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HomeMy WebLinkAboutYoungblut Farmland - Development Agreement - 10.3.2022Preparer: Christopher S. Wendland, P.O. Box 596, Waterloo, Iowa 50704 (319) 234-5701 After recording, return to Community Planning & Development, 715 Mulberry Street, Waterloo, IA 50703. DEVELOPMENT AGREEMENT This Development Agreement (the "Agreement") is entered into as of October 3 , 2022, by and between Youngblut Farmland, Ltd. (the "Company") and the City of Waterloo, Iowa, ("City"). RECITALS A. In furtherance of the objectives of Iowa Code Chapter 403 (the "Urban Renewal Act"), the City is engaged in carrying out urban renewal project activities in an area known as the Martin Road Development Plan Area (the "Urban Renewal Area"). B. Company and City are parties to a purchase agreement for property located in the Urban Renewal Area and legally described on Exhibit "A" attached hereto (the "City Property"). C. City and KL Properties, L.L.C. ("KL") are parties to an agreement for development of abutting property described on Exhibit "B" attached hereto (the "KL Property"). KL is purchasing the KL Property from Company for $1.00. The City Property and KL Property are collectively referred to as the "Property." D. 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 projects described herein are in the vital and best interests of the City and that the projects and such incentives are in accordance with the public purposes and provisions of applicable State and local laws and requirements under which the projects have been undertaken and are being assisted. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree as follows: 1. Payment to Company. City will pay to Company the principal sum of $270,072.00, plus interest, for a total repayment of $300,000.00 (the "Payable Amount"). Said principal sum is proportionately divisible as $132,947.00 for the City Property and $87,125.00 for the KL Property. Repayment will be made as follows: A. City shall make payment to Company in an annual amount equal to the greater of (i) $50,000.00 or (ii) the amount due under paragraph 1.B or 1.0 below, as applicable, beginning in the 2022/2023 fiscal year and continuing in each fiscal year thereafter until City has paid Company all sums payable under this Agreement. B. This paragraph sets forth the default method for calculating payments when a party making improvements on the Property (a "Developer") has a separate development agreement with the City that provides for payment of tax rebates to the Developer. City shall pay to Company a semi-annual grant equal to 100% of the property taxes collected by the City (excluding non-TIF Collections as defined in paragraph 1.C.2 below) from a Developer pursuant to a separate development agreement with the City, reduced by any and all tax rebates that the City is required to pay to the Developer pursuant to the terms of such development agreement. For purposes of illustration only, if an agreement between City and Developer provides for rebatement of 50% of qualifying property taxes for a period of five years, then Company would receive a grant equal to the remaining 50% of qualifying property taxes in each year of such period. No grant with respect to such Developer's project shall be made to Company before a property tax rebate is first paid to the Developer. At the end of the Developer's tax rebatement period, City will grant to Company 100% of property tax rebates allowable until Company has been repaid pursuant to paragraph 3.F below. For purposes of this paragraph, the term "Developer" may include Company with respect to improvements made on the Property other than the improvements that are the subject of this Agreement. C. This paragraph sets forth the default method for calculating grant payments that are not within the scope of paragraph 1.6 above. With respect to any taxable improvements ("Non -Qualifying Improvements") constructed on the Property that are not subject to a separate development agreement between the City and the owner -builder of the Non -Qualifying Improvements, City shall pay to Company a semi-annual grant equal to 100% (with the exceptions noted below) of the property tax capable of rebatement, if not for the non -qualifying character of the improvements, starting in "Year One" and continuing thereafter until Company has been repaid pursuant to paragraph 1.F below. For purposes of illustration, a "Non -Qualifying Improvement" means, generally, an improvement of a type that is not eligible for property tax rebates or similar incentives, such as improvements for a retail business, or improvements made under a development agreement that does not provide for the payment of tax rebates or similar incentives to the developer party. The parties agree that the agreement between City and KL is an agreement for Non -Qualifying Improvements. 2 1. "Year One" shall be the first year for which the assessment is based upon the partial or completed value of the Non -Qualifying Improvements, but not a prior year for which the assessment is based solely upon the value of the land. 2. The above -described rebate program is not applicable to any special assessment levy, debt service levy, or any other levy that is exempted from treatment as tax increment financing under the provisions of applicable law (collectively, "Non-TIF Collections"). D. Rebates are payable in respect to a given year only to the extent that general property taxes that are due and owing for such year have actually been paid. E. City will pay Company all sums payable under this Agreement in equal semi-annual installments on or before November 1 and the following May 1 of each fiscal year. F. If City fails to make payment of any installment due under this Section 1 within ninety (90) days of it being due and payable, Company shall have the right to declare City to be in default of this Agreement following City's failure to cure the default within an additional sixty (60) days after written notice from Company to City that specifically references this paragraph 1.F. In addition to the City officials required to be notified under paragraph 6(a), Company shall also deliver a copy of the foregoing notice to City's Chief Financial Officer. 2. Limitations on Payments. A. Each payment 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 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 3 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 1 hereof, City shall have no obligation to make a payment 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 payment to Company, as contemplated under Section 1 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 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 payments would otherwise have been paid to Company under the terms of Section 1, 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 Property and improvements thereon 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. 3. Conditions to City Funding. A. The complete or initial funding by City of the payments 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 payment 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 payment date, it being understood that each party shall 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 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 payments, is subject to completion and satisfaction of certain separate city 4 council actions and required legal proceedings relating to the creation or amendment of a tax increment financing (TIF) district, including the holding of public hearings on the same. 4. Obligations Contingent. Each and every obligation of City under this Agreement is expressly made subject to and contingent upon City's completion of all procedures, hearings and approvals deemed necessary by City or its legal counsel for amendment of the urban renewal plan applicable to the Property and/or project area, all of which must be completed within 180 days from the date this Agreement is approved by the City council. City hereby agrees to timely undertake and complete all such procedures, hearings and approvals so that the benefits that City promises to Company hereunder as an inducement for Company to undertake and complete the Project as set forth in this Agreement will not be lost. 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. To the extent permitted by applicable law, City agrees to indemnify Company and hold it harmless from and against any claims, damages, costs, expenses or loss of value suffered by Company and arising from such revocation or repayment. 5. 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. 6. 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. 7. 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. 5 (b) if to Company, at 643 E. Griffith Road, Waterloo, Iowa 50701, Attn: Harold Youngblut, 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 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. 8. 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. 9. 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. 10. 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. 11. 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. 12. 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. 6 13. Binding Effect. This Agreement shall be binding and shall inure to the benefit of the parties and their respective successors, assigns, and legal representatives. 14. 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. 15. 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. 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 YOUNGBLUT FARMLAND, LTD. Qu Ntin Jr{ -art By: By: Quentin Hart, Mayor Harold Youngblut, President 'Kerrey rFe[chre Attest: Kelley Felchle, City Clerk 7 EXHIBIT "A" Legal Description of City Property Lot 1, Greenbelt Centre Plat No. 2, City of Waterloo, Iowa, except Parcel "H" according to Plat of Survey filed 9/06/2022 as Doc. No. 2023-3984, and except Parcel "F" according to Plat of Survey filed 3/28/2016 as Doc. No. 2016-16188. EXHIBIT "B" Legal Description of KL Property Parcel "H" according to Plat of Survey filed 9/06/2022 as Doc. No. 2023-3984, being a part of Lot 1, Greenbelt Centre Plat No. 2, City of Waterloo, Iowa.