HomeMy WebLinkAboutTop Notch Tile and Construction-Dev. Agreement-03.07.2022Prepared by Christopher S. Wendland, P.O. Box 596, Waterloo, IA 50704 Phone (319) 234-5701
DEVELOPMENT AGREEMENT — Phased Development
This Development Agreement (the "Agreement") is entered into as of
'cNC-10urCh 1 ,20 22. , by and between Top Notch Tile and Construction, LLC (the
"Company") and the City of Waterloo, Iowa (the "City").
RECITALS
A. In furtherance of the objectives of Chapter 403 of the Code of Iowa, 2015,
as amended (the "Urban Renewal Act"), City is engaged in carrying out
urban renewal project activities in an area known as the East Waterloo
Unified Urban Renewal and Redevelopment Plan Area, formerly known as
the Airport Area Development Plan area ("Urban Renewal Area").
Company is willing and able to finance and construct buildings and related
improvements on property located in the Urban Renewal Area, which
property is legally described on Exhibit "A" attached hereto (the "Project
Property" or "Property").
C. 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.
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 to
Company the Project Property for the sum of $1.00 (the "Purchase Price").
Conveyance shall be by quit claim deed, free and clear of all encumbrances arising by
or through City except: (a) easements, servitudes, conditions and restrictions of record;
(b) general utility and right-of-way easements serving the Project Property; and (c)
restrictions imposed by the City zoning ordinances and other applicable law. City shall
have no duty to convey title to Company until Company delivers to City reasonable and
satisfactory proof of financial ability to undertake and carry on the Phase 1
Improvements (defined below), which may take the form of a lending commitment letter.
Company shall, at its own expense, prepare an updated abstract of title, or in lieu
thereof Company may, at its own expense, obtain whatever form of title evidence it
desires. City shall provide any title documents it has in its possession, including any
abstracts, to assist in title review. 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 without further obligation and return the
abstract of title to City.
2. Phased Development. The parties contemplate that Company will
develop the Project Property in phases, each of which is generally described as follows,
although more detailed plans for each phase will be developed at one or more future
dates:
A. Phase 1. A commercial building of approximately 4,800 square feet
(the "Phase 1 Improvements").
B. Phase 2. An addition or expansion to the Phase 1 Improvements of
7,200 square feet on the Project Property (the "Phase 2
Improvements").
Improvements to the Project Property completed within the schedule established by
Section 4 below will be eligible for the benefits provided for in this Agreement, and any
Phase of the Improvements not completed within the prescribed period will not be
eligible for said benefits.
2.1. Phase 3 Option. Company shall have the option to acquire the real
property described on Exhibit "A-1" attached hereto (the "Phase 3 Property") on the
terms set forth in this Section. To exercise said option, Company shall deliver written
notice of exercise to City within five (5) years from the date of this Agreement, or said
option shall lapse. Upon City's receipt of said notice, the parties shall negotiate a new
development agreement with respect to said project, pursuant to which Company shall
construct a commercial building of no less than 4,800 square feet and related
improvements at an agreed minimum assessed value, supported by such development
incentives to which the parties may agree, including but not limited to Company's
purchase of the Phase 3 Property from the City for the sum of $1.00.
3. Improvements by Company. Company shall construct on the Project
Property the improvements described in Section 2 above, and related landscaping,
paving, signage and parking improvements (collectively, the "Improvements").
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Company agrees that the Improvements shall be constructed in accordance with the
terms of this Agreement, the Urban Renewal Plan, and all applicable City, state, and
federal building codes and shall comply with all applicable City ordinances and other
applicable law. For each phase, City may require that Company submit specific building
designs and site plans for City review and approval. Company will use its best efforts to
obtain, or cause to be obtained, in a timely manner, all required permits, licenses and
approvals, and will meet, in a timely manner, all requirements of all applicable local,
state, and federal laws and regulations which must be obtained or met before the
Improvements may be lawfully constructed. The Project Property, the Improvements,
and all site preparation and development -related work to make any of the Project
Property usable for Company's purposes as contemplated by this Agreement are
collectively referred to as the "Project".
