194 in Town (now City)of Dubuque, Iowa,according to the United States Commissioners' Map of the
Survey of said Town of Dubuque.
TRACT III
The Northerly 24 feet of Lot 194 in the City of Dubuque, Iowa,according to the United States Commissioners' Map of the Survey of
the Town of Dubuque, Iowa.
TRACT IV
Lot 193 in City of Dubuque, Iowa,according to the United States Commissioners Map thereof.
TRACT V
Lots A, B,C and D of Julien Hotel Plaza in the City of Dubuque, Iowa,according to the recorded Plat thereof.
TRACT VI
Lot 195A and Lot 197A in the City of Dubuque, Iowa,according to the United States Commissioners Map thereof.
TRACT VII
A parcel of land located in the North 60 feet of Lot 745;the South 40 feet of the North 100 feet of Lot 745 and the North 111 feet of
the South 157 feet of Lot 745 in the City of Dubuque, Iowa,as described in Patent, Instrument No.9801-91 and Patent, Instrument
No.7684-92,records of Dubuque County, Iowa.
TRACT VIII
South 22'of City Lot 8, Dubuque, Iowa.(also known as 200 Main Street),and all buildings,structures and improvements now
standing or at any time hereafter constructed or placed upon the Land(the"Buildings"),including all hereditaments,easements,
appurtenances,riparian rights,mineral rights,water rights,rights in and to the lands lying in streets,alleys and roads adjoining the
land,estates and other rights and interests now or hereafter belonging to or in anyway pertaining to the Land.
b. Personal Property. All fixtures and other personal property integrally belonging to,or hereafter becoming an integral
part of the Land or Buildings.whether attached or detached,including but not limited to,light fixtures,shades,rods,blinds,
Venetian blinds,awnings,storm windows,screens,linoleum,water softeners,automatic heating and air-conditioning
equipment and all proceeds,products,increase,issue,accessions,attachments,accessories,parts,additions,repairs.
replacements and substitutes of,to,and for the foregoing(the"Personal Property').
c. Revenues and Income. Al rents,issues,profits,leases,condemnation awards and insurance proceeds now or
hereafter arising from the ownership,occupancy or use of the Land, Buildings and Personal Property,or any part thereof
(the"Revenues and Income").
TO HAVE AND TO HOLD the Land, Buildings, Personal Property and Revenues and Income(collectively called the
"Mortgaged Property'),together with all privileges,hereditaments thereunto now or hereafter belonging,or in anyway
appertaining and the products and proceeds thereof,unto Mortgagee,its successors and assigns.
2.Obligations. This Mortgage secures the following(hereinafter collectively referred to as the"Obligations"):
a.The payment of the loan made by Mortgagee to HJD Landlord, LLC evidenced by a promissory note dated
2016 in the principal amount of$600,000.00,any renewals,extensions,modifications or refinancing
thereof and any promissory notes issued in substitution therefor;and
b.All other obligations of Mortgagors to Mortgagee,now existing or hereafter arising,whether direct or indirect,contingent
or absolute and whether as maker or surety,including,but not limited to,future advances and amounts advanced and
expenses incurred by Mortgagee pursuant to this Mortgage.
3. Representations and Warranties of Mortgagors. Mortgagors represent,warrant and covenant to Mortgagee that(i)
Mortgagors hold clear title to the Mortgaged Property and title in fee simple in the Land;(ii)Mortgagors have the right,power and
authority to execute this Mortgage and to mortgage,and grant a security interest in the Mortgaged Property;(iii)the Mortgaged
Property is free and clear of all liens and encumbrances,except for real estate taxes not yet delinquent and except as otherwise
stated in subparagraph 1a.herein;(iv)Mortgagors will warrant and defend title to the Mortgaged Property and the lien and priority of
this Mortgage against all claims and demands of all persons,whether now existing or hereafter arising;and(v)all buildings and
improvements now or hereafter located on the Land are,or will be,located entirely within the boundaries of the Land.
4. Payment and Performance of the Obligations. Mortgagors will pay all amounts payable under the Obligations in
accordance with the terms of the Obligations when and as due and will timely perform all other obligations of Mortgagors under the
Obligations.The provisions of the Obligations are hereby incorporated by reference into this Mortgage as if fully set forth herein.
5.Taxes. Mortgagors shall pay each installment of all taxes and special assessments of every kind,now or hereafter levied
against the Mortgaged Property before the same become delinquent,without notice or demand,and shall deliver to Mortgagee proof
of such payment within fifteen(15)days after the date in which such tax or assessment becomes delinquent.
6. Liens. Mortgagors shall not create,incur or suffer to exist any lien,encumbrance,security interest or charge on the
Mortgaged Property or any part thereof which might or could be held to be equal or prior to the lien of this Mortgage,other than the
lien of current real estate taxes and installments of special assessments with respect to which no penalty is yet payable. Mortgagors
shall pay,when due,the claims of all persons supplying labor or materials to or in connection with the Mortgaged Property.
7.Compliance with Laws. Mortgagors shall comply with all present and future statutes,laws,rules,orders,regulations and
ordinances affecting the Mortgaged Property,any part thereof or the use thereof.
