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HomeMy Public PortalAboutResolutions-2016-072 (4) DocuSign Envelope ID:2229A71F-OC3E-472D-A9DE-E33376BE2379 DEVELOPMENT AGREEMENT This Agreement is entered into between the City of Tiffin, Iowa (the "City") and TAT, LLC (the "Developer") as of the day of 2016 (the "Commencement Date"). WHEREAS, the City and the Developer have been in discussions regarding the development (the "Park Place Development Project") of certain real property situated within in the Tiffin Urban Renewal Area (the "Urban Renewal Area"), including the construction of certain public infrastructure projects; and WHEREAS, the Developer agreed to cause the engineering of preliminary infrastructure designs and land use plans associated with the Park Place Development Project(the "Planning and Design Project"), and WHEREAS, the Developer has requested that the City provide financial assistance in the form of incremental property tax payments to be used by the Developer in defraying the costs of the Planning and Design Project; and WHEREAS, Chapter 403 of the Code of Iowa authorizes cities to establish urban renewal areas and to undertake economic development projects; and WHEREAS, Chapter 15A of the Code of Iowa authorizes cities to provide grants, loans, guarantees, tax incentives and other financial assistance to or for the benefit of private persons; and NOW, THEREFORE, in consideration of the mutual obligations contained in this Agreement, the parties hereto agree as follows: A. Developer's Covenants -Planning and Design Proiect. The Developer agrees to enter into a professional services agreement (the "Professional Services Agreement") in substantially the form attached hereto as Exhibit A with MMS Consultants, Inc. (the "Engineer"), pursuant to which the Developer will engage the Engineer to undertake the Planning and Design Project. The Developer hereby agrees to enter into the Professional Services Agreement by no later than December 31, 2016. The Developer further agrees to demonstrate to the satisfaction of the City the actual fees incurred by the Developer under the Professional Services Agreement (the "Actual Design Fees"). To the extent that the Developer has not demonstrated to the satisfaction of the City the Actual Design Fees by May 31, 2018, this Agreement will terminate. B. Developer's Covenants 1. Payments. In recognition of the Developer' obligations set out above, the City agrees to make two (2) economic development tax increment payments (the "Payments") to the Developer pursuant to Chapters 15A and 403 of the Code of Iowa, on December 1, 2017 and June 1, 2018. The aggregate amount of the Payments shall not exceed an amount equal to the lesser of(i) $427,500 or(ii) the Actual Design Fees. 1 DocuSign Envelope ID:2229A71F-OC3E-472D-A9DE-E33376BE2379 So long as the Actual Design Fees are equal to or greater than Two Hundred Thirteen Thousand Seven Hundred Fifty Dollars ($213,750), then the first Payment shall be in an amount equal to Two Hundred Thirteen Thousand Seven Hundred Fifty Dollars ($213,750). If the Actual Design Fees are less than Two Hundred Thirteen Thousand Seven Hundred Fifty Dollars ($213,750), then the first Payment shall be in amount equal to the Actual Design Fees. The second Payment shall be in an amount equal to the lesser of(i) Two Hundred Thirteen Thousand Seven Hundred Fifty Dollars ($213,750) or(ii) the difference between the Actual Design Fees minus Two Hundred Thirteen Thousand Seven Hundred Fifty Dollars ($213,750). 2. Security for Payments. The Payments shall not constitute general obligations of the City, but shall be made solely and only from Incremental Property Tax Revenues received by the City from the Johnson County which are attributable to the Urban Renewal Area. Incremental Property Tax Revenues are determined by: (1) determining the consolidated property tax levy (city, county, school, etc.) then in effect with respect to taxation of the property in the Urban Renewal Area; (2) subtracting (a) the debt service levies of all taxing jurisdictions, (b) the school district instructional support and physical plant and equipment levies and (c) any other levies which may be exempted from such calculation by action of the Iowa General Assembly; and (3) multiplying the resulting modified consolidated levy rate times any incremental growth in the taxable valuation of the property situated in the Urban Renewal Area, as shown on the property tax rolls of Johnson County. To the extent it becomes necessary, the City may advance alternative City funds to make the Payments and collect Incremental Property Tax Revenues over time to be made whole. C. Administrative Provisions 1. Amendment and Assignment. This Agreement may not be amended or assigned by either party without the prior written consent of the other party. However, the City hereby gives its permission that the Developer' rights to receive the Payments hereunder may be assigned by the Developer to a private lender or the Engineer, as security on a borrowing to be done in connection with the carrying out of the Planning and Design Project or as security for payment to the Engineer under the Professional Services Agreement, without further action on the part of the City. 2. Succession. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. 3. Choice of Law. This Agreement shall be deemed to be a contract made under the laws of the State of Iowa and for all purposes shall be governed by and construed in accordance with laws of the State of Iowa. 2 DocuSign Envelope ID:2229A71F-OC3E-472D-A9DE-E33376BE2379 4 Term. The term (the "Term") of this Agreement shall commence on the Commencement Date and end on the date on which the last Payment is made by the City to the Developer under Section B.l above. The City and the Developer have caused this Agreement to be signed in their names and on their behalf by their duly authorized officers, all as of the day and date written above. CITY OF TIFFIN, IOWA By: Mayor Attest: City Clerk TAT, LLC By: 3 DocuSign Envelope ID:2229A71F-OC3E-472D-A9DE-E33376BE2379 EXHIBIT A-PROFESSIONAL SERVICES AGREEMENT: 4