HomeMy WebLinkAboutHQAA-JSA, LLC-Development Agreement-03.17.2008 DEVELOPMENT AGREEMENT
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This Agreement is made and entered into this day of Ilia r�h
2008, by and between HQAA-•JSA, LLC ("Company") and the City of Waterloo, Iowa
("City").
WHEREAS, City considers economic development within the City a benefit to the
community and is willing for the total good and welfare of the community to provide
financial incentives so as to encourage that goal, and
WHEREAS, Company is willing and able to renovate and develop a mixed use
commercial/housing building on property located in the Downtown Waterloo Urban
Renewal and Redevelopment Plan, described as Parcels 8913-25-101-011 8913-25-
101-012 and legally described on attached Exhibit "A" (the "Property"), and
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS
HEREINAFTER CONTAINED, the parties agree as follows:
1. Tax Rebates. Provided that Company has completed the Improvements as
set forth in paragraph 2 and has executed the minimum assessment agreement as set
forth in paragraph 3, the City agrees to property tax rebates as follows (with the
exceptions noted below):
a. Year One - 100% Rebate
b. Year Two - 100% Rebate
c. Year Three - 100% Rebate
d. Year Four - 100% Rebate
e. Year Five - 100% Rebate
f. Year Six - 100% Rebate
g. Year Seven - 100% Rebate
h. Year Eight - 100% Rebate
Year Nine - 100% Rebate
j. Year Ten - 100% Rebate
for any value over the January 1, 2007 value of $263,700.00.
The taxable value of the property as a result of development must be increased
by a minimum of 10% and increase the annual tax by a minimum of $500.00. This
program is not applicable to (i.e., rebates will not be given for) the Self-Supported
Municipal Improvement District levy or other special tax assessments and/or the 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 of 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
Property or upon the value of the Property and a partial value of the Improvements due
to partial completion of the Improvements or a partial tax year.
2. Construction. Company shall rehabilitate the structures commonly known
as 112-116 E. 4th Street and 118 E. 4th Street, Waterloo, Iowa, for an estimated cost of
$1,500,000.00 in improvements (the "Improvements"). The Improvements are to be
constructed in accordance with all applicable City, State, and Federal building codes
and be in compliance with all applicable City ordinances and other applicable law. The
parties agree that Company's commitment to undertake the project and to construct the
Improvements in timely fashion constitutes a material inducement for the City to offer
tax rebatements. Company must obtain a building permit and begin construction within
four (4) months from the date of this Agreement and be completed with construction
within twenty-four (24) months from the date of this Agreement. If, after the expiration
of four (4) months from the date hereof, Company has not begun in good faith the
construction of the Improvements described above upon the Property, this Agreement
shall be null and void. If construction has not begun at the end said four-month period,
but the development of the project is still imminent, the City Council may, but shall not
be required to, consent to an extension of time for the construction of the
Improvements. If development has commenced within the four-month period 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 completed within twenty-four (24) months 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
shall be null and void.
2.1 City Commitments to Aid Construction. As an additional inducement
for Company to undertake the Improvements, and to assist Company in completing the
Improvements, the City hereby extends the following commitments to Company:
a. to approve rental, by Company's future tenants in the Property, of
spaces in the municipal parking ramp commonly known as the "East 5 h Street
Ramp" according to the terms and conditions set forth in a separate written
agreement between the parties;
b. to approve construction by Company of a pedestrian walkway
connecting said ramp with the Property, according to the terms and conditions
set forth in a separate written agreement and supplemental discussions between
the parties, subject to construction of said walkway in accordance with applicable
building codes and to design and construction oversight by Company's licensed
architect;
c. to approve a curb cut in the area fronting the vacant lots in the 100
block of E. 4th Street between buildings located at 118 E. 4th Street and 128 E.
4th Street (the "Vacant Lots"), to enable Company to construct additional off-
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street parking, subject to compliance with applicable ordinances and to submittal
of a site plan showing parking layout;
d. to approve construction by Company of a two-level parking
structure on the Vacant Lots, if requested by Company, with vehicular access to
the second level by means of a connecting bridge between said parking structure
and the E. 5th Street Ramp, subject to construction of said vehicular bridge in
accordance with applicable building codes and to design and construction
oversight by Company's licensed architect;
e. to begin proceedings to vacate the alley, if requested by Company,
and to support said action, otherwise to grant an easement to Company for
parking in the alley and an easement for construction and use of the pedestrian
walkway described in paragraph (b) above and the vehicular bridge described in
paragraph (d) above.
City agrees to work with Company in good faith as necessary to follow through
on the foregoing commitments.
