HomeMy WebLinkAboutLK Holdings - Development Agmnt (Conv Ctr) RECORDED-7/17/2017i
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Doc ID: 008242750025 Type GEN
Recorded: 10/02/2017 at 04:15:23 PM
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Black Hawk County Iowa
SANDIE L. SMITH RECORDER
File2018-00005820
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Prepared by Christopher S. Wendland, P.O. Box 596, Waterloo, IA 50703. 319-234-5701
DEVELOPMENT AGREEMENT
This Development Agreement (the "Agreement") is entered into as of
\ \ l , 2017, by and between LK Holdings Waterloo, LLC, a Wyoming
limited liability company (the "Company"), and the City of Waterloo, Iowa (the "City").
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 undertake acquisition and
rehabilitation of an existing convention center property located in the
Downtown Waterloo Urban Renewal and Redevelopment Plan Area.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the parties agree as follows:
1. Sale of Property. Subject to the terms and conditions of this Agreement,
City will convey to Company for the sum of $1.00 the real property described on Exhibit
"A" attached hereto ("Property"), located at 200 W. 4th Street and consisting of assessor
parcel no. 8913-26-231-002. Company will undertake the Project (defined below) upon
the Property. Included with the Property at no additional cost will be all personal
property and fixtures (collectively, the "FFE") located therein or thereon that belong to
City, and the skywalk that connects the Convention Center (defined below) with the
hotel located at 205 W. 4th Street, including structures supporting the skywalk.
Company agrees to take the Property, all FFE, and the skywalk and supporting
structures in their "as is, where is" condition, subject to all faults. Company further
agrees that City has not made and does not hereby make any representation or
warranty concerning the Property, FFE, or the skywalk and supporting structures as to
their condition, operability, merchantability, fitness for any particular use, or otherwise,
and Company hereby disclaims any and all such warranties.
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2. Improvements by Company. Company shall upgrade and renovate the
lobby, meeting rooms and other facilities (all of the foregoing renovations and
improvements are collectively referred to as the "Improvements") at a minimum
estimated investment cost of $6,000,000. A list of intended Improvements is attached
hereto as Exhibit "B". 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. The Property, the Improvements, and all
development -related work to make the Property usable for Company's purposes as
contemplated by this Agreement are collectively referred to as the "Project". Company
shall commence Improvements within six (6) months after the date of this Agreement or
after taking ownership of the Property, whichever occurs last, and shall substantially
complete the Project within eighteen (18) months thereafter.
3. City Commitments in Aid of Project.
A. Rebates. City shall provide property tax rebates as further set forth
in Section 10 below.
B. Economic development grants. City will make an economic
development grant to Company in the amount of $700,000, payable within sixty (60)
days after plans for exterior improvements have been approved by the downtown
design/build management team (DBMT) and Waterloo Building Official. City will make
a further economic development grant to Company in the amount of $350,000, payable
within sixty (60) days after completion of final permit inspections relating to interior
improvements.
C. Parking. The parties agree to enter into a separate agreement for
use of up to 200 non -reserved spaces in the connected parking ramps by patrons of the
Waterloo Convention Center (the "Convention Center") and the associated hotel (the
"Hotel"). Because both facilities will be under management by Company, no particular
number of spaces is allocated herein between the facilities. Company may choose to
validate parking for authorized patrons, at rates to be determined by City policy.
D. Dedicated Support. City agrees that for a period of ten (10) years
after it deeds the Property to Company, City will not promote, provide incentives for, or
otherwise assist in the development of any convention center or events center in Black
Hawk County, Iowa that contains more than 10,000 square feet of rentable space, nor
will City assist or encourage any other person or entity to do so.
