HomeMy WebLinkAboutWBM, LLC - Development Agreement and Minimum Assessment Agreement - 12/19/2022Prepared 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
1%ecembe tit zr z2, by and between WBM, 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").
B. Company is willing and able to finance and construct buildings and related
improvements on property located in the Urban Renewal Area, and legally
described on Exhibit "A" attached hereto (the "Project 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. Phased Development. The parties contemplate that Company will
develop the Project Property in phases. Each phase will consist generally of two
commercial buildings, with more detailed plans for each phase to be developed at one
or more future dates. 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. Improvements by Company. Company shall construct on the Project
Property the improvements described in Section 1 above, and related landscaping,
paving, signage and parking improvements (collectively, the "Improvements"). The
Improvements relating to each separate phase are referred to as the Phase 1
Improvements and the Phase 2 Improvements, as applicable. 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".
3. Construction Plans. Company agrees that it will cause the Improve-
ments to be constructed on the Property in conformance with construction plans (the
"Plans") that have been submitted to the City. Company agrees that the scope and
scale of the Improvements to be constructed shall not be significantly less than the
scope and scale of the Improvements as detailed and outlined in the Plans.
If any material modification in the scope, scale or nature of the Plans is
proposed, Company shall submit modified Plans (the "Modified Plan") to the City for
review. Modified Plans shall be subject to approval by the City as provided in this
Section. City shall approve the modified Plans in writing if: (a) the Modified Plans
conform to the terms and conditions of this Agreement; (b) the Modified Plans conform
to the terms and conditions of the urban renewal plan; (c) the Modified Plans conform to
all applicable federal, state and local laws, ordinances, rules and regulations and City
permit and design review requirements; (d) the Modified Plans are adequate for
purposes of this Agreement to provide for the construction of the Improvements, and (e)
no Event of Default under the terms of this Agreement has occurred; provided, however,
that any such approval of the Plans or Modified Plans pursuant to this Section shall
constitute approval for the purposes of this Agreement only and shall not be deemed to
constitute approval or waiver by the City with respect to any building, fire, zoning or
other ordinances or regulations of the City, and shall not be deemed to be sufficient
plans to serve as the basis for the issuance of a building permit if the Plans or Modified
Plans are not as detailed or complete as the plans otherwise required for the issuance
of a building permit.
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The Modified Plans must be rejected in writing by City within thirty (30) days of
submission or shall be deemed to have been approved by the City. If City rejects the
Modified Plans in whole or in part, Company shall submit new or corrected Modified
Plans within thirty (30) days after receipt by Company of written notification of the
rejection, accomplished by a written statement of the City specifying the respects in
which Company's Modified Plans fail to conform to the requirements of this Section.
The provisions of this Section relating to approval, rejection and resubmission of
corrected Modified Plans shall continue to apply until the Modified Plans have been
approved by the City; provided, however, that in any event Company shall submit
Modified Plans which are approved by City prior to commencement of construction of
the additional or modified Improvements.
Approval of the Plans or Modified Plans by the City shall not relieve Company of
any obligation to comply with the terms and provisions of this Agreement, or the
provision of applicable federal, state and local laws, ordinances and regulations, nor
shall approval of the Plans or Modified Plans by City be deemed to constitute a waiver
of any Event of Default. Approval of Plans or Modified Plans hereunder is solely for
purposes of this Agreement and shall not constitute approval for any other City purpose
nor subject the City to any liability for the Improvements as constructed.
4. Timeliness of Conveyance and Construction. 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 provide the incentives
set forth in this Agreement 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 Substantially Complete
construction within eighteen (18) months after the date of this Agreement (the
"Phase 1 Completion Deadline"). Construction of Phase 2 Improvements must
begin within twelve (12) months after Phase 1 Improvements are Substantially
Completed, and Company must Substantially Complete Phase 2 Improvements
within twelve (12) months thereafter (the "Phase 2 Completion Deadline").
"Substantially Complete" means the date on which the Improvements have been
completed to the extent necessary for the City to issue a certificate of occupancy
relating thereto and the City has verified that any Project element for which no
permit was necessary has been Substantially Completed.
B. Events triggering termination. If, by the Phase 1 Start Date or any
agreed period of extension, Company has not in good faith begun construction of
the Improvements upon the Phase 1 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. The City's Community Planning
and Development Director may, but shall not be required to, consent to an
extension of time of up to six (6) months for the construction of any phase of the
Improvements. Any additional or longer time extensions will require consent of
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the City Council. 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 any given phase of Improvements, then City may terminate this
Agreement following Company's failure to resume and diligently carry on
construction within thirty (30) days following written notice of default from City.
City shall have no further obligations to Company under this Agreement if City
terminates this Agreement as provided herein.
5. 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.
