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HomeMy WebLinkAboutN & S Property LLC-5/20/2013DEVELOPMENT AGREEMENT This Development Agreement (the "Agreement") is entered into as of , 2013, by and between N & S Property, LLC ("Company"), and the City of Waterloo, Iowa ("City"). Rodney A. Anderson and Patricia C. Johnson -Anderson are principals of Company and execute 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 a building and related improvements (the "Improvements") on property located in the Logan Plaza urban renewal area. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree as follows: 1. Purchase and Conveyance of Property. City will purchase the real property described on Exhibit "A" attached hereto (the "Property"), located at 401-409 Franklin Street and consisting of assessor parcel nos. 8913-24-352-001, -002, and - 007. The purchase price shall be no more than $300,000.00 (the "Purchase Price"). On or before , 2013, City shall convey the Property to Company for the sum of $1.00. Conveyance shall be by quit claim deed, and Company shall accept the Property from City in its "AS IS" condition, without any representation or warranty of any type or nature as to title, condition, fitness for use for any particular purpose, or otherwise. Company acknowledges and agrees that City is purchasing the Property as an accommodation to Company to encourage the development objectives of this Agreement. Company agrees that it will, before receiving a deed of conveyance, directly pay or that it will reimburse City for any costs of the purchase transaction that exceed the Purchase Price. Company further agrees that City will have no responsibility whatsoever for the condition of the Property, the presence of any environmental hazards on the Property, or otherwise, and Company hereby waives any and all claims against City and hereby agrees to indemnify and hold City harmless from and against any and all claims, demands, causes of action, costs, expenses, damages, or liabilities whatsoever, of any type or nature. City's only duty to Company is to purchase the Property, to convey it to Company, and to clear any reasonable objections to marketable title that arise from City's ownership. City's duty to convey is expressly made subject to occurrence of a closing on the City's acquisition of the Property. Company may obtain whatever evidence of title it desires at its own cost and expense. 1 2. Project Assistance. Because the Property is located in a designated Consolidated Urban Revitalization Area (CURA), the Property is eligible for tax exemption consistent with and to the extent provided for in Iowa law, provided that Company meets all requirements to qualify for such exemption. 3. Improvements by Company. Company shall construct a new commercial building for occupancy by two retail tenants and a restaurant tenant or similar combination of commercial tenants, and related parking and landscaping (the "Improvements"), all of which shall be located 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 will have a total project cost of approximately $700,000.00. 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 Construction; Possibility of Reverter. The parties agree that Company's commitment to construct the Improvements in timely fashion constitutes a material inducement for the City to purchase the Property and to convey it to Company and that without Company's commitment City would not have agreed to provide the incentive. Company must substantially complete construction of the Improvements by December 31, 2013 (the "Completion Date"). If Company has not obtained a building permit and begun the Project work by the date that is two (2) months from the date of this Agreement (the "Commencement Date"), then title to the Property shall revert to City, except as provided in this Agreement. If 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 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 title to the Property shall revert to the City after the end of said extended period. 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, 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 title to the Property shall revert to City. 5. 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 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 2 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 5, 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 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 5 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, 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. 7. 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 taxable valuation for the Property, which shall be fixed for assessment purposes, below the amount of $700,000.00 ("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. Company agrees to sign and deliver to City the agreement attached as Exhibit "B" concurrently with execution and delivery of this Agreement. 8. Representations and Warranties of City. City hereby represents and warrants as follows: 3 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. 9. 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. 10. 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 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. 11. 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. 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. 12. 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 4 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 N & S Property, LLC, 2110 Logan Avenue, Waterloo, Iowa, 50703, facsimile number , Attn: Rodney A. Anderson, Managing Member. 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. 13. 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. 14. 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. 15. 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. 16. 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 Property. 5 17. 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. 18. 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. 19. 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 N & S PROPERTY, LLC By: By: Ernest G. Clark, Mayor R•r%' ey A. Knderson Managing Member Attest: Suzy S. ares, City Clerk [personal guaranty on next page] 6 PERSONAL GUARANTY. The undersigned members and/or managers 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, if any. Liability of guarantors hereunder is joint and several. '7 Ro ey A. An erson 7 Patricia C. J nson-Anderson 4, EXHIBIT "A" Legal Description of Property to be Improved Assessor parcel nos. 8913-24-352-001, -002, and -007, legally described as: Lots 2, 3, 6, 7 and 10, and the Northwesterly 35 feet of the Southwesterly one- half of Lot 5, and the Northwesterly 35 feet of Lots 8 and 9, all in Block 62, Cooley Addition, City of Waterloo, Black Hawk County, Iowa. EXHIBIT "B" MINIMUM ASSESSMENT AGREEMENT This Minimum Assessment Agreement (the "Agreement") is entered into as of , 2013, by and among the CITY OF WATERLOO, IOWA ("City"), N & S Property, 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 "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 Logan Avenue 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 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 $700,000.00 ("Minimum Actual Value") until termination of this Agreement. The parties hereto agree that construction of the Improvements will be substantially completed on or before December 31, 2013. If it is not, then the parties agree to execute an amendment to this Agreement that will extend the dates specified in Section 2 below. 1 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, 2023. 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. 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, 2024. 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 ATERLOO, IOWA By: Ernest G. Clark, Mayor Attest: Suzy S. hares, City Clerk 2 N & S PROPERTY, LLC By: Roey A. Anderson Managing Member STATE OF IOWA COUNTY OF BLACK HAWK ) ss. ) On this day of , 2013, 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. Notary Public STATE OF IOWA ) ) ss. COUNTY OF BLACK HAWK ) Acknowledged before me on , 2013 by Rodney A. Anderson as Managing Member of N & S Property, LLC. Notary Public 3 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 Tess than Seven Hundred Thousand Dollars ($700,000.00) in the aggregate, until termination of this Minimum Assessment Agreement pursuant to the terms hereof. Assessor for Black Hawk County, Iowa Date STATE OF IOWA ) ) ss. COUNTY OF BLACK HAWK ) Subscribed and sworn to before me on , 2013 by Tami McFarland, Assessor for Black Hawk County, Iowa. Notary Public 4