3. 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 Property, and
further agrees that prior to the date set forth in Section 2 of Exhibit "B", it will not cause
a reduction in the real property taxes paid with respect to the Project below the amount
of $ 718,000.00 Dollars ("Minimum Actual Value"). Company agrees to sign
said attached Exhibit "B" concurrently with execution of this Agreement. The parties
agree that if the pedestrian walkway contemplated by Section 2.1(b) above is
constructed, then the Minimum Actual Value will increase and both this Agreement and
the Minimum Assessment Agreement will be amended to reflect the adjusted figure.
4. 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.
5. Representations and Warranties of Company. Company hereby
represents and warrants as follows:
A. Company is not prohibited from consummating the transaction
contemplated in this Agreement by any law, regulation, agreement, instrument,
restriction, order or judgment.
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B. Company is duly organized, validly existing, and in good standing
under the laws of the State of 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.
6. 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 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.
7. 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.
8. 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.
9. 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.
10. Binding Effect. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective successors, assigns, and legal
representatives.
11. 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.
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12. Entire Agreement. This Agreement, together with the Minimum
Assessment Agreement attached hereto as Exhibit "B", 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 as of the date and year written above.
HQAA-JSA, I L
By:
,tame'E. Walsh Jr.,Manager
CITY OF WATERLOO, IOWA
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By:
Timothy J. H Mayor
Attest: /
cksf,SL
Nancy cCit Clerk
y
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EXHIBIT "A"
Legal Description
Lot No. Six(6)except the Southeasterly Sixty(60)feet thereof; and
The Southwesterly Twenty(20)feet of the Northwesterly Eighty(80)feet of Lot No. Three(3)in
Block No. Three(3), in the Original Plat,on the East Side of the Cedar River, in the City of Waterloo,
Black Hawk County, Iowa,excepting that part thereof conveyed to Johanna M. Tippman by Warranty
Deed filed March 31, 1875 and recorded in Town Lot Deed Record P at page 467 and described as
follows: Commencing at a point on the Northwesterly line of said Lot No. Three(3),that is Forty(40)feet
Southwesterly of the most Northerly corner of said Lot; running thence Southwesterly along the
Northwesterly line of said Lot to the center of the Northeasterly Wall of the building known as"Union
Block";thence Southeasterly on the center of said Wall and at right angles to Fourth Street a distance of
Eighty(80)feet,thence Northeasterly and parallel with the Northwesterly line of said Lot to a point that is
Forty(40)feet Southwesterly of the Northeasterly line of said Lot;thence Northwesterly a distance of
Eighty(80)feet to the point of beginning; and
Part of Lot 3, Block 3,Original Plat,on the East Side of the Cedar River, City of Waterloo,Black
Hawk County, Iowa, described as follows: Beginning at a point on the NW-ly line of said Lot that is 40
feet SW-Iy of the most Northerly corner of said Lot;thence SW-ly along said NW-ly line and the SE-ly
line of Fourth Street, to the center line of the NE-ly wall of the building known as"Union Block";thence
SE-ly on the center line of said wall and at right angles to Fourth Street, 80 feet; thence NE-ly parallel with
Fourth Street to a point that is 40 feet SW-Iy from the NE-ly line of said Lot;thence NW-ly 80 feet to the
point of beginning.
MINIMUM ASSESSMENT AGREEMENT
THIS MINIMUM ASSESSMENT AGREEMENT is entered into as of
2008, by and among the CITY OF WATERLOO, IOWA, ("City"), HQAA-JSA, LLC
("Developer"), and the COUNTY ASSESSOR of the City of Waterloo, Iowa
("Assessor").
WITNESSETH:
WHEREAS, on or before the date hereof the City and Developer have entered
into a Development Agreement (the "Agreement") regarding certain real property
located in the City; and
WHEREAS, it is contemplated that pursuant to said Agreement, the Developer
will undertake the development of an area ("Project") within the City and within the
"Downtown Waterloo Urban Renewal and Redevelopment Plan."
WHEREAS, pursuant to Iowa Code section 403.6, as amended, the City and the
Developer desire to establish a minimum actual value for the land and building thereon
pursuant to the Agreement and applicable only to the development, which shall be
effective upon substantial completion of the development 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 building as to the development only; and
WHEREAS, the City and the Assessor have reviewed the preliminary plans and
specifications for the improvements which it is contemplated will be erected as a part of
the development;
NOW, THEREFORE, the parties to this Minimum Assessment Agreement, 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 above-referenced
improvements by the Developer on the property described in Exhibit "A" attached
hereto, 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 development shall not be less than $ 718,000.00 ("Minimum Actual
Value") until termination of this Minimum Assessment Agreement. The parties hereto
agree the construction of the improvements will be substantially completed on or before
January 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
of the twentieth (20th) year after the county assessor first establishes the actual taxable
value of the land and improvements in an amount no less than the Minimum Actual
Value, which the parties agree shall be December 31, 2030, unless this Agreement is
amended to state a different date of termination.
