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Home My WebLink About2007-07-26 Info Packet I;:: 1 ~~~~-r ~~~~IIII.~C- ...... ~ ~ CITY OF IOWA CITY www.icgov.org CITY COUNCIL INFORMATION PACKET July 26, 2007 MISCELLANEOUS IP1 Tentative Council Meetings and Work Session Agenda IP2 Letter from the Personnel Administrator: City of Iowa City Request for Qualifications City Manager Search Services IP3 Memorandum from the President, Downtown Association: Jim Mondanaro's Use of Planter Proposal IP4 Memorandum from the City Attorney: DTA Public Forum re: Mondanaro Proposal IPS Memorandum from the Parking Manager: Farmer's Market Parking IP6 Quarterly Investment Report April 1, 2007 - June 30, 2007 [submitted by the Finance Department Senior Accountant] IP7 Invitation: Asia in the Heartland Community Picnic Sunday, August 5, 2007 IP8 Agenda Packet: Economic Development Committee July 24, 2007 IP9 Final Minutes: Economic Development Committee July 10, 2007 PRELIMINARY/DRAFT MINUTES IP10 Telecommunications Commission: June 25,2007 IP11 Board of Appeals: July 2, 2007 IP12 Youth Advisory Commission: July 18, 2007 I;;; I --= -~ ~~Wj!:'t ~~"IID!-~ ....... -..&L. CiTY OF IOWA CiTY City Council Meeting Schedule and Work Session Agendas I o~ ::107 I July 26, 2007 www.icgov.org TENTATIVE FUTURE MEETINGS AND AGENDAS I . MONDAY, AUGUST 20 6:30p Council Work Session Emma J. Harvat Hall . TUESDAY, AUGUST 21 7:00p Formal Council Meeting Emma J. Harvat Hall . WEDNESDAY, AUGUST 22 4:30p Joint Meeting Emma J. Harvat Hall . TUESDAY, AUGUST 28 6:30p Special Council Work Session - Selection of firms to be interviewed Emma J. Harvat Hall . MONDAY, SEPTEMBER 3 Labor Day - Offices closed . TUESDAY, SEPTEMBER 4 TBA Special Council Work Session 7:00p Formal Council Meeting Emma J. Harvat Hall . SATURDAY, SEPTEMBER 15 8:00a - 5:00p Special Council Work Session - Interviews with firms Emma J. Harvat Hall . MONDAY, SEPTEMBER 17 6:30p Council Work Session Emma J. Harvat Hall . TUESDAY, SEPTEMBER 18 7:00p Formal Council Meeting Emma J. Harvat Hall . MONDAY, OCTOBER 1 6:30p Council Work Session Emma J. Harvat Hall . TUESDAY, OCTOBER 2 7:00p Formal Council Meeting Emma J. Harvat Hall . MONDAY, OCTOBER 15 6:30p Council Work Session Emma J. Harvat Hall . TUESDAY,OCTOBER16 7:00p Formal Council Meeting Emma J. Harvat Hall . MONDAY, NOVEMBER 5 TBA Council Work Session 7:00p Special Formal Council Meeting Emma J. Harvat Hall (Cover letter for RFQ's mailed) ~~ l- 1~ -,...= -...... .it..-..... .,...... ~~~~~ ~ ~...~ ~~ CITY OF IOWA CITY CITY OF IOWA CITY REQUEST FOR QUALIFICATIONS CITY MANAGER SEARCH SERVICES 410 East Washington Street Iowa City, Iowa 52240-1826 (319) 356-5000 (319) 356-5009 FAX www.icgov.org July 20, 2007 You are invited to submit a Statement of Qualifications for providing professional executive search services to assist the City of Iowa City, Iowa in finding and hiring a new City Manager. Firms interested in being considered for the services described are requested to submit 11 copies of the information requested herein in an envelope marked "Proposal for City Manager Search Services". Information must be received in the office of the City Clerk, 410 E. Washington St., Iowa City IA 52240 by noon (COT) on Monday, August 6,2007. Submittals will be reviewed by the City Council followed by interviews of selected firms. Interviews will be held in Iowa City, Iowa on Saturday, September 15 and must include the lead consultant assigned to the project. No phone interviews will be considered. Final selection will occur after the interviews are complete. Negotiations will be conducted and a contract will be finalized with the selected firm. After a contract is awarded, a letter will be sent to all firms who submitted qualifications. The City is not responsible for delays occasioned by the U.S. Postal Service, the internal mail delivery system of the City, or any other means of delivery employed by the respondent. Late responses to the project will not be considered. Any matter in this information package that requires explanation or interpretation must be inquired into by the respondent in writing at least 72 hours (excluding weekends and holidays) prior to the time set for the proposal submittal. FAX or e-mail all questions to Sylvia Mejia (fax and e-mail information listed below). The only official position of the City is that position which is stated in writing. No other means of communication shall be construed as a formal or official response statement. The City of Iowa City reserves the right to reject any or all responses, and to accept in whole or in part, the response which, in the judgment of the City Council, is the most responsive and responsible submittal. Respectfully, Sylvia A. Mejia IPMA-CP Personnel Administrator sylvia-mejia@iowa-city.org Fax 319-356-5027 (Cover letter for RFQ's on the City website) l ~ 1 .....~= -&:I :t~~i!:'t ~~~...,- ~~ 1 CITY OF IOWA CITY CITY OF IOWA CITY REQUEST FOR QUALIFICATIONS CITY MANAGER SEARCH SERVICES July 20, 2007 410 East Washington Street Iowa City, Iowa 52240-1826 (319) 356-5000 (319) 356-5009 FAX www.icgov.org You are invited to submit a Statement of Qualifications for providing professional executive search services to assist the City of Iowa City, Iowa in finding and hiring a new City Manager. Firms interested in being considered for the services described are requested to submit 11 copies of the information requested herein in an envelope marked "Proposal for City Manager Search Services". Information must be received in the office of the City Clerk, 410 E. Washington St., Iowa City IA 52240 by noon (COT) on Monday, August 6,2007. A copy of the DVD entitled "Cedar Rapidsllowa City Technology Corridor" distributed by the Iowa City Area Development Group (ICAD) is also available upon request until August 6, 2007 in my office and in the office of the City Clerk. Submittals will be reviewed by the City Council followed by interviews of selected firms. Interviews will be held in Iowa City, Iowa on Saturday, September 15 and must include the lead consultant assigned to the project. No phone interviews will be considered. Final selection will occur after the interviews are complete. Negotiations will be conducted and a contract will be finalized with the selected firm. After a contract is awarded, a letter will be sent to all firms who submitted qualifications. The City is not responsible for delays occasioned by the U.S. Postal Service, the internal mail delivery system of the City, or any other means of delivery employed by the respondent. Late responses to the project will not be considered. Any matter in this information package that requires explanation or interpretation must be inquired into by the respondent in writing at least 72 hours (excluding weekends and holidays) prior to the time set for the proposal submittal. FAX or e-mail all questions to Sylvia Mejia (fax and e-mail information listed below). The only official position of the City is that position which is stated in writing. No other means of communication shall be construed as a formal or official response statement. The City of Iowa City reserves the right to reject any or all responses, and to accept in whole or in part, the response which, in the judgment of the City Council, is the most responsive and responsible submittal. Respectfully, Sylvia A. Mejia IPMA-CP Personnel Administrator sylvia-mejia@iowa-city.org Fax 319-356-5027 l ~ 1 -,...= -~ ~~ai~'t ::-~ ~...~ ~AL- CITY OF IOWA CITY BACKGROUND 410 East Washington Street Iowa City, Iowa 52240-1826 (319) 356-5000 (319) 356-5009 FAX www.icgov.org Iowa City, Iowa is strategically located in the heart of the Midwest, near the geographical center of the country. Located in the center of eastern Iowa, Iowa City lies within 300 miles of Chicago, Minneapolis, Omaha and St. Louis. Iowa City is both casual and cosmopolitan, a gathering place for people from all walks of life. The downtown area with its mall, specialty shops and services attracts people from surrounding areas. With a population of 62,220 people, Iowa City has a major art gallery, remarkable theatre and music events and many cultural events. Iowa City is a center of learning, a place where education is valued by students of all ages and by the community as a whole. The city's public school system has an enviable record of success in educating young people. Iowa City is home to the University of Iowa which draws faculty and students from around the world. Iowa City has long been distinguished as one of the nation's leading medical centers. The University of Iowa Hospitals and Clinics provides health care through extensive clinical services. Iowa City residents also have the services of Mercy Hospital, an outstanding community hospital. The Veterans Administration Medical Center is Iowa City's third hospital. Iowa City's largest employers include ACT Inc., Pearson Educational Measurement, Lear Corporation, University of Iowa, Mercy Hospital, Proctor & Gamble, Oral B Laboratories, University of Iowa Health Care, VA Medical Center, Systems Unlimited, Hy-Vee, the City of Iowa City, Iowa City Community School District and Johnson County. The City of Iowa City operates under a City Council/City Manager form of government. The voters of the City elect the seven members of the City Council on a non-partisan basis. The mayor is elected by the City Council. The City Council is the governing body and is responsible for the appointment of the City Manager. The City Manager is responsible for administering all policies, laws and ordinances enacted by the City Council. With support from the Assistant City Manager and Department Directors the City Manager is responsible for the day-to-day operations of the city organization. City Departments include City Attorney, City Clerk, Finance, Fire, Housing and Inspection Services, Library, Parking and Transit, Parks and Recreation, Planning and Community Development, Police, Public Works and Senior Center. The City work force consists of 635 permanent positions and up to 400 temporary positions. SCOPE OF SERVICES The City Council is seeking professional executive search services to assist them in hiring a City Manager. The anticipated scope of services will include: . Publicizing the opening including contacting potential candidates that may not be actively seeking employment. . Screening candidates and providing a list of preferred candidates to the City Council. . Performing background checks including verification of education, past employment, criminal history checks, credit checks and all other due diligence verification regarding previous work performance. . Arranging interviews (initial and second if required). . Assisting with negotiations with selected candidate (if requested). STATEMENT OF QUALIFICATIONS AND FORMAT Interested firms are strongly encouraged to submit qualifications, which are as comprehensive and complete as possible, so as to ensure a proper evaluation of the firm's capabilities. The Statement of Qualifications shall contain the following response items arranged in order, tabbed and with a table of contents. In order to ensure a uniform review process and to obtain the maximum degree of comparability, it is required that the submittal be organized in the manner specified. The Statement of Qualifications will be considered public information upon opening following the deadline. 1. Name of firm, owners and brief history of the firm. 2. Key personnel: specific qualifications of the individual proposed for this project shall be included. The geographic location of this individual should be indicated as well as major current assignments and availability of this individual. Personnel should not be proposed unless they will be available to fulfill proposed project commitments. The individual proposed for this project will be required to interview with the Council as well as any other individual designated by the firm. 3. Firm capabilities and experience: a detailed description of the firm's technical capabilities as they relate to providing executive search services in the public sector. Included herein are: a. Firm's experience filling executive level positions with public sector employers. b. Listing of the past seven years experience with City Manager recruitments including identification of lead consultant on each project and whether lead consultant is still with the company. If the lead consultant proposed for this project was involved as the lead consultant on a City Manager recruitment with another firm within the past seven years, please include this recruitment information. c. Firm's experience utilizing a participatory process involving the community including a description of that process. d. Description of a minimum of three (3) City Manager searches the firm has conducted including timetables and outcomes. 4. References: references should be for City Manager searches that best demonstrate the firm's ability to complete the proposed project successfully. For each reference provide a brief description of the project, the client name, year completed, and the portion of work for which your firm was responsible. The responsibilities of any personnel on those projects who are proposed for work on this project should also be included. The City of Iowa City reserves the right to contact references other than, and/or in addition to, those furnished. 5. Other information the firm wishes to have considered during the evaluation of professional qualifications may also be included. 6. Anticipated schedule: a schedule reflective of the anticipated time necessary for a City Manager search. METHOD OF EVALUATION, SELECTION AND RETENTION The City Council will evaluate the submittals based on the firm's experience and qualifications in public sector executive searches including City Manager searches, the firm's experience utilizing community involvement in the process and references. Selected firms will be invited to interview with the City Council in Iowa City IA on September 15, 2007. These meetings will be held in open session. Following the interviews the Council will select a firm and will work with that firm to determine the terms of the contract. This allows both parties to have a dialog and discuss the project thoroughly, resulting in a mutual understanding of the expectations and the type of work required. Once a firm has been selected a cost proposal will be submitted within five business days of the City's request. The cost proposal must include an official offer to undertake the proposed work at the proposed price and a detailed explanation of the proposed price, which shall include an estimate of the time to be spent by the firm on the project. All cost proposals shall remain in effect for ninety days from the date of the City's receipt of the cost proposal. In the event the negotiations between the selected firm and the City cannot be completed as a result of an inability to reach agreement on the fee for services or the scope of services to be performed, then at the option of the City, the negotiations will proceed to another firm. After the City accepts the fee proposal, the parties shall enter a written contract. The final proposed contract will be approved by resolution of the City Council. SUBMITTAL Statements of Qualifications shall be addressed as follows and submitted to: City Manager Search City of Iowa City Office of the City Clerk 410 E. Washington St. Iowa City IA 52240 Method of Submittal: U.S. Mail delivery, delivery service, in person; Fax submittals are not acceptable. The envelope shall be endorsed on the outside with the Firm's name and return address. TIMELlNE FOR SELECTION OF FIRM Noon, August 6 August 21 August 28 September 15 Response from firms to RFQ Council members to provide list of top 5 firms to City Clerk Council work session to select firms to be interviewed Council work session to interview firms RIGHTS RESERVED BY THE CITY The rights reserved by the City include, but are not limited to, the following: . The City reserves the right to select, and subsequently recommend for award, the firm which best meets its required needs, quality levels and budget constraints. . The City reserves the right to require further documentation prior to the award of a contract. . The City reserves the right to reject any or all submittals. The City further reserves the right to waive technicalities and formalities in submittals, as well as to accept in whole or in part such submittals where it is deemed advisable in protection of the best interests ofthe City. . The City reserves the right to enter into discussion with firms regarding their qualifications and associated monetary offers. Any such discussions shall not obligate the City in any manner. . The City reserves the right to rescind its acceptance of a submittal at any time in the event the scope of servfces and work products furnished do not meet the prescribed service quality standards or the firm fails to properly fulfill its service and delivery obligations. All such determinations shall be made solely at the discretion of the City and shall be without penalty to the City. morn Downtown Association of Iowa City July 25, 2007 To: From: Re: City of Iowa City Council Members Craig Gustaveson, President, Downtown Association Jim Mondanaro 's Use of Planter Proposal The Downtown Association is sponsoring a Public Forum on August 1st regarding Jim Mondanaro's use of planter proposal. We are inviting DTA members, the Pedestrian Plaza merchants and bar owners and the general public. Jim Mondanaro will also be invited to make a brief presentation of his proposal. We would like to keep this as an informal meeting but encourage members of the City Council to attend. If you plan to attend, please RSVP to Dada Boudjenah at dtaiowacity@gmail.com by Monday, July 30. Respectfully, Craig Gustaveson President, Downtown Association Public Forum August 1,2007 3:30-5:30 p.m. Chamber Offices W[] [1.1.~ iP ,~ 1 ~~5._~... ~~~jt:~ ~... ~aII.~ -"\ - CITY OF IOWA CITY MEMORANDUM Date: July 26, 2007 From: City Council Eleanor Dilkes, City Attorney v To: Re: DTA Public Forum re: Mondanaro Proposal Council members have been invited to attend the DTA's Public Forum on August 1, 2007. This forum is not being noticed as a meeting of the City Council. Therefore, if four or more of you are in attendance you may not participate and should only listen. Cc: City Manager Assistant City Manager City Clerk DTA ern Steve Atkins From: Chris O'Brien Thursday, July 19,20079:50 AM Steve Atkins Sent: To: Subject: Farmer's Market Parking Steve, I wanted to update you on the Farmer's Market parking issue that we discussed. Working with Tammy Neumann we are putting together signs that will be posted around the entrances to Chauncey Swan garage and the Recreation Center parking lot that will direct market shoppers to the City Hall Lot. Doc Services is obtaining stickers of the Farmer's Market logo that will be adhered to the signs which will be made up by the City's sign shop, Tammy is also sending out notices to the vendors to inform them that parking will be free in the City Hall Lot for market shoppers. Barb Coffey has placed information on the Farmer's Market website stating that parking for the market will be free in the City Hall Lot. I will keep you updated on the progress with the signs. Chris el)/7 ta;Uu~ 7/19/2007 CITY OF IOWA CITY QUARTERL Y INVESTMENT REPORT Apri I 1, 2007 to June 30, 2007 Finance Department Prepared by: Brian Cover Senior Accountant ~ .. OVERVIEW The City of Iowa City's investment objectives are safety, liquidity and yield. The primary objective of the City of Iowa City's investment activities is the preservation of capital and the protection of investment principal. The City's investment portfolio remains sufficiently liquid to enable the City to meet operating requirements that cash management procedures anticipate In investing public funds, the City's cash management portfolio is designed with the objective of regularly exceeding the average return on the six month U,S. Treasury Bill. The Treasury Bill is considered a benchmark for risk less investment transactions and therefore comprises a minimum standard for the portfolio's rate of return. The rolling average return on the six-month U.S. Treasury Bill for the prior 365 days was 5.07% at 6/30/07. The investment program seeks to achieve returns above this threshold, consistent with risk limitations and prudent investment principles, The rate of return on the City's entire portfolio for the quarter was 5.34%. Investments purchased by the City of Iowa City for the fourth quarter of this fiscal year had an average return of 5.25%, which is 18 basis points higher than the threshold, Rates on new investment purchases in our operating cash portfolio for the fourth quarter were approximately 5 basis points higher than investments purchased at this time last year. The federal funds rate is the interest rate at which banks lend to each other. The Federal Reserve maintained the target of the federal funds rate at 5.25% during the second calendar quarter of 2007, The Federal Reserve has raised interest rates 400 basis points since June 2004 but has not raised the rate since June 2006. The quarterly investment report lists investments by fund, by institution, by maturity date, and investments purchased and redeemed. New official state interest rates setting the minimum that may be paid by Iowa depositories on public funds in the 180 to 364 day range during this quarter were 3.65% in April, 3,70% in May and 3.80% in June 2007. ity vs. 6 Month Treasury Bill owaC I City of -+- City of Iowa City - 6 Month T -bi 6.0 5.0 c .. .a 4.0 ! .... o & 3.0 J! c Q) ~ 2 Q) .0 0.. 