4. Conveyance; Title. Conveyance shall be by special warranty deed (the
"Deed"), free and clear of all encumbrances arising by or through City except:
(a) easements, conditions and restrictions of record; (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 financial ability to undertake and carry on the Project (defined
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below), which may take the form of a lending commitment letter. The parties will
schedule a closing to occur as promptly as possible following completion of the
hearings, procedures and approvals that City is required to complete pursuant to
Section 18. No less than 30 days before closing, City shall provide to Company any
abstracts of title for the Property in its possession, updated to a date within 60 days
before closing. Company may, at its own expense, obtain whatever additional form of
title evidence it desires. City shall make every reasonable effort to promptly perfect
title. If closing is delayed due to City's inability to provide marketable title, this
Agreement shall continue in force and effect until either party rescinds the Agreement
after giving ten days' written notice to the other party. The abstract shall become the
property of Company when the Purchase Price is paid in full.
5. 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. Company must obtain a building permit
and begin renovations within six (6) months after the date this Agreement is approved
by City (the "Project Start Date") and substantially complete renovations within eighteen
(18) months of the Project Start Date (the "Project Completion Date").
If Company has not, in good faith, begun work on the Improvements by
the Project Start Date, then title to the Property shall revert to the City, except as
provided in this Agreement; provided, however, that if work has not begun by the
Project Start Date 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 work on the
Improvements, and if an extension is granted but the work 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 work has commenced by the Project Start Date 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 the Improvement work is to be completed by the Project
Completion Date shall be tolled for a period of time equal to the period of such
stoppage or delay, and thereafter if work is not completed within the allowed period of
extension the title to the Property shall revert to the City after the end of said period.
6. Dedicated Property Use; Possibility of Reverter. The parties
acknowledge that the Property is used principally as a convention center and events
facility (the "Dedicated Uses"). Company agrees that the Property will continue to be
used principally for such purposes until City gives its written consent to an alternate
principal use. If Company permits the Property to be used principally for any purpose
other than the Dedicated Uses, then title to the Property shall revert to the City. The
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parties agree that the Deed shall include a statement of the Dedicated Uses and the
possibility of reverter.
7. 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, charge, security interest, mortgage or
encumbrance (collectively, "Liens") arising by or through Company. Company shall pay
in full, so as to discharge or satisfy, all Liens on or against the Property.
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 or Liens 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, incurred by City. Company's duties of indemnity pursuant to this
section shall survive the expiration, termination or cancellation of this Agreement for
any reason.
8. No Encumbrances; Limited Exception. Until completion of the
Improvements, Company agrees that it shall not create, incur, or suffer to exist any
Liens 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.
9. 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 "C", it will not seek or cause a reduction in the taxable valuation for the Property,
which shall be fixed for assessment purposes, below the aggregate amount of
$5,000,000 ("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.
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Company agrees to sign the agreement attached as Exhibit "C" at closing.
10. Property 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 9, the City agrees to rebate property taxes (with the
exceptions noted below) as follows:
34% rebate for each of Years One through Fifteen, inclusive,
for any taxable value over the January 1, 2018 value of $2,500,000, subject to
adjustment as provided in this section based on evaluation by the performance review
board provided for in Section 14. If the board's scoring system at any time yields an
aggregate score of less than three (3), Company's eligibility for a full rebate shall be
placed on probationary status and the rebate payable in the succeeding year will be
adjusted down to a 25% rebate if the aggregate score in the succeeding year is not at
least six (6). Each year will be separately evaluated using the foregoing methodology.
The board will notify Company of all scoring decisions, which shall be subject to the
dispute resolution procedures set forth in Section 24.
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, otherwise Company will forfeit its right to a rebate for
that year in the City's discretion.
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. 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 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.
11. Job Creation. Company agrees that it will hire no fewer than 100
employees to provide an adequate staffing level for operation of the Hotel and
Convention Center to a standard of quality established by an oversight board more fully
described in Section 14 hereof. Company shall be free to assign or allocate its
personnel between the facilities as it deems best for optimal operation of the two
facilities, consistent with the quality standards referenced above. During each year that
a tax rebate is payable hereunder, Company shall, within thirty (30) days after the close
of City's fiscal year, provide a written report to City showing the number of full-time (30
or more hours per week) and part-time employees that Company has on its payroll as
of the last calendar day of each month during the reporting period.
