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HomeMy WebLinkAboutJSA Development, LLC-12/19/2011DOWNTOWN RESIDENTIAL and MIXED-USE HISTORICAL PROPERTY DEVELOPMENT AGREEMENT .This Development Agreement (the "Agreement") is made and entered into this vriday of December, 2011, by and between JSA Development, LLC (the "Company"), and the City of Waterloo, Iowa ("City"). WHEREAS, City considers economic development within the City a benefit to the community and is willing for the total good and welfare of the community to provide financial incentives so as to encourage that goal, and WHEREAS, JSA Development, LLC or its affiliated companies have and will redevelop property in the Downtown Waterloo Urban Renewal and Redevelopment Plan Area, and this redevelopment presents a cohesive plan to the redevelopment of over 40 parcels in the central business district, and WHEREAS, JSA Development, LLC and its affiliates have contributed significantly to the economic vitality and viability of Downtown and this vitality is necessary to fully leverage the City's investment in public infrastructure, and WHEREAS, Company has invested and will invest over $6,000,000 in rehabilitating properties and bringing them up to modern standards in the Downtown Waterloo Urban Renewal and Redevelopment Plan, as listed by the commonly known address and/or tax parcel number and legally described on attached Exhibit "A" (each a "Property"). NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, Company and City agree as follows: 1. CUBA Tax Exemptions. Provided that the Company has prepared and submitted required documents upon completion of work in accordance with the terms of the City's Consolidated Urban Renewal Area ("CURA") ° property tax exemption program, the City will grant and affirmatively support Company's receipt of property tax exemptions of 100% for any taxable value over the January 1, 2010 value as shown on Exhibit "A" for the first three years following completion of rehabilitation projects. Completion of the rehabilitation projects shall be determined by notice of completion delivered to City by the Company. 2. Property Tax Rebates. Provided that Company has executed the Minimum Assessment Agreement as set forth in paragraph 2, City agrees to rebate property taxes (with the exceptions noted below) for each improved Property in the years following any CURA exemptions as follows: a. Year One - 100% Rebate b. Year Two - 100% Rebate c. Year Three - 100% Rebate d. Year Four - 100% Rebate e. Year Five - 100% Rebate f. Year Six 100% Rebate g. Year Seven 100% Rebate for any taxable value over the January 1, 2010 value as shown on Exhibit "A". 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. The taxable value of a Property as a result of the improvements, to the Properties described herein, 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 (such as the Self -Supported Municipal Improvement District) that is exempted from treatment as tax increment financing under the provisions of applicable law. For improved Properties, the first year 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 a prior year for which the assessment is based solely upon the value of the land or upon the value of the land and a partial value of the improvements, due to partial completion of the improvements or a partial tax year. 2.1. 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 each Property. Company further agrees that, prior to January 1, 2023, it will not seek or cause a reduction in the taxable valuation for a Property, which shall be fixed for assessment purposes, below the aggregate amount shown on Exhibit "A" ("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 the agreement attached as Exhibit "B" concurrently with execution of this Agreement. The parties agree to cooperate with any reasonable request by the other party or by the Black Hawk County Assessor to modify such agreement and this Agreement in order to divide the Minimum Actual Value among condominium units that may be established upon one or more of the Properties following completion of Improvements. 2 2.2. Effect on Earlier Agreements. The parties agree that they have previously entered into development agreements (the "Prior Agreements") providing tax rebates for the following properties that will overlap with benefits provided under this Agreement: 112-118 E. 4th Street — tax parcels 8913-25-102-011, -012 226-228 E. 4th Street — tax parcels 8913-25-103-001 326-330 E. 4th Street — tax parcels 8913-24-362-001 The parties desire by this Agreement to include said properties in the scope of this Agreement and, where appropriate, to extend the term of tax rebates. Each Prior Agreement and its corresponding minimum assessment agreement shall be deemed terminated as of June 30, 2011, and rebates payable in respect of the 2011/2012 tax year and thereafter shall be determined with reference to the taxable value that exceeds the January 1, 2010 value for each property, subject to such conditions and limitations as may be provided in this Agreement, regardless of any other date fixed by a Prior Agreement. Each property covered by a Prior Agreement shall be eligible for payment of rebates for a term equal to ten consecutive years, minus the number of years for which rebates were paid under a Prior Agreement. For purposes of illustration, if rebates were paid for two consecutive years under a Prior Agreement, then rebates may be payable under this Agreement, if eligible, for eight consecutive years starting with the 2011/2012 tax year. 3. Abatement or Rebatement Funded by Others. The City and the Company acknowledge that a property tax exemption, abatement, rebatement or similar program may be implemented and funded by the State of Iowa or other governmental entities during the term of this Agreement. In the event such a program is established, the benefits thereof, if any, shall flow to the Company or its successor(s) or assignee(s), and City agrees to cooperate in good faith with the Company to support Company's applications for such benefits and to otherwise aid the Company in securing such benefits. 4. Conversion to Condominiums. The City and the Company acknowledge that subdivision and condominium conversion of one or more of the Properties may occur during the term of this Agreement. The City commits to amend this Agreement or otherwise work in good faith to ensure that benefits and obligations under this Agreement are protected. 