HomeMy WebLinkAboutDA_MAA_Highlands Enterprises, LLC - 6.1.2026 Prepared by Austin J. McMahon, Lange&McMahon, PLC, Independence, IA 50644 319-334-4488
Return To:ATTN:Community Planning&Development, City of Waterloo, 715 Mulberry Street, Waterloo, IA 50703.
DEVELOPMENT AGREEMENT — Phased Development
This Development Agreement (the "Agreement") is entered into as of
,)u , 2026 by and between Highlands Enterprises, LLC, a Kansas limited
liability company (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, as
amended (the "Urban Renewal Act"), City is engaged in carrying out urban
renewal project activities in an area known as the University Avenue Area
Urban Renewal and Redevelopment Plan Area ("Urban Renewal Area").
B. Company is willing and able to finance and undertake improvements to
renovate property located in the Urban Renewal Area, and legally
described on Exhibit "A" attached hereto (the "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 economic development
within the City, and the City further believes that the Project (defined
below) 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 of Iowa and local laws and requirements under which
the Project has been undertaken and is being assisted by the City.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the parties agree as follows:
1. Development Property. Company owns the Property and will undertake
the Project (defined below) upon the Property.
2. Improvements by Company. Company shall upgrade and renovate the
existing commercial building on the Property (the "Improvements") in phases described
below, in accordance with the Plans as provided in Section 3. Company agrees that the
Improvements shall be constructed in accordance with the terms of this Agreement, the
urban renewal plan applicable to the Property'-, and all applicable City, state, and
federal building codes and shall comply with all applicable City ordinances and other
applicable law. 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 Property, the Improvements, and all site preparation and
development-related work to make any of the Property usable for Company's purposes
as contemplated by this Agreement are collectively referred to as the "Project."
A. Phase 1. Company has completed upgrades and renovations to
the existing structure located on the Property for utilization/operation as a
veteran's clinic of approximately 15,000 square feet in addition to further
improvements to the Property, including improvements to the building exterior
and parking lot, in accordance with the Plans or Modified Plans (defined below)
(all of the foregoing renovations and improvements are collectively referred to as
the "Phase 1 Improvements"). Company's minimum estimated investment in the
Phase 1 Improvements is $2,800,000.
B. Phase 2. Company shall upgrade and renovate, for retail or other
allowable commercial uses, the remaining portion of the existing structure that is
not included in Phase 1, shall further make improvements to the building exterior
and parking lot, and shall otherwise renovate and improve the Property in
accordance with the Plans or Modified Plans (defined below) (all of the foregoing
renovations and improvements are collectively referred to as the "Phase 2
Improvements"). Company's minimum estimated investment in the Phase 1 and
Phase 2 Improvements will not be less than $5,500,000.
3. Construction Plans. Company agrees that it will cause the
Improvements to be made on the Property in substantial conformance with construction
plans (the "Plans") that have been, or will be, 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 such improvements as detailed and
outlined in the Plans. Notwithstanding anything to the contrary contained in this
Agreement, City acknowledges and agrees that the Phase 1 Improvements are
complete and were completed in accordance with the terms and conditions of this
Agreement including, but not limited to, the Plans and the urban renewal plan applicable
to the Property.
If any material modification in the scope, scale or nature of the Plans is
proposed, Company shall submit modified Plans (the "Modified Plans") to the City for
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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
substantially 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 and remain uncured; 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.
If the Plans or Modified Plans are not rejected in writing by City within twenty (20)
days of submission, they shall be deemed to have been approved by the City. If City
rejects the Plans or Modified Plans in whole or in part, City shall provide a written
notification to Company that shall describe with reasonable particularity the manner in
which the Plans or Modified Plans fail to conform to the requirements of this Section. In
such event, Company shall submit new or corrected Plans or Modified Plans within
thirty (30) days after receipt by Company of City's written notification of the rejection.
The provisions of this Section relating to approval, rejection and resubmission of
corrected Plans or Modified Plans shall continue to apply until they have been approved
by the City; provided, however, Company shall submit Plans or Modified Plans which
are approved by City prior to commencement of construction of 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 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 offer the incentives provided
for in this Agreement, and that without said commitment City would not do so.
