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HomeMy WebLinkAboutRedzo Karabegovic-2/18/2013Preparer Irdormatiare Christopher S. Wendland, PO Box 596, Waterloo, Iowa 50704 (319) 234.5701 Name Address City Phone SPACE ABOVE THIS UNE FOR RECORDER DEVELOPMENT AGREEMENT This Development Agreement (the "Agreement") is entered into as of , 2013 by and between Redzo Karabegovic (the "Company") and the City of Waterloo, Iowa (the "City"). Redzo Karabegovic 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 deconstruct existing building and related improvements on property located in the Downtown Urban Renewal and Redevelopment Plan located at 2063 Howard Avenue, and 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. Sale of Property; Title. Subject to the terms hereof, City shall convey the Property to Company for the sum of $1.00 (the "Purchase Price"). 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 the 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 DEVELOPMENT AGREEMENT Page 2 financial ability to undertake and carry on 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 has in its possession, including any abstracts, to assist in title preparation. 2. In ,prove: gents by Co piny. After completion of demolition activities, Company shall construct on the Property an industrial building of not less than 2,400 square feet, and related improvements to the buildings and grounds (collectively, the "Improvements"). Company shall first demolish existing structures and remove all debris from the Property at its own cost and expense. The Improvements shall be constructed in accordance with all applicable City, state, and federal building codes, and demolition, debris disposal, and the Improvements shall comply with all applicable City ordinances and other applicable law. It is contemplated that the Improvements will have a total project cost of approximately $ 100,000. 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". 3. Timeliness of Construction; Possibility of Revert r. The parties agree that Company's commitment to undertake the Project and to demolish the structure 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. Measured from the date the Property is deeded to Company, Company must obtain a demolition permit and begin demolition within one (1) month and substantially complete demolition by April 30, 2013. If Company has not, in good faith, begun the demolition of the Improvements on the schedule stated above, then title to the Property shall revert to the City, except as provided in this Agreement; provided, however, that if construction has not begun within the state 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 Property shall revert to the City after the end of said extended period. 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 Property to City by special warranty deed, and thereupon neither party shall have any further obligation under this Agreement except as expressly provided. 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 the Project DEVELOPMENT AGREEMENT Page 3 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 Property shall revert to the City. 3. 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 aC 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. 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 attomey-in-fact, the special warranty deed required by this Section, and for such limited purpose Company does hereby constitute and appoint City as its attomey-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 of any type or nature whatsoever that attaches to the 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, 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 or any part thereof for any purpose except in connection with financing of the Improvements. • 6. Water and Sewer. Company will be responsible for extending water and sewer service to any location on the Property and for payment of any associated connection fees. 7. 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 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 taxable valuation for the Property, which shall be DEVELOPMENT AGREEMENT Page 4 fixed for assessment purposes, below the amount of $ 100,000 (the "Minimum Actual Value"), through: (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 govemment. Company agrees to sign said attached Exhibit "B" at the closing. 8. Reserved 9. Right of First Refusal. 10. 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. 11. Representations and Warr nties 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. 12. No Assignment or Conveyance. Company agrees that it will not sell, convey, assign or otherwise transfer its interest in the Property prior to completion of DEVELOPMENT AGREEMENT Page 5 the Project, whether in whole or in part, to any other person or entity 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. 13. Materiality of Copany's Promises, Cov= :ants, 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. 14. 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 Heartland Properties Holdings LLC, PO Box 1257 Waterloo, Iowa 50634, Attention: Redzo Karabegovic. 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 ovemight 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. 15. No Joint Vent: re. 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. 16. Amendment, ry1odification, 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 DEVELOPMENT AGREEMENT Page 6 authorized representative of same, and specifying with particularity the extent and nature of the amendment, modification, or waiver. Any waiver by any p&ty_of any default by another party shall not affect or impair any rights arising from any subsequent default. 17. Severability. Each provision, section, sentence, clause, phrase, and word of this Agreement is intended to be severable fl an ortion of this Agreemen 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. 18. 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. 19. ' inding Effect. This Agreement shall be binding and shall inure to the benefit of the parties and their respective successors, assigns, and legal representatives. 20� Counter ;• arts.:- 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. 21. 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. 22. 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 HEARTLAND HOLDINGS LLC By: B . ,\E . .r-- .re�F �"c Y „- Ernest G. Clark, Mayor Redzo Karabegovic By: DEVELOPMENT AGREEMENT Page 7 Attest: Suzy Schares, City Clerk Redzo Karabegovic 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. ReL- EXHIBIT "A" Legal Description of Property The east one -one half of the South one half of Lot 10 in "Garden Place" in the City of Wt&Ioo, ac iaw- oun , owa. • rte' �br- r LLD ,.e000000,o