1.0 0.0 Mar-06 Jun-06 Sep-06 Dee-06 Mar-O? Jun-07 Federal Funds Rate 7.0 6.5 6.0 5.5 Q) ....., 5.0 co ~ 4.5 ....., U> 4.0 ~ 3.5 Q) ....., 3.0 c: - 2.5 2.0 1.5 1.0 I I 1 I ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ }j }j }j ~C5 ~ ~ ~ ~(;j s:s s:s s:s ~~ ~ ~~ U(lj ~~ UrJj ~~ UrJj ~ )V C:J0 {)lO ~ )V C:J0 {)0 ~ )V C:J0 {)lO ~ )V EXHIBIT A CITY OF IOWA CITY INVESTMENTS ON HAND DETAIL LISTING BY MATURITY DATE 6/30/2007 INSTITUTION INVESTMENT PURCHASE MATURITY INVESTMENT INTEREST NAME TYPE DATE DATE AMOUNT RATE NORWEST BANK SAVINGS o 1-Dec-99 N/A $ 200,000.00 VARIABLE IOWA PUBLIC AGENCY INVEST TRUST IPAIT 13-J u n-02 N/A $ 3,000,000,00 VARIABLE HILLS BANK SAVINGS 10-0ct-06 N/A $ 1,000,000.00 VARIABLE BANK OF THE WEST CD 17 -May-07 01-Jul-08 $ 1,000,000.00 5.180 LIBERTY BANK CD 24-May-06 02-Jul-07 $ 3,500,000.00 5.370 UICCU CD 10-Aug-06 02-Jul-07 $ 2,000,000.00 5.520 UICCU CD 18-0ct-06 02-Jul-07 $ 2,425,000.00 5.360 BANK OF THE WEST 05 GO CD 4-Jun-07 05-Jul-07 $ 1,447,981.80 5.210 IOWA STATE BANK CD 26-Jul-06 06-Jul-07 $ 2,000,000.00 5.620 IPAIT CD 14-Sep-06 13-Jul-07 $ 750,00000 5.370 IPAIT CD 14-Sep-06 20-Jul-07 $ 2000,00000 5.370 IPAIT CD 14-Sep-06 27 -Jul-07 $ 750.00000 5.370 BANK OF THE WEST 07 GO CD 31-May-07 31-Jul-07 $ 400,00000 5.190 BANK OF THE WEST 07 GO CD 29-Jun-07 31-Jul-07 $ 400,000.00 5.170 FIRST AMERICAN BANK CD 31-Jan-07 31-Jul-07 $ 2,000,00000 5.460 IOWA STATE BANK CD 13-Sep-06 03-Aug-07 $ 2,000,000.00 5.460 UICCU CD 13-Sep-06 10-Aug-07 $ 750,000.00 5.410 FIRST AMERICAN BANK CD 11-0ct-06 17 -Aug-07 $ 2,150,000.00 5.310 FARMERS & MERCHANTS CD 11-0ct -06 24-Aug-07 $ 750,000.00 5.350 FIRST AMERICAN BANK CD 26-Feb-07 26-Aug-07 $ 2,000,000.00 5.310 BANK OF THE WEST 07 GO CD 31-May-07 31-Aug-07 $ 400,00000 5.210 UICCU CD 11-0ct -06 31-Aug-07 $ 2,150,00000 5.310 BANK OF THE WEST CD 18-0ct-06 07 -Sep-07 $ 750,000.00 5.290 IOWA STATE BANK CD 9-Mar-07 10-Sep-07 $ 2,000,00000 5.330 LIBERTY BANK CD 14-Jun-07 14-Sep-07 $ 2,000,000.00 5.325 IOWA STATE BANK CD 18-0ct-06 14-Sep-07 $ 2,150,000.00 5.310 BANK OF THE WEST CD 18-0ct-06 21-Sep-07 $ 750,00000 5,290 BANK OF THE WEST 07 GO CD 31-May-07 28-Sep-07 $ 400,000,00 5,220 BANK OF THE WEST CD 18-0ct-06 28-Sep-07 $ 2,150,00000 5.290 UICCU CD 28-Mar-07 28-Sep-07 $ 1,000,000.00 5.360 UICCU CD 28-Mar-07 28-Sep-07 $ 4,000,000,00 5.370 BANK OF THE WEST CD 18-0ct-06 05-Oct-07 $ 750,00000 5.290 UICCU CD 22-Dec-06 12-0ct-07 $ 2,150,00000 5.320 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 $ 1,000,00000 5.260 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 $ 1,000,00000 5260 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 $ 1,000,00000 5260 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 $ 1,000,00000 5.260 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 $ 1,000,000.00 5.260 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 $ 1,000,00000 5.260 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 $ 1,000,000.00 5.260 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 $ 1,000,00000 5.260 IOWA STATE BANK CD 13-Apr-07 15-0ct-07 $ 2,000,000.00 5.310 UICCU CD 22-Dec-06 19-0ct-07 $ 750,000.00 5.310 BANK OF THE WEST CD 20-Apr-07 22-0ct-07 $ 1,000,000.00 5.230 BANK OF THE WEST CD 20-Apr -07 22-0ct-07 $ 1,000,000,00 5.230 BANK OF THE WEST CD 20-Apr-07 22-0ct-07 $ 1,000,000.00 5.230 BANK OF THE WEST CD 20-Apr-07 22-0ct-07 $ 1,000,000.00 5.230 BANK OF THE WEST CD 20-Apr-07 22-0ct-07 $ 1,000,00000 5.230 BANK OF THE WEST CD 20-Apr-07 22-0ct-07 $ 1,000,000.00 5.230 UICCU CD 22-Dec-06 26-0ct-07 $ 2,150,00000 5.320 BANK OF THE WEST 07 GO CD 31-May-07 31-0ct-07 $ 400,000.00 5.230 UICCU CD 22-Dec-06 02-Nov-07 $ 750,000,00 5.310 BANK OF THE WEST CD 10-May-07 09-Nov-07 $ 6,000,00000 5.250 IOWA STATE BANK CD 17 -Jan-07 09-Nov-07 $ 2,000,000.00 5.320 INSTITUTION INVESTMENT PURCHASE MATURITY INVESTMENT INTEREST NAME TYPE DATE DATE AMOUNT RATE IOWA STATE BANK CD 10-May-07 12-Nov-07 $ 2,000,00000 5.270 FARMERS & MERCHANTS CD 15-Feb-07 16-Nov-07 $ 1,000,00000 5.500 BANK OF THE WEST CD 17 -May-07 19-Nov-07 $ 5,000,00000 5.260 IOWA STATE BANK CD 17-May-07 19-Nov-07 $ 2,000,00000 5.270 FIRST AMERICAN BANK CD 15-Feb-07 21-Nov-07 $ 2,000,000.00 5.310 BANK OF THE WEST 07 GO CD 31-May-07 30-Nov-07 $ 400,000.00 5.230 HILLS BANK CD 29-Nov-06 30-Nov-07 $ 2,000,000.00 5.410 HILLS BANK CD 29-Nov-06 07 -Dee-07 $ 1,000,000.00 5.410 LIBERTY BANK CD 14-Jun-07 14-Dee-07 $ 2,000,00000 5.355 HILLS BANK CD 29-Nov-06 14-Dee-07 $ 2,000,000.00 5.410 HILLS BANK CD 29-Nov-06 21-Dee-07 $ 1,000,00000 5.410 HILLS BANK CD 29-Nov-06 28-Dee-07 $ 2,000,00000 5.410 LIBERTY BANK 03 GO CD 29-Jun-07 29-Dee-07 $ 1,256,590.95 5.275 BANK OF THE WEST 07 GO CD 31-May-07 31-Dec-0 7 $ 400,000.00 5.230 UICCU CD 17-Jan-07 02-Jan-08 $ 2,400,00000 5.310 FARMERS & MERCHANTS CD 15-F eb-07 11-Jan-08 $ 1,000,000,00 5.510 BANK OF THE WEST 07 GO CD 31-May-07 31-Jan-08 $ 400,000.00 5.230 BANK OF THE WEST CD 26-Feb-07 26-Feb-08 $ 2,261,901.00 5.280 BANK OF THE WEST 07 GO CD 31-May-07 29-Feb-08 $ 400,000.00 5,240 LIBERTY BANK 06A CD 29-Jun-07 29-Mar-08 $ 1,450,605.16 5.235 BANK OF THE WEST 07 GO CD 31-May-07 31-Mar-08 $ 400,00000 5.240 FREEDOM SECURITY CD 20-Apr-07 20-Apr-08 $ 1,000,000.00 5.200 BANK OF THE WEST 07 GO CD 31-May-07 30-Apr-08 $ 400,00000 5.240 BANK OF THE WEST 07 GO CD 31-May-07 30-May-08 $ 2,300,000,00 5.240 IOWA STATE BANK CD 14-Jun-07 16-Jun-08 $ 2,000,00000 5.360 FARMERS & MERCHANTS CD 03-Jul-06 27-Jun-08 $ 974,50400 5.760 FREEDOM SECURITY CD 20-Apr-07 01-Jul-08 $ 1,000,00000 5.200 FIRST AMERICAN BANK CD 17 -Jan-07 01-Jul-08 $ 2,000.00000 5.300 FARMERS & MERCHANTS CD 12-Dec-06 12-Dec-08 $ 6,577,86000 5.050 TOTAL $ 127,844,44291 CITY OF IOWA CITY INVESTMENT ACTIVITY FOR THE QUARTER ENDED JUNE 30. 2007 3/31/2007 $ 118,706,953.03 INVESTMENT PURCHASE MATURITY INTEREST INSTITUTION TYPE DATE DATE RATE PURCHASES 4/01/07 TO 6/30/07 BANK OF THE WEST 05 GO CD 4-Apr-07 04-May-07 5.210 $ 1,444,86312 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 5.260 $ 1,000,00000 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 5.260 $ 1,000,00000 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 5.260 $ 1,000,00000 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 5.260 $ 1,000,000.00 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 5.260 $ 1,000,000.00 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 5.260 $ 1,000,00000 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 5.260 $ 1,000,00000 BANK OF THE WEST CD 13-Apr-07 15-0ct-07 5.260 $ 1,000,000.00 IOWA STATE BANK CD 13-Apr-07 15-0ct-07 5.310 $ 2,000,000.00 BANK OF THE WEST CD 13-Apr-07 01-Jun-07 5.220 $ 2,500,00000 BANK OF THE WEST CD 20-Apr-07 22-0ct-07 5.230 $ 1,000,00000 BANK OF THE WEST CD 20-Apr-07 22-Oct-07 5.230 $ 1,000.00000 BANK OF THE WEST CD 20-Apr-07 22-0ct-07 5.230 $ 1,000000.00 BANK OF THE WEST CD 20-Apr-07 22-0ct-07 5230 :5 100000000 BANK OF THE WEST CD 20-Apr-07 22-0ct-07 5.230 S 1.000.00000 BANK OF THE WEST CD 20-Apr-07 22-0ct-07 5230 $ 1000,00000 FREEDOM SECURITY CD 20-Apr-07 01-Jul-08 5.200 $ 1,000,00000 FREEDOM SECURITY CD 20-Apr-07 20-Apr-08 5.200 $ 1,000,000.00 BANK OF THE WEST 05 GO CD 4-May-07 04-Jun-07 5.210 $ 1,441,514.60 IOWA STATE BANK CD 10-May-07 12-Nov-07 5.270 $ 2,000,00000 BANK OF THE WEST CD 10-May-07 09-Nov-07 5.250 $ 6,000,000.00 BANK OF THE WEST CD 17 -May-07 19-Nov-07 5.260 $ 5,000,000.00 BANK OF THE WEST CD 17 -May-07 01-Jul-08 5.180 $ 1,000,000.00 IOWA STATE BANK CD 17 -May-07 19-Nov-07 5.270 $ 2,000,00000 BANK OF THE WEST 07 GO CD 31-May-07 29-Jun-07 5.170 $ 400,00000 BANK OF THE WEST 07 GO CD 31-May-07 31-Jul-07 5.190 $ 400,00000 BANK OF THE WEST 07 GO CD 31-May-07 31-Aug-07 5.210 $ 400,00000 BANK OF THE WEST 07 GO CD 31-May-07 28-Sep-07 5.220 $ 400,00000 BANK OF THE WEST 07 GO CD 31-May-07 31-0ct-07 5.230 $ 400,00000 BANK OF THE WEST 07 GO CD 31-May-07 30-Nov-07 5.230 $ 400,00000 BANK OF THE WEST 07 GO CD 31-May-07 31-Dec-07 5.230 $ 400,00000 BANK OF THE WEST 07 GO CD 31-May-07 31-Jan-08 5.230 $ 400,00000 BANK OF THE WEST 07 GO CD 31-May-07 29-Feb-08 5.240 $ 400,00000 BANK OF THE WEST 07 GO CD 31-May-07 31-Mar-08 5.240 $ 400,000.00 BANK OF THE WEST 07 GO CD 31-May-07 30-Apr-08 5.240 $ 400,00000 BANK OF THE WEST 07 GO CD 31-May-07 30-May-08 5.240 $ 2,300,000.00 BANK OF THE WEST 05 GO CD 4-Jun-07 05-Jul-07 5.210 $ 1,447,981.80 IOWA STATE BANK CD 14-Jun-07 18-Jun-08 5.360 $ 2,000,00000 LIBERTY BANK CD 14-Jun-07 14-Sep-07 5325 $ 2,000,00000 LIBERTY BANK CD 14-Jun-07 14-Dec-07 5355 $ 2.000.00000 LIBERTY BANK 03 GO CD 29-Jun-07 29-Dec-07 5275 $ 1.256,59095 BANK OF THE WEST 07 GO CD 29-Jun-07 31-Jul-07 5.170 $ 400.00000 LIBERTY BANK 06A CD 29-Jun-07 29-Mar-08 5235 $ 1.450.60516 TOTAL PURCHASES $ 56,641,55563 REDEMPTIONS 4/01/07 TO 6/30/07 FIRST AMERICAN BANK CD 2-0ct-06 02-Apr-07 5.100 $ (1,444,863.12) LIBERTY BANK CD 2-Jan-07 02-Apr-07 5.280 $ (984,450.35) UICCU CD 20-Apr-06 06-Apr-07 5.230 $ (750,000.00) UICCU CD 20-Apr-06 13-Apr-07 5.230 $ (2150,000.00) UICCU CD 15-Nov-06 13-Apr-07 5.310 $ (2,150,000.00) UICCU CD 20-Apr-06 20-Apr-07 5.230 $ (750,000.00) UICCU CD 15-Nov-06 20-Apr-07 5.310 $ (750,000.00) BANK OF THE WEST 05 GO (PARTIAL REDEMPTION) CD 4-Apr-07 04-May-07 5.210 $ (9,570.36) LIBERTY BANK 06A (PARTIAL REDEMPTION) CD 29-J un-06 2S-Jun-07 5.690 $ (197,615.55) LIBERTY BANK 03 GO (PARTIAL REDEMPTION) CD 29-Mar-07 29-Jun-07 5.215 $ (24,423.24 ) IPAIT CD OS-May-06 27-Apr-07 5.290 $ (2,000,000.00) UICCU CD 15-Nov-06 27 -Apr-07 5.310 $ (2,150,000.00) BANK OF THE WEST 05 GO (PARTIAL REDEMPTION) CD 4-Apr-07 04-May-07 5.210 $ (1,435,29276) IPAIT CD OS-May-06 04-May-07 5.290 $ (1000,00000) IPAIT CD 16-Nov-06 04-May-07 5.340 $ (750000.00) IOWA STATE BANK CD 16-May-06 11-May-07 5.330 $ (2000,000.00) UICCU CD 15-Nov-06 11-May-07 5.330 $ (215000000) LIBERTY BANK CD 16-May-06 18-May-07 5290 $ (1000000.00) LIBERTY BANK 03 GO (PARTIAL REDEMPTION) CD 29-Mar-07 29-Jun-07 5215 $ (291,49463) LIBERTY BANK 06A (PARTIAL REDEMPTION) CD 29-Jun-06 28-Jun-07 5690 $ (620187.09) LIBERTY BANK CD 24-May-06 25-May-07 5.320 $ (2,000000.00) LIBERTY BANK CD 11-Mar-04 01-Jun-07 2.670 $ (190,347.39) FARMERS & MERCHANTS CD OS-Jun-06 01-Jun-07 5.500 $ (1,000,000.00) BANK OF THE WEST CD 13-Apr-07 01-Jun-07 5.220 $ (2,500,000.00) IPAIT CD 26-Jul-06 01-Jun-07 5.5S0 $ (1,000,000.00) BANK OF THE WEST CD 18-0ct-06 01-Jun-07 5.300 $ (3,600,000.00) IPAIT CD 16-Nov-06 01-Jun-07 5.360 $ (1,000,000.00) HILLS BANK CD 29-Nov-06 01-Jun-07 5.310 $ (1,000000.00) BANK OF THE WEST 05 GO CD 4-May-07 04-Jun-07 5.210 $ (1,441514.60) FREEDOM SECURITY CD OS-Jun-06 OS-Jun-07 5.520 $ (2000,000.00) IPAIT CD 26-Jul-06 08-Jun-07 5.5S0 $ (2000,000.00) IPAIT CD 26-Jul-06 15-Jun-07 5.580 $ (1,000,000.00) IOWA STATE BANK CD 26-Jul-06 22-Jun-07 5.600 $ (2,000,000.00) LIBERTY BANK 06 A CD 29-J un-06 28-Jun-07 5.690 $ (1,452,19174) UICCU CD 26-Jul-06 29-Jun-07 5.560 $ (1,000,000.00) LIBERTY BANK 03 GO CD 29-Mar-07 29-Jun-07 5.220 $ (1,312,114.92) BANK OF THE WEST 07 GO CD 31-May-07 29-Jun-07 5170 $ (400,000.00) TOTAL REDEMPTIONS $ (47,504,065.75) INVESTMENTS ON HAND AT 6/30/07 $ 127,844,44291 CITY OF IOWA CITY INVESTMENTS ON HAND SUMMARY BY FUND FUND TYPE 6/30/07 INVESTMENT AMOUNT 6/30/2006 INVESTMENT AMOUNT ALL OPERATING FUNDS GENERAL OBLIGATION BOND FUND EMPLOYEE BENEFIT RESERVE FUND BOND RESERVE FUND $ 103,705,177.91 $ $ $ $ $ $ 24,139,265.00 $ 90,463,300.34 379,277.80 200,000.00 17,624,265.00 TOTAL $ 127,844,442.91 S 108,666,84314 CITY OF IOWA CITY INVESTMENTS ON HAND LISTING BY INSTITUTION 6/30/07 6/30/2006 INSTITUTION INVESTMENT INVESTMENT NAME AMOUNT AMOUNT BANK OF THE WEST $ 40,809,882.80 $ 3,871,257.31 FARMERS & MERCHANTS SAVINGS BANK $ 10,302,364.00 $ 5,400,000.00 FIRST AMERICAN BANK $ 10,150,000.00 $ 7,508,738.58 FREEDOM SECURITY BANK $ 2,000,000.00 $ 3,974,504.00 HILLS BANK & TRUST $ 9,000,000.00 $ IOWA STATE BANK $ 18,150,000.00 $ 20,950,000.00 IOWA PUBLIC AGENCY INVESTMENT TRUST $ 6,500,000.00 $ 17,762,092.62 LIBERTY BANK $ 10,207,196.11 $ 21,485,294.78 U OF I COMM CREDIT UNION $ 20,525,000.00 S 20,810,00000 US BANK $ S 2,261,901 00 US TREASURY NOTES AND AGENCIES $ $ 1,454,614.69 WELLS FARGO BANK $ 200,000.00 S 200,00000 WEST BANK $ $ 2,788,440,16 VAN KAMPEN $ $ 200,000.00 TOTAL $ 127,844,442.91 $ 108,666,843,14 [JEJ Marian Karr From: Mollie [mollie@iowaasianalliance.com] Thursday, July 19, 2007 3:52 PM Sent: To: info@meditateiniowacity.org; nanjappa@mchsi.com; Council; aramirez@diversityfocus.org; rdraydm@aol.com; tcao001 @yahoo.com; amarsinha2001@mchsLcom; Pradhan .Namrata@principal.com; cstump@kirkwood.edu; president@foicr.org; aangle@mchsLcom; AlmaReed@financial.wellsfargo.com; amjed12841@hotmail.com; Annie. Hartman@dnr.state.ia.us; apeterson@diversityfocus.org; asingh@ambankqc.com; bdo@abcv.com; bing2f@yahoo.com; Chungs@wmpenn.edu; c1mcdonald@belinlaw.com; clo@amfam.com; cxiong@efr.org; cyndLchen@iowa.gov; Eric.E.ldehen@WellsFargo.COM; estradaj@dnc.org; focus242@yahoo.com; hkim@gvc.edu; huizenj@nationwide.com; il_ 90293@yahoo.com; jennifer .chung@pioneer.com; katakura@daikousa.com; kim.nguyen@dmps.k12.ia.us; kplogan@mchsi.com; Ivang@efr.org; mahajanpramodb@yahoo.com; Manisay .Lo@wellsfargo.com; mecksavanh@aol.com; pafortune@midamerican.com; pchan991@yahoo.com; phensypane@yahoo.com; PHONESV@nationwide.com; pjtaro826@aol.com; raj3m@aol.com; srodari@bankerstrust.com; swallowxyan@yahoo.com; swati .dandekar@legis.state.ia.us; swong@dmacc.edu; wagma_ wardak2000@yahoo.com; willwzhang@yahoo.com; gdt@mchsi.com Subject: IAA: You're invited! Attachments: Call for Cultural Performances.doc Dear IAA Members and Friends, This year marks an exciting time for the Iowa Asian Alliance (IAA) and the united Asian American community in Iowa. The IAA - Eastern Chapter held its inaugural event called Asia in the Heartland in Cedar Rapids in September of 2006. In this event, our diverse Asian communities throughout Eastern Iowa came together to showcase their cultural heritage and contribution to Iowa's economic landscape. In March of2007, the Eastern Chapter elected Suresh Basnet as President and Rita Arora as Vice President of the chapter. Omar Ahmed has taken the position of interim secretary until the position can be voted on at the next chapter meeting. To facilitate the continued collaboration of the diverse Asian communities in Eastern Iowa, the IAA - Eastern Chapter invites you, your family and members of your community to: Asia in the Heartland 1 st Annual Community Picnic Sunday, August 5th, 2007 2:00 p.m. - 5:00 p.m. Lake McBride, Main Lodge 3525 HWY 382 NE Solon, IA 52333 Please bring your favorite ethnic dish to share. Drinks and table service will be provided. Please RSVP to Shweta via phone at 515-273-5103 or via email atshweta@iowaasianalliance.com. We also invite communities to participate in a short program by showcasing your heritage through cultural presentations. For more information, please see the attached flyer. We hope you will take advantage of the opportunities for exposure and networking with community leaders from Eastern Iowa at the 1 st annual community picnic of the Eastern Chapter of IAA. See you August 5th! 7/19/2007 Page 2 of2 Sincerely, San Wong, Chair, IAA Board of Directors swong@dmacc.edu Suresh Basnet, President- IAA Eastern Chapter suresh. basnet@ingfp.com 7/1912007 AGENDA City of Iowa City City Council Economic Development Committee Tuesday, July 24,2007 8:30 a.m. Lobby Conference Room City Hall 1. Call to Order 2. Approval of Economic Development Committee Minutes, July 10, 2007 3. Alpla Expansion TIF Application - Ford 4. Gluten Evolution CDBG Economic Development Funds Request 5. Nile Valley Restaurant CDBG Economic Development Funds Request 6. Staff time a. Bankruptcy wording on CDBG loan application b. Loan portfolio management 7. Committee time 8. Adjoumment 07 -26:07 IP~ MINUTES CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE JULY 10, 2007 CITY HALL, LOBBY CONFERENCE ROOM Preliminary Members Present: Regenia Bailey, Connie Champion, Bob Elliott Members Absent: none Staff Present: Wendy Ford, Tracy Hightshoe, Jeff Davidson Carmen and Alex Legaspi with La Reyna, Jill Pitcher with Alpla, Joe Raso Others Present: RECOMMENDATIONS TO CITY COUNCIL: None. CALL MEETING TO ORDER: Bailey called the meeting to order at 8:32 AM. APPROVAL OF MINUTES OF MAY 29.2007: Champion moved that the minutes be approved, Elliott seconded. Motion carried 3-0. LA REYNA - CDBG APPLICATION: According to legal, the City can't fully secure the loan as the building was purchased under contract. The deed holder granted an interest in the building to West Chester Bank for the start up loan. West Chester also placed a blanket lien on all equipment for the business. Staff's recommendation is for $60,000, unsecured. The City will place a mortgage on the building with La Reyna and will file a blanket lien on all equipment; however it will not fully secure the loan. In the case of default we may recover some of the loss, however there is no guarantee that any amount will be recovered. Many of our previous CDBG loans have been secured or partially secured. In cases of default, the City has not recovered significant amounts, except for The Rack where all funds were recovered. La Reyna requested $100,000; however upon discussions with the applicant and their current lender, $60,000 would greatly assist their cash flow. Elliot asked how much would be recovered in case of default, worst case scenario. Hightshoe stated there is a possibility that the entire $60,000 could be lost in the worst case scenario. The City's lien would not take precedence over the existing liens in such an event. Hightshoe stated that the recommendation to fund was also in part due to the grocery store serving a low income neighborhood where there are limited places to by grocery store items. CDBG funds can be used to fund businesses that provide necessary goods and service (non-luxury items) to low-income residents. Elliot is uneasy with this proposal as this is the second unsecured loan in a row. Bailey commented that with this form of micro- enterprise the City exercises excellent due diligence. Champion moved to continue with the $60,000 loan, Bailey seconded. Motion carried 2 - 1. Alpla Expansion Tax Abatement ReQuest: Alpla is considering a $5 million expansion to their production and warehousing facilities and are requesting Partial Industrial Property Tax Exemption (PIPTE) or TIF to aid in this expansion. They have indicated that Iowa City is competing for the expansion with their Jefferson, Missouri location. PIPTE amounts to about a 45% break on taxes due on the new, improved part of the property. PIPTE can be automatically done through the City Assessor's office unless City Council would rather implement a TIF agreement. Alpla is seeking one or both, PIPTE and TIF, which is applicable in this case. One of Alpla's main customers is Procter and Gamble also located in Iowa City. The current TIF that Alpla has will expire in three years. Economic Development Committee June 21, 2007 Page 2 To address concerns of noise associated with Alpla, ambient noise readings were taken north of the plant in the residential zone and compared with the Pedestrian Mall, City Park, and the intersection of Court Street and 1st Avenue, all of which were higher than those taken near Alpla. HUD's ambient noise standards for residential areas rates 65 to 70 dB as undesirable and above 70 dB as unacceptable; the ambient noise near Alpla averaged around 55 to 57 dB. Registered complaints were from 2 years ago since which Alpla has made investments to mitigate the noise. Current perceptions of noise are more likely due to quality of noise as opposed to intensity as suggested by the ambient noise readings. Alpla has made efforts to ascertain whether there have been any further noise complaints. Champion supports a shorter tax abatement period since they currently have a TIF. Elliot supports helping Alpla as it has flourished here and the City has benefited from their presence. Alpla reports that the expansion will add 25 new permanent positions at an average wage of $14 per hour plus benefits. While Elliot and Champion are willing to help Alpla, they noted a preference for using TIF as it protects the debt of the taxing bodies. Ford will run some scenarios and produce them to Committee members in memo format for review prior to including them into a draft agreement. Motion for this issue will be considered at the next Economic Development Committee meeting on July 24th. DOWNTOWN MARKET NICHE ANALYSIS - STAFF UPDATE: Surveys concluded the previous day at midnight at which time there were more than 1,100 consumer surveys and only 31 business surveys; additional telephone surveys are being conducted by Marketek. This response rate is considered particularly low in light of the amount of publicity; Bailey is concerned about the implications of this turnout rate. Champion commented that with regards to small businesses, the issue may be that time is in short supply and thus a lack of willingness to devote the time to engage in the survey. Of the consumer surveys there is a good distribution of age ranges. Marketek is currently analyzing data and planning a site visit in September. Committee Time: Elliot wants to keep bankruptcy questions on the application for financial assistance. Bailey commented about circumstances