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HomeMy WebLinkAboutGBC, LLC - Dev Agmnt - 11/5/2018 (RECORDED)111111111111111111111111111111111111111111111111111111111111111111111111111111 Doc ID 009441710012 Type GEN Recorded: 12/03/2018 at 02:35:39 PM Fee Amt: $62.00 Pape 1 of 12 Black Hawk County Iowa SANDIE L. SMITH RECORDER File2019-00008654 ci &0`ker-/ o 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 :•i - , 2018, by and between GBG, LLC (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, 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 a building and related improvements on property legally described on Exhibit "A" attached hereto (the "Property") located in the East Waterloo Unified Urban Renewal and Redevelopment Plan Area, formerly known as the Logan Plaza Urban Renewal and Redevelopment Plan Area ("Urban Renewal Area"). AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree as follows: 1. Improvements by Company. Company has purchased or will purchase the Property, on which Company shall construct a commercial building of no less than 10,000 square feet and shall make 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". 2. Timeliness of Construction. 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 extend the development incentives provided for in this Agreement, and that without said commitment City would not have done so. Company must obtain a building permit and begin construction no later than April 30, 2019 (the "Project Start Date") and substantially complete construction within twelve (12) months thereafter (the "Project Completion Date"). If development has commenced but 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 City may terminate this Agreement following Company's failure to diligently undertake construction within thirty (30) days following written notice of default from City. If at any time Company fails to diligently undertake construction and other activities necessary for completion of the Project, then City may terminate this Agreement following Company's failure to resume and diligently carry on construction within thirty (30) days following written notice of default from City. 3. Utilities. Company will be responsible for extending water, sewer, telephone, telecommunications, electricity, gas and other utility services from public right of way to any location on the Property and for payment of any associated connection fees. 4. City Activities in Aid of Project. A. Rebates. City shall provide property tax rebates as set forth elsewhere in this Agreement. B. CURA Exemption. The Project is not eligible for tax exemptions under City's Consolidated Urban Renewal Area (CURA) program, but future expansions of the Improvements made pursuant to this Agreement may be eligible. 5. 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 $1,504,820 (the "Minimum Actual Value"), through: (i) willful destruction of the Property, the City Property, the Improvements, or any part of either; 2 (H) 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. 6. 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 Three 85% rebate each year Year Four through Year Seven 80% rebate each year for any taxable value over $50,260.00. 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. 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. 3 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. 9. 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 10% per annum commencing with the date of demand for payment, if said payment is not remitted to City within 30 days. 10. No Assignment or Conveyance. Company agrees that it will not sell, convey, assign or otherwise transfer its interest in the Property prior to completion of the Project, whether in whole or in part, to any other person or entity without the prior written consent of City. Reasonable grounds for the City to withhold its consent shall include but are not limited to the inability of the proposed transferee to demonstrate to the City's satisfaction that it has the financial ability to observe all of the terms to be performed by Company under this Agreement. 11. Materiality of Company's Promises, Covenants, Representations, and Warranties. Each and every promise, covenant, representation, and warranty set forth in this Agreement on the part of Company to be 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, 4 or in the event of the incorrectness or falsity of any representation or warranty, City may, at its sole option and in addition to any other right or remedy available to it, terminate this Agreement and declare it null and void. 12. Notices. Any notice under this Agreement shall be in writing and shall be delivered in person, by overnight air courier service, by United States registered or 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 1633 Dakota Drive, Waterloo, Iowa 50701, Attention: Thomas S. Gorsche, with a copy to Richard R. Morris, 620 Lafayette Street, Waterloo, Iowa 50703. 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. 13. 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. 14. 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. 15. 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 5 thereof shall be deemed to be written, and shall be construed and enforced, as so limited. 16. 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. 17. Binding Effect. This Agreement shall be binding and shall inure to the benefit of the parties and their respective successors, assigns, and legal representatives. 18. Counterparts. This Agreement may be executed in one or more counterparts, each of which, including signed counterparts transmitted by facsimile or other electronic means, shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. 19. 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. 20. 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] 6 CITY OF WATERLOO, IOWA By: aL Quentin M. Hart, Mayor GBG, LLC By: Thomas S. Gorsche, Manager Robert B. Bartelt, Manager By: Mark T. Gorsche, Manager 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. Thomas S. Gorsche Robert B. Bartelt Mark T. Gorsche 7 EXHIBIT "A" Legal Description of Property Parcel "G" according to Plat of Survey filed September 20, 2018 as Doc. No. 2019- 4719, being a part of the Southeast Quarter (SE'/) of the Northeast Quarter (NE 14) of Section Fourteen (14), Township Eighty-nine North (T89N), Range Thirteen West (R13W) of the Fifth Principal Meridian, in the City of Waterloo, Black Hawk County, Iowa. EXHIBIT "B" MINIMUM ASSESSMENT AGREEMENT This Minimum Assessment Agreement (the "Agreement") is entered into as of , 2018, by and among the CITY OF WATERLOO, IOWA ("City"), GBG, 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 Logan Plaza Urban Renewal and Redevelopment Plan Area, of the City; 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 $1,504,820 (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 April 30, 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 By: Quentin M. Hart, Mayor Thomas S. Gorsche, Manager By: GBG, LLC Ke ey Felc e, City Clerk By: Robert B. Bartelt, Manager By:' Mark T. Gorsche, Manager STATE OF IOWA ) ) ss. COUNTY OF BLACK HAWK ) On this 14\ day of N no' , 2018, before me, a Notary Public in and for the State of Iowa, personally 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 and sealed on behalf of said municipal corporation by authority and resolution of its City 2 Council, and said Mayor and City Clerk acknowledged said instrument to be the free act and deed of said municipal corporation by it and by them voluntarily executed. Notary Public STATE OF IOWA ) ) ss. COUNTY OF BLACK HAWK NANCY HICBY COMMISSION NO.788229 MY CQIMISSION OCPIRES Subscribed and sworn to before me on NoV€kitr �, 2018 by Thomas S. Gorsche, Robert B. Bartelt and Mark T. Gorsche as Managers of GBG, LLC. MATTHEW R MIEHE COMMISSION NO. 759398 MY COMMISSION EXPIRES AUGUST 3, 2021 ,J12 Notary Public 3 CERTIFICATION OF ASSESSOR The undersigned, having reviewed the plans and specifications for the improvements to be constructed and the market value assigned to the land upon which the improvements are to be constructed for the development, and being of the opinion that the minimum market value contained in the foregoing Minimum Assessment Agreement appears reasonable, hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the property subject to the development, upon completion of improvements to be made on it and in accordance with the Minimum Assessment Agreement, certifies that the actual value assigned to such land, building and equipment upon completion of the development shall not be Tess than One Million Five Hundred Four Thousand Eight Hundred Twenty Dollars ($1,504,820) until termination of this Minimum Assessment Agreement pursuant to the terms hereof. STATE OF IOWA ) ss. COUNTY OF BLACK HAWK or for Black Hawk County, Iowa 3c� Date Subscribed and sworn to before me on /2i-.7 /7f Koenigsfeld, Assessor for Black Hawk County, ow . /OWN TIM ANDERA COMMISSION NO. 772518 MY COMMISSION EXPIRES APRIL 11, 2021 by T.J.