HomeMy WebLinkAboutPrairie Legacy Ventures, LLC-9/14/2015 (2)PTease return t its copy to:
City Clerk & Finance Dept.
715 Mulberry St.
Waterloo, IA 50703
Prepared by Christopher S. Wendland, P.O. Box 596, Waterloo, IA 50704 Phone (319) 234-5701
DEVELOPMENT AGREEMENT — Phased Development
This Development Agreement (the "Agreement") is entered into as of
S 1'4 , 2015 by and between Prairie Legacy Ventures, LLC (the
"Company") and the City of Waterloo, Iowa (the "City").
RECITALS
A. City considers economic development within the City a benefit to the
community and is willing for the overall good and welfare of the
community to provide financial incentives so as to encourage that goal.
B. Company is willing and able to finance and construct a building and
related improvements on property that it will acquire, legally described on
Exhibit "A" (the "Property"), located in the Martin Road tax increment
financing district.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the parties agree as follows:
1. Improvements by Company. The parties contemplate that Company will
develop the Property in two phases, as follows:
A. Phase 1 — A commercial building of no less than 15,000 square
feet. It is contemplated that the Property will, upon substantial completion of the
Phase 1 Improvements, have an assessed value of no less than $1,200,000.
B. Phase 2 — An addition to the Phase I structure, consisting of no
less than 15,000 square feet. It is contemplated that the Property will, upon
substantial completion of the Phase 2 Improvements, have an assessed value of
no less than $2,200,000.
In addition to the buildings described above, each phase shall include related parking,
landscape, and other improvements to the building and grounds (the "Improvements").
The Improvements shall be constructed in accordance with all applicable City, state,
and federal building codes and shall comply with all applicable City ordinances and
other applicable law. The Improvements and all site preparation and development -
related work as contemplated by this Agreement are collectively referred to as the
"Project".
2. Property Acquisition. The Property will be acquired in either of the
following ways:
A. Company will purchase the Property and City will make a grant
payment (the "Grant") to Company in an amount equal to the purchase price
thereof, payable on Company's behalf to the seller or the closing agent; or
B. City will purchase the Property and deed it to Company for $1.00.
Conveyance from City to Company shall be by quit claim deed, free and clear of
all encumbrances arising by or through City except: (a) easements, conditions
and restrictions of record which do not, in Company's opinion, interfere with
Company's proposed use; (b) current and future real estate real property taxes
and assessments subject to the agreements made herein; (c) general utility and
right-of-way easements serving the Property; and (d) restrictions imposed by the
City zoning ordinances and other applicable law. As between City and
Company, Company shall be responsible for all property taxes and special
assessments payable in respect of the Property. Company shall, at its own
expense, prepare an updated abstract of title, or in lieu thereof Company may, at
its own expense, obtain whatever form of title evidence it desires. City shall
provide any title documents it has in its possession, including any abstracts, to
assist in title preparation.
3. Timeliness of Construction; Possibility of Reverter. The parties agree
that Company's commitment to undertake the Project and to construct the
Improvements in a timely manner constitutes a material inducement for the City to
extend the development incentives provided for in this Agreement, and that without said
commitment City would not have done so.
A. Phase 1. Company must obtain a building permit and begin
construction no later than the date that is four (4) months after the date of this
Agreement (the "Project Start Date"), and construction of Improvements on the
Property shall be completed within twelve (12) months thereafter (the "Project
Completion Date"). If, by the Project Start Date, Company has not in good faith
begun construction of the Improvements upon the Property, then the City may
terminate this Agreement following Company's failure to begin construction
within thirty (30) days following written notice of default from City. If development
has commenced by the Project Start Date or within any agreed period of
extension and is stopped and/or delayed as a result of an act of God, war, civil
disturbance, court order, labor dispute, fire, or other cause beyond the
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reasonable control of Company, the requirement that construction is to be
completed by the Project Completion Date shall be tolled for a period of time
equal to the period of such stoppage or delay, and thereafter if construction is
not completed within the allowed period of extension the City may terminate this
Agreement following Company's failure to diligently undertake construction within
thirty (30) days following written notice of default from City. If at any time
Company fails to diligently undertake construction and other activities necessary
for completion of the Project, then City may terminate this Agreement following
Company's failure to resume and diligently carry on construction within thirty (30)
days following written notice of default from City. In the event of any termination
of this Agreement provided for in this paragraph, title to the Property shall revert
to the City.