6. 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 Phase 1
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 valuation for the Phase 1 Property as improved
pursuant to this Agreement, which shall be fixed for assessment purposes, below the
amount of $1,034,700.00 (the "Phase I Minimum Actual Value"), through:
(i) willful destruction of the Phase 1 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, or a new MAA governing
the Phase 2 Property, 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 2 Improvements will have a minimum actual value of no less than
$900,000.00.
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7. City Incentives. City shall, at its sole option, provide to Company as
development incentives either of the following but not both:
A. Rebates. Property tax rebates as set forth in Section 8 and Section
8.1.
B. Grant. A grant payment of $250,000.00 (the "Grant") within thirty
(30) days after approval of this Agreement by the Waterloo City Council, to be
used by Company in payment of Property acquisition costs.
8. Tax Rebates — Phase 1. Provided that Company has completed Phase 1
Improvements before the Completion Deadline thereof, and that Company has
executed the MAA as set forth in Section 6 above, City agrees to rebate property tax
(with the exceptions noted below) with respect to Phase 1 Improvements, as follows:
Year One through Year Five 50% rebate each year
for any assessed value added by the completed Phase 1 Improvements that exceeds
the initial base value of $34,700.00 (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 assessed value of the Property as a result of the 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
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 Phase 1 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 Phase 1 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-
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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.
8.1. Tax Rebates — Phase 2. Provided that Company has Substantially
Completed Phase 1 and Phase 2 Improvements before the respective Completion
Deadlines, and that Company has executed an amendment to the MAA as set forth in
Section 6 above, City agrees to rebate property tax (with the exceptions noted below)
with respect to both Phase 1 and Phase 2 Improvements, as follows:
Year One through Year Two 50% rebate each year
for any assessed value added by the completed Phase 1 and Phase 2 Improvements
combined that exceeds the initial base value of $34,700.00. Payment of Rebates
pursuant to this Section 8.1 shall commence in the year immediately following
completion of the Phase 1 Rebate schedule, and for purposes of this Section 8.1 such
year shall be "Year One." The payment of Rebates shall otherwise be subject to all
terms and conditions set forth in Section 8.
9. Limitations on Payment of Rebates and Grant.
A. Each payment of a Rebate or Grant 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 or a Grant 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 7, Section 8 or Section
8.1 hereof, City shall have no obligation to make a payment of a Rebate or Grant
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 or Grant payment to Company, as contemplated under Section 7,
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Section 8 or Section 8.1 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
circumstances, 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 8 or Section 8.1, 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 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.
10. 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(s) 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 the Improvements are Substantially Completed, 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.
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E. The Project Property, or phase portion thereof, will have an
assessed 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 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(s), 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. Until termination of the MAA(s), Company agrees that (1) if the
completed Improvements are to be Company's primary location for business
operations, 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.
11. Conditions to City Funding.
A. The complete or initial funding by City of the Rebates or Grants 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 or Grant disbursement date, this Agreement shall
terminate unless a new disbursement date is established by amendment to this
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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 or Grant 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 Rebate
or Grant 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 or
Grant 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 or Grant payment date, of each of the
following conditions precedent:
(i) The representations and warranties made by Company in
Section 13 shall be true and correct as of the Rebate or Grant
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 or Grant 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.
12. 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.
13. Representations and Warranties of Company. Company hereby
represents and warrants as follows:
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A. Company is not prohibited from consummating the transaction
contemplated in this Agreement by any law, regulation, agreement, instrument,
restriction, order or judgment.
B. Company is duly organized, validly existing, and in good standing
under the laws of the state of its organization and is duly qualified and in good
standing under the laws of the State of Iowa.
C. Company has full right, title, and authority to execute and perform
this Agreement and to consummate all of the transactions contemplated herein,
and each person who executes and delivers this Agreement and all documents
to be delivered to City hereunder is and shall be authorized to do so on behalf of
Company.
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.
14. 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,
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or any other person who may be about the Project Property or the Improvements,
due to any negligent act or omission or willful misconduct of any person, other
than any negligent act or omission 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, 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 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.
15. Obligations Contingent. Each and every obligation of City under this
Agreement is expressly made subject to and contingent upon City's completion of all
procedures, hearings and approvals deemed necessary by City or its legal counsel for
amendment of the urban renewal plan applicable to the Project 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.
16. 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.
17. 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:
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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;
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.
18. 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
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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. In the
alternative, if the Project has not commenced beyond earthwork Company may
choose to convey the Project Property to City by special warranty deed, or failing
conveyance by Company within thirty (30) days after written demand by City then
City shall be authorized to execute, on Company's behalf and as Company's
attorney -in -fact, a special warranty deed, and for such limited purpose
Company does hereby constitute and appoint City as its attorney -in -fact. If the
Project Property is conveyed to City by any means, Company shall discharge
and satisfy any and all liens, claims, charges, security interests, mortgages,
encumbrances or past -due or currently due property taxes or assessments
(collectively, "Liens") arising by or through Company, so that title is delivered to
City free and clear of Liens.
