WS Live - Release of Obligation on Forgivable CDBG Loan Copyright 2014
City of Dubuque Consent Items # 10.
ITEM TITLE: WS Live - Release of Obligation on Forgivable Loan
SUMMARY: City Manager recommending approval to release WS Live
from any further obligations under Loan Agreement CDBG
#1-2009 as of December 31 , 2015, and authorizing staff to
send a letter to the company acknowledging that the terms
have been met and that the promissory note is considered
paid in full.
RESOLUTION Acknowledging satisfaction of the terms of
a Loan Agreement providing for a Community Development
Block Grant Loan of three hundred seventy-five thousand
dollars ($375,000) to WS Live, LLC
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt
Resolution(s)
ATTACHMENTS:
Description Type
WS Live CDBG Forgivable Loan Release-MVM Memo City Manager Memo
Staff Memo Staff Memo
CDBG Agreement& Promissory Note Supporting Documentation
1st Amendment to CDBG Agreement Supporting Documentation
Resolution Supporting Documentation
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: Release of Obligation on CDBG Forgivable Loan for WS Live, LLC
DATE: February 25, 2016
On January 6, 2009, the City of Dubuque entered into Loan Agreement CDBG #1-2009
with WS Live, LLC to offset the costs associated with the company's relocation to 131
W. 10th Street in the Greater Downtown Urban Renewal District.
The loan provided $375,000, with an annual forgiveness of $75,000 if the terms of the
agreement were met and maintained. The loan was secured with a promissory note.
The company agreed to maintain its 100 FTE positions and to have at least 107 FTE
positions by January 1, 2011, and 114 FTE positions by January 1, 2013. The company
has exceeded the required number of FTE positions each year, and certified that as of
January 1, 2015 they have 136 FTE positions.
The agreement indicates the final $75,000 shall be forgiven at the end of 2015, and this
most recent job certification finalizes the company's obligations under the agreement.
Economic Development Director Maurice Jones recommends City Council approval to
release WS Live from any further obligations under Loan Agreement CDBG #1-2009 as
of December 31, 2015, and authorizing staff to send a letter to the company
acknowledging that the terms have been met and that the promissory note is
considered paid in full.
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
Alvin Nash, Housing & Community Development Department Director
Erica Haugen, Assisted Housing Specialist
2
Dubuque Economic Development Department
THE CITY OF 50 West 13th Street
All-AmMmIily 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: Release of obligation on CDBG forgivable loan for WS Live, LLC
DATE: February 23, 2016
INTRODUCTION
This memorandum presents the obligations met by WS Live, LLC under their forgivable
loan agreement CDBG #1-2009, and requests a release of further obligations under
said agreement after December 31, 2015.
BACKGROUND
On January 6, 2009 the City of Dubuque entered into Loan Agreement CDBG #1-2009
with WS Live, LLC to offset the costs associated with the company's relocation to 131
W. 10th Street in the Greater Downtown Urban Renewal District. This relocation was
key to maintaining and growing the company's workforce.
The loan provided $375,000, with an annual forgiveness of$75,000 if the terms of the
agreement were met and maintained. The loan was secured with a promissory note
(see attached).
DISCUSSION
The company agreed to maintain its 100 FTE positions and to have at least 107 FTE
positions by January 1, 2011 and 114 FTE positions by January 1, 2013. The company
has, in fact, exceeded the required number of FTE positions each year, and certified
that as of January 1, 2015 they have 136 FTE positions.
The agreement indicates the final $75,000 shall be forgiven at the end of 2015, and this
most recent job certification finalizes the company's obligations under the agreement.
As such, we believe the City can close out any loan documents associated with this
agreement and provide a written release of obligation to the company.
The company will continue to submit job certification forms for TIF rebate purposes
through the end of 2016.
RECOMMENDATION/ ACTION STEP
I recommend releasing WS Live from any further obligations under Loan Agreement
CDBG #1-2009 as of December 31 , 2015, and authorizing staff to send a letter to the
company acknowledging that the terms have been met and that the promissory note is
considered paid in full.
RESOLUTION NO. 58-16
ACKNOWLEDGING SATISFACTION OF THE TERMS OF A LOAN AGREEMENT
PROVIDING FOR A COMMUNITY DEVELOPMENT BLOCK GRANT LOAN OF THREE
HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($375,000) TO WS LIVE, LLC
Whereas, under provisions of Title I of the Housing and Community Development Act of
1974, as amended, the City of Dubuque, Iowa received Community Development Block
Grant (CDBG) Funds for the purpose of stimulating economic development activities within
the community; and
Whereas, the City of Dubuque, Iowa entered into Loan Agreement CDBG #1-2009 (the
Loan Agreement) with WS Live, LLC to assist with the creation of new permanent
employment opportunities for low and moderate income citizens, which included a
forgivable $375,000 CDBG Loan;
Whereas, WS Live, LLC has satisfied all of the requirements of the Loan Agreement;
and
Whereas, the City Council has determined that WS Live, LLC should be released from
all further obligations under the Loan Agreement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. The City Manager is hereby authorized to execute, on behalf of the City of
Dubuque, Iowa, all necessary documents to release WS Live, LLC of all further obligations
under Loan Agreement CDBG #1-2009.
Passed, approved and adopted this 7th day of March, 2016.
0 L.,/
Foy D. Buol, Mayor
Attest:
Kevin (S. Firnstahl,City lerk
CITY OF DUBUQUE, IOWA
ECONOMIC DEVELOPMENT LOAN PROGRAM
WS LIVE, LLC -
LOAN AGREEMENT
NUMBER: CDBG #1-2009
This AGREEMENT(the "Agreement"), dated as of the 6th day of January, 2009, 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
WS LIVE, LLC, a Delaware Limited Liability Company with its principal place of business in
Plano, Texas (hereinafter referred to as the "Company").
WITNESSETH:
WHEREAS, Company has requested a forgivable loan to offset the costs associated
with the relocation of its Dubuque Operations building to 131 West 10th Street in the
Greater Downtown Urban Renewal District; and
WHEREAS, City has considered said proposal and has determined that it will create
permanent employment opportunities for the community's low and moderate income
population within a low and moderate income census tract; and
WHEREAS, City is a participating city in the Community Development Block Grant
Program of the United States Department of Housing and Urban Development(hereinafter
referred to as "HUD");
NOW THEREFORE, in consideration of the promises and respective covenants,
agreements and representations hereinafter set forth, the parties agree as follows:
1. SOURCE OF LOAN FUNDS. City, pursuant to its Grant Agreement with HUD,
has obtained a Letter of Credit from HUD, issued by the United States Treasury, for funds
sufficient to carry out its obligations under this Agreement.
2. LOAN TERMS. City agrees to provide a loan to Company in the amount of
three hundred seventy-five thousand dollars ($375,000.00) (the "Loan"). The term of the
Loan shall be up seven (7)years. Interest shall accrue at the rate of zero percent(0%) per
annum, computed on a 365 day basis. No payments of interest or principal shall be made
during the term of the Loan, and the Loan shall be fully forgiven within seven (7) years if
the job retention requirements of paragraph 9(a) are met. On or before the date of the first
disbursement of loan funds to Company, Company shall execute its Promissory Note in the
form attached hereto as Exhibit A payable to the order of City in the principal amount of
three hundred seventy-five thousand dollars ($375,000.00) (The "Note").
(a) Portions of the Loan may be forgiven if Company satisfies the job retention
requirements specified in Section 9(a). The Annual Reporting requirements specified in
Paragraph 9(b) will determine the amount of forgiveness for the specified year. The
following is the schedule of loan forgiveness should Company meet all job retention
requirements:
End of Year Amount Forgiven Balance
2011 $75,000 $300,000
2012 $75,000 $225,000
2013 $75,000 $150,000
2014 $75,000 $75,000
2015 $75,000 $0
The forgiveness will be a pro-rata share of the actual positions filled by Company to the
committed retained positions(Example: Should Company retain 95 percent of the required
amount of positions, then only 95 percent of the scheduled loan forgiveness will be
honored).