B. Phase 2. The provisions of paragraph A of this Section 3 are
incorporated herein, except that the Project Start Date applicable to the Phase 2
Improvements shall be the date that is five (5) years after the date of this
Agreement, and the possibility of reverter shall apply only with respect to that
portion of the Property described on Exhibit "A-1" attached hereto (the "Phase 2
Parcel").
4. Reverter of Title; Indemnity. In the event of any reverter of title,
Company agrees that it shall, at its own expense, promptly execute all documents,
including but not limited to a special warranty deed, or take such other actions as the
City may reasonably request to effectuate said reverter and to deliver to City title to the
Property or the Phase 2 Parcel, as applicable, that is free and clear of any lien, claim,
or encumbrance arising by or through Company. Company shall pay in full, so as to
discharge or satisfy, all liens, claims, charges, and encumbrances on or against the
Property or the Phase 2 Parcel, as applicable. If Company fails to deliver such
documents, including but not limited to a special warranty deed, to City within thirty (30)
days of written demand by City, then City shall be authorized to execute, on Company's
behalf and as its attorney-in-fact, the special warranty deed required by this Section,
and for such limited purpose Company does hereby constitute and appoint City as its
attorney-in-fact.
Company further agrees that it shall indemnify City and hold it harmless
with respect to any demand, claim, cause of action, damage, or injury made, suffered,
or incurred as a result of or in connection with the Project, Company's failure to carry on
or complete same, or any lien, claim, charge, or encumbrance on or against the
Property or the Phase 2 Parcel, as applicable, of any type or nature whatsoever that
attaches to the such property by virtue of Company's ownership of same. If City files
suit to enforce the terms of this Agreement and prevails in such suit, then Company
shall be liable for all legal expenses, including but not limited to reasonable attorneys'
fees. Company's duties of indemnity pursuant to this Section shall survive the
expiration, termination or cancellation of this Agreement for any reason.
5. No Encumbrances; Limited Exception. Until completion of the
Improvements, Company agrees that it shall not create, incur, or suffer to exist any lien,
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encumbrance, mortgage, security interest, or charge on the Property, other than such
mortgage or mortgages as may be reasonably necessary to finance Company's
completion of the Improvements and of which Company notifies City in advance of
Company's execution of any such mortgage. Company may not mortgage the Property
for any purpose except in connection with financing of the Improvements.
6. Option to Purchase. Upon the occurrence of any instance where the
provisions of this Agreement would require reverter of title with respect to the Phase 2
Parcel, in lieu of reverter of title Company shall have the option to purchase the Phase
2 Parcel by payment to City of an amount equal to one-third (1/3) of the Grant or one-
third (1/3) of the purchase paid by the City to acquire the entire Property. Company
shall exercise said option within thirty (30) days after written notice from City, and if said
option is not timely exercised then title to the Phase 2 Parcel shall revert to the City.
7. Utilities. Company will be responsible for extending water, sewer,
telephone, telecommunications, electric, gas and other utility services to any location on
the Property and for payment of any associated connection fees.
8. Minimum Assessment Agreement. Company acknowledges and
agrees that it will pay when due all taxes and assessments, general or special, and all
other lawful charges whatsoever levied upon or assessed or placed against the
Property. Company further agrees that, prior to the date set forth in Section 2 of
Exhibit "B", it will not seek or cause a reduction in the assessed valuation for the
Property, which shall be fixed for assessment purposes, below the amount stated in the
minimum assessment agreement applicable to a given phase (the "Minimum Actual
Value"), through:
(i) willful destruction of the Property, Improvements, or any part of
either;
(ii) a request to the assessor of Black Hawk County; or
(iii) any proceedings, whether administrative, legal, or equitable, with
any administrative body or court within the City, Black Hawk
County, the State of Iowa, or the federal government.
