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HomeMy WebLinkAboutKL Properties LLC - Development Agreement -(RECORDED) 12.15.2025 2026-01017 RECORDED: 01/23/2026 03:28:59 PM RECORDING FEE: $27.00 REVENUE TAX: $ COMBINED FEE: $27.00 SANDIE L. SMITH, RECORDER BLACK HAWK COUNTY, IOWA .45.. Prepared by Christopher S. Wendland, P.O. Box 596, Waterloo, IA 50703. 319-234-5701 AMENDMENT TO DEVELOPMENT AGREEMENT This Amendment to Development Agreement (the "Amendment") is entered into as of `-c l S , 2025 by and between KL Properties, L.L.C. (the "Company") and the City of Waterloo, Iowa (the "City"). RECITALS A. Company and City are parties to that certain Development Agreement dated October 17, 2022 and recorded January 17, 2023 as Doc. No. 2023-10110 (the "DA") concerning the development of property as described in the DA. B. The parties desire to amend the DA to modify the terms as set forth in this Amendment to provide reimbursement to Company for certain Project expenses incurred to extend sanitary sewer service and additional electric service to the Property because the Property was split from a larger parcel. NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree to amend the DA to add new terms or modify existing terms as set forth herein: 1 . Tax Rebates. Provided that Company has Substantially Completed the Improvements before the Completion Deadline and provided that City has verified that any Project element not requiring a permit has also been Substantially Completed, City agrees to rebate property tax (with the exceptions noted below) with respect to the Improvements, as follows: Year One through Year Two 80% rebate each year Year Three 75% rebate Year Four 60% rebate (each such payment is a "Rebate") for any taxable value over the initial base value of $900.00. 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 Page 2 and owing for such Fiscal Year and(b)the city council has made an appropriation for the payment of the Rebate. To receive a Rebate for a given Fiscal Year,Company must,within twelve(12)months after the due date of the last installment of the property taxes for the respective Fiscal Year(i.e.,the"March Installment"),submit a completed Rebate request to City on the form provided by or otherwise satisfactory to City. A failure to timely submit a request for a Rebate for a Fiscal Year will result in a forfeiture of the right to request a Rebate for such Fiscal Year. City agrees to consider a completed application for a Rebate within sixty(60)days after submission of the application to City. The taxable value of the Property as a result of the 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 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 all Improvements on the Property are Substantially Completed prior to January 1,2024 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 1,2024 assessed value would be for the Fiscal Year ending June 30,2026,with the taxes payable one- half by September r Se be 30,2025 and one-half by March 31,2026,then the first Rebate could be applied for after March 31,2026 and prior to April 1,2027. 2. Limitations on Payment of Rebates. A. Each payment of a Rebate is subject to annual appropriation by the city council each fiscal year.City has no obligation to make any payments to Company as contemplated under the Agreement until the city council annually appropriates the funds necessary to make such payments.The right of non- appropriation reserved to City in this paragraph is intended by the parties,and shall be construed at all times,so as to ensure that City's obligation to make future payments of Rebates shall not constitute a legal indebtedness of City within the meaning of any applicable constitutional or statutory debt limitation prior to the adoption of a budget which appropriates funds for the payment of that installment or amount. In the event that any of the provisions of the 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 the Agreement or the application thereof to any circumstance is so suspended,the suspension shall Page 3 not affect other provisions of the Agreement which can be given effect without the suspended provision. To this end the provisions of the Agreement are severable. B. Notwithstanding the provisions of Section 1 above, City shall have no obligation to make a payment of a Rebate to Company if at any time during the term hereof City fails to appropriate funds for payment; City receives an opinion from its legal counsel to the effect that the use of Tax Increments resulting from the Property and Improvements to fund a Rebate payment to Company, as contemplated under Section 1 above, is not, based on a change in applicable law or its interpretation since the date of the Agreement, authorized or otherwise an appropriate urban renewal activity permitted to be undertaken by City under the Urban Renewal Act or other applicable provisions of the Code, as then constituted or under controlling decision of any Iowa court having jurisdiction over the subject matter hereof; or City's ability to collect Tax Increment from the Improvements and Property is precluded or terminated by legislative changes to Iowa Code Chapter 403. Upon occurrence of any of the foregoing circum- stances, City shall promptly forward notice of the same to Company. If the circumstances continue for a period during which two (2) annual Rebate payments would otherwise have been paid to Company under the terms of Section 1, then City may terminate the Agreement, without penalty or other liability to City, by written notice to Company. C. For purposes of the 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 the Agreement, the provisions of Iowa Code § 403.19 and the ordinance governing the Urban Renewal Plan. 3. Conditions to City Funding. A. The complete or initial funding by City of the Rebates and other Project commitments shall be deemed an agreement of the parties that the applicable conditions to disbursement of funds shall, as of the date of such funding, have been satisfied or waived. If the conditions set forth in this Section are not satisfied at a Rebate disbursement date, the Agreement shall terminate unless a new disbursement date is established by amendment to the Agreement. The termination of the Agreement shall be the sole remedy available to City or Company if, for whatever reason, a condition set forth in this Section is not satisfied at a Rebate