4. Timeliness of Conveyance and Construction; Possibility of Reverter.
The parties agree that Company's commitment to undertake the Project and to
construct the Improvements in a timely manner constitutes a material inducement for
the City to convey the Project Property, or to cause the Project Property to be
conveyed, to Company and that without said commitment City would not do so.
A. Deadlines to commence and complete. Subject to Unavoidable
Delays (defined below), Company must obtain a building permit and begin
construction on Phase 1 Improvements within six (6) months after the date of this
Agreement (the "Phase 1 Start Date") and must complete construction within
fourteen (14) months after the date of this Agreement (the "Phase 1 Completion
Deadline"). If Company desires to undertake the Phase 2 Improvements, it must
complete construction of same within twelve (12) months after commencement of
construction (the "Phase 2 Completion Deadline") in order to qualify for the tax
rebates set forth in Section 9. For any phase, completion of construction shall be
evidenced by issuance of an occupancy permit.
B. Events triggering reverter of title. If, by the Phase 1 Start Date,
Company has not in good faith begun construction of the Improvements upon the
Project Property, then the City may terminate this Agreement following
Company's failure to begin construction within thirty (30) days following written
notice of default from City. If development has commenced by the Phase 1 Start
Date or within any agreed period of extension, or with respect to Phase 2 such
development has commenced, 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 (each such condition or event being
an "Unavoidable Delay"), the requirement that construction is to be completed by
the respective Phase Completion Deadline 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 Phase 1 Improvements, then City may terminate this
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Agreement following Company's failure to resume and diligently carry on
construction to City's satisfaction within thirty (30) days following written notice of
default from City. For clarification, Company's failure to timely complete
construction of Phase 2 Improvements shall not trigger a reverter of title as to
any of the Project Property.
5. Reverter of Title; Indemnity. In the event of any reverter of title,
Company agrees that it shall, at its own expense, promptly execute all documents,
including but not limited to a special warranty deed, or take such other actions as the
City may reasonably request to effectuate said reverter and to deliver to City title to the
Project Property that is free and clear of any lien, claim, charge, security interest,
mortgage or encumbrance (collectively, "Liens") arising by or through Company.
Concurrently with delivery of the deed, Company shall also deliver to City the abstract of
title. Company shall pay in full, so as to discharge or satisfy, all Liens on or against the
Project Property. Appointment of Attorney in Fact: If Company fails to deliver such
documents, including but not limited to a special warranty deed, to City within thirty (30)
days of written demand by City, then City shall be authorized to execute, on Company's
behalf and as its attorney -in -fact, the special warranty deed required by this Section,
and for such limited purpose Company does hereby constitute and appoint City as its
attorney -in -fact.
Company further agrees that it shall indemnify City and hold it harmless
with respect to any demand, claim, cause of action, damage, or injury made, suffered,
or incurred as a result of or in connection with the Project, Company's failure to carry on
or complete same, or any Lien or Liens on or against the Project Property of any type or
nature whatsoever that attaches to the Project Property by virtue of Company's
ownership of same. If City files suit to enforce the terms of this Agreement and prevails
in such suit, then Company shall be liable for all legal expenses, including but not
limited to reasonable attorneys' fees, incurred by City. Company's duties of indemnity
pursuant to this Section shall survive the expiration, termination or cancellation of this
Agreement for any reason.
6. No Encumbrances; Limited Exception. Until completion of the
Improvements, Company agrees that it shall not create, incur, or suffer to exist any
Liens on the Project Property, other than such mortgage or mortgages as may be
reasonably necessary to finance Company's completion of the Improvements and of
which Company notifies City before Company executes any such mortgage. Company
may not mortgage the Project Property or any part thereof for any purpose except in
connection with financing of the Improvements.