The Minimum Actual Value for each phase shall be as follows:
Phase 1
Phase 2
$1,200,000
$1,000,000
Total $2,200,000
In connection with each phase of Improvements, and as a condition to receiving the
benefits provided for in this Agreement, Company agrees to sign an agreement
substantially in the form attached as Exhibit "B". The minimum assessment agreement
for Phase I shall be executed concurrently with execution of this Agreement, and the
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minimum assessment agreement for Phase 2 shall be executed when Company takes
out a building permit for Phase 2 Improvements.
9. Tax Rebates.
A. Phase 1. Provided that Company has completed the Phase 1
Improvements as set forth herein and has executed the Minimum Assessment
Agreement as set forth in Section 4, City agrees to rebate property tax (with the
exceptions noted below) as follows:
Year One through Year Five 80% rebate each year
Year Six through Year Ten 30% rebate each year
Rebates are payable in respect of a given year only to the extent that Company
has actually paid general property taxes due and owing for such year. To
receive rebates for a given year, Company must, within twelve (12) months after
the tax payment due date, submit a completed rebate request to City on the form
provided by or otherwise satisfactory to City. The first year in which a rebate
may be given ("Year One") shall be the first full year for which the assessment is
based on the completed value of the Improvements and not a prior year for
which the assessment is based solely on the value of the land or on the value of
the land and a partial value of the Improvements, due to partial completion of the
Improvements or a partial tax year.
The taxable value of the Property as a result of the Improvements must
be increased by a minimum of 10% and must increase the annual tax by a
minimum of $500.00. This rebate program is not applicable to any special
assessment levy, debt service levy, or any other levy that is exempted from
treatment as tax increment financing under the provisions of applicable law.
B. Phase 2. Upon completion of the Phase 2 Improvements as set
forth herein, and provided that Company has executed a Minimum Assessment
Agreement with respect to such Improvements as set forth in Section 4, City
agrees to rebate property tax payable in respect of the value added by the
Phase 2 Improvements as follows:
Year One through Year Five 80% rebate each year
Year Six through Year Ten 30% rebate each year
on the same terms as provided above in paragraph A of this Section 9, except
that any reference therein to the Improvements shall, for purposes of this
paragraph B, mean the Phase 2 Improvements only.
10. Obligations Contingent. Each and every obligation of City under this
Agreement is expressly made subject to and contingent upon City's completion of all
procedures, hearings and approvals deemed necessary by City or its legal counsel for
amendment of the urban renewal plan applicable to the Property and/or project area, all
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of which must be completed within 180 days from the date this Agreement is approved
by the City council. If such completion does not occur, then any conveyance, benefit or
incentive of any type provided by City hereunder within said 180 -day period is subject to
reverter of title, revocation, repayment or other appropriate action to restore such
property, benefit or incentive to City, and Company agrees to cooperate diligently and in
good faith with any reasonable request by City to effectuate the restoration of same, or
failing such restoration Company agrees to be liable for same or for the fair value
thereof, plus interest on any sums owing at the rate of 10% per annum commencing
with the date of demand for payment, if said payment is not remitted to City within 30
days.
11. Representations and Warranties of City. City hereby represents and
warrants as follows:
A. City is not prohibited from consummating the transaction
contemplated in this Agreement by any law, regulation, agreement, instrument,
restriction, order or judgment.
B. Each person who executes and delivers this Agreement and all
documents to be delivered hereunder is and shall be authorized to do so on
behalf of City.
12. Representations and Warranties of Company. Company hereby
represents and warrants as follows:
A. Company is not prohibited from consummating the transaction
contemplated in this Agreement by any law, regulation, agreement, instrument,
restriction, order or judgment.
B. Company is duly organized, validly existing, and in good standing
under the laws of the state of its organization and is duly qualified and in good
standing under the laws of the State of Iowa.
C. Company has full right, title, and authority to execute and perform
this Agreement and to consummate all of the transactions contemplated herein,
and each person who executes and delivers this Agreement and all documents
to be delivered to City hereunder is and shall be authorized to do so on behalf of
Company.
