HomeMy WebLinkAboutWAHAWK POWER, LLC - Development Agreement - 12.15.2025Prepared Bv: Austin J. McMahon, Lange & McMahon, PLC, 222 1u St. E., Independence, IA (319) 334-4488
DEVELOPMENT AGREEMENT
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This Development Agreement (the "Agreement") is entered into as of this tS
day of QP_G•r r z — 2025, by and between Wahawk Power, LLC
(the "Company") and the City of Waterloo, Iowa (the "City").
RECITALS
A. In furtherance of the objectives of Chapter 403 of the Code of Iowa, as
amended (the "Urban Renewal Act"), City is engaged in carrying out urban renewal project
activities in an area known as the San Marnan Urabn Renewal and Redevelopment Plan
Area, being changed to the Amended and Restated South Waterloo Unified Urban Renewal
and Redevelopment Plan Area ("Urban Renewal Area").
B. Company is willing and able to finance and undertake improvements on certain
real property described in Exhibit A (the "Property"), consisting of approximately 12.00 acres,
and which is located in the Urban Renewal Area.
C. City considers economic development within the City a benefit to the
community and is willing for the overall good and welfare of the community to provide financial
incentives so as to encourage that goal, and the City further believes that the project is in the
vital and best interests of the City and that the project and such incentives are in accordance
with the public purposes and provisions of applicable State and local laws and requirements
under which the project has been undertaken and is being assisted.
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AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the
parties agree as follows:
1. Sale of Property; Title. Subject to the terms hereof, City shall convey the
Property (Exhibit A) to Company in its as -is condition for the sum of $1.00 (the "Purchase
Price"). Conveyance shall be by special warranty deed, free and clear of all encumbrances
arising by or through City except: (a) easements, servitudes, conditions and
restrictions of record; (b) general utility and right-of-way easements sending the Property;
and (c) restrictions imposed by the City zoning ordinances and other applicable law. City
makes no representation or warranty as to the condition of the Property or its suitability
for Company's purposes. Company is responsible for conducting its own due diligence
and inspections. City shall have no duty to convey title to Company until Company delivers
to City reasonable and satisfactory proof of financial ability to undertake and carry on the
Improvements (defined below), which may take the form of a lending commitment letter.
Company shall, at its own expense, prepare an updated abstract of title, or in lieu thereof
Company may, at its own expense, obtain whatever form of title evidence it desires. City
shall provide any title documents it has in its possession, including any abstracts, to assist
in title review. If title is unmarketable or subject to matters not acceptable to Company,
and if City does not remedy or remove such objectionable matters in timely fashion
following written notice of such objections from Company, Company may terminate this
Agreement without further obligation and return the abstract of title to City.
2. Improvements by Company. Company shall develop or construct a data
center building that is approximately 80,000 sq. feet in size, an accessory water treatment
area, a substation, and such other things that are necessary for the operation of the data
center on the Property. Company shall further develop or construct incidental
infrastructure and features, such as landscaping, water detention, paving, signage, and
parking on the Property. The foregoing shall be collectively referred to as the
"Improvements" or the "Project." All Improvements shall be developed or constructed in
accordance with 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 or plans for City's review and reasonable 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, including but not limited to final permit
inspections. 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."
3. Construction Plans. Company agrees that it will cause the Improvements to
be constructed on the Property in conformance with construction plans (the "Plans") that
have been submitted to the City. Company agrees that the scope and scale of the
Improvements to be constructed shall not be significantly less than the scope and scale
of such improvements as detailed and outlined in the Plans.
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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 review.
Modified Plans shall be subject to approval by the City as provided in this Section. City
shall approve the modified Plans in writing if: (a) the Modified Plans conform to the terms
and conditions of this Agreement; (b) the Modified Plans conform to the terms and
conditions of the urban renewal plan; (c) the Modified Plans conform to all applicable
federal, state and local laws, ordinances, rules and regulations and City permit and design
review requirements; (d) the Modified Plans are adequate for purposes of this Agreement
to provide construction to provide for the construction of the Improvements, and (e) no
Event of Default under the terms of this Agreement has occurred; provided, however, that
any such approval of the Plans or Modified Plans pursuant to this Section shall constitute
approval for the purposes of this Agreement only and shall not be deemed to constitute
approval or waiver by the City with respect to any building, fire, zoning or other ordinances
or regulations of the City, and shall not be deemed to be sufficient plans to serve as the
basis for the issuance of a building permit if the Plans or Modified Plans are not as detailed
or complete as the plans otherwise required for the issuance of a building permit.