A. Deadline to complete. Company has already substantially
completed the Phase 1 Improvements. Company or associated Company's
Tenant must obtain a building permit and begin construction of Phase 2
Improvements within Thirty Six (36) months after the date of this Agreement (the
"Phase 2 Start Date") and must Substantially Complete construction within
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eighteen (18) months after starting the Phase 2 Improvements (the "Phase 2
Completion Date"). For purposes of this Agreement, "Substantially Complete"
means the date on which the Improvements have been completed pursuant to
the Plans or Modified Plans to the extent necessary for the City to issue a
certificate of occupancy (or temporary certificate of occupancy) relating thereto
and also the City has verified that any Project element for which no permit was
necessary has been substantially completed in accordance with the Plans or
Modified Plans. All deadlines are subject to Unavoidable Delays as defined in
paragraph B below.
B. Events triggering termination. If Company does not Substantially
Complete construction of the Improvements on the schedule stated above, then
City may terminate this Agreement, subject to applicable notice and cure
provisions contained in this Agreement, as set forth in Section 18, and City and
Company shall then have no further obligation under this Agreement. In any
circumstance where Company's progress on the Project fails to meet the
schedule stated above, then City's Community Planning and Development
Director may, but shall not be required to, consent to an extension of time of up
to twelve (12) months for the construction of the Improvements, and if an
extension is granted but construction of the Improvements has not begun within
such extended period, then any further time extensions will require consent of the
City Council. If development has commenced within the required period(s), as
the same may be extended, and is subsequently stopped or delayed as a result
of an act of God, war, civil disturbance, court order, labor dispute, fire, pandemic,
or other cause beyond the reasonable control of Company (each an
"Unavoidable Delay"), the requirement that construction be completed by the
Completion Deadline shall be tolled for a period of time equal to the period of
Unavoidable Delay.
5. Utilities. Company will be responsible for extending water, sewer,
telephone, telecommunications, electricity, gas and other utility services to any location
on the 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 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 taxable valuation for the Property as improved pursuant to this
Agreement, which shall be fixed for assessment purposes, below the amount of
$5,500,000.00 (the "Minimum Actual Value"), through:
(a) willful destruction, by the Company, of the Property, the
Improvements, or any part of either;
(b) a request to the assessor of Black Hawk County; or
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(c) 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 its execution and
delivery of this Agreement.
8. Tax Rebates. Provided that Company has Substantially Completed the
Improvements before the Phase 2 Completion Deadline, City agrees to rebate property
tax (with the exceptions noted below and subject to reduction by amendment as set
forth in Section 6.A above), as follows:
Year One through Year Fifteen 50% rebate each year
(each such payment is a "Rebate") for any gross assessed taxable value (including both
land value and improvement value) over the initial gross assessed base value of
$1,832,790.00 (the "Initial Base Value").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 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 (the City shall promptly provide a Rebate request form to
the Company upon request by the Company). 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, and the City may not deem a
Rebate request from the Company to be unsatisfactory without first providing Company
a 30-day opportunity to correct any deficiencies in the Rebate request as set forth in
written notice from the City describing with reasonable particularity such deficiencies.
Notwithstanding anything to the contrary herein, City's obligation to pay Rebates shall
terminate immediately upon termination of the MAA for any reason before the end of the
MAA term.
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, 2026 and the Property and
Improvements are assessed as fully completed based on the Plans, as may be revised,
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the property taxes that would be assessed based on the January 1, 2026 assessed
value would be for the Fiscal Year ending June 30, 2028, with the taxes payable one-
half by September 30, 2027 and one-half by March 31, 2028, then the first Rebate could
be applied for after March 31, 2028 and prior to April 1, 2029.
9. 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 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 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 8 hereof, 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 8 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 written 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, then City may terminate this Agreement, without penalty or other
liability to City, by written notice to Company.
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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. City shall have no obligation to pay Rebates from revenues other
than the Tax Increments.
10. 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, this Agreement shall terminate
unless a new disbursement date is established by amendment to this Agreement.
The termination of this Agreement shall be the sole remedy available to City or
Company if, for whatever reason, a condition set forth in this Section is not
satisfied at a 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 this Agreement, including but not limited to the Rebate
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 and amendment of the urban renewal plan,
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
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 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 disbursement date, 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.
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11. 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 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 written 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 in writing, as to the actual progress of Company
with respect to construction of the Improvements.
C.
During construction of the Improvements and thereafter until the MAA termination
date Company will reasonably cooperate 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.
E. Until the MAA termination date Company will maintain, preserve
and keep the 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.
F. The Property will have a taxable value as set forth in the MAA and
any amendments thereto, and Company agrees that the minimum actual value of
the Property and completed Improvements as stated in the MAA and any
amendments thereto will be a reasonable estimate of the actual value of the
Property and 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 Property and related site improvements, will equal
or exceed the assessor's minimum actual value for the Property and
Improvements as set forth in the MAA and any amendments thereto.