13. Restriction on Assignment or Conveyance; Sharing of Proceeds.
Company agrees that it will not sell, convey, assign or otherwise transfer, in whole or in
part, to any other person or entity, its interest in the Property or the Phase 2 Parcel
before completion of all Improvements to be made under this Agreement without the
prior written consent of City. Reasonable grounds for the City to withhold its consent
shall include but are not limited to the inability of the proposed transferee to
demonstrate to the City's satisfaction that it has the financial ability to observe all of the
terms to be performed by Company under this Agreement. As a further condition to the
granting of such consent, the parties agree to negotiate in good faith for Company's
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sharing of sale proceeds with City as partial reimbursement to City for its expenses
relating to its activities in support of the Project and in assembling the Property.
14. Materiality of Company's Promises, Covenants, Representations,
and Warranties. Each and every promise, covenant, representation, and warranty set
forth in this Agreement on the part of Company to be performed is a material term of
this Agreement, and each and every such promise, covenant, representation, and
warranty constitutes a material inducement for City to enter this Agreement. Company
acknowledges that without such promises, covenants, representations, and warranties,
City would not have entered this Agreement. Upon breach of any promise or covenant,
or in the event of the incorrectness or falsity of any representation or warranty, City
may, at its sole option and in addition to any other right or remedy available to it,
terminate this Agreement and declare it null and void.
15. Notices. Any notice under this Agreement shall be in writing and shall be
delivered in person, by overnight air courier service, by United States registered or
certified mail, postage prepaid, or by facsimile (with an additional copy delivered by one
of the foregoing means), and addressed:
(a) if to City, at 715 Mulberry Street, Waterloo, Iowa 50703, facsimile
number 319-291-4571, Attention: Mayor, with copies to the City Attorney and the
Community Planning and Development Director.
(b) if to Company, at 1012 V\In.ut Street, Decorah, Iowa, 52101,
facsimile numbersD 'g ,Attention: Steven L. Tjossem.
Delivery of notice shall be deemed to occur (i) on the date of delivery when delivered in
person, (ii) one (1) business day following deposit for overnight delivery to an overnight
air courier service which guarantees next day delivery, (iii) three (3) business days
following the date of deposit if mailed by United States registered or certified mail,
postage prepaid, or (iv) when transmitted by facsimile so long as the sender obtains
written electronic confirmation from the sending facsimile machine that such
transmission was successful.
16. No Joint Venture. Nothing in this Agreement shall, or shall be deemed
or construed to, create or constitute any joint venture, partnership, agency,
employment, or any other relationship between the City and Company nor to create any
liability for one party with respect to the liabilities or obligations of the other party or any
other person.
17. Amendment, Modification, and Waiver. No amendment, modification,
or waiver of any condition, provision, or term of this Agreement shall be valid or of any
effect unless made in writing, signed by the party or parties to be bound or by the duly
authorized representative of same, and specifying with particularity the extent and
nature of the amendment, modification, or waiver. Any waiver by any party of any
default by another party shall not affect or impair any rights arising from any subsequent
default.
18. Severability. Each provision, section, sentence, clause, phrase, and
word of this Agreement is intended to be severable. If any portion of this Agreement
shall be deemed invalid or unenforceable, whether in whole or in part, the offending
provision or part thereof shall be deemed severed from this Agreement and the
remaining provisions of this Agreement shall not be affected thereby and shall continue
in full force and effect. If, for any reason, a court finds that any portion of this
Agreement is invalid or unenforceable as written, but that by limiting such provision or
portion thereof it would become valid and enforceable, then such provision or portion
thereof shall be deemed to be written, and shall be construed and enforced, as so
limited.
19. Captions. All captions, headings, or titles in the paragraphs or sections
of this Agreement are inserted only as a matter of convenience and/or reference, and
they shall in no way be construed as limiting, extending, or describing either the scope
or intent of this Agreement or of any provisions hereof.
20. Binding Effect. This Agreement shall be binding and shall inure to the
benefit of the parties and their respective successors, assigns, and legal
representatives.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which, taken
together, shall constitute one and the same instrument.
