Loading...
HomeMy WebLinkAbout09-11-2006 Council Economic Development Committee AGENDA City of Iowa City City Council Economic Development Committee Monday, September 11,2006 9:00 a.m. City Hall Lobby Conference Room 410 East Washington Street 1. Call to Order 2. Approval of Sept. 5,2006 Economic Development Committee Meeting Minutes 3. Discussion of application for TIF rebate for a development project - Hieronymus Square Associates 4. Committee time 5. Adjournment NEXT REGULAR MEETING DATE: Sept. 19,2006 MINUTES CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE SEPTEMBER 5, 2006 LOBBY CONFERENCE ROOM Members Present: Regenia Bailey, Connie Champion, Bob Elliot Members Absent: NONE Staff Present: Karin Franklin, Tracy Hightshoe, Wendy Ford Others Present: Kevin Digmann, Mike Hodge CALL MEETING TO ORDER Chairperson Bailey called the meeting to order at 9:00 AM. APPROVAL OF MINUTES - AUG 22, 2006 MOTION: Elliot moved to approve the August 22,2006 minutes as submitted. Champion seconded the motion. The motion passed 3:0. ACTIVITY REPORT, AUGUST 22 - 29,2006 Ford said she attended ICAD fund raising and Marriot opening festivities in Coralville. In house she revised and submitted an amended FY07 Economic Development budget and began gathering information for the Community Profile. Ford said she worked on Hieronymus Square TIF agreements which included 3 meetings and responded to several business inquiries. REPORT ON CDBG ECONOMIC DEVELOPMENT FUND Hightshoe said since 2002 CDBG has funded 11 projects, 5 of which are no longer in business. She said that 3 of the projects funded were non-profit, and one was historic preservation related. Hightshoe stated that she's been meeting with some lenders to determine how to be more successful in projects that are funded. She proposed working with lenders to try to get referrals for what lenders consider their gray area. She explained that the gray area consists of those projects the banks are willing to fund but not fully fund. Hightshoe presented reasons compiled by the National Development Council as to why the focus of CDBG funds should be small and medium sized businesses. She said that small and medium sized businesses create 80% of all new, permanent, private sector jobs and employ 50% of the nation's workforce. She noted small/medium businesses create new jobs at 1/10 the cost of new jobs created by Fortune 500 companies, are productive and profitable, and locally oriented. In addition, she noted that small businesses can actually be quite large with up to 100-200 employees. However, she said they have thin capital and collateral and the profits are not enough to pay bills and support new growth. Hightshoe said she met with the committee oflocallenders to determine ifthere would be enough interest from the local community. She noted the information the applicants provide to lenders is far more extensive than what the city requested. She noted committee had concerns in regard to reporting requirements. She said if a private business can get funds from a bank there is no need to come to the city and meet all federal requirements, but for those businesses that can not get enough for banks are willing to work with the city and all the requirements. She said they noted the need to be more flexible with wage requirements especially in the case of start-up businesses. Another concern was in regard to existing businesses. She said that businesses are in competition with other businesses and the proforma and balance sheet which are part of the application are then becoming public and visible for everyone. Hightshoe said there is currently $255,000 CDBG funds to spend. Answering a question by Elliot, Hightshoe said that banks provide technical assistance to businesses. Bailey said that requiring a Fast Track course would be helpful to new businesses also. Bailey said she is interested in pursuing the partnership with the local banks. Elliot said that he has a problem with the statement that in order to receive CDBG assistance 51 % of the jobs created must be held or made available to low-to-moderate income persons based on family size. He noted that an employer can only discriminate the employment selection in legal areas and they will want to find the best qualifying people they can. Elliot said the committee needs to look at total compensation rather than wage. Hightshoe said business start-up do not have a lot of experience with benefits and therefore the city is asking for higher wages, however, for existing businesses the city looks at total compensation. Franklin said the committee should differentiate between the type of funds used and requirements for each type of fund. She stated that there might be two different wage levels and flexibility to look at benefit packages for TIF agreements versus CDBG funds. Champion said that most start-up businesses will not provide benefits. She said the committee should look at the whole package, but with the type of businesses applying for CDBG funds that criterion is not applicable all the time. Bailey said it will be a good idea to support a few people to go through the Fast Track program. She noted that it is a good program. Franklin said that they should first try to project how many business they could support in 1 year. She noted that it might not be possible to support the Fast track course for a business unless funded. She noted the Fast Track program might not actually be the best program. She said the staff should find out 2 what business courses are available in the community and then have the committee decide on which one to pursue. DISCUSSION OF APPLICATION FOR TIF REBATE FOR A DEVELOPMENT PROJECT - HIERONYMUS SQUARE ASSOCIATES Ford said that there has been a minor change to the TIF agreement that was included in the informational package. She said in the description, Exhibit B they discuss about the inclusion of a hotel lobby. Ford said that the reference to the hotel and LEED certification has been left out of the document to date. Ford said the agreement is the oll;tline for a TIF rebate that would be over the course of 12/13 years depending on the completion date of the project. She stated the estimated rebate amount is based on an assessed value of property of 40 million dollars which is the amount of minimum improvements agreed to. She said the total grant will not exceed 16.374 million dollars. Ford said that the LEED certification is not yet integrated in the agreement but still open for discussion. Ford noted the actual components of the project reference a minimum 12 story building, and a minimum investment of 40 million dollars. She noted that there will be residential high end condominiums with no more than 3 bedrooms per unit and no more than 30% of the units having 3 bedrooms. She added the agreement notes landscaped court yard by the building where the vehicle drop off Ipassenger drop area is, streetscape improvements including street lights, trees, street furniture and sidewalk finishes. She noted the developers wanted to evoke that the project will not go forward without the TIF agreement. Bailey asked how TIF rebates work for predominantly residential projects. Ford said the project is assessed and the owners pay at either commercial or residential rates which subject 0 rollbacks. All parts of the project will be assessed and have to pay property taxes which will go to the TIF fund through which the City writes the checks for the project. Elliot said that based on the previous discussions the committee will be happy to see as much commercial uses as possible. Champion asked why there is a limit of not more than 3 bedrooms per unit. Franklin said there are up to 3 bedrooms to guide this project to not become student housing. She noted that the 3 bedrooms limit is in the zoning agreement determined by the Planning and Zoning Commission. Bailey said that TIF should be a ladder to get things that would not be otherwise be happen without the support. She added the project is not dramatically different from other projects in the area, except that it is taller. Kevin Digmann, Hieronymus Square Associates, said they would be excited to have a hotel there, but the last thing they would like to do is to have occupancy rates downtown not ready for another hotel. He said they will do the best effort to have a hotel but they 3 will need to do it with diligence. Bailey said the best effort possible is expected, and they will not like to require a hotel that will not be successful. ..