Nothing herein shall be deemed to waive the Developer's rights under Iowa Code
section 403.6(19), as amended, to contest that portion of any actual value assessment
made by the Assessor in excess of the Minimum Actual Value established herein. In no
event, however, shall the Developer seek to reduce the actual value assigned below the
Minimum Actual Value established herein during the term of this Agreement.
The City shall not unreasonably withhold its consent to permit the Developer to
contest its taxable valuations in full, commencing with the assessment of January 1
following the date of termination of this Agreement as provided in this Section 2.
3. This Minimum Assessment Agreement shall be promptly recorded by the
City with the Recorder of Black Hawk County, Iowa, the City paying all costs of
recording.
4. Neither the preambles nor provisions of this Minimum Assessment
Agreement are intended to, or shall be construed as, modifying the terms of the
Agreement between the City and the Developer.
5. This Minimum Assessment Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the parties.
CITY OF WATERLOO, IOWA
By:
Timothy J. Hu ayor
Attest:
By:
Nancy Ec ert, ity Clerk
H AA- A, L
B •
Ames alsh, Jr., M ager
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STATE OF IOWA )
COUNTY OF BLACK HAWK )
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On this day of / , 2008, before me a Notary Public
in and for the State of Iowa, pers pally 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.
Nota Public
STATE OF IOWA, BLACK HAVVK COUNTY, ss:
Acknowledged before me on M c v L t C , 2008, by James E. Walsh,
Jr., as Manager of HQAA-JSA, LLC.
„tui z,„ CHRISTOPHER S.WENDLA'JD d
itit� a L S ezti.e ( 1 z
' Commission Number 197109 �— �
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4w). h1YCONj ILSSIO EXPIRES Notary Public
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PARKING RAMP USE AGREEMENT
This Parking Ramp Use Agreement (the "Agreement") is entered into as of
Marc h 1'7 , 2008, by and between the City of Waterloo, Iowa("City") and HQAA-JSA,
LLC ("Company").
RECITALS
A. Company is the owner of real property located in the 100 block of East 4th Street,
Waterloo, Iowa(the "Company Property"). City and Company are parties to a
development agreement concerning a project to renovate and improve a building
located on the Company Property at 112-116 E. 4th Street (the "HQAA Project").
B. The HQAA Project contemplates that upon completion of improvements the
building will provide space for more than 50 office workers on the upper floors of
the building.
C. By this Agreement, City and Company desire to set forth the terms on which City
will provide parking spaces to Company and its tenants in the E. 5th Street
parking ramp (the "Ramp") and otherwise cooperate with Company on other
matters relating to the Ramp.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises exchanged herein and for
other consideration, the receipt and sufficiency of which is hereby acknowledged, the parties
agree as follows:
1. Lease of Ramp Spaces. The parties acknowledge that City has made
commitments to lease parking spaces in the Ramp to Waterloo Industries Inc. ("WI")pursuant to
a written agreement between them (the "WI Agreement"). City agrees to lease to Company any
spaces in the Ramp, up to a maximum of 50 (the "Spaces"), that are not (a) under lease to WI, (b)
under active option to lease to WI pursuant to receipt by the City of a written notice of option
exercise as provided in the WI Agreement, or(c)under lease to any other person or company for
a term that is more than month-to-month. If City is not able to lease the maximum number of
Spaces to Company upon commencement of this Agreement, then as additional spaces become
available thereafter City shall lease them to Company, at the option of Company, until the
maximum has been reached. If additional spaces in the Ramp become available after the
maximum has been reached, Company shall have a right of first refusal to lease such spaces,
subject to the prior rights of WI, on the same terms that it leases the Spaces. If Company does
not exercise its right of first refusal by delivery of written notice to City within twenty(20) days
of receiving notice from City that spaces are available, then such right of first refusal shall lapse
as to such spaces.
2. Location of Spaces. Subject to availability, Company may designate the location
of the Spaces. From time to time, as other spaces in the Ramp become available,the parties
agree to cooperate to reassign the location of the Spaces as requested by Company.