that lead to bankruptcy, this is especially the case for women and women business owners. Elliot indicated that he is thinking on the abstract rather than with regards to The Discerning Eye bankruptcy which was tied to personal rather than business circumstances. Bailey disagreed with Elliot, stating concern over judging long past personal problems as businesses issues. Champion mentioned that few small businesses make enough money to live on in the first five years unless they get some help or significant business. Bailey is comfortable with using the 7 year window standard that banks do with regard to bankruptcy; Hightshoe reminded the committee that she uses an entire spectrum of due diligence tools to examine applications. ADJOURNMENT: Bailey adjourned the meeting at 9:25 AM. Next meeting is scheduled for Tuesday, July 24, 8:30 AM, in the City Hall Lobby Conference Room. Submitted by John Dawson s/pcd/mins/ecodev/200717 -1 0-07ed,doc Economic Development Committee Attendance Record 2007 Council Name Term 1/23 2/09 2/20 2/27 3/06 3/12 4/06 4/12 5/29 5/31 6/21 7/10 Expires Regenia Bailey 01/02/08 X X X X X X X X X X X X Bob Elliott 01/02/08 X X X X X X X X X X X X . Connie Champion 01/02/08 X X X X X X X X X OlE X X Key X = Present o = Absent OlE = Absent/Excused July 24, 2007 Council Economic Development Committee Gluten Evolution LLC Working Capital Staff Recommendation: The applicant has a history of paying loan obligations and is current with all supplier and bank payments. The owner has made a significant investment into the company. She is knowledgeable in her field, has experience with research and development and the product has a growing market. She has had a great team of advisors assisting her and has a strong lender recommendation in terms of her commitment to the business, repaying the loan and remaining in business. She has received and will continue to receive advice and consultation through the Entrepreneurial Development Center (EDC) in Cedar Rapids. The EDC helped recruit a chief operating officer knowledgeable in sales and financial operations. Since 2005 the cost of goods over sales (margins) is stable and the SGA/sales (overhead) have decreased. Estimated sales appear high, however lender believes if the business watches expenses and has increasing sales - the business will be successful. Staff recommendation: $50,000, partially secured by a mortgage on the private residence. Job creation would require 1.5 FTEs. Would not advise creating additional jobs until cash flow improves. Deferred payment allowed not exceeding 6 months; however term would remain at 7 years, 3% interest rate. Nile Valley Restaurant Staff Recommendation: The applicant disclosed that the co-owner filed for bankruptcy in 1997; however the credit report indicates no past due amounts and demonstrates that the applicants have a current history of paying loan obligations. The owner is willing to make a significant financial investment in the business and has experience with food preparation, storage and handling. A start up business is inherently more risky than a business that has been in operation. There,is no security for this loan. The wage for three of the positions would be over $1 0.50/hour. Any funds used for construction would require that the applicant comply with federal labor provisions, including Davis Bacon prevailing wages. This could potentially limit what contractors the applicant could use and would increase the time the applicant must spend with complying with the regulations. It also has the potential of increasing the price of the work. Staff recommendation: $25,000 for working capital only to limit risk/exposure and not subject the project to additional federal regulations. Maximum term of 7 years at 4% interest and new cash projections completed prior to award. Job creation would require three FTE positions that are paid $10.50/hour or more. Staff recommends as a condition of the award the owner receive additional business assistance regarding items such as loss prevention, portion control, personnel and financial management. The training required would be based on an evaluation by the Small Business Development Center. (Note: The City funded Oasis Falafel with CDBG-Economic Development Funds. The loan was for $25,000,4% interest, 5-year term) I ~ ! -~= -lit.., ~~W~~ ~::r...aa.' ..... - CITY OF IOWA CITY MEMORANDUM Date: To: From: Re: July 20, 2007 City Council Economic Development Committee Wendy Ford Alpla Expansion TIF request Alpla, a plastic container manufacturer on Heinz Rd. in Iowa City is seeking a financial assistance package for a $5 million expansion of their facility. They are requesting a 4 year $600,000 Tax Increment Financing Rebate. Alpla is a growing plastic bottle manufacturer in our industrial area supplying packaging to, among others, Procter and Gamble in the same vicinity. The expansion will enable them to do additional manufacturing and warehousing facilities as their business grows. In 2003, the City agreed to provide Alpla with a 5 year, $510,000 maximum TIF rebate (including a $35,000 grant) to aid in an expansion providing an additional 86,000 square feet to the original building. In exchange, Alpla was to maintain at least 35 full time jobs. Each year since certifying completion, Alpla has been in compliance, and expanded operations and added employees. Since the initial expansion, Alpla purchased the old General Mills building on adjacent property, expanded operations at that building and now, would like to expand again with an 82,200 square foot addition at that location. Alpla now employs more than 200 people full time (most permanent, some temporary) and they will commit to maintaining 180 permanent full time jobs as well as adding an additional 25 permanent full time jobs with an average wage of at least $14.00 per hour plus benefits. Construction would begin in the fall of 2007 and be complete in 2008. They would certify for completion in November of 2009 and their first rebate would be distributed in June of 2011. The final rebate, provided they had not reached the $600,000 maximum, would be in June of 2014. Details of the Development Agreement include the following: . Making Minimum Improvements consisting of an 82,200 square foot addition and increasing assessed value on Jan. 1 2009 by at least 15% over Jan. 1, 2007 assessment. . Alpla would receive 4 annual 100% TIF rebates with a $600,000 cap. . Alpla would agree to not seek Partial Industrial Property Tax Exemptions on the new building. . Alpla would agree to maintain 180 permanent full time positions at an average of $14.00 per hour wage or above, benefits. . Alpla would agree to adding 25 additional permanent full time positions at an average of $14.00 per hour wage or above, plus benefits. . Alpla would agree to fully cooperate with the City in the resolution of any traffic, parking, trash removal, noise or public safety problems which may arise in connection with the construction and operation of the Minimum Improvements. AGREEMENT FOR PRIVATE REDEVELOPMENT By and Between THE CITY OF IOWA CITY, IOWA AND ALPLA OF IOWA, INC. AGREEMENT FOR PRlV A TE REDEVELOPMENT THIS AGREEMENT FOR PRlV A TE REDEVELOPMENT (hereinafter called "Agreement"), is made on or as of the day of ,2007, 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 of Iowa, 2007, as amended (hereinafter called "Urban Renewal Act") and Alpla of Iowa, Inc., having an office for the transaction of business at 2258 Heinz Road, Iowa City, Iowa 52240 (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 Heinz Road Urban Renewal Plan Area, which area is described in the Urban Renewal Plan approved for such area by Resolution No. 02-195 dated May 21, 2002; 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 annexed 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 - 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 I. 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 of Iowa, 2007, 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 and the other properties upon which the Public 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 Alpla of Iowa, Inc., a corporation. Development Property means that portion of the Heinz Road Urban Renewal Plan Area of the City described in Exhibit A hereto. Economic Development Grants mean the Tax Increment payments to be made by the City to the Developer under Article VIII of this Agreement. - 2 - 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. ALPLA OF IOWA. INC. - Alpla TIF Account No.2 means a separate account within the Heinz Road 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 on the Development Property described in Exhibit A. Minimum Improvements shall mean the construction of improvements to the existing structure and the construction of a new commercial building, together with all related site improvements as outlined in Exhibit B hereto. Minimum Improvements shall not include increases in assessed or actual value due to market factors. 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. 02-195 of the City, under which the taxes levied on the taxable 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 - Heinz Road 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 Heinz Road 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 Heinz Road 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. - 4 - (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 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. Covenants. Obligations. Representations and Warranties of Developer. The Developer makes the following representations and warranties: (a) Developer is a corporation duly organized and validly existing under the laws of the State of Georgia and 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 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 the certificate of incorporation and bylaws of Developer or its parents or subsidiaries of any contractual restriction, 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. - 5 - (e) Developer has not received any notice from any local, State for federal official that the activities of Developer with respect to the Development Property mayor will be in violation of any environmental law or regulation (other than those notices, if any, of which the City has previously been notified in writing). 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 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. (f) Developer will fully cooperate with the City in resolution of any traffic, parking, trash removal, excessive noise or public safety problems which may arise in connection with the construction and operation of the Minimum Improvements. (g) 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. (h) The Developer will cause the Minimum Improvements to be constructed in accordance with the terms of this Agreement and when constructed will comply with the Urban Renewal Plan and all local, State and federal laws and regulations, except for variances that may be necessary to construct the Minimum Improvements. (i) 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 shall not, prior to the expiration of this agreement, cause or voluntarily permit the Development Property and/or Minimum Improvements to become other than taxable property by applying for or seeking any industrial property tax exemption, by being owned by a utility or any other entity of a type where the assessed value of taxable property of such entity is not treated as located within the Development Property, by being owned by any entity having tax exempt status or by applying for or seeking for a deferral, abatement or exemption from property tax pursuant to any present or future statute or ordinance. - 6 - ARTICLE III. DEVELOPMENT AND OCCUPANCY REQUIREMENT Section 3.1. Minimum Improvements. The Developer agrees to complete Minimum Improvements generally consisting of improvements to an existing 100,255 square foot freestanding Alpla building through the construction of additional manufacturing, warehousing or distribution space totaling approximately 82,200 square feet for industrial uses on the Development Property, all as more fully described on Exhibit B hereto. The construction of the Minimum Improvements must increase the actual assessed value of the Development Property by at least 15% over the actual assessed value on January 1,2007. Section 3.2. Certificate of Completion. Upon written request of the Developer after issuance of an occupancy permit for the Minimum Improvements, or any discreet portion thereof, the City will furnish the Developer with a Certificate of Completion for such portion 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 solely 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 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. ARTICLE IV. RESERVED - 7 - 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 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 against risk 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 $250,000. 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 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. (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. - 8 - (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 selected by the Developer which are authorized under the laws of the State of Iowa 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 therefor 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 $250,000 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 and tear accepted, and from time to time will make all necessary repairs, replacements, renewals and additions. - 9 - 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. Continued Operation and Employment. Commencing upon the signing of the Agreement, the Developer agrees that it will operate a manufacturing plant at the Development Property and will continue operation of this business until at least the Termination Date set forth in Section 12.8 hereof. From September 1,2007 until November 1, 2009 the Developer will maintain a minimum of 180 Full Time Employment Units at the Development Property. Commencing with the first certification, on November 1, 2009, Developer agrees to employ, on average, an additional 25 new full time positions at an average hourly wage of $14.00 per hour plus a competitive benefit package until at least the Termination Date set forth in Section 12.8 hereof. A Full Time Employment Unit means the equivalent of employment of one (1) person for eight (8) hours per day for a five (5) day, forty (40) hour workweek for fifty-two (52) weeks per year. Section 6.6. Annual Certification. To assist the City in monitoring and 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 - 10- 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 I of each year, commencing November 1,2009, and ending on November 1,2012 both dates inclusive. Upon certification by the Developer on or before November 1,2009, the City will certify to establish a base value as of January 1,2007. Section 6.7 Taxation of Development Property. The Developer shall not, prior to the expiration of this agreement, cause or voluntarily permit the Development Property and/or Minimum Improvements to become other than taxable property by applying for or seeking any industrial property tax exemption, by being owned by a utility or any other entity of a type where the assessed value of taxable property of such entity is not treated as located within the Development Property, by being owned by any entity having tax exempt status or by applying for or seeking for a deferral, abatement or exemption from property tax pursuant to any present or future statute or ordinance. ARTICLE VII. ASSIGNMENT AND TRANSFER Section 7.1. Status of the Developer: Transfer of Substantially All Assets. 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 maintain existence as an adequately capitalized corporation and will not wind up or otherwise dispose of all substantially all of the Development Property and Minimum Improvements, 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 consents thereto in writing in advance thereof. Notwithstanding the foregoing, however, or any other provisions of this Agreement, (a) Developer may transfer its interest in and to this Agreement to any affiliate which is controlled by, under common control with or controls Developer or to any entity that - 11 - acquires all or substantially all of the assets of the Developer or to any corporate successor to Developer by consolidation, merger, or otherwise, and (b) the Developer may (1) pledge any and/or all of its assets as security for any financing of the Minimum Improvements; (2) assign its rights under this Agreement to a third party, provided such assignment shall not release the Developer of its obligations hereunder, and the City agrees in writing that Developer may assign its interest under this Agreement for such purpose; and (3) the Developer may transfer its ownership interest to a third-party under an arrangement whereby Developer will lease the Development Property back and continue to satisfy the requirements of this Agreement. 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 to make up to four annual grants to the Developer, subject to the Developer having received a Certificate of Completion and being and remaining in compliance with the terms of this Agreement and subject to the terms of this Article VIII. The annual grants shall commence on June 1, 2011 and end on June 1, 2014, or when the total of all grants is equal to $600,000. All annual grants shall be equal to one hundred percent (100%) per fiscal year of the Tax Increments (unless the total grant amount of $600,000 is reached first) collected by the City with respect to the Minimum Improvements on Development Property pursuant to Section 403.9 of the Urban Renewal Act 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 6.6 hereof and the City Manager's approval thereof. Beginning with the November 1,2009 certification, if the Developer's annual statement, proof and certification is timely filed and contains the information required under Section 6.6 and the City Manager approves of the same, the City shall certify to the County prior to December 1 of that 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 - 12 - City as taxes are paid during the following fiscal year and which 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 2009, respectively, the first Economic Development Grant would be paid to the Developer on June 1, 2011). ( 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 1 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 and that, as a result, no Economic Development Grant may be made to the Developer in respect thereof. The City covenants to act in good faith to appropriately review and consider any late certification on the part of the Developer, but the City shall not be obligated to make any certification to the County for the available Tax Increments or make any corresponding payment of the Economic Development Grant to the Developer if, in the reasonable judgment of the City, it is not able to give appropriate consideration (which may include, but not be limited to, specific discussion before the City Council at a regular City Council meeting with respect thereto) to the Developer's certification due to its late filing. In the event Developer fails to timely file an annual statement, proof or certificate due to an Unavoidable Delay and, as a result, an Economic Development Grant cannot be make, Developer may give written notice to the City and, if the City finds that Developer's failure is due to an Unavoidable Delay, the missed Economic Development Grant shall be made in the year succeeding the last scheduled Economic Development Grant under Section 8.1, subject to Developer's filing under Section 6.6 and all other provisions of this Article VIII with respect to such grant, it being the intention of the parties to allow four (4) annual Economic Development Grants if Developer is in compliance with this Agreement. ( d) The total, aggregate amount of all Economic Development Grants under this Agreement shall not exceed $600,000. Each Economic Development Grant shall be equal to one hundred percent (100%) of all Tax Increments collected per fiscal year in respect of the assessments imposed on the Development Property and Minimum Improvements as of January 1,2007, and on January 1 of each of the following four (4) years, until the total, aggregate of all such Economic Development Grants equals no more than the sum of$600,000. The final grant shall be adjusted, if necessary, if payment of 100% of Tax Increments for that grant would result in total, aggregate Economic Development Grants in an amount exceeding $600,000. Such Economic Development Grants shall at all times be subject to termination in accordance with the terms of this Article VIII and Article X. Thereafter, the taxes levied on the Development Property and Minimum Improvements shall be divided and applied in accordance with the - 13 - Urban Renewal Act and the Ordinance. It is recognized by all parties that the total aggregate amount set forth above is a maximum amount only and that the actual payment amounts will be determined after the Minimum Improvements are completed and the valuations of said Improvements have been determined by the City Assessor. (e) In the event that any certificate filed by the Developer under Section 6.6 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 ALPLA OF IOWA. INC. - Alpla TIF Account No.2 of the 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 ALPLA OF IOWA. INC. - Alpla TIF Account No.2 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 during the term hereof the City receives an opinion of its legal counselor a controlling decision of an Iowa court having jurisdiction over the subject matter hereof 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. Upon receipt of such an opinion or decision, the City shall promptly forward a copy of the same to the Developer. If the circumstances or legal constraints giving rise to the opinion or decision 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. - 14- (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 ALPLA OF IOWA, INC. - Alpla TIF Account No.2 (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) 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. 