payment date, it being understood that each party shall nonetheless incur costs and liabilities prior thereto for which they alone are responsible. City and Company each expressly assumes all responsibility for the costs and liabilities they may each so incur prior to a Rebate payment date and agree to indemnify and hold each other harmless therefrom. B. It is recognized and agreed that the ability of the City to perform the obligations described in the Agreement, including but not limited to the Rebate payments, is subject to completion and satisfaction of certain separate city Page 4 council actions and required legal proceedings relating to the creation of a tax increment financing (TIF) district and/or amendment of the urban renewal plan, including the holding of public hearings on the same. Further, all the obligations of City under the Agreement are subject to fulfillment, on or before each Rebate payment date, of each of the following conditions precedent: (i) The representations and warranties made by Company in Section 9 of the Agreement shall be true and correct as of the Rebate disbursement date with the same force and effect as if made at such date. (ii) Company shall be in material compliance with all the terms and provisions of the Agreement. (iii) There has not been, as of the Rebate disbursement date,of substantial change for the worse in the financial resources and ability d 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 the Agreement. 4. Obligations Contingent. Each and every obligation of City under the Agreement ent 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 g all amendment of the urban renewal plan applicable to the Property and/or project aea, of which must be completed within 180 days from the date the Agreement is approve benefit or d by the City council. If such completion does Ho then any conveyance, within said 180-day period is subject to incentive of any type provided by City hereund reverte r of title, revocation, repayment or other appropriate action to restore such and in property, benefit or incentive to City, and Company agrees to cooperate diligently agreesor failing such restoration Company ood faith with any reasonable request by City to effectuate the restoration o sa g to be liable for same or for the lue thereof, pl us 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. 5. Amendment. Section 12.A of the DA is amended to strike the last sentence therefrom and to substitute the following new sentence in its place: "Further, after suspensionperformance of in the manner set forth above, City may terminate this Agreement and exercise any and all remedies available at law, equity, contract or otherwise, including but not limited to recovery of any sums paid by City to Company before the date of termination as set forth in this Agreement. 6. General. Except as modified herein, the DA shall continue unmodified in full force and effect. Terms in this Amendment that are capitalized but not definedThe DA herein will have the same meanings herein that are ascribed to them in the DA. and this Amendment shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. Page 5 IN WITNESS WHEREOF, the parties have executed this Amendment to Development Agreement by their duly authorized representatives as of the date first set forth above. CITY OF WATERLOO, IOWA KL PROPERTIES, L.L.C. By: By: _2._ Quentin Hart, Mayor y Krystal L. Schmitz Managing Member Attest: elley F Ichle, City Clerk Prepared by Christopher S.Wendland, P.O. Box 596,Waterloo, IA 50703. 319-234-5701 AMENDMENT TO DEVELOPMENT AGREEMENT This Amendment to Development Agreement (the "Amendment") is entered into as of -- 1 , 2025 by and between KL Properties, L.L.C. (the "Company") and the City of Waterloo, Iowa (the "City"). RECITALS A. Company and City are parties to that certain Development Agreement dated October 17, 2022 and recorded January 17, 2023 as Doc. No. 2023-10110 (the "DA") concerning the development of property as described in the DA. B. The parties desire to amend the DA to modify the terms as set forth in this Amendment to provide reimbursement to Company for certain Project expenses incurred to extend sanitary sewer service and additional electric service to the Property because the Property was split from a larger parcel. NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree to amend the DA to add new terms or modify existing terms as set forth herein: 1. Tax Rebates. Provided that Company has Substantially Completed the Improvements before the Completion Deadline and provided that City has verified that any Project element not requiring a permit has also been Substantially Completed, City agrees to rebate property tax (with the exceptions noted below) with respect to the Improvements, as follows: Year One through Year Two 80% rebate each year Year Three 75% rebate Year Four 60% rebate (each such payment is a "Rebate") for any taxable value over the initial base value of $900.00. 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 Page 2 and owing for such Fiscal Year and (b) the city council has made an appropriation for the payment of the Rebate. To receive a Rebate for a given Fiscal Year, Company must, within twelve (12) months after the due date of the last installment of the property taxes for the respective Fiscal Year (i.e., the "March Installment"), submit a completed Rebate request to City on the form provided by or otherwise satisfactory to City. A failure to timely submit a request for a Rebate for a Fiscal Year will result in a forfeiture of the right to request a Rebate for such Fiscal Year. City agrees to consider a completed application for a Rebate within sixty (60) days after submission of the application to City. The taxable value of the Property as a result of the 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 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 all Improvements on the Property are Substantially Completed prior to January 1 , 2024 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, 2024 assessed value would be for the Fiscal Year ending June 30, 2026, with the taxes payable one- half by September 30, 2025 and one-half by March 31, 2026, then the first Rebate could be applied for after March 31, 2026 and prior to April 1, 2027. 