HomeMy WebLinkAboutGMJ2 Industries, LLC-6/8/2015Please return this copy to:
City Clerk & Finance Dept.
715 Mulberry St.
Waterloo, IA 50703
Preparer
Information: Christopher S. Wendland, PO Box 596, Waterloo, Iowa 50704 (319) 234-5701
Name Address City Phone
DEVELOPMENT AGREEMENT — Phased Project
This Development Agreement (the "Agreement") is entered into as of
, 2015 by and between GMJ2 Industries, LLC (the "Company")
and the City of Waterloo, Iowa (the "City"). Jim D. Ellis is a principal of Company and
executes the personal guaranty at the end of this Agreement for the purposes stated
therein.
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 buildings and related
improvements on property located in the Northeast Industrial Park urban
renewal area, legally described on Exhibit "A" attached hereto (the
"Property").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the parties agree as follows:
1. Phased Development. The parties contemplate that Company will
develop the Property in three phases. Each phase shall consist of two or more mini -
storage buildings of no less than 14,400 square feet and related improvements for each
of Phases 1 and 2, and 7,800 square feet and related improvements for Phase 3. In
connection with each separate phase, Company and City agree to enter into a
minimum assessment agreement as described in Section 8 below. Company shall
submit specific site plans for City review and approval as a condition to conveyance of
any given Phase Area (defined below) pursuant to Sections 2 and 4 below.
Improvements to the Property completed within the schedule established by Section 4
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will be eligible for the benefits provided for in this Agreement, and any part of the
Improvements not completed within the prescribed period will not be eligible for said
benefits.
2. Sale of Property; Title. Subject to the terms hereof, City shall convey the
Property, or cause it to be conveyed, to Company in separate transactions on a phase -
by -phase basis as set forth herein, for the sum of $1.00 (the "Purchase Price") for that
part of the Property subject to each phase (each a "Phase Area"). Conveyance 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
City zoning ordinances and other applicable law. City shall have no duty to convey title
to Company until Company delivers to City reasonable and satisfactory proof of
financial ability to undertake and carry on the next phase of the Project (defined below),
which may take the form of a lending commitment letter. 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. If title is unmarketable
or subject to matters not acceptable to Company, and if City does not remedy or
remove such objectionable matters in timely fashion following written notice of such
objections from Company, Company may terminate this Agreement. City shall provide
any title documents it currently has in its possession, including any abstracts, to assist
in title preparation. Company shall, at its sole expense, undertake all work of surveying
necessary to subdivide the Property into distinct Phase Areas, and all other survey or
platting work necessary or desirable for Company's Project purposes.
3. Improvements by Company. Company shall construct on each Phase
Area the improvements described in Section 1 above, including related parking,
landscape, and other improvement to the buildings and grounds (collectively, the
"Improvements"). Parking for each phase of Improvements shall meet City's minimum
requirements based on building use, occupancy, and future intended development on
the 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 Improvements for a
given phase will have a cost as set forth in the supplemental development agreement
applicable to that phase. The Property, the Improvements, and all site preparation and
development -related work to make the Property usable for Company's purposes as
contemplated by this Agreement are collectively referred to as the "Project".
4. Timeliness of Conveyance and 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 convey the Property, or to cause the Property to be conveyed, to Company
and that without said commitment City would not do so.
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A. Deadlines to convey, commence and complete. Subject to the
terms of this Agreement, Company may request conveyance of a Phase Area at
any time before the following deadlines:
Phase 1 conveyance deadline: April 30, 2016
Phase 2 conveyance deadline: April 30, 2018
Phase 3 conveyance deadline: April 30, 2020
Conveyance shall be made as promptly after Company's request as practicable.
Measured from the date that any Phase Area is deeded to Company, Company
must obtain a building permit and begin construction on the corresponding phase
within two (2) months. Construction of Improvements for each phase must begin
within the time set forth in this paragraph, or Company's right to acquire any
Phase Area not yet conveyed to Company will expire. Construction of each
phase shall be completed within twelve (12) months of its commencement.
B. Events triggering reverter of title.
(i) If Company has not, in good faith, begun the construction of any
phase of the Improvements on said schedule, then title to the applicable
Phase Area shall revert to the City, except as provided in this Agreement;
provided, however, that if construction has not begun at the end of any
phase commencement period but the development of the Project is still
imminent, the City Council may, but shall not be required to, consent to an
extension 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 the title to the applicable Phase Area
shall revert to the City after the end of said extended period.
(ii) If Company determines at any time that the Project is not
economically feasible, then after giving thirty (30) days' advance written
notice to City, Company may convey the applicable Phase Area(s) to City
by special warranty deed, free and clear of any lien, claim, or
encumbrance arising by or through Company, and thereupon neither party
shall have any further obligation under this Agreement except as
expressly provided. In connection with any conveyance to City, Company
shall pay in full, so as to discharge or satisfy, all liens, claims, charges,
and encumbrances on or against the Property or any Phase Area.