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 his 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 - 15 - (iii) any hazardous substance or environmental contamination located in or on the Development Property relating to conditions caused by Developer after the effective date of this Agreement. (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 on or 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. ARTICLE X. DEFAULT 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; (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; (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; (d) If 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; - 16- (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 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) If 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 (d) or (e) 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: - 17 - (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. 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 10.4. No Implied Waiver. In the event any agreement 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 therefor, pay to the part not in default the reasonable fees of such attorneys and such other - 18 - 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 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.m - 19 - 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 2258 Heinz Road, Iowa City, Iowa 52240. (b) In the case of the City, is addressed to or delivered personally to the City at Civic Center, 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. 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. - 20- 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. Section 12.8. Termination Date. This Agreement shall terminate and be of no further force or effect on and after December 31,2014. 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 Alpla of Iowa, Inc. (SEAL) CITY OF IOWA CITY, IOWA By: Mayor ATTEST: By: City Clerk - 21 - ALPLA OF IOWA, INC. By: ATTEST: By: (title) STATE OF IOWA ) ) SS COUNTY OF ) On this day of , 2007, 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 - 22- COUNTY OF ) ) SS ) STATE OF On this day of , 2007, before me the undersigned, a Notary Public in and for said County, in said State, personally appeared and , to me personally known, who, being by me duly sworn, did say that they are the and of Alpla of Iowa, Inc. and that said instrument was signed on behalf of said corporation; and that the said and , as such officers acknowledged the execution of said instrument to be the voluntary act and deed of said corporation, by them voluntarily executed. Notary Public in and for County and State - 23 - EXHIBIT A DEVELOPMENT PROPERTY The Development Property is described as consisting of all that certain parcel or parcels of land located in the City of Iowa City, County of Johnson, State of Iowa, more particularly described as follows: LEGAL DESCRIPTION The real property located in the County of Johnson, State of Iowa, and legally described as follows: Lot 4, BDI Second Addition to Iowa City, Johnson County, Iowa, as filed in Book 19, Page 80 of the Johnson County Recorder's Office; and Lot 1, BDI Fifth Addition to Iowa City, Johnson County, Iowa, as filed in Book 29, Page 74 of the Johnson County Recorder's Office. A -1 EXHIBIT B MINIMUM IMPROVEMENTS The Developer agrees to complete Minimum Improvements generally consisting of improvements to an existing 100,255 square foot freestanding Alpla building through the construction of additional manufacturing, warehousing and distribution space totaling approximately 82,200 square feet for industrial uses on the Development Property. The construction of the Minimum Improvements must increase the actual assessed value of the Development Property by at least 15% over the actual assessed value on January 1, 2007. EXHIBIT C CERTIFICATE OF COMPLETION WHEREAS, the City of Iowa City, Iowa (the "City") and ALPLA OF IOWA, INC., having an office for the transaction of business at 2258 Heinz Road, Iowa City, Iowa (the "Developer"), did on or about the day of , 2007, 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: LEGAL DESCRIPTION Lot 4, BDI Second Addition to Iowa City, Johnson County, Iowa, as filed in Book 19, Page 80 of the Johnson County Recorder's Office; and Lot 1, BDI Fifth Addition to Iowa City, Johnson County, Iowa, as filed in Book 29, Page 74 of the Johnson County Recorder's Office. 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 C - 1 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 of the Agreement, this is to certify 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. (SEAL) CITY OF IOWA CITY, IOWA By: Mayor ATTEST: By: City Clerk C-2 STATE OF IOWA ) ) SS COUNTY OF JOHNSON ) On this day of ,2007, 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 - 3 INITIAL REVIEW OF GLUTEN EVOLUTION LLC WORKING CAPITAL Business Proposed: Gluten Evolution LLC is a test kitchen and creator of the bread mixes, Breads from Anna. The business started as a personal chef service in 2002 to help persons live on a gluten free diet. Since that time the business has expanded to offer bread and pie mixes made of gluten-free and all-natural ingredients. The market for the mixes include those with Celiac disease, the failure of one's body to produce the enzyme that breaks down the protein in gluten, found in wheat, barley and rye, and others who desire all-natural ingredients. In 2004 their products become available for sale online. Only about 5% of their products are sold to Iowa City customers. The overwhelming majority of their products are shipped throughout the United States. They also have an international market with shipments going to United Kingdom, Australia and New Zealand. The owner request funds for working capital. Sales increased by 71 % from 2005 to 2006. There is an 11 % increase in sales in the first half of 2007 compared to the first half of 2006. Budget & Private Financial Contribution The applicant requests a $105,000 Iowa City CDBG low interest loan (7-year maximum, 6 month deferred payment). Applicant has invested $50,000 in business operations. Owner withdrawals (owner salary) have been sporadic over the past three years, but not considered excessive. Comprehensive Plan/CITY STEPS Plan The project does not require public infrastructure and is located in a CI-1 zone (intensive commercial). CITY STEPS notes a high priority for the expansion and/or retention of business that pay at least the living wage and increases full- time, permanent jobs with benefits. Quality of Jobs The business is a woman owned business. The three positions proposed are two at $12/hour and one at $15/hour with medical benefits. The business provides goods and services to a segment of the population that require a gluten-free diet by medical reasons or by preference. Economic Impact The proposed CDBG funds will provide a woman owned business access to low interest working capital. The business is in need of low cost capital to achieve profitability. July 2007 Environmental/Community Involvement The owner provides educational consultation to individuals, non-profit organizations, schools, hospitals and restaurants in the preparation of gluten-free foods. She has published articles/recipes for the Celiac Disease Foundation and others. Items to Address: 1. The business has been open since 2002, however has not been profitable to date. Estimated 2008 sales appear high. Business needs to watch expenses and increase sales to achieve profitability. Expanding by three positions could potentially delay when the business may become profitable. 2. Business is accumulating credit card debt to pay for business expenses. Permanent working capital is a long term use, the source of funds, such as a line of credit, must be long term as well. 3. The owner will accept a mortgage on her personal home. She estimates that approximately $30,000 could be secured by the home. Will need to discuss collateral situation and how much of the loan may be secured. 4. Business continues to receive support and guidance through the Entrepreneurial Development Center in Cedar Rapids and has had knowledgeable advisors. Staff encourages the business to continue utilizing this service. July 2007 Iowa City CDBG Economic Development Funds Application for Business Financial Assistance Business Requesting Financial Assistance: Individual Anna Sobaski Home Address 358 Westside Drive, Iowa City, IA 52246 Name of Appleant Business Gluten EvolLtion, LLC Full Street Address of Business 1630 WiIION Creek Drive, #7, Iowa City, IA 52246 Phone Number & Email Address 319-358-9967, glutenevolutior@earthlink.net DUNS Number (If awarded funds, appleant mustobtail a DUNS number): Type of Business Gluten Free Bread Mix Manufacturer with National Distribution Date Business Established January 2002 Bankof Business Account and Address (if appleable): Cedar Rapids Bank & Trust NOTE: The City w ill not provde assistance in situctions w here it is detemined that any repre- sentction, warra1ty or statement made in connection with this applcation is incorrect, false, msleading or erroneous in any material respect. If assistance has alreajy been provced by the City prior to discOlery of the incorrect, false or msleadin9 representation, the City may initiate legal actioo to recover City funds. Section 1: Description of Business and Proposed Project 1.1. Describe the proposed "project" (fa exal1l>le, cOl1l>any relocation, building expansion, remodeling, new product line, m.rrt>er of ne\N jobs, arrount of investment in machinery and equiJl11ent) and the expeced benefits it w iIIreceive from the financial assistance requested: The funds are required to add staff and purchase equipment. All of the positions to be created are LMI eligible with the exception of the OIief Operating Officer. New positions to be added over the next two }Vars include: Chief Operating Officer (1), SalesfTrade Show Manager (1), PackinglStippingJWarehouse (2) personnel The addition of new staff he~ the company scale-up its sales and operations; as well as allow the founder to spend more time on the R& 0 associated with developirlJ new products. Funds are also needed to purchase warehouse computers and a forklft, as well as upgrade the shopping cart portion c:l the corporate website. 12 A-ovi:Je a brief history d your corrpany: Gluten Evolution TM began as a personal chef service in 2002. Today Gluten Evolution TM is primarily a test kitchen and creator of the bread mixes Breads From Anna TM, available in stores across the United States and online as of March 2004. The personal chef service continues to be an educational force for helping others learn to live very well on the gluten-free diet. . 1.3. Describe the organizational structure of the business: Iowa Limited Liability Corporation 1.4. Management (A-op-ietor, painers, officers, drectors, sl holders of outstCl'lding stock, 100%of ownership mustbe shown) Name & PositionITitle Compete Address % Owned Anna Sobaski, CEO 358 Wests ide Drive, Iowa City, IA 100% 52246 Darin Vig will be joining the company as COO if the company receives this want. His CV is included in the attachments along with Ms. Sobaski's. Attach a brief descriptial sirrilar to a resurre of the education, technical and business backgroond for sl the peq>1e listed under Management. 1.5. Will the project involve a transfer of operations or jobs from any other Iowa City or Johnson County facility or replace operations or jobs currently being provided by another Iowa City or Johnson County company? If yes, please indicate the facility(s) and/or company(s) affected. No Section 2: Financial Contributions to the Proposed Project 2.1. Use of Proceeds USE a= Proceeds Loan Requested (Enter gross dollar amourt rounded to Activity the nearest hundreds) Land acquisition $0 New Construction/Expansion Repair $0 Acquisition ancllor Repairof Machinery $10,000 and Equipment Inventory Purchase $0 Workhg Capital (marketing, website) $95,000 Acquisition of Existing Business $0 Salaries $0 Total Loan Requested (All Sources): $105,000 Equipnent Explanation - We will purchase the following with these funds Used 8ectric Forklift - $1 ,000 CompLter Equipment - $5,000 - Web site re-design - $4,000 Workilg Capital Explanation - The $97,000 wi. be used to help pay the salaries for three new full-time positions, fund the purchase of addtional inventory to support the projected ilcrease in sales, and fund the'additional general and administrative expenses associated with hiring addtional personnel. 2.2. Terms of Proposed Financing (Sources) Monthly Type(l) Proposed Financing Amount Payment Rate Term Rnarciallnstlution: $ Rnarciallnstlution : CR Bank & Trust $ 60,000 $600 Lac 7.2% Indefinite Other: A"iva1e Loans $ 33,000 None Loan 0% Indefinite Iowa City CDBG Economic cev. Fund $105,000 " TOT AL: $198,000 ., 2.3. Explain why assistance is needed from the City, and why it cannot be obtained elsewhere. If the applicant did not apply for a loan through a private financial institution, please explain why. If denied assistance through a financial institution, please attach the letter of denial. Gluten Evolution is already highly leveraged and incurring additional bank debt would not be prudent Gluten Evolution is committed to supporting the economic growth of Iowa City and being a good corporate citizen. This low-interest, deferred loan will help the company undertake the marketing initiatives and fill key staff positions it needs to accelerate its growth. 2.4. Indicate the owner's contribution (cash, assets for the operation of the business, etc.) to this project. Anna Sobaski has invested over $50,000 in the company since its inception and does not draw a regular salary from the business. 2.5. Identify all agencies or institutions involved in the project (financial, technical assistance, etc.) and what their i~volvement is: · The Entrepreneurial Development Center (EDC) is providing business guidance to the company. · Story Lounge is a marketing firm that will help the company build and expand its brand. 2.6. What type of security will the assisted business provide the City? If no security or less than the dollar amount requested is offered, an explanation must be provided. X Corporate Guaranty UCC Financing Statement Irrevocable Letter of Credit X Personal Guarantee Surety Bonds Mortgage on Real Estate Escrow Account Other: Before execution of a CDBG agreement, if the collateral consists of machinery and equipment, inventory, or other, the applicant must provide an itemized list that contains serial and identification numbers for all articles that had an original value of greater than $5,000. Include a legal description of real estate offered as collateral. 2.7 If the City did not provoe financial assistCl'lce, could the project proceed? No Section 3: Jobs to Be CreatedlRetained Special Note: The Community Development Block Grant (CDBG) program requires that at least 51% of the jobs created or retained must be held by or made available to low-moderate income persons. The business acknowledges that if it fails to create and/or retain the jobs identified below by the end of the project period and maintain them for a period of time (usually 12 months from the date of the award); it may be required to reimburse City funds for the employment shortfall. 3.1 If an existing business, how many er11>loyees S'e currenUy errployed at your Iowa City location? Rease attach a copy of the corrpa~'s quartS'1y low a 'En1>loyer's Contribution and Riyroll Report" fa the rrost recent qLBrter. 2 part-time + the ownerlfbunder 32 Corrplete the fdlow ing chart identfying the nurri>er of jobs to be created a1d/or retained based on this specific project. Type of Job and Hourly Rate for Created and/or Retained Positions in First 12 Months of Project A ward (please see attached Job Category Definitions) # of Jobs # of Jobs No. I-burs Hourly Fringe Created Retained Type of Job Per Wtek Rate of Pay Benefits. 1 0 Officials & Managers 40 $35 MKIical A"ofessional Techricians 1 0 Sales 40 $15 MKIical Office & Oerical Craft WorkS's (Skiled) Operaives (sem-skilled) 2 0 Laborers (unskilled) 40 $12 tJedical Servce WorkS's *If fringe benefits are p-ovided, pease att~h a description of all errployee benefits provided by aro paid for (in full or in part) by the rosiness. NOTE: The OfflCiallManager position will be created as part of this expansion, but funds are not being requested for this position. 3.3 What is the estimated anrual payrol for the new errplOfees resuling from this project? $154,000 3.4 If an existing business, w ill any d the current errployees lose lheir jobs if the prqect does not p-oceed? If yes, how many? Expein why: No Section 4: Economic & Environmental Impact 4.1. What other Johnson County corrpanies could be considered to be your cOf'1l)etibrs? None 4.2. Rease describe the energy and resoorce efficiency progams, wasia reducti<J'l, waste excha1ge, and recycling Jl"ograms at your Iowa aty operation. We recycle bot1les, cans, and paper. Our company's operations are such that other energy or resoll'ce efficiency programs are not really meaningful to us. Section 5: Community Involvement, Compliance with Law 5.1 In aeXiition to your normal business activities, does ywr business contribLte or have plans to contribute to the cOrrm.Jnly through volunteer work, financial cortributions, or through other means? Rease describe. Anna has been an active member of the Celiac community since she was diagnosed with Celiac disease in 1999. Since the incei1ion of GkJten Evol_on in 2002, she has been an active financial and product contributor to the Iowa CitytCoralvil1e Celiac Support group. As the company expands, we wll become more actiYa with other support groups that could benefit from a gluten-free diet. 52 Has the business been ciEd or fouro to violae any federal or s1ate statue or reguBtion W ithh the last five years (includhg, but net Iinited to envirol'lTental regulations, payroll taxes, Occup:ltional Sctety and t-ealth Adrrilistration law s, Far Labor S1andards, the National Labor Relations Act, the Americans w ith Disatilities Act)? If yes, please explain the circum- stances of theviolation(s). No 5.3 Has tle corrpany or any officer of your corrpa~ ever been involved in bankn.ptcy or insowency proceedings? If so, please provide the detals. No 5.4 Are you or your business involved h any pendng law suts? If yes, provide the case name of the BW suit, docket nuni:>e'", and city and staiB w here it is pendi'lJ. No Release of Information and Certification NOTE: Please read carefully before signing I herel:7y give perl'rSsion to the City of Iowa City (the City) to resea-ch the COI1l>a1Y's histay, make credi chec~, cont~t the cOrT1>my's finarcial instlution, and perfam other relaed activities necessary for reasooable evaluation of this propa;al. I understand that all infonnation subnited to the City relating to this applcation is subject to the Open Records Law (1994 Iowa Code, Olapter 22) and that confi::lentiality may not be guarmteed. I here~ certfy that all representaions, warrmties or statements made or furnshed to the City in connection with this applcation are true and correct in all material respects. I understand that it is a crirrilal violaion under Iowa law to engage in decepion and knowngly make, or cause to be made, directly or indirectly, a false statement in w ritng for the purpose of procuring econaric devebprrent assistance from a state agency or political subdwision. If ap~lr~t is a. proprietor or general partner, ~gn below. By:<:.p<l;L~ ~~"Y'VL, o.te:-JtM~ S '07 If applicant is a Corporation, sign below: Corpaate Narre and Seal Date By: Signaure of A"esi::lent Attested by: Signaure of Corpaate Secretary Description of Fringe Benefits The company currently does not offer fringe beneits to it employees. After receiving this grant the company will begin offering N1edical and Dental coverage to all current and future employees. Otherbeneits will be added as the company has the resources to add them. Anna Sobaski CV - Work Experience: Gluten Evolution, LLC, Iowa City, IA: Owner and operator of company, which creates and distributes nation wide a line of gluten-free bread mixes. Mixes are purchased in stores and through the website www.glutenevolution.com. Gluten Evolution, LLC also provides educational consultation to individuals, non-profit organizations, schools, hospitals and restaurants in the preparation of gluten- free foods. Established in 2002. Natural Gourmet Cookery School, Institute for Food and Health, New York, NY. Adjunct faculty teaching cooking classes on gluten-free foods. 