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12. Insurance. Until City has, following completion of the Improvements,
released its rights for reverter of title as provided in Section 5, Company agrees to keep
in force one or more policies of insurance covering the Property and FFE against loss
or damage, in an amount not less than the Minimum Actual Value. Such policy or
policies shall name City as an additional insured and provide for at least a 30 -day notice
of cancellation to City. Company shall provide proof of insurance to City at each policy
renewal.
13. Improvement Plan and Escrow. The parties acknowledge that the
Convention Center is a 40 -year-old facility that is likely to require significant periodic
maintenance, renovation, and upgrade. Accordingly, Company agrees to maintain a
segregated escrow account into which Company will deposit, during each calendar year
or within thirty (30) days after the close of each calendar year, an amount equal to four
percent (4%) of the Convention Center's operating revenues for such calendar year, but
not less than $100,000. Company's first contribution to the account shall be after the
second year that it operates the Convention Center. For purposes of this section,
"operating revenues" means the total amount received from third parties by Company or
any other person or entity operating the Convention Center on behalf of Company,
directly or indirectly arising out of or connected with the Convention Center, including
but not limited to transactions for cash, credit and credit card sales, less applicable
sales taxes. Company may utilize funds from the escrow account to defray the cost of
capital upgrades and improvements to the Convention Center, other than the initial
Improvements described in Section 2. By having such a fund, the parties express no
expectation that it will be the sole source of funds for such upgrades or improvement
costs. Company shall develop and periodically update (not less than annually) a facility
improvement plan to address foreseeable needs for Convention Center maintenance or
upgrades, desired improvements, and contingencies. The plan shall be provided to the
performance review board described in Section 14 after each update, and Company
shall consider input from said board.
14. Review Board. The parties agree to formation of a performance review
board for the Convention Center (the "Board"). The Board shall consist of at least
seven members, including two City staff members appointed by the mayor, the
Executive Director or other designee of the Waterloo Convention & Visitors Bureau, the
Executive Director or other designee of Main Street Waterloo, one representative of
Waterloo Development Corporation, one representative of Company, and one
representative from a company in the community that is designated by the mayor
because of the company's high utilization of the Convention Center. Each organization
that contributes a Board member may replace its appointed member at any time in its
discretion. The Board will meet at least semi-annually to evaluate the use, operation
and condition of the Convention Center and to assess the extent to which the
Convention Center has been utilized to positively impact the local economy, to enhance
the business climate of Waterloo, and to enhance the quality of life for Waterloo
residents and area visitors by providing a high-quality venue and user experience for
meetings, conventions, banquets, and other community gatherings and events.
Evaluation criteria shall include user attendance, the service satisfaction metrics
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described in Exhibit "D" attached hereto, and the requirements of Section 15. At least
annually, the Board will rate the evaluation criteria as set forth in Exhibit "D" and the
requirements of Section 15 to encourage continuous improvement and to provide an
incentive to Company for payment of full rebates as provided in Section 10.
15. General Operating Standard. Company, its successors, assigns and
transferees, shall at all times operate and maintain the Convention Center to a standard
that is substantially equivalent to that of a four-star hotel. Such standard shall be
determined with reference to applicable provisions of the Lodging Approval
Requirements & Diamond Rating Guidelines issued by the American Automobile
Association ("AAA"), or similar standards or system of AAA in effect at any given time.
16. Facility Name. In confirmation of public commitments previously made,
City agrees to name the city block on which the Convention Center is located "Five
Sullivan Brothers Plaza", and Company agrees that the Convention Center shall be
named "Waterloo Convention Center at Five Sullivan Brothers Plaza." Company will
ensure that all print, video, broadcast and social media refer to the Convention Center
by said name. Company, its successors, assigns and transferees, shall not rename the
Convention Center or adopt any other form or style of designation without the prior
written consent of City.