3. DISBURSEMENT AND USE OF LOAN FUNDS. Loan funds shall be disbursed
for the benefit of Company by City for Qualifying Project Expenses up to three hundred
seventy-five thousand dollars ($375,000.00). Company shall furnish to City written request
for disbursement of loan funds identifying by serial number or equivalent the machinery
and/or equipment to be purchased. City will reimburse Company within ten (10) business
days of request. It is expressly understood that all funds advanced under this Agreement
shall be specifically earmarked and used by Company only for the purpose of paying the
Qualifying Project Expenses listed in the applicable written request and as defined in
Paragraph 27(c). Company shall complete the Project as defined in Paragraph 27(b) in
accordance with the terms of this Agreement within twelve (12) months of the date of this
Agreement. City shall not be obligated to pay any funds not drawn by Company as of said
date and any undrawn funds shall be credited against the balance due on the Promissory
Note.
4. SECURITY. The Loan shall be secured by a UCC-1 Financing Statement on all
Qualifying Project Expenses acceptable to City amounting to at least $500,000 in
machinery, furniture, and equipment.
5. STATUS OF COMPANY. Company represents that it is a limited liability
company duly organized and existing under the laws of the State of Delaware; that it is
authorized to borrow under this Agreement, to execute and deliver the Note and otherwise
perform the obligations of this Agreement; that is has organization 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 Organization or the Operating Agreement
of Company, or any agreement binding on it; and that, except as disclosed in writing to
City, it is not a party to any material 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
material contingent liabilities not provided for or disclosed in the financial statement
provided City.
6. FINANCIAL CONDITION OF COMPANY. Company has delivered to City a
statement of Company's financial condition as of the date of application for financial
assistance which fairly represents the financial condition of Company as of the date stated,
prepared in accordance with generally accepted accounting principles consistently applied,
and that the Company represents that the statements still correctly reflect the financial
condition and status of its operations as of the date of this Agreement. Company agrees to
notify City of any material change in Company's financial condition.
7. TITLE OF COMPANY. Except as otherwise disclosed in writing to City,
Company represents that it has good and marketable title, free of 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, as are assets disposed of in the ordinary course of business or disclosed in
writing to City. City acknowledges that as of the date of execution of this Agreement,
Company has a loan outstanding with Chase Bank (Loan #450591731001), such loan is
secured by a security interest on the Company's assets and such loan is not considered a
violation of this paragraph.
8. CONDITIONS OF BORROWING. On the date on which any sum is to be
borrowed, Company, 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.
Company shall be required at the closing date to comply, or establish compliance, as
follows:
(a) That the representations and warranties of Company are correct on the
closing date, as well as on the date of execution of this Agreement;
(b) That Company 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 material litigation or proceeding is pending against Company
which might result in any change in the business or materially adversely affect the
properties of Company, taking into account the entire assets and overall business of
Company;
(e) That since the date of execution of this Agreement and to the closing date
there has been no material adverse change in the financial condition of Company
from that shown by the financial statements delivered to City under Paragraph 6;
(f) That since the date of execution of this Agreement no fire or casualty has
occurred in any building or to any inventories or property of Company that might
substantially, adversely affect the conduct of its business;
(g) That it will furnish to City on the closing date with the opinion of
Company's counsel that Company is a limited liability company duly organized,
existing and in good standing under the laws of the State of Delaware; that it has
organizational power to own its properties and conduct the business in which it is
then engaged; that Company is not in violation of any law, ordinance or regulation of
any governmental authority as to its business, premises or assets;that Company has
full power to execute and deliver this Agreement, to execute and deliver the Note that
evidences the sum borrowed, to borrow moneys under this Agreement, and to
perform its obligations under this Agreement and the Note; that such actions have
been duly authorized by all necessary organization actions and are not in conflict with
any agreement binding on Company known to counsel; and that this Agreement and
the Note when executed and delivered by Company will be a valid and binding
obligation of Company in accordance with its terms.
9. COVENANTS OF COMPANY. Company covenants that until any sums
borrowed under this Agreement are paid in full, or forgiven, it will, unless City agrees in
writing to a modification or otherwise stated herein:
(a) Take all actions necessary and required to retain the positions below:
agreement.
Retention Date Number of FTE
Current 100
January 1, 2011 107
January 1, 2013 114
Company shall certify that at least fifty-one (51) percent of retained positions
listed above will be held by or made available to, through first consideration
accommodations, persons who, at the time of their employment, are considered by
HUD to be of low or moderate income. Company shall use its best efforts to hire
local area residents whenever practicable and not otherwise in conflict with
nondiscrimination provisions herein stated. For purposes of determining the extent of
employment opportunities maintained under this Agreement, City and Company
agree that a total of at least 100 full-time equivalent positions exist in Dubuque, Iowa
as of January 1, 2009. Company will be required to retain the amount of positions
described this paragraph above. A listing by job title of the existing and new
permanent employment opportunities to be created is attached hereto as Exhibit B
and entitled "Position Analysis";
(b) Submit an Annual Employment Performance Report for the prior year
ending December 31 of each year during the job retention term required in
subparagraph (a) of this Paragraph above summarizing the employment status of
Company and status of new permanent jobs to be created. Said report shall be
submitted to the City by the following April 1 and must note the number of individuals
employed within each job classification (management or agent)with the specific title
of the position, the wage ranges of each position and the average hours of work per
week of individuals engaged in each job activity. The report shall also indicate the
number of individuals who, prior to their employment with Company, fell within the
low or moderate income guidelines established by HUD. The form of such Annual
Employment Performance Report and required Employee Income Report/Employee
Demographic Report verifying income, ethnic origin and head of household status
are attached hereto as Exhibit C, and D respectively. Upon reasonable advance
notice, City shall have the right to verify the information within the Annual
Employment Performance Report via examination of the underlying records
maintained by Company;
(c) Furnish City within ninety(90)days after the end of each fiscal year with a
copy of its annual report, which shall be prepared in conformity with generally
accepted accounting principles consistently applied, and, within sixty(60) days after
the end of each semi-annual period of its fiscal year, with a copy of its financial
statement similarly prepared and, from time to time, such other financial information
as City may reasonably request;
(d) Pay when due all rent, taxes, assessments and other liabilities, except
those contested in good faith where notice of such contest has been given to City;
(e) Not create or permit to exist any mortgage, 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 Agreement without written consent of
City. City approval of such written consent will not be unreasonably withheld;
(f) Not become a party to any merger, consolidation or sale of Company; not
sell, transfer, convey or lease all or any part of its property except in the ordinary
course of business;
(g) Not cause, suffer or permit any of its subsidiaries to do any of the things
prohibited to Company in this Agreement;
(h) Not change the general character of its business as conducted at the date
hereof, engage in any type of business not reasonably related to its business as
normally conducted, or relocate Company's current Dubuque operations outside the
city limits of the City of Dubuque;
(i) 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 Company to perform its obligations under this Agreement or the Note
executed pursuant to the terms of this Agreement;
Q) Use loan funds only for purposes authorized herein;
(k) Take no action that would knowingly cause City to be found in default
under its Community Development Block Grant Agreement;
(1) Pay all fees, expenses and charges in respect to this Agreement or its
making in any way connected therewith including, but not limited to, legal fees,
abstract continuation, recording and filing fees, mortgage taxes, documentary
stamps, and any other taxes, fees and expenses payable in connection with this
transaction;
(m) Comply with all requirements imposed upon City under its Community
Development Block Grant Agreement including, without limitation, the requirements
of 24 CFR Part 570 attached as Exhibit E.
10. DEFAULT. Company shall be in default if:
(a) It fails to pay any installment of principal or interest on the Note or as
required by the Agreement when due or within ten (10)days thereafter or defaults on
any of its other loan agreements;
(b) It 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 received 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 (10) days undismissed;
(c) It fails to meet its job retention obligations contained within this
Agreement; however, application of the pro rata forgiveness provisions of 2(a) shall
constitute meeting that specific obligation for purposes of this subparagraph in which
case the failure to meet such job retention obligations shall not be an event of
default;
(d) It fails in the performance of the terms and conditions of this Agreement
(other than the payment terms referred to in (a) above) and such non-performance
continues for ten (10)days after notice thereof from City or from the holder of a note;
(e) Any warranty made by Company is untrue in any material respect, or any
schedule, statement, report, notice or writing furnished by Company to City is untrue
in any material respect on the date as of which the facts set forth are stated or
certified;
(f) Any government board, agency, department, commission or public or
private lender takes possession or control of any substantial part of the property of
Company and such possession or control continues for ten (10) days.
11. ACCELERATION AT OPTION OF CITY. If any default occurs, City may
declare the Note immediately due and payable, at which time all unpaid principal and
interest shall immediately become due and payable. City shall promptly advise Company
in writing of any acceleration under this paragraph, but the failure to do so shall not impair
the effect of such declaration.
