HomeMy WebLinkAboutEndeavors Ltd, LLC.-6/29/2015Please return this copy to:
City Clerk & Finance Dept.
715 Mulberry St.
Waterloo, IA 50703
DEVELOPMENT AGREEMENT
phis Development Agreement (the "Agreement") is entered into as of July
029 , 2015, by and between Endeavors Ltd., L.L.C. ("Company") and the
City of Waterloo, Iowa ("City").
RECITALS
A. Pursuant to a letter dated March 1, 2015, the City notified the Company
that the City plans to condemn the Company Property (as defined below)
unless the Company voluntarily sells the Company Property to the City. In
order to avoid the condemnation of the Company Property, the Company
desires to voluntarily sell the Company Property to the City on the terms
and conditions set forth in this Agreement.
B. 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.
C. Company is willing and able to finance and construct a building and
related improvements (the "Improvements") on property located in the
Airport Area Development Plan Area.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the parties agree as follows:
1. Purchase of Property. Company will purchase the real property
described on Exhibit "A" attached hereto (the "New Property"). Company shall
complete the purchase transaction no later than October 31, 2015.
2. Project Assistance. City shall provide the following development
assistance for the Project:
A. Purchase of Company Property. Subject to completion of
Company's acquisition of the New Property, and in lieu of exercising any rights of
eminent domain, City will purchase from Company the property occupied by its
current business operations at 329 W. 6th Street, consisting of assessor parcel
nos. 8913-26-283-015 and 8913-26-283-016 (the "Company Property"), legally
described as set forth in Exhibit "B" attached hereto and located within the
Downtown Waterloo Urban Renewal and Redevelopment Plan Area. No later
than November 30, 2015, City will close on its purchase of the Company
Property from Company for the sum of $470,000 (the "Purchase Price"),
provided, however, that if the Commencement Date prescribed in Section 4 is
extended, then City will have no duty to close on its purchase of the Company
Property until thirty (30) days after such extension or extensions of the
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Commencement Date. Seller shall pay taxes prorated to the closing date in
accordance with the provisions of Iowa Code § 427.2, and any unpaid real estate
taxes payable in prior years, either paying Buyer, or giving Buyer a credit, for all
of such taxes. Buyer shall pay all subsequent real estate taxes. The parties
acknowledge that the Company's sale of the Company Property is made under
threat of condemnation. At closing on the sale of the Company Property,
Company will enter into a lease of the Company Property so that it can continue
its current activities until completion of the Project and relocation of its business
operations. Prior to the end of the lease term, Company may exercise salvage
rights upon the Company Property, subject to making any buildings upon
Company Property secure against entry by others and against intrusion by the
elements.
B. Development Grant. Concurrently with closing on Company's
purchase of the New Property, City will provide a payment of $266,576.31 to
assist Company with acquisition of the New Property. The payment will be made
on Company's behalf to the seller of the New Property.
3. Improvements by Company. Company shall construct a new building
for its warehouse and related office space, totaling no less than 30,000 square feet,
and related parking and landscaping (the "Improvements"), all of which shall be located
on the New Property. 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. It is contemplated that the New Property
together with the Improvements will have a total value upon completion of no Tess than
$1,000,000. The New Property, the Improvements, and all site preparation and
development -related work to make the New Property usable for Company's purposes
as contemplated by this Agreement are collectively referred to as the "Project".
4. Timeliness of Construction.
A. The parties agree that Company's commitment to construct the
Improvements in timely fashion constitutes a material inducement for the City to
purchase the Company Property and to provide the development grant, and that
without Company's commitment City would not have agreed to make the
incentives described in this Agreement available to Company. Company must
substantially complete construction of the Improvements by June 30, 2016 (the
"Completion Date").
B. Subject to subsection D below, if Company has not obtained a
building permit and begun the Project work by October 31, 2015, (the
"Commencement Date"), then at its sole option City may cancel this Agreement
without further obligation by either party.