17. Restrictions on Transfer; Purchase Rights. Company may not sell,
convey, give, or otherwise transfer title to the Property to any third party without the
prior written consent of City, except to a successor by merger or consolidation, which
consent shall not be unreasonably withheld if such third party has demonstrated
experience of no less than ten (10) years in profitably operating one or more facilities of
similar size and agrees to assume all obligations of Company hereunder. If Company
is in receipt of a bona -fide purchase offer from a party that is unrelated to Company by
common ownership or control, and if the terms of the offer are acceptable to Company,
then Company shall promptly deliver a full and true copy of same to City. For a period
of sixty (60) days after receipt of the offer, City shall have a right of first refusal to
purchase the Property for the same price as stated in the offer, which City may exercise
by delivery of written notice to Company. At closing, City shall be given credit against
the purchase price as set forth below:
(i)
If the City exercises its purchase right on or before December 31,
2023, the credit will equal the sum of (a) the assessed value of the
Property at the time of conveyance to Company pursuant to
Section 4 above, namely, $2,500,000, and (b) the economic
development grant paid to Company pursuant to Section 3.B
above.
(ii) If City exercises its purchase right from January 1, 2024 until and
including December 31, 2028, the credit will be the assessed value
of the Property at the time of conveyance to Company pursuant to
Section 4 above.
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(iii) If City exercises its purchase right after December 31, 2028, the
credit will be $250,000.
In any event where City exercises a right of purchase, the closing shall occur within an
additional forty-five (45) days after delivery of written notice of exercise, and Company
shall provide to City an updated abstract of title for the Property and convey title at
closing by general warranty deed.
18. Regulatory Approvals. Company acknowledges and agrees that the
Project will require Company to obtain various approvals from the City of Waterloo
and/or other applicable governmental authorities, including but not limited to zoning, site
plan, subdivision, building permit and other approvals required or necessary for
Company's proposed Improvements to the Property. To optimize coordination of
Project plans and development with such approvals, Company agrees to participate
regularly and in good faith in the project management/design-build management
(PMT/DBMT) process applicable to the Property for design issues, landscape design,
parking, construction documents, and other matters.
19. 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 120 days from the date this Agreement is approved
by the City council. Likewise, Company's obligations under this Agreement are subject
to and contingent upon City's completion of all such procedures, hearings and
approvals.
20. 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.
21. 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.
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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 may operate the Convention Center through a separate
company affiliated with Company by common ownership and/or control, but
Company will be responsible to ensure that Company or its operating affiliate
perform all of the terms of this Agreement that are Company's duty to perform.
22. 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 and would not have offered the substantial
Project incentives described herein. Upon breach of any promise or covenant, or in the
event of the incorrectness or falsity of any representation or warranty, City shall provide
written notice of such breach to Company, and if Company fails to cure such breach
within sixty (60) days thereafter, 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.
23. Cross -Default. City and Company are parties to a certain development
agreement with respect to the Hotel (the "Hotel DA"). The parties agree that a default
by Company under the Hotel DA shall constitute and be treated as a default under this
Agreement. In the event of a default under either this Agreement or the Hotel DA, City
shall be entitled to exercise any or all remedies available to it under either agreement or
under applicable law.
24. Dispute Resolution. If Company disputes any scoring decision of the
review board, then within fourteen (14) days it may notify the board in writing, and for a
period of fourteen (14) days after such notification Company and the board shall confer
about the score and whether it will be revised. If Company is not satisfied with the
board's final decision, which the board shall provide to Company in writing, then within
fourteen (14) days thereafter Company may serve on the board a written notice to
submit the matter to arbitration. Except as provided in this section, the arbitration shall
be conducted in accordance with the provisions of Iowa Code Chapter 679A. The
parties shall select an arbitrator by mutual agreement, and if they fail to do so then
Chapter 679A shall govern the selection of an arbitrator. Arbitration shall be conducted,
if possible, by mail and telephone conference call, and if personal appearances are
required, then in Waterloo, Iowa. The decision of the arbitrator shall determine all
issues in dispute between the parties with respect to the contested scoring decision.