12. FAILURE TO MEET JOB RETENTION OBLIGATION. If Company is
determined by City to be in default under paragraph 10(c) of this Agreement for failing to
meet the job retention requirements of paragraph 9(a), the entire principal balance will be
due and payable with accrued interest less any job retention forgiveness earned. Should
the number of low and moderate income persons not meet or exceed fifty-one(51) percent
of all those hired as of the annual reporting dates in 9(b), the entire principal balance will
be due and payable to City with accrued interest.
13. MAINTENANCE OF RECORDS AND RIGHT TO INSPECT. Company will
keep and maintain all normal business books and records and all other documents,
invoices and receipts relating directly to the receipt and disbursement of loan funds and job
retention; and any duly authorized independent accounting representative of City, or the
Comptroller General of the United States, shall at all reasonable times have access to and
the right to inspect, copy, audit and examine all such books and other documents of
Company pertaining to the project until the completion of all closeout procedures
respecting the Loan and the final settlement and conclusion of all issues arising out of the
Loan.
14. ADDRESS. Company's initial business address is:
WS LIVE, LLC
Attn: Jeff Mentzer
131 W. 10th Street
Dubuque, Iowa 52001
Company shall promptly give City written notice of any further change in its principal
office address. City's address is:
Economic Development Department
City Hall
50 West 13th Street
Dubuque, IA 52001
15. ACCESS TO PROJECT. Upon reasonable notice to Company, Company
agrees that any duly authorized representative of City or of the United States shall at all
reasonable times have access to any portion of the project, for monitoring purposes, until
the completion of all closeout procedures respecting the Community Development Block
Grant Loan.
16. LIMITATION OF CITY'S LIABILITY FOR PROJECT ACTIVITIES. City shall
not be liable to Company, or to any party except HUD, for the completion of, or the failure
to complete, any activities that are part of the project, except as may be specifically
provided in this Agreement. Company agrees to indemnify, hold harmless and defend City
from any such claims against City for which liability is limited hereunder.
17. CONFLICT OF INTEREST. Company agrees that no member, officer or
employee of City, or its designees or agents, nor any consultant or member of the
governing body of City, and no other public official of City who exercises or has exercised
any functions or responsibilities with respect to the project during his or her tenure, or who
is in a position to participate in a decision making process or gain inside 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.
18. NONDISCRIMINATION. In carrying out the project, Company shall not
discriminate against any employee or applicant for employment because of race, religion,
color, sex, national origin, age, sexual orientation, or disability. Such action shall include,
but not be limited to, the following: employment upgrading, demotion or transfer;
recruitment or recruitment advertising; layoff or termination; rate of pay or other forms of
compensation; and selection for training, including apprenticeship. Company 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. Company
shall state that all qualified applicants will receive consideration for employment without
regard to race, religion, color, sex, national origin, age, sexual orientation, or disability.
19. NO ASSIGNMENT OR SUCCESSION. Company acknowledges and agrees
that no transfer of loan funds by City to Company shall be deemed an assignment of grant
funds, and Company shall neither succeed to any rights, benefits or advantages of City
authorities or interests in or under the Grant Agreement.
20. DISCLAIMER OF RELATIONSHIPS. Nothing contained in this Agreement
between the parties, nor any act of City or Company 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, or of any association or
relationship involving the United States.
21. NOTICE. Any notice, if mailed by United States certified mail, shall be deemed
given when mailed, postage prepaid, addressed to Company at its address shown above,
or at any other address subsequently designated to City by Company.
22. SUCCESSORS AND ASSIGNS. All covenants, representations, warranties
and agreements herein set forth shall be binding upon Company, and its legal
representatives, successors and assigns. This Agreement may not be assigned by City or
Company, without the express written consent of the other party.
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
Company shall survive the execution and delivery of this Agreement and any notes
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) "Grant Agreement"shall mean that Community Development Block Grant
Agreement entered into by City and HUD.
(b) "Project" shall mean those activities to be carried out by Company to
purchase equipment for the relocation of its operations to 131 W. 10" Street.
(c) "Qualifying Project Expenses"shall mean those expenditures or expenses
incurred by Company during and for the Project for the acquisition of needed
machinery, furniture and equipment not permanently installed to the Property.
(d) "Full-Time Job Equivalent" shall equal a total of forty (40) hours of labor
per work week. Such hours may be accrued by single individuals or divided among
two or more Company employees.
IN WITNESS WHEREOF, City has caused this Agreement to be executed by the City
Manager. Company has executed this Agreement in its organization name by its duly
authorized officer. All of the above occurred as of the 6th day of January, 2009.
CITY OF DUBUQUE, IOWA WS LIVE, LLC.
G � �
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Michael C. Van Milligen Jeff Kgentz67r
City Manager Chief Financial Officer
Y:\USERS\Adejong\CDBG\WS Live\WS Live CDBG Loan Agreement FINAL.doc
Exhibit A
PROMISSORY NOTE
WS Live, LLC
Community Development Block Grant Loan Program
CDBG Loan#1-08
Value: $375,000
FOR VALUE RECEIVED, WS Live, LLC ("Company") promises to pay to the order of the
CITY OF DUBUQUE, IOWA, a municipal corporation ("City"), the principal amount of three
hundred seventy-five thousand dollars ($375,000) together with interest from the date said
monies are disbursed by City pursuant to the terms of the attached Loan Agreement dated
the c day ofJ�, ,,:�,�, , , 200y, ("the Loan Agreement")which interest shall be at
the rate of zero percent (0%) per annum.
All payments hereunder shall be made in lawful money of the United States at the
administrative offices of the Finance Department of City, or at such other place as City may
from time to time in writing designate.
Company may, from time to time, prepay all or any portion of the principal balance due
hereunder without penalty and without consent of City. All such payments of principal shall
be applied to principal installments in reverse order of maturity and which last come due
under the terms of this Promissory Note.
This Promissory Note is made, executed and delivered in accordance with and subject to
all of the terms and provisions of the Loan Agreement, entered into and between
Company, as borrower, and City, as lender, which is incorporated herein by reference.
This Promissory Note is secured by a UCC-1 Financing Statement.
In the event of occurrence of an act of default under Section 10 of the Loan Agreement or
any mortgage or security agreement between the parties, then written notice of said default
shall be given by City to Company, and Company shall have the time specified in such
agreement if any is specified, to cure said default. If default is not cured by Company
within the time allowed, City may, at its option declare the entire unpaid amount, including
interest, to be immediately due and payable or take such other actions as may be
permitted under the Loan Agreement. Principal and interest not paid when due shall draw
interest at a rate of fifteen percent(15%) per annum. Company agrees to pay all expenses
of collection, including reasonable attorney's fees, court costs, abstracting costs, storage
costs, costs of disposition of collateral, and any and all other related and incidental
expenses thereto, all of which shall first be deducted from the proceeds of sale or
foreclosure. In addition, the holder of this Note shall have all other rights and remedies as
are provided for under the Loan Agreement, or as are provided by law.
Makers, endorsers and sureties waive demand of payment, notice of nonpayment, protest
and notice thereof. Sureties, endorsers and guarantors agree to all of the provisions of
this Note and consent that the time or times for payment of all or any part hereof may be
extended after maturity, from time to time, without notice.
WS Live, LLC.
M
Jeff MentNr V Date
FAUSERS\Adejong\CDBG\WS Live\Promissory Note Exhibit A.doc
Exhibit B
Position Analysis
For WS Live, LLC
Job Status Job Title Full Time Equivalents (FTE)
Current Various 100
Created by 1/1/2011 Various 7
Created by 1/1/2013 Various 7
Total FTE Retained or Created 114
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1E R
EMPLOYEE INCOME REPORT
Community Development Block Grant Program
Low to Moderate Income Requirements
CITY OF DUBUQUE,IOWA
The U.S.Department of Housing and Urban Development(HUD)has asked that the following information be collected from
those individuals employed by to verify that your employment
is achieving the goals of the Community Development Block Grant(CDBG)Loan Program. The information is confidential
and will be used solely by HUD for the purposes of monitoring. If you have any questions regarding this form,please contact
the Economic Development Department at(563)589-4393.
INCOME VERIFICATION
1. Position hired for:
2. Please CIRCLE,under Family Size on the chart below,the total number of related people living in your
household,including yourself.