The Plans or Modified Plans must be rejected in writing by City within thirty (30) days
of submission or shall be deemed to have been approved by the City. If City rejects the
Plans or Modified Plans in whole or in part, Company shall submit new or corrected Plans
or Modified Plans within thirty (30) days after receipt by Company of written notification of
the rejection, accomplished by a written statement of the City specifying the respects in
which Company's Plans or Modified Plans fail to conform to the requirements of this
Section. 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, that in any event 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; Possibility of Reverter. 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 convey the Property to
Company and that without said commitment City would not do so.
A. Deadlines to Commence and Complete. Company must obtain all
required permits or licenses and begin development or construction of the
Improvements within six (6) months from the date that the City conveys the Property
to Company (the "Commencement Date"). Company must Substantially Complete
development or construction within fourteen (14) months from the date of conveyance
(the "Completion Deadline"). For purposes of this Agreement, "Substantially
Completed" means the date on which the Improvements have been completed to the
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extent necessary for the City to issue a certificate of occupancy relating thereto and
the City has verified that any Project element for which no permit was necessary has
been Substantially Completed. All deadlines are subject to Unavoidable Delays as
described below. The City's Community Planning and Development Director may, but
shall not be required to, consent to an extension of time of up to six (6) months for the
construction of the Improvements. Any additional or longer extensions will require
approval and consent of the City Council.
B. Events Triggering Termination and/or Reverter of Title. If Company does
commence or does not Substantially Complete development or construction of the
Improvements in accordance with the deadlines stated above, then, subject to
Unavoidable Delays, then City may terminate this Agreement, and City shall then have
no further obligation to Company under this Agreement. If development has
commenced within the required period, as the same may be extended, and is
subsequently stopped or delayed as a result of extreme weather such as ice, ground
freezing, and other conditions that restrict construction, as well as an Act of God, war,
civil disturbance, court order, labor dispute, fire, pandemic, governmental mandates
(local, state or federal), delays in City approvals, 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. If City terminates this Agreement, City shall have no
further obligations to Company under this Agreement, including but not limited to, any
legal or equitable obligation to reimburse Company for any costs expended by
Company with respect to the Project or to compensate Company for any value added
to the Property by any Improvements. In connection with termination of the Agreement
as set forth herein, City may demand reimbursement of any sums paid to or for the
benefit of Company in connection with the Project, in addition to exercising any other
available remedies.
5. Reverter of Title; Indemnity. If City terminates this Agreement, then Company
agrees that it shall, at its own expense, promptly execute all documents, including but not
limited to a special warranty deed, or take such other actions as the City may reasonably
request to effectuate said reverter and to deliver to City title to the Property, free and clear
of any lien, claim, charge, security interest, mortgage or encumbrance (collectively,
"Liens") arising by or through Company. Concurrently with delivery of the deed, Company
shall also deliver to City the abstract of title. Company shall pay in full, so as to discharge
or satisfy, all Liens on or against the Property conveyed back to City. In connection with
any reverter of title, Company shall not be entitled to, or otherwise recover any amounts
paid to City to acquire property or other amounts it expended for the Improvements,
Project, or other activities.
Appointment of Attorney in Fact: If Company fails to deliver such documents,
including but not limited to a special warranty deed, to City within thirty (30) days after
written demand by City, then City shall be authorized to execute, on Company's behalf
and as its attorney -in -fact, the special warranty deed or other documents required by this
Section, and for such limited purpose Company does hereby constitute and appoint City
as its attorney -in -fact.
Company further agrees that it shall indemnify City and hold it harmless with
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respect to any demand, claim, cause of action, damage, or injury made, suffered, or
incurred as a result of or in connection with the Project, Company's failure to carry on or
complete same, or any Lien or Liens on or against the Property of any type or nature
whatsoever that attaches to the Property by virtue of Company's ownership of same. The
foregoing indemnity shall include the cost of removing any Improvements constructed by
Company and reverting the Property to substantially the same condition as of the date of
conveyance, but shall not include any consequential damages or perceived damages
such as lost opportunities for another user. If City files suit to enforce the terms of this
Agreement and prevails in such suit, then Company shall be liable for all legal expenses,
including but not limited to, reasonable attorneys' fees, incurred by City. Company's duties
of indemnity pursuant to this Section shall survive the expiration, termination or
cancellation of this Agreement for any reason.