7. Utilities. Company will be responsible for extending water, sewer,
telephone, telecommunications, electricity, gas and other utility services to any location
on the Project Property and for payment of any associated connection fees.
8. Minimum Assessment Agreement. Company acknowledges and
agrees that it will pay when due all taxes and assessments, general or special, and all
other charges whatsoever levied upon or assessed or placed against the Project
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Property. Company further agrees that prior to the date set forth in Section 2 of the
Minimum Assessment Agreement (the "MAA") attached hereto as Exhibit "B" it will not
seek or cause a reduction in the taxable valuation for the Project Property as improved
pursuant to this Agreement, which shall be fixed for assessment purposes, below the
amount of $250,000.00 (the "Phase I Minimum Actual Value"), through:
(i) willful destruction of the Project Property, the Phase 1
Improvements, or any part of either;
(ii) a request to the assessor of Black Hawk County; or
(iii) any proceedings, whether administrative, legal, or equitable, with
any administrative body or court within the City, Black Hawk County, the State of
Iowa, or the federal government.
Company agrees to execute and deliver the MAA concurrently with execution and
delivery of this Agreement. In connection with construction of Phase 2 Improvements,
the parties will execute and record an amendment to the MAA for the purpose of
increasing the Minimum Actual Value to an amount that reflects the value added by
Phase 2 Improvements. The parties anticipate that Phase 1 Improvements and Phase
2 Improvements together shall have a minimum actual value of no less than
$538,000.00.
9. Phase 2 Tax Rebates. Provided that Company has completed all Phase
1 Improvements and Phase 2 Improvements as contemplated by this Agreement before
the respective Completion Deadline for each phase and has executed an amendment to
the MAA as set forth in Section 8 above, City agrees to rebate property tax (with the
exceptions noted below) with respect to Phase 2 Improvements, as follows:
Year One through Year Five 50% rebate each year
for any taxable value over the Minimum Actual Value of Phase 1 Improvements (each
such payment is a "Rebate"). Each Rebate is payable in respect of a given property tax
fiscal year (a "Fiscal Year") only to the extent that (a) Company has actually paid
general property taxes due and owing for such Fiscal Year and (b) the city council has
made an appropriation for the payment of the Rebate. To receive a Rebate for a given
Fiscal Year, Company must, within twelve (12) months after the due date of the last
installment of the property taxes for the respective Fiscal Year (i.e., the "March
Installment"), submit a completed Rebate request to City on the form provided by or
otherwise satisfactory to City. A failure to timely submit a request for a Rebate for a
Fiscal Year will result in a forfeiture of the right to request a Rebate for such Fiscal Year.
City agrees to consider a completed application for a Rebate within sixty (60) days after
submission of the application to City.
The taxable value of the Property as a result of the Phase 2 Improvements must
be increased by a minimum of 10% and must increase the annual tax by a minimum of
$500.00. Rebates shall not be paid based on any special assessment levy, debt
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service levy, or any other levy that is exempted from treatment as tax increment
financing under the provisions of applicable law. The first Fiscal Year in respect of
which a Rebate may be given ("Year One") shall be the first full Fiscal Year for which
the assessment is based upon the completed value of the Improvements and not based
on a prior Fiscal 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 such Improvements or a partial Fiscal Year.
As an example of the above provision, in the event the Improvements on the
Property are completed prior to January 1, 2025 and the Property and Improvements
are assessed as fully completed based on the Plans, as may be revised, the property
taxes that would be assessed based on the January 1, 2025 assessed value would be
for the Fiscal Year ending June 30, 2027, with the taxes payable one-half by September
30, 2026 and one-half by March 31, 2027, then the first Rebate could be applied for
after March 31, 2027 and prior to April 1, 2028.