The decision of the arbitrator shall be final and binding and shall not be subject to
appeal on a question of fact, law, or mixed fact and law. Each party shall bear all costs
and expenses, including but not limited to attorneys' fees, that it incurs in the handling
of any dispute pursuant to this section. Except where clearly prevented by the area in
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dispute, both parties agree to continue performing their respective obligations under this
Agreement while the dispute is being resolved.
25. 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, at 1402 S. 13th Street, Omaha, NE 68108, Attn:
Edwin W. Leslie. With a copy to: Matthew R. Berens, Berens Blonstein PLC,
7033 East Greenway Parkway, Suite 210, Scottsdale, AZ 85254.
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, or (iii) three (3) business days
following the date of deposit if mailed by United States registered or certified mail,
postage prepaid.
26. 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.
27. 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.
28. 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.
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29. 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.
30. Binding Effect. This Agreement shall be binding and shall inure to the
benefit of the parties and their respective successors, assigns, and legal
representatives.
31. 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.
32. Entire Agreement. This Agreement, together with the Minimum
Assessment Agreement attached hereto as Exhibit "D", 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.
33. 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
By:
Quentin M. Hart, Mayor
Attest:
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LK HOLPj® ATERLOO, LLC
in W. Leslie
Managing Member of Leslie
Hospitality Consulting, LLC, its
Managing Member
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
pursuantt• foregoing Agreement, including but not limited to the duties of indemnity
set forth n.
W. eslie
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EXHIBIT"A"
Legal Description of Property
Block 7, Original Plat on the West Side of the Cedar River, City of Waterloo, Iowa, and Lots 1
through 6 of Elwell's Subdivision, city of Waterloo, Iowa, including all alleys but excepting street
right of way.
EXHIBIT "B"
Description of Improvements
See attached.
Waterloo Convention Center
Leslie Hospitality
Development Agreement Exhibit B
Improvements
1
Area
Task
Category
Elevators
Install required life safety signage outside elevator entrance (do not use in case of fire - use stairs)
90 days
Elevators
Clean light diffusers.
Immediate
Exterior
Power wash exterior including walls, windows, walkways and drive surfaces to remove all dust accumulation, bird/Insect debris
and/or stains
90 days
Exterior
Following pressure washings, point/tuck grout as needed and seal brick to eliminate any further fluorescence.
Immediate
Exterior
Clean and replant all plant beds
Immediate
Exterior
Repair any damaged, cracked or lifting curbs or walkways.
Immediate
Exterior
Replace signage
Immediate
Exterior
Paint and seal exterior with new colors
90 days
Exterior
Close in Soffit of building with EFIS or similar product
90 days
Exterior
Repair/replace any damaged or cloudy windows.
90 days
Exterior
Provide designated guest smoking area away from front entrance.