8. Permitted Contests. Mortgagors shall not be required to(i)pay any tax,assessment or other charge referred to in
paragraph 5 hereof,(ii)discharge or remove any lien,encumbrance or charge referred to in paragraph 6 hereof,or(iii)comply with
any statute,law,rule,regulation or ordinance referred to in paragraph 7 hereof,so long as mortgagors shall contest,in good faith,the
existence,amount or the validity thereof,the amount of damages caused thereby or the extent of Mortgagors'liability therefor,by
appropriate proceedings which shall operate during the pendency thereof to prevent(A)the collection of,or other realization upon the
tax,assessment,charge or lien,encumbrances or charge so contested,(B)the sale,forfeiture or loss of the Mortgaged Property or
any part thereof,and(C)any interference with the use or occupancy of the Mortgaged Property or any part thereof. Mortgagors shall
give prompt written notice to Mortgagee of the commencement of any contest referred to in this paragraph 8.
9.Care of Property. Mortgagors shall take good care of the Mortgaged Property;shall keep the Buildings and Personal
Property now or later placed upon the Mortgaged Property in good and reasonable repair and shall not injure,destroy or remove
either the Buildings or Personal Property during the term of this Mortgage. Mortgagors shall not make any material alteration to the
Mortgaged Property without the prior written consent of Mortgagee.
10.Insurance.
a. Risks to be Insured. Mortgagors,at their sole cost and expense,shall maintain insurance on the Buildings and other
improvements now existing or hereafter erected on the Land and on the Personal Property included in the Mortgaged
Property against loss by fire,extended coverage perils and such other hazards as Mortgagee may from time to time
require,such insurance to have a"Replacement Cost"endorsement attached thereto,with the amount of the insurance at
least equal to the balance of the Obligations.Such insurance shall name Mortgagee as a loss payee. At Mortgagors'
option,such policy may have a coinsurance clause of not less than 90%of replacement cost provided the policy contains
an appropriate form of cost escalation endorsement. Mortgagors will at their sole cost and expense,from time to time,and
at anytime at the request of Mortgagee,provide Mortgagee with evidence satisfactory to Mortgagee of the replacement
cost of Mortgaged Property. Mortgagors will maintain such other insurance as Mortgagee may reasonably require.
b. Policy Provisions. Al insurance policies and renewals thereof maintained by Mortgagors pursuant to this Mortgage
shall be written by an insurance carrier satisfactory to Mortgagee,contain a mortgagee clause in favor of and in form
acceptable to Mortgagee,contain an agreement of the insurer that it will not amend,modify or cancel the policy except
after thirty(30)days prior written notice to Mortgagee,and be reasonably satisfactory to Mortgagee in all other respects.
c. Delivery of Policy or Certificate. If requested by Mortgagee, Mortgagors will deliver to Mortgagee original policies
satisfactory to Mortgagee evidencing the insurance which is required under this Mortgage,and Mortgagors shall promptly
furnish to Mortgagee all renewal notices and,upon request of Mortgagee,evidence of payment thereof.At least ten(10)
days prior to the expiration date of a required policy, Mortgagors shall deliver to Mortgagee a renewal policy in form
satisfactory to Mortgagee.
d.Assignment of Policy. If the Mortgaged Property is sold at a foreclosure sale or if Mortgagee shall acquire title to the
Mortgaged Property, Mortgagee shall have all of the right,title and interest of Mortgagors in and to any insurance policies
required hereunder,and the unearned premiums thereon,and in and to the proceeds thereof resulting from any damage to
the Mortgaged Property prior to such sale or acquisition.
e. Notice of Damage or Destruction;Adjusting Loss. If the Mortgaged Property or any part thereof shall be damaged
or destroyed by fire or other casualty, Mortgagors will,within five(5)calendar days after the occurrence of such damage or
destruction,give written notice thereof to the insurance carrier and to Mortgagee and will not adjust any damage or loss
which is estimated by Mortgagors in good faith to exceed$25,000 unless Mortgagee shall have joined in or concurred with
such adjustment;but if there has been no adjustment of any such damage or loss within four(4)months from the date of
occurrence thereof and if an Event of Default shall exist at the end of such four(4)month period or at anytime thereafter,
Mortgagee may alone make proof of loss,adjust and compromise any claim under the policies,and appear in and
prosecute any action arising from such policies. In connection therewith, Mortgagors do hereby irrevocably authorize,
empower and appoint Mortgagee as attorney-in-fact for Mortgagor(which appointment is coupled with an interest)to do
any and all of the foregoing in the name and on behalf of Mortgagors.
f.Application of Insurance Proceeds. Al sums paid under any insurance policy required by this Mortgage shall be paid
to Mortgagee,which shall,at its option,apply the same(after first deducting therefrom Mortgagee's expenses incurred in
collecting the same including but not limited to reasonable attorneys fees)to the reduction of the Obligations or to the
payment of the restoration,repair,replacement or rebuilding of Mortgaged Propertythat is damaged or destroyed in such
manner as Mortgagee shall determine and secondly to the reduction of the Obligations.Any application of insurance
proceeds to principal of the Obligations shall not extend or postpone the due date of the installments payable under the
Obligations or change the amount of such installments.
g. Reimbursement of Mortgagee's Expenses. Mortgagors shall promptly reimburse Mortgagee upon demand for all of
Mortgagee's expenses incurred in connection with the collection of the insurance proceeds,including but not limited to
reasonable attorneys fees,and all such expenses shall be additional amounts secured bythis Mortgage.
11.Inspection. Mortgagee,and its agents,shall have the right at all reasonable times,to enter upon the Mortgaged Property
for the purpose of inspecting the Mortgaged Property or any part thereof. Mortgagee shall,however,have no dutyto make such
inspection.Any inspection of the Mortgaged Property by Mortgagee shall be entirely for its benefit and Mortgagors shall in no way rely
or claim reliance thereon.