22. Entire Agreement. This Agreement, together with the Minimum
Assessment Agreement attached hereto as Exhibit "B", constitutes the entire
agreement of the parties and supersedes all prior or contemporaneous negotiations,
discussions, understandings, or agreements, whether oral or written, with respect to the
subject matter hereof.
23. Time of Essence. Time is of the essence of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Development
Agreement by their duly authorized representatives as of the date first set forth above.
CITY OF WATERLOO, IOWA PRAIRIE LEGACY VENTURES -LLC
By:
Ernest G. Clark, Mayor
Attest:
Suzy Sc .ar? City Clerk
8
By:
Steven L. Tjosse
Managing Memb
PERSONAL GUARANTY. The undersigned, being either an officer, shareholder,
manager, or member of Company, hereby agree for themselves and their heirs,
personal representatives, and assigns, to unconditionally guarantee to City, its
successors and assigns, the full and prompt performance by Company, its successors
and assigns, of all promises and covenants on the part of Company to be performed
pursuant to the foregoing Agreement, including but not limited to the duties of indemnity
set forth therein. Liability of guarantors hereunder is joint and several.
Steven L. Tjosse
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Greenbelt Centre — 4 acre parcel
Property Description
That part of the Northwest Quarter of the Southeast Quarter of Section 6, Township 88
North, Range 13 West of the Fifth Principal Meridian, Black Hawk County, Iowa,
described as follows:
Commencing at the Southwest corner of said Northwest Quarter of the Southeast
Quarter; thence N89°27'09"E 268.49 feet to the intersection of the South line of said
Northwest Quarter of the Southeast Quarter and the East line of Greyhound Drive;
thence Northwesterly following said East line of Greyhound Drive 262.09 feet along a
576.62 foot radius curve, concave Easterly, said curve having a chord of 259.84 feet
bearing N13°28'23"W; thence N0°28'30"W 490.62 feet along said East line of
Greyhound Drive; thence N89°31'30"E 362.33 feet to the point of beginning; thence
N0°28'47"W 240.32 feet; thence N89°29'00"E 422.36 feet; thence S0°31'00"E 96.70
feet; thence S54°52'07"E 192.22 feet to the Northwesterly line of the former Chicago &
Great Western Railroad (now City of Waterloo recreational trail); thence S35°07'53"W
371.66 feet along said Northwesterly line; thence N54°52'07"W 189.69 feet; thence
N0°28'30"W 159.72 feet; thence S89°31'30"W 208.09 feet to the point of beginning,
containing 4.00 acres, and is subject to easements and restrictions of record.
Greenbelt Centre — 2 acre parcel
Property Description
That part of the Northwest Quarter of the Southeast Quarter of Section 6, Township 88
North, Range 13 West of the Fifth Principal Meridian, Black Hawk County, Iowa,
described as follows:
Commencing at the Southwest corner of said Northwest Quarter of the Southeast
Quarter; thence N89°27'09"E 268.49 feet to the intersection of the South line of said
Northwest Quarter of the Southeast Quarter and the East line of Greyhound Drive;
thence Northwesterly following said East line of Greyhound Drive 262.09 feet along a
576.62 foot radius curve, concave Easterly, said curve having a chord of 259.84 feet
bearing N13°28'23"W; thence N0°28'30"W 490.62 feet along said East line of
Greyhound Drive to the point of beginning; thence continuing N0°28'30"W along said
East line 240.06 feet; thence N89°29'00"E 362.31 feet; thence SO°28'47"E 240.32 feet;
thence S89°31'30"W 362.33 feet to the East line of Greyhound Drive and the point of
beginning, containing 2.00 acres, and is subject to easements and restrictions of record.
EXHIBIT "B"
Form of
MINIMUM ASSESSMENT AGREEMENT
This Minimum Assessment Agreement (the "Agreement") is entered into as of
, by and among the CITY OF WATERLOO, IOWA ("City"),
Prairie Legacy Ventures, LLC ("Developer"), and the COUNTY ASSESSOR of the
City of Waterloo, Iowa ("Assessor").