3. Look at the income ranges on the line for the Family Size you circled. CIRCLE the income range that
includes your gross family income.
Family Size A B C D
1 $0-$12,500 $12,501 -$20,850 $20,851-$33,300 Above $33,300
2 $0-$14,300 $14,301 -$23,800 $23,801-$38,100 Above $38,100
3 $0-$16,050 $16,051 -$26,800 $26,801-$42,850 Above $42,850
4 $0-$17,850 $17,851 -$29,750 $29,751-$47,600 Above $47,600
5 $0-$19,300 $19,301 -$32,150 $32,151-$51,400 Above $51,400
6 $0-$20,700 $20,701 -$34,500 $34,501-$55,200 Above $55,200
7 $0-$22,150 $22,151 -$36,900 $36,901-$59,000 Above $59,000
8 or more $0-$23,550 $23,551 -$39,250 $39,251-$62,850 Above $62,850
4. Hispanic? ❑ Yes ❑No
5. What is your ethnic origin? (Please check only one)
❑ White ❑Black/African American ❑ Asian ❑ American Indian/Alaskan native
❑ Native Hawaiian/Other Pacific Islander ❑ American Indian/Alaskan Native&White
❑ Asian&White ❑ Black/African American&White
❑ American Indian/Alaskan Native&Black/African American ❑ Balance/Other
6. Female head of household? ❑Yes ❑No
I certify that the information above is,to the best of my knowledge and belief,true,correct and complete as of the date prior to
hire and stated herein.I am aware that the information being provided is subject to verification by the local or Federal
government.
Name(print) Signature Date
Address(street,city,state,zip) Social Security Number Telephone Number
Warning: Whoever knowingly and willingly makes or uses a document or writing containing any false,fictitious or
fraudulent statement or entry may be subject to federal prosecution.
28/08 F:\Users\ATAUKE\CDBG\FormsUobs\Employee Income Form.doc
[Code of Federal Regulations]
[Title 24, Volume 3]
[Revised as of April 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR570.203]
[Page 45-46]
TITLE 24--HOUSING AND URBAN DEVELOPMENT
CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND
DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
PART 570 COMMUNITY DEVELOPMENT BLOCK GRANTS--Table of Contents
Subpart C Eligible Activities
Sec. 570.203 Special economic development activities.
A recipient may use CDBG funds for special economic development
activities in addition to other activities authorized in this subpart
that may be carried out as part of an economic development project.
Guidelines for selecting activities to assist under this paragraph are
provided at Sec. 570.209. The recipient must ensure that the
appropriate level of public benefit will be derived pursuant to those
guidelines before obligating funds under this authority. Special
activities authorized under this section do not include assistance for
the construction of new housing. Activities eligible under this section
may include costs associated with project-specific assessment or
remediation of known or suspected environmental contamination. Special
economic development activities include:
[ [Page 46] ]
(a) The acquisition, construction, reconstruction, rehabilitation
or
installation of commercial or industrial buildings, structures, and
other real property equipment and improvements, including railroad
spurs
or similar extensions. Such activities may be carried out by the
recipient or public or private nonprofit subrecipients.
(b) The provision of assistance to a private for-profit business,
including, but not limited to, grants, loans, loan guarantees, interest
supplements, technical assistance, and other forms of support, for any
activity where the assistance is appropriate to carry out an economic
development project, excluding those described as ineligible in Sec.
570.207 (a) . In selecting businesses to assist under this authority, the
recipient shall minimize, to the extent practicable, displacement of
existing businesses and jobs in neighborhoods.
(c) Economic development services in connection with activities
eligible under this section, including, but not limited to, outreach
efforts to market available forms of assistance; screening of
applicants; reviewing and underwriting applications for assistance.-
preparation
ssistance;preparation of all necessary agreements; management of assisted
activities; and the screening, referral, and placement of applicants
for
employment opportunities generated by CDBG-eligible economic
development
activities, including the costs of providing necessary training for
persons filling those positions.
[53 FR 34439, Sept. 6, 1988, as amended at 60 FR 1944, Jan. 5, 1995; 71
FR 30035, May 24, 20061
TITLE 24--HOUSING AND URBAN DEVELOPMENT
CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND
DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
PART 570 COMMUNITY DEVELOPMENT BLOCK GRANTS--Table of Contents
Subpart C Eligible Activities
Sec. 570. 209 Guidelines for evaluating and selecting
economic development projects .
The following guidelines are provided to assist the recipient to
evaluate and select activities to be carried out for economic
development purposes. Specifically, these guidelines are applicable to
activities that are eligible for CDBG assistance under Sec. 570.203.
These guidelines also apply to activities carried out under the
authority of Sec. 570.204 that would otherwise be eligible under Sec.
570.203, were it not for the involvement of a Community-Based
Development Organization (CBDO) . (This would include activities where a
CBDO makes loans to for-profit businesses. ) These guidelines are
composed of two components: guidelines for evaluating project costs and
financial requirements; and standards for evaluating public benefit.
The
standards for evaluating public benefit are mandatory, but the
guidelines for evaluating projects costs and financial requirements are
not.
(a) Guidelines and objectives for evaluating project costs and
financial requirements. HUD has developed guidelines that are designed
to provide the recipient with a framework for financially underwriting
and selecting CDBG-assisted economic development projects which are
financially viable and will make the most effective use of the CDBG
funds. These guidelines, also referred to as the underwriting
guidelines, are published as appendix A to this part. The use of the
underwriting guidelines published by HUD is not
[ [Page 60] ]
mandatory. However, grantees electing not to use these guidelines would
be expected to conduct basic financial underwriting prior to the
provision of CDBG financial assistance to a for-profit business. Where
appropriate, HUD's underwriting guidelines recognize that different
levels of review are appropriate to take into account differences in
the
size and scope of a proposed project, and in the case of a
microenterprise or other small business to take into account the
differences in the capacity and level of sophistication among
businesses
of differing sizes. Recipients are encouraged, when they develop their
own programs and underwriting criteria, to also take these factors into
account. The objectives of the underwriting guidelines are to ensure:
(1) That project costs are reasonable;
(2) That all sources of project financing are committed;
(3) That to the extent practicable, CDBG funds are not substituted
for non-Federal financial support;
(4) That the project is financially feasible;
(5) That to the extent practicable, the return on the owner's
equity
investment will not be unreasonably high; and
(6) That to the extent practicable, CDBG funds are disbursed on a
pro rata basis with other finances provided to the project.
(b) Standards for evaluating public benefit. The grantee is
responsible for making sure that at least a minimum level of public
benefit is obtained from the expenditure of CDBG funds under the
categories of eligibility governed by these guidelines. The standards
set forth below identify the types of public benefit that will be
recognized for this purpose and the minimum level of each that must be
obtained for the amount of CDBG funds used. Unlike the guidelines for
project costs and financial requirements covered under paragraph (a) of
this section, the use of the standards for public benefit is mandatory.
Certain public facilities and improvements eligible under Sec.
570.201 (c) of the regulations, which are undertaken for economic
development purposes, are also subject to these standards, as specified
in Sec. 570.208 (a) (4) (vi) (F) (2) .
(1) Standards for activities in the aggregate. Activities covered
by
these guidelines must, in the aggregate, either:
(i) Create or retain at least one full-time equivalent, permanent
job per $35, 000 of CDBG funds used; or
(ii) Provide goods or services to residents of an area, such that
the number of low- and moderate-income persons residing in the areas
served by the assisted businesses amounts to at least one low- and
moderate-income person per $350 of CDBG funds used.
(2) Applying the aggregate standards. (i) A metropolitan city, an
urban county, a non-entitlement CDBG grantee in Hawaii, or an Insular
Area shall apply the aggregate standards under paragraph (b) (1) of this
section to all applicable activities for which CDBG funds are first
obligated within each single CDBG program year, without regard to the
source year of the funds used for the activities. For Insular Areas,
the
preceding sentence applies to grants received in program years after
Fiscal Year 2004. A grantee under the HUD-administered Small Cities
Program, or Insular Areas CDBG grants prior to Fiscal Year 2005, shall
apply the aggregate standards under paragraph (b) (1) of this section to
all funds obligated for applicable activities from a given grant;
program income obligated for applicable activities will, for these
purposes, be aggregated with the most recent open grant. For any time
period in which a community has no open HUD-administered or Insular
Areas grants, the aggregate standards shall be applied to all
applicable
activities for which program income is obligated during that period.