- Franklin said she believed the agreement stated that the building could be designed as that the floor of efficiency condominiums could be the hotel floor. She added that if the hotel is not successful there could be some transferability from hotel to condos. She added there will be some space on the main floor which will be the hotel lobby which also could be translated to something else. She noted that by the construction of the building you could have a hotel function in there. She said the language existing in the agreement stated the developer agrees to use best efforts to establish a viable hotel in the project. Best efforts require 'that the space be built out to facilitate use of the space as a functioning hotel pursuing to exhibit B. She noted they need not go for the demand because there will always be demand for residential downtown, but need to pursue best effort to have a hotel. Digmann said they would need to determine if the numbers match on the paper and if the facility is built for hotel and does not go through as a hotel they will get good numbers from efficiencies. Elliot said he would like to see occupancy rates in downtown and determine the impact of the new hotel in Coralville. Bailey said occupancy rates are important, but at the same time you build the hotel and build demand. Elliot said with occupancy rates you can see trends. Digmann said no one can predict what will happen with the demand because market changes. Champion said she has problems with using TIF for condominiums. She said that efficiency condominiums are student housing. She said she is not willing to do a TIF for all condos, and if the hotel does not work she would like those efficiencies to be apartments and not condos. Elliot said that previously the committee had a two-prong test for qualifying TIF projects: quality employment and expanding the tax base. He said a third one would be environmental design. Elliot said that it would be nice to foster cutting edge environmental design. A fourth thing is promoting the City plan for an area. He said he does not know how much the project will expand the tax base if it will be mainly condos, he does not know how much employment will result, and therefore the environmental design might be an empathize for other buildings, but this is the only asset. Elliot said he would like to see more commercial uses in the building. He said he would like the project to work but can not see how to justify using public funds to support it. Franklin said that for this project the City does not invest money upfront. She said it will add to the tax base in time. She added that a $40 million investment does not necessarily result in a $40 million building. - 4 Elliot said at this point he can not justify using public money. Bailey said she is very supportive of the project but would like to see money used for something that would not otherwise go through without TIF funds. Digmann said that assistance is needed to do something different. He said that the numbers do not work without support. He said that they cannot market the building until they know what they can have in there. He said they want to partner with the city and they do not want to have too many limitations in the agreement. Franklin asked if instead of specifying a hotel in the agreement it would be better to ask for 3 floors of commercial. Bailey said she is very interested in LEED certification and she would be interested in further negotiations. Elliot asked if the amount of TIF is variable at the committee's discretion. He said that the committee would be interested in a significant TIF if the building had multiple commercial floors, and in a smaller TIF for just 2 floors of commercial space. Bailey said she would like to see the money used for something that would not otherwise happen. Champion said that in the long run the building will be a good asset for Iowa City. Champion said she does not want to make demands that cannot be fulfilled, but is concerned about the amount of condominiums that will be in the building. She added that if the condos are targeting the student population she is bothered by the roll back. She added that tax payers' money will be used, but there will be taxpayers' money that would not exist if the building is not built. Hodge said they are looking in applying energy efficiency and green practices as much as applicable. However, he noted that LEED requirements ask that the building be smoke free, but due to the residential character of most of the building that might not be applicable. Hodge said their architect is LEED certified and they will try to incorporate good practices as much as possible in a mix use building. The committee would like further information and negotiations. COMMITTEE TIME Elliot said he would like to discuss about putting a cap on TIFs. Champion said there are just a few TIF projects in Iowa City. ADJOURNMENT The meeting adjourned at 11 A.M. NEXT MEETING DATE: Sept.12, 2006 at 10:30AM. 5 ,~ 1 -~= -u:r... ~~W!:..,. ~~.....~ CITY OF IOWA CITY MEMORANDUM Date: September 8, 2006 To: Economic Development Committee From: Wendy Ford Economic Development Coordinator Hieronymus Square Development Agreement for an Economic Development Grant Re: The draft Agreement for Private Development by and between the City of Iowa City and Hieronymus Square Associates follows. The salient points include: . The agreement is structured to provide a property tax rebate (as opposed to bonds) disbursed each of thirteen (13) consecutive years beginning 2012 and ending the year the TIF district expires, in 2024. . The estimated rebate amount is calculated on the tax increment for improvements assessed at $40,000,000 and rebated at $31.49/$1,000 ($1,259,600 per year) not to exceed $10,000,000 in net present values The total grant not to exceed the 13 year period is $16,374,800. . The project shall be certified Energy Efficient by LEED (Leadership in Energy and Environmental Design) or a utility company. . The project shall be completed no later than Dec. 1, 2010 and include the following minimum improvements: o 12-story mixed-use building o A minimum investment of $40 million in construction costs o Three floors of commercial retail and office development o Developer's best efforts to establish a 40 unit hotel on floors 4 through 6, which optionally, if the hotel does not succeed, can be apartments. o Residential units including high end residential condominiums, with no more than 3 bedrooms per unit and not more than 30% of the units having 3 bedrooms o Landscaped courtyard framed by the building, with drop-off area o Streetscape improvements, including trees, lights, street furniture and sidewalk finishes . The developer has stated the project, as described, would not proceed without the Economic Development Grant. A recommendation from the Committee to the full Council is requested for the Sept. 19 meeting of the Council. cc: City Manager draft - draft -. draft .