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HomeMy WebLinkAboutFusion Investments, LLC - Dev Agmnt - 4/15/19Prepared 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 .fie- = , 2019 by and between Fusion Investments LLC (the "Company") and the City of Waterloo, Iowa (the "City"). RECITALS A. City considers economic development within the City to be 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 the owner of real property as described and set forth on Exhibit "A" attached hereto, located within the corporate limits of the City of Waterloo, Iowa (the "Property"). C. Company is willing and able to finance and construct the installation of roads, related infrastructure, and other improvements and to plat and subdivide the Property (collectively, the "Project") on the Property, which is located in the Martin Road Development Plan Area. D. In view of the Company's investment in assembling the Project and its commitment to develop the Property, the City desires to provide certain incentives to encourage the Company to facilitate timely development of the Property. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree as follows: 1. Improvements by Company. Company shall construct, or cause to be constructed, all streets, sewers, utilities, and water lines on the Property (all such street and infrastructure improvements and related site preparation, including, but not limited to, necessary grading, fill, and earth work for such street improvements, are referred to as the "Street Improvements"). The Street 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. Company shall provide all information requested by City that is reasonably necessary to verify that the Street Improvements were properly constructed and are eligible for acceptance. In addition to construction of the Street Improvements, Company shall plat and subdivide the Property into multiple lots for development by Company or by third parties and shall act with diligence to market said lots for sale and development. 2. Timeliness. To be eligible for the incentives provided by this Agreement, Company must complete construction of all of the Street Improvements and must plat and subdivide the Property within twelve (12) months from the date of this Agreement. If all Street Improvements are not accepted by City within eighteen (18) months from the date of this Agreement, then the grant payments provided for in Section 3 shall be suspended until acceptance of the Street Improvements. 3. Grants to Company. As an inducement for Company to undertake the Project, the City agrees to make development grants to Company as follows, subject to the other terms of this Agreement: A. A semi-annual grant in an amount equal to 100% of the property taxes collected by City (excluding Non -TIF Collections as defined in paragraph 3.0 below) from land valuations on the subject properties and minimum assessment agreements for land valuation with a party making improvements on the Property (a "Developer") pursuant to a separate development agreement with City, reduced by any and all tax rebates that City is required to pay to the Developer pursuant to the terms of any development agreement with such Developer. For purposes of illustration only, if an agreement between City and a Developer provides for rebatement of 50% of qualifying property taxes for a period of five years, then Company would receive a grant equal to the remaining 50% of qualifying property taxes in each year of such period. No grant with respect to such Developer's improvements to a parcel of land for a project shall be made to Company before a property tax rebate is first paid to the Developer. At the end of the Developer's tax rebatement period, City will make a semi- annual grant to Company in an amount equal to 100% of qualifying property taxes until Company has been paid pursuant to paragraph 3.F below. For purposes of this paragraph, the term "Developer" may include Company with respect to improvements made on the Property other than the improvements that are the subject of this Agreement. B. With respect to any taxable improvements constructed on the Property that are not subject to a separate development agreement between City 2 and the owner -builder thereof (referred to as "Non -Qualifying Improvements", which are further explained below), a semi-annual grant in an amount equal to 100% of the property taxes collected by City (excluding Non -TIF Collections), if not for the non -qualifying character of the improvements, starting in "Year One" and continuing thereafter until Company has been paid pursuant to paragraph 3.F below. The grant shall be determined with reference to taxes paid on the increased valuation of the subject property over the base valuation as of January 1, 2018. For purposes of illustration, a "Non -Qualifying Improvement" means, generally, an improvement of a type that is not eligible for property tax rebates or similar incentives, such as property that is or becomes exempt from taxation, or other classifications of property determined from time to time as ineligible by City policy. "Year One" shall be the first year for which the assessment is based upon the partial or completed value of the Non -Qualifying Improvements, but not a prior year for which the assessment is based solely upon the value of the land. C. Expressly excluded from the above-described grant and rebate program is 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 (collectively, "Non -TIF Collections"). D. Grants to Company are payable in respect of a given year only to the extent that general property taxes that are due and owing for such year have actually been paid. The City will pay grants semi-annually. The Company reserves the right to assign the semi-annual payments to a lender as an assignment of grant payments. E. In respect of any grant amount that is determined from time to time, payment shall be made within a reasonable time following the tax installment payment due date, provided that the tax installment was actually paid and Company has submitted proof of payment to City or has otherwise notified City of completed payment in a manner that is satisfactory to City. F. Notwithstanding anything to the contrary in this Section 3, City will pay to Company a minimum annual grant amount of $40,000.00, but in no event will the cumulative amount of grants payable by City to Company under this Agreement exceed $1,200,000.00. 