12. Protection of Mortgagee's Security. Subject to the rights of Mortgagors under paragraph 8 hereof,if Mortgagors fail to
perform any of the covenants and agreements contained in this Mortgage or if any action or proceeding is commenced which affects
the Mortgaged Property or the interest of the Mortgagee therein,or the title thereto,then Mortgagee,at Mortgagee's option,may
perform such covenants and agreements,defend against or investigate such action or proceeding,and take such other action as
Mortgagee deems necessary to protect Mortgagee's interest.Any amounts or expenses disbursed or incurred by Mortgagee in good
faith pursuant to this paragraph 12 with interest thereon at the rate of 10%per annum,shall become an Obligation of Mortgagors
secured by this Mortgage.Such amounts advanced or disbursed by Mortgagee hereunder shall be immediately due and payable by
Mortgagors unless Mortgagors and Mortgagee agree in writing to other terms of repayment. Mortgagee shall,at its option,be
subrogated to the lien of any mortgage or other lien discharged in whole or in part by the Obligations or by Mortgagee under the
provisions hereof,and any such subrogation rights shall be additional and cumulative security for this Mortgage. Nothing contained in
this paragraph shall require Mortgagee to incur any expense or do any act hereunder,and Mortgagee shall not be liable to
Mortgagors for any damage or claims arising out of action taken by Mortgagee pursuant to this paragraph.
13.Condemnation. Mortgagors shall give Mortgagee prompt notice of any action,actual or threatened,in condemnation or
eminent domain and hereby assign,transfer and set over to Mortgagee the entire proceeds of any award or claim for damages for all
or any part of the Mortgaged Property taken or damaged under the power of eminent domain or condemnation. Mortgagee is hereby
authorized to intervene in any such action in the names of Mortgagors,to compromise and settle any such action or claim,and to
collect and receive from the condemning authorities and give proper receipts and acquittances for such proceeds.Any expenses
incurred by Mortgagee in intervening in such action or compromising and settling such action or claim,or collecting such proceeds
shall be reimbursed to Mortgagee first out of the proceeds.The remaining proceeds or any part thereof shall be applied to reduction
of that portion of the Obligations then most remotely to be paid,whether due or not,or to the restoration or repair of the Mortgaged
Property,the choice of application to be solely at the discretion of Mortgagee.
14. Fixture Filing. From the date of its recording,this Mortgage shall be effective as a financing statement fled as a fixture
fling with respect to the Personal Property and for this purpose the name and address of the debtor is the name and address of
Mortgagors as set forth in paragraph 20 herein and the name and address of the secured party is the name and address of the
Mortgagee as set forth in paragraph 20 herein.
15. Events of Default. Each of the following occurrences shall constitute an event of default hereunder("Event of Default"):
a. Mortgagors shall default in the due observance or performance of or breach its agreement contained in paragraph 4
hereof or shall default in the due observance or performance of or breach any other covenant,condition or agreement on
its part to be observed or performed pursuant to the terms of this Mortgage.
b. Mortgagors shall make an assignment for the benefits of its creditors,or a petition shall be fled by or against
Mortgagors under the United States Bankruptcy Code or Mortgagors shall seek or consent to or acquiesce in the
appointment of any trustee,receiver or liquidator of a material part of its properties or of the Mortgaged Property or shall
not,within thirty(30)days after the appointment of a trustee,receiver or liquidator of any material part of its properties or of
the Mortgaged Property,have such appointment vacated.
c.Ajudgment,writ or warrant of attachment or execution,or similar process shall be entered and become a lien on or be
issued or levied against the Mortgaged Property or any part thereof which is not released,vacated or fully bonded within
thirty(30)days after its entry,issue or levy.
d.An event of default,however defined,shall occur under any other mortgage,assignment or other security document
constituting a lien on the Mortgaged Property or any part thereof.
16.Acceleration; Foreclosure. Upon the occurrence of any Event of Default and at anytime thereafter while such Event of
Default exists, Mortgagee may,at its option,after such notice as may be required by law,exercise one or more of the following rights
and remedies(and any other rights and remedies available to it):
a. Mortgagee may declare immediately due and payable all Obligations secured by this Mortgage,and the same shall
thereupon be immediately due and payable,without further notice or demand.
b. Mortgagee shall have and may exercise with respect to the Personal Property,all the rights and remedies accorded
upon default to a secured party under the Iowa Uniform Commercial Code. If notice to Mortgagors of intended disposition
of such property is required by law in a particular instance,such notice shall be deemed commercially reasonable if given
to Mortgagors at least ten (10)days prior to the date of intended disposition.
c. Mortgagee may(and is hereby authorized and empowered to)foreclose this Mortgage in accordance with the law of the
State of Iowa,and at any time after the commencement of an action in foreclosure,or during the period of redemption,the
court having jurisdiction of the case shall at the request of Mortgagee appoint a receiver to take immediate possession of
the Mortgaged Property and of the Revenues and Income accruing there from,and to rent or cultivate the same as he may
deem best for the interest of all parties concerned,and such receiver shall be liable to account to Mortgagors only for the
net profits,after application of rents,issues and profits upon the costs and expenses of the receivership and foreclosure
and upon the Obligations.
