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HomeMy WebLinkAboutBlack Hawk Street Investments, LLC - Dev Agmnt - 5.17.2021 Preparer Information: Christopher S. Wendland PO Box 596 Waterloo, Iowa 50704 (319) 234.5701 Name Address City Phone SPACE ABOVE THIS LINE FOR RECORDER DEVELOPMENT AGREEMENT This Development Agreement (the "Agreement") is entered into as of cx , 2021 by and between Black Hawk Street Investments, LLC (the "Develo r") 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. Developer is willing and able to finance and construct buildings and related improvements on property located in the Rath Urban Renewal Plan area at 1326 Black Hawk Street, 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 Developer for the sum of $166,000.00 (the "Purchase Price") within forty-five (45) days after execution of this Agreement by both parties. The parties acknowledge that the Purchase Price reflects a reduction in value resulting from the City's retention of additional street right of way. Conveyance shall be by special warranty 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. Developer shall, at its own expense, prepare an updated abstract of title, or in lieu thereof Developer may, at its own expense, obtain whatever form of title evidence it desires. If title is unmarketable or subject to matters DEVELOPMENT AGREEMENT Page 2 not acceptable to Developer, and if City does not remedy or remove such objectionable matters in timely fashion following written notice of such objections from Developer, Developer may terminate this Agreement. City shall provide any title documents it has in its possession, including any abstracts, to assist in title preparation. 2. Improvements by Developer. Developer shall renovate on the Property an existing office and warehouse building, and make related parking and 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 debris disposal shall comply with all applicable City ordinances and other applicable law. It is contemplated that the Improvements will have a total project cost of no less than $100,000.00. The Property, the Improvements, and all site preparation and development-related work to make the Property usable for Developer's purposes as contemplated by this Agreement are collectively referred to as the "Project". 3. Timeliness of Construction. The parties agree that Developer'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 Developer and that without said commitment City would not do so. Measured from the date the Property is deeded to Developer, Developer must begin construction within six (6) months, and must substantially complete construction by December 31 , 2021. 4. Minimum Assessment Agreement. Developer 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. Developer further agrees that prior to the date set forth in Section 2 of the Minimum Assessment Agreement (the "MAX) attached hereto as 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 $244,350.00 (the "Minimum Actual Value"), 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. Developer agrees to execute and deliver the MAA to City concurrently with execution and delivery of this Agreement. 5. Partial Tax Exemption. Because the Property is located in a designated Consolidated Urban Revitalization Area (CURA), the Property is eligible for tax DEVELOPMENT AGREEMENT Page 3 exemption consistent with and to the extent provided for in Iowa law, provided that Developer meets all requirements to qualify for such exemption. 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 Developer. Developer hereby represents and warrants as follows: A. Developer is not prohibited from consummating the transaction contemplated in this Agreement by any law, regulation, agreement, instrument, restriction, order or judgment. B. Developer 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 Developer. 8. Additional Covenants of Developer. In addition to the other promises, covenants and agreements of Developer as provided elsewhere in this Agreement, Developer agrees as follows: A. Developer agrees during construction of the Improvements and thereafter until the MAA termination date to maintain, as applicable, builder's risk, property damage, and liability insurance coverages with respect to the Improvements in such amounts as are customarily carried by like organizations engaged in activities of comparable size and liability exposure, and shall provide evidence of such coverages to the City upon request. B. Until substantial completion of the Improvements, Developer shall make such reports to City, in such detail and at such times as may be reasonably requested by City, as to the actual progress of Developer with respect to construction of the Improvements. C. Developer will comply with all applicable land development laws and City and county ordinances, and all laws, rules and regulations relating to its businesses, other than laws, rules and regulations where the failure to comply with the same, or where the sanctions and penalties resulting therefrom, would DEVELOPMENT AGREEMENT Page 4 not have a material adverse effect on the business, property, operations, or condition, financial or otherwise, of Developer. D. Developer will cooperate fully with the City in resolution of any traffic, parking, trash removal or public safety problems which may arise in connection with the construction and operation of the Improvements. E. The Property will have a taxable value as set forth in the MAA, and Developer agrees that