6. Option to Purchase Additional Land and Right of First Refusal.
A. Option to Purchase Additional Land. For a period of 5 years from the
date of this Agreement, and provided that Company is not in default of any terms of
this Agreement, Company shall have an option to purchase from the City an additional
10-12 acres of land that abuts the Property for a purchase price of $1.00. Company
shall be permitted to designate or identify said 10-12 acres of land which shall be the
subject of this option to purchase (the "Option Property") and a formal legal description
shall be obtained and inserted as Exhibit A-1 to this Agreement. In connection with the
exercise of the option, Company shall enter into a development agreement and
minimum assessment agreement with respect to an expansion or a new project on the
Option Property that is comparable in scale to the Project that is the subject of this
Agreement or to other projects on similarly sized properties within the Urban Renewal
Area. The option may be exercised at any time on or before the fifth (5th) anniversary
of the date of this Agreement by delivery of written notice of exercise to City. Within
thirty (30) days following delivery of the option notice, the parties shall execute a
written purchase agreement in form acceptable to City, which purchase agreement
shall require, among other things, that Closing shall occur on a date to be agreed upon
by the parties following delivery of the option exercise notice, which date shall be within
sixty (60) days of delivery of said notice.
B. Right of First Refusal. During the option period described above,
Company shall also have a right of first refusal with respect to the Option Property.
Upon receipt of written notice from City that includes the terms and conditions of a
bona fide third -party offer for all or any portion of the Option Property, Company shall
have a period of fifteen (15) days in which to exercise its right of first refusal to
purchase the subject portion of the Option Property, on the same terms and conditions
as are set forth in the offer, with a purchase price of $1.00. In connection with the
exercise of its right of first refusal, Company shall enter into a development agreement
and minimum assessment agreement with respect to an expansion or a new project
on the Option Property that is comparable in scale to the Project that is the subject of
this Agreement or to other projects on similarly sized properties within the Urban
Renewal Area. Company shall exercise its right of first refusal by delivery of written
notice to City, and thereafter Company and City shall act with diligence to close on
said transaction and to execute any related documents required by the offer.
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7. No Encumbrances; Limited Exception. Until the Improvements are
Substantially Completed, Company agrees that it shall not create, incur, or suffer to exist
any Liens on the Property, other than such mortgage or mortgages as may be reasonably
necessary to finance Company's completion of the Improvements and of which Company
notifies City before Company executes any such mortgage. Company may not mortgage
the Property or any part thereof for any purpose except in connection with financing of the
Improvements.
8. Utilities. Company will be responsible for extending water, sewer, telephone,
telecommunications, electricity, gas and other utility services to any location on the
Property. Company will be responsible for payment of any associated connection fees
other than water connection fees, which will be paid by City.
9. 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 value for the Property as improved pursuant to this Agreement, which shall be
fixed for assessment purposes, below the amount of $6,000,000.00 (the "Minimum Actual
Value"), through:
(a) Willful destruction of the Property, the Improvements, or any part of either;
(b) a request to the Assessor of Black Hawk County; or
(c) any proceedings, whether 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.
10. Public Infrastructure. The City shall be responsible for the construction of
public infrastructure that is necessary for the Improvements.
11. Tax Rebates. Provided that Company has completed Substantially Completed
the Improvements before the Completion Deadline, and subject to the other terms of this
Agreement, including any extensions for Substantial Completion, City agrees to rebate
property tax (with the exceptions noted below) with respect to the Improvements, as
follows:
Year One through Year Ten: 50% rebate each year
for any taxable value added by the completed Improvements (each such payment is
a "Rebate") over the initial base value of $73,957.00. 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 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
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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.
12. 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. 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 or 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 11 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
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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 this Agreement, then City may terminate this
Agreement, without penalty or other liability to City, by written notice to Company.
C. For purposes of this Agreement, "Tax Increments" shall mean the
property tax revenues on the Improvements and Property received by and made
available to City for deposit in an account maintained under this Agreement, the
provisions of Iowa Code§ 403.19 and the ordinance governing the Urban Renewal
Plan.
13. 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 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 expansion of a tax increment
financing (TIF) district, including the holding of public hearings on the same. Further,
all the obligations of City under this Agreement are subject to fulfillment, on or before
each Rebate payment date, of each of the following conditions precedent:
(i) The representations and warranties made by Company and in this
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 this 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 this Agreement.