10. Limitations on Payment of Rebates.
A. Each payment of a Rebate is subject to annual appropriation by the
city council each fiscal year. City has no obligation to make any payments to
Company as contemplated under this Agreement until the city council annually
appropriates the funds necessary to make such payments. The right of non -
appropriation reserved to City in this paragraph is intended by the parties, and
shall be construed at all times, so as to ensure that City's obligation to make
future payments of Rebates shall not constitute a legal indebtedness of City
within the meaning of any applicable constitutional or statutory debt limitation
prior to the adoption of a budget which appropriates funds for the payment of that
installment or amount. In the event that any of the provisions of this Agreement
are determined by a court of competent jurisdiction or by City's bond counsel to
create, or result in the creation of, such a legal indebtedness of City, the
enforcement of the said provision shall be suspended, and the Agreement shall
at all times be construed and applied in such a manner as will preserve the
foregoing intent of the parties, and no Event of Default by City shall be deemed
to have occurred as a result thereof. If any provision of this Agreement or the
application thereof to any circumstance is so suspended, the suspension shall
not affect other provisions of this Agreement which can be given effect without
the suspended provision. To this end the provisions of this Agreement are
severable.
B. Notwithstanding the provisions of Section 9 hereof, City shall have
no obligation to make a payment of a Rebate to Company if at any time during
the term hereof City fails to appropriate funds for payment; City receives an
opinion from its legal counsel to the effect that the use of Tax Increments
resulting from the Property and Improvements to fund a Rebate payment to
Company, as contemplated under Section 9 above, is not, based on a change in
applicable law or its interpretation since the date of this Agreement, authorized or
otherwise an appropriate urban renewal activity permitted to be undertaken by
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City under the Urban Renewal Act or other applicable provisions of the Code, as
then constituted or under controlling decision of any Iowa court having jurisdiction
over the subject matter hereof; or City's ability to collect Tax Increment from the
Improvements and Property is precluded or terminated by legislative changes to
Iowa Code Chapter 403. Upon occurrence of any of the foregoing circum-
stances, City shall promptly forward notice of the same to Company. If the
circumstances continue for a period during which two (2) annual Rebate
payments would otherwise have been paid to Company under the terms of
Section 9, then City may terminate this Agreement, without penalty or other
liability to City, by written notice to Company.
C. For purposes of this Agreement, "Tax Increments" shall mean the
property tax revenues on the Improvements and Property received by and made
available to City for deposit in an account maintained under this Agreement, the
provisions of Iowa Code § 403.19 and the ordinance governing the Urban
Renewal Plan.
11. Additional Covenants of Company. In addition to the other promises,
covenants and agreements of Company as provided elsewhere in this Agreement,
Company agrees as follows with respect to each phase of Improvements:
A. Company 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, Company 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 Company with respect to
construction of the Improvements.
C. Company 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.
D. Company 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 the sanctions and penalties resulting therefrom, would not have
a material adverse effect on the business, property, operations, or condition,
financial or otherwise, of Company.
E. The Project Property will have a taxable value as set forth in the
MAA and any amendments thereto, and Company agrees that the minimum
actual value of the Project Property and completed Improvements as stated in
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the MAA and any amendments thereto will be a reasonable estimate of the
actual value of the Project Property and phase Improvements for ad valorem
property tax purposes. Company agrees that it will spend enough in construction
of the Improvements that, when combined with the value of the Project Property
and related site improvements, will equal or exceed the assessor's minimum
actual value for the Project Property and Improvements as set forth in the MAA
and any amendments thereto.
F. Until termination of the MAA, Company will maintain, preserve and
keep the Project 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. During the period that any Rebate is payable to Company under
this Agreement, Company agrees that (1) it will not undertake, in any other
municipality in Black Hawk County, the construction or rehabilitation of any
commercial property as a primary location for Company's business operations of
the type to be conducted on the Project Property, and (2) it will make no
conveyance, lease or other transfer of the Project Property or any interest therein
that would cause the Project Property or any part thereof to be classified as
exempt from taxation or subject to centralized assessment or taxation by the
State of Iowa.