Immediate
Exterior
Replace exterior lighting to enhance curb appeal of building
Immediate
Exterior
Replace Main entry doors with automated self opening door systems
90 days
Exterior
Upgrade egress doors to open In accordance with current code requirements
90 days
Exhibit Hall
Sand blast and clean ceiling and beams removing all paint
90 days
Exhibit Hall
Seal and coat ceiling to include sound barrier
90 days
Exhibit Hall
Paint and finish ceiling
90 days
Exhibit Hall
Replace wall sound boards with new
90 days
Exhibit Hall
Paint walls
90 days
Exhibit Hall
Replace signage
90 days
Exhibit Hall
Grind, clean, and resurface floor with new color and finish to new
90 days
Exhibit Hall
Paint and repair entry and exit doors
90 days
Public Restrooms
Combine Men's Room and Womens Room on 1st floors and 2nd floors to enlarge and enhance space into larger restrooms
180 days
Public Restrooms
Replace flooring
180 days
Public Restrooms
Replace and repair fixtures
180 days
Public Restrooms
Replace vanities
180 days
Public Restrooms
Replace wall vinyl and lighting
180 days
Public Restrooms
Repair and paint walls and doors
180 days
Public Restrooms
Enhance and add lighting
180 days
Lobby / Public Areas
Remove and replace brick flooring with wood / marble / granite
120 Days
Lobby / Public Areas
Repair walls and replace wall vinyl
120 Days
Lobby / Public Areas
Replace and update ceiling lighting
120 Days
Lobby / Public Areas
Replace all ceiling tiles and ceiling grid
120 Days
Lobby / Public Areas
Replace artwork
120 Days
Lobby / Public Areas
Repair and replace all carpeted areas of coat check
120 Days
Lobby / Public Areas
Replace center meeting room / elevated space with new office space for sales development team
120 Days
Lobby / Public Areas
Replace and enhance entire AV and Wireless Internet systems
Immediate
Lobby / Public Areas
Upgrade egress doors to open in accordance with current code requirements
90 days
Lobby / Public Areas
Replace sheetrock ceiling in south east entry
90 days
Meeting Rooms
Repair damaged walls and ceilings
180 days
Meeting Rooms
Repair and replace ceiling the and grid
180 days
Meeting Rooms
Replace all interior lighting with modern upgraded fixtures
180 days
Meeting Rooms
Replace all interior carpet
180 days
Meeting Rooms
Replace all signage
180 days
Meeting Rooms
Repair and paint doors
180 days
Meeting Rooms
Replace all linens
180 days
1
Waterloo Convention Center
Leslie Hospitality
Development Agreement Exhibit B
Improvements
2
Area
Task
Category
Meeting Rooms
Replace any damaged and worn tables and chairs
180 days
Facility -wide
Inspect fire sprinkler system and make any required improvements
90 days
Facility -wide
Mount fire sprinkler head box by sprinkler rise pipe
90 days
Facility -wide
Inspect fire alarm system and make any required improvements
90 days
Facility -wide
Inspect kitchen hood fire suppression system and make any required improvements
90 days
Facility -wide
Replace lamps in sockets where needed
90 days
Facility -wide
Inspect generator and make any required Improvements
90 days
Facility -wide
Upgrade all egress and exit lighting
90 days
Facility -wide
Replace light switch and outlet covers as needed
90 days
Facility -wide
Replace lamps in sockets where needed
90 days
Facility -wide
Replace electric panel covers where needed
90 days
Facility -wide
Upgrade wiring where needed
90 days
Storage Areas
Re -organize and remove storage from prohibited corridor areas
90 days
Kitchen/Storage Areas
Reorganize storage to ensure 18" gap below fire sprinkler deflectors
90 days
2
EXHIBIT "C"
MINIMUM ASSESSMENT AGREEMENT
his Minimum Assessment Agreement (the "Agreement") is entered into as of
1 , 2017, by and among the CITY OF WATERLOO, IOWA ("City"),
LK Holdings Waterloo, 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
Developer, 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 $5,000,000 ("Minimum Actual Value") until
termination of this Agreement. The parties agree for purposes of this Agreement that
construction of the Improvements will be substantially completed on or before
December 31, 2019.
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,
2034. 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.
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.
CITY OF WATERLOO, IOWA
By:
Quentin M. Hart, Mayor
Attest:
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK )
On this day of ua , 2017, before me, a Notary Public in
and for the State of Iowa, personally appeed Quentin M. Hart and Kelley Felchle, 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.
LK HO Qj ATERLOO, LLC
By.
Edwin W. Leslie
Managing Member of Leslie
Hospitality Consulting, LLC, its
Managing Member
��"'"` ,
: . T.
.
'0'0^
NANCY HIGBY
COMMISSION NO.788229
MY COMMISSION EXPIRES
o-- 1-- 201 q,
2
Notary Public
fl
STATE OFIi,UG�J )
)ss.