2005-Present. Wellness Foods, Toronto, Canada: Recipe developer for gluten, dairy-free foods to be manufactured on a mass-market scale. 2002 James Beard Foundation, New York, NY: Assisting in the kitchen for visiting chefs from around the United Sates. 2001-2002 Beaver Country Day School, Chestnut Hill, MA: Acting Department Chair. Guided department with nine full-time faculty. Responsible for department budget, gallery exhibition schedule and artwork installation while maintaining a full teaching load. 1998-2000 McDonough School, Baltimore, MD: Full-time faculty, member of the Art Department. Taught foundation as well as advanced courses in photography, environmental design, drawing and mixed media. 1994-1998 Education: Chef Training Program, Natural Gourmet Cookery School, Institute for Food and Health, New York, NY. Additional course work in gluten free recipe development. 2002 Master of Fine Arts Degree in Photography, Maryland Institute College of Art. Baltimore, MD. Awarded the Patricia Harris Fellowship (full scholarship). Also awarded to one graduating graduate student the Walter's Traveling Fellowship with additional support from the Kodak Corporation for expenses and photographic supplies for travel throughout Eastern Europe. 1992 Bachelor of General Studies, University of Iowa, Iowa City, IA. Interdepartmental degree in Film and American Studies, 1984 Publications: The Gazette Newspaper, Cedar Rapids, IA. The Edge business section. Profile on Gluten Evolution as a female owned business. Sunday, June 4, 2006 University of Chicago Celiac Research Center Newsletter. Featured article on Gluten Evolution and the Breads From Anna TM products. Spring 2006 The Gazette Newspaper, Cedar Rapids, IA. New Product Profile in the business section. Wednesday, February 25, 2004 The Catalyst, Iowa City/Coralville New Pioneer Co-op Newsletter. Interview about gluten-free products and the gluten free diet. May/June 2004 Vegetarian Times, Published recipe. March 2002. Memberships: Celiac Disease Foundation Celiac Sprue Association of America Gluten Intolerance Group of North America Darin Vig CV PROFESSIONAL EXPERIENCE OverCoffee Productions; Cedar Rapids, IA July 2006 - March 2007 OverCoffee is a web design and hosting company focused on the gift and home industry. Director of Operations Challenge Drive growth and improve operations while keeping tight control over corporate finances. Accomplishments included: Introduced new project tracking processes and tools to provide better information for staff and management Engaged all team members to encourage open sharing of ideas to improve service delivery Reviewed and reset standard pricing for all products to improve profit margin Negotiated favorable re-payment plans with various creditors to provide some financial flexibility Created first ever annual strategic plan and financial projections BIR Training Center; Chicago, IL November 2002 - July 2006 BIR is a post-secondary school with current enrollment of about 1,500 students. Director of Operations, Marketing, and Customer Service Challenge Increase enrollment while controlling marketing spend and improve operations to support a growing student body while maintaining headcount and cost discipline. Major accomplishments included: Increased enrollment by over 400% in 3 years from 275 to almost 1,500 Increased revenue per employee from about $70,000 per employee to over $100,000 per employee Built and led multilingual sales and support staff that served students in 8 languages Improved communication and processes between all major business functions including Registrar, Academics, Financial Aid, International Students, Bursar, and Facilities Centerpost Corporation; Chicago, IL October 2000 - July 2002 Centerpost is a pioneer in the field of improving customer and employee communications through proactive, multi-channel messaging. Director - Business Development Challenge Joined the business development team to help the co-founders tackle strategic problems in order to help Centerpost reach profitability. Some of the major projects and responsibilities were: Negotiated deals with channel partners to help increase the reach of Centerpost's products Created the first pricing model and base pricing for Centerpost's product line Performed detailed financial and quantitative analysis to ensure pricing would generate sufficient profitability Created standard pricing sheets for field sales staff and special pricing models for sales management team Created methodology for conducting pre-sales consulting engagements, which included standard presentations and financial models USatWork.com; Rolling Meadows, IL January 2000 - May 2000 USatWork provided web site creation and hosting services to small businesses using a proprietary, cutting-edge web site creation technology. Director - Business Development Challenge Joined the business development team to tackle any and all projects necessary to help USatWork reach profitability. Led the Builders and Contractors industry vertical. Managed a team of 7 web developers and sales people. Created go-to-market strategy and drove the implementation. My industry vertical led the company in sales and profitability. Created and led a corporate strategy group responsible for enhancing the overall brand of USatWork and reducing costs by centralizing redundant functions in the 20 market verticals. Cost reducing initiatives reduced the burn rate by 25% while improving the overall image of USatWork in the marketplace. Ernst & Young, LLP - Strategic Advisory Services; Chicago, IL Sept 1998 - December 1999 Ernst & Young - Strategic Advisory Services (E&Y SAS) was the strategic consulting arm of Ernst & Young. Senior Consultant Challenge Help E&Y SAS clients refine their strategies to grow profitably. Helped a consumer products manufacturer understand the impact of new Internet procurement alternatives. Created the business plan for what is. now Integres, a joint venture that aims to revolutionize the heavy freight market. Created a new product strategy for an annuity provider that created new revenue far exceeding expectations. EARLY CAREER HISTORY Independent IT Consultant; Chicago, IL April 1995 - September 1996 Andersen Consulting (now Accenture); Chicago, IL June 1990 - April 1995 EDUCATION University Of Chicago, Graduate School Of Business; Chicago, IL June 1998 Master of Business Administration (MBA) - Strategic Management and Finance Graduated with Honors Grinnell College; Grinnell, IA May 1990 Bachelor of Arts - Mathematics Captain - Grinnell Golf Team; 1990 NCAA Division III Academic All-American Golf Team Gluten Evolution Profit and Loss Detail 2005-2008 Q42005 Q12006 Q22006 Q32006 Q42006 Q1 2007 Q22007 Q32007 Q42007 Q12008 Q22008 Q32008 Q42008 $37,000 $34,000 $54,000 $37,000 $60,000 $46,000 $40,000 $48,000 $138,000 $106,000 $93,000 $125,000 $276,000 Q2 2005 Q3 2005 000 $25,000 $40,000 Q 1 2005 $21 $50,000 $110,000 $53,000 $53,000 $22,000 $22,000 $2,000 $2,000 $1,000 $1,000 $10.000 $10,000 $5,000 $5,000 $2,000 $2,000 $2.000 $2,000 $37,000 $46,000 $22,000 $2,000 $1,000 $10,000 $5,000 $2,000 $2,000 $42.000 $46,000 $22,000 $2,000 $1,000 $10,000 $5.000 $2,000 $2,000 $55,000 $46,000 $21,500 $2,000 $1,000 $10,000 $5,000 $2,000 $1,500 $19,000 $44,000 $28,500 $2,000 $1,000 $10,000 $12,000 $2,000 $1.500 $26,000 $38,000 $36,000 $18,000 $30,000 $29,000 $10,000 $0 $0 $0 $0 $0 $2,000 $2,000 $25,000 $11,000 $16,000 $21,000 $25,000 $13,000 $13,000 $2,000 $2,000 $1,500 $4,000 $5.000 $3,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $4,000 $1,000 $3,000 $5,500 $9,500 $2,000 $3,000 $10,000 $2,500 $6,000 $5,000 $4,000 $2,500 $2,500 $6,000 $2,000 $2.000 $3,000 $3,000 $2,000 $2,000 $1,000 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $4,000 $25,000 $0 $0 $7,000 $11,000 $2,000 $2,000 $0 $2,000 $2,000 $3,000 $2,000 $3,000 $1,000 $1,000 $0 $0 $24,000 $0 $7,000 $1,000 $1,000 $2.500 $1,500 $1,000 $0 Total Revenue Total COGS Payroll Total G&A Professional Fees Insurance Marketing General Office Interest & Depreciation Rent 500 $122,500 $110,000 $105.000 $125,000 $185,000 $91,000 $0 -$12,000 -$4,000 $15,500 -$43,500 $91 $52,000 $39,000 $55,000 $44,000 $25,000 $2,000 $15,000 $5,000 -$2,000 $2,000 $49,000 -$15.000 000 -$14,000 $51 000 $36,000 $4,000 -$10,000 $14,000 000 $11 $31 Total Expenses ncome Net 5:00 PM 07/12/07 Gluten Evolution, LLC Profit & Loss January through June 2007 Accrual Basis Ordinary Income/Expense Income 4000. MIX SALES 4010 ' Mix 1 - Gluten Free 4015 ' Mix 2 - G, C, & D Free 4020. Mix 3 - G,C,D & Y Free 4025 ' Mix 4 - Banana Bread 4030 ' Mix 5 - Pumpkin Bread 4035 . Mix 6 - Pie Crust 4000 . MIX SALES - Other Total 4000 ' MIX SALES 4500, SHOW INCOME 4800 . Related Item Sales 4801 ' Bread Machines 4802 ' Covered Baker 4803 . Brick Oven 4814. Apron Total 4800, Related Item Sales 4820 ' Consulting & Teaching 4900 ' Customer Shipping Charged 4950 . OVER/SHORT Total Income Cost of Goods Sold 5000 . Cost of Mixes 5010 . Mix 1 CGS - Gluten Free 5015. Mix 2 CGS - G, C, & D Free 5020 . Mix 3 CGS - Yeast Free 5025 . Mix 4 CGS - Banana Bread 5030 ' MIX 5 CGS - Pumpkin Bread 5035 . MIX 6 CGS - Pie Crust 5100 . FREIGHT 5000 . Cost of Mixes - Other Total 5000 ' Cost of Mixes 5001 . Cost of Labels & Packaging 5800 . Related Item CGS 5810. Bread Machine CGS 5900 . Shipping Costs Total COGS Gross Profit Jan - Jun 07 25,182.88 12,359,13 6,397,79 10,374,85 9,534,25 3,724.71 24.70 67,598,31 1,489,11 4,163.00 92.00 92.00 4,34700 2,015,00 10,352.48 (10,74) 85,791,16 7,259.30 4, 141 .94 3,394,26 3,283,20 3,620,56 2,192.55 1,739.00 25,630.81 199.50 1,132.40 7,991,32 34,954.03 50,837,13 Page 1 07/12/07 Gluten Evolution, LLC Profit & Loss January through June 2007 5:00 PM Accrual Basis Jan - Jun 07 Expense 6010. PROMOTIONAL DISCOUNTS 6040 . Life Insurance 6000 ' WAGES - STORE 6030 . Medical Insurance 6070 . Travel 6075 . Meals & Entertainment 6100 . Advertising & Promotion 6105. Product Shows 6150 . Office Supplies & Postage 6152 . Cooking Supplies 6160. Telephone 6165, Internet Expense 6167. Website Expense 6170 . Dues, Subscriptions & Licenses 6200 ' Bank Charges 6225 . Credit Card Processing Costs 6200 . Bank Charges - Other Total 6200 . Bank Charges 6250 . Interest Expense 6350 . Professional Fees 6360 ' Accounting Fees 6355 . Legal Fees Total 6350 . Professional Fees 6600 ' Vehicle Expense 6620 ' General & Liability Insurance 6700 ' Rent Expense 6730 . Computer Repairs & Maintenance 6750 ' Repairs & Maintenance 6800 ' Utilities Total Expense 21,00 112,84 3,450,00 1,328.44 468.79 786,24 652,50 503,09 427.47 676.43 1,538,19 299.20 850.00 24.70 1,169.55 10,50 1,180,05 2,188.97 2,065,00 200,00 2,265.00 541,09 554.44 3,210,00 200.00 18.90 547,62 21,844,96 Net Ordinary Income 28,992.17 Net Income 28,992.17 Not 1\;U e'G ~~~ 'we~ ~.~ ~cAiVf Ol Page 2 4:54 PM 07/12/07 Gluten Evolution, LLC Profit & Loss January through December 2006 Accrual Basis Ordinary Income/Expense Income 4000 . MIX SALES 4010, Mix 1 - Gluten Free 4015, Mix 2 - G, C, & D Free 4020, Mix 3 - G,C,D & Y Free 4025 . Mix 4 - Banana Bread 4030 ' Mix 5 - Pumpkin Bread 4035 ' Mix 6 - Pie Crust 4000 ' MIX SALES - Other Total 4000 . MIX SALES 4500, SHOW INCOME 4800 . Related Item Sales 4801 . Bread Machines 4802 . Covered Baker 4803 ' Brick Oven 4804 . Garlic Baker 4810 ' Cookbook 4815, T-Shirt Sales 4800 . Related Item Sales - Other Total 4800. Related Item Sales 4820 ' Consulting & Teaching 4900 . Customer Shipping Charged 4950 . OVER/SHORT Total Income Cost of Goods Sold 5000 . Cost of Mixes 5010 . Mix 1 CGS - Gluten Free 5015, Mix 2 CGS - G, C, & D Free 5020 . Mix 3 CGS - Yeast Free 5025 . Mix 4 CGS - Banana Bread 5030 . MIX 5 CGS - Pumpkin Bread 5035 ' MIX 6 CGS - Pie Crust 5100, FREIGHT 5000 ' Cost of Mixes - Other Total 5000 . Cost of Mixes 5001 . Cost of Labels & Packaging 5700 . Product Development Costs 5800 ' Related Item CGS 5815, T-Shirt CGS 5800 . Related Item CGS - Other Total 5800 ' Related Item CGS 5810 . Bread Machine CGS 5900 . Shipping Costs Total COGS Gross Profit Jan - Dec 06 59,538,06 30,270.41 17,668.75 22,721,50 21,591,05 9,974.89 (436.01 ) 161,328,65 1,066,68 3,660.00 500,00 300 00 60,00 8.00 10.14 150.00 4,688,14 743.79 17,705.79 (6.88) 185,526.17 31,722,03 11,652,84 6,486.82 15,020.73 17,433.22 6,248.06 4,537.72 93,101.42 3,241,30 35,00 100,80 1,499,95 1,600,75 2,371.20 21,898,01 122,247,68 63,278.49 Page 1 4:54 PM 07/12/07 Accrual Basis Gluten Evolution, LLC Profit & Loss January through December 2006 Expense 6030 ' Medical Insurance 6050 . Contract Labor 6070 . Travel 6075 ' Meals & Entertainment 6100, Advertising & Promotion 6105. Product Shows 6150 ' Office Supplies & Postage 6152. Cooking Supplies 6160, Telephone 6165. Internet Expense 6167 . Website Expense 6170 . Dues, Subscriptions & Licenses 6180 . Education and Training 6200 . Bank Charges 6225 . Credit Card Processing Costs 6200 . Bank Charges - Other Total 6200 . Bank Charges 6250 . Interest Expense 6300 . Bad Debts / Returned Checks 6350 ' Professional Fees 6360 ' Accounting Fees 6355 . Legal Fees 6350 . Professional Fees - Other Total 6350 ' Professional Fees 6600 ' Vehicle Expense 6620 . General & Liability Insurance 6700 . Rent Expense 6730 ' Computer Repairs & Maintenance 6750 . Repairs & Maintenance 6800 . Utilities Total Expense Net Ordinary Income Other Income/Expense Other Income 000000 . other income Total Other Income Net Other Income Net Income Jan - Dec 06 4,996.66 5,549.00 3,329.43 820.97 2,330,95 7,805,32 3,203,60 2,419.98 4,673.85 1,202.10 4,923,86 628,98 150,00 2,508.45 323,85 2,832,30 7,361.32 8.95 5,573,00 325.00 480.00 6,37800 2,881,42 2,495.43 6,070.00 1,049.10 1,067.51 72,178.73 (8,900,24) 112 50 112.50 112.50 (8,787,74) Page 2 4:54 PM 07/12/07 Accrual Basis Gluten Evolution, LLC Profit & Loss January through December 2005 Ordinary Income/Expense Income 4000 ' MIX SALES 4010 ' Mix 1 - Gluten Free 4015 ' Mix 2 - G, C, & D Free 4020. Mix 3 - G,C,D & Y Free 4025 . Mix 4 - Banana Bread 4030 . Mix 5 - Pumpkin Bread 4035 ' Mix 6 - Pie Crust 4000 ' MIX SALES - Other Total 4000 ' MIX SALES 4500 ' SHOW INCOME 4800 . Related Item Sales 4801 . Bread Machines Total 4800, Related Item Sales 4820. Consulting & Teaching 4900 ' Customer Shipping Charged 4950 . OVER/SHORT Total Income Cost of Goods Sold 5000 . Cost of Mixes 5010 . Mix 1 CGS - Gluten Free 5015. Mix 2 CGS - G, C, & D Free 5020 . Mix 3 CGS - Yeast Free 5025 . Mix 4 CGS - Banana Bread Total 5000 . Cost of Mixes 5001 ' Cost of Labels & Packaging 5800 . Related Item CGS 5815. T-Shirt CGS Total 5800 . Related Item CGS 5810. Bread Machine CGS 5900 . Shipping Costs Total COGS Gross Profit Expense 6030 ' Medical Insurance 6050 ' Contract Labor 6070 . Travel 6075 ' Meals & Entertainment 6100 ' Advertising & Promotion 6105. Product Shows 6125. Charitable Contributions 6150, Office Supplies & Postage 6152 . Cooking Supplies 6160, Telephone 6165. Internet Expense 6167. Website Expense 6170 ' Dues, Subscriptions & Licenses Jan - Dec 05 57,466.91 18,767.00 7,146,05 5,181,70 1,297.15 838,55 686,77 91,384.13 1,020.00 5,508,00 5,508.00 675,00 9,537.29 (0,30) 108,124.12 28,10748 10,698.51 3,72345 2,460,15 44,989,59 12,891,55 86.14 86,14 3,72848 18,099,20 79,794,96 28,329.16 4,030.39 562.37 3,166.50 1,105,70 2,031.28 1,835,95 485,28 1,300,12 1,180,89 2,618,89 7,814.12 1,990,95 35.00 Page 1 4:54 PM 07/12/07 Accrual Basis Gluten Evolution, LLC Profit & Loss January through December 2005 6200 . Bank Charges 6225 ' Credit Card Processing Costs 6200 ' Bank Charges - Other Total 6200 ' Bank Charges 6250 . Interest Expense 6350 ' Professional Fees 6360 ' Accounting Fees 6355, Legal Fees 6350 . Professional Fees - Other Total 6350 ' Professional Fees 6400 . Depreciation 6600 . Vehicle Expense 6620 ' General & Liability Insurance 6700 . Rent Expense 6730 . Computer Repairs & Maintenance 6750 . Repairs & Maintenance 6800 ' Utilities Total Expense Net Ordinary Income Other Income/Expense Other Income 000000 . other income Total Other Income Net Other Income Net Income Jan - Dec 05 1,744.00 147,38 1,891.38 3,678,79 3,233,75 1,030,93 715,00 4,979.68 2,878.00 2,179.10 2,632.47 1,000,00 144,90 264.98 1,510,99 49,317.73 (20,988.57) 15,000,00 15,000,00 15,000.00 (5,988.57) Page 2 10:48 AM Gluten Evolution, LLC Balance Sheet As of July 5, 2007 07/05/07 Accrual Basis ASSETS Current Assets Checking/Savings 1010, CRB&T Checking 1012. WIRE ACCT. CRB&T Total Checking/Savings Accounts Receivable 1100 . Accounts Receivable Total Accounts Receivable Other Current Assets 1120, Inventory Asset 1150 . Labels & Packaging 1400. Undeposited Funds Total Other Current Assets Total Current Assets Fixed Assets 1610. Equipment & Furniture 1699. Accumulated Depreciation 1600 . Auto Total Fixed Assets TOTAL ASSETS LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable 2000 . Accounts Payable Total Accounts Payable Credit Cards 1035 . ADV ANT A CARD 1030 ' CITI CARD 1025 . Bank of America 1020 . Chase Visa Card Total Credit Cards Other Current Liabilities 2105. PAYROLL L1ABILlTES 2190. LaC Payable - CRB&T 2200' Iowa Sales Tax Payable 2400 ' Due TolDue (From) Shareholder Total Other Current Liabilities Total Current Liabilities Jul5,07 20,221,78 (5.02) 20,216,76 11,437.21 11,437.21 15,766.51 2,744.89 12,465.09 " -".-_.. ----------. 30,976.49 62,630.46 3,512.25 (5,838.00) 15,723.00 13,397.25 76,027.71 11,315.04 11,315.04 7,279.69 6,710.84 11,314,75 (2,173.10) 23,132,18 338.93 59,496.68 (28.94 ) 8,420.10 68,226.77 102,673,99 Page 1 . 10:48 AM 07/05/07 Accrual Basis Gluten Evolution, LLC Balance Sheet As of July 5, 2007 Long Term Liabilities 2600. GREG JESSON LOAN 011005, Betty Sobaski 2500 . Auto Loan-Capital One Total Long Term Liabilities Total Liabilities Equity 3100' Member Equity - AS 3110 . Owner's Draws 3900 . Retained Earnings Net Income Total Equity TOTAL LIABILITIES & EQUITY Jul5,07 8,000.00 25,000,00 7,140.29 40,140.29 142,814.28 (53,242.94 ) (42,953,25) (8,787,74 ) 38,197.36 (66,786.57) 76,027.71 Page 2 1 (\;48 AM 07/05/07 Gluten Evolution, LLC Balance Sheet As of July 5, 2006 Accrual Basis ASSETS Current Assets Checking/Savings 1010 . CRB& T Checking Total Checking/Savings Accounts Receivable 1100 . Accounts Receivable Total Accounts Receivable Other Current Assets 1120. Inventory Asset 1150 ' Labels & Packaging 1400, Undeposited Funds 1499 . DO NOT USE - Old Undep. Funds Total Other Current Assets Total Current Assets Fixed Assets 1610' Equipment & Furniture 1699. Accumulated Depreciation 1600 ' Auto Total Fixed Assets TOTAL ASSETS LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable 2000 . Accounts Payable Total Accounts Payable Credit Cards 1020 . Chase Visa Card Total Credit Cards Other Current Liabilities 2190, LaC Payable - CRB&T 2200 . Iowa Sales Tax Payable 2400. Due To/Due (From) Shareholder Total Other Current Liabilities Total Current Liabilities Long Term Liabilities 011005 . Betty Sobaski 2500 ' Auto Loan-Capital One Total Long Term Liabilities Total Liabilities Ju15,06 (5,935,63) (5,935,63) 3,136.38 3,136.38 4,451.47 2,744.89 469,06 192.00 7,857.42 5,058,17 3,512.25 (5,838,00) 15,723,00 13,397,25 18,455.42 1,920,00 1,920,00 18,706,98 18,706.98 49,996,68 (38.89) 7,724.77 57,682.56 78,309.54 9,000,00 10,243.89 19,243,89 97,553.43 Page 1 10;48 AM 07/05/07 Gluten Evolution, LLC Balance Sheet As of July 5, 2006 Accrual Basis Equity 3100, Member Equity - AS 3110. Owner's Draws Net Income Total Equity TOTAL LIABILITIES & EQUITY Ju15,06 (53,242.94) (11,740.87) (14,114,20) (79,098,01 ) 18,455.42 Page 2 '10:49 AM 07/05/07 Gluten Evolution, LLC Balance Sheet As of July 5, 2005 Accrual Basis ASSETS Current Assets Checking/Savings 1010. CRB&T Checking Total Checking/Savings Accounts Receivable 1100 . Accounts Receivable Total Accounts Receivable Other Current Assets 1120. Inventory Asset 1150 ' Labels & Packaging 1499 . DO NOT USE - Old Undep. Funds Total Other Current Assets Total Current Assets Fixed Assets 1610 . Equipment & Furniture 1699. Accumulated Depreciation 1600 . Auto Total Fixed Assets TOTAL ASSETS LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable 2000 ' Accounts Payable Total Accounts Payable Other Current Liabilities 2190. LOC Payable - CRB&T 2200. Iowa Sales Tax Payable 2400, Due TolDue (From) Shareholder Total Other Current Liabilities Total Current Liabilities Long Term Liabilities 011005 . Betty Sobaski 2500 . Auto Loan-Capital One Total Long Term Liabilities Total Liabilities Ju15,05 1,751.08 1,751.08 3,974,68 3,974,68 5,154,95 2,744,89 308.58 8,208.42 13,934.18 1,013,86 (2,960,00) 16,034.03 14,087.89 28,022.07 1,920.00 1,920,00 25,850.00 (35,11) 6,663.49 32,478,38 34,398,38 9,000.00 12,868.12 21,868.12 56,266.50 Page 1 '10:49 AM 07/05/07 Gluten Evolution, LLC Balance Sheet As of July 5, 2005 Accrual Basis Equity 3100. Member Equity - AS 3110. Owner's Draws 3900 ' Retained Earnings Net Income Total Equity TOTAL LIABILITIES & EQUITY Jul5,05 2,000.00 (28,712,89) (6,454.59) 4,923.05 (28,244.43) 28,022.07 Page 2 INITIAL REVIEW OF SUMMA ENTERPRISES, LLC (NILE VALLEY RESTAURANT) WORKING CAPITAL Business Proposed: Nile Valley is a new restaurant that will serve Middle Eastern/Mediterranean food and gourmet coffee. The business hopes to open late summer/early fall of 2007 at 335 S. Gilbert Street on the ground floor of a multi-unit complex that consists of 300 apartments. The owner request funds for working capital, construction and inventory. Budget & Private Financial Contribution The applicant initially requested $110,000, but has reduced their request to $50,000. U.S. Bank has committed to providing a $50,000 5-year loan for equipment and will secure their loan with a UCC filing statement. Applicant will invest $70,000 in personal funds to this business. Comprehensive Plan/CITY STEPS Plan The project does not require public infrastructure and is located in a CB-5 zone (central business support). CITY STEPS notes a high priority for the expansion and/or retention of business that pay at least the living wage. Quality of Jobs The applicant proposes to create 9 jobs, 3 full-time and six part-time. The three full-time jobs will pay $10.50/hour or more, the part time wage is $7.00/hour. No fringe benefits are paid. Economic Impact The proposed CDBG funds will provide a minority owned business access to low interest working capital. The business is in need of low cost capital for start up costs. Environmental/Community Involvement The business will support Neighborhood Centers of Johnson County, the Sudanese Association of Iowa City and the Out Reach program for Girl Scouts with cash contributions/fund raising events. Items to Address: 1. 