3. Lease Rate. Company shall pay to City a sum for lease of the Spaces, determined
on a per-space basis, equivalent to the rate paid by WI pursuant to the WI Agreement. Company
will remit the lease payment in equal monthly installments for all Spaces actually leased. The
lease payment shall be made no later than the first day of each month. City may adjust the lease
rate from time to time on the same terms as it may adjust the lease rate to WI pursuant to the WI
Agreement. If any payment from Company is more than fifteen(15) days overdue,then City
may, at its option, charge Company a late fee equal to two percent(2%) of the overdue amount.
4. Future Pedestrian Traffic Connection. City agrees that Company may, at
Company's option and sole cost and expense, make an elevated connecting walkway from one of
its buildings on the Company Property to the Ramp, crossing over the alley between the Ramp
and Company Property. All designs and plans are subject to compliance with applicable building
codes and the City's prior written approval, which approval shall not be unreasonably withheld,
and City agrees to cooperate with Company in good faith in all aspects of this improvement
project. Company agrees to construct the walkway at its sole cost and expense according to
approved designs, plans, and specifications and in a good and workmanlike manner. The parties
agree that design and construction of the project will be undertaken by and/or overseen by a
licensed architect retained by Company. The parties agree that the walkway may include
additional supportive structures to hold HVAC equipment and other mechanical equipment to
service buildings on the Company Property, if the plans for said supportive structures are
approved by a registered architect. The City agrees to grant an easement for said walkway over
any public way if an easement is deemed necessary by Company.
5. Future Vehicular Traffic Connection. City agrees that Company may, at
Company's option and sole cost and expense, make an elevated connecting vehicular bridge from
the Ramp to a two-level parking structure that may be erected on vacant lots in the 100 block of
E. 4th Street between buildings located at 118 E. 4th Street and 128 E. 4th Street. Such bridge
would cross over the alley between the Ramp and said vacant lots. All designs and plans are
subject to compliance with applicable building codes and the City's prior written approval, which
approval shall not be unreasonably withheld, and City agrees to cooperate with Company in good
faith in all aspects of this improvement project. Company agrees to construct the walkway at its
sole cost and expense according to approved designs, plans, and specifications and in a good and
workmanlike manner. The parties agree that design and construction of the project will be
undertaken by and/or overseen by a licensed architect retained by Company. The parties agree
that the bridge may include additional supportive structures to hold HVAC equipment and other
mechanical equipment to service buildings on the Company Property, if the plans for said
supportive structures are approved by a registered architect. The City agrees to grant an easement
for said bridge over any public way if an easement is deemed necessary by Company.
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6. Maintenance of Ramp. City agrees to maintain the Ramp in a condition of good
repair, consistent with the maintenance standards prevailing in commercial parking areas.
7. Notices. Any notice under this Agreement shall be in writing and shall be delivered
in person, by United States registered or certified mail, postage prepaid, or by facsimile, 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 Planner.
b. if to Company,to HQAA-JSA,LLC,315 E. 5th Street,Waterloo, Iowa 50703,
facsimile number 319-232-9579, Attention: James E. Walsh, Jr.
Delivery of notice shall be deemed to occur(i) on the date of delivery when delivered in
person, (ii) three (3) business days following the date of deposit if mailed by United States
registered or certified mail, postage prepaid, or(iii) when transmitted by facsimile so long as the
sender obtains written electronic confirmation from the sending facsimile machine that such
transmission was successful and mails a duplicate copy of the notice to the other party by first
class United States mail at such party's address as set forth above.
8. Entire Agreement; Modification. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof. All exhibits hereto, if any, are hereby
incorporated into and made a part of this Agreement. This Agreement may not be modified or
amended except pursuant to a written instrument executed by both parties.
9. Severability. In the event any provision of this Agreement is held invalid, illegal,
or unenforceable, whether in whole or in part,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 provision of this Agreement is invalid, illegal, or unenforceable as written, but that by
limiting such provision it would become valid, legal, and enforceable, then such provision shall
be deemed to be written and shall be construed and enforced as so limited.
10. Binding Effect. The provisions of this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective personal representatives, successors, and
assigns.
[remainder of page intentionally blank]
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11. Headings and Captions. The title or captions of paragraphs in this Agreement are
provided for convenience of reference only and shall not be considered a part hereof for purposes
of interpreting or applying this Agreement, and such titles or captions do not define, limit,
extend, explain, or describe the scope or extent of this Agreement or any of its terms or
conditions.
12. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF,the parties have executed this Parking Ramp Use Agreement
by their duly authorized representatives as of the date first written above.
HQAA-J A CITY OF WATERLOO, IOWA
By: By:
ames . Wals , Jr., anage Timothy J. Hu Mayor
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Attes
Nancy ckert, 'ty Clerk
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