H. Company 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 Project
Property. Company 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 Project
Property that is determined by any tax official to be applicable to the Project
Property or to Company, 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 Project Property.
12. Conditions to City Funding.
A. The complete or initial funding by City of the Rebates and other
Project commitments shall be deemed an agreement of the parties that the
applicable conditions to disbursement of funds shall, as of the date of such
funding, have been satisfied or waived. If the conditions set forth in this Section
are not satisfied at a Rebate disbursement date, this Agreement shall terminate
unless a new disbursement date is established by amendment to this Agreement.
The termination of this Agreement shall be the sole remedy available to City or
Company if, for whatever reason, a condition set forth in this Section is not
satisfied at a Rebate payment date, it being understood that each party shall
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nonetheless incur costs and liabilities prior thereto for which they alone are
responsible. City and Company each expressly assumes all responsibility for the
costs and liabilities they may each so incur prior to a Rebate payment date and
agree to indemnify and hold each other harmless therefrom.
B. It is recognized and agreed that the ability of the City to perform the
obligations described in this Agreement, including but not limited to the Rebate
payments, is subject to completion and satisfaction of certain separate city
council actions and required legal proceedings relating to the creation of a tax
increment financing (TIF) district, including the holding of public hearings on the
same. Further, all the obligations of City under this Agreement are subject to
fulfillment, on or before each Rebate payment date, of each of the following
conditions precedent:
(i) The representations and warranties made by Company in
Section 14 shall be true and correct as of the Rebate disbursement date
with the same force and effect as if made at such date.
(ii) Company shall be in material compliance with all the terms
and provisions of this Agreement.
(iii) There has not been, as of the Rebate disbursement date, a
substantial change for the worse in the financial resources and ability of
Company, or a substantial decrease in the financing commitments
secured by Company for construction of the Improvements, which
change(s) makes it likely, in the reasonable judgment of the City, that
Company will be unable to fulfill its covenants and obligations under this
Agreement.
13. 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.
14. 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.
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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.
D. The execution and delivery of this Agreement, the consummation of
the transactions contemplated hereby, and the fulfillment of or compliance with
the terms and conditions of this Agreement are not prevented by, limited by, in
conflict with, or result in a violation or breach of, the terms, conditions or
provisions of the articles of organization or bylaws of Company or of any
contractual restriction, evidence of indebtedness, agreement or instrument of
whatever nature to which Company is now a party or by which it or its property is
bound, nor do they constitute a default under any of the foregoing.
E. Assuming due authorization, execution and delivery by the other
parties hereto, this Agreement is in full force and effect and is a valid and legally
binding instrument of Company that is enforceable in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency, reorganization or
other laws relating to or affecting creditors' rights generally.
F. There are no actions, suits or proceedings pending or threatened
against or affecting Company in any court or before any arbitrator or before or by
any governmental body in which there is a reasonable possibility of an adverse
decision which could materially adversely affect the business (present or
prospective), financial position, or results of operations of Company or which in
any manner raises any questions affecting the validity of the Agreement or
Company's ability to perform its obligations under this Agreement.
15. Indemnification and Releases.
A. Company 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 Project 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 Company or its directors, officers, employees, contractors or agents,
or any other person who may be about the Project 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.
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B. Except for any willful misrepresentation, any willful misconduct, or
any unlawful act of the indemnified parties, Company 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 Company against the City to enforce its
rights under this Agreement), or (2) the acquisition and condition of the Project
Property and the construction, installation, ownership, and operation of the
Improvements, or (3) any hazardous substance or environmental contamination
located in or on the Project Property, but only to the extent such liability has not
been previously transferred to and accepted by the City in writing.
C. The provisions of this Section shall survive the expiration or
termination of this Agreement.