(ii) The grantee shall apply the aggregate standards to the number
of jobs to be created/retained, or to the number of persons residing in
the area served (as applicable) , as determined at the time funds are
obligated to activities.
(iii) Where an activity is expected both to create or retain jobs
and to provide goods or services to residents of an area, the grantee
may elect to count the activity under either the jobs standard or the
area residents standard, but not both.
(iv) Where CDBG assistance for an activity is limited to job
training and
[ [Page 61] ]
placement and/or other employment support services, the jobs assisted
with CDBG funds shall be considered to be created or retained jobs for
the purposes of applying the aggregate standards.
(v) Any activity subject to these guidelines which meets one or
more
of the following criteria may, at the grantee's option, be excluded
from
the aggregate standards described in paragraph (b) (1) of this section:
(A) Provides jobs exclusively for unemployed persons or
participants
in one or more of the following programs:
(1) Jobs Training Partnership Act (DTPA) ;
(2) Jobs Opportunities for Basic Skills (JOBS) ; or
(3) Aid to Families with Dependent Children (AFDC) ;
(B) Provides jobs predominantly for residents of Public and Indian
Housing units;
(C) Provides jobs predominantly for homeless persons;
(D) Provides jobs predominantly for low-skilled, low- and moderate-
income persons, where the business agrees to provide clear
opportunities
for promotion and economic advancement, such as through the provision
of
training;
(E) Provides jobs predominantly for persons residing within a
census
tract (or block numbering area) that has at least 20 percent of its
residents who are in poverty;
(F) Provides assistance to business (es) that operate(s) within a
census tract (or block numbering area) that has at least 20 percent of
its residents who are in poverty;
(G) Stabilizes or revitalizes a neighborhood that has at least 70
percent of its residents who are low- and moderate-income;
(H) Provides assistance to a Community Development Financial
Institution that serve an area that is predominantly low- and moderate-
income persons;
(I) Provides assistance to a Community-Based Development
Organization serving a neighborhood that has at least 70 percent of its
residents who are low- and moderate-income;
(J) Provides employment opportunities that are an integral
component
of a project designed to promote spatial deconcentration of low- and
moderate-income and minority persons;
(K) With prior HUD approval, provides substantial benefit to low-
income persons through other innovative approaches;
(L) Provides services to the residents of an area pursuant to a
strategy approved by HUD under the provisions of Sec. 91.215 (e) of this
title:
(M) Creates or retains jobs through businesses assisted in an area
pursuant to a strategy approved by HUD under the provisions of Sec.
91.215 (e) of this title.
(N) Directly involves the economic development or redevelopment of
environmentally contaminated properties.
(3) Standards for individual activities. Any activity subject to
these guidelines which falls into one or more of the following
categories will be considered by HUD to provide insufficient public
benefit, and therefore may under no circumstances be assisted with CDBG
funds:
(i) The amount of CDBG assistance exceeds either of the following,
as applicable:
(A) $50,000 per full-time equivalent, permanent job created or
retained; or
(B) $1, 000 per low- and moderate-income person to which goods or
services are provided by the activity.
(ii) The activity consists of or includes any of the following:
(A) General promotion of the community as a whole (as opposed to
the
promotion of specific areas and programs) ;
(B) Assistance to professional sports teams;
(C) Assistance to privately-owned recreational facilities that
serve
a predominantly higher-income clientele, where the recreational benefit
to users or members clearly outweighs employment or other benefits to
low- and moderate-income persons;
(D) Acquisition of land for which the specific proposed use has not
yet been identified; and
(E) Assistance to a for-profit business while that business or any
other business owned by the same person(s) or entity(ies) is the
subject
of unresolved findings of noncompliance relating to previous CDBG
assistance provided by the recipient.
[ [Page 62] )
(4) Applying the individual activity standards. (i) Where an
activity is expected both to create or retain jobs and to provide goods
or services to residents of an area, it will be disqualified only if
the
amount of CDBG assistance exceeds both of the amounts in paragraph
(b) (3) (i) of this section.
(ii) The individual activity standards in paragraph (b) (3) (i) of
this section shall be applied to the number of jobs to be created or
retained, or to the number of persons residing in the area served (as
applicable) , as determined at the time funds are obligated to
activities.
(iii) Where CDBG assistance for an activity is limited to job
training and placement and/or other employment support services, the
jobs assisted with CDBG funds shall be considered to be created or
retained jobs for the purposes of applying the individual activity
standards in paragraph (b) (3) (i) of this section.
(c) Amendments to economic development projects after review
determinations. If, after the grantee enters into a contract to provide
assistance to a project, the scope or financial elements of the project
change to the extent that a significant contract amendment is
appropriate, the project should be reevaluated under these and the
recipient's guidelines. (This would include, for example, situations
where the business requests a change in the amount or terms of
assistance being provided, or an extension to the loan payment period
required in the contract. ) If a reevaluation of the project indicates
that the financial elements and public benefit to be derived have also
substantially changed, then the recipient should make appropriate
adjustments in the amount, type, terms or conditions of CDBG assistance
which has been offered, to reflect the impact of the substantial
change.
(For example, if a change in the project elements results in a
substantial reduction of the total project costs, it may be appropriate
for the recipient to reduce the amount of total CDBG assistance. ) If
the
amount of CDBG assistance provided to the project is increased, the
amended project must still comply with the public benefit standards
under paragraph (b) of this section.
(d) Documentation. The grantee must maintain sufficient records to
demonstrate the level of public benefit, based on the above standards,
that is actually achieved upon completion of the CDBG-assisted economic
development activity(ies) and how that compares to the level of such
benefit anticipated when the CDBG assistance was obligated. If the
grantee's actual results show a pattern of substantial variation from
anticipated results, the grantee is expected to take all actions
reasonably within its control to improve the accuracy of its
projections. If the actual results demonstrate that the recipient has
failed the public benefit standards, HUD may require the recipient to
meet more stringent standards in future years as appropriate.
[60 FR 1947, Jan. 5, 1995, as amended at 60 FR 17445, Apr. 6, 1995; 71
FR 30035, May 24, 2006; 72 FR 12535, Mar. 15, 2007; 72 FR 46370, Aug.
17, 2007]
PART 570_COMMUNITY DEVELOPMENT BLOCK GRANTS--Table of Contents
Subpart C Eligible Activities
Sec. 570.208 Criteria for national objectives.
The following criteria shall be used to determine whether a CDBG-
assisted activity complies with one or more of the national objectives
as required under Sec. 570.200 (a) (2) :
(a) Activities benefiting low- and moderate-income persons.
Activities meeting the criteria in paragraph (a) (1) , (2) , (3) , or (4)
of this section as applicable, will be considered to benefit low and
moderate income persons unless there is substantial evidence to the
contrary. In assessing any such evidence, the full range of direct
effects of the assisted activity will be considered. (The recipient
shall appropriately ensure that activities that meet these criteria do
not benefit moderate income persons to the exclusion of low income
persons. )
(1) Area benefit activities. (i) An activity, the benefits of which
are available to all the residents in a particular area, where at least
51 percent of the residents are low and moderate income persons. Such
an area need not be coterminous with census tracts or other officially
recognized boundaries but must be the entire area served by the
activity. An activity that serves an area that is not primarily
residential in character shall not qualify under this criterion.
(ii) For metropolitan cities and urban counties, an activity that
would otherwise qualify under Sec. 570.208 (a) (1) (i) , except that the
area served contains less than 51 percent low- and moderate-income
residents, will also be considered to meet the objective of benefiting
low- and moderate-income persons where the proportion of such persons
in the area is within the highest quartile of all areas in the
recipient's
jurisdiction in terms of the degree of concentration of such persons.
This exception is inapplicable to non-entitlement CDBG grants in
Hawaii.
In applying this exception, HUD will determine the lowest proportion a
recipient may use to qualify an area for this purpose, as follows:
(A) All census block groups in the recipient's jurisdiction shall
be rank ordered from the block group of highest proportion of low and
moderate income persons to the block group with the lowest. For urban
counties, the rank ordering shall cover the entire area constituting
the urban county and shall not be done separately for each
participating unit of general local government.
(B) In any case where the total number of a recipient's block
groups does not divide evenly by four, the block group which would be
fractionally divided between the highest and second quartiles shall be
considered to be part of the highest quartile.
