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HomeMy WebLinkAbout2015-04-07 Correspondence4f(1) Marian Karr From: Linda S. Fisher <linda7484uu@msn.com> Sent: Thursday, March 19, 2015 4:46 PM To: Council Subject: Zoning Dear Iowa City Council members: As someone who lives in Coralville, where not many of our housing and buildings are historic, I urge you to please keep or change zoning to protect remaining history -blessed buildings! ! ! Student high-rise buildings may be somewhat functional, but they certainly lack the class and beauty of the historic old buildings, many of which are either gone or threatened! ! And as a member of the Unitarian Universalist Society, I shudder to think what is going to come in beside City Hall if/when our beautiful, historic church home comes down. Do what you can to encourage sustainment of the old and classy old buildings. Once gone, they can never enlighten our days again!!! Good luck in choosing appropriate zonings for preservation of historicity and architectural excellence! ! ! ! Linda S. Fisher 303 7th St., Coralville 52241-2015 3Tfi3" 4f(2) Marian Karr From: MacKenzie Bihl <MacKenzie.Bihl@shelterhouseiowa.org> Sent: Monday, March 23, 2015 3:19 PM To: Council Cc: josh. god ing@gmail.com; patv18@gmaii.com Subject: PATV Agreement Renewal Attachments: PATV Letter w SH.doc Dear Iowa City Council, Please seethe attached letter regarding Shelter House's support of PATV's Agreement Renewal Thank you, MacKenzie Bihl Fairweather Lodge Marketing VISTA mackenzie.bihl@shelterhouseiowa.or 612-770-7382 1 Opening Doors House March 20, 2015 Iowa City Council 410 E Washington Street Iowa City IA 52240 Dear Iowa City Council, I am writing to encourage you to renew the Agreement for PATV to provide public access services through 2018. PATV has been indispensable for me, Shelter House, and the Fairweather Lodge. Without PATV's help, our organization would not have access to the materials or training needed to create an informational video about the programs we have available. Our current project will be used to inform those who are in need of permanent housing and mental health services about the resources we have available. It is a project that serves an important role in providing an opportunity for individuals in need in the community of Iowa City. PATV provides support to programs like ours, and therefore is a major part of creating positive change in the greater Iowa City community. Thank you for partnering with such an honorable organization. Sincerely, MacKenzie Bihl Fairweather Lodge Marketing AmeriCorps VISTA P.O. BOX 3146 Shelter House is a tax exempt 501(c)(3) organization. Asa partner agency of the United Iowa City, = IA 52244-3146 Way of Johnson County, we have successfully met all local membership accountability 319.351-0326 standards in finance, ethics, governance, and diversity. United ,==� Way J 4f(3) Marian Karr From: Lucy Singer <lucy.singer34@gmail.com> Sent: Wednesday, March 25, 2015 11:27 PM To: Council Subject: Fwd: Safety By Design I was very disappointed that the Council made it very difficult for Uber to do business in Iowa City. In my opinion this is not something a forward thinking city does. I'm forwarding this from Uber in the hopes it might make you rethink your archaic thinking. Lucy Singer 710 Walker Circle Iowa City 52245 Sent from my iPhone Begin forwarded message: From: "Uber" <email ,et.uber.com> Date: March 25, 2015 at 12:56:10 PM MST To: <lucy.sin eg_r34(cr�gmail.com> Subject: Safety By Design Reply -To: "Uber" 7-6338491- 3282(a et.uber.com> From before the start of your trip until after it's finished, safety is built into every step of the Uber experience. Look under the hood and see how. U B E R From before the start of your trip until after it's finished, safety is built into every step of the Uber experience. Look under the hood and see how. 0 0 0 0 0 0 BACKGROUND CHECKS Drivers pass federal, multi -state, and county background checks before driving. Extensive Screening Uber prohibits drug or alcohol offenses, severe traffic violations, and sexual offenses. Insurance From pick up to drop off, your ride is covered by a $1 M commercial insurance policy. REQUEST A RIDE Safe Pickups The app pinpoints your location so you can request a ride from anywhere and wait safely. Nobody's A Stranger Your driver's name, photo, and vehicle information appear in the app. Disguised Phone Numbers Communication between riders and drivers is anonymized to protect private phone numbers. DURING YOUR TRIP Always On The Map The GPS -enabled map provides your driver's location and trip details in real-time. I'm on my way! Check out my trip and ETA... Great! See you soon. ); ( �� n 11Ilfln,1�0 Share My ETA Share your ETA with friends and family to keep track of your ride and safe arrival. Hassle -Free Payments Your credit card is on file so you