100% of the loan for a start up business is unsecured. US Bank would take a lien on all equipment. The applicant will lease t,he space. 2. The owner has experience in the preparation, storage and handling of food, however lacks experience in financially operating a for-profit business. 3. The monthly payment for the US Bank loan should be approximately $1,001, not $766.67 as stated in the application; however the estimated total loan July 2007 payment with the requested City funds is accurate in the cash flow projection. 4. The cash flow projection for gross wages is lower than the amount of payroll generated under the question 3.2. Annual payroll under 3.2 would be $9,620; the cash flow projection indicates $8,000 by month 12. July 2007 Iowa City CDBO Economic Development Funds Application for Business Financial Assistance Business Requesting Financial Assistance: Individual: IIham. B. Mohamed and Bedrelddin B. Ahmed Home Address: 628 12m Ave. Apt# 2 Coralville AI 52241 Name of Applicant Business: SUMMA Enterprises, LLC / Nile Valley Restaurant Full Street Address of Business: 335 S, Gilbert St, Iowa City, IA 52240 Phone Number & Email Address: (319) 354-6546- (319) 594-0439, bederelddin@yahoo.com DUNS Number (If awarded funds, applicant must obtain a DUNS number): Type of Business: Restaurant or Retail Date Business Established: August 2007 Bank of Business Account and Address (if applicable): U.S Bank Washington St, Iowa City, IA NOTE: The City will not provide assistance in situations where it is determined that any representation, warranty or statement made in connection with this application is incorrect, false, misleading or erroneous in any material respect. If assistance has already been provided by the City prior to discovery of the incorrect, false or misleading representation, the City may initiate legal action to recover City funds. Section 1: Description of Business and Proposed Project 1. Describe the proposed "project" (for example, company relocation, building expansion, remodeling, new product line, number of new jobs, amount of investment in machinery and equipment) and the expected benefits it will receive from the financial assistance requested: Our project is starting a new Middle Eastern food restaurant, Nile Valley, in South Gilbert Street, Iowa City. To make The Nile Valley Restaurant a reality we request financial assistance to cover the construction and inventory costs. IIham Mohamed and Bedrelddin Ahmed, the owners, will put down $70.000 from their own savings. The vital assistance from the City will help us meet the building renovations costs of $90,000. Since we have no collateral assets to help us in obtaining the loans from the commercial banks, we would be enormously helped by the financial assistance we could get from the City. 2. Provide a brief history of your company: NA. 3. Describe the organizational structure of the business: IIham Mohamed and Bedrelddin Ahmed will own and manage the restaurant, EI- fatih AI-Siddig Chef/Shift Manager; eight new employees will work on the counter and meeting the customers. 4. Management (Proprietor, partners, officers, directors, all holders of outstanding stock, 100% of ownership must be shown> Name & Positionfritle Complete Address % Owned 628 12th Ave, # 2, Coralville, IA 52241 51% IIham Mohamed owner/director 628 12th Ave,# 2, Coralville, IA 52241 49% Bedrelddin Ahmed owner/director Attach a brief description similar to a resume of the education, technical and business background for all the people listed under Management. Attached 5. Will the project involve a transfer of operations or jobs from any other Iowa City or Johnson County facility or replace operations or jobs currently being provided by another Iowa City or Johnson County company? If yes, please indicate the facility(s) and/or company(s) affected. NO Section 2: Financial Contributions to the Proposed Project 1. Use of Proceeds USE OF Proceeds Loan Requested (Enter gross dollar amount rounded to the nearest Activity hundreds) Land acquisition $0,000.00 New Construction/Expansion Repair $90,000.00 Acquisition and/or Repair of Machinery $30,000.00 and Equipment Inventory Purchase $15,000.00 Working Capital (including accounts $35,000.00 payable) Acquisition of Existing Business $0,000.00 All Other (provide description) $0,000.00 Total Loan Requested (All Sources): $170,000.00 2. Terms of Proposed Financing (Sources) Monthly Type(1) Proposed Financing Amount Payment Rate Term Financial $ 50.000 766.67 7.49% 5 years Financial Institution : $ Other: $ 70.000 0 owners 0 0 Iowa City COBG Economic Oev. Fund $ 50.000 TOTAL: $ 170.000 (1)For example: forgivable loan, direct loan, or grant. 3. Explain why assistance is needed from the City, and why it cannot be obtained elsewhere. If the applicant did not apply for a loan through a private financial institution, please explain why. If denied assistance through a financial institution, please attach the letter of denial. U. S bank will lend us money to purchase the equipment which is considered as collateral. Since we do not own a home or any property other than our own savings, the need for the city assistance is vital for us to make the Nile Valley Restaurant a reality. 4. Indicate the owner's contribution (cash, assets for the operation of the business, etc.) to this project. The owners will contribute 70,000.00 cash, IIham resigned from her job as a Site Director at the Neighborhood Center, to devote her entire time to managing the Nile Valley Restaurant. 5. Identify all agencies or institutions involved in the project (financial, technical assistance, etc.) and what their involvement is: The technical assistance is provided by Paul Heath of the Small Businesses Center, Attorney Ann Tompkins represents SCORE, Joni Thornton from the Women's Business Center, Amy Greazel Accountant, Attorney Julie Pulkrabek for legal advice and US Bank as the financial institution. 6. What type of security will the assisted business provide the City? If no security or less than the dollar amount requested is offered, an explanation must be provided. Personal Guarantee 410 Corporate Guaranty 411 UCC Financing Statement 412 Irrevocable Letter of Credit 413 Personal Guarantee 414 Surety Bonds 415 Mortgage on Real Estate 416 Escrow Account 417 Other: Before execution of a CDBG agreement, if the collateral consists of machinery and equipment, inventory, or other, the applicant must provide an itemized list that contains serial and identification numbers for all articles that had an original value of greater than $5,000. Include a legal description of real estate offered as collateral. 2.7 If the City did not provide financial assistance, could the project proceed? It will almost be impossible for the Nile Valley Restaurant to proceed without the assistance, but we will keep trying. Section 3: Jobs to Be Created/Retained Special Note: The Community Development Block Grant (CDBG) program requires that at least 51% of the jobs created or retained must be held by or made available to low-moderate income persons. The business acknowledges that if it fails to create and/or retain the Jobs Identified below by the end of the project period and maintain them for a period of time (usually 12 months from the date of the award); it may be required to reimburse City funds for the employment shortfall. 3.1 If an existing business, how many employees are currently employed at your Iowa City location? Please attach a copy of the company's quarterly Iowa "Employer's Contribution and Payroll Report" for the most recent quarter. NA 3.2 Complete the following chart identifying the number of jobs to be created and/or retained based on this specific project. Type of Job and Hourly Rate for Created and/or Retained Positions in First 12 Months of Project Award (please see attached Job Category Definitions) # of Jobs # of Jobs No. Hours Hourly Fringe Created Retained Tvpe of Job Per Week Rate of Pay Benefits* 2 Officials & Managers 40 $12 Professional Technicians 3 Sales 20 $7 Office & Clerical Craft Wokers (Skilled) Operatives (semi-skilled) 3 Laborers (unskilled) 20 $7 1 Service Workers 40 $10.50 *If fringe benefits are provided, please attach a description of all employee benefits provided by and paid for (in full or in part) by the business. 3.3 What is the estimated annual payroll for the new employees resulting from this project? We will hire Three full time employees at $12 and $10.50 per hour. 3.4 If an existing business, will any of the current employees lose their jobs if the project does not proceed? If yes,how many? Explain why: NA Section 4: Economic & Environmental Impact 1. What other Johnson County companies could be considered to be your competitors? . Oasis Falafel Restaurant 206 Linn St, Iowa City . Aladdin Restaurant, 2419 2nd St, Coralville. . Pita Pit 113 Iowa Ave, Iowa City. 2. Please describe the energy and resource efficiency programs, waste reduction, waste exchange, and recycling programs at your Iowa City operation. We are planning on using Energy STAR bulbs, LED exit signs, to change HVAC units filters and we contacted the utility company in our area for more assistance. Section 5: Community Involvement, Compliance with Law 5.1 In addition to your normal business activities, does your business contribute or have plans to contribute to the community through volunteer work, financial contributions, or through other means? Please describe. YES, we have been involved with many community organizations and we, as owners are planning on continuing this practice. Restaurant will make regular cash contributionsl fund raising events for the Neighborhood Centers of Johnson County, the Sudanese Association of Iowa City and the Out Reach program for Girls Scouts. 5.2 Has the business been cited or found to violate any federal or state statute or regulation within the last five years (including, but not limited to environmental regulations, payroll taxes, Occupational Safety and Health Administration laws, Fair Labor Standards, the National Labor Relations Act, the Americans with Disabilities Act)? If yes, please explain the circumstances of the violation(s). NO 5.3 Has the company or any officer of your company ever been involved in bankruptcy or insolvency proceedings? If so, please provide the details. Yes Bedrelddin Ahemd had file for bankruptcy in 1997, ten years ago, but he reestablished his credit worthiness by paying-off and settling all the his debts. His current credit score is over 690 the last time we checked our credit reports. 5.4 Are you or your business involved in any pending lawsuits? If yes, provide the case name of the lawsuit, docket number, and city and state where it is pending. NO Section 6: Summary of Required Attachments Check off each attachment submitted. If not submitted, explain why. [x] Business plan (if start-up business) [x I Balance Sheet (3 year historical if an existing business. Start-ups must provide a pro- forma balance sheet) [x I Profit and loss statements (3 year historical if an existing business, 3 year projection for start-ups) [x ] 12 month cash flow statement (if the business does not expect to turn profitable within the first 12 months, provide a cash flow statement extended to the year the business expects to turn profitable) [na] Description of fringe benefits provided to employees, if applicable [x] Brief description of the education, technical and business background for all the persons listed under Management (Question #1.4) [ x] Please provide the social security numbers for all the persons listed under Management (Question #1.4) IIham Mohamed"'" Bederelddin Ahmed [na] If an existing company, copy of the company's quarterly Iowa "Employer's Contribution and Payroll Report" for the most recent quarter. [ x ] Construction loans only: Cost estimates for construction and a statement of the source of any additional funds [x] Include a list of any machinery or equipment or other non-real estate assets to be purchased with the financial assistance and the cost of each item as quoted by the seller. Include the seller's name and address. Upon review of a submitted application, the City reserves the right to request additional information in order to assist the City with its evaluation of an application. Release of Information and Certification NOTE: Please read carefully before signing I hereby give permission to the City of Iowa City (the City) to research the company's history, make credit checks, contact the company's financial institution, and perform other related activities necessary for reasonable evaluation of this proposal. I understand that all information submitted to the City relating to this application is subject to the Open Records Law (1994 Iowa Code, Chapter 22) and that confidentiality may not be guaranteed. I hereby certify that all representations, warranties or statements made or furnished to the City in connection with this application are true and correct in all material respects. I understand that it is a criminal violation under Iowa law to engage in deception and knowingly make, or cause to be made, directly or indirectly, a false statement in writing for the purpose of procuring economic development assistance from a state agency or political subdivision. If applicant is a proprietor or general partner, sign below. By: IIham B. Mohamed_ Date: 6/14/2007_ If applicant is a Corporation, sign below: Date Corporate Name and Seal By: IIham B. Mohamed Signature of President Attested by: Signature of Corporate Secretary 1 , Strate~ic & Tactical Business Plan Strategic & Tactical Business Plan For Nile Valley Restaurant 335 S. Gilbert St. Iowa City, IA 52240 Phone: (319) 594-0439 Fax: (319) 354-6546 Email : ilham fadul~yahoo.com Nile Valley Restaurant EXECUTIVE SUMMARY: There is an opportunity in Iowa City to open and operate a successful Middle Eastern! Mediterranean restaurant that will serve food and gourmet coffee. Ilham Mohamed and Bederelddin Ahmed have recognized this opportunity and have decided to go forward with a new company named SUMMA ENTERPRICES, LLC, which will penetrate the market in the business of operating a Middle Eastern! Mediterranean restaurant to be named Nile Valley. It will serve a variety of delicious food at competitive prices. Planning to open August or September of 2007, the building has 2,500 sq. ft, and will be equipped with one long elegant customer counter to serve all products. The total seating capacity would be around 50-60 seats. Nile Valley Restaurant is proud of its main product line, the features, and the benefits that make up its attractiveness to this ever-growing market. The main features of its core product include pita wrapped sandwiches of omelets (for breakfast), falafel, fava beans, gyros, kufra, or complete entrees of shish kebabs served in a traditional style for dine-in customers. Some of the strengths and capabilities of its core products as it and availability include the fact that our falafel is made with fresh ingredients such as chickpeas, which are high in protein, calcium and iron. The Nile Valley Restaurant will promise to provide an affordable, delicious, healthy and exotic home style meal. To make this restaurant a reality, the financial need is $170,000. The owners will put down $60,000 towards the loan. Starting on the building renovations will cost $ 90,000 and $30,000 for the equipments, the rest will go towards three month rent, employees, utilities, phones, advertising, inventory, supplies and insurance. MISSION STATEMENT: The Nile Valley Restaurant will strive to excel in the business of operating a Middle Eastern! Mediterranean restaurant that serves a variety of delicious food and coffee at highly competitive prices. What makes our restaurant unique is that we will offer a courteous and knowledgeable staff of well trained personnel dedicated to providing exceptional service and we will be open 6:00 am to 9:00 pm to serve our customers hot meals all day. LOCATION: Because of the nature of this business the company has learned that the best place to locate its restaurant is 335 S. Gilbert St, Iowa City, IA 52240. On the ground floor of a multi-unit complex that consists of 300 apartments, just half a block away from Burlington St, near a major parking ramp for downtown Iowa City and the Pedestrian Mall and only two blocks away from the Iowa City Public Library and one block from the Robert Lee Recreation Center of Iowa City. This location will give many advantages to Nile Valley Restaurant such as: residents and business personnel do not need to drive or leave downtown for a hot meal and the restaurant will generate more revenue. I ORGANIZATIONAL STRUCTUE: Ilham Mohamed and Bederelddin Ahmed will own and manage the restaurant. Ilham has been a flight attendant for over thirteen years and has gained a profound experience in dealing will all kind of passengers all around the world. After immigrating to the United States with her husband Bederelddin Ahmed, Ilham worked in many odd jobs which contributed to her learning experience and helped her to appreciate the value of affordable restaurants. She went back to school and earned an AA degree and a diploma in Early Childhood Education from Kirkwood Community College and worked in a child care center for four years. As a lead teacher in Pheasant Ridge Neighborhood Center, She helped and implemented a monthly menu for 180 children and learned how to order food from different suppliers and how to maintain proper food storage, as well as how to handle and comply with the Iowa State health codes. Ilham was promoted to be a Youth Programs Coordinator, and then to the position of Site Director. EI-Fatih AI-Siddig, Chef/shift Manager: He has spent five years running his family restaurant in Sudan, gained ability to supervise and train employees, including scheduling work assignments and organizing shifts to meet the work need and employees' needs. He planned the menu through the entire five years of running the business. EI- Fatih has gained knowledge of the needed supplies, ordering and controlling inventory, understanding of food safety and storage. Since he immigrated, with his family, to the United States he worked at Papa Johns Pizza in Texas and Iowa, currently as a store manager, this experience helped him to learn new skills and equipped him with the knowledge that he will implement in Nile Valley Restaurant. Nine new employees: Nile Valley will have nine employees, two chefs (52 hrs/week) one full time employee (40 hrs/week) and six part time employees (104 hrs/week). We know how important the organizational structure is to the success of the restaurant, so each position has a detailed job description as well as a defined relationship to the whole. Ilham Mohamed will manage the employees. THE MARKET: According to the 2003 census the population ofIowa City/ Coralville, was 82,123 people, and during the school year it increases by 29,745. Median household family income is $57,568. Downtown Iowa City, where Nile Valley is located, is the most condensed and populated area. Residents are mostly students and staff of the University of Iowa. Nile Valley Restaurant has done an exhaustive study of the State's restaurant industry. We found that it is one of the most exciting industries in the United States. It presents an ever increasing market, a very healthy bottom line, and an excellent opportunity for growth. The restaurant has all this to offer and its management team will keep its finger on the pulse of market demand. The demand is: quality delicious food, vegetarian or non-vegetarian selection, served by attentive personnel who provide superior customer service, in a clean comfortable atmosphere in which the customer can eat and relax. 