COUNTY OF taia C- a.caiz'/�)
Acknowledged before me on acct re2 2017 by Edwin W. Leslie as
Managing Member of Leslie Hospitality Consulting, LLC, Managing Member of LK
Holdings Waterloo, LLC.
A.•""` •.
• •
•e t.
SHELLIE L CRISMAN
COMMISSION NO.778700
MY COMI SSON EXPIRES
`-i'd�—del
3
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 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 and
building upon completion of the development shall not be less than Five Million Dollars
($5,000,000).
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
sor for Black Hawk County, Iowa
Date
Subscribed and sworn to before me on 10 - 2 , 2017, by T.J.
Koenigsfeld, Assessor for Black Hawk County, Iowa.
TARA JOHNSON
Commission Number 767467
My Commission Expires
April 5, 2020
EXHIBIT "D"
Criteria to Evaluate Service Satisfaction
The annual performance review will be conducted by weighing Company's
performance each fiscal year (July 1 to next June 30) against quantitative and
qualitative goals mutually established by the Performance Review Board in the
categories of (1) service satisfaction, (2) attendance, (3) maintenance and (4) other
measures. The definition of each category is as follows:
(1) "Service Satisfaction" is the level of satisfaction set annually by the
Performance Review Board, rating Company's performance in meeting the overall goals
of the Board. The Board will consider f the following sub -categories, giving
consideration to the criteria set forth for each sub -category and other relevant and
related considerations by using customer satisfaction surveys that encompass the
concepts outlined below. The initial survey document is attached. The Company and
the Performance Review Board can jointly approve periodic changes to the survey
document. Survey responses will be requested from event planners for each event by
an independent third party.
Cleanliness — Are the building and grounds consistently in a high state of
cleanliness? Is cleaning done beyond a surface level? Company shall have a
manual that outlines cleaning procedures, schedules and standards applicable to
the facility. Company will provide committee with a copy of the manual as well
as documentation of cleaning.
Event Execution — Do set-up and tear -down happen in a timely fashion? Is the
audio-visual equipment prepared appropriately for the event? Are the details
and expectations that are set out in the banquet event order matched? The
committee will review all customer surveys that Company receives.
Customer Service — Have Company and staff performed all duties in a
professional productive manner with the aim of ensuring a successful event and
experience for the client, ensured that client needs are met and operational
policies and procedures followed, and been responsive to requests by customers
and prospective customers to view the facility and to address inquiries
satisfactorily and in a timely manner?
Food and beverage service — Is food served at the appropriate temperature?
Are guests being served the correct food? Does the quantity of food match what
was ordered by the customer? Are food and beverage served in a timely
fashion? Does the setup of food service adequately provide guests an
opportunity to serve themselves (banquet setup)? Are there enough beverages
available to guests? Are dirty plates, glasses, silverware cleared at the
appropriate time?
(2) "Attendance" is the total number of persons attending events at the Facility in
a fiscal year, determined by recording the attendance at each usage and adding up the
total attendance for all usages for the year. For attendance figures to be counted in this
calculation, an event must be a contracted event, for which a contract has been
completed. Casual attendance resulting from such day-to-day activities such as facility
tours shall not be counted as attendance. Attendance will be compared to targets
previously set annually by the Board and scored accordingly on the scale described
below. The initial attendance targets would be scored as follows:
Annual attendance
Less than 30,000 0
30,000 or more and less than 40,000 1
40,000 or more and less than 50,000 2
50,000 or more and less than 65,000 3
65,000 or more 4
(3) "Maintenance" — Are all facility features, systems and mechanicals in good
working order and, if appropriate, of a presentable appearance? This standard will be
measured using the American Automobile Association inspection guidelines.
(4) "Other measures" encompasses the following evaluative issues:
Reports and communications — Has Company made regular reports (monthly,
unless otherwise noted) to the Board with attendance figures, property and
equipment maintenance, facility cleaning and post -event customer surveys?