- draft .. draft AGREEMENT FOR PRIVATE REDEVELOPMENT By and Between THE CITY OF IOWA CITY, IOWA AND HIERONYMUS SQUARE ASSOCIATES drnft-drnft-drnft-drnft-drnft AGREEMENT FOR -- PRIVATE REDEVELOPMENT THIS AGREEMENT FOR PRIV A TE REDEVELOPMENT (hereinafter called "Agreement"), is made on or as of the day of ,2006, by and among the CITY OF IOWA CITY, IOWA, a municipality (hereinafter called "City"), established pursuant to the Code of Iowa of the State of Iowa and acting under the authorization of Chapter 403 of the Code ofIowa, 2005, as amended (hereinafter called "Urban Renewal Act") and Hieronymus Square Associates, having an office for the transaction of business at 711 S. Gilbert Street, Iowa City, Iowa (the "Developer"). WITNESSETH: WHEREAS, in furtherance of the objectives of the Urban Renewal Act, the City has undertaken a program for the revitalization of an economic development area in the City and, in this connection, is engaged in carrying out urban renewal project activities in an area known as the City-University Project I Urban Renewal Plan Area, which area is described in the Urban Renewal Plan approved for such area by Resolution No. 01-366 dated November 13,2001; and WHEREAS, a copy of the foregoing Urban Renewal Plan has been recorded among the land records in the office of the Recorder of Johnson County, Iowa; and WHEREAS, the Developer owns or has the right to occupy certain real property located in the foregoing Urban Renewal Area as more particularly described in Exhibit A attached hereto and made a part hereof (which property as so described is hereinafter referred to as the "Development Property"); and WHEREAS, the Developer will cause certain improvements to be constructed on the Development Property and will cause the same to be operated in accordance with this Agreement; and WHEREAS, the City believes that the development and continued operation of the. Development Property pursuant to this Agreement and the fulfillment generally of this Agreement, are in the vital and best interests of the City and in accord with the public purposes and provisions of the applicable State and local laws and requirements under which the foregoing project has been undertaken and is being assisted. - 1 - draft -. draft-- draft -- draft dr,dt NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: ARTICLE 1. DEFINITIONS Section 1.1. Definitions. In addition to other definitions set forth in this Agreement, all capitalized terms used and not otherwise defined herein shall have the following meanings unless a different meaning clearly appears from the context: Agreement means this Agreement and all appendices hereto, as the same may be from time to time modified, amended or supplemented. Certificate of Completion means a certification in the form of the certificate attached hereto as Exhibit C and hereby made a part of this Agreement, provided to the Developer pursuant to Section 3.2 of this Agreement. City means the City of Iowa City, Iowa, or any successor to its functions. Code means the Code ofIowa, 2005, as amended. Construction Plans means the plans, specifications, drawings and related documents reflecting the construction work to be performed by the Developer on the Development Property upon which the Minimum Improvements will be located; the Construction Plans shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the building inspector of the City as required by applicable City codes. County means the County of Johnson, Iowa. Developer means Hieronymus Square Associates, a corporation. Development Property means that portion of the City-University Project I Urban Renewal Plan Area of the City described in Exhibit A attached hereto and incorporated herein. Economic Development Grants mean the Tax Increment payments to be made by the City to the Developer under Article VIII of this Agreement. - 2 - draft - dr-aft - draft - draft - draft Event of Default means any of the events described in Section 10.1 of this Agreement. -" First Mortgage means any Mortgage granted to secure any loan made pursuant to either a mortgage commitment obtained by the Developer from a commercial lender or other financial institution to fund any portion of the construction costs and initial operating capital requirements of the Minimum Improvements, or all such Mortgages as appropriate. Hieronymus Square - City-University Proiect I TIF Account means a separate account within the City-University Project I Urban Renewal Tax Increment Revenue Fund of the City, in which there shall be deposited all Tax Increments received by the City with respect to the Minimum Improvements. Minimum Improvements shall mean the construction of a $40 million 12-story mixed use approximate 200,000 square foot building with all related site and streetscape improvements as outlined in Exhibit B hereto. Minimum Improvements shall not include increases in assessed or actual value due to market factors. The $40 million capital investment in Minimum Improvements shall be verified via the construction contract. Mortgage means any mortgage or security agreement in which the Developer has granted a mortgage or other security interest in the Development Property, or any portion or parcel thereof, or any improvements constructed thereon. Net Proceeds means any proceeds paid by an insurer to the Developer under a policy or policies of insurance required to be provided and maintained by the Developer, as the case may be, pursuant to Article V of this Agreement and remaining after deducting all expenses (including fees and disbursements of counsel) incurred in the collection of such proceeds. Ordinance means Ordinance No. 01-3991 of the City, under which the taxes levied on the tax"able property in the Project Area shall be divided and a portion paid into the Iowa City Urban Renewal Tax Increment Revenue Fund. Proiect shall mean the construction and operation of the Minimum Improvements on the Development Property, .as described in this Agreement. State means the State of Iowa. - 3 - -" drnft-drnft-drnft-drnft-drnft City-University Proiect I Urban Renewal Tax Increment Fund means the special fund of the City created under the authority of Section 403.19(2) of the Code and the Ordinance, which fund was created in order to pay the principal of and interest on loans, monies advanced to or indebtedness, whether funded, refunded, assumed or otherwise, including bonds or other obligations issued under the authority of Section 403.9 or 403.12 of the Code, incurred by the City to finance or refinance in whole or in part projects undertaken pursuant to the Urban Renewal Plan for the Project Area. Tax Increments means the property tax revenues with respect to the Minimum Improvements that are divided and made available to the City for deposit in the City- University Project I Urban Renewal Tax Increment Revenue Fund under the provisions of Section 403.19 of the Code and the Ordinance. Termination Date means the date of termination of this Agreement, as established in Section 12.8 of this Agreement. Unavoidable Delays means delays resulting from acts or occurrences outside the reasonable control of the party claiming the delay including but not limited to storms, floods, fires, explosions or other casualty losses, unusual weather conditions, strikes, boycotts, lockouts or other labor disputes, delays in transportation or delivery of material or equipment, litigation commenced by third parties, or the acts of any federal, State or local governmental unit (other than the City). Urban Renewal Plan means the Urban Renewal Plan, as amended, approved in respect of the City-University Project I Urban Renewal Area, described in the preambles hereof. ARTICLE II. REPRESENTATIONS AND WARRANTIES Section 2.1. Representations and Warranties of the City. The City makes the following representations and warranties: (a) The City is a municipal corporation and political subdivision organized under the provisions of the Constitution and the laws of the State and has the power to enter into this Agreement and carry out its obligations hereunder. (b) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and - 4- draft - draft - draft .- draft ~ draft conditions of this Agreement are not prevented by, limited by, in conflict with, or result in a breach of, the terms, conditions or provisions of any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which the City is now a party or by which it is bound, nor do they constitute a default under any of the foregoing. -" Section 2.2. Representations and Warranties of Developer. The Developer makes the following representations and warranties: (a) The Developer 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 their obligations under the Agreement. (b) This Agreement has been duly and validly authorized, executed and delivered by the Developer and, assuming due authorization, execution and delivery by the City, is in full force and effect and is a valid and legally binding instrument of the Developer 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. (c) 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 on the Developer, evidence of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it or its property is bound, nor do they constitute a default under any of the foregoing. (d) There are no actions, suits or proceedings pending or threatened against or affecting the Developer 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 the Developer or which in any manner raises any questions affecting the validity of the Agreement or the Developer's ability to perform its obligations under this Agreement. (e) The Developer will cause the Minimum Improvements to be constructed in accordance with the terms of this Agreement, the Urban Renewal Plan and all local, State and federal laws and regulations. - 5 - - draft.