17. Redemption. It is agreed that if this Mortgage covers less than ten(10)acres of land,and in the event of the foreclosure of
this Mortgage and sale of the property by sheriffs sale in such foreclosure proceedings,the time of one year for redemption from said
sale provided by the statues of the State of Iowa shall be reduced to six(6)months provided the Mortgagee,in such action files an
election to waive any deficiency judgment against Mortgagors which may arise out of the foreclosure proceedings;all to be consistent
with the provisions of Chapter 628 of the Iowa Code. If the redemption period is so reduced,for the first three(3)months after sale
such right of redemption shall be exclusive to the Mortgagor,and the time periods in Sections 628.5,628.15 and 628.16 of the Iowa
Code shall be reduced to four(4)months. It is further agreed that the period of redemption after a foreclosure of this Mortgage shall
be reduced to sixty(60)days if all of the three following contingencies develop:(1)The real estate is less than ten(10)acres in size;
(2)the Court finds affirmatively that the said real estate has been abandoned by the owners and those persons personally liable
under this Mortgage at the time of such foreclosure;and(3)Mortgagee in such action files an election to waive any deficiency
judgment against Mortgagors or their successors in interest in such action. If the redemption period is so reduced, Mortgagors or
their successors in interest or the owner shall have the exclusive right to redeem for the first thirty(30)days after such sale,and the
time provided for redemption by creditors as provided in Sections 628.5,628.15 and 628.16 of the Iowa Code shall be reduced to
forty(40)days. Entry of appearance by pleading or docket entry by or on behalf of Mortgagors shall be a presumption that the
property is not abandoned.Any such redemption period shall be consistent with all of the provisions of Chapter 628 of the Iowa
Code.This paragraph shall not be construed to limit or otherwise affect any other redemption provisions contained in Chapter 628 of
the Iowa Code.
18.Attorneys'Fees. Mortgagors shall pay on demand all costs and expenses incurred by Mortgagee in enforcing or protecting
its rights and remedies hereunder,including,but not limited to,reasonable attorneys'fees and legal expenses.
19. Forbearance not a Waiver, Rights and Remedies Cumulative. No delay by Mortgagee in exercising any right or remedy
provided herein or otherwise afforded by law or equity shall be deemed a waiver of or preclude the exercise of such right or remedy,
and no waiver by Mortgagee of any particular provisions of this Mortgage shall be deemed effective unless in writing signed by
Mortgagee.Al such rights and remedies provided for herein or which Mortgagee or the holder of the Obligations may have
otherwise,at law or in equity,shall be distinct,separate and cumulative and may be exercised concurrently,independently or
successively in any order whatsoever,and as often as the occasion therefor arises.
20. Notices. All notices required to be given hereunder shall be in writing and deemed given when personally delivered or
deposited in the United States mail,postage prepaid,sent certified or registered,addressed as follows:
a. If to Mortgagors,to: HJD Landlord, LLC,Attn: L.Anthony Pfohl,200 Main Street, Dubuque, Iowa 52001
b. If to Mortgagee,to: Economic Development Department;City Hall;50 West 13th St., Dubuque, Iowa 52001
or to such other address or person as hereafter designated in writing by the applicable party in the manner provided in this paragraph
for the giving of notices.
21.Severability. In the event any portion of this Mortgage shall,for any reason,be held to be invalid,illegal or unenforceable in
whole or in part,the remaining provisions shall not be affected thereby and shall continue to be valid and enforceable and if,for any
reason,a court finds that any provision of this Mortgage is invalid,illegal,or unenforceable as written,but that by limiting such
provision it would become valid,legal and enforceable then such provision shall be deemed to be written,construed and enforced as
so limited.
22. Further Assurances. At any time and from time to time until payment in full of the Obligations, Mortgagors will,at the request of
Mortgagee,promptly execute and deliver to Mortgagee such additional instruments as may be reasonably required to further
evidence the lien of this Mortgage and to further protect the security interest of Mortgagee with respect to the Mortgaged Property,
including,but not limited to,additional security agreements,financing statements and continuation statements.Any expenses
incurred by Mortgagee in connection with the recordation of any such instruments shall become additional Obligations of Mortgagors
secured by this Mortgage.Such amounts shall be immediately due and payable by Mortgagors to Mortgagee.
23.Successors and Assigns bound; Number;Gender;Agents;Captions. The rights,covenants and agreements contained
herein shall be binding upon and inure to the benefit of the respective legal representatives,successors and assigns of the parties.
Words and phrases contained herein,including acknowledgment hereof,shall be construed as in the singular or plural number,and
as masculine,feminine or neuter gender according to the contexts.The captions and headings of the paragraphs of this Mortgage
are for convenience only and are not to be used to interpret or define the provisions hereof.
24.Governing Law. This Mortgage shall be governed by and construed in accordance with the laws of the State of Iowa.
25. Release of Rights of Dower, Homestead and Distributive Share. Each of the undersigned hereby relinquishes all rights of
dower,homestead and distributive share in and to the Mortgaged Property and waives all rights of exemption as to any of the
Mortgaged Property.
26.Acknowledgment of Receipt of Copies of Debt Instrument. Mortgagors hereby acknowledge the receipt of a copy of this
Mortgage together with a copy of each promissory note secured hereby.
27.Additional Provisions.