Sales and marketing — Has Company worked with the Convention & Visitors
Bureau to ensure that the facility event calendar is kept up-to-date, and met
regularly with Convention & Visitors Bureau sales team?
Compliance (Legal and Audit) — Has Company maintained all appropriate
permits and insurance and ensured that staff has appropriate training? Have
Company and its staff complied with all applicable local, state and federal laws?
Under this plan, the customer satisfaction surveys would be tabulated using the
scale indicated below. Attendance would be tabulated using the scale indicated under
item 2 above. For the "other measures" category, each Board member would complete
a score card at the end of each fiscal year for which a property tax rebate may be
payable. For each evaluation category, one of the following scores would be assigned:
0 — Fails to meet expectations
1 — Sometimes meets expectations
2 — Consistently meets expectations
3 — Meets and sometimes exceeds expectations
4 — Consistently exceeds expectations
2
Each sub -category under "service satisfaction" will be separately scored, and then the
scores will be totaled, averaged and rounded to the nearest tenth of a point to
determine a score for the service satisfaction category as a whole, using the customer
satisfaction surveys.
The overall score on all evaluation criteria shall be the sum of (a) the service
satisfaction category score times 70%; (b) the attendance category score times 20%;
(c) the maintenance category score times 10%; and (d) the other measures category
score times 5%. Aggregate scores for the two major categories falling below three (3)
for more than one consecutive year would lead to Company being placed on probation
for the next year for tax rebate purposes. Company will be required to provide plans for
specific corrective measures. Failure to bring scores to three (3) or above by the end of
the probationary period may result in downward adjustment of the tax rebate as
provided in the Development Agreement. The scoring system and expectations for
scores will be reviewed annually by the Performance Review Board and modified as
deemed appropriate by a majority of all members of the Board.
3
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IT WATERLOO
CONVENTION CENTER
- AT SULLIVAN BROTHERS PLAZA -
The Waterloo Convention Center requests your help. Please complete the following Customer Satisfaction Survey
based on the event you recently held with us. Thank you for your time.
Customer Name:
[Customer Name]
Event Name:
[Project Name]
Meeting Planner Name: Date of Event:
[Project Manager] [Date]
Our Sales Manager was:
[Project Number]
Z Did the Convention Services team deliver the results and quality that were promised?
O Less than expected 0 As expected
0 More than expected 0 Consistently more
la. Were key setup and service deadlines met with a "whatever it takes" attitude?
O Less than expected 0 As expected 0 More than expected 0 Consistently more
1 b. Was the team consistent in its approach to the event, its overall scope, and schedule?
O Less than expected 0 As expected 0 More than expected 0 Consistently more
1 c. Did the Sales and Convention Services team guide your staff and meet your
expectations?
O Less than expected 0 As expected
0 More than expected 0 Consistently more
Cnrtomer Sad/ f1clion Surry Date) l
2 The Food Quality was ...
O Less than desirable 0 is expected
2a. Was the food service timely?
O Better than expected 0 Consistently better
O Less than expected ❑ As expected
2b. Was the presentation?
❑ More than expected 0 Consistently more
O Less than expected 0 As expected
O More than expected 0 Consistently more
2c. Was the service team professional in dress, communication, etc.?
❑ Less than expected 0 As expected
The overall service for your event ...
O More than expected 0 Consistently more
O Less than desirable 0 As expected
3. Comments / Testimonial..
[Add your comments here.]
O Better than expected 0 Consistently better
❑ Please check this box to grant us permission to use your company logo and testimonial on our website or in our
future marketing efforts.
❑ Please check this box if you are willing to act as a reference for our company in the future.3a. Would you
recommend the Waterloo Convention Center for a return visit for your group or for others?
O Yes 0 No
Thank you very much for taking the time to complete this survey. Your feedback is valued and very much
appreciated)
Customer Stdis/iretion Sumeej '[Date] 2