(C) The proportion of low and moderate income persons in the last
census block group in the highest quartile shall be identified. Any
service area located within the recipient's jurisdiction and having a
proportion of low and moderate income persons at or above this level
shall be considered to be within the highest quartile.
(D) If block group data are not available for the entire
jurisdiction, other data acceptable to the Secretary may be used in the
above calculations.
(iii) An activity to develop, establish, and operate for up to two
years after the establishment of, a uniform emergency telephone number
system serving an area having less than the percentage of low- and
moderate-income residents required under paragraph (a) (1) (i) of this
section or (as applicable) paragraph (a) (1) (ii) of this section,
provided the recipient obtains prior HUD approval. To obtain such
approval, the recipient must:
(A) Demonstrate that the system will contribute significantly to
the safety
[ [Page 53] ]
of the residents of the area. The request for approval must include a
list of the emergency services that will participate in the emergency
telephone number system;
(B) Submit information that serves as a basis for HUD to determine
whether at least 51 percent of the use of the system will be by low-
and
moderate-income persons. As available, the recipient must provide
information that identifies the total number of calls actually received
over the preceding 12-month period for each of the emergency services
to
be covered by the emergency telephone number system and relates those
calls to the geographic segment (expressed as nearly as possible in
terms of census tracts, block numbering areas, block groups, or
combinations thereof that are contained within the segment) of the
service area from which the calls were generated. In analyzing this
data
to meet the requirements of this section, HUD will assume that the
distribution of income among the callers generally reflects the income
characteristics of the general population residing in the same
geographic area where the callers reside. If HUD can conclude that the
users have primarily consisted of low- and moderate-income persons, no
further submission is needed by the recipient. If a recipient plans to
make other submissions for this purpose, it may request that HUD review
its planned methodology before expending the effort to acquire the
information it expects to use to make its case;
(C) Demonstrate that other Federal funds received by the recipient
are insufficient or unavailable for a uniform emergency telephone
number
system. For this purpose, the recipient must submit a statement
explaining whether the lack of funds is due to the insufficiency of the
amount of the available funds, restrictions on the use of such funds,
or
the prior commitment of funds by the recipient for other purposes; and
(D) Demonstrate that the percentage of the total costs of the
system
paid for by CDBG funds does not exceed the percentage of low- and
moderate-income persons in the service area of the system. For this
purpose, the recipient must include a description of the boundaries of
the service area of the emergency telephone number system, the census
divisions that fall within the boundaries of the service area (census
tracts or block numbering areas) , the total number of persons and the
total number of low- and moderate-income persons within each census
division, the percentage of low- and moderate-income persons within the
service area, and the total cost of the system.
(iv) An activity for which the assistance to a public improvement
that provides benefits to all the residents of an area is limited to
paying special assessments (as defined in Sec. 570.200 (c) ) levied
against residential properties owned and occupied by persons of low and
moderate income.
(v) For purposes of determining qualification under this criterion,
activities of the same type that serve different areas will be
considered separately on the basis of their individual service area.
(vi) In determining whether there is a sufficiently large
percentage
of low- and moderate-income persons residing in the area served by an
activity to qualify under paragraph (a) (1) (i) , (ii) , or (vii) of this
section, the most recently available decennial census information must
be used to the fullest extent feasible, together with the section 8
income limits that would have applied at the time the income
information
was collected by the Census Bureau. Recipients that believe that the
census data does not reflect current relative income levels in an area,
or where census boundaries do not coincide sufficiently well with the
service area of an activity, may conduct (or have conducted) a current
survey of the residents of the area to determine the percent of such
persons that are low and moderate income. HUD will accept information
obtained through such surveys, to be used in lieu of the decennial
census data, where it determines that the survey was conducted in such
a manner that the results meet standards of statistical reliability
that are comparable to that of the decennial census data for areas of
similar size. Where there is substantial evidence that provides a clear
basis to believe that the use of the decennial census
[ [Page 54] ]
data would substantially overstate the proportion of persons residing
there that are low and moderate income, HUD may require that the
recipient rebut such evidence in order to demonstrate compliance with
section 105 (c) (2) of the Act.
(vii) Activities meeting the requirements of paragraph (d) (5) (i) of
this section may be considered to qualify under this paragraph,
provided
that the area covered by the strategy is either a Federally-designated
Empowerment Zone or Enterprise Community or primarily residential and
contains a percentage of low- and moderate-income residents that is no
less than the percentage computed by HUD pursuant to paragraph
(a) (1) (ii) of this section or 70 percent, whichever is less, but in no
event less than 51 percent. Activities meeting the requirements of
paragraph (d) (6) (i) of this section may also be considered to qualify
under paragraph (a) (1) of this section.
(2) Limited clientele activities. (i) An activity which benefits a
limited clientele, at least 51 percent of whom are low- or moderate-
income persons. (The following kinds of activities may not qualify
under paragraph (a) (2) of this section: activities, the benefits of
which are available to all the residents of an area; activities
involving the acquisition, construction or rehabilitation of property
for housing; or activities where the benefit to low- and moderate-
income persons to be considered is the creation or retention of jobs,
except as provided in paragraph (a) (2) (iv) of this section. ) To qualify
under paragraph (a) (2)
of this section, the activity must meet one of the following tests:
(A) Benefit a clientele who are generally presumed to be
principally
low and moderate income persons. Activities that exclusively serve a
group of persons in any one or a combination of the following
categories may be presumed to benefit persons, 51 percent of whom are
low- and moderate-income: abused children, battered spouses, elderly
persons, adults meeting the Bureau of the Census' Current Population
Reports definition of ' 'severely disabled, ' ' homeless persons,
illiterate adults, persons living with AIDS, and migrant farm workers;
or
(B) Require information on family size and income so that it is
evident that at least 51 percent of the clientele are persons whose
family income does not exceed the low and moderate income limit; or
(C) Have income eligibility requirements which limit the activity
exclusively to low and moderate income persons; or
(D) Be of such nature and be in such location that it may be
concluded that the activity's clientele will primarily be low and
moderate income persons.
(ii) An activity that serves to remove material or architectural
barriers to the mobility or accessibility of elderly persons or of
adults meeting the Bureau of the Census ' Current Population Reports
definition of ' 'severely disabled' ' will be presumed to qualify under
this criterion if it is restricted, to the extent practicable, to the
removal of such barriers by assisting:
(A) The reconstruction of a public facility or improvement, or
portion thereof, that does not qualify under paragraph (a) (1) of this
section;
(B) The rehabilitation of a privately owned nonresidential building
or improvement that does not qualify under paragraph (a) (1) or (4) of
this section; or
(C) The rehabilitation of the common areas of a residential
structure that contains more than one dwelling unit and that does not
qualify under paragraph (a) (3) of this section.
(iii) A microenterprise assistance activity carried out in
accordance with the provisions of Sec. 570.201 (o) with respect to those
owners of microenterprises and persons developing microenterprises
assisted under the activity during each program year who are low- and
moderate-income persons. For purposes of this paragraph, persons
determined to be low and moderate income may be presumed to continue to
qualify as such for up to a three-year period.
(iv) An activity designed to provide job training and placement
and/or other employment support services, including, but not limited
to, peer support programs, counseling, child care, transportation, and
other similar services, in which the percentage of low- and moderate-
income persons assisted
[ [Page 55] ]
is less than 51 percent may qualify under this paragraph in the
following limited circumstance:
(A) In such cases where such training or provision of supportive
services assists business (es) , the only use of CDBG assistance for the
project is to provide the job training and/or supportive services; and
(B) The proportion of the total cost of the project borne by CDBG
funds is no greater than the proportion of the total number of persons
assisted who are low or moderate income.
(3) Housing activities. An eligible activity carried out for the
purpose of providing or improving permanent residential structures
which, upon completion, will be occupied by low- and moderate-income
households. This would include, but not necessarily be limited to, the
acquisition or rehabilitation of property by the recipient, a
subrecipient, a developer, an individual homebuyer, or an individual
homeowner; conversion of nonresidential structures; and new housing
construction. If the structure contains two dwelling units, at least
one
must be so occupied, and if the structure contains more than two
dwelling units, at least 51 percent of the units must be so occupied.
Where two or more rental buildings being assisted are or will be
located
on the same or contiguous properties, and the buildings will be under
common ownership and management, the grouped buildings may be
considered
for this purpose as a single structure. Where housing activities being
assisted meet the requirements of paragraph Sec. 570.208 (d) (5) (ii) or
(d) (6) (ii) of this section, all such housing may also be considered for
this purpose as a single structure. For rental housing, occupancy by
low and moderate income households must be at affordable rents to
qualify under this criterion. The recipient shall adopt and make public
its standards for determining ' 'affordable rents' ' for this purpose.