Dated: ,2016
HJD Landlord, LLC, Mortgagor
I UNDERSTAND THAT HOMESTEAD PROPERTY IS IN MANY CASES PROTECTED FROM THE CLAIMS OF CREDITORS AND
EXEMPT FROM JUDICIAL SALE;AND THAT BY SIGNING THIS MORTGAGE,I VOLUNTARILY GIVE UP MY RIGHT TO THIS
PROTECTION FOR THIS MORTGAGED PROPERTY WITH RESPECT TO CLAIMS BASED UPON THIS MORTGAGE.
Dated:
STATE OF IOWA
ss:
COUNTY OF DUBUQUE
On this__day of 2016,before me,the undersigned,a Notary Public,personally appeared L.Anthony Pfohl,to
me known to be the identical person named in and who executed the foregoing instrument,and acknowledged that they executed the
same as their voluntary act and deed.
Notary Public
EXHIBIT A
City of Dubuque, Iowa
PROMISSORY NOTE
Date: 12016
Loan Number: DRLP # 1 - 16
Fund Source: Downtown Rehabilitation Loan Program (TIF)
$600,000
FOR VALUE RECEIVED, the undersigned, HJD Landlord, LLC 200 Main Street, Dubuque, Iowa, promises to
pay to the order of the City of Dubuque, Iowa, 50 W. 13th Street, Dubuque, Iowa, 52001, or at such place as it
may direct,the sum of SIX HUNDRED THOUSAND DOLLARS($600,000),together with interest at the rate of
3 % per annum, upon the unpaid balance, in monthly interest only payments for the first sixty(60) months of
the loan and monthly principal and interest payments, amortized over an additional one hundred-eighty(180)
months, beginning in the sixty-first month of the loan, on the 1st day of each month beginning after the final
disbursement of the loan proceeds and continuing on the 1 st day of each month until paid in full. The entire
outstanding principal balance and interest, if not sooner paid, shall be paid in full on the 1st day of the two
hundred-fortieth (240) month after final disbursement of the loan proceeds.
If a default occurs under this Promissory Note or any of the other agreements between the undersigned and
the holder and is not cured within TEN (10) DAYS after written notice to the undersigned,then the holder may,
as its right and option, declare immediately due and payable the principal balance of this Promissory Note and
interest accrued hereon. The undersigned further agrees to pay all costs of collection, including reasonable
attorneys'fees. The City of Dubuque may at any time renew this Promissory Note or extend its maturity date
for any period and release any security for, or any party to this Promissory Note, all without notice to or
consent of and without releasing any maker, accommodation maker, endorser or guarantor from any liability
on the Promissory Note. Presentment or other demand for payment, notice of dishonor and protest are
hereby waived by the undersigned and each endorser and guarantor.
This Promissory Note is subject to the Loan Agreement of same date by and between the undersigned and
the City of Dubuque(including but not limited to a reduction in the principal amount of this Promissory Note as
authorized by paragraph 5 of said Loan Agreement) and any default under said Loan Agreement is a default
under this Promissory Note.
Signed,
HJD Landlord, LLC
L. Anthony Pfohl
Title
SUBORDINATION AGREEMENT
Principal Loan Date Maturity Loan No Call / Coll Account Officer Initials
00000149427 027
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing "***" has been omitted due to text length limitations.
Borrower:
HJD Landlord, L.L.C.
PO Box 267
Dubuque, IA 52004-0267
Creditor: City Of Dubuque
50 W 13th St
Dubuque, IA 52001
Lender:
American Trust & Savings Bank
Dubuque - Main
895 Main St
PO Box 938
Dubuque, IA 52004-0938
THIS SUBORDINATION AGREEMENT dated March 7, 2016, is made and executed among HJD Landlord, L.L.C.; PO Box 267; Dubuque, IA
52004-0267 ("Borrower"); City Of Dubuque, 50 W 13th St, Dubuque, IA 52001 ("Creditor"); and American Trust & Savings Bank, Dubuque - Main,
895 Main St, PO Box 938, Dubuque, IA 52004-0938 ("Lender").
REQUESTED FINANCIAL ACCOMMODATIONS. Creditor and Borrower each want Lender to provide financial accommodations to Borrower in the form
of (A) new credit or loan advances, (B) an extension of time to pay or other compromises regarding all or part of Borrower's present indebtedness to
Lender, or (C) other benefits to Borrower. Borrower and Creditor each represent and acknowledge to Lender that Creditor will benefit as a result of
these financial accommodations from Lender to Borrower, and Creditor acknowledges receipt of valuable consideration for entering into this Agreement.
Based on the representations and acknowledgments contained in this Agreement, Borrower and Creditor agree with Lender as follows:
SUBORDINATED INDEBTEDNESS. The words "Subordinated Indebtedness" as used in this Agreement mean all present and future indebtedness,
obligations, liabilities, claims, rights, and demands of any kind which may be now or hereafter owing from Borrower to Creditor. The term "Subordinated
Indebtedness" is used in its broadest sense and includes without limitation all principal, all interest, all costs, attorneys' fees, all sums paid for the purpose of
protecting the rights of a holder of security, all contingent obligations of Borrower (such as a guaranty), and all other obligations, secured or unsecured, of
any nature whatsoever.
SUPERIOR INDEBTEDNESS, The words "Superior Indebtedness" as used in this ,Agreement mean and include all present and future indebtedness,
obligations, liabilities, claims, rights, and demands of any kind which may be now or hereafter owing from Borrower to Lender. The term "Superior
Indebtedness" is used in its broadest sense and includes without limitation all principal, all interest, all costs, attorneys' fees, all sums paid for the purpose of
protecting Lender's rights in security (such as paying for insurance on collateral if the owner fails to do so), all contingent obligations of Borrower (such as a
guaranty), all obligations arising by reason of Borrower's accounts with Lender (such as an overdraft on a checking account), and all other obligations of
Borrower to Lender, secured or unsecured, of any nature whatsoever.