the minimum actual value of the Property and completed Improvements as stated in the MAA will be a reasonable estimate of the actual value of the Property and Improvements for ad valorem property tax purposes. Developer agrees that it will spend enough in construction of the Improvements that, when combined with the value of the Property and related site improvements, will equal or exceed the assessor's minimum actual value for the Property and Improvements as set forth in the MAA. F. Until termination of the MAA, Developer will maintain, preserve and keep the Property, including but not limited to the Improvements, in good repair and working order, ordinary wear and tear excepted, and from time to time will make all necessary repairs, replacements, renewals and additions. G. Developer shall pay, or cause to be paid, when due, all real property taxes and assessments payable with respect to any and all parts of the Property. Developer agrees that (1) it will not seek administrative review or judicial review of the applicability or constitutionality of any Iowa tax statute or regulation relating to the taxation of real property included within the Property that is determined by any tax official to be applicable to the Property or to Developer, or raise the inapplicability or constitutionality of any such tax statute or regulation as a defense in any proceedings of any type or nature, including but not limited to delinquent tax proceedings, and (2) it will not seek any tax deferral, credit or abatement, either presently or prospectively authorized under Iowa Code Chapter 403 or 404, or any other state law, of the taxation of real property included within the Property. 9. No Assignment or Conveyance. Developer 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 Developer under this Agreement. 10. Inspection of Project. Developer is responsible for making their own inspection of the Property. Within 20 days after the final acceptance date of this Agreement, Developer may, at Developer's sole expense, have the Property inspected by a person(s) of Developer's choice to identify any structural, mechanical, plumbing, electrical, pest infestation, environmental concerns or other deficiency(s). Within this DEVELOPMENT AGREEMENT Page 5 same period, Developer may notify City in writing of any such deficiency the Developer wants remedied. Failure to do so shall be deemed a waiver of the Developer's inspection. In the event of any request by Developer as a result of inspections, City shall within three (3) business days after said notification (date of notification does not count) notify the Developer in writing which steps, if any City will take to remedy any deficiency before closing. The Developer shall within three (3) business days (date of notification does not count) notify the City in writing that (1) such steps are acceptable, in which case, this Agreement, so modified, shall be binding upon all parties; or (2) that such steps are not acceptable. In the event City informs Developer that such steps are not acceptable, Developer shall within three (3) business days after said notification (date of notification does not count), inform City that (1) Developer will waive said deficiency(s), in which case this Agreement shall continue to be binding upon all parties; or (2) that this Agreement shall be null and void. Failure by either City or Developer to give the notification within the three (3) business days as stated above, shall render this Agreement null and void. 11. Indemnification and Releases. A. Developer hereby releases City, its elected officials, officers, employees, and agents (collectively, the "indemnified parties") from, covenants and agrees that the indemnified parties shall not be liable for, and agrees to indemnify, defend and hold harmless the indemnified parties against, any loss or damage to property or any injury to or death of any person occurring at or about the Property or resulting from any defect in the Improvements. The indemnified parties shall not be liable for any damage or injury to the persons or property of Developer or its employees, contractors or agents, or any other person who may be about the Property or the Improvements, due to any act of negligence or willful misconduct of any person, other than any act of negligence or willful misconduct on the part of any such indemnified party or its officers, employees or agents. B. Except for any willful misrepresentation, any willful misconduct, or any unlawful act of the indemnified parties, Developer agrees to protect and defend the indemnified parties, now or forever, and further agrees to hold the indemnified parties harmless, from any claim, demand, suit, action or other proceedings or any type or nature whatsoever, by any person or entity whatsoever that arises or purportedly arises from (1) any violation of any agreement or condition of this Agreement (except with respect to any suit, action, demand or other proceeding brought by Developer against the City to enforce its rights under this Agreement), or (2) the construction, installation, ownership, and operation of the Improvements, or (3) otherwise as a result of or in connection with the Project or Developer's failure to carry on or complete same. C. The indemnification obligations under this Section shall include attorneys' fees and expenses incurred by any indemnified part. The provisions of this Section shall survive the expiration or termination of this Agreement. DEVELOPMENT AGREEMENT Page 6 12. Materiality of Developer's Promises, Covenants, Representations, and Warranties. Each and every promise, covenant, representation, and warranty set forth in this Agreement on the part of Developer 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. Developer 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. 