2 As owners we feel that the Nile Valley Restaurant will meet the demand and will fit perfectly in this industry. Iowa City has many unique restaurants and always busy, the city has a highly diverse population and they like to taste international gourmet. It appears to the observer all over the United States people are too busy to cook or don't want to cook and if the neighborhood food places are good with great service they will come and tell about their experience. Nile Valley Restaurant will use its talent to position itself in the future markets serving a variety of delicious Middle Eastern and Mediterranean food and coffee at a highly competitive prices and sufficient in today's demanding market. In addition to this, we will develop and enhance as well as creating new products and services to keep our position in the marketplace. PROMOTION STRATEGY: The management on Nile Valley Restaurant believes very strongly that promotion is a crucial part of any business success. Our focus will be on extensive mailing to the residence of Iowa City and Coralville, online Internet exposure through search engine optimization, Yellow Pages, press releases, special promotions and coupons and eventually word of mouth. COMPETITIION: 1. Oasis Falafel Joint Restaurant - 206 N. Linn Street- downtown Iowa City 2. Aladdin Restaurant - 2419 2nd St - Coralville 3. Pita Pit- 113 Iowa Ave - Iowa City Oasis is seven blocks away from Nile Valley Restaurant, has a smaller building, and customers often complain about the uninviting atmosphere. Pita Pit is also somewhat similar but does not use fresh ingredients especially for its main product, the falafel. Aladdin restaurant also is a small place, highly priced and has an unfriendly staff that costumers often complain about. What sets Nile Vallev Restaurant apart from other competitor is: What sets Nile Valley Restaurant apart from other competitors is its unique location as visible for the traffic in Gilbert St, has 2,500 sq. ft of well designed space. It is also a few steps away from a highly condensed students' residence area, and students do not prefer to travel long distances when they are hungry. The location is also very convenient to many businesses around the area such as the phone company and the new Greyhound bus station to name a few. Weare better because we intend to make our restaurant a very welcoming and inviting place. We noticed this is lacking at other places due to their small area or unwelcoming environment. We will pay very special and utmost regard for the quality of the services and food we deliver. Our focus on fresh food and meat will no doubt make a big different. We observed that our competitors are using ready made mixture for falafel, which does not taste the same as the fresh mixtures. The same can be said with many 3 other items such as shish-kebab. Weare also better because we offer better prices, knowing that most our customers are students who cannot afford expensive food. Proiection of Sales: We need a least 150 customer per day (in all three meals) with average customer spending at $6 for food and drink, which will generate sales of $ 900 per/day for the first six months (150 customers X 30days X $6 == 27,000). We expect customer numbers to increase to 200 people for the next six months to generate sales of $1200 per/day (200 X 30 X 6== 36,000). Our goal is to reach 400 customers per/day by the end of the 3rd year. More details in the attached Monthly Cash Flow Projection. 4 PROJECTED BALANCE SHEET YEAR ONE ASSETS Current Assets Cash On Hand Accounts Receivable Inventory Prepaid Expenses Suppliers TOTAL CURRENT ASSETS AMOUNT $ 25,940.00 $ $ 5,500.00 $ $ 480.00 $ 31,920.00 Fixed Assets Equipment &Improvements Land and Building Less Depreciation ( 6,000.00 NET FIXED ASSETS $ 120,000.00 $ ) $ 114,000.00 TOTAL ASSETS: $ 145,920.00 LIABILITIES Current Liabilities Accounts Payable Notes Payable - Bank Current Portion L TD TOTAL CURRENT LIABILITIES $ $ 97,942.00 $ $ 97,942.00 Long Term Debt Officer's Debt $ $ TOTAL LIABILITIES Common Stock Paid in Capital Retained Earnings (Less) Treasury Stock $ $ 45,000.00 $ 2,978.00 $ TOTAL NET WORTH TOTAL LIABILITIES AND NET WORTH $ $ 145,920.00 PROJECTED PROFIT AND LOSS STATEMENT YEAR ONE ANNUAL Sales $ 298,000.00 Less: Cost of Goods Sold $ 76,600.00 Gross Profit $ 221,400.00 Operating Expenses Payroll (excluding owner's draw) $ 93,000.00 Payroll Taxes $ 5,580.00 Outside Services $ Supplies (office & operating) $ 2,805.00 Repairs & Maintenance $ 500.00 Advertising $ 13,000.00 Car Delivery & Travel $ Accounting & Legal $ 1,800.00 Rent $ 48,000.00 Telephone $ 1,350.00 Utilities $ 12,000.00 Insurance $ 3,500.00 Taxes(ReaIEstate,etc) $ Interest $ 7,628.00 Depreciation $ 6,000.00 Health Permit & Dumpster $ 1,240.00 Total Operating Expenses $ 196,403.00 Profit or (Loss) $ 14,997.00 PROJECTED BALANCE SHEET YEAR TWO ASSETS Current Assets Cash On Hand Accounts Receivable Inventory Prepaid Expenses Supplies TOTAL CURRENT ASSETS AMOUNT $ 57,422.00 $ $ 5,500.00 $ $ 250.00 $ 63,172.00 Fixed Assets Equipment & Improvements Land and Building Less Depreciation ( 6,000.00 NET FIXED ASSETS $ 114,000.00 $ ) $ 108,000.00 TOTAL ASSETS: $ 171,172.00 LIABILITIES Current Liabilities Accounts Payable Notes Payable - Bank Current Portion L TD TOTAL CURRENT LIABILITIES $ $ 84,920.00 $ $ 84,920.00 Long Term Debt Officer's Debt $ $ TOTAL LIABILITIES Common Stock Paid in Capital Retained Earnings (Less) Treasury Stock $ $ 45,000.00 $ 41,252.00 $ TOTAL NET WORTH TOTAL LIABILITIES AND NET WORTH $ $ 171,172.00 PROJECTED PROFIT AND LOSS STATEMENT YEAR TWO Sales ANNUAL $ 370,000.00 Gross Profit $ 81,400.00 $ 288,600.00 Less: Cost of Goods Sold Operating Expenses Payroll (excluding owner's draw) $ 102,000.00 Payroll Taxes $ 6,120.00 Outside Services $ Supplies (office & operating) $ 3,500.00 Repairs & Maintenance $ 400.00 Advertising $ 12,000.00 Car Delivery & Travel $ Accounting & Legal $ 1,450.00 Rent $ 48,000.00 Telephone $ 1,200.00 Utilities $ 12,000.00 Insurance $ 4,000.00 Taxes (Real Estate, etc.) $ Interest $ 7,363.00 Depreciation $ 6,000.00 Heath Permit & Dumpster $ 1,064.00 Total Operating Expenses $ 205,097.00 Profit or (Loss) $ 83,503.00 CASH POSITION AT MONTH END $0.00 11 500.00 2,95 .00 $ 8,403.00 $ $2,000.00 $25,548.00 7,855.00 $ $2,000.00 $2'3.499.00 4,356.00 $ $2,000.00 $23,798.00 0,558.00 $9,959.00 $2,000.00 $ 25.599:Oci 4,260.00 $2,000.00 $ 2S,699.OO $ $2,000.00 $26,349.00 7,9 11 .00 $25,588.00 $2,000.00 $27,3'2'3.'00 $25,989.00 $2,000.00 $24,599.00 $25,940.00 $2,000.00 $25,049.00 $22,000.00 $426,060.00 r) Loan principal payment (s) Capital purchases (specify) (t) Other start-up costs (u) Reserve and/or escrow (specify) (v) Owner's withdrawal TOTAL CASH PAID OUT $ 54,000.00 $30,000.00 $90,000.00 $ 50,500.00 $30,000.00 $90,000.00 $2,000.00 $23,549.00 $2,000.00 $24,548.00 $22,687.00 $1,012.00 $23,330.00 $1,019.00 $24,298.00 ~ $2 $ 567.00 ,032.00 $22,010.00 $1,039.00 $34,000.00 $30,500.00 $20,577.00 $9'72.Oci $21,570.00 $978.Ocj $22,563.00 $985.00 $20,507.00 $992.00 $20,800.00 $99'8.'Oci $22,594.00 $1,005.00 Dumpster (q) Misc. unspecified su'BTOTAi:'; CASH PAID OUT (a) Purchases (Merchandise) (b) Gross Wages (excludes withdrawals) (c) Payroll expenses (taxes etc.) (d) Outside Services (e) Supplies (office and operating) (0 Repairs and Maintenance (g) Advertising (h) Car delivery and travel 0) Accounting and legal 0> Rent (k) Telephone (I) Utilities (m) Insurance (n) Taxes (Real Estate, etc.) (0) Interest (p) Depreciaton Health Permits $200.00 $70.00 $500.00 $200.00 $70.00 $727.00 $ 500.00 $ 200.00 $70.00 $70.00 $70.00 $70.00 $70.00 $70.00 $694.00 $500.00 $ "$ ,000.00 ,000.00 $ $ ,000.00 ,000.00 $4,000.00 $100.00 $1,000.00 $720.00 $ 500.00 $4,000.00 $100.00 $1,000.00 $70.00 $687.00 $500.00 $ "$ $713.00 $500.00 ,000.00 ,000.00 $70.00 $680.00 $500.00 $707.00 $500.00 $4,000.00 $100.00 $1,000.00 $70.00 $673.00 $500.00 $700.00 $500.00 $350.00 $4,Ci0Q.60 $100.00 $1,000.00 $ 70.00 $667.00 $ 500.00 $4,000.00 $100.00 $1,000.00 - $1,000.00 $4,000.00 $100.00 $1,000.00 $350.00 $ 4.OOQ.06 $100.00 $1,000.00 $1,000.00 "$500.00 $4,000.00 $1 00.00 $70.00 $660.00 $500.00 $4,000.00 $100.00 $1,000.00 $350.00 $4,000.00 $100.00 $1,000.00 $1.,057.00 $30,000.00 $90,000.00 $0.00 $1,800.00 $48,000.00 $1,350.00 $1 2,000.00 $3,500.00 $0.00 $7,628.00 $6,000.00 $400~00 $840.00 $0.00 $273,003.00 $750.00 $8,000.00 $250.00 $750.00 $4,000.00 $250.00 $4,000.00 $1 00.00 $2,000.00 $2,000.00 $ ,000.00 $ ,000.00 $ ,000.00 $150.00 $100.00 $1,000.00 $ ,000.00 $ ,000.00 $ ,000.00 $250.00 $300.00 $1,000.00 $ ,000.00 ,000.00 $250.00 $100.00 $1,000.00 $430.00 $15,000.00 $5,000.00 $300.00 $430.00 $15,000.00 $5,000.00 $300.00 $ $4,400.00 $8,000.00 $480.00 00.00 $200.00 $5,500.00 $8,000.00 $480.00 $200.00 $5,500.00 $8,000.00 $480.00 $4,400.00 $8,000.00 $480.00 $200.00 $4,400.00 $8,000.00 $480.00 $250.00 $5,500.00 $8,000.00 $480.00 $250.00 $6,600.00 $8,000.00 $480.00 $6,600.00 $8,000.00 $480.00 $275.00 $7,700.00 $8,000.00 $480.00 $250.00 $5,500.00 $8,000.00 $480.00 $5,500.00 $8,000.00 $480.00 $76,600.00 $93,000.00 $5,580.00 $0.00 $2,805.00 $500.00 3,000.00 $0.00 $1 1 . Cash on hand 2. Cash Receipts (a) Cash sales (b )Collection from Credit Accounts (c) Loan or other cash injection TOTAL CASH RECEIPTS TOTAL CASH AVAILABLE $30,000.00 $44,260.00 $35,000.00 $52,911.00 $25,000.00 $50,588.00 $25,000.00 $25,000.00 $50,989.00 $1 $i $i 09,000.00 09,000.00 54,000.00 $ $ '$ 09,000.00 ~ 62,000.00 $25,000.00 $36,500.00 $30,000.00 $42,951.00 $25,000.00 $43,403.00 $20,000.00 $37,855.00 $20,000.00 $34,356.00 $25,000.00 $35,558.00 $30,000.00 $39,959.00 $29B,OOO.00 $0.00 $109,000.00 $407,000.00 (beg. of NILE VAlLEY RESlUARNT YEAR ONE month) Start Up Position $45,000.00 $8,000.00 AUG 1 Actual $45.Ocio.OO $25,000.00 Actual $ii":SOO.OO SEP 2 $30,000.00 Actual $i2.95 OCT 3 .00 $25,000.00 Actual $'i8.403.00 NOV 4 Monthly Cash Flow Projection $20,000.00 DEe 5 Actual $i"7,855.00 $20,000.00 Actual $"'i'4':356.00 JAN 6 $25,000.00 FEB 7 Actual $iO,S'S8.00 $30,000.00 MAR B Actual $9.959.00 $30,000.00 APR 9 Actual $i'4.2'60.00 $35,000.00 MAY 10 Actual $17,91 .00 $25,000.00 JUN 11 Actual $'25.588.00 JUL 12 Actual CASH POSmON AT MONTH ENO r) Loan principal payment s) Capital purchases (specify) t) Other start-up costs u) Reserve and/or escrow (specify) v) Owner's withdrawal TOTAL CASH PAID OUT CASH PAID OUT (a) Purchases (Merchandise) (b) Gross Wages (excludes withdrawals) (c) Payroll expenses (taxes etc.) (d) Outside Services (e) Supplies (office and operating) (f) Repairs and Maintenance (g) Advertising (h) Car delivery and travel (i) Accounting and legal Gl Rent (k) Telephone (I) Utilities (m) Insurance (n) Taxes (Real Estate, etc.) (0) Interest (p) Depreciation Health Permit Dumpster (q) Misc. unspecified SUBTOTAL: $0.00 $30,984.00 $37.578.00 $44. 72.00 $49,666.00 $48,536.00 $47,406.00 $48,7 5 .00 $5 ,495.00 $56,539.00 $62 $4,000.00 $"29.'405.00 34.00 $60,003.00 $4,000.00 $27,131.00 $57,422.00 $4,000.00 $27.581.00 $40,000.00 $338,518.00 $0.00 $3.000.00 - $29,956.00 $ 3,000.00 $28.406.00 $3.000.00 $'28:40'6.0'0 $3.000.00 $29.506.00 $3,000.00 $26,130.00 $3.000.00 $26,130.00 $3,000.00 $28,655.00 $3,000.00 $27,256.00 $4,000.00 $29,956.00 $24,567.00 $ 1 ,088.00 $23,160.00 $1,096.00 $24,853.00 $ 1,103.00 $25,295.00 $110.00 $22,0 $1,1 3.00 8.00 $ 2 2,456.00 $1,125.00 $0.00 $286,4'97.'00 $1 2,021.00 $0.00 $0.00 $0.00 $0.00 $25,910.00 $1,046.00 $653.00 $ 500.00 $200.00 $72.00 $24,353.00 $1,053.00 $72.00 $24,346.00 ~ $72.00 $25,439.00 $ 1,067.00 $72.00 $22,056.00 $1,074.00 $72.00 $22,049.00 $ 1,081.00 $72.00 $72.00 $72.00 $72.00 $72.00 $ 7 2.00 $581.00 $ 500.00 $574.00 $500.00 $72.00 $7,363.00 $6,000.00 $200.00 $864.00 $350.00 $4,000.00 $ 1 00.00 $1,000.00 $1,000.00 $646.00 $ 500.00 $4,000.00 $100.00 $1,000.00 $639.00 $ 500.00 $4,000.00 $100.00 $1,000.00 $632.00 $500.00 $4,000.00 $ 1 00.00 $1,000.00 $1,000.00 $624.00 $ 500.00 $4,000.00 - $ 1 00.00 - $1,000.00 $617.00 $500.00 $4,000.00 $100.00 $1,000.00 $610.00 $500.00 $400.00 $4.000.00 $100.00 $1,000.00 $1,000.00 $603.00 $ 500.00 $4,000.00 $ 1 00.00 $ 1,000.00 $ 596.00 $ 500.00 $350.00 $4,000.00 $100.00 $ 1,000.00 $588.00 $500.00 $4,000.00 $ 100.00 $ 1,000.00 $ 1,000.00 $4,000.00 $ 100.00 $1,000.00 $350.00 $ 4.OOo:DO $ 1 00.00 $1,000.00 $1,450.00 $48,000.00 $1,200.00 $12,000.00 $4,000.00 $0.00 $ ,000.00 $ ,000.00 ,000.00 $325.00 $ 1 00.00 $1,000.00 .000.00 ,000.00 $ ,000.00 $ ,000.00 $ $325.00 $200.00 1,000.00 $ ,000.00 ,000.00 $ $250.00 $ 1 00.00 1,000.00 $3,500.00 $400.00 $12,000.00 $0.00 $325.00 $7,700.00 $8,500.00 $510.00 $325.00 $7,700.00 $8,500.00 $510.00 $325.00 $7,700.00 $8,500.00 $510.00 $7,700.00 $8,500.00 $510.00 $250.00 $5,500.00 $8,500.00 $510.00 $250.00 $5,500.00 $8,500.00 $510.00 $275.00 $6,600.00 $8,500.00 $510.00 $275.00 $6,600.00 $8,500.00 $510.00 $7,700.00 $8,500.00 $510.00 $325.00 $7,700.00 $8,500.00 $510.00 $250.00 $5,500.00 $8,500.00 $510.00 $5,500.00 $8,500.00 $510.00 $81,400.00 $1 02,000.00 $6.120.00 $0.00 $35,000.00 $65,984.00 $35,000.00 $72,578.00 $35,000.00 $79,172.00 $25,000.00 $74,666.00 $25,000.00 $73,536.00 $30,000.00 $77,406.00 $30,000.00 $78,751.00 $35,000.00 $86,495.00 $35,000.00 $91.539.00 $25,000.00 $87,134.00 $25,000.00 $25,000.00 $85,003.00 1. Cash on hand (beg. of month) 2. Cash Receipts (a) Cash sales (b)Collection from Credit Accounts (c) Loan or other cash Injection TOTAL CASH RECEIPTS TOTAL CASH AVAILABLE $0.00 $0.00 $35,000.00 $60,940.00 $370,000.00 $0.00 $0.00 $370,000.00 NILE VALLEY RESTUARNT YEAR TWO Start Up Position $0.00 $35,000.00 AUG 1 Actual $25,940.00 $35,000.00 Actual $30,984.00 SEP 2 $35.000.00 OCT 3 Actual $37,578.00 $35,000.00 NOV 4 Actual $44.i72.00 Monthly Cash Flow $25,000.00 DEC 5 Actual $'4'9:6'66.00 Projection $25,000.00 Actual $"48,'5"36.00 JAN 6 $30,000.00 Actual $47,406.00 FEB 7 $30,000.00 Actual $48,75 MAR 8 .00 $35,000.00 APR 9 Actual $5'i'A95.00 $35,000.00 MAY 10 Actual $56,'5'39.00 $25,000.00 JUN 11 Actual $62,134.00 JUL 12 Actual $60,003.00 ~ MINUTES CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE JULY 10, 2007 CITY HALL, LOBBY CONFERENCE ROOM Final Members Present: Regenia Bailey, Connie Champion, Bob Elliott Members Absent: none Staff Present: Wendy Ford, Tracy Hightshoe, Jeff Davidson Others Present: Carmen and Alex Legaspi with La Reyna, Jill Pitcher with Alpla, Joe Raso RECOMMENDATIONS TO CITY COUNCIL: None. CALL MEETING TO ORDER: Bailey called the meeting to order at 8:32 AM. APPROVAL OF MINUTES OF MAY 29,2007: Champion moved that the minutes be approved, Elliott seconded. Motion carried 3-0. LA REYNA - CDBG APPLICATION: According to legal, the City can't fully secure the loan as the building was purchased under contract. The deed holder granted an interest in the building to West Chester Bank for the start up loan. West Chester also placed a blanket lien on all equipment for the business. Staffs recommendation is for $60,000, unsecured. The City will place a mortgage on the building with La Reyna and will file a blanket lien on all equipment; however it will not fully secure the loan. In the case of default we may recover some of the loss, however there is no guarantee that any amount will be recovered. Many of our previous CDBG loans have been secured or partially secured. In cases of default, the City has not recovered significant amounts, except for The Rack where all funds were recovered. La Reyna requested $100,000; however upon discussions with the applicant and their current lender, $60,000 would greatly assist their cash flow. Elliot asked how much would be recovered in case of default, worst case scenario. Hightshoe stated there is a possibility that the entire $60,000 could be lost in the worst case scenario. The City's lien would not take precedence over the existing liens in such an event. Hightshoe stated that the recommendation to fund was also in part due to the grocery store serving a low income neighborhood where there are limited places to by grocery store items. CDBG funds can be used to fund businesses that provide necessary goods and service (non-luxury items) to low-income residents. Elliot is uneasy with this proposal as this is the second unsecured loan in a row. Bailey commented that with this form of micro- enterprise the City exercises excellent due diligence. Champion moved to continue with the $60,000 loan, Bailey seconded. Motion carried 2 - 1. Elliott voted no. Alpla Expansion Tax Abatement Request: Alpla is considering a $5 million expansion to their production and warehousing facilities and are requesting Partial Industrial Property Tax Exemption (PIPTE) or TIF to aid in this expansion. They have indicated that Iowa City is competing for the expansion with their Jefferson, Missouri location. PIPTE amounts to about a 45% break on taxes due on the new, improved part of the property. PIPTE can be automatically done through the City Assessor's office unless City Council would rather implement a TIF agreement. Alpla is seeking one or both, PIPTE and TIF, which is applicable in this case. One of Alpla's main customers is Procter and Gamble also located in Iowa City. The current TIF that Alpla has will expire in three years. Economic Development Committee June 21, 2007 Page 2 To address concerns of noise associated with Alpla, ambient noise readings were taken north of the plant in the residential zone and compared with the Pedestrian Mall, City Park, and the intersection of Court Street and 15t Avenue, all of which were higher than those taken near Alpla. HUD's ambient noise standards for residential areas rates 65 to 70 dB as undesirable and above 70 dB as unacceptable; the ambient noise near Alpla averaged around 55 to 57 dB. Registered complaints were from 2 years ago since which Alpla has made investments to mitigate the noise. Current perceptions of noise are more likely due to quality of noise as opposed to intensity as suggested by the ambient noise readings. Alpla has made efforts to ascertain whether there have been any further noise complaints. Champion supports a shorter tax abatement period since they currently have a TIF. Elliot supports helping Alpla as it has flourished here and the City has benefited from their presence. Alpla reports that the expansion will add 25 new permanent positions at an average wage of $14 per hour plus benefits. While Elliot and Champion are willing to help Alpla, they noted a preference for using TIF as it protects the debt of the taxing bodies. Ford will run some scenarios and produce them to Committee members in memo format for review prior to including them into a draft agreement. Motion for this issue will be considered at the next Economic Development Committee meeting on July 24th. DOWNTOWN MARKET NICHE ANALYSIS - STAFF UPDATE: Surveys concluded the previous day at midnight at which time there were more than 1,100 consumer surveys and only 31 business surveys; additional telephone surveys are being conducted by Marketek. This response rate is considered particularly low in light of the amount of publicity; Bailey is concerned about the implications of this turnout rate. Champion commented that with regards to small businesses, the issue may be that time is in short supply and thus a lack of willingness to devote the time to engage in the survey. Of the consumer surveys there is a good distribution of age ranges. Marketek is currently analyzing data and planning a site visit in September. Committee Time: Elliot wants to keep bankruptcy questions on the application for financial assistance. Bailey commented about circumstances that lead to bankruptcy, this is especially the case for women and women business owners. Elliot indicated that he is thinking on the abstract rather than with regards to The Discerning Eye bankruptcy which was tied to personal rather than business circumstances. Bailey disagreed with Elliot, stating concern over judging long past personal problems as businesses issues. Champion mentioned that few small businesses make enough money to live on in the first five years unless they get some help or significant business. Bailey is comfortable with using the 7 year window standard that banks do with regard to bankruptcy; Hightshoe reminded the committee that she uses an entire spectrum of due diligence tools to examine applications. ADJOURNMENT: Bailey adjourned the meeting at 9:25 AM. Next meeting is scheduled for Tuesday, July 24, 8:30 AM, in the City Hall Lobby Conference Room. Submitted by John Dawson slpcdlminslecodevl200717 -1 o-07ed.doc ttee Comm Economic Development Attendance Record 2007 Council Name Term 1/23 2/09 2/20 2/27 3/06 3/12 4/06 4/12 5/29 5/31 6/21 7/10 Expires Regenia Bailey 01/02/08 X X X X X X X X X X X X Bob Elliott 01/02/08 X X X X X X X X X X X X I Connie Champion 01/02/08 X X X IX X X X X X I OlE X X I I Key X = Present o = Absent OlE = AbsenUExcused UWJ IOWA CITY TELECOMMUNICATIONS COMMISSION DRAFT MONDA Y, JUNE 25--5:30 P.M. CITY CABLE TV OFFICE, 10 S. LINN ST.