SUBORDINATION. All Subordinated Indebtedness of Borrower to Creditor is and shall be subordinated in all respects to all Superior Indebtedness of
Borrower to Lender. If Creditor holds one or more Security Interests, whether now existing or hereafter acquired, in any of Borrower's real property or
personal property, Creditor also subordinates all Creditor's Security Interests to all Security Interests held by Lender, whether now existing or hereafter
acquired.
PAYMENTS TO CREDITOR. Borrower will not make and Creditor will not accept, at any time while any Superior Indebtedness is owing to Lender, (A)
any payment upon any Subordinated Indebtedness, (B) any advance, transfer, or assignment of assets to Creditor in any form whatsoever that would
reduce at any time or in any way the amount of Subordinated Indebtedness, or (C). any transfer of any assets as security for the Subordinated
Indebtedness, except upon Lender's prior written consent. Notwithstanding the foregoing, Borrower may make regularly scheduled payments of principal
and interest to Creditor in accordance with the terms of the Subordinated Indebtedness, so long as Borrower is not in default under any agreement or
Related Documents between Lender and Borrower. Creditor may not accelerate any amounts owed to Creditor or accept any additional payments outside
the terms of the Subordinated Indebtedness without Lender's prior written consent. Additionally, Creditor will not commence or join with any other creditor
for the purpose of making a bankruptcy filing or receivership proceeding against Borrower.
In the event of any distribution, division, or application, whether partial or complete, voluntary or involuntary, by operation of law or otherwise, of all or any
part of Borrower's assets, or the proceeds of Borrower's assets, in whatever form, to creditors of Borrower or upon any indebtedness of Borrower, whether
by reason of the liquidation, dissolution or other winding -up of Borrower, or by reason of any execution sale, receivership, insolvency, or bankruptcy
proceeding, assignment for the benefit of creditors, proceedings for reorganization, or readjustment of Borrower or Borrower's properties, then and in such
event, (A) the Superior Indebtedness shall be paid in full before any payment is made upon the Subordinated Indebtedness, and (0) all payments
and distributions, of any kind or character and whether in cash, property, or securities, which shall be payable or deliverable upon or in respect of the
Subordinated Indebtedness shall be paid or delivered directly to Lender for application in payment of the amounts then due on the Superior Indebtedness
until the Superior Indebtedness shall have been paid in full.
In order that Lender may establish its right to prove claims and recover for its own account dividends based on the Subordinated Indebtedness, Creditor
does hereby assign all its right, title, and interest in such claims to Lender. Creditor further agrees to supply such information and evidence, provide access
to and copies of such of Creditor's records as may pertain to the Subordinated Indebtedness, and execute such instruments as may, be required by Lender
to enable Lender to enforce all such claims and collect all dividends, payments, or other disbursements which may, be made on account of the Subordinated
Indebtedness. For such purposes, Creditor hereby irrevocably authorizes Lender in its discretion to make and present for or on behalf of Creditor such
proofs of claims on account of the Subordinated Indebtedness as Lender may deem expedient and proper and to vote such claims in any such proceeding
and to receive and collect any and all dividends, payments, or other disbursements made thereon in whatever form the same may be paid or issued and to
apply the same on account of the Superior Indebtedness.
Should any payment, distribution, security, or proceeds thereof be received by Creditor at any time on the Subordinated Indebtedness contrary to the terms
of this Agreement, Creditor immediately wit deliver the same to Lender in precisely the form received (except for the endorsement or assignment of Creditor
if necessary), for application on or to secure the Superior Indebtedness, whether it is due or not due, and until so delivered the same shall be held in trust by
Creditor as property of Lender. In the event Creditor fails to make any such endorsement or assignment, Lender, or any of its officers on behalf of Lender,
is hereby irrevocably authorized by Creditor to make the same.
CREDITOR'S NOTES, Creditor agrees to deliver to Lender, at Lender's request, all notes of Borrower to Creditor, or other evidence of the Subordinated
Indebtedness, now held or hereafter acquired by Creditor, while this Agreement remains in effect. At Lender's request, Borrower also will execute and
deliver to Creditor a promissory note evidencing any book account or claim now or hereafter owed by Borrower to Creditor, which note also shall be
delivered by Creditor to Lender. Creditor agrees not to sell, assign, pledge or otherwise transfer any of such notes except subject to all the terms and
conditions of this Agreement.
CREDITOR'S REPRESENTATIONS AND WARRANTIES. Creditor representsand warrants to Lender that: (A) no representations oragreements of
any kind have been made to Creditor which would limit or qualify in any way the terms of this Agreement; (B) this Agreement is executed at Borrower's
request and not at the request of Lender; (C) Lender has made no representation to Creditor as to the creditworthiness of Borrower; and (D) Creditor
has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Creditor agrees to
keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Creditor's'risks under this Agreement, and
Creditor further agrees that Lender shall have no obligation to disclose to Creditor information or material acquired by Lender in the course of its relationship
with Borrower.