C. If a building permit has not been obtained or Project work has not
begun by the Commencement Date, but the development of the Project is still
imminent, the City Council may, but shall not be required to, grant an extension
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of time for the construction of the Improvements, and if an extension is granted
but construction of the Improvements has not begun within such extended
period, then at its sole option City may cancel this Agreement without further
obligation by either party.
D. Notwithstanding the provisions of subsections B and C above, the
City may not cancel this Agreement due to the Company's failure to obtain a
building permit or begin the Project work by the Commencement Date if such
failure is due to an Unavoidable Delay (as defined in subsection E below). In
such circumstance, the requirement that the building permit and commencement
of Project work occur by the Commencement Date shall be tolled for a period of
time equal to the Unavoidable Delay.
E. If construction has commenced by the Commencement Date or
extension thereof and is stopped and/or delayed as a result of an act of God,
war, civil disturbance, court order, labor dispute, fire, weather, or other cause
beyond the reasonable control of Company (an "Unavoidable Delay"), the
requirement that construction is to be substantially completed by the Completion
Date shall be tolled for a period of time (the "Tolled Period") equal to the period
of the Unavoidable Delay, and thereafter if construction is not completed within
the Tolled Period following the Completion Date, then at its sole option City may
elect to require that Company repurchase the Company Property for a sum equal
to the Purchase Price, minus any transactional costs incurred by City in
connection with this Agreement or the Project. Upon payment in full by
Company, City shall convey title to the Company Property to Company by quit
claim deed, free and clear of all liens and encumbrances other than easements,
restrictive covenants, ordinances, and limited access provisions of record, if any.
Company may obtain whatever evidence of title it desires, and City shall
cooperate in good faith with removing any reasonable objections to marketable
title.
F. Upon written request of the Company after issuance of an
occupancy permit for the Project, the City will furnish the Company with a
Certificate of Completion in recordable form. Such Certificate of Completion
shall be a conclusive determination of satisfactory termination of the covenants
and conditions of this Agreement with respect to the obligations of the Company
to cause construction of the Improvements. The Certificate of Completion may
be recorded in the Black Hawk County Recorder's office at the Company's sole
expense. If the City shall refuse or fail to provide a Certificate of Completion in
accordance with the provisions of this Section, the City shall, within twenty (20)
days after written request by the Company, provide to the Company a written
statement indicating in adequate detail in what respects the Company has failed
to complete the Improvements in accordance with the provisions of this
Agreement, or is otherwise in default under the terms of this Agreement, and
what measures or acts will be necessary, in the opinion of the City, for the
Company to take or perform in order to obtain such Certificate of Completion.
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5. Indemnity. Except for any willful misrepresentation, or any willful or
wanton misconduct, or any unlawful act, or any negligent act or omission of the City, the
Company 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 Company Property
of any type or nature whatsoever which exists prior to the time the Company Property is
conveyed to the City. If City files suit to enforce the terms of this Agreement and
prevails in such suit, then Company shall be liable for all of City's legal expenses,
including but not limited to reasonable attorneys' fees. Company's duties of indemnity
pursuant to this Section 5 shall survive the expiration, termination or cancellation of this
Agreement for any reason.
6. Deed. Upon City's purchase of the Company Property, Company shall
convey or cause to be conveyed fee simple title to the Company Property by warranty
deed, free and clear of all encumbrances except: (a) easements, conditions, and
restrictions of record which do not, in City's reasonable opinion, interfere with City's
proposed use; (b) current and future real property taxes and assessments subject to
the agreements made herein; (c) general utility and right-of-way easements serving the
Company Property; and (d) restrictions imposed by the City zoning ordinances and
other applicable law.
7. Abstracting. No less than fourteen (14) days prior to the anticipated date
of conveyance of the Company Property, Company shall, at its own expense, deliver to
City an updated abstract of title. If title is unmarketable or subject to matters not
acceptable to the City, Company shall remedy or remove such objectionable matters in
timely fashion following written notice of such objections from City.