- draft .- draft -- (baft . draft (f) The Developer 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 in connection with the Project. (g) The Developer has not received any notice from any local, State or federal ofticial that the activities of the Developer with respect to the Development Property may or will be in violation of any environmental law or regulation. The Developer is not currently aware of any State or federal claim filed or planned to be filed by any party relating to any violation of any local, State or federal environmental law, regulation or review procedure applicable to the Development Property, and the Developer is not currently aware of any violation of any local, State or federal environmental law, regulation or review procedure which would give any person a valid claim under any State or federal environmental statute with respect thereto. (h) The Developer will cooperate fully with the City in resolution of any traffic, parking, trash removal or public safety problems that may arise in connection with the construction and operation of the Minimum Improvements. (i) The Developer would not undertake its obligations under this Agreement without the payment by the City of the Economic Development Grants being made to the Developer pursuant to this Agreement. ARTICLE III. DEVELOPMENT REQUIREMENTS Section 3.1. Minimum Improvements. The Developer agrees to complete Minimum Improvements generally consisting of the construction of a $40 million 12-story mixed use approximate 200,000 square foot building and all related site and streetscape elements on the Development Property, all as more fully described on Exhibit B hereto. Construction of the Minimum Improvements shall commence no later than May 1, 2008 and shall be completed by December 1,2010 and the $40 million capital investment in Minimum Improvements shall be verified via the construction contract. Developer agrees to use best efforts to establish a viable hotel in the project. Best efforts require that the space be built out to enable a functioning hotel with an option for apartments ifhotel option does not succeed, pursuant to Exhibit Band that construction plans show such. - 6 - draft - draft - draft - draft - draft The Developer shall submit all exterior changes or new construction requiring a building permit for review and approval by the City Staff Design Review Committee. Pursuant to this Development Agreement, the Developer shall submit a site plan for approval by the City Manager, or his/her designee, which includes all site and streetscape improvements. The Staff Design Review Committee will review the project under a Level II review under Chapter 3, Article C. Design Review of the Zoning Code, City of Iowa City within seven (7) working days of receipt of the design plans by the Director of Planning & Community Development. Additional criteria specific to this Project include, but are not limited to: . Appropriate building articulation at the street level . Multiple entries along Burlington and Clinton streets . Seamless integration of the private spaces at the street level with the public sidewalk . Streetscape improvements including textured concrete, plantings, and street furniture, as approved by the City. During the term of this Agreement as established in Section 12.8, any proposed new construction on the Development Property shall be subject to approval by the Design Review Committee before the issuance of any building permit. Section 3.2. Energy Efficiency. Developer agrees to seek an Energy Efficiency certification such as LEED or Utility Company certification. Section 3.3. Certificate of Completion. Upon written request of the Developer after issuance of an occupancy permit for the Minimum Improvements, the City will furnish the Developer with a Certificate of Completion for the Project in recordable form, in substantially the form set forth in Exhibit C attached hereto. Such Certificate of Completion shall be a conclusive determination of satisfactory termination of the covenants and conditions of this Agreement with respect to the obligations of the Developer to construct such portion of the Minimum Improvements. A Certificate of Completion may be recorded in the proper office for the recordation of deeds and other instruments pertaining to the Development Property at the Developer's sole expense. If the City shall refuse or fail to provide a Certificate of Completion in accordance with the provisions of this Section 3.2, the City shall within twenty (20) days - 7 - -.", draft .-- draft ..- draft - draft w draft after written request to the Developer, provide the Developer with a written statement indicating with adequate detail, in what respects the Developer has failed to complete the Minimum Improvements in accordance with the provisions of this Agreement, or is otherwise in default under the terms of this Agreement, and what measures or acts will be necessary in the opinion of the City, to obtain such Certificate of Completion. Once the Certificate of Completion is issued by the City, design review on the Minimum Improvements will cease; however, any proposed new construction on the Development Property shall continue to be subject to approval by the Design Review Committee before the issuance of any building permit during the term of this Agreement as established under Section 12.8. New construction shall not include changes in signage or minor changes in the existing structure which do not result in significant changes to the fa((ade of the building. ARTICLE IV. RESERVED - 8 - draft - draft - draft - draft M draft ARTICLE V. INSURANCE Section 5.1. Insurance Requirements. (a) Upon completion of construction of the Minimum Improvements and at all times prior to the Termination Date, the Developer shall maintain, or cause to be maintained, at its sole cost and expense (and from time to time at the request of the City shall furnish proof of the payment of premiums on) insurance as follows: (i) Insurance against loss and/or damage to the Minimum Improvements under a policy or policies covering such risks as are ordinarily insured through property policies by similar businesses, including (without limitation the generality of the foregoing) fire, extended coverage, vandalism and malicious mischief, explosion, water damage, demolition cost, debris removal, and collapse in an amount not less than the full insurable replacement value of the Minimum Improvements, but any such policy may have a deductible amount of not more than $100,000. No policy of insurance shall be so written that the proceeds thereof will produce less than the minimum coverage required by the preceding sentence, by reason of co-insurance provisions or otherwise, without the prior consent thereto in writing by the City. The term "full insurable replacement value" shall mean the actual replacement cost of the Minimum Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be determined and redetermined from time to time at the request of the City, but not more frequently than once every three years, by an insurance consultant or insurer selected and paid for by the Developer and approved by the City. (ii) Comprehensive general public liability insurance, including personal injury liability for injuries to persons and/or property, including any injuries resulting from the operation of automobiles or other motorized vehicles on or about the Development Property, in the minimum amount for each occurrence and for each year of $1,000,000 with a maximum deductible of$500,000. (iii) Such other insurance, including worker's compensation insurance respecting all employees of the Developer, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the Developer may be self-insured with respect to all or any part of its liability for worker's compensation. - 9 - ,-' draft -.. draft .