(iii) If development has commenced within the required period or
any extended period 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 reasonable control of Company, the requirement that
construction of any phase or of the entire Project 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 then title to the Phase Area(s) shall revert to the City.
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5. Reverter of Title; Indemnity. Title shall not revert to City as to any phase
of Improvements that has been substantially completed. 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 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 any portion thereof. 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 any Phase Area of any type or nature whatsoever that attaches to the
Property or a Phase Area 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.
6. 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 Property or any Phase
Area, 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 or any Phase Area for any purpose except in connection with
financing of the Improvements.
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 charges whatsoever levied upon or assessed or placed against any portion of the
Property conveyed to Company hereunder. Company further agrees that prior to the
date set forth in Section 2 of such minimum assessment agreement it will not seek or
cause a reduction in the taxable 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:
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(i)
either;
willful destruction of the Property, the Improvements, or any part of
(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 Area will be as follows:
Phase Area 1 $432,000
Phase Area 2 $432,000
Phase Area 3 $234,000
In connection with each phase of Improvements, and as a condition to receiving the
benefits provided for in this Agreement, Company agrees to execute a minimum
assessment agreement substantially in the form attached hereto as Exhibit "C."
9. Tax Rebates. Provided that Company has completed the Improvements
as set forth herein for all Phase Areas and has executed a minimum assessment
agreement for each Phase Area as set forth in Section 8, City agrees to rebate property
tax (with the exceptions noted below) as follows:
Year One through Year Five 50% rebate each year
for any taxable value over the January 1, 2014 value, which is as follows for each
Phase Area:
Phase Area 1 $24,050
Phase Area 2 $21,350
Phase Area 3 $20,300
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, or the rebate for that year shall be subject to forfeiture.
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.
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The first year of in which a rebate may be given ("Year One") shall be the first full
year for which the assessment is based upon the completed value of the Improvements
for all three Phase Areas, and in any event not based on a prior year for which the
assessment is based solely upon (x) the value of the Property or a Phase Area or upon
(y) the value of the Property or a Phase Area and a partial value of the Improvements
due to partial completion of the Improvements or a partial tax year. Company must
complete all phases of the Project in order to qualify hereunder for tax rebates with
respect to any given Phase Area.
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
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,
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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 any Phase Area before completion of
all Improvements to be made upon such Phase Area 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 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, or by United States registered or
certified mail, postage prepaid, and addressed:
(a) if to City, at 715 Mulberry Street, Waterloo, Iowa 50703, Attention:
Mayor, with copies to the City Attorney and the Community Planning and
Development Director.
(b) if to Company, at 3731 Pheasant Lane, Suite 201, Waterloo, Iowa,
50701, Attention: Jim Ellis.
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. A party may change the address for giving notice by any
method set forth in this section.
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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 exhibits attached
hereto, 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.
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CITY OFWA/ TERLOO, IOWA
By:
GMJ2 INDUSTRIES, LLC
By:
Ernest G. Clark, Mayor Jim
Attest:c
Suzy Sc f ares, City Clerk
. Ellis, Manager
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.
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EXHIBIT "A"
Legal Description of the Property
Lots 14, 15, and 16, Northeast Industrial Park Plat No. 3, City of Waterloo, Black Hawk
County, Iowa.
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EXHIBIT "B"
General Depiction of Phase Areas
See attached.
EXHIBIT "C"
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"), GMJ2 Industries, LLC ("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 "DA") regarding certain real property described
therein located in the City of Waterloo; 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
Northeast Industrial Park urban renewal 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 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 Phase 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 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 Phase
Project shall not be less than $456,550.00 (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 December 31, 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,
2031. 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
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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.
The City shall not unreasonably withhold its consent to permit the Company to contest
its taxable valuations in full, commencing with the assessment of January 1, 2032.
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 DA.
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 officers as of the date first set forth above.
CITY OF WATERLOO, IOWA
By:
By:
Ernest G. Clark, Mayor
r _cam- -
Suzy Scha}es, City Clerk
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GMJ2 INDUSTRIES, LLC
By:
° Ej2(2),'
Jird D. Ellis, Manager
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
On this (Jr day of , before me, a Notary Public in and
for the State of Iowa, personally 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.
NANCY HIGBY
COMMISSION NO.788229
MY CMM1SStONIRES
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK )
Subscribed and sworn to before me on ,Q/1 _ i je) by Jim D.
Notary Public
Ellis as Manager of GMJ2 Industries, LLC.
Pa-bLece ',
Notary Public
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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 equipment upon completion of the development shall not be
less than Dollars ($ ) until termination
of this Minimum Assessment Agreement pursuant to the terms hereof.
Ass'or f r Black Hawk County, Iowa
Date
STATE OF IOWA )
) ss.
COUNTY OF BLACK HAWK )
Subscribed and sworn to before me on l /b -<„2-0/5— .
Notary Public
"' •� DEBORAH L. BOECKMANN
MY COMMISSION NO. 195788
a MY CO S ION IFIES
'0
M
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