G. Until the MAA termination date Company agrees that it will make no
conveyance, lease or other transfer of the Property or any interest therein that
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would cause the 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 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 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 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 Property.
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:
A. It 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.
B. It has all requisite power and authority to own and operate its
properties, to carry on its business as now conducted and as presently proposed
to be conducted, and to enter into and perform its obligations under this
Agreement.
C. This Agreement has been duly and validly authorized, executed
and delivered by Company and, assuming due authorization, execution and
delivery by the other parties hereto, 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.
D. The execution and delivery of this Agreement, the consummation of
the transactions contemplated hereby, and the fulfillment of or compliance with
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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 operating agreement 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. 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.
F. The financing commitments, which Company will proceed with due
diligence to obtain, to finance the construction of the Improvements will be
sufficient to enable Company to successfully complete construction of the
Improvements as contemplated in this Agreement, subject to additional costs
incurred due to Unavoidable Delays.
14. Indemnification and Releases.
A. Other than any act of gross negligence or willful misconduct on the
part of any such indemnified party or its officers, employees or agents, 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 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, or any other person who
may be about the Property or the Improvements, due to any act of negligence or
willful misconduct of any person, other than any act of negligence 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,
gross negligence, 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 condition of the Property and the
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construction, installation, ownership, and operation of the Improvements, or (3)
any hazardous substance or environmental contamination located in or on the
Property.
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 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.
16. No Assignment or Conveyance. Company agrees that it will not sell,
convey, assign or otherwise transfer its interest in the 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, which shall not be unreasonably conditioned, withheld or
delayed. 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. Notwithstanding the foregoing, the Company may (a)
assign its interest in the Property to an entity affiliated with Company by common
ownership or control, and (b) enter into leases for all or any portion of the Property.
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:
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, any part of the Property, or this Agreement, without the prior
written consent of City (subject to Company's rights described in Section 16);
C. Failure by Company to pay, before delinquency, all ad valorem
property taxes levied on or against any of the 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;
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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 the 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
subject to applicable notice and cure periods as provided in this Agreement.
Before exercising such remedy, and upon the occurrence of any Event of
Default, City shall give 30 days' written notice to Company of the Event of Default
(providing specific details and descriptions as to the nature of the Event of
Default), and, thereafter, Company shall have 30 days in which to cure or
commence to cure the Event of Default by providing assurances reasonably
satisfactory to the City that the Event of Default will be cured as soon as
reasonably possible if not curable within 30 days. If the Company's cure efforts
fail, upon termination of this Agreement by the City, City may exercise any 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 as set forth in this
Agreement.
B. Default by City. Whenever any Event of Default in respect of City
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
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the Company that the Event of Default will be cured as soon as reasonably
possible.
C. 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
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 any material 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 provide written notice thereof to Company 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 12911 W. 105th Street, Overland Park, Kansas
66215, Attention: Chris Williams.
13
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) four (4) 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
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.
14
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, including counterparts signed electronically or signed counterparts
transmitted by electronic means, 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.
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.
[signatures on next page]
15
CITY OF WATERLOO, IOWA HIGHLANDS ENTERPRISES, LLC,
a Kansas limited liability company
By: 44.24,_____ By: it/....4. 9_ ,,,
David Boesen , Mayor
Title: Manager
Attest.
