HomeMy WebLinkAboutDahlstrom Real Estate - Dev Agmnt - 8/13/2018 Please return this copy to:
City Clerk&Finance Dept.
715 Mulberry St.
Waterloo,IA 50703
Prepared by Christopher S Wendland P O Box 596 Waterloo IA 50704 Phone(319)234-5701
DEVELOPMENT AGREEMENT
This Development Agreement (the "Agreement") is entered into as of
, 2018 by and between Dahlstrom Real Estate LLC (the "Company")
and We 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, and the City
further believes that the project is in the vital and best interests of the City
and that the project and such incentives are in accordance with the public
purposes and provisions of applicable State and local laws and
requirements under which the project has been undertaken and is being
assisted.
B. Company is willing and able to finance and construct buildings and related
improvements on property located in the East Waterloo Unified Urban
Renewal and Redevelopment Plan Area, formerly known as the Airport
Area Development Plan area, consisting of approximately 17 acres 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, servitudes, 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
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 review.
2. Improvements by Company. Company shall construct on the Property a
warehouse facility of 200,000 square feet, and related parking, landscaping, and other
improvements to the buildings and grounds (collectively, the "Improvements"). 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 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 to Company and that without said commitment City would not do
so. Company must obtain a building permit and begin construction within six (6) months
from the date of this Agreement (the "Project Start Date") and substantially complete
construction within 12 months thereafter (the "Project Completion Date").
If Company has not, in good faith, begun the construction of the
Improvements by the Project Start Date, then title to the Property shall revert to the City,
except as may be provided in this Agreement; provided, however, that if construction
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 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 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
construction 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
construction 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.
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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, 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. Appointment
of Attorney in Fact: 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 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.
5. 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 before Company executes 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. Reserved.
7. Utilities. Company will be responsible for extending water, sewer,
telephone, telecommunications, electricity, gas and other utility services to any location
on the Property and for payment of any associated connection fees.
8. Minimum Assessment Agreement. Company acknowledges and
agrees that it will pay when due all taxes and assessments, general or special, and all
other charges whatsoever levied upon or assessed or placed against the Property.
Company further agrees that prior to the date set forth in Section 2 of Exhibit "B" it will
not seek or cause a reduction in the taxable valuation for the Property, which shall be
fixed for assessment purposes, below the amount of $8,022,830 (the "Minimum Actual
Value"), through:
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(i) willful destruction of the Property, the 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 said attached Exhibit "B" at the closing.
9. Tax Rebates. Provided that Company has completed the Improvements
as set forth herein and has executed the Minimum Assessment Agreement as set forth
above, City agrees to rebate property tax (with the exceptions noted below) as follows:
Year One through Year Ten 50% rebate each year
for any taxable value over the January 1, 2018 value of$22,830 for parcels 8913-04-
476-006 and 8913-04-476-007. 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.
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.
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11. 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.
12. 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 180 days from the date this Agreement is approved
by the City council. If such completion does not occur, then any conveyance, benefit or
incentive of any type provided by City hereunder within said 180-day period is subject to
reverter of title, revocation, repayment or other appropriate action to restore such
property, benefit or incentive to City, and Company agrees to cooperate diligently and in
good faith with any reasonable request by City to effectuate the restoration of same, or
failing such restoration Company agrees to be liable for same or for the fair value
thereof, plus interest on any sums owing at the rate of 5% per annum commencing with
the date of demand for payment, if said payment is not remitted to City within 30 days.
13. 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.
14. 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
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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.
15. 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 604 Clay Street, Cedar Falls, Iowa 50613,
facsimile number 319-483-6806, Attention: President.
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.
16. 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.
17. 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.
18. Severability; Reformation. 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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19. 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.
20. Binding Effect. This Agreement shall be binding and shall inure to the
benefit of the parties and their respective successors, assigns, and legal
representatives.
21. 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.
22. 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.
23. 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.
[signatures on next page]
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CITY OF WATERLOO, IOWA Dahlstrom Real Estate LLC
By: By: -
Quentin M. Hart, Mayor
Title: V WB?
Attest: �4jj
Kelley FelcV City Clerk
PERSONAL GUARANTY. The undersigned members and/or managers of
Company hereby agree for themselves and their heirs, personal representatives, and
assigns, to unconditionally guarantee to City, its successors and assigns, the full and
prompt performance by Company, its successors and assigns, of all promises and
covenants on the part of Company to be performed pursuant to the foregoing
Agreement, including but not limited to the duties of indemnity set forth therein, if any.
Liability of guarantors hereunder is joint and several.
o.
Brent Dahlstrom
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EXHIBIT "A"
Legal Description of Property
MIDPORT AMERICA PARK PLAT NO. 3 LOT 20
and
UNPLATTED WATERLOO EAST PART SEC 4 T 89 R 13 BEG AT INTERS NLY ROW LINE W AIRLINE
HWY&WLY ROW LINE WAGNER RD TH N 600 FT TH W 3300 FT TH S TO NLY ROW LINE ICG RR
TH SELY ALONG NLY LINE RR ROW TO NLY ROW LINE W AIRLINE HWY TH ELY ALONG SAID
ROW LINE TO PT OF BEG &THAT PART SE SW SEC 4 T 89 R 13 LYING S OF IC RR EXC WLY 875
FT & EXC STREET AND EXC THAT PART PLATTED TO MIDPORT AMERICA PARK PLAT NO. 1 AND
NO. 2 AND NO. 3
EXHIBIT "B"
MINIMUM ASSESSMENT AGREEMENT
This Minimum Assessment Agreement (the "Agreement") is entered into as of
N 2018, by and among the CITY OF WATERLOO, IOWA ("City"),
Dahls om Real Estate 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 East Waterloo Unified Urban Renewal and Redevelopment Plan Area,
formerly known as the Airport Area Development 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 $8,022,830 (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 March 31, 2020.
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,
2035. 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, 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 Dahlstrom Real Estate LLC
By:
' By.
Quentin M. Hart, Mayor
1� Title: aw"AZ
By:
Kelley Felc I , City Clerk
STATE OF IOWA ) o NANCY HIGBY
) SS. ; COMMISSION NO.788M
COUNTY OF BLACK HAWK ) MYCOMMI 0N"PIRES
ow� 2s
On this day of ► 2018, before me, a Notary Public
in and for the State of Iowa, personal`y appeared 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
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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.
NANC i i IUd tl
COMMISSION NO.788229
« « MY Mi^t'I�ji 'TIRES ��k'.L� .
- - - �>� Notary Publi
STATE OF IOWA )
COUNTY OF BLACK HAWK ) ss.
Subscribed and sworn to before me on , 2018 by �/lt-
Estate LLC.
� -�,as f��,t�l�-�,�,
of Dahlstrom Real
JILL L KRAAYENBRINK
z° y `�T Conxrnssion Number 797477
r my I ul m29 on 20 9Aires
N ary Pu c
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
less than Eight Million Twenty Two Thousand Eight Hundred Thirty Dollars ($8,022,830)
until termination of this Minimum Assessment Agreement pursuant to the terms hereof.
A4srorBlack Hawk County, Iowa
�-
x' - Z 8, - If
Date
STATE OF IOWA )
COUNTY OF BLACK HAWK ) Ss.
Subscribed and sworn to before me on 2018 by T.J.
Koenigsfeld, Assessor for Black Hawk Coun yI a.
Al
ADRIENNE MILLER jotary Public
ACOMMISSION NO.809109
MY COMMISSION EXPIRES
w FEBRUARY 23,2021