HomeMy WebLinkAboutSFN Real Estate, LLC - Dev Agmnt - 6/3/2019Please return this copy to:
City Clerk & Finance Dept.
715 Mulberry St.
Waterloo, IA 50703
Preparer
Information: Christopher S. Wendland, PO Box 596, Waterloo, Iowa 50704 (319) 234-5701
Name Address City Phone
Return to Preparer.
DEVELOPMENT AGREEMENT
This Development Agreement (the "Agreement") is entered into as of
3 , 2019, by and between SFN Real Estate, 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.
Company is willing and able to finance and construct buildings and related
improvements on property located in the Rath Urban Renewal Plan area
at 1426-1430 Commercial Street, and legally described on Exhibit "A"
attached hereto (the "Property").
C. City believes that development of the Project (as defined below) is in the
vital and best interests of the City and in accordance with the public
purposes and provisions of the applicable State and local laws and
requirements under which the projects have been or will be undertaken
and are being assisted.
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, 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 City zoning ordinances and other applicable law. Conveyance shall occur
within sixty (60) days after approval of this Agreement by the Waterloo City Council, on
a date mutually acceptable to the parties. No less than fourteen (14) days prior to the
anticipated date of conveyance, City will provide for update whatever abstracts of title it
has in its possession, if any, or in lieu thereof Company may have a new abstract
created or obtain whatever form of title evidence it desires. All abstracting and title work
shall be at the sole expense of Company. City shall provide any title documents it has
in its possession, including any abstracts, to assist in title preparation. 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.
2. Improvements by Company. Company shall construct upon the
Property at its own expense no less than two (2) buildings for the housing of
telecommunication equipment and make related landscaping improvements to the
building 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. The parties agree that the conditions set
forth in this Section 3 constitute Company's commitment to undertake the Project and to
construct the Improvements in a timely manner, that such conditions are therefore 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 of the first building within six (6) months after the date of this
Agreement and begin construction of the second building within sixty (60) days after the
first building reaches capacity, as determined by Company in good faith, but in any
event construction of the second building must begin within thirty-six (36) months after
the date of this Agreement. Each such date is a "Required Start Date". Company
must complete construction of the first building within twelve (12) months after the
Required Start Date, and Company must complete construction of the second building
within twelve months after it commences construction on the second building. Each
such completion date is a "Building Completion Date".
4. Possibility of Reverter. If Company has not, in good faith, begun the
construction of the Improvements by a Required Start Date, then title to the Property
shall revert to the City, except as provided in this Agreement; provided, however, that if
construction has not begun by the Required 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
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extended period, except as provided in this Agreement. 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, free and clear of Liens (defined below), and thereupon neither party
shall have any further obligation under this Agreement except as expressly stated,
provided that Company shall indemnify and hold harmless City as set forth in Section 8.
If development has commenced by the Required 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 Building 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. The provisions of this
Section shall apply to the entire Property as to the Required Start Date and the Building
Completion Date for both buildings.
5. Reverter of Title.
A. Title Transfer. 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, tax 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 arising by or through Company. Appointment of Attorney
in Fact: If Company fails to deliver such documents, including but not limited to
a special warranty deed, to City within sixty (60) days of written demand by City
(a "Reverter Demand"), 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.
B. Payment Alternative. As an alternative to reverter of title, Company
may opt to make to City a payment of $20,000.00 within fifty (50) days after City
delivers a Reverter Demand to Company. Delivery of said payment in good
funds shall cancel the reverter of title. If the payment is not so made, then the
parties shall proceed as set forth in paragraph A above.
6. Additional City Assistance. The incentives described in the following
subsections of this Section 6 are in addition to the other Project incentives extended by
City to Company hereunder.
A. Demolition. City will demolish all structures on the Property and
shall remove all debris, leaving a relatively level site. City's work shall be
completed no Tater than April 30, 2019.
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B. Broker Fee. City will pay the real estate broker fee. Half will be
payable when ground is broken for the first building, and the second half will be
paid within fourteen (14) days after Company receives a certificate of occupancy
for the first building.
C. Partial Tax Exemption. Because the Property is located in a
designated Consolidated Urban Revitalization Area (CURA), the Property is
eligible for tax exemption consistent with and to the extent provided for in Iowa
law, provided that Company meets all requirements to qualify for such
exemption.
7. 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 after the
date of Company's ownership of 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 $200,000.00 (the "Minimum Actual Value"), through:
either;
(i) willful destruction of the Property, the Improvements, or any part of
(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.