14. Additional Covenants of Company. In to the other promises, covenants and
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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 request.
B. Until the Improvements are Substantially Completed, Company shall
make such reports to City, in such detail and at such times as may be reasonably
requested by City, as to the actual progress of Company with respect to construction
of the Improvements. However, in no event shall Company be required to submit a
report more frequently than once every thirty (30) day period.
C. During construction of the Improvements and thereafter until the MAA
termination date Company will cooperate fully with the City in resolution of any traffic,
parking, trash removal or public safety problems which may arise in connection with
the construction and operation of the Improvements.
D. Company will comply with all applicable land development laws and City
and county ordinances, and all laws, rules and regulations relating to its businesses,
other than laws, rules and regulations where the failure to comply with the same or the
sanctions and penalties resulting therefrom, would not have a material adverse effect
on the business, property, operations, or condition, financial or otherwise, of Company.
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 (1) it will not
undertake, in any other municipality in Black Hawk County, the construction or
rehabilitation of any commercial property as a primary location for Company's
business operations of the type to be conducted on the Property, and (2) it will make
no conveyance, lease or other transfer of the Property or any interest therein that
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.
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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
conveyed to it. Until the MAAtermination date, 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.
15. 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.
16. 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 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 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 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
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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.
17. Indemnification and Releases.
A. Company hereby releases City, its elected officials, officers, employees,
and agents (collectively, the "indemnified parties") from, covenants and agrees that
the indemnified parties shall not be liable for, and agrees to indemnify, defend and
hold harmless the indemnified parties against, any Toss or damage to property or any
injury to or death of any person occurring at or about the Property arising after
Company's lease or acquisition of the same 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, 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 acquisition and
conditions of the Property and the 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.
18. 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
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amendment of the urban renewal plan applicable to the Property and/or Project area, all
of which must be completed within 90 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 90-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.
19. 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. 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, (a) Company may assign the
Property to an affiliate of Company without prior approval of City provided (i) the assignee
assumes the obligations of Company under this Agreement, (ii) the assignee shall receive
all Rebates payable as of and after the date of assignment, and (iii) Company provides
written notice of assignment to City within five (5) business days after execution of
assignment and (b) Company may mortgage the Property to a lender as security for
financing of Project improvements, but for no other purpose.
20. 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 except as security for financing of Improvements or the Project;
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;
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
12
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 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.
21. Remedies.
A. Default by Company. Whenever any Event of Default in respect of
Company occurs and is continuing, the City may terminate this Agreement upon a 30-
day written notice. Upon termination, 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 and to recover ownership of the Property 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 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. The
remedies available to the City shall survive any termination of this Agreement.
22. 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 the incorrectness or falsity of any representation or warranty, City may, at
its sole option and in addition to any other right or remedy available to it, terminate this
13
Agreement and declare it null and void.
23. 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.
24. 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.
25. Notices. 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, and addressed:
(a) If to City, 715 Mulberry Street, Waterloo, Iowa 50703, Attention: Mayor,
with copies to the City Attorney and the Community Planning and Development
Director.
(b) If to Company,
Delivery of notice shall be deemed completed upon: (i) on the date of delivery when
delivered in person, (ii) one (1) business day following deposit for overnight delivery to an
overnight air courier service which guarantees next day delivery, (iii) three (3) business
days following the date of deposit if mailed by United States registered or certified mail,
postage prepaid, or (iv) when transmitted by facsimile or electronic mail so long as the
sender obtains electronic confirmation that such transmission was successful. A party may
change the address for giving notice by any method set forth in this Section.
26. 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.
27. 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.
28. 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
14
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.
29. 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.
30. 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.
31. Binding Effect. This Agreement shall be binding and shall inure to the benefit
of the parties and their respective successors, assigns, and legal representatives.
32. Counterparts. This may be executed in multiple counterparts, each of which
shall be deemed an original and all of which, taken together, shall constitute one and the
same instrument.
33. 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.
34. 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 set forth above.
CITY OF WATERLOO, IOWA
By:
WAHAWK POWER, LLC
By:
Quentin M. Hart, Mayor Charles Moore, Manager
VAttest:
eigi
elley FelchCity Clerk
15
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.
29. 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.
30. 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.