8. Water and Sewer. Company will be responsible for extending water and
sewer service from the City main to be located right in front of the New Property to any
location on the New Property and for payment of any associated connection fees.
9. No Encumbrances; Limited Exception. Until completion of the
Improvements, Company agrees that it shall not create, incur, or suffer to exist any lien,
encumbrance, mortgage, security interest, or charge on the New Property, other than
such mortgage or mortgages (a "Project Mortgage") 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 Project Mortgage. Company may
not mortgage or encumber the new Property or any part thereof for any purpose except
in connection with financing of the Improvements, whether through a construction loan
or permanent loan.
10. Minimum Assessment Agreement. Company acknowledges and
agrees that, from and after the time it takes title to the New Property, 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 New Property. Company
further agrees that, prior to the date set forth in Section 2 of Exhibit "C," it will not seek
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or cause a reduction in the taxable valuation for the New Property, which shall be fixed
for assessment purposes, below the amount of $1,000,000.00 ("Minimum Actual
Value"), through:
(i) willful destruction of the New 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.
Company agrees to sign and deliver to City the agreement attached as Exhibit "C"
concurrently with execution and delivery of this Agreement.
11. Tax Rebates. Provided that Company has completed the Improvements
as set forth herein and has executed the Minimum Assessment Agreement as set forth
in Section 10, City agrees to rebate property tax (with the exceptions noted below) for
five (5) years at 50% per year for taxes actually paid on any taxable value over the
January 1, 2015 value of $5,467.00. 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. Any rebate for which a request is
not timely filed shall be forfeited. 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.
12. Termination of Prior Agreement. City and Company acknowledge that
they are parties to a development agreement and related minimum assessment
agreement dated as of April 13, 2015 and filed in the Black Hawk County Recorder's
office on April 21, 2015 as Doc. No. 2015-16877. Said development agreement and
minimum assessment agreement are hereby canceled in their totality, effective as of
the date hereof, being superseded by the terms and conditions of this Agreement.
13. Representations and Warranties of City. City hereby represents and
warrants as follows:
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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.
14. 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.
15. No Assignment or Conveyance. Company agrees that it will not sell,
convey, assign or otherwise transfer its interest in the New Property prior to completion
of the Project, whether in whole or in part, to any other person or entity without the prior
written consent of City, which consent shall not be unreasonably withheld. 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.
16. 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 made or 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. In the event of the material
incorrectness or falsity of any representation or warranty of Company, 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.
17. 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
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amendment of the urban renewal plan applicable to the Property and/or project area, all
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.
18. 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, to Endeavors Ltd., L.L.C., 329 W. 6th Street,
Waterloo, Iowa 50701, facsimile number 319-233-3001, Attn: Leslie A. Reese.
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.
19. 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.
20. 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
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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.
21. 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.
22. Binding Effect. This Agreement shall be binding and shall inure to the
benefit of the parties and their respective successors, assigns, legal representatives,
and future owners of the New Property.
23. 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.
24. Entire Agreement. This Agreement, together with the Minimum
Assessment Agreement attached hereto as Exhibit "C", 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.
25. Time of Essence. Time is of the essence of this Agreement.
26. Memorandum of Agreement. Consistent with its established practices,
the City intends to record this Agreement with the Black Hawk County Recorder. If
Company desires instead that only a summary of the material terms of this Agreement
be recorded, then Company shall prepare a Memorandum of Development Agreement
at its own cost to serve as notice to the public of the existence and provisions of this
Agreement, and the rights and interests held by the City by virtue hereof. City agrees to
execute the Memorandum and to pay the cost of recording same.
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
By.
rnest G. Clark, Mayor
Attes
LOLL
Suzy S hares, City Clerk
8
ENDEAVORS LTD., L.L.C.
By: ! a1 d
Leslie A. Reese, President
EXHIBIT "A"
Legal Description of New Property to be Improved
Lots 8, 9 and 10, in South Port 3rd Addition, City of Waterloo, Black Hawk
County, Iowa. (as shown on the Final Plat attached hereto).