16. Obligations Contingent. Each and every obligation of City under this
Agreement is expressly made subject to and contingent upon City's completion of all
procedures, hearings and approvals deemed necessary by City or its legal counsel for
amendment of the urban renewal plan applicable to the Property and/or project area, all
of which must be completed within 180 days from the date this Agreement is approved
by the City council. If such completion does not occur, then any conveyance, benefit or
incentive of any type provided by City hereunder within said 180-day period is subject to
reverter of title, revocation, repayment or other appropriate action to restore such
property, benefit or incentive to City, and Company agrees to cooperate diligently and in
good faith with any reasonable request by City to effectuate the restoration of same, or
failing such restoration Company agrees to be liable for same or for the fair value
thereof, plus interest on any sums owing at the rate of 5% per annum commencing with
the date of demand for payment, if said payment is not remitted to City within 30 days.
17. No Assignment or Conveyance. Company agrees that it will not sell,
convey, assign or otherwise transfer its interest in the Project 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.
18. Default. The following shall be "Events of Default" under this Agreement,
and the term "Event of Default" shall mean any one or more of the following events that
continues beyond any applicable cure periods:
A. Failure by Company to cause the construction of the Improvements
to be commenced and completed pursuant to the terms, conditions and
limitations of this Agreement;
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B. Transfer by Company of any interest (either directly or indirectly) in
the Improvements, the Project Property, or this Agreement, without the prior
written consent of City;
C. Failure by Company to pay, before delinquency, all ad valorem
property taxes levied on or against any of the Project Property;
D. Failure by any party hereto to substantially observe or perform any
covenant, condition, obligation or agreement on its part to be observed or
performed under this Agreement or an MAA;
E. Company (1) files any petition in bankruptcy or for any
reorganization, arrangement, composition, readjustment, liquidation, dissolution,
or similar relief under the federal bankruptcy law or any similar state law; (2)
makes an assignment for the benefit of its creditors; (3) admits in writing its
inability to pay its debts generally as they become due; (4) is adjudicated a
bankrupt or insolvent; or if a petition or answer proposing the adjudication of
Company as a bankrupt or its reorganization under any present or future federal
bankruptcy act or any similar federal or state law shall be filed in any court and
such petition or answer shall not be discharged or denied within ninety (90) days
after the filing thereof; or a receiver, trustee or liquidator of Company, or part
thereof, shall be appointed in any proceedings brought against Company and
shall not be discharged within ninety (90) days after such appointment, or if
Company shall consent to or acquiesce in such appointment; or (5) defaults
under any mortgage applicable to any of Project Property.
F. Any representation or warranty made by Company in this
Agreement, or made by Company in any written statement or certificate furnished
by Company pursuant to this Agreement, shall prove to have been incorrect,
incomplete or misleading in any material respect on or as of the date of the
issuance or making thereof.
19. Remedies.
A. Default by Company. Whenever any Event of Default in respect of
Company occurs and is continuing, the City may terminate this Agreement.
Before exercising such remedy, City shall give 30 days' written notice to
Company of the Event of Default, provided that by the conclusion of such period
the Event of Default shall not have been cured, or the Event of Default cannot
reasonably be cured within 30 days and Company shall not have provided
assurances reasonably satisfactory to the City that the Event of Default will be
cured as soon as reasonably possible. Upon termination, City may exercise any
and all remedies available at law, equity, contract or otherwise for recovery of
any sums paid by City to Company before the date of termination or to recover
ownership of the Project Property or portion thereof as set forth in this
Agreement.
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B. Default by City. Whenever any Event of Default in respect of
Company occurs and is continuing, Company may take such action against City
to require it to specifically perform its obligations hereunder. Before exercising
such remedy, Company shall give 30 days' written notice to City of the Event of
Default, provided that by the conclusion of such period the Event of Default shall
not have been cured, or if the Event of Default cannot reasonably be cured within
30 days and City shall not have provided assurances reasonably satisfactory to
the Company that the Event of Default will be cured as soon as reasonably
possible.