Kelley F le, ity Clerk
16
EXHIBIT "A"
Legal Description of Property
PART OF LOTS 1, 2, AND 4 AND ALL OF LOT 3 OF CENTENNIAL SECOND ADDITION IN THE CITY
OF WATERLOO, BLACK HAWK COUNTY, IOWA, AS RECORDED IN PLAT BOOK I AT PAGE 87 IN
THE OFFICE OF THE COUNTY RECORDER, BLACK HAWK COUNTY, IOWA AND ALL OF LOTS 3
AND 4 IN CENTENNIAL ADDITION IN THE CITY OF WATERLOO, BLACK HAWK COUNTY, IOWA, AS
RECORDED IN PLAT BOOK H AT PAGE 132 IN THE OFFICE OF THE COUNTY RECORDER, BLACK
HAWK COUNTY, IOWA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF SAID LOT 3 OF CENTENNIAL ADDITION; THENCE
SOUTH 88°50'12" WEST 200.80 FEET ON THE SOUTH LINE TO THE SOUTHWEST CORNER OF
SAID LOT 3 OF CENTENNIAL ADDITION, ALSO BEING A POINT ON THE EAST LINE OF SAID LOT 4
OF CENTENNIAL SECOND ADDITION; THENCE SOUTH 00°09'45" WEST 211.20 FEET ON SAID
EAST LINE TO A POINT ON THE NORTH RIGHT-OF-WAY LINE OF UNIVERSITY AVENUE; THENCE
NORTH 73°50'52" WEST 310.96 FEET ON SAID RIGHT-OF-WAY LINE TO A POINT ON THE WEST
LINE OF SAID LOT 4 OF CENTENNIAL SECOND ADDITION; THENCE NORTH 00°00'08" WEST
307.00 FEET ON SAID WEST LINE TO THE NORTHWEST CORNER OF SAID LOT 4 OF
CENTENNIAL SECOND ADDITION, ALSO BEING A POINT ON THE SOUTH LINE OF SAID LOT 2 OF
CENTENNIAL SECOND ADDITION; THENCE NORTH 89°20'20" WEST 2.66 FEET ON SAID SOUTH
LINE TO A POINT THAT IS COMMON WITH SAID LOT 2 OF CENTENNIAL SECOND ADDITION;
THENCE NORTH 38°38'02" WEST 97.16 FEET ON A LINE THAT IS COMMON WITH SAID LOT 2 OF
CENTENNIAL SECOND ADDITION TO A POINT THAT IS COMMON WITH SAID LOT 2 OF
CENTENNIAL SECOND ADDITION; THENCE NORTH 00°02'27" EAST 69.93 FEET; THENCE SOUTH
89°59'58" EAST 85.08 FEET; THENCE NORTH 00°00'03" WEST 299.83 FEET TO A POINT THAT IS
ON THE SOUTH LINE OF ACORN ADDITION IN THE CITY OF WATERLOO, BLACK HAWK COUNTY,
IOWA, AS RECORDED AS DOCUMENT 2004-00011179 IN THE OFFICE OF THE COUNTY
RECORDER, BLACK HAWK COUNTY, IOWA; THENCE SOUTH 89°42'35" EAST 478.50 FEET ON
SAID SOUTH LINE TO A POINT THAT IS ON THE EAST LINE OF SAID LOT 1 OF CENTENNIAL
SECOND ADDITION; THENCE SOUTH 00°01'23" WEST 621.49 FEET ON SAID EAST LINE, THE
EAST LINE OF SAID LOTS 2 AND 3 OF CENTENNIAL SECOND ADDITION AND THE EAST LINE
SAID LOTS 4 AND 3 OF CENTENNIAL ADDITION TO THE POINT OF BEGINNING, CONTAINING 8.35
ACRES.
THE SOUTH LINE OF SAID LOT 3 OF CENTENNIAL ADDITION IS ASSUMED TO BEAR SOUTH
88°50'12" WEST.
EXHIBIT "B"
MINIMUM ASSESSMENT AGREEMENT
\This Minimum Assessment Agreement (the "Agreement") is entered into as of
J U ►'e 1 , 2026, by and among the CITY OF WATERLOO, IOWA ("City"),
HIGHLANDS ENTERPRISES, LLC, a Kansas limited liability company ("Company"),
and the COUNTY ASSESSOR of the County of Blackhawk, 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 (the "Property"), described in Exhibit "A" thereto, located in the City; and
WHEREAS, it is contemplated that pursuant to the Development Agreement, the
Company will undertake the development of an area within the City and within the
University Avenue Area Urban Renewal and Redevelopment Plan Area, including the
construction of certain improvements as described in the Development Agreement (the
"Minimum Improvements") on the Property (the "Project"); and
WHEREAS, pursuant to Iowa Code § 403.6, as amended, the City and the
Company desire to establish a minimum actual value for the Property and the Minimum
Improvements to be constructed thereon by Company pursuant to the Development
Agreement, which shall be effective upon substantial completion of the Project 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 Minimum 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 Minimum
Improvements by Company, the minimum actual taxable value which shall be fixed for
assessment purposes for the Property and Minimum Improvements to be constructed
thereon by Company as a part of the Project shall not be less than $5,500,000.00 (the
"Minimum Actual Value") until termination of this Agreement. The parties hereto agree
that construction of the Minimum Improvements will be substantially completed by the
date set forth in the Development Agreement, and in any case if the Minimum
Improvements are not substantially completed by December 31, 2028 the parties agree
to execute an amendment to this Agreement that will extend the date specified in
Section 2 below.