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. Contingent Indemnification. In any circumstance where the Project
Property is conveyed to City pursuant to Section 18.A above, Company 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 Property of any type or nature
whatsoever that attaches to the Property by virtue of Company's ownership of
same. If City files suit to enforce the terms of this paragraph 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 paragraph shall survive the expiration, termination or cancellation
of this Agreement for any reason.
D. 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.
19. 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
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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.
20. 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.
21. 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.
22. Notices. Any notice under this Agreement shall be in writing and shall be
delivered in person, by overnight air courier service, by United States registered or
certified mail, postage prepaid, or by facsimile (with an additional copy delivered by one
of the foregoing means), and addressed:
(a) if to City, at 715 Mulberry Street, Waterloo, Iowa 50703, facsimile
number 319-291-4571, Attention: Mayor, with copies to the City Attorney and the
Community Planning and Development Director.
(b) if to Company, at 1200 Grand Blvd, Cedar Falls, Iowa , 50613,
Attention: Walker Martinson; Managing Member.
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.
23. 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
14
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.
24. 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.
25. 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.
26. 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.
27. 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.
28. Binding Effect. This Agreement shall be binding and shall inure to the
benefit of the parties and their respective successors, assigns, and legal
representatives.
29. 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.
30. 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.
15
31. Time of Essence. Time is of the essence of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Development
Agreement by their duly authorized representatives as of the date first set forth above.
CITY OF WATERLOO, IOWA
By: t A_A_.Q„- uTzti
Quentin M. Hart, Mayor
Attest:
Kelley Fel', le, City Clerk
WBM, LLC
By:
Managing Member
By: Walker Martinson
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
Lot 6, South Port 2nd Addition, City of Waterloo, Black Hawk County, Iowa.
EXHIBIT "B"
MINIMUM ASSESSMENT AGREEMENT
This Minimum Assessment Agreement (the "Agreement") is entered into as of
2022, by and among the CITY OF WATERLOO, IOWA ("City"),
WBM, LLC ("Company"), and the COUNTY ASSESSOR of the City of Waterloo, Iowa
("Assessor").
WITNESSETH:
WHEREAS, on or before the date hereof the City and Company have entered
into a development agreement (the "Development Agreement") regarding certain real
property, described in Exhibit "A" thereto, (the "Property") located in the City; and
WHEREAS, it is contemplated that pursuant to the Development Agreement, the
Company will undertake the development of an area ("Project") within the City and
within the East Waterloo Unified Urban Renewal and Redevelopment Plan Area,
formerly known as the Airport Area Development Plan Area; and
WHEREAS, pursuant to Iowa Code § 403.6, as amended, the City and the
Company desire to establish a minimum actual value for the land and the building(s)
pursuant to this Agreement and applicable only to the Project, which shall be effective
upon substantial completion of the Project and from then until this Agreement is
terminated pursuant to the terms herein and which is intended to reflect the minimum
actual value of the land and buildings as to the Project only; and
WHEREAS, the City and the Assessor have reviewed the preliminary plans and
specifications for the improvements (the "Improvements") which the parties contemplate
will be erected as a part of the Project.
NOW, THEREFORE, the parties hereto, in consideration of the promises,
covenants, and agreements made by each other, do hereby agree as follows:
1. Upon substantial completion of construction of the Improvements by the
Company, the minimum actual value which shall be fixed for assessment purposes for
the land and Improvements to be constructed thereon by the Company as a part of the
Project shall not be less than $1,034,700.00 (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 the date set forth in the
Agreement, but in any event not later than December 31, 2024. If it is 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,
2034. 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 Improvements in excess of the Minimum Actual Value.
3. Company 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 Company, 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
WBM, LLC
By: C 47 By:
Quentin M. Hart, Mayor
By:
Kelley FIchle, City Clerk
Managing Member
By: Walker Martinson
2
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
On this day of be \iNr 2 22; 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.
NANCY Hk. BY
COMMISSION NO.788229
MY COMMISSION EXPIRES
-
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
Subscribed and sworn to before me on A5\7D`): - , by VO01,`tar
k\Of kf Orl as Managing Member of WBM, LLC.
ADRIENNE MILLER 1 COMMISSION NO. 809109
MY COMMISSION EXPIRES
FEBRUARY 23, 2024
3
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 One Million Thirty -Four Thousand Seven Hundred Dollars ($1,034,700.00)
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 , by T.J. Koenigsfeld,
Assessor for Black Hawk County, Iowa.
Notary Public