C. Remedies under this Agreement shall be cumulative and in addition
to any other right or remedy given under this Agreement or existing at law or in
equity or by statute. Waiver as to any particular default, or delay or omission in
exercising any right or power accruing upon any default, shall not be construed
as a waiver of any other or any subsequent default and shall not impair any such
right or power.
20. 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.
21. Performance by City. Company acknowledges and agrees that all of the
obligations of City under this Agreement shall be subject to, and performed by City in
accordance with, all applicable statutory, common law or constitutional provisions and
procedures consistent with City's lawful authority. All covenants, stipulations, promises,
agreements and obligations of City contained in this Agreement shall be deemed to be
the covenants, stipulations, promises, agreements and obligations of City and not of any
governing body member, officer, employee or agent of City in the individual capacity of
such person.
22. No Third -Party Beneficiaries. No rights or privileges of any party hereto
shall inure to the benefit of any contractor, subcontractor, material supplier, or any other
person or entity, and no such contractor, subcontractor, material supplier, or other
person or entity shall be deemed to be a third -party beneficiary of any of the provisions
of this Agreement.
23. 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
13
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 1101 Fleur Drive, Waterloo, Iowa 50701,
Attention: Manager.
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.
24. 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.
25. 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.
26. Severability; Reformation. Each provision, section, sentence, clause,
phrase, and word of this Agreement is intended to be severable. If any portion of this
Agreement shall be deemed invalid or unenforceable, whether in whole or in part, the
offending provision or part thereof shall be deemed severed from this Agreement and
the remaining provisions of this Agreement shall not be affected thereby and shall
continue in full force and effect. If, for any reason, a court finds that any portion of this
Agreement is invalid or unenforceable as written, but that by limiting such provision or
portion thereof it would become valid and enforceable, then such provision or portion
thereof shall be deemed to be written, and shall be construed and enforced, as so
limited.
27. 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
28. Interpretation. This Agreement shall not be construed more strictly
against one party than against the other merely by virtue of the fact that it may have
been prepared by counsel for one of the parties, it being recognized that the parties
hereto and their respective attorneys have contributed substantially and materially to the
preparation of each and every provision of this Agreement.
29. Binding Effect. This Agreement shall be binding and shall inure to the
benefit of the parties and their respective successors, assigns, and legal
representatives.
30. 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.
31. 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.
32. 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]
15
CITY OF WATERLOO, IOWA
By: "1:
Quentin M. Hart, Mayor
Attest:
Jelley Felch
City Clerk
TOP NOT H TILE AND
CONSTI ° CTION. L
By:
tin Schmitz, ager
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.
16
EXHIBIT "A"
Legal Description of Project Property
The Westerly one-half of Lot 3, Waterloo Air and Rail Park, 1st Addition, City of
Waterloo, Black Hawk County, Iowa.
EXHIBIT "A-1"
Legal Description of Phase 3 Property
The Easterly one-half of Lot 3, Waterloo Air and Rail Park, 1st Addition, City of Waterloo,
Black Hawk County, Iowa.
EXHIBIT "B"
MINIMUM ASSESSMENT AGREEMENT
This Minimum Assessment Agreement (the "Agreement") is entered into as of
Nye)(17 , LDZZ. , by and among the CITY OF WATERLOO, IOWA ("City"), Top
Notch Tile and Construction, 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 (the "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 within the City and within the East
Waterloo Unified Urban Renewal and Redevelopment Plan Area, formerly known as the
Airport Area Development Plan area, including the construction of certain improvements
as described in the Development Agreement (the "Minimum Improvements") on the
Property, as provided in the Development Agreement (the "Project"); and
WHEREAS, pursuant to Iowa Code § 403.6, as amended, the City and the
Company desire to establish a minimum actual value for the Property and the Minimum
Improvements to be constructed thereon by Company pursuant to the Development
Agreement, 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 Minimum 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 Minimum
Improvements by the Company, the minimum actual taxable value which shall be fixed
for assessment purposes for the Property and Minimum Improvements to be
constructed thereon by the Company as a part of the Project shall not be less than
$250,000.00 (the "Minimum Actual Value") until termination of this Agreement. The
parties hereto agree that construction of the Minimum Improvements will be
substantially completed by the Completion Deadline stated in the Development
Agreement. If the Minimum Improvements are not substantially completed by said date,
then the parties agree to execute an amendment to this Agreement that will extend the
date 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,
2033. The Minimum Actual Value shall be maintained during such period regardless of:
(a) any failure to complete the Minimum Improvements; (b) destruction of all or any
portion of the Minimum Improvements; (c) diminution in value of the Property or the
Minimum Improvements; or (d) any other circumstance, whether known or unknown and
whether now existing or hereafter occurring.