EXHIBIT "B"
Legal Description of Company Property
Lots 6, 7 and 8, Lot 9 except the SEIy 5 feet of the SWIy 75 feet thereof,
and the NEIy 65 feet of Lot 10, all in Block 47, Original Plat on the West
Side of the Cedar River, City of Waterloo, Black Hawk County, Iowa.
EXHIBIT "C"
MINIMUM ASSESSMENT AGREEMENT
This Minimum Assessment Agreement (the "Agreement") is entered into as of
IA -
I a9 'f'¢' , 2015, by and among the CITY OF WATERLOO, IOWA ("City"),
Endeavors Ltd., L.L.C. ("Company"), and the COUNTY ASSESSOR of the City of
Waterloo, Iowa ("Assessor").
WITNESSETH:
WHEREAS, on or before the date hereof the City and Company have entered
into a development agreement (the "Development Agreement") regarding certain real
property, described in Exhibit "A" thereto, located in the City; and
WHEREAS, it is contemplated that pursuant to the Development Agreement, the
Company will undertake the development of an area ("Project") within the City and
within the Airport Area Redevelopment Plan Area; and
WHEREAS, pursuant to Iowa Code § 403.6, as amended, the City and the
Company desire to establish a minimum actual value for the land and the building(s)
pursuant to this Agreement and applicable only to the Project, which shall be effective
upon substantial completion of the 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 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, the minimum actual taxable 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 Project shall not be less than $1,000,000.00 ("Minimum Actual Value") until
termination of this Agreement. The parties hereto agree that construction of the
Improvements will be substantially completed on or before June 30, 2016.
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,
2026. Nothing herein shall be deemed to waive the Company's rights under Iowa Code
1
§ 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, including but not limited to future owners of the
Project property.
IN WITNESS WHEREOF, the parties have executed this Minimum Assessment
Agreement by their duly authorized representatives as of the date first set forth above
CITY OF WATERLOO, IOWA ENDEA ORS LTD., L.L.C.
By:
BY: t _
Ernest G. Clark, Mayor Leslie A. Reese, President
Attes
zy S ares, City Clerk
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STATE OF IOWA
COUNTY OF BLACK HAWK
On this �1` day of ° , 2015, before me, a Notary
Public in and for the State of Iowa, pers ally appeared Ernest G. Clark and Suzy
Schares, to me personally known, who being duly sworn, did say that they are the
Mayor and City Clerk, respectively, of the City of Waterloo, Iowa, a municipal
corporation, created and existing under the laws of the State of Iowa, and that the seal
affixed to the foregoing instrument is the seal of said municipal corporation, and that
said instrument was signed and sealed on behalf of said municipal corporation by
authority and resolution of its City Council, and said Mayor and City Clerk
acknowledged said instrument to be the free act and deed of said municipal corporation
by it and by them voluntarily executed.
) ss.
NANCY HIGBY
COMMISSION NO.788229
MY COMMISSIONI XPIRES
STATE OF IOWA
) ss.
LIAO 4-4
Notary Public
COUNTY OF BLACK HAWK )
Acknowledged before me on L,,`� Ct `��' , 2015 by Leslie A. Reese as
President of Endeavors Ltd., L.L.C.
Not Publi ) 1
TINA J DAY
Commission Number 780040
MyCommission Expires
August 28, 2018
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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, building and improvements upon completion of the Project shall not be less
than One Million Dollars ($1,000,000.00) in the aggregate, until termination of this
Minimum Assessment Agreement pursuant to the terms hereof.
Asses r for Black Hawk County, Iowa
Date
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
Subscribed and sworn to before me on 41G— , 2015 by T.J.
Koenigsfeld, Assessor for Black Hawk County, Iowa.
11M ANDERA
COMMISSION NO.772518
MY COMMISSION DSS
APRIL 11, 2818
Notary Public
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