31. Binding Effect. This Agreement shall be binding and shall inure to the benefit
of the parties and their respective successors, assigns, and legal representatives.
32. Counterparts. This may be executed in multiple counterparts, each of which
shall be deemed an original and all of which, taken together, shall constitute one and the
same instrument.
33. 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.
34. 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 set forth above.
CITY OF WATERLOO, IOWA WAHAWK POWER, LLC
By: By: //,'
Quentin M. Hart, Mayor `Charles core, Manager
Attest:
Kelley Felchle, City Clerk
15
EXHIBIT A
Description
The East 1600 feet of the Southwest Quarter (SW 1/4) lying north of the South Half (S 1/2) of
the South Half (S 1/2) of the Southwest Quarter (SW 1/4), Section 9, Township 88 North,
Range 13 West of the Fifth Principal Meridian, City of Waterloo, Black Hawk County, Iowa.
16
EXHIBIT A-1
Description of Option Property
To be determined by formal plat of survey.
EXHIBIT B
MINIMUM ASSESSMENT AGREEMENT
This Minimum Assessment Agreement (the "Agreement") is entered into as of this
S'"` day of der,-,Ioe , 202, and among the CITY OF
WATERLOO, IOWA ("City") and WAHAWK POWER, LLC ("Company"), and the COUNTY
ASSESSOR of the BLACK HAWK COUNTY, 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 East
Waterloo Unified 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 and from then until this Agreement is
terminated pursuant to the terms herein and which is intended to reflect the minimum actual
value of the land and buildings as to the Project only; and
WHEREAS, the City and the Assessor have reviewed the preliminary plans and
specifications for the 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 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 $6,000,000.00 (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, 2026, the parties agree to execute an amendment to this Agreement
that will extend the date specified in Section 2 below.
2. The Minimum Actual Value herein established shall be of no further force and
effect, and this Minimum Assessment Agreement shall terminate, on December 31, 2037.
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
18
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.
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. Such tax payments shall be made without regard to any Toss, 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. 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, nor to
any early termination of this Agreement for any reason whatsoever.
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 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 review of the city, county, state or to the Director of
Revenue of the State of Iowa to reduce the Minimum Actual Value; or
19
(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 det forth above.
[signatures on next page]
20
CITY OF WATERLOO, IOWA
By'.
Quentin M. Hart, Mayor
•
Attest:
Kelley Fecchle, City Clerk
1
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
WAHAWK POWER LLC
By:
Name:
Title:
On this day of UAL , 202(0 , before me, a notary public in and for
the State of Iowa, personally ar eared Quentin M. Hart and Kelley Felchle, to me personally
known, who being duly sworn ho 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.
STATE OF -It/j0�
COUNTY OF Riwi(. 14(1A,O4L
) ss.
)
ea r
Notary Public
o c"" LEANN M EVEN
COMMISSION NO. 731693
* * MY COMMISSIQN EXP,RES
'ow v► c. )S
Subscribed and sworn before me on , by
as (title) of
Wahawk Power, LLC.
21
Notary Public
CITY OF WATERLOO, IOWA
By:
Quentin M. Hart, Mayor
Attest:
WAHAWK POWER LLC
By: /�iL
Name:
Kelley Felchle, City Clerk Title:
STATE OF IOWA
) ss.
COUNTY OF BLACK HAWK
01,1111 � eY
On this day of , 202_, before me, a notary public in and for
the State of Iowa, personally appeared Quentin M. Hart and Kelley Felchle, to me personally
known, who being duly swom ho 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.
STATE OF t f),)J(L
COUNTY OF \NC1C-tvl-Sovm
C Ar\e),v li > Cv\cx re
Wahawk Power, LLC.
KATHERINE WIGANS
o Commission Number 838556
My Commission Expires
row,- April 6, 2028
Notary Public
) ss.
Subscribed and sworn before me on 3\y vut_ 30 2LY21J by
as I(VU,,00.121PV (title) of
21
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 Six Million and 00/ 100 Dollars
($6,000,000.00) until termination of this Minimum Assessment Agreement pursuant to the
terms hereof, subject to adjustment as provided in said agreement.
Date Assessor for Black Hawk County, Iowa
STATE OF IOWA
COUNTY OF BLACK HAWK
)
) ss.
Subscribed and sworn to before me on by
T.J. Koenigsfeld, Assessor for Black Hawk County, Iowa.
Notary Public
22