never need to carry cash or stop at an ATM. AFTER YOU RIDE Actionable Feedback You rate your experience after every trip and drivers do the same. Trip History After each ride, you receive a detailed email receipt with trip route, driver name, and total fare. 24/7 Support Lose something? Have questions? Contact our 24/7 customer support. WATCH VIDEO Follow Us f dm Uber Technologies Inc. 1455 Market Street San Francisco, CA 94103 Get Help Unsubscribe 4f(4) Marian Karr From: Alexa Homewood-Weldon<aiexahomewood@uiccuinsurance. org> Sent: Thursday, March 26, 2015 4:52 PM To: Council Subject: Iowa City Telecommunications Commission Attachments: City Council Letter.docx Good afternoon, On behalf of the Iowa City Telecommunications Commission, please include the attached letter in the next Council meeting packet. Thank you, Alexa Homewood-Weldon Personal Lines Supervisor UICCU Insurance Ph: 319-339-1000 1 Fax: 319-665-2207 alexahomewoodnuiccuinsurance.org I www.uiccu.orsz UICCUMNif Insurance i�e9W*' AVNf' liaa�,re.r�s - This e-mail, including attachments, is covered by the Electronic Communications Privacy Act, 18 U.S.C. 2510- 2521, is confidential, and may be legally privileged. If you are not the intended recipient, you are hereby notified that any retention, dissemination, distribution, or copying of this communication is strictly prohibited. Please reply to the sender if you received this message in error, and then please delete it. Thank you. I City Council, The Iowa City Telecommunications Commission is writing to apprise you of a situation that has come to our attention. In October 2013, Alliance Technologies applied to the Iowa Utilities Board (IUB) for a state issued franchise to provide video service in Iowa City. The application indicated that Alliance Technologies intended to provide service in February 2014. To this day, Alliance Technologies has not provided video service to Iowa City residents. As of February 2015, the IUB had the option to relinquish the agreement with Alliance Technologies, as they have not provided service. It does not appear that the IUB has done anything about Alliance Technologies' inactivity. It is unclear if the IUB is just unaware of the situation or if they have chosen not to take action. The members of this community have been asking for years for competition between cable providers. It is a disservice to the members of this community to allow companies, such as Alliance Technologies, that agree to provide service and never perform to go unnoticed. As a commission, our job is to protect the interests of the community in regards to telecommunication services. We want to encourage competition among cable providers in our area. Allowing companies to agree to provide service and not following through does not accomplish that. Other viable cable companies may overlook Iowa City because they see that there are already two providers, when in fact there is only one-Mediacom. Although the Iowa City Telecommunications Commission is not making a formal recommendation at this time, we wanted to make sure you were aware of the situation and voice our support for the City to inform the IUB. Respectfully, The Iowa City Telecommunications Commission Alexa Homewood -Weldon Nick Kilburg Bram Elias Laura Bergus Matt Butler 4f(5) Marian Karr From: Peter Byler <peterbyler@yahoo.com> Sent: Friday, March 27, 2015 12:49 PM To: Tom Markus Cc: Council; Peter Byler Subject: "Gap" finance agreement information request Hello Mr. Markus and City Councilors, I am requesting that someone address two items with regard to recent development agreements. Thank you in advance for you time, and your continued service to the city. First, at the council meeting of February 23, a question was raised by a member of the public (Mr. Eastham I think) as to the ability of these development agreements to allow for adjustment over time based on better-than- expected financial results of the developer. Mr. Markus, you indicated you thought this was a good point, as I recall, and said you would "internalize" it. What exactly does that mean, and when will the public be made aware of progress on this issue? I note that no such "claw -back" type clause was apparently included in the agreement that was approved for the Hilton Garden Inn hotel project. Is that correct? Will the next project have one? If not, why not? That is a fantastic, common sense idea that would almost certainly add money to city coffers over time. My second, and related request, is brought on by something our consultant, Mr. Jackson, mentioned to me in the cheap seats of the March 23 meeting after we had each spoken to the council. It was, before that conversation, my understanding that the actual calculations (other than the repeatedly wrong sums in the summary letter) that NDC uses in their reports were not made available to the city. But