WITNESSETH:
WHEREAS, on or before the date hereof the City and Developer have entered
into a development agreement (the "DA") regarding certain real property, described in
Exhibit "A" thereto, located in the City; and
WHEREAS, it is contemplated that pursuant to the DA, the Company will
undertake the development of an area ("Phase Project") within the City and within the
"Martin Road tax increment financing district"; and
WHEREAS, pursuant to Iowa Code § 403.6, as amended, the City and the
Developer desire to establish a minimum actual value for the land and the building(s)
pursuant to this Agreement and applicable only to the Phase Project, which shall be
effective upon substantial completion of the Phase Project and from then until this
Agreement is terminated pursuant to the terms herein and which is intended to reflect
the minimum actual value of the land and buildings as to the Phase Project only; and
WHEREAS, the City and the Assessor have reviewed the preliminary plans and
specifications for the improvements (the "Improvements") which the parties contemplate
will be erected as a part of the Project.
NOW, THEREFORE, the parties hereto, in consideration of the promises,
covenants, and agreements made by each other, do hereby agree as follows:
1. Upon substantial completion of construction of the Improvements by the
Company upon the real property described on Exhibit "A" attached hereto, the minimum
actual value which shall be fixed for assessment purposes for the land and
Improvements to be constructed thereon by the Company as a part of the Phase
Project shall not be less than $ (the "Minimum Actual Value") until
termination of this Agreement. The parties hereto agree that construction of the
Improvements will be substantially completed on or before
2. The Minimum Actual Value herein established shall be of no further force
and effect, and this Minimum Assessment Agreement shall terminate, on December 31,
. Nothing herein shall be deemed to waive the Company's rights under Iowa
Code § 403.6, as amended, to contest that portion of any actual value assignment
made by the Assessor in excess of the Minimum Actual Value established herein. In no
event, however, shall the Company seek or cause the reduction of the actual value
assigned below the Minimum Actual Value established herein during the term of this
Agreement.
3. This Agreement shall be promptly recorded by the City with the Recorder
of Black Hawk County, Iowa. The City shall pay all costs of recording.
4. Neither the preambles nor provisions of this Agreement are intended to, or
shall be construed as, modifying the terms of the Development Agreement.
5. This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the parties.
CITY OF W\TERLOO, IOWA PRAIRIE LEGACY VENTURES, LLC
By:
, Mayor
By:
Steven L. Tjossem
Managing Member
[acknowledgments on next page]
2
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
This record was acknowledged before me on 14ci LfK, by ernes+ C,.elc�r
and SA 5c-4- \c" -es , as Mayor and City Clerk, respectively,
of the City of Waterloo, Iowa.
NANCY HIGBY
COMMISSION NO.788229
MY COMMISSION lE CPIRES
STATE OF IOWA pp� ''
COUNTY OF L�i,�l.��Lk(ie- PJ ) ss.
Notary Public
This record was acknowledged before me on " r /J f 7 % , by Steven L.
Tjossem as Managing Member of Prairie Legacy Ventures, LLC.
DAL%
100
3
JAN A SON
Cormniulon Number 752540
My Commission Expires
Ma+, 8 2011
Apit,411
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CERTIFICATION OF ASSESSOR
The undersigned, having reviewed the plans and specifications for the
improvements to be constructed and the market value assigned to the land upon which
the improvements are to be constructed for the development, and being of the opinion
that the minimum market value contained in the foregoing Minimum Assessment
Agreement appears reasonable, hereby certifies as follows: The undersigned
Assessor, being legally responsible for the assessment of the property subject to the
development, upon completion of improvements to be made on it and in accordance
with the Minimum Assessment Agreement, certifies that the actual value assigned to
such land and building upon completion of the development shall not be Tess than
Dollars ($ ) in the aggregate, until
termination of this Minimum Assessment Agreement.
Asse)g°r for Black Hawk County, Iowa
7<- y -
Date
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK )
Subscribed and sworn to before me on j/ — , by
.7� ���� as Assessor for Black Hawk County, Iowa.
DEBORAH L. BOECKMANN
hp, COMMISSION NO. 185788
MY COM MSSIQN EXPIRES