HomeMy WebLinkAboutFischels Holdings LLC-10/15/2012Preparer
Information: 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
, 2012 by and between Fischels Holdings LLC (the "Company") and
the City of Waterloo, Iowa (the "City"). 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 Downtown Urban Renewal and
Redevelopment Plan area in the 1100 block of Jefferson Street, 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. Improvements by Co :piny. After completion of demolition activities,
Company shall construct on the Property an industrial building of not less than 6,300
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 $ 180,000. 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 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. Measured from the date the Property is
deeded to Company, Company must obtain a building permit and begin construction
within six (6) months and substantially complete construction by December 31, 2013.
If Company has not, in good faith, begun the construction 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 shall be tolled for a period of time equal to the period of such
DEVELOPMENT AGREEMENT
Page 3
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.
4. Reverter of Title; indemnity. In the event of any reverter of title,
Company agrees that it shall, at its own expense, promptly execute all documents,
including but not limited to a special warranty deed, or take such other actions as the
City may reasonably request to effectuate said reverter and to deliver to City title to the
Property 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 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 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 dye 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
fixed for assessment purposes, below the amount of $ 180,000 (the "Minimum Actual
Value"), through:
DEVELOPMENT AGREEMENT
Page 4
(1)
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.
Company agrees to sign said attached Exhibit "B" at the closing.
8. 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 7, City agrees to rebate property tax (with the exceptions noted below) as
follows:
Year One 60% rebate
Year Two 60% rebate
Year Three 60% rebate
Year Four 60% rebate
Year Five 60% rebate
Year Six 60% rebate
Year Seven 60% rebate
Year Eight 60% rebate
Year Nine 60% rebate
Year Ten 60% rebate
for any taxable value over the January 1, 2012 value of $7,450 for the land only.
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 shall be forfeited.
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.
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, and not based on a prior year for which the assessment is based solely
upon (x) the* value of the Property or upon (y) the value of the Property and a partial
value of the Improvements due to partial completion of the Improvements or a partial
tax year.
DEVELOPMENT AGREEMENT
Page 5
9. Right of First Refusal. Real estate abutting the Property, consisting of
assessor parcel nos. 8913-25-304-007 to -013 and legally described on Exhibit "C"
attached hereto (the "Klingfus Property"), is the subject of an amended development
agreement with Roger Klingfus. In the event that City reacquires title to the Klingfus
Property, the parties agree that Company shall have a right of first refusal to purchase
the Klingfus Property for the sum of $1.00. The right is exercisable for a period of thirty
(30) days following written notice from City. All matters in relation to conveyance of the
Klingfus Property will be subject to the same terms and conditions set forth in this
Agreement for conveyance of the Property. If Company acquires ownership of the
Klingfus Property following exercise of the right of first refusal, it shall integrate same
into the Project and not make a separate sale or conveyance of it to any other party.
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
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.
DEVELOPMENT AGREEMENT
Page 6
13. 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.
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 Fischels Holdings LLC, PO Box 567 Gilbertville,
Iowa 50634, Attention: Robert A. Fischels.
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.
15. 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.
16. Amend .ent, IVIS_ dification, 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.
DEVELOPMENT AGREEMENT
Page 7
17. 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.
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. Binding Effect. This Agreement shall be binding and shall inure to the
benefit of the parties and their respective successors, assigns, and legal
representatives.
20. 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.
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 FISCHELS HOLDINGS LLC
By: By:
Ernest G. Clark, Mayor Robert A. Fischels
Attest:
Suzy Schares, City Clerk
By:
Kathy J. Fischels
DEVELOPMENT AGREEMENT
Page 8
PERSONAL GUARANTY. The undersigned, being either an officer, shareholder,
manager, or member of Company, hereby agree for themselves and their heirs,
personal representatives, . and asgns, 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 Property
Lots 2 and 3, in Block 44, Original Plat on the West Side of the Cedar River, City of
Waterloo, Black Hawk County, Iowa.
EXHIBIT "B"
INIMUM ASSESSMENT AGREEMENT
This Minimum Assessment Agreement (the "Agreement") is entered into as of
this day of , 2012, by and among the CITY OF
WATERLOO, IOWA ("City"), FISCHELS HOLDINGS 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 Downtown Waterloo Urban Renewal and 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 $180,000 (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, 2013.
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,
2032. 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, 2033.
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 FISCHELS HOLDINGS LLC
By: By:
Ernest G. Clark, Mayor Robert A. Fischels
By:
Suzy Schares, City Clerk
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
By:
Kathy J. Fischels
On this day of , 2012, before me, a Notary Public in
and for the State of Iowa, personally appeared Emest 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 )
Subscribed and sworn to before me on , 2012 by Robert
A. Fischels and Kathy J. Fischels as of FISCHELS HOLDINGS
LLC.
Notary Public
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 properly 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 One Hundred Eighty Thousand Dollars ($180,000.00) until termination of this
Minimum Assessment Agreement pursuant to the terms hereof.
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
Assessor for Black Hawk County, Iowa
Date
Subscribed and sworn to before me on , 2012 by
, Assessor for Black Hawk County, Iowa.
Notary Public
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EXHIBIT "C" -Q -
Legal Description of Klingfus Property
Lot 1, in in Block 44, Original Plat on the West Side of the Cedar River, City of
Waterloo, Black Hawk County, Iowa.
3 parcels for agreement