2. Limitations on Payment of Rebates. A. Each payment of a Rebate is subject to annual appropriation by the city council each fiscal year. City has no obligation to make any payments to Company as contemplated under the Agreement until the city council annually appropriates the funds necessary to make such payments. The right of non- appropriation reserved to City in this paragraph is intended by the parties, and shall be construed at all times, so as to ensure that City's obligation to make future payments of Rebates shall not constitute a legal indebtedness of City within the meaning of any applicable constitutional or statutory debt limitation prior to the adoption of a budget which appropriates funds for the payment of that installment or amount. In the event that any of the provisions of the 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 the Agreement or the application thereof to any circumstance is so suspended, the suspension shall Page 3 not affect other provisions of the Agreement which can be given effect without the suspended provision. To this end the provisions of the Agreement are severable. B. Notwithstanding the provisions of Section 1 above, City shall have no obligation to make a payment of a Rebate to Company if at any time during the term hereof City fails to appropriate funds for payment; City receives an opinion from its legal counsel to the effect that the use of Tax Increments resulting from the Property and Improvements to fund a Rebate payment to Company, as contemplated under Section 1 above, is not, based on a change in applicable law or its interpretation since the date of the Agreement, authorized or otherwise an appropriate urban renewal activity permitted to be undertaken by City under the Urban Renewal Act or other applicable provisions of the Code, as then constituted or under controlling decision of any Iowa court having jurisdiction over the subject matter hereof; or City's ability to collect Tax Increment from the Improvements and Property is precluded or terminated by legislative changes to Iowa Code Chapter 403. Upon occurrence of any of the foregoing circum- stances, City shall promptly forward notice of the same to Company. If the circumstances continue for a period during which two (2) annual Rebate payments would otherwise have been paid to Company under the terms of Section 1, then City may terminate the Agreement, without penalty or other liability to City, by written notice to Company. C. For purposes of the 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 the Agreement, the provisions of Iowa Code § 403.19 and the ordinance governing the Urban Renewal Plan. 3. Conditions to City Funding. A. The complete or initial funding by City of the Rebates and other Project commitments shall be deemed an agreement of the parties that the applicable conditions to disbursement of funds shall, as of the date of such funding, have been satisfied or waived. If the conditions set forth in this Section are not satisfied at a Rebate disbursement date, the Agreement shall terminate unless a new disbursement date is established by amendment to the Agreement. The termination of the Agreement shall be the sole remedy available to City or Company if, for whatever reason, a condition set forth in this Section is not satisfied at a Rebate payment date, it being understood that each party shall nonetheless incur costs and liabilities prior thereto for which they alone are responsible. City and Company each expressly assumes all responsibility for the costs and liabilities they may each so incur prior to a Rebate payment date and agree to indemnify and hold each other harmless therefrom. B. It is recognized and agreed that the ability of the City to perform the obligations described in the Agreement, including but not limited to the Rebate payments, is subject to completion and satisfaction of certain separate city Page 4 council actions and required legal proceedings relating to the creation of a tax increment financing (TIF) district and/or amendment of the urban renewal plan, including the holding of public hearings on the same. Further, all the obligations of City under the Agreement are subject to fulfillment, on or before each Rebate payment date, of each of the following conditions precedent: (i) The representations and warranties made by Company in Section 9 of the Agreement shall be true and correct as of the Rebate disbursement date with the same force and effect as if made at such date. (ii) Company shall be in material compliance with all the terms and provisions of the Agreement. (iii) There has not been, as of the Rebate disbursement date, a substantial change for the worse in the financial resources and ability of Company, or a substantial decrease in the financing commitments secured by Company for construction of the Improvements, which change(s) makes it likely, in the reasonable judgment of the City, that Company will be unable to fulfill its covenants and obligations under the Agreement. 4. Obligations Contingent. Each and every obligation of City under the Agreement is expressly made subject to and contingent upon City's completion of all procedures, hearings and approvals deemed necessary by City or its legal counsel for amendment of the urban renewal plan applicable to the Property and/or project area, all of which must be completed within 180 days from the date the 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. 5. Amendment. Section 12.A of the DA is amended to strike the last sentence therefrom and to substitute the following new sentence in its place: "Further, after suspension of performance in the manner set forth above, City may terminate this Agreement and exercise any and all remedies available at law, equity, contract or otherwise, including but not limited to recovery of any sums paid by City to Company before the date of termination as set forth in this Agreement." 6. General. Except as modified herein, the DA shall continue unmodified in full force and effect. Terms in this Amendment that are capitalized but not defined herein will have the same meanings herein that are ascribed to them in the DA. The DA and this Amendment shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. Page 5 IN WITNESS WHEREOF, the parties have executed this Amendment to Development Agreement by their duly authorized representatives as of the date first set forth above. CITY OF WATERLOO, IOWA KL PROPERTIES, L.L.C. By: nBY: Quentin Hart, Mayor ( Krystal L. Schmitz Managing Member Attest: elley Ichle, City Clerk