8. Indemnity. 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, claim, charge, or encumbrance on or against
the Property of any type or nature whatsoever that attaches to the Property by virtue of
Company's ownership of same, except to the extent any such demand, claim, cause of
action, damage, injury, lien, claim, charge or encumbrance results from a negligent or
willful act or omission by the City, its employees or agents. 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.
9. No Encumbrances; Limited Exception. Until substantial completion of
the Project, Company agrees that it shall not create, incur, or suffer to exist any lien,
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encumbrance, mortgage, security interest, or charge on the Property, other than such
mortgage or mortgages as may be reasonably necessary to finance Company's
undertaking of the Project and of which Company notifies City in advance of Company's
execution of any such mortgage.
10. Water and Sewer; Utilities. Company will be responsible, at its own
expense, for extending water, sewer, telephone, telecommunications, electricity, gas
and utilities services from their current location to any location on the Property and for
payment of any associated connection fees.
11. 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.
12. 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.
13. No Assignment or Conveyance. Company agrees that it will not sell,
convey, assign or otherwise transfer its interest in the Property prior to substantial
completion of Improvements, whether in whole or in part, to any other person or entity
without the prior written consent of City, which consent will not be unreasonably
withheld or delayed. 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.
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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 and to
extend to Company the development incentives provided for herein. Company
acknowledges that without such promises, covenants, representations, and warranties,
City would not have entered this Agreement and extended such incentives. 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.
15. 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.
16. Termination. This Agreement shall terminate upon the earlier of (a) the
Company's completion of construction of the second building, (b) delivery to the City of
a deed or other muniment of title to the Property pursuant to Section 5(A) or (c)
payment to the City by the Company pursuant to Section 5(B). Notwithstanding any
such termination, the minimum assessment agreement provided for in Section 5 above
shall continue in full force and effect according to its terms.
17. 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, to City of Waterloo, 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, to SFN Real Estate, LLC, 320 E. Liberty Street,
Mankato, Minnesota 56001, 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
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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.
18. 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.
19. 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.
20. 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.
21. 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.
22. Binding Effect. This Agreement shall be binding and shall inure to the
benefit of the parties and their respective successors, assigns, and legal
representatives.
23. 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.
24. Entire Agreement. This Agreement, together with the exhibits attached
hereto, constitutes the entire agreement of the parties and supersedes all prior or
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contemporaneous negotiations, discussions, understandings, or agreements, whether
oral or written, with respect to the subject matter hereof.
25. 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:
8
SFN REAL ESTATE, LLC
By:
EXHIBIT "A"
Legal Description of Property
Lots 1 and 2, Block 58, Anthony Baker's Addition, City of Waterloo, Iowa.
EXHIBIT "B"
MINIMUM ASSESSMENT AGREEMENT
This Minimum Assessment Agreement (the "Agreement") is entered into as of
JUS Z5 , 2019, by and among the CITY OF WATERLOO, IOWA ("City"),
SFN 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 Rath Urban Renewal 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 $200,000.00 (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 December 31, 2021.
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,
2031. 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
through:
(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.
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. Notwithstanding any earlier termination of the Development
Agreement, this Agreement shall continue in full force and effect according to the terms
hereof.
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
SFN REAL ESTATE, LLC
By:By:
Quentin M. Hart, Mayor
B
elley FelchlCity Clerk
2
anon Hanke, President
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
04\ -
On this _ day of , 2019, 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
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.
ANANCY
owI.
HIGBY
COMMISSION NO.788229
MY COMMIISION EXPIRES
'+-Z-,
STATE OF IOWA
)
) ss.
COUNTY OF BLACK HAWK )
Y �
Notary Pu lic
Subscribed and sworn to before me on JGa...e, 25 , 2019 by Jason
Hanke as President of SFN Real Estate, LLC.
Nota
3
IGNASZE\NSKI
No Minnesota
My Commission Expires Jan 31, 2021
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 Two Hundred Thousand and 00/100 Dollars ($200,000.00) until termination of
this Minimum Assessment Agreement pursuant to the terms hereof.
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
essor for Black Hawk County, Iowa
Date
Subscribed and sworn to before me on
Koenigsfeld, Assessor for Black Hawk County, low
eft do;
z
* *
bWA
TIM ANDERA
COMMISSION NO. 772518
MY COMMISSION EXPIRES
APRIL 11, 2021
, 2019 by T.J.
Nota
Public