13. 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 Developer agrees to cooperate diligently and in good faith with any reasonable request by City to effectuate the restoration of same, or failing such restoration Developer agrees to be liable for same or for the fair value thereof. 14. 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 Developer, at 1010 Commercial Street, Waterloo, IA 50701, facsimile number 319-232-4317, Attention: Jim Skarlis. (c) a copy to Eric W. Johnson, 620 Lafayette St., Ste. 300, Waterloo, IA 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. DEVELOPMENT AGREEMENT Page 7 15. 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 Developer nor to create any liability for one party with respect to the liabilities or obligations of the other party or any other person. 16. 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. 17. 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. 18. 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. 19. Binding Effect. This Agreement shall be binding and shall inure to the benefit of the parties and their respective successors, assigns, and legal representatives. 20. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. 21. 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. 22. Time of Essence. Time is of the essence of this Agreement. DEVELOPMENT AGREEMENT Page 8 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 DEVELOPER Black Hawk Street Investments, LLC r By: Quentin M. HaA, Mayor By: *es T. Sk rlis Its: Manager Attest: Kelley Felchl , City Clerk 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 pursuant to the foregoing Agreement, including but not limited to the duties of indemnity set forth therein. Liability of guarantors hereunder is joint and several. r James T. Skarlis EXHIBIT "A" Legal Description of Property Lots 1, 2, and 3, the Southeasterly 15 feet of Lot 4, and the Northeasterly 70 feet of Lots 4 and 5 except the Southeasterly 15 feet of Lot 4, all in Block 60, Anthony Baker's Addition, City of Waterloo, Black Hawk County, Iowa. EXHIBIT "B" MINIMUM ASSESSMENT AGREEMENT This Minimum Assessment Agreement (the "Agreement") is entered into as of this \*14'` day of "' 1 12021 , by and among the CITY OF WATERLOO, IOWA ("City"), Back Hawk Street Investments, LLC ("Developer"), and the COUNTY ASSESSOR of the City of Waterloo, Iowa ("Assessor"). WITNESSETH: WHEREAS, on or before the date hereof the City and Developer 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 Developer 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 Developer 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 Developer as a part of the Project shall not be less than $244,350.00 (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. If they are not, then the parties agree to execute an amendment to this Agreement that will extend the dates specified in Section 2 below. 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, 2026. Nothing herein shall be deemed to waive the Developer'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 Developer seek or cause the reduction of the actual value assigned below the Minimum Actual Value established herein during the term of this Agreement. Nothing herein shall limit the discretion of the Assessor to assign at any time an actual value to the land and Improvements in excess of the Minimum Actual Value. 3. Developer agrees that it will not seek administrative review or judicial review of the applicability or constitutionality of any Iowa tax statute or regulation relating to the taxation of real property included within the Property that is determined by any tax official to be applicable to the Property or to Developer, or raise the inapplicability or constitutionality of any such tax statute or regulation as a defense in any proceedings. 4. 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. 5. Neither the preambles nor provisions of this Agreement are intended to, or shall be construed as, modifying the terms of the Development Agreement. 6. 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 DEVELOPER Black Haw Street Investments, LLC By: �� ch Quentin M. Hart, Mayor By: ,fames T. Skarlis Its: Manager By: 14A Kelley Felchle City Clerk STATE OF IOWA ) ) SS. COUNTY OF BLACK HAWK ) On this day of Lt�1 2021, before me, a Notary Public in and for the State of Iowa, personally appQared 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. b Notary blic NANCY HICBY COMMISSION NO 788229 ' U ` MY CO MISSION IXPIRES aw> — r0N STATE OF IOWA ) ) SS. COUNTY OF BLACK HAWK ) This instrument was acknowledged before me on 13 2021 by James T. Skarlis, as Manager of Black Hawk Street Investments, LLC. Notary Public ERIC VVVJOHNSON z° COMMISSIOrJ ,`lO.725372 *gym* MY COMMISSION EXPIRES Lowa NOVEMBER 4,2021 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 Forty-Four Thousand Three Hundred Fifty Dollars ($244,350.00) until termination of this Minimum Assessment Agreement pursuant to the terms hereof. Assessor for Black Hawk County, Iowa Date STATE OF IOWA ) ) ss. COUNTY OF BLACK HAWK ) Subscribed and sworn to before me on 2021 by T.J. Koenigsfeld, Assessor for Black Hawk County, Iowa. Notary Public