3. Company shall pay, or cause to be paid, when due, all real property taxes
and assessments payable with respect to all and any parts of the Property and the
Minimum Improvements pursuant to the provisions of this Agreement and the
Development Agreement. Such tax payments shall be made without regard to any loss,
complete or partial, to the Property or the Minimum Improvements, any interruption in,
or discontinuance of, the use, occupancy, ownership or operation of the Property or the
Minimum Improvements by Company or any other matter or thing which for any reason
interferes with, prevents or renders burdensome the use or occupancy of the Property
or the Minimum Improvements.
4. Company agrees that its obligation to make the tax payments required
hereby, to pay the other sums provided for herein, and to perform and observe its other
agreements contained in this Agreement shall be absolute and unconditional obligations
of Company (not limited to the statutory remedies for unpaid taxes) and that Company
shall not be entitled to any abatement or diminution thereof, or set off therefrom, nor to
any early termination of this Agreement for any reason whatsoever.
5. 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. Nothing herein shall limit the discretion of the Assessor to assign at any
time an actual value to the land and Minimum Improvements in excess of the Minimum
Actual Value.
6. Company agrees that during the term of this Agreement it will not:
(a) seek administrative review or judicial review of the applicability or
constitutionality of any Iowa tax statute relating to the taxation of property
contained as a part of the Property or the Minimum Improvements determined by
any tax official to be applicable to the Property or the Minimum Improvements, or
raise the inapplicability or constitutionality of any such tax statute as a defense in
any proceedings, including delinquent tax proceedings; or
(b) seek any tax deferral, credit or abatement, either presently or
prospectively authorized under Iowa Code Chapter 403 or 404, or any other state
2
law, of the taxation of real property, including improvements and fixtures thereon,
contained in the Property or the Minimum Improvements; or
(c) request the Assessor to reduce the Minimum Actual Value; or
(d) appeal to the board of review of the city, county, state or to the
Director of Revenue of the State of Iowa to reduce the Minimum Actual Value; or
(e) cause a reduction in the actual value or the Minimum Actual Value
through any other proceedings.
7. 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.
8. Neither the preambles nor provisions of this Agreement are intended to, or
shall be construed as, modifying the terms of the Development Agreement.
9. 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.
10. 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 TOP NOTCH TILE AND
CONSTC ION
By: Q' i By:
Quentin M. Hart, Mayor J stin Schmitz, .. ager
B
Th
elley Felchle, {pity Clerk
3
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
On this day of , 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.
Notary Public
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
Subscribed and sworn to before me on )) l� c Q) by Justin Schmitz
as Manager of Top Notch Tile and Construction, LLC.
A(9-41
Notary Public
4
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 Fifty Thousand Dollars ($250,000.00) until termination of this
Minimum Assessment Agreement pursuant to the terms hereof.
essor for Black Hawk County, Iowa
Date
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
Subscribed and sworn to before me on Li IR , by T.J.
Koenigsfeld, Assessor for Black Hawk County, Iowa.
`tP`AL, ADRIENNE MILLER
a ;,, r COMMISSION NO. 809109
* MY COMMISSION EXPIRES
'owp FEBRUARY 23, 2024