Mr. Jackson told me that the entire financial analysis IS given to the city. I cannot find this in the public record anywhere. Could someone point me to it, or, if it is not in the public record, explain why something so fundamental to such a huge city expense would be kept secret? It would be very interesting, for example, to compare the actual rents for 316 Madison when it opens to what was assumed in the analysis, or compare actual off street prices at the Hilton to that analysis. But interested members of the tax -paying public can't do that without the information. Thanks again for your time and diligence, Peter Byler 30 Ashwood Dr. 1 Marian Karr From: Peter Byler <peterbyler@yahoo.com> Sent: Monday, April 06, 2015 11:05 AM To: Wendy Ford Cc: Tom Markus; Council Subject: Re: "Gap" finance agreement information request Hi Wendy, Thanks for your thoughtful and serious reply. I am glad the city has someone on staff with your expertise to handle these matters. I agree that it would be very complex to structure the deals so that the TIF would be subject to a certain IRR or performance metrics. But we are talking about tens of millions of dollars of expenses, so I certainly hope we don't waive off the attempt due to its complexity. As for the NDC analysis, I would question why Tom Jackson would have said to me at the meeting that the full analysis was available to the city. He said it clearly and I could not have misunderstood him. If the analysis is not available to the city, I am very concerned that these enormous expenditures are taking place with no opportunity to audit the underlying calculations. Surely that is unlike any other city expense of comparable size. Why do we put so much trust in a single consultant, especially given that the reports that they do provide have repeated arithmetic errors in them? Why are we not demanding the calculations so we can check them? That is nonsensical to me. Please consider what I've said. I'm not going to keep getting up at council meetings questioning these deals, which I'm sure are going to be coming fast and furious now. With the setup of me only having five minutes and then staff being able to rebut me without limit, not to mention all the pre -meeting interactions, it's not worth my time. But we (you, the staff, and all residents of Iowa City) should be demanding more transparency with regard to these calculations. Thanks again for your time. Peter Byler From: Wendy Ford <Wendy-Ford@iowa-city.org> To: "'peterbyler@yahoo.com"' <peterbyler@yahoo.com> Cc: Council <Council-@iowa-city.org>; Tom Markus <Tom-Markus@iowa-city.org> Sent: Monday, April 6, 2015 10:25 AM Subject: RE: "Gap" finance agreement information request Dear Mr. Byler, I write in response to your email, dated Friday, March 27. Your first question was about whether the City has the ability to build in adjustments to development agreements with TIF rebate recipients if they experience better returns than those used to calculate the financial gap before the project was built. While staff is still in the process of examining this issue, we have asked NDC to identify issues that must be considered in determining the feasibility of such a measure. 1 In doing the gap analysis, NDC considers the timing of cash flow for a period of years to determine the internal rate of return (IRR) of a project -- a key metric in the analysis. Because the IRR requires several years (the life of the TIF payout period) to be realized, an audit of a project at any one point in operation (annually, for example) would not necessarily predict the accuracy of an IRR calculated for the life of the TIF payout period granted. To aid in determining the IRR, an independent market study is also required for each project to confirm or challenge assumptions made by the developer to ensure revenue projections are as accurate as possible. These two components of the analysis are among the most important and provide a strong basis for recommending City financial participation, or not. Obtaining an accurate measure of better- or worse -than -expected returns is further complicated by the mix of rental and for sale units within the building. In a rental project, while a developer may raise (hotel or apartment) rental rates over projections used in the financial analysis, the independent market studies required in the analysis would suggest that business would suffer if those rates were substantially higher than the market rate and thus, fewer units would be rented. If a developer were to succeed in renting units at rates substantially higher than those used in the analysis, it could signal an overall increase in market prices, but be offset by a corresponding difference in expenses. Since the City has little control over market prices or expenses of operations, it would be challenging to track the true better- or worse -than