-TOWER PLACE P ARKING FACILITY MEMBERS PRESENT: Saul Mekies, Gary Hagen, Brett Gordon, Hans Hoerschelman, Margaret Wieting MEMBERS ABSENT: STAFF PRESENT: Drew Shaffer, Dale Helling, Bob Hardy, Mike Brau OTHERS PRESENT: Beth Fisher, Lee Grassley, Josh Goding, Laura Lowe, Michael McBride, Craig O'Brien, Susan Roguskey. RECOMMENDATIONS TO CITY COUNCIL None at this time. SUMMARY OF DISCUSSION Mekies reported that he met with Lane Plugge, Superintendent of Schools. Improvements in the school channel have been made and Plugge said continued improvements can be expected. Grassley said Mediacom is preparing to move towards digital transmission. One step is to implement a simultaneous digital feed so the family package channels will continue to be available in analog as well as digital. To free up spectrum space the west coast feed of the movie channels, which offered the same programming as the east coast feed at a different time, has been dropped. Grassley said older televisions will work with a set top box and the federal government has a fund to assist the purchase-of 40 million boxes nationwide. Grassley said that Mediacom has been discussing carrying the Big Ten Network (BTN) but BTN is requesting a large fee. At this time Mediacom does not believe the fee is fair and will not add the channel until a reasonable agreement can be made, particularly because the Big Ten Network insists on carriage on the basic tier. Shaffer said that the City Channel has been streaming the city council meetings on a playback basis, but the new system will allow the meetings to be streamed live. The division will soon be hiring a person for the Avatar Project. Brau provided a demonstration of the new online interactive program guide. Brau said that the new guide provides a lengthy description of each program, links to websites of sponsoring organizations or other additional resources, and the ability to search the guide by keyword. Each program is given a category, which is color coded and searchable. For example, all the music programs or programs covering local government meetings can be listed by clicking on that category. In addition the guide serves as a gateway for programs that are streamed over the Internet. In the future much of channel 4 programming will be streamed and the guide will serve as a means to provide those programs. Shaffer said he has been in contact with representatives from CFreewireless. CFree would like to provide a free wi-fi that would allow coverage of College Green Park and a wider area downtown. They are developing costs. CFree is a nonprofit organization. APPROV AL OF MINUTES Hoerschelman moved and Hagen seconded a motion to approve the May 25,2007 minutes. The minutes were approved unanimously. ANNOUNCEMENTS OF COMMISSIONERS Mekies reported that he met with Lane Plugge, Superintenant of Schools. Improvements in the school channel have been made and Plugge said continued improvements can be expected. Mekies said the Commission deserves credit for motivating the school district. Gordon said there is a meeting Saturday at 2 p.m. at the library to discuss the effect of the new state cable TV legislation and the effect on community media. Goding said the meeting will be a roundtable discussion including some video clips and strategy session. SHORT PUBLIC ANNOUNCEMENTS None. CONSUMER ISSUES Shaffer referred to the complaint report in the meeting packet and noted that the number of complaints was a bit higher than usual. All the complaints that could be resolved have been resolved. MEDIACOM REPORT Grassley said Mediacom is preparing to move towards digital transmission. One step is to implement a simultaneous digital feed so the family package channels will continue to be available in analog as well as digital. To free up spectrum space the west coast feed of the movie channels, which offered the same programming as the east coast feed at a different time, has been dropped. With the video on demand feature this should have little impact on subscribers. Mediacom has filed a petition with the FCC to permit them to down convert digital signals to analog after the FCC-mandated digital conversion period ends in February of2008. Mediacom will be undertaking a public education campaign to inform the public of the effect of the digital conversion and the changes it will mean for them. Hagen asked if after February 2008 subscribers will need a new television or will a set top box be available. Grassley said older televisions will work with a set top box and the federal government has a fund to assist the purchase of 40 million boxes nationwide. At this time there is no guarantee that a newly purchased television will be compatible with the digital signal due to the disagreement on digital standards. Evolving digital technology will allow greater capacity with the existing plant. Once the analog signal is no longer needed and a full transition to digital is complete a large amount of spectrum will be freed up. Hagen asked about the impact on the basic tier. Grassley said unlike in the past if a must-carry broadcaster is added to the lineup it would not necessitate another channel being moved out of the basic tier. The basic tier will be digital so a set top box will be needed and a rental fee added to the rates. Grassley said that Sinclair Broadcasting, owner of KGAN in Cedar Rapids, has filed a petition with the FCC to require Mediacom to pull WHBF from the Quad Cities from the Iowa City basic tier. Both channels are CBS affiliates. Mediacom added WHBF when KGAN was removed from the lineup. UNIVERSITY OF lOW A REPORT McBride distributed a report covering the previous 6 months. Staff has been cut by 2 people or 25% due to attrition. Programming highlights include a live news conference announcing the new president of the University ofIowa, 78 nightly DITV (Daily Iowan TV) newscasts, and 67 programs from the Student Video Producers. The basketball coach's show will be cablecast but the football coach's show may not be available to UITV. Students working for UI TV produced about 120 programs over the past 6 months. McBride is working with Mediacom to get their schedule on the on-screen program guide. Readings from Prairie Lights and Java Blend will be continue to be cablecast. It is anticipated that some of the secondary sports such as volleyball will be covered by UI TV and get carriage on the Big Ten Network (BTN). Grassley said that Mediacom has been discussing carrying the Big Ten Network (BTN) but BTN is requesting a large fee. At this time Mediacom does not believe the fee is fair and will not add the channel until they believe it is reasonable, particularly because the Big Ten Network insists on carriage on the basic tier. Mediacom would have no problem if the Big Ten Network would consent to being on a digital sports tier. PATV REPORT Goding reported that P A TV would be sending most of their staff to the national Alliance for Community Media conference the last week in July. P A TV will be closed July 24-29 for the conference. Programs will be cablecast as usual. The guidelines class will be July I at 12. A Final Cut Pro editing class will be held July 15 2-5 p.m. The next Open Channel and the studio class will be June 27, 6-9 p.m. P A TV will have a meeting June 30, 2-5 p.m. at the public library to discuss the impact of recent state franchising legislation and strategies to keep access organizations functioning in the future. KIRKWOOD COMMUNITY COLLEGE REPORT O'Brien referred to his written report included in the meeting packet. Kirkwood is working on an idea to produce a program on the departmental reports given to the board of trustees. The program would be a repackaging of the presentation given to the trustees. The program would help one of Kirkwood's goals of showcasing their activities to the public. SENIOR CENTER REPORT Rogusky distributed a monthly program schedule. SCTV is producing a new program called "At the Center", which is about the Senior Center and the activities and services offered. Rogusky will be on a panel discussion at the Alliance for Community Media conference on how to get senior citizens involved in community television. IOWA CITY COMMUNITY SCHOOLS REPORT Lowe referred to a written report included in the meeting packet. New programs include the Kate Wickam scholarship reception, West High Senior Honor Awards, and some elementary school concerts. In July a number of music concerts will start to be cablecast. West High speech and debate performances will also be cablecast. Many of these programs are supplied by Ryan Wickstrom. Lowe, Perry Ross, and Lane Plugge met to discuss the channel's mission statement and goals. Programs are planned on the English Language Learners programs and the contract with the bus company. Mekies said that Plugge said at their meeting that he had not received the letters sent by the Commission. Mekies was glad Plugge was following up on their discussion. LIBRARY REPORT Fisher reported that the last of the library's programs have been transferred to their server. A new intern has been hired. 12 new programs are planned for July. Among the programs is a book discussion associated with the All Iowa Reads program. University of Iowa faculty will lead the discussion. CITY MEDIA UNIT REPORT Hardy reported that the Media Unit has been using the Cable TV Division's slower production schedule to catch up on the backlog of editing. Work on a promotional piece for all the access channels is in the works. Hardy thanked Mediacom for their work on improving the technical quality of the INET that carries the access channels' signal to Mediacom. Hardy said he recently met with SCTV on how they could improve the quality of their video signal. Hardy will also be talking with other program providers. The Video Voter Project will again be activated in the upcoming election season. Work on streaming the city council meetings live continues and will be operational shortly. The Community Television Service upcoming programs include three programs on economic development, events from the family stage at Arts Fest, a program on estate planning, and a program with the League of Women Voters on regional government. CABLE ADMINISTRATOR REPORT Shaffer said that the City Channel has been streaming the city council meetings after the meeting had taken place but the new system will allow the meetings to be streamed live. The division will soon be hiring a person for the Avatar Project. The Avatar Project had been on hold due to uncertainty regarding finances in light of the state franchising legislation and a lawsuit regarding franchise fees. Shaffer has been participating in workshops from the National Association for Telecommunications Officers and Advisors. Topics include community fiber to the home and new funding for PEG funding. Shaffer will provide the Commission with summaries of these workshops. LEGISLATION AND FCC UPDATE Shaffer referred to the interpretation of Iowa General Assembly SF 554. This was not a legal interpretation of the bill. The legislation prohibits municipalities from requiring a mandatory build-out of plant. This is a loss for citizens as new entrants will be able to choose who will have access to market competition. Municipalities will not be able to offer consumer protection services for the subscribers of new entrants. The legislation requires only that an 800 telephone number subscribers can call to try and resolve their complaint. If there is a complaint that cannot be resolved there is a process for nonbinding mediation, which lacks enforcement authority. SF 554 does make the franchise fee legal, which undercuts a lawsuit claiming franchise fees are an illegal tax. Other fees paid by cable operators will remain intact until the end of the franchise period. The franchise in Iowa City expires in 10 years. Shaffer and Brau are working to determine what the process will be regarding public input in the Iowa Utility Board's state franchising rule-making process regarding SF 554. Access channels may face costs of $20,000 for equipment costs and $10,000 a year for a T -I line to make their signal available to new entrants. NA TOA WORKSHOP Shaffer said that he participated in a National Association of Telecommunications Officers and Advisors workshop on PEG funding. Shaffer referred to the summary included in the meeting packet. One issue addressed was how to re-think PEG services in light of the legislation being passed around the country which often times reduces funding for PEG channels. Rather than conceptualizing service as a public access cable TV channel it may be constructive to reorganize as a community media center. Access centers need to also become more proactive in their community identifying community organizations, their needs, assets and interests and determine how they can work with those organizations in a way that is useful and relevant to them. Other sources of income were also discussed such as underwriting and providing job-training services. CITY CHANNEL 4 PROGRAM SCHEDULE DEMONSTRATION Brau provided a demonstration of the new online interactive program guide. Brau said that the new guide provides a lengthy description of each program, links to websites of sponsoring organizations or other additional resources, and the ability to search the guide by keyword. Each program is given a category, which is color coded and searchable. For example, all the music programs or programs covering local government meetings can be listed by clicking on that category. In addition the guide serves as a gateway for programs that are streamed over the Internet. In the future much of channel 4 programming will be streamed and the guide will serve as a means to provided those programs. Brau said Crawley is responsible for the difficult work of creating the code for the program guide. A promotional campaign is planned once a few bugs have been worked out. Shaffer said that he is unaware of any access channel or commercial service in the country that is provides such a detailed and comprehensive service. WIFI Shaffer said he has been in contact with representatives from CFreewireless. CFree would like to provide a free wi - fi service that would allow coverage of College Green Park and a wider area downtown. They are developing costs. CFree is a nonprofit organization. ADJOURNMENT Hoerschelman moved and Hagen seconded a motion to adjourn. The motion passed unanimously. Adjournment was at 7:07. Respectfully submitted, Drew Shaffer Cable TV Administrator DRAFT ~ MINUTES IOWA CITY BOARD OF APPEALS MONDAY, JULY 2,2007 LOBBY CONFERENCE ROOM, IOWA CITY CITY HALL 410 E. WASHINGTON STREET IOWA CITY, IA MEMBERS PRESENT: John Roffman, Steve Buckman, Doug DuCharme, Chad Campion, AI Gerard, Gary Haman MEMBERS ABSENT: Tim Fehr STAFF PRESENT: Tim Hennes (Sr. Building Inspector), Sue Dulek (Asst. City Attorney), John Grier (Fire Marshall), Jann Ream (Code Enfoecement Asst. acting as minute taker) OTHERS PRESENT: Joe Younker, Nancy Wood (932 E. College St.) RECOMMENDATIONS TO COUNCIL: none CALL TO ORDER: Chairperson Roffman called the meeting to order at 4:02 PM. CONSIDERATION OF MINUTES: Minutes from the June 4, 2007 meeting were reviewed. Haman moved to adopt the minutes. Gerard seconded. Minutes were approved with a unanimous vote. Appeal of Notice of Housinq Code Violation -932 Colleqe Street (Leiqhton House). Tim Hennes referred the Board to the memo written to them by Sarah Holocek, Assistant City Attorney, which gives the opinion that the Board of Appeals does not have jurisdiction to hear this appeal because it is a zoning issue and, therefore, should be heard by the Board of Adjustment. Members indicated that they had reviewed the memo. Sue Dulek clarified that the two counsel present, Joe Younker and Nancy Wood, had been in communication with the City Attorney's office. Also, if the Board of Appeals did determine that they should hear the appeal then that would occur at the next meeting, not this one. Dulek said that is the opinion of the City Attorney's office that the issue before them is a zoning issue since it deals with the occupancy for the property allowed by a Variance from the Board of Adjustment. Dulek stated that the applicants had appealed to both the Board of Appeals and the Board of Adjustment to make sure that they had covered all avenues of appeal; however, even the applicants agreed that the governing body in this matter should be the Board of Adjustment and had indicated that opinion in written communication to the City Attorney's office. DRAFT Haman said that because the issue did not relate to any of the codes that the Board of Appeals makes decisions about, then they should not hear the appeal - it was a zoning issue. Roffman asked the applicants present, Joe Younkers and Nancy Wood, if they thought that the Board or the City Attorney's office was missing anything in their interpretation - did they actually think that the Board of Appeals had jurisdiction? Younker answered that they concurred with the opinion of the City Attorney's office - that the Board of Adjustment had jurisdiction. MOTION: Haman moved that the Board of Appeals should deny the appeal because they do not have jurisdiction over zoning matters. Gerard seconded. VOTE: The Board voted to deny the appeal 6-0. OTHER BUSINESS: The next meeting date was set for Monday, August 13th. Hennes handed out the proposed local amendments for the next building and fire code update to board members for their review. He stated that he was meeting with the Iowa City Homebuilders on July 1 yth to get their input about the proposed amendments. Hennes said there was nothing really new to report about the new state licensing requirements. He said that staff wants to take some time to review the new requirements and then make recommendations to the Board in how to amend the licensing code. Campion stated that he had been working on the state board concerning this issue for the last five years and their intent was not to try and reinvent the wheel. The State simply saw some gaps in licensing that they were trying to close. Hennes stated that that may have been their intent but the consequence of the new law will be more far reaching. Buckman said what the Board needs to know in simple terms is: what the State can or cannot require, what the City can or cannot require, what is the responsibility of each jurisdiction and what is negotiable between the two jurisdictions. ADJOURNMENT: Haman moved to adjourn the meeting. Gerard seconded. The meeting adjourned at 4:21 PM. John Roffman, Board of Appeals Chairperson Date KEY X = present o = absent OlE = absenUexcused NM = No meeting _ = not a member NAME Gary Haman Steve Buckman Doug DuCharme Tim Fehr John Roffman Chad Campion AI Gerard TERM EXPIRES 12/31/2007 12/31/2011 12/31/2009 12/31/2008 12/31/2007 12/31/2008 12/31/2010 Jan-07 x x x x x o x x x x x x o x x x OlE OlE x x x Apr-07 NM May-07 NM Jun-07 x x o x x x x Jul-07 x x x OlE x x x Aug-07 2006 Feb-07 Mar-07 Board of Appeals Attendance Record MINUTES Youth Advisory Commission July 18, 2007 Lobby Conference Room, City Hall Call to Order: Meeting was called to order at 7:07 P.M. Members Present: Bleam, Keranen, Linn, Nelson, Ziegenhorn Members Absent: Stubbers, Weeks Others Present: City Clerk Marian Karr, City Council Liaison Amy Correia Approve Minutes: Motioned by Bleam, seconded by Nelson. Approve 5-0. Report from Summer of the Arts/Global VillaQe Subcommittee: Ziegenhorn expressed that the event was a success. She reported approximately 200 children attended. The drums did not work as well as hoped, since they were made of Styrofoam and not paper. The flags were not as popular as the masks, however. The items displayed from Ghana were not displayed as effectively as possible, since they were moved to a corner to provide enough room for the coloring activities. There was too much pineapple juice/ginger drink prepared, since one of the two coolers was left full of the drink. The ginger clogged the dispenser, so a ladle had to be purchased. Keranen expressed that the activities were popular and that there were too many volunteers than necessary. Ziegenhorn explained that the children wanted to make the items and move on to other booths, requiring that the volunteers only make sure that enough supplies are available. Karr noted that the budget was well below the maximum amount allotted. Ziegenhorn suggested that a display poster board of images of the country would be beneficial. Report from the Website Subcommittee: Nelson reported that the calendar is now online and accessible and that a protocol is in place for approving submissions. Karr noted that the calendar is blank and asked whether it should be kept online without events posted. Correia suggested that the calendar should contain city-sponsored events of youth interest, including the Commission meetings and Friday night concert series. The Commission generally agreed that the overlap with the official City calendar was acceptable in this case. Youth Advisory Commission July 18, 2007 Page 2 DRAFT Keranen noted that more events should be posted once the academic years begin in the fall. Karr noted that the ideal situation would be for the public to post items to the calendar, rather than individual commissioners having to suggest items to be posted during meetings. Keranen suggested posting flyers promoting the website using the allotted budget. Karr suggested advertising the calendar at high school through orientation packet inserts. Academic planner advertising of the calendar may not be practical since the date of submissions has probably passed. Karr noted that the promotion of the website can also include promotion of the committee itself. Nelson suggested handing out flyers and through placing advertisements on Facebook. Correia suggested placing adds in youth oriented locations like UA Y. Keranen suggested designing bookmarks for distribution at libraries. Meetina Adiournment: The meeting was adjourned due to a tornado warning at 7:22 P.M.; and tentatively rescheduled for Wednesday, July 25 at 7:00 P.M. Minutes prepared by Nelson. Youth Advisory Commission July 18, 2007 Page 3 YOUTH ADVISORY COMMISSION ATTENDANCE RECORD YEAR 2007 (Meeting Date) TERM 1/17 2/21 3/21 4/25 5/30 7/18 NAME EXP. Audrey 12/31/07 X X X X X X Keranen Sarah 12/31/07 X X OlE X X X Ziegenhorn Un Weeks 12/31/08 X X X OlE X OlE David Segar 12/31/08 X X OlE X X X Maison 12/31/07 X OlE X OlE OlE X Bleam Jacqueline 12/31/07 X X OlE OlE X OlE Stubbers Michael 12/31/08 X X X X OlE X Nelson KEY: X = Present o = Absent OlE = Absent/Excused NM = No meeting m = Not a Member