5. Cooperation towards Correction of Adverse Conditions in Downtown Alleyways. The City and the Company will work together to rationalize and improve the safety, appearance and functionality of downtown alleyways both public and private. Where ownership elements for alleyways are either unknown or held in common the City will work with any party claiming ownership interest and take steps as needed to determine who needs to be involved and how improvements can be accomplished, including, where appropriate, cost -shared assessments, ordinance changes, access control requirements and other mechanisms. City will engage interested parties and 3 develop methodologies to accomplish required improvements in a timely fashion. Nothing herein obligates the City or any other party to expend funds in any specific amount or at any specific time. 6. Parking improvements. City agrees to continue exploration of parking requirements and improvements in the downtown area, including further investigation into creating a limited access parking area or areas in the Park Avenue garage and others either in cooperation with Main Street Waterloo or otherwise. City also agrees to study locations and placement of parking spaces in each downtown block to maximize available on -street parking, minimize obstructions to on -street parking and provide "pick up zones" where appropriate. City also agrees to explore and further investigate the concept of "free" two-hour parking areas on a revenue -neutral basis with the Company, other downtown property owners and tenants and Main Street Waterloo. Nothing herein obligates any party to expend any specific amount of money at any time. 7. 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. 8. 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. D. Company has full authority to execute this Agreement on behalf of each separate company affiliated with the Company, and to bind each such affiliated company to the terms hereof. Affiliated companies include, but are not 4 limited to, Four East Village Properties, LLC, Fowler Project, LLC, HQAA-JSA, LLC, Lincoln Park Building, LLC, MB Rentals, LLC and SycamOrr, LLC. 9. 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. 10. 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. 11. 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. 12. 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. 13. 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. 14. Entire Agreement. This Agreement and each of its exhibits, including but not limited to 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. 15. Time of Essence. Time is of the essence of this Agreement. 5 IN WITNESS WHEREOF, the parties have executed this Development Agreement by their duly authorized representatives as of the date first written above. CITY OF ; ATERLOO, IOWA JSA DEVELOPMENT, LLC mest G. Clark, Mayor Attest ysm� eve ,_ Suzy SchOres, City Clerk 6 By: James E. Walsh, Jr., Manager, for itself and as manager of Four East Village Properties, LLC, Fowler Project, LLC, HQAA-JSA, LLC, Lincoln Park Building, LLC, MB Rentals, LLC and SycamOrr, LLC EXHIBIT "A" Legal Description of Improved Property: See attachment. EXHIBIT "B" MINIMUM ASSESSMENT AGREEMENT This Mini um Assessment Agreement (the "Agreement') is entered into as of December tO6 2011, by and among the CITY OF WATERLOO, IOWA, ("City"), JSA Development, 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 located in the City; and WHEREAS, it is contemplated that pursuant to the Development Agreement, the Company will undertake the development of an area (the "Project") within the City and within the "Downtown Waterloo Urban Renewal and Redevelopment Plan" area WHEREAS, pursuant to Iowa Code section 403.6, as amended, the City and the Company desire to establish a minimum actual value for the land and building thereon pursuant to the Development Agreement and applicable only to the development, which shall be effective upon substantial completion of the development 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 building as to the development only; and WHEREAS, the City and the Assessor have reviewed the plans and specifications for the improvements (the "Improvements") and the work completed as a part of the development; NOW, THEREFORE, the parties to this Agreement, 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 or its affiliated companies on each of the properties described in Exhibit "A" attached hereto, the minimum actual taxable value which shall be fixed for assessment purposes for the land and Improvements constructed on each such property as a part of the Project shall not be less than those shown on Exhibit "A" ("Minimum Actual Value") until termination of this Agreement. The parties also acknowledge that the Company may submit one or more of the properties to a condominium regime after completion of the Improvements and that future owners of any such property as so divided are intended to be the beneficiaries of this Agreement and a related Development Agreement. 2. The Minimum Actual Value herein established shall be of no further force and effect and this 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 paying 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 between the City and the Company. 5. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. The City agrees to cooperate with any reasonable request by the Company to execute a written assignment of this Agreement to future owners of condominium units that may be created on any of the properties and to execute one or more amendments to this Agreement to divide the Minimum Actual Value for the property among such units and to ensure that such future owners receive the benefits contemplated by this Agreement and a related Development Agreement between the parties. CITY OF WATERLOO, IOWA By: Ernest G. Clark, Mayor Attest:- Suzy Sch4res, City Clerk 2 JSA DEVELOPMENT, LLC By: James E. Walsh, Jr., Manager, for itself and as manager of Four East Village Properties, LLC, Fowler Project, LLC, HQAA-JSA, LLC, Lincoln Park Building, LLC, MB Rentals, LLC and SycamOrr, LLC STATE OF IOWA ) ) ss. COUNTY OF BLACK HAWK ) On this V day of December, 2011, 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 swom, 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. 1) STATE OF IOWA ) ) ss. COUNTY OF BLACK HAWK ) Subscribed and sworn to before me on , 2011 by James E. Walsh, Jr., as Manager of JSA Development, LLC., for itself and as manager of Four East Village Properties, LLC, Fowler Project, LLC, HQAA-JSA, LLC, Lincoln Park Building, LLC, MB Rentals, LLC and SycamOrr, 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, in the aggregate, than those shown on Exhibit "A" hereto, 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 by , Assessor for Black Hawk County, Iowa. Notary Public