- draft - draft - draft (b) All insurance required by this Article V to be provided prior to the Termination Date shall be taken out and maintained in responsible insurance companies which are authorized under the laws of the State to assume the risks covered thereby. The Developer will deposit annually with the City copies of policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V, each policy shall contain a provision that the insurer shall not cancel or modify it without giving written notice to the Developer and the City at least thirty (30) days before the cancellation or modification becomes effective. Not less than fifteen (15) days prior to the expiration of any policy, the Developer shall furnish the City evidence satisfactory to the City that the policy has been renewed or replaced by another policy conforming to the provisions of this Article V, or that there is no necessity therefore under the terms hereof. In lieu of separate policies, the Developer may maintain a single policy, or blanket or umbrella policies, or a combination thereof, which provide the total coverage required herein, in which event the Developer shall deposit with the City a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. ( c) The Developer agrees to notify the City immediately in the case of damage exceeding $25,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. Net Proceeds of any such insurance shall be paid directly to the Developer, and the Developer will forthwith repair, reconstruct and restore the Minimum Improvements to substantially the same or an improved condition or value as they existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Developer will apply the Net Proceeds of any insurance relating to such damage received by the Developer to the payment or reimbursement of the costs thereof. (d) The Developer shall complete the repair, reconstruction and restoration of the Minimum Improvements, whether or not the Net Proceeds of insurance received by the Developer for such purposes are sufficient. ARTICLE VI. COVENANTS OF THE DEVELOPER Section 6.1. Maintenance of Properties. The Developer will maintain, preserve and keep its properties (whether owned in fee or a leasehold interest), including but not limited to the Minimum Improvements, in good repair and working order, ordinary wear - 10- draft - draft - draft - draft - draft and tear accepted, and from time to time will make all necessary repairs, replacements, renewals and additions. Section 6.2. Maintenance of Records. The Developer will keep at all times proper books of record and account in which full, true and correct entries will be made of all dealings and transactions of or in relation to the business and affairs of the Developer in accordance with generally accepted accounting principles, consistently applied throughout the period involved, and the Developer will provide reasonable protection against loss or damage to such books of record and account. Section 6.3. Compliance with Laws. The Developer will comply with all laws, rules and regulations relating to the Minimum Improvements, other than laws, rules and regulations the failure to comply with which 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 the Developer. Section 6.4. Non-Discrimination. In operating the Minimum Improvements, the Developer shall not discriminate against any applicant, employee or tenant because of race, creed, color, religion, sex, national origin, sexual orientation, age, disability, marital status or gender identity. The Developer shall ensure that applicants, employees and tenants are considered and are treated without regard to their race, creed, color, religion, sex, national origin, sexual orientation, age, disability, marital status or gender identity. -" Section 6.5. Available Information. The Developer shall upon request provide the City with a letter of an independent public accountant selected by the Developer to the effect that a Certified Public Accountant has reviewed the financial statements of the Developer which have been prepared in conformity with the federal income tax fair market basis, that the examination of such financial statements by such accountant has been undertaken in accordance with generally accepted auditing standards, and that the Developer is financially capable of fulfilling its obligations under this Agreement. Section 6.6. Continued Operation. Commencing upon the signing of the Agreement, and with the understanding that the Development Property may be subject to horizontal property regime, the Developer agrees that it will operate a mixed use building occupied by commercial and residential users at the Development Property and will continue operation of this building until at least the Termination Date set forth in Section 12.8 hereof. - 11 - - draft .- draft draft-- draft draft Section 6.7. Annual Certification. To assist the City in monitoring the performance of the Developer hereunder, a duly authorized officer of the Developer shall annually provide to the City: (a) a written statement from the County Auditor showing the amount of Tax Increments (as defined in Section 1.1 of this Agreement) in respect of the Minimum Improvements (excluding increases in assessed or actual value due to market factors) for the following fiscal year; (b) proof that all ad valorem taxes on the Development Property have been paid for the prior fiscal year; and (c) certification that such officer has re-examined the terms and provisions of this Agreement and that at the date of such certificate, and during the preceding twelve (12) months, the Developer is not, or was not, in default in the fulfillment of any of the terms and conditions of this Agreement and that no Event of Default (or event which, with the lapse of time or the giving of notice, or both, would become an Event of Default) is occurring or has occurred as of the date of such certificate or during such period, or if the signer is aware of any such default, event or Event of Default, said officer shall disclose in such statement the nature thereof, its period of existence and what action, if any, has been taken or is proposed to be taken with respect thereto. Such statement, proof and certificate shall be provided not later than November 1 of each year, commencing no later than November 1, 2011, and ending on November 1, 2022 both dates inclusive. Upon the first December 1 certification, the City will use the January 1 assessment on the Development Property to calc 1 1 . fI h fi 11 h d 1 u ate an annua mcrement rom t e 0 owmg sc e u e: for NovemberlDecember Certifications in City uses January Assessment from 2010 2007 2011 2008 Prior to the November 1 in the year of the first certification, the Developer shall submit the lease plan for the Development Property, with the gross leasable floor space calculation to the City. ARTICLE VII. ASSIGNMENT AND TRANSFER Section 7.1. Status of the Developer; Transfer of Substantially All Assets. With the exception of parcels subject to a residential horizontal property regime, as security for the obligations of the Developer under this Agreement, the Developer represents and agrees that, prior to the issuance of the Certificate of Completion and prior to the Termination Date, the Developer will not dispose of all or substantially all of its assets or assign its interest in this Agreement to any other party unless (i) the transferee partnership, corporation, limited liability company or individual assumes in writing all of the obligations of the Developer under this Agreement and (ii) the City, as represented by the City Manager, consents thereto in writing in advance thereof. Notwithstanding the - 12 - draft - draft - draft - draft - draft foregoing, however, or any other provisions of this Agreement, the Developer may pledge any and/or all of its assets as security for any financing of the Minimum Improvements, and the City agrees that Developer may assign its interest under this Agreement for such purpose. -" - 13 - - draft -- draft -- -- di'aft ~ draft ARTICLE VIII. ECONOMIC DEVELOPMENT GRANTS Section 8.1. Economic Development Grants. (a) For and in consideration of the obligations being assumed by the Developer hereunder, and in furtherance of the goals and objectives of the Urban Renewal Plan for the Project Area and the Urban Renewal Act, the City agrees, subject to the Developer having received a Certificate of Completion and being and remaining in compliance with the terms of this Agreement and to the terms of this Article VIII, to assume an obligation to make up to thirteen (13) consecutive annual payments to the Developer commencing no later than June I, 2013 and ending on June 1,2024, pursuant to Section 403.9 of the Urban Renewal Act, equal in amounts to one hundred percent (100%) per fiscal year of the Tax Increments collected by the City with respect to the Minimum Improvements on the Development Property under the terms of the Ordinance (without regard to any averaging that may otherwise be utilized under Section 403 .19( 6) and excluding any interest that may accrue thereon prior to payment to the Developer) during the preceding twelve-month period in respect of the Development Property and the Minimum Improvements, but subject to adjustment and conditions precedent as provided in this Article (such payments being referred to collectively as the "Economic Development Grants"). (b) The obligation of the City to make an Economic Development Grant to the Developer in any year as specified above shall be subject to and conditioned upon the timely filing by the Developer of all previous annual statements, proofs and certifications required under Section 6.7 hereof and the City Manager's approval thereof. Beginning with the first November I certification, if the Developer's annual statement, proof and certification is timely filed and contains the information required under Section 6.7 and the City Manager approves of the same, the City shall certify to the County prior to December 1 ofthat year its request for the available Tax Increments resulting from the assessments imposed by the County as of January 1 of that year, to be collected by the City as taxes and paid during the 'following fiscal year, shall thereafter be disbursed to the Developer on June 1 of the following fiscal year. (For example, if the Developer and the City each so certify on November and December of 20 1 0, respectively, the first Economic Development Grant would be paid to the Developer on June 1,2012). (c) In the event that the annual statement, proof or certificate required to be delivered by the Developer under Section 6.7 is not delivered to the City by November I of any year, the Developer recognizes and agrees that the City may have insufficient time to review and approve the same and certify its request for- Tax Increments to the County - 14 - draft - draft - draft - draft - draft and that, as a result, no Economic Development Grant may be made to the Developer in respect thereof. (d) The total, aggregate amount of all Economic Development Grants under this Agreement shall not exceed $16,374,800, which reflects a net present value of$9,162,253 at the end of the term of this agreement calculated on a discount rate of 6.25%. Each Economic Development Grant shall be equal to the sum of one hundred percent (100%) of all Tax Increments collected per fiscal year in respect of the assessments imposed on the Minimum Improvements as of January 1, after the first certification, and on January 1 of each of the following years, until 2024 or when the total, aggregate of all such Economic Development Grants equals no more than the sum of$16,374,800. Ifa final grant based upon one hundred percent of Tax Increments would result in total, aggregate Economic Development Grants in an amount exceeding $16,374,800, the final Economic Development Grant shall be reduced accordingly. Such Economic Development Grants shall at all times be subject to termination in accordance with the terms of this Article VIII. Thereafter the taxes levied on the Minimum Improvements shall be divided and applied in accordance with the Urban Renewal Act and the Ordinance. (e) In the event that any certificate filed by the Developer under Section 6.7 or other information available to the City discloses the existence or prior occurrence of an Event of Default that was not cured or cannot reasonably be cured under the provisions of Section 10.2 (or an event that, with the passage of time or giving of notice, or both, would become an Event of Default that cannot reasonably be cured under the provisions of Section 10.2), the City shall have no obligation thereafter to make any further payments to the Developer in respect of the Economic Development Grants and may proceed to take one or more of the actions described in Section 10.2 hereof. Section 8.2. Source of Grant Funds Limited. (a) The Economic Development Grants shall be payable from and secured solely and only by amounts deposited and held in the Hieronymus Square - City-University Proiect I TIF Account ofthe City. The City hereby covenants and agrees to maintain the Ordinance in force during the term hereof and to apply the incremental taxes collected in respect of the Minimum Improvements and allocated to the Hieronymus Square - City-University Proiect I TIF Account to pay the Economic Development Grants, as and to the extent set forth in Section 8.1 hereof. The Economic Development Grants shall not be payable in any manner by other tax increment revenues or by general taxation or from any other City funds. (b) Notwithstanding the provisions of Section 8.1 hereof, the City shall have no obligation to make an Economic Development Grant to the Developer if at any time - 15 - ,- drnft-drnft-drnft-drnft-drnft during the term hereof the City receives an opinion of its legal counsel to the effect that the use of Tax Increments resulting from the Minimum Improvements to fund an Economic Development Grant to the Developer, as contemplated under said Section 8.1, is not authorized or otherwise an appropriate project activity permitted to be undertaken by the City under the Urban Renewal Act or other applicable provisions of the Code, as then constituted, or under a controlling decision of an Iowa court having jurisdiction over the subject matter hereof. Upon receipt of such an opinion, the City shall promptly forward a copy of the same to the Developer. If the circumstances or legal constraints giving rise to the opinion continue for a period during which two (2) Economic Development Grants would otherwise have been paid to the Developer under the terms of Section 8.1, the City may terminate this Agreement, without penalty or other liability to the Developer, by written notice to the Developer. (c) The City makes no representation with respect to the amounts that may finally be paid to the Developer as the Economic Development Grants, and under no circumstances shall the City in any manner be liable to the Developer so long as the City timely applies the Tax Increments actually collected and held in the Hieronymus Square..