CREDITOR'S WAIVERS. Creditor waives any right to require Lender: (A) to make, extend, renew, or modify any loan to Borrower or to grant any other
financial accommodations to Borrower whatsoever; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any
nonpayment of the Superior Indebtedness or of any nonpayment related• to any Security Interests, or notice of any action or nonaction on the part of
1
Borrower, Lender, any surety, endorser, or other guarantor in connection with the Superior Indebtedness, or in connection with the creation of new or
additional Superior Indebtedness; (C) to resort for payment or to proceed directly or at once against any person, including Borrower; (D) to proceed
directly against or exhaust any Security Interests held by Lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms,
time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of
the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power; or (G) to commit any act or omission of any kind, at any time,
with respect to any matter whatsoever.
LENDER'S RIGHTS. Lender may take or omit any and all actions with respect to the Superior Indebtedness or any Security Interests for the Superior
Indebtedness without affecting whatsoever any of Lender's rights under this Agreement. In particular, without limitation, Lender may, without notice of any
kind to Creditor, (A) make one or more additional secured or unsecured loans to Borrower; (B) repeatedly alter, compromise, renew, extend,
accelerate, or otherwise change the time for payment or other terms of the Superior Indebtedness or any part thereof, including increases and decreases of
the rate of interest on the Superior Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) take and hold
Security Interests for the payment of the Superior Indebtedness, and exchange, enforce, waive, and release any such Security Interests, with or without the
substitution of new collateral; (D) release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or guarantors on
any terms or manner Lender chooses; (E) determine how, when and what application of payments and credits, shall be made on the Superior
Indebtedness; (F) apply such security and direct the order or manner of sale thereof, as Lender in its discretion may determine; and (G) assign this
Agreement in whole or in part.
DEFAULT BY BORROWER. If Borrower becomes insolvent or bankrupt, this Agreement shall remain in full force and effect. In the event of a corporate
reorganization or corporate arrangement of Borrower under the provisions of the Bankruptcy Code, as amended, this Agreement shall remain in full force
and effect and the court having jurisdiction over the reorganization or arrangement is hereby authorized to preserve such priority and subordination provided
under this Agreement in approving any such plan of reorganization or arrangement. Any default by Borrower under the terms of the Subordinated
Indebtedness also shall constitute an event of default under the terms of the Superior Indebtedness in favor of Lender.
DURATION AND TERMINATION. This Agreement will take effect when received by Lender, without the necessity of any acceptance by Lender, in writing
or otherwise, and will remain in full force and effect until Creditor shall notify Lender in writing at the address shown above to the contrary. Any such notice
shall not affect the Superior Indebtedness owed Lender by Borrower at the time of such notice, nor shall such notice affect Superior Indebtedness thereafter
granted in compliance with a commitment made by Lender to Borrower prior to receipt of such notice, nor shall such notice affect any renewals of or
substitutions for any of the foregoing. Such notice shall affect only indebtedness of Borrower to Lender arising after receipt of such notice and not arising
from financial assistance granted by Lender to Borrower in compliance with Lender's obligations under a commitment. Any notes lodged with Lender
pursuant to the section titled "Creditor's Notes" above need not be returned until this Agreement has no further force or effect.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:
Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party
or parties sought to be charged or bound by the alteration or amendment.
Attorneys' Fees; Expenses. Creditor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and
Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this
Agreement, and Creditor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal
expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), appeals, and any anticipated post judgment collection services. Creditor also shall pay all court bosts and
such additional fees as may be directed by the court.
Authority. The person who signs this Agreement as or on behalf of Creditor represents and warrants that he or she has authority to execute this
Agreement and to subordinate the Subordinated Indebtedness and the Creditor's security interests in Creditor's property, if any.
Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the
provisions of this Agreement.
Governing Law. This Agreement will be governed by federallaw applicable to Lender and, to the extent not preempted by federal law, the
laws of the State of lowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of
Iowa.
Choice of Venue. If there is a lawsuit, Creditor agrees upon Lender's request to submit to the jurisdiction of the courts of Dubuque County, State of
Iowa.
Interpretation. In all cases where there is more than one Creditor, then all words used in this Agreement in the singular shall be deemed to have
been used in the plural where the context and construction so require; and where there is more than one Creditor named in this Agreement or when
this Agreement is executed by more than one , the words "Creditor" shall mean all and any one or more of them. Reference to the phrase "Creditor"
includes the heirs, successors, assigns, and transferees of each of them.
Successors and Assigns. This Agreement shall be understood to be for the benefit of Lender and for such other person or persons as may from
time to time become or be the holder or owner of any of the Superior Indebtedness or any interest therein, and this Agreement shall be transferable to
the same extent and with the same force and effect as any such Superior Indebtedness may be transferable.
No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed
by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Creditor, shall
constitute a waiver of any of Lender's rights or of any of Creditor's obligations as to any future transactions. Whenever the consent of Lender is
required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances
where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.
DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to
the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular
shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement
shall have the meanings attributed to such terms in the Uniform Commercial Code:
Agreement. The word "Agreement" means this Subordination Agreement, as this Subordination Agreement may be amended or modified from time
to time, together with all exhibits and schedules attached to this Subordination Agreement from time to time.
Borrower. The word "Borrower" means HJD Landlord, L.L.C. and includes all co-signers and co -makers signing the Note and all their successors
and assigns.
Creditor. The word "Creditor" means City Of Dubuque.
Lender. The word "Lender" means American Trust & Savings Bank, its successors and assigns.
Note, The word "Note" means individually, collectively, and interchangeably, any and all promissory notes entered into by and between Borrower and
Lender, whether now or hereafter existing, together with all renewals, extensions, modifications, amendments, supplements, consolidations,
refinancings, restatements and substitutions thereof.
Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with the Superior Indebtedness.
Security Interest. The words "Security Interest" mean, without limitation, any and all types of collateral security, present and future, whether in the
form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel
mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a
security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise.
Subordinated Indebtedness. The words "Subordinated Indebtedness" mean the indebtedness described in the section of this Agreement titled
"Subordinated Indebtedness".
Superior Indebtedness. The words "Superior Indebtedness" mean the indebtedness described in the section of this Agreement titled "Superior
Indebtedness". -
BORROWER AND CREDITOR EACH ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS SUBORDINATION AGREEMENT, AND
BORROWER AND CREDITOR EACH AGREE TO ITS TERMS. THIS AGREEMENT IS DATED March 7, 2016.
CREDITOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS SUBORDINATION AGREEMENT AND ALL OTHER DOCUMENTS
RELATING TO THIS DEBT.
BORROWER:
HJD LANDLORD, L.L.C.
By:
L. Anthony Pfohl, Manager of HJD Landlord,
L,L.C.
CREDITOR: ,
CITY OF DUBUQUE/
LeserRo, Ver. 15.5.10.002 Cap, QOH USA Corpo,otlon 1907, 2010. AU li{g Reserved. .IA p)CFIILPLIFIO.FC'TR.0403 P7.11 (M)
3
895 Main Street
P.O. Box 938
Dubuque, Iowa 52004-0938
563 589-0840
Americaln `Ust Fax 589.0860
Member F010 Shively better banking' p � _ dwaish@americantrust.com
www.americantrust.com
Daniel E.Walsh
Senior Vice President.
Commercial Banking Group
March 7, 2016
Mr. Barry Lindahl
City Attorney
City of Dubuque, Iowa
50 W. 13th St.
Dubuque, IA 52001-4805
VIA E-Mail: balesq@cityofdubuque.org
Dear Mr. Lindahl:
It i the understanding of American Trust& Savings Bank that the Cit of Dubuque, Iowa
s g g Y q
(hereinafter"City") entered into a development agreement with HJD Landlord, L.L.C. ("HJD
Landlord") and HJD Manager, L.L.C. ("HJD Manager")whereby the City committed to a
$600,000 low interest loan to HJD Landlord and HJD Manger. In consideration for the loan,
! HJD Landlord and HJD Manager agreed to pledge a mortgage to the City that would be
subordinate to any other financing in connection with the redevelopment of the Hotel Julien
property in Dubuque, Iowa.
American Trust& Savings Bank is the owner and holder of a certain mortgage, assignment of
leases and profits, security agreement and fixture filing from HJD Landlord, L.L.C., an Iowa
r
limited liability company, dated June 27., 2008, and recorded with the Dubuque County Recorder
on June 30, 2008, as file number 2008-00009383 ("Mortgage"). The Mortgage secures
indebtedness from HJD Landlord to American Trust& Savings Bank related to the
redevelopment of the Hotel Julien property.
i Pursuant to the terms of section 11(d) of the Mortgage,upon the City of Dubuque's execution of
the attached Subordination Agreement and delivery of the same American Trust& Savings
Bank consents to a mortgage from HJD Landlord, L.L.C. to the City and to the indebtedness of
HJD Landlord, and HJD Manager in the amount of$600,000.00 to the City.
Sincerely,
Y
e
it Daniel E. Walsh Victoria J. Richte
Senior Vice President Senior Vice President
Cc: Louis A. Pfoh1, HJD Landlord, L.L.C.
t
k
r
RESOLUTION NO. 57-16
APPROVING A LOAN AGREEMENT AND MORTGAGE BETWEEN THE CITY OF
DUBUQUE AND HJD LANDLORD, LLC AND A SUBORDINATION AGREEMENT BY
AND AMONG HJD LANDLORD, LLC, THE CITY OF DUBUQUE AND AMERICAN
TRUST AND SAVINGS BANK
Whereas, the City of Dubuque, Iowa, (City) and HJD Landlord, LLC have entered into a
Development Agreement (the Agreement) for the rehabilitation of the Hotel Julien (the
Project); and
Whereas, the Agreement includes the award of a $600,000 Downtown Rehabilitation
Loan/Grant Program (the Loan) for the purpose of stimulating reinvestment in the Greater
Downtown Urban Renewal District; and
Whereas, the Project meets the requirements of the Loan; and
Whereas, as security for the Loan, HJD Landlord, LLC will grant to City a mortgage on
the Project (the City Mortgage); and
Whereas, the HJD Landlord, LLC financing of the Project with American Trust and
Savings Bank includes a mortgage (the Bank Mortgage) and requires that the City
Mortgage be subordinate to the Bank Mortgage pursuant to a Subordination Agreement;
and
Whereas, it is the determination of the City Council that approval of the Loan
Agreement, the City Mortgage, and the Subordination Agreement are 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 Loan Agreement and the City Mortgage with HJD Landlord, LLC,
and the Subordination Agreement by and among the City, HJD Landlord, LLC and
American Trust and Savings Bank are hereby 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 Loan Agreement, , the City Mortgage, and the
Subordination Agreement.
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 documents in connection with the Loan
Agreement, the City Mortgage, and the Subordination Agreement, 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 Loan Agreement.
Passed, approved and adopted this 7th day of March, 2016.
Attest:
,12 /LI
g- Roy D. Buol, Mayor