The following shall also qualify under this criterion:
(i) When less than 51 percent of the units in a structure will be
occupied by low and moderate income households, CDBG assistance may be
provided in the following limited circumstances:
(A) The assistance is for an eligible activity to reduce the
development cost of the new construction of a multifamily, non-elderly
rental housing project;
(B) Not less than 20 percent of the units will be occupied by low
and moderate income households at affordable rents; and
(C) The proportion of the total cost of developing the project to
be
borne by CDBG funds is no greater than the proportion of units in the
project that will be occupied by low and moderate income households.
(ii) When CDBG funds are used to assist rehabilitation eligible
under Sec. 570.202 (b) (9) or (10) in direct support of the recipient's
Rental Rehabilitation program authorized under 24 CFR part 511, such
funds shall be considered to benefit low and moderate income persons
where not less than 51 percent of the units assisted, or to be
assisted,
by the recipient's Rental Rehabilitation program overall are for low
and moderate income persons.
(iii) When CDBG funds are used for housing services eligible under
Sec. 570.201(k) , such funds shall be considered to benefit low- and
moderate-income persons if the housing units for which the services are
provided are HOME-assisted and the requirements at 24 CFR 92.252 or
92.254 are met.
(4) Job creation or retention activities. An activity designed to
create or retain permanent jobs where at least 51 percent of the jobs,
computed on a full time equivalent basis, involve the employment of
low- and moderate-income persons. To qualify under this paragraph, the
activity must meet the following criteria:
(i) For an activity that creates jobs, the recipient must document
that at least 51 percent of the jobs will be held by, or will be
available to, low- and moderate-income persons.
(ii) For an activity that retains jobs, the recipient must document
that the jobs would actually be lost without the CDBG assistance and
that either or both of the following conditions apply with respect to
at least 51 percent of the jobs at the time the CDBG assistance is
provided:
(A) The job is known to be held by a low- or moderate-income
person; or
[ [Page 56] ]
(B) The job can reasonably be expected to turn over within the
following two years and that steps will be taken to ensure that it will
be filled by, or made available to, a low- or moderate-income person
upon turnover.
(iii) Jobs that are not held or filled by a low- or moderate-income
person may be considered to be available to low- and moderate-income
persons for these purposes only if:
(A) Special skills that can only be acquired with substantial
training or work experience or education beyond high school are not a
prerequisite to fill such jobs, or the business agrees to hire
unqualified persons and provide training; and
(B) The recipient and the assisted business take actions to ensure
that low- and moderate-income persons receive first consideration for
filling such jobs.
(iv) For purposes of determining whether a job is held by or made
available to a low- or moderate-income person, the person may be
presumed to be a low- or moderate-income person if:
(A) He/she resides within a census tract (or block numbering area)
that either:
(1) Meets the requirements of paragraph (a) (4) (v) of this section;
or
(2) Has at least 70 percent of its residents who are low- and
moderate-income persons; or
(B) The assisted business is located within a census tract (or
block numbering area) that meets the requirements of paragraph
(a) (4) (v) of this section and the job under consideration is to be
located within that census tract.
(v) A census tract (or block numbering area) qualifies for the
presumptions permitted under paragraphs (a) (4) (iv) (A) (1) and (B) of
this section if it is either part of a Federally-designated Empowerment
Zone or Enterprise Community or meets the following criteria:
(A) It has a poverty rate of at least 20 percent as determined by
the most recently available decennial census information;
(B) It does not include any portion of a central business district,
as this term is used in the most recent Census of Retail Trade, unless
the tract has a poverty rate of at least 30 percent as determined by
the most recently available decennial census information; and
(C) It evidences pervasive poverty and general distress by meeting
at least one of the following standards:
(1) All block groups in the census tract have poverty rates of at
least 20 percent;
(2) The specific activity being undertaken is located in a block
group that has a poverty rate of at least 20 percent; or
(3) Upon the written request of the recipient, HUD determines that
the census tract exhibits other objectively determinable signs of
general distress such as high incidence of crime, narcotics use,
homelessness, abandoned housing, and deteriorated infrastructure or
substantial population decline.
(vi) As a general rule, each assisted business shall be considered
to be a separate activity for purposes of determining whether the
activity qualifies under this paragraph, except:
(A) In certain cases such as where CDBG funds are used to acquire,
develop or improve a real property (e.g. , a business incubator or an
industrial park) the requirement may be met by measuring jobs in the
aggregate for all the businesses which locate on the property, provided
such businesses are not otherwise assisted by CDBG funds.
(B) Where CDBG funds are used to pay for the staff and overhead
costs of an entity making loans to businesses exclusively from non-CDBG
funds, this requirement may be met by aggregating the jobs created by
all of the businesses receiving loans during each program year.
(C) Where CDBG funds are used by a recipient or subrecipient to
provide technical assistance to businesses, this requirement may be met
by aggregating the jobs created or retained by all of the businesses
receiving technical assistance during each program year.
(D) Where CDBG funds are used for activities meeting the criteria
listed at Sec. 570.209 (b) (2) (v) , this requirement may be met by
aggregating the jobs created or retained by all businesses for which
CDBG assistance is obligated for such
[ [Page 57] ]
activities during the program year, except as provided at paragraph
(d) (7) of this section.
(E) Where CDBG funds are used by a Community Development Financial
Institution to carry out activities for the purpose of creating or
retaining jobs, this requirement may be met by aggregating the jobs
created or retained by all businesses for which CDBG assistance is
obligated for such activities during the program year, except as
provided at paragraph (d) (7) of this section.
(F) Where CDBG funds are used for public facilities or improvements
which will result in the creation or retention of jobs by more than one
business, this requirement may be met by aggregating the jobs created
or retained by all such businesses as a result of the public facility
or improvement.
(1) Where the public facility or improvement is undertaken
principally for the benefit of one or more particular businesses, but
where other businesses might also benefit from the assisted activity,
the requirement may be met by aggregating only the jobs created or
retained by those businesses for which the facility/improvement is
principally undertaken, provided that the cost (in CDBG funds) for the
facility/improvement is less than $10,000 per permanent full-time
equivalent job to be created or retained by those businesses.
(2) In any case where the cost per job to be created or retained
(as determined under paragraph (a) (4) (vi) (F) (1) of this section) is
$10,000 or more, the requirement must be met by aggregating the jobs
created or
retained as a result of the public facility or improvement by all
businesses in the service area of the facility/improvement. This
aggregation must include businesses which, as a result of the public
facility/improvement, locate or expand in the service area of the
facility/improvement between the date the recipient identifies the
activity in its action plan under part 91 of this title and the date
one
year after the physical completion of the facility/improvement. In
addition, the assisted activity must comply with the public benefit
standards at Sec. 570.209(b) .
(b) Activities which aid in the prevention or elimination of slums
or blight. Activities meeting one or more of the following criteria, in
the absence of substantial evidence to the contrary, will be considered
to aid in the prevention or elimination of slums or blight:
(1) Activities to address slums or blight on an area basis. An
activity will be considered to address prevention or elimination of
slums or blight in an area if:
(i) The area, delineated by the recipient, meets a definition of a
slum, blighted, deteriorated or deteriorating area under State or local
law;
(ii) The area also meets the conditions in either paragraph (A) or
(B) :
(A) At least 25 percent of properties throughout the area
experience
one or more of the following conditions:
(1) Physical deterioration of buildings or improvements;
(2) Abandonment of properties;
(3) Chronic high occupancy turnover rates or chronic high vacancy
rates in commercial or industrial buildings;
(4) Significant declines in property values or abnormally low
property values relative to other areas in the community; or
(5) Known or suspected environmental contamination.
(B) The public improvements throughout the area are in a general
state of deterioration.
(iii) Documentation is to be maintained by the recipient on the
boundaries of the area and the conditions and standards used that
qualified the area at the time of its designation. The recipient shall
establish definitions of the conditions listed at Sec.
570.208 (b) (1) (ii) (A) , and maintain records to substantiate how the area
met the slums or blighted criteria. The designation of an area as slum
or blighted under this section is required to be redetermined every 10'
years for continued qualification. Documentation must be retained
pursuant to the recordkeeping requirements contained at Sec. 570.506
(b) (8) (ii) .