2
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,
2046. The Minimum Actual Value shall be maintained during such period regardless of:
(a) any failure to complete the Minimum Improvements; (b) destruction of all or any
portion of the Minimum Improvements; (c) diminution in value of the Property or the
Minimum Improvements; or (d) any other circumstance, whether known or unknown and
whether now existing or hereafter occurring. Notwithstanding the foregoing, in the event
of (a) any failure to complete the Minimum Improvements; (b) destruction of all or any
portion of the Minimum Improvements; or (c) diminution in value of the Property or the
Minimum Improvements, Company may terminate this Agreement by providing written
notice of such termination to the City and Assessor and, upon such termination, this
Agreement and the provisions, requirements, and obligations therein shall be
terminated, null and void, and of no further force and effect.
3. Company shall pay, or cause to be paid, when due, all real property taxes
and assessments payable with respect to all and any parts of the Property and the
Minimum Improvements pursuant to the provisions of this Agreement and the
Development Agreement. Unless and until this Agreement is terminated by Company
as set forth in Section 2, such tax payments shall be made without regard to any loss,
complete or partial, to the Property or the Minimum Improvements, any interruption in,
or discontinuance of, the use, occupancy, ownership or operation of the Property or the
Minimum Improvements by Company or any other matter or thing which for any reason
interferes with, prevents or renders burdensome the use or occupancy of the Property
or the Minimum Improvements.
4. Unless the Agreement is terminated, the Company agrees that its
obligation to make the tax payments required hereby, to pay the other sums provided
for herein, and to perform and observe its other agreements contained in this
Agreement shall be absolute and unconditional obligations of Company (not limited to
the statutory remedies for unpaid taxes) and that Company shall not be entitled to any
abatement or diminution thereof, or set off therefrom.
5. 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 Minimum Improvements in excess of the Minimum
Actual Value.
6. Company agrees that during the term of this Agreement it will not:
(a) seek administrative review or judicial review of the applicability or
constitutionality of any Iowa tax statute relating to the taxation of property
contained as a part of the Property or the Minimum Improvements determined by
any tax official to be applicable to the Property or the Minimum Improvements, or
3
raise the inapplicability or constitutionality of any such tax statute as a defense in
any proceedings, including delinquent tax proceedings; or
(b) 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, including improvements and fixtures thereon,
contained in the Property or the Minimum Improvements; or
(c) request the Assessor to reduce the Minimum Actual Value; or
(d) appeal to the board of review of the city, county, state or to the
Director of Revenue of the State of Iowa to reduce the Minimum Actual Value; or
(e) cause a reduction in the actual value or the Minimum Actual Value
through any other proceedings.
7. 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.
8. Neither the preambles nor provisions of this Agreement are intended to, or
shall be construed as, modifying the terms of the Development Agreement.
9. 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.
10. 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.
[signatures on next page]
4
CITY OF WATERLOO, IOWA HIGHLANDS ENTERPRISES, LLC,
a Kansas limited liability company
By: By: (_,.
David Boesen , Mayor
Title: Manager
By:
Kelley chle, City Clerk
STATE OF IOWA )
) ss.
COUNTY OF BLACK HAWK )
On this C day of J v , 2026, before me, a Notary Public in
and for the State of Iowa, personally appeared David Boesen 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.
1N
Notary Puleja
„0*'"L. NANCYANNE HIGBY
R * C�ONMMISSIOON,/NNO.853884
* * Mi �iL
w
STATE OF
ss.
COUNTY 0 Uy�_
Subscribed and sworn to before me on ` , 2026 by
Manager of Highlands Ent es, LLC, a Kansas limited liability
ompa
LISA B ARONSON
NOTARY PUBLIC-NOTARY SEAL A"L cry(
STATE OF MISSOURI ota Public
MY COMMISSION EXPIRES JULY 17,2028
JACKSON COUNTY 5
COMMISSION#16303654 j
j .1„
'14:43EZ.1.01,4 A0j8EINAtoont,'.../.
4:21trzt‘iX1 ktotEsuoitoo
•',AY.
_ .
CERTIFICATION OF ASSESSOR
The undersigned, having reviewed the plans and specifications for the Minimum
Improvements to be constructed and the market value assigned to the land upon which
the Minimum 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
described in the foregoing Minimum Assessment Agreement, certifies that the actual
value assigned to that land and improvements upon completion shall not be less than
Five Million Five Hundred and 00/100 Dollars ($5,500,000.00) until termination of this
Minimum Assessment Agreement pursuant to the terms hereof, subject to adjustment
as provided in said agreement.
Assessor for Black Hawk County, Iowa
Date
STATE OF IOWA )
) ss.
COUNTY OF BLACK HAWK )
Subscribed and sworn to before me on , 2026 by T.J.
Koenigsfeld, Assessor for Black Hawk County, Iowa.
Notary Public