4. 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 this Agreement shall be deemed canceled and shall be null and void. 5. Taxable Value Targets. As an inducement to City to furnish the incentives provided for in this Agreement, Company agrees that it shall develop the 3 Property, or shall cause the Property to be developed, so that the following aggregate taxable values are attained for the Property as a whole: By 12/31/2021 $1,500,000 By 12/31/2023 $3,000,000 By 12/31/2024 $4,500,000 If the above targets are not met, then Company shall forfeit 10% of each grant payment for each semi-annual period in which the taxable value target has not been met, up to a total forfeiture of 50% of each grant payment. By way of illustration, if the taxable value of the Property, accounting for the taxable value of each project, development or separate lot within the Property, is short of an applicable target for three consecutive semi-annual periods, then 10% of the grant payment shall be forfeited for the first period, an additional 10% shall be forfeited in respect of the second period (for a total forfeiture of 20%, and an additional 10% shall be forfeited in respect of the third period (for a total forfeiture of 30%). Once a target has been met, then grant payments shall resume at full funding thereafter. The parties agree that the taxable value added by all future development projects on the Property, whether undertaken by Company or a third -party developer, will be included for purposes of determining attainment of a target. 6. 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. 7. 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 4 Company. 8. Materiality of Company's Promises, Covenants, Representations, and Warranties. Each and every promise, covenant, representation, and warranty set forth in this Agreement on the part of Company to be performed is a material term of this Agreement, and each and every such promise, covenant, representation, and warranty constitutes a material inducement for City to enter this Agreement. Company acknowledges that without such promises, covenants, representations, and warranties, City would not have entered this Agreement. Upon breach of any promise or covenant, or in the event of the incorrectness or falsity of any representation or warranty, City may, at its sole option and in addition to any other right or remedy available to it, terminate this Agreement and declare it null and void. 9. 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 13557 Sharwood Court, Dyersville, IA 52040, facsimile number , Attention: 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. 10. Relationship of Parties. 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. 11. 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. 5 12. 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. 13. 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. 14. Binding Effect. This Agreement shall be binding and shall inure to the benefit of the parties and their respective successors, assigns, and legal representatives. 15. 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. 16. Entire Agreement. This Agreement 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. 17. 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 FUSION INVESTM TS LLC By: y.��_. ti'L #t.}'L_ Quentin Hart, Mayor Attest: 1//tiej elley Fel, , City Clerk 7 By: c*. Managing Member EXHIBIT "A" Legal Description of Property PART OF NE FRAC 1/4 AND PART OF THE N 1/2 SE 1/4 SEC 6 T 88 R 13 COM AT THE NE COR OF THE SE 1/4 OF THE SE 1/4 OF SAID SEC TH W ALONG THE S LINE OF THE N 1/2 OF THE SE 1/4 A DIST OF 649.59' WHICH IS THE PT OF BEG TH W ALONG THE S LINE OF THE N 1/2 OF THE SE 1/4 OF SAID SEC A DIST OF 1052.14' TO A PT 119' PERPENDICULAR DIST FROM CENTERLINE OF HIGHWAY 63 TH N 35 DEG 43 MIN E ALONG THE SELY R.O.W. LINE OF HIGHWAY 63 A DIST OF 1749.83' TO A PT 119' PERPENDICULAR DIST RIGHT FROM CENTERLINE HIGHWAY 63 TH S A DIST OF 1419.57' TO THE PT OF BEG EXC THAT PART OF THE ABOVE DESC PLATTED AS SOUTH WATERLOO COMMERCIAL PARK BK Z PLAT PG 075. and PART E 1/2 SEC 6 AND SW QTR SEC 5 ALL IN T 88 R 13 DESC AS FOL: BEG AT SE COR NE SE SAID SEC 6 TH W 649.59 FT ALONG S LINE SAID NE SE TH N 1419.57 FT M/L TO SELY ROW LINE US HWY 63 TH N 35 DEG 43 MIN 00 SEC E ALONG SAID ROW LINE 391.73 FT TH E 454.37 FT TO E LINE NE QTR SAID SEC 6 TH S 417.86 FT TO NE COR SE QTR SAID SEC 6 TH S 1130.49 FT ALONG E LINE SE QTR SAID SEC 6 TO PROPERTY AGREEMENT LINE WHICH IS RECORDED IN BK 268 MISC P 134 TH E ALONG SAID AGREEMENT LINE TO NWLY ROW LINE W FOURTH ST TH SWLY 231.58 FT ALONG SAID ROW LINE TO E LINE SAID SE QTR TH S 38.23 FT TO PT OF BEG EXC THAT PART OF THE ABOVE DESC PLATTED AS SOUTH WATERLOO COMMERCIAL PARK BK Z PLAT PG 075 EXC PARCEL C IN SURVEY 2012 017524 DESC AS FOL BEG SE COR NE TH S 89 DEG 24 MIN 43 SEC W 200 FT TH N 410 FT TH N 89 DEG 25 MIN 08 SEC E 200 FT TH S 217.47 FT TH N 89 DEG 40 MIN 11 SEC E 172.73 FT TH S 47 DEG 53 MIN 24 SEC W 231.43 FT TH S 38.32 FT TO PT OF BEG. **Note: All of the above-described property will be platted by Company as "Cedar Valley Crossing."