(iv) The assisted activity addresses one or more of the conditions
which contributed to the deterioration of the area. Rehabilitation of
residential
[ [Page 58] ]
buildings carried out in an area meeting the above requirements will be
considered to address the area's deterioration only where each such
building rehabilitated is considered substandard under local definition
before rehabilitation, and all deficiencies making a building
substandard have been eliminated if less critical work on the building
is undertaken. At a minimum, the local definition for this purpose must
be such that buildings that it would render substandard would also fail
to meet the housing quality standards for the Section 8 Housing
Assistance Payments Program-Existing Housing (24 CFR 882.109) .
(2) Activities to address slums or blight on a spot basis. The
following activities may be undertaken on a spot basis to eliminate
specific conditions of blight, physical decay, or environmental
contamination that are not located in a slum or blighted area:
acquisition; clearance; relocation; historic preservation; remediation
of environmentally contaminated properties; or rehabilitation of
buildings or improvements. However, rehabilitation must be limited to
eliminating those conditions that are detrimental to public health and
safety. If acquisition or relocation is undertaken, it must be a
precursor to another eligible activity (funded with CDBG or other
resources) that directly eliminates the specific conditions of blight
or
physical decay, or environmental contamination.
(3) Activities to address slums or blight in an urban renewal area.
An activity will be considered to address prevention or elimination of
slums or blight in an urban renewal area if the activity is:
(i) Located within an urban renewal project area or Neighborhood
Development Program (NDP) action area; i.e. , an area in which funded
activities were authorized under an urban renewal Loan and Grant
Agreement or an annual NDP Funding Agreement, pursuant to title I of
the
Housing Act of 1949; and
(ii) Necessary to complete the urban renewal plan, as then in
effect, including initial land redevelopment permitted by the plan.
Note: Despite the restrictions in (b) (1) and (2) of this section,
any rehabilitation activity which benefits low and moderate income
persons pursuant to paragraph (a) (3) of this section can be undertaken
without regard to the area in which it is located or the extent or
nature of rehabilitation assisted.
(c) Activities designed to meet community development needs having
a particular urgency. In the absence of substantial evidence to the
contrary, an activity will be considered to address this objective if
the recipient certifies that the activity is designed to alleviate
existing conditions which pose a serious and immediate threat to the
health or welfare of the community which are of recent origin or which
recently became urgent, that the recipient is unable to finance the
activity on its own, and that other sources of funding are not
available. A condition will generally be considered to be of recent
origin if it developed or became critical within 18 months preceding
the certification by the recipient.
(d) Additional criteria. (1) Where the assisted activity is
acquisition of real property, a preliminary determination of whether
the
activity addresses a national objective may be based on the planned use
of the property after acquisition. A final determination shall be based
on the actual use of the property, excluding any short-term, temporary
use. Where the acquisition is for the purpose of clearance which will
eliminate specific conditions of blight or physical decay, the
clearance
activity shall be considered the actual use of the property. However,
any subsequent use or disposition of the cleared property shall be
treated as a "change of use' ' under Sec. 570.505.
(2) Where the assisted activity is relocation assistance that the
recipient is required to provide, such relocation assistance shall be
considered to address the same national objective as is addressed by
the
displacing activity. Where the relocation assistance is voluntary on
the
part of the grantee the recipient may qualify the assistance either on
the basis of the national objective addressed by the displacing
activity
or on the basis that the recipients of the relocation assistance are
low and moderate income persons.
(3) In any case where the activity undertaken for the purpose of
creating or retaining jobs is a public improvement
[ [Page 59] ]
and the area served is primarily residential, the activity must meet
the requirements of paragraph (a) (1) of this section as well as those
of paragraph (a) (4) of this section in order to qualify as benefiting
low and moderate income persons.
(4) CDBG funds expended for planning and administrative costs under
Sec. 570.205 and Sec. 570.206 will be considered to address the
national objectives.
(5) Where the grantee has elected to prepare an area revitalization
strategy pursuant to the authority of Sec. 91.215 (e) of this title and
HUD has approved the strategy, the grantee may also elect the following
options:
(i) Activities undertaken pursuant to the strategy for the purpose
of creating or retaining jobs may, at the option of the grantee, be
considered to meet the requirements of this paragraph under the
criteria
at paragraph (a) (1) (vii) of this section in lieu of the criteria at
paragraph (a) (4) of this section; and
(ii) All housing activities in the area for which, pursuant to the
strategy, CDBG assistance is obligated during the program year may be
considered to be a single structure for purposes of applying the
criteria at paragraph (a) (3) of this section.
(6) Where CDBG-assisted activities are carried out by a Community
Development Financial Institution whose charter limits its investment
area to a primarily residential area consisting of at least 51 percent
low- and moderate-income persons, the grantee may also elect the
following options:
(i) Activities carried out by the Community Development Financial
Institution for the purpose of creating or retaining jobs may, at the
option of the grantee, be considered to meet the requirements of this
paragraph under the criteria at paragraph (a) (1) (vii) of this section
in
lieu of the criteria at paragraph (a) (4) of this section; and
(ii) All housing activities for which the Community Development
Financial Institution obligates CDBG assistance during the program year
may be considered to be a single structure for purposes of applying the
criteria at paragraph (a) (3) of this section.
(7) Where an activity meeting the criteria at Sec. 570.209(b) (2) (v)
may also meet the requirements of either paragraph (d) (5) (i) or
(d) (6) (i) of this section, the grantee may elect to qualify the
activity
under either the area benefit criteria at paragraph (a) (1) (vii) of this
section or the job aggregation criteria at paragraph (a) (4) (vi) (D) of
this section, but not both. Where an activity may meet the job
aggregation criteria at both paragraphs (a) (4) (vi) (D) and (E) of this
section, the grantee may elect to qualify the activity under either
criterion, but not both.
[53 FR 34439, Sept. 6, 1988; 53 FR 41330, Oct. 21, 1988, as amended at
60 FR 1945, Jan. 5, 1995; 60 FR 17445, Apr. 6, 1995; 60 FR 56912, Nov.
9, 1995; 61 FR 18674, Apr. 29, 1996; 71 FR 30035, May 24, 2006; 72 FR
46370, Aug. 17, 2007]
F:\USERS\ATAUKE\CDBG\CDBG regs.WSLIve jobs.doc
FIRST AMENDMENT
TO
LOAN AGREEMENT CDBG #1-2009
BETWEEN
THE CITY OF DUBUQUE
AND
WS LIVE, LLC.
This First Amendment to Loan Agreement, dated for reference purposes the
day of 5 -n,,gLg _, 2010, is made and entered into by and among the
City of Dubuque, Iowa (Cit-y , WS Live, LLC, a Delaware limited liability company
with its principal place of business in Dubuque, Iowa (Company), and Working
Solutions, Inc., a Delaware corporation with its principal place of business in Plano,
Texas (Guarantor).
Whereas, City and Company previously entered into a Loan Agreement
dated the 6th day of January, 2009 (the Agreement) pursuant to which City loaned
funds to Company for the purchase of certain machinery, furniture, and equipment;
and
Whereas, Guarantor, a related entity, purchased the machinery, furniture,
and equipment for the benefit of Company; and
Whereas, the machinery, furniture, and equipment is now legally owned by
Guarantor and will be used to secure the loan funds; and
Whereas, City, Company, and Guarantor have agreed that Guarantor should
be added as a party to the Agreement for security purposes; and
Whereas, the parties desire to amend the Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual terms and covenants
contained herein, the parties agree as follows:
1. Par. 4 is amended by adding thereto the following:
Guarantor agrees to be added as a party to this Agreement pursuant to this
subsection 4, and to enter into a security agreement in form reasonably
acceptable to the City, for the sole purpose of providing City with a perfected
security interest in and to the machinery, furniture and equipment purchased
with the proceeds of the Loan made under this Agreement, and agrees that
City may file the requisite UCC-1 Financing Statement to secure the
machinery, furniture and equipment as collateral for the Loan. Guarantor
shall have no other obligations under this Agreement.
I
2. Except as modified herein, the Agreement shall remain in full force
and effect.
CITY OF DUBUQUE, IOWA WS LIVE, LLC
By. /"21
��. . By.
Michael C. Van Milligen Jeff Men er
City Manager Chief Financial Officer
WORKING SOLUTIONS, INC.
By.
Tim Houlne
Chief Executive Officer
2