= City-University Proiect I TIF Account (regardless of the amounts thereof) to the payment of the Economic Development Grants to the Developer, as and to the extent described in this Article. Section 8.3. Use of Other Tax Increments. Subject to this Article VIII, the City shall be free to use any and all Tax Increments collected in respect of increases in valuation on the Development Property unrelated to construction of the Minimum Improvements (i.e. increases in assessed or actual value due to market factors), or on any other properties within the Project Area, or any available Tax Increments resulting from the suspension or termination of the Economic Development Grants under Section 8.1 hereof, for any purpose for which the Tax Increments may lawfully be used pursuant to the provisions of the Urban Renewal Act, and the City shall have no obligations to the Developer with respect to the use thereof. - 16 - draft - draft -. draft - draft. draft ARTICLE IX. INDEMNIFICATION Section 9.1. Release and Indemnification Covenants. (a) The Developer releases the City and the governing body members, officers, agents, servants and employees thereof (hereinafter, for purposes of this Article IX, 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 or resulting from any defect in the Minimum Improvements. (b) Except for any willful misrepresentation or any willful or wanton misconduct or any unlawful act of the indemnified parties, the Developer 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 whatsoever by any person or entity whatsoever arising or purportedly arising from (i) any violation of any agreement or condition of this Agreement (except with respect to any suit, action, demand or other proceeding brought by the Developer against the City to enforce its rights under this Agreement), (ii) the acquisition and condition of the Development Property and the construction, installation, ownership, and operation of the Minimum Improvements or (iii) any hazardous substance or environmental contamination located in or on the Development Property. (c) The indemnified parties shall not be liable for any damage or injury to the persons or property of the Developer or its officers, agents, servants or employees or any other person who may be about the Minimum Improvements due to any act of negligence of any person, other than any act of negligence on the part of any such indemnified party or its officers, agents, servants or employees. (d) All covenants, stipulations, promises, agreements and obligations of the City contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the City, and not of any governing body member, officer, agent, servant or employee of the City in the individual capacity thereof. (e) The provisions of this Article IX shall survive the termination of this Agreement. - 17 - -- draft '"" w draft ~ ARTICLE X. DEF AUL T AND REMEDIES Section 10.1. Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement, anyone or more of the following events: (a) Failure by the Developer to cause the construction of the Minimum Improvements to be commenced and completed pursuant to the terms, conditions and limitations of Article III of this Agreement; or (b) Transfer of any interest in this Agreement or the assets of the Developer in violation of the provisions of Article VII of this Agreement; or (c) Failure by the Developer to substantially observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement; or (d) The holder of any Mortgage on the Development Property, or any improvements thereon, or any portion thereof, commences foreclosure proceedings as a result of any default under the applicable Mortgage documents; or (e) If the Developer shall: (A) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy Act of 1978, as amended, or under any similar federal or state law; or (B) make an assignment for the benefit of its creditors; or (C) admit in writing its inability to pay its debts generally as they become due; or (D) be adjudicated a bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Developer 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 the Developer or the Minimum Improvements, or part thereof, shall be appointed in any proceedings brought - 18 - draft - draft - draft - draft - draft against the Developer, and shall not be discharged within ninety (90) days after such appointment, or if the Developer shall consent to or acquiesce in such appointment; or (f) Any representation or warranty made by the Developer in this Agreement, or made by the Developer in any written statement or certificate furnished by the Developer 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. Section 10.2. Remedies on Default. Whenever any Event of Default referred to in Section 10.1 of this Agreement occurs and is continuing, the City, as specified below, may take anyone or more of the following actions after (except in the case of an Event of Default under subsections (e) or (f) of said Section 10.1 in which case action may be taken immediately) the giving of thirty (30) days' written notice by the City to the Developer and the holder of the First Mortgage (but only to the extent the City has been informed in writing of the existence of a First Mortgage and been provided with the address of the holder thereof) of the Event of Default, but only if the Event of Default has not been cured within said thirty (30) days, or if the Event of Default cannot reasonably be cured within thirty (30) days and the Developer does not provide assurances reasonably satisfactory to the City that the Event of Default will be cured as soon as reasonably possible: (a) The City may suspend its performance under this Agreement until it receives assurances from the Developer, deemed adequate by the City, that the Developer will cure its default and continue its performance under this Agreement; (b) The City may terminate this Agreement; (c) The City may withhold the Certificate of Completion; (d) The City may take any action, including legal, equitable or administrative action, which may appear necessary or desirable to enforce performance and observance of any obligation, agreement, or covenant of the Developer, as the case may be, under this Agreement; or (e) The City shall be entitled to recover from the Developer, and the Developer shall re-pay to the City, an amount equal to the most recent Economic Development Grant previously made to the Developer under Article VIII hereof, and the City may take any action, including any legal action it deems necessary, to recover such amount from the Developer. - 19 - - draft - draft -. draft - draft w draft Section 10.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the City is intended to be exclusive of any other available remedy or remedies, but each and every remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. Section IDA. No Implied Waiver. In the event any term or covenant contained in this Agreement should be breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 10.5. Agreement to Pay Attorneys' Fees and Expenses. Whenever any Event of Default occurs and the party who is not in default shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement or performance or observance of any obligation or agreement on the part of the party in default herein contained, the party in default agrees that it shall, on demand therefore, pay to the party not in default the reasonable fees of such attorneys and such other expenses as may be reasonably and appropriately incurred by the party not in default in connection therewith. ARTICLE XI. OPTION TO TERMINATE AGREEMENT Section 11.1. Option to Terminate. This Agreement may be terminated by the Developer if (i) the Developer is in compliance with all material terms of this Agreement and no Event of Default has occurred which has not been cured in accordance with the provisions of Section 10.2 hereof; and (ii) the City fails to comply with any material term of this Agreement, and, after written notice by the Developer of such failure, the City has failed to cure such noncompliance within ninety (90) days of receipt of such notice, or, if such noncompliance cannot reasonably be cured by the City within ninety (90) days of receipt of such notice, the City has not provided assurances reasonably satisfactory to the Developer that such noncompliance will be cured as soon as reasonably possible. Section 11.2. Effect of Termination. If this Agreement is terminated pursuant to this Article XI, this Agreement shall be from such date forward null and void and of no - 20- draft - draft -- draft - draft w draft further effect; provided, however, that the City's rights to indemnification under Article IX hereof shall in all events survive and provided further that the termination of this Agreement shall not affect the rights of any party to institute any action, claim or demand for damages suffered as a result of breach or default of the terms of this Agreement by another party, or to recover amounts which had accrued and become due and payable as of the date of such termination. In any such action, the prevailing party shall be entitled to recover its reasonable attorneys fees and related expenses incurred in connection therewith (but only, in the case of the City, to the extent permitted by applicable law). Upon termination of this Agreement pursuant to this Article XI, the Developer shall be free to proceed with the construction and operation of the Minimum Improvements at its own expense and without regard to the provisions of this Agreement. ARTICLE XII. MISCELLANEOUS Section 12.1. Conflict of Interest. The Developer represents and warrants that, to its best knowledge and belief after due inquiry, no officer or employee of the City, or its designees or agents, nor any consultant or member of the governing body of the City, and no other public official of the City who exercises or has exercised any functions or responsibilities with respect to the Project during his or her tenure, or who is in a position to participate in a decision-making process or gain insider information with regard to the Project, has had or shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work or services to be performed in connection with the Project, or in any activity, or benefit therefrom, which is part of the Project at any time during or after such person's tenure. Section 12.2. Notices and Demands. A notice, demand or other communication under this Agreement by any party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, and (a) In the case of the Developer, is addressed or delivered personally to the Developer at 711 S. Gilbert Street, Iowa City, Iowa 52240. (b) In the case of the City, is addressed to or delivered personally to the City at City Hall, 410 E. Washington Street, Iowa City, Iowa, 52240, Attn: City Manager; or to such other designated individual or to such other address as any party shall have furnished to the other in writing in accordance herewith. - 21 - .- drnft-drnft-drnft-drnft-drnft Section 12.3. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 12.4. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 12.5. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Iowa. Section 12.6. Entire Agreement. This Agreement and the exhibits hereto reflect the entire agreement between the parties regarding the subject matter hereof, and supersedes and replaces all prior agreements, negotiations or discussions, whether oral or written. This Agreement may not be amended except by a subsequent writing signed by all parties hereto. Section 12.7. Successors and Assigns. This Agreement is intended to and shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. However, all economic development grants shall be payable only to the Developer. Section 12.8. Termination Date. This Agreement shall terminate and be of no further force or effect on and after June 1,2024. Section 12.9 Recording. This Agreement shall be recorded at the Johnson County Recorder's Office, Iowa City, within 30 days of execution at the expense of the Developer. IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in its name and behalf by its Mayor and its seal to be hereunto duly affixed and attested by its City Clerk, the Developer has caused this Agreement to be duly executed in its name and behalf by John Hieronymus and Michael Hodge, principals of Hieronymus Square Associates. - 22- draft -, draft - draft - draft - draft (SEAL) CITY OF IOWA CITY, IOWA By: Mayor A TTES1: By: City Clerk Hieronymus Square Associates By: Developer\Owner Developer\Owner ATTEST: By: (title) STATE OF IOWA ) ) SS COUNTY OF ) On this day of , 2006, before me a Notary Public in and for said County, personally appeared Ross Wilburn and Marian Karr to me personally known, who being duly sworn, did say that they are the Mayor and City Clerk, respectively of the City of Iowa City, 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 voluntarily executed. - 23 - - draft -- draft - draft - draft - draft Notary Public in and for Johnson County,. Iowa - 24- drnft-drnft-drnft-drnft-drnft ) ) SS ) STATE OF COUNTY OF On this day of , 2006, before me the undersigned, a Notary Public in and for said County, in said State, personally appeared John Hieronymus and Michael Hodge, principals of Hieronymus Square Associates, to me personally known, who, being by me duly sworn, did say that the execution of said instrument to be the voluntary act and deed, by each of them voluntarily executed. Notary Public in and for County , - 25 - -- draft - draft -- draft .- draft ~ draft EXHIBIT A DEVELOPMENT PROPERTY The Development Property is described as consisting of all that certain parcel or parcels of land located in the City ofIowa City, County of Johnson, State ofIowa, more particularly described as follows: Need Legal With the street address of C - 1 drnft-drnft-drnft-drnft-drnft EXHIBIT B MINIMUM IMPROVEMENTS The Minimum Improvements shall consist of the construction a 12-story mixed-use building and related site and streetscape improvements within the Development Property as defined in Exhibit A. Said Minimum Improvements, as generally referenced by the site plan dated DATE, and attached hereto, are subject to applicable permits and approvals. These improvements shall include, but not be limited to, retail, office, and high-end residential condominium uses at a minimum investment of $40 million. The building will include a minimum of three floors of commercial retail and office development with best efforts to include a 40-unit hotel on floors four through six, and residential units with no more than 3 bedrooms per unit and no more than 30% ofthe units with 3 bedrooms. The site will include a landscaped courtyard framed by the building, which can be used as a drop-off and loading area as well as a landscaped amenity for the development, and streetscape improvements including trees, lights, street furniture, and sidewalk finishes, all as approved by the City. C-2 --" draft - draft -- draft - draft - draft EXHIBIT C CERTIFICATE OF COMPLETION WHEREAS, the City ofIowa City, Iowa (the "City") and Hieronymus Square Associates, having an office for the transaction of business at 711 S. Gilbert Street, Iowa City, Iowa (the "Developer"), did on or about the day of , 2009, make, execute and deliver, each to the other, an Agreement for Private Redevelopment (the "Agreement"), wherein and whereby the Developer agreed, in accordance with the terms of the Agreement, to develop and maintain certain real property located within the City and as more particularly described as follows: Need Legal With the street address of WHEREAS, the Agreement incorporated and contained certain covenants and restrictions with respect to the development of the Development Property, and obligated the Developer to construct certain Minimum Improvements (as defined therein) in accordance with the Agreement; and WHEREAS, the Developer has to the present date performed said covenants and conditions insofar as they relate to the construction of said Minimum Improvements in a manner deemed by the City to be in conformance with the approved building plans to permit the execution and recording of this certification. NOW, THEREFORE, pursuant to Section 3.2 ofthe Agreement, this is to certity that all covenants and conditions of the Agreement with respect to the obligations of the Developer, and its successors and assigns, to construct the Minimum Improvements on the Development Property have been completed and performed by the Developer and are hereby released absolutely and forever terminated insofar as they apply to the land described herein. The County Recorder of Johnson County is hereby authorized to accept for recording and to record the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants and conditions of said Agreement with respect to the construction of the Minimum Improvements on the Development Property. All other provisions of the Agreement shall otherwise remain in full force and effect until termination as provided therein. C - 3 draft - draft - draft - draft - draft (SEAL) ATTEST: By: City Clerk STATE OF IOWA ) ) SS COUNTY OF JOHNSON ) CITY OF IOWA CITY, IOWA By: Mayor C-4 - dnlft .- draft - On this day of ,2006, before me a Notary Public in and for said County, personally appeared Ross Wilburn and Marian Karr, to me personally known, who being duly sworn, did say that they are the Mayor and City Clerk, respectively of the City of Iowa City, 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 voluntarily executed. Notary Public in and for Johnson County, Iowa C - 5