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HomeMy WebLinkAboutMenard, Inc.-Development Agreement ay,F24,7„,f ie/Jda a_to `k 0o7 _ 8 a-5 DEVELOPMENT AGREEMENT This Development Agreement (the "Agreement") is entered into as of , 2002, by and between Menard, Inc. ("Company"), and the City of Waterloo, Iowa ("City"). RECITALS A. City considers economic development within the City a benefit to the community and is willing for the overall good and welfare of the community to provide financial incentives so as to encourage that goal. B. Company is willing and able to finance and construct a building and related improvements on property located in the Logan Plaza urban renewal area. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree as follows: 1. Purchase of Property. Company is purchasing the real property described on Exhibit "A" attached hereto (the "Property") upon which the Company anticipates constructing the Improvements as defined below on a portion of the Property (the "Company Store Parcel"). Company shall take all steps necessary or advisable to complete the purchase of the Property and to obtain marketable title thereto as promptly as possible. In the event that Company does not close on the purchase of the Property on or before November 30, 2007, then this Agreement shall be null and void. 2. Improvements by Company. It is anticipated that Company shall construct on the Property a building consisting of approximately 162,340 square feet, and related landscape, outdoor storage for building materials, warehousing, and parking (the "Improvements"), all as set forth on the site plan attached hereto as "Exhibit B." The Improvements shall be constructed in accordance with all applicable City, state, and federal building codes and shall comply with all applicable City ordinances or any variances to the applicable City ordinances granted thereto. It is contemplated that the taxable value upon completion of the land and building for the Menards project will be $7,000,000. 3. Dirtwork. The parties acknowledge that City has planned a project (the "Drainage Project") to improve drainage of surface waters in the general vicinity of the Property toward Virden Creek, which lies to the east and north of the Property. The Drainage Project consists of work that includes but is not limited to earthwork and installation of culverts, headwalls, and concrete ditch bottoms. An aerial map and depiction of the Drainage Project area is attached hereto as "Exhibit C." The parties further acknowledge that the Drainage Project will require the movement of soil on the Property and neighboring lands to create ditches for the collection and movement of surface water and that Company has a need for additional soils to properly construct the Improvements on the Property. Recognizing the mutual advantages to be realized by each party in working cooperatively to achieve their respective objectives, the parties agree as follows: A. City will obtain all necessary approvals and consents from regulatory authorities and affected landowners to undertake the Drainage Project. B. Company will undertake and perform at its sole cost and expense all work necessary to excavate, construct, and complete the earthwork and preliminary grading for the Drainage Project pursuant to the design, plans, and specifications prepared and provided by City as project # A5 , dated (the "Specifications"). Company acknowledges that it has received a complete copy of the Specifications from City, which are voluminous and for the convenience of the parties are not attached hereto. The work of Company and its agents shall be done in a good and workmanlike manner and shall meet or exceed all applicable construction standards. Company shall remove and dispose of all excess soils from the Drainage Project area when City has determined in good faith that such soils are not needed for the Drainage Project. Company may utilize any and all such soils upon the Property for fill, grading, and otherwise to prepare the Property for construction of the Improvements. Company may not remove more soil from the Drainage Project area than is necessary for proper excavation, construction, and completion of same. Company will provide erosion control as required by applicable law for all stored soils. C. Upon completion of the Drainage Project by Company and acceptance of same by City, City will make a grant to Company in an amount equal to the cost and expense of labor and materials incurred by Company in performing and completing said work for the Drainage Project, not to exceed the good faith estimate made by City at the time the parties agree to commence the work of said project. Any cost or expense in excess of the grant made by City shall be the sole liability of Company, unless the parties otherwise provide by amendment to this Agreement. The parties agree that copies of contractor invoices and associated lien waivers will constitute sufficient proof of such costs and expenses and Company's payment of same. City shall have the right to review the unit prices prior to initiation of this work. D. In lieu of Ccmpany carrying out the work of the Drainage Project and in lieu of making the grant provided for in paragraphs B and C above of this Section 3, City may elect, at its sole option and before Company begins to let contracts for said work, to undertake and perform all of said work at its sole cost and expense. In such event City shall work with Company to deliver excess soils 2 from the Drainage Project area for Company's use in improving the Property as contemplated by this Agreement. Company shall be solely responsible, at its own cost and expense, to remove all delivered soils from the Property that are not needed by Company to complete the Improvements. 4. Public Improvements. The parties acknowledge that, in connection with the development contemplated by this Agreement, Heath Street will be extended to the eastern side of U.S. Highway 63 (also referred to a Logan Avenue) and that the intersection of Heath Street and U.S. Highway 63 will become a fully signalized intersection. To facilitate completion of the intersection and to achieve better efficiency and coordination with other work being done by Company pursuant to this Agreement, the parties agree as follows: A. Company agrees to undertake and perform all work (the "Signal Work") necessary to construct, erect, and install all traffic signals at the intersection and related poles, armatures, lighting, concrete pads, and wiring. The work of Company and its agents shall be pursuant to the design, plans, and specifications prepared and provided by City, shall be done in a good and workmanlike manner, and shall meet or exceed all applicable construction standards. B. Company agrees to undertake and perform all other improvements reasonably necessary in connection with the development project, including but not limited to frontage roads, water main, sanitary and storm sewer (collectively, the "Public Improvements"). The work of Company and its agents shall be pursuant to the design, plans, and specifications prepared by Company and approved by City, shall be done in a good and workmanlike manner, and shall meet or exceed all applicable construction standards. C. Company shall undertake and perform the Signal Work and the Public Improvements at its sole cost and expense and at no cost to the City. 5. Timeliness of Construction. It is anticipated that Company shall substantially complete construction of the Improvements by October 1, 2010. If Company has not obtained a building permit and begun in good faith the construction of the Improvements upon the Property by July 1, 2009, this Agreement may be cancelled at the sole option of City. If construction has not begun by July 1, 2009, but the development of the project is still imminent, the City Council may, but shall not be required to, grant an extension of time for the construction of the Improvements. If construction has commenced by July 1, 2009 and is stopped and/or delayed as a result of an act of God, war, civil disturbance, court order, labor dispute, fire, or other cause beyond the reasonable control of Company, the requirement that construction is to be substantially completed by October 1, 2010 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 this Agreement may be cancelled at the sole option of City. 3 6. Minimum Assessment Agreement. Company acknowledges and agrees that it will pay when due all taxes and assessments, general or special, and all other lawful charges whatsoever levied upon or assessed or placed against the Property. Company further agrees that, after completion of the Improvements and prior to January 1, 2032, it will not seek or cause a reduction in the taxable valuation for the Company Store Parcel, which shall be fixed for assessment purposes, below the aggregate amount of$7,000,000 ("Minimum Actual Value"), through: (i) willful destruction of the Property, 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 sign the agreement attached as Exhibit "D" at closing. 7. Property Tax Rebates. Provided that Company has completed the Improvements as set forth in Section 2 and has executed the Minimum Assessment Agreement as set forth in Section 6, the City agrees to rebate property taxes (with the exceptions noted below) each fiscal year for ten consecutive years, starting in "Year One" (defined below). Rebates will be in an amount equal to one hundred percent (100%) of property taxes for any taxable value over the January 1, 2007 value of $74,360.00. Rebates are payable in respect of a given year only to the extent that Company has actually paid general property taxes due and owing for such year, subject to the further limitations of the next paragraph. The City will pay rebates semi-annually. The taxable value of the Property as a result of the Improvements must be increased by a minimum of 10°%o and must increase the annual tax by a minimum of $500.00. This 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. The first year in which a rebate may be given ("Year One") shall be the first full year for which the assessment is based upon the completed value of the Improvements and not a prior year for which the assessment is based solely upon the value of the land or upon the value of the land and a partial value of the Improvements, due to partial completion of the Improvements or a partial tax year. Rebates shall not be payable with respect to any outlots that Company may sell or improve. Rebates are payable only with respect to property taxes paid on the Company Store Parcel for Company's facility as depicted on Exhibit "B" hereto. If the Property consists of excess land that Company intends to sell or lease to third parties, the parties agree to cooperate with the county assessor to identify the area comprising 4 the Company Store Parcel and to create an appropriate tax parcel for assessment, payment, and rebate of property taxes as contemplated by this Agreement. 8. 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. 9. Representations and Warranties of Company. Company hereby represents and warrants as follows: A. Company is not prohibited from consummating the transaction contemplated in this Agreement by any law, regulation, agreement, instrument, restriction, order or judgment. B. Company is duly organized, validly existing, and in good standing under the laws of the state of its organization and is duly qualified and in good standing under the laws of the State of Iowa. C. Company has full right, title, and authority to execute and perform this Agreement and to consummate all of the transactions contemplated herein, and each person who executes and delivers this Agreement and all documents to be delivered to City hereunder is and shall be authorized to do so on behalf of Company. 10. 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, to Menard, Inc., 4777 Menard Drive, Eau Claire, Wisconsin 54703, facsimile number 715-876-5960, Attention: Vice President of Real Estate, with a copy'to the Senior Corporate Counsel. 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 5 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. 11. 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. 12. Severability. Each provision, section, sentence, clause, phrase, and word of this Agreement is intended to be severable. If any portion of this Agreement shall be deemed invalid or unenforceable, whether in whole or in part, the offending provision or part thereof shall be deemed severed from this Agreement and the remaining provisions of this Agreement shall not be affected thereby and shall continue in full force and effect. If, for any reason, a court finds that any portion of this Agreement is invalid or unenforceable as written, but that by limiting such provision or portion thereof it would become valid and enforceable, then such provision or portion thereof shall be deemed to be written, and shall be construed and enforced, as so limited. 13. 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. Binding Effect. This Agreement shall be binding and shall inure to the benefit of the parties and their respective successors, assigns, legal representatives, and future owners of the Property. 15. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. 16. Entire Agreement. This Agreement and the exhibits hereto, including but not limited to the Minimum Assessment Agreement attached hereto as Exhibit "D", 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. 17. Time of Essence. Time is of the essence of this Agreement. 6 IN WITNESS WHEREOF, the parties have executed this Development Agreement as of the date first set forth above. CITY OF WATERLOO, IOWA MENARD, INC. By: By: �' -��QC12011 Timothy J. H , Mayor Mary ProchaPresident Atte : G� Nan y Eck ity Clerk 7 EXHIBIT "A" Legal Description of Property to be Improved ALL THAT PART OF THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 12, TOWNSHIP 89 NORTH, RANGE 13 WEST OF THE FIFTH PRINCIPAL MERIDIAN, BLACK HAWK COUNTY, IOWA, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF SAID SW 1/4 OF THE SW 1/4; THENCE N 0°54'20" W ALONG THE EAST LINE OF SAID SW 1/4 OF THE SW 1/4 A DISTANCE OF 33.00 FEET TO THE NORTH RIGHT OF WAY OF DONALD STREET; THENCE N 89°55'15" W A DISTANCE OF 33.00 FEET TO THE WEST RIGHT OF WAY OF EAST 4TH STREET AND THE SOUTHEAST CORNER OF PARCEL "F" (RECORDED AS DOC. 2004 22550); THENCE N 0°54'20" E 508.48 FEET ALONG THE SAID WEST RIGHT OF WAY TO THE NORTHEAST CORNER OF PARCEL "E" (RECORDED AS DOC. 2003 33301) AND THE POINT OF BEGINNING; THENCE N 89°55'30" W 628.15 TO THE NORTHWEST CORNER OF SAID PARCEL "E"; THENCE N 0°38'48" W 129.41 FEET; THENCE S 89°09'36" W 201.09 FEET; THENCE N 0°50'24" W 28.00 FEET; THENCE S 89°09'36" W 180.00 FEET; THENCE N 0°50'24" W 81.00 FEET; THENCE S 89°09'36" W 29.00 FEET TO THE SOUTHEAST CORNER OF LOT 1, LOGAN PLAZA FIRST ADDITION, WATERLOO, BLACK HAWK COUNTY, IOWA; THENCE N 0°49'S1" W 297.30 FEET ALONG THE EAST LINE OF LOT 1 AND LOT 2 OF SAID ADDITION; THENCE N 89°10'09" E 63.05 FEET ALONG THE SOUTH LINE OF TRACT A IN SAID ADDITION TO THE SOUTHEAST CORNER OF SAID TRACT A; THENCE N 0°50'O1" W 239.29 FEET ALONG THE EAST LINE OF TRACT A AND LOT 3 OF SAID ADDITION TO THE NORTHEAST CORNER OF SAID LOT 3 AND THE NORTH LINE OF THE SW 1/4 OF THE SW 1/4; THENCE S 89°38'08" E 973.47 FEET ALONG SAID NORTH LINE TO THE WEST RIGHT OF WAY OF EAST 4TH STREET; THENCE S 0°55'31" E 776.94 FEET ALONG SAID WEST RIGHT OF WAY TO THE POINT OF BEGINNING, CONTAINING 16.681 ACRES, AND IS SUBJECT TO EASEMENTS AND RESTRICTIONS OF RECORD. AND THE NORTH 120 FEET OF THE SOUTH 136 FEET OF THE WEST 363 FEET OF THE NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 12, TOWNSHIP 89 NORTH, RANGE 13 WEST OF THE 5TH P.M., IN THE CITY OF WATERLOO, BLACK HAWK COUNTY, IOWA, EXCEPT LEGAL HIGHWAYS. AND ALL THAT PART THE THE NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 12, TOWNSHIP 89 NORTH, RANGE 13 WEST OF THE FIFTH PRINCIPAL MERIDIAN, BLACK HAWK COUNTY, IOWA, LYING SOUTH OF RALSTON ROAD AS ESTABLISHED BY 420 DEEDS 475 EXCEPT THE NORTH 120 FEET OF THE SOUTH 136 FEET OF THE WEST 363 FEET THEREOF AND EXCEPT THE EAST 33 FEET THEREOF AND EXCEPT THAT PART THEREOF CONVEYED T THE STATE OF IOWA IN 547 LD 447 AND FURTHER EXCEPT PARCEL "D" IN PLAT OF SURVEY DOC. #2003-05489. AND A PART OF THE NE '% SW % SECTION 12, T-89-N, R-13-W OF THE FIFTH PRINCIPAL MERIDIAN, BLACK HAWK COUNTY BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE S % CORNER OF SAID SECTION 12; THENCE N 00°53'50"W ALONG THE EAST LINE OF SW % OF THE SAID SECTION 12, 1310.50 FEET TO THE POINT OF BEGINNING. THENCE S89°38'06"W, ALONG THE SOUTH LINE OF THE NE % SW % OF SAID SECTION, 1297.78 FEET TO THE EAST RIGHT OF WAY LINE OF E. 4TH STREET; THENCE N00°55'45"W ALONG SAID EAST RIGHT OF WAY, 667.02 FEET; THENCE S89°56'50"E, 1032.27 FEET; THENCE S65°38'15"E, 294.10 FEET TO THE EAST LINE OF THE NE % SW % OF SAID SECTION; THENCE S00°53'50"E, ALONG SAID EAST LINE, 536.47 FEET TO THE POINT OF BEGINNING. 2 EXHIBIT "B" Site Plan r I —, .� L I a 7 , N i 1p , I A t I ig pia@ i .¢ tt¢.411 A 4 r 1 g 1 1 I '! R_ airk ti , , IM . , »fry` 1F €Fi o a 1` eN S - R¢ I, N 1 1 ,, I 3 9¢ a �"r^ Pam' 1 i g,: IO Ill Z K o I n I I gil 3. NfN ° D 3 t J A al e a sa d ji a+ a a 1 hi 1dill:,9 ¢° NS33 D^ 3¢'. € n Tom— `^,S H a z y d 3 a3 3°6 °3° c' l� , J ii t $S. D !Y i Z1II gigi4 AfV A + Pee sea 6f iS 1 iaS d 3 a : EXHIBIT "C" Aerial map and depiction of Drainage Project area ..,.. ,_ ,. . ,„ ,, ,. , _ '.i.r, 1' _ , - /1 _ ., 1, ' '''---;\:- ' ''''': JO :,-;..-.5,:. ;,';,-,,,, 7..,-'.i,-1-7-.''',''''',. . -',1: :' ' '.' ''' ® 0w 0 i it tea„ .dZ ''.5! te) / ,,„ I CII II fr- • i Q i % ', . / - - - 1 f ij • ( • ,• ILI I `ry 1, +. 1 f ,. e zj EXHIBIT "D" MINIMUM ASSESSMENT AGREEMENT This Minimum Assessment Agreement (the "Agreement") is entered into as of this day of , 2007, by and among the CITY OF WATERLOO, IOWA ("City"), Menard, Inc. ("Developer"), and the COUNTY ASSESSOR of the City of Waterloo, Iowa ("Assessor"). WITNESSETH: WHEREAS, on or before the date hereof the City and Developer have entered into a development agreement (the "Development Agreement") regarding certain real property, described in Exhibit "A" thereto, located in the City; and WHEREAS, it is contemplated that pursuant to the Development Agreement, the Developer will undertake the development of an area ("Project") within the City and within the Logan Plaza urban renewal area; and WHEREAS, pursuant to Iowa Code § 403.6, as amended, the City and the Developer desire to establish a minimum actual value for the land and the building(s) pursuant to this Agreement and applicable only to the Project, which shall be effective upon substantial completion of the Project and from then until this Agreement is terminated pursuant to the terms herein and which is intended to reflect the minimum actual value of the land and buildings as to the Project only; and WHEREAS, the City and the Assessor have reviewed the preliminary plans and specifications for the improvements (the "Improvements") which the parties contemplate will be erected as a part of the Project. NOW, THEREFORE, the parties hereto, in consideration of the promises, covenants, and agreements made by each other, do hereby agree as follows: 1. Upon substantial completion of construction of the Improvements by the Developer, the minimum actual taxable value which shall be fixed for assessment purposes for the land and Improvements to be constructed thereon by the Developer as a part of the Project shall not be less than $7,000,000 ("Minimum Actual Value") until termination of this Agreement. The parties anticipate that construction of the Improvements will be substantially completed on or before October 1, 2010. 2. The Minimum Actual Value herein established shall be of no further force and effect, and this Minimum Assessment Agreement shall terminate, on December 31, 2031. Nothing herein shall be deemed to waive the Developer's rights under Iowa Code § 403.6, as amended, to contest that portion of any actual value assignment made by the Assessor in excess of the Minimum Actual Value established herein. In no event, however, shall the Developer seek or cause the reduction of the actual value assigned below the Minimum Actual Value established herein during the term of this Agreement. Commencing with the assessment of January 1, 2032, no consent from the City shall be necessary for the Developer to contest its taxable valuations in full. 3. This Agreement shall be promptly recorded by the City with the Recorder of Black Hawk County, Iowa. The City shall pay all costs of recording. 4. Neither the preambles nor provisions of this Agreement are intended to, or shall be construed as, modifying the terms of the Development Agreement. 5. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties, including but not limited to future owners of the Project property. CITY OF WATERLOO, IOWA MENARD, INC. By: By: (--\sw.0( �✓ Timothy J. r y, May Mary Prochaska, Vice President Attes : Nancy cke ity Clerk STATE OF IOWA ) ) ss. COUNTY OF BLACK HAWK ':, ) On this day of - ; 2007, before me, a Notary Public in and for the State of Iowa, personally appeared Timothy J. Hurley and Nancy Eckert, 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. 2 ota Public 3 STATE OF WISCONSIN ) ) ss. COUNTY OF EAU CLAIRE ) Subscribed and sworn to before me on - i "ar7 , 200$, by Mary Prochaska as Vice President of Menard, Inc. '-'''" . (/ /3W/iic.,/:/ =g- z. Notary Publi , State of iscon4in ��'`,„,OFW�so��• ! m. i/ s'Tfa4 , 1` er_ilitp' Jz 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 Seven Million Dollars ($7,000,000) in the aggregate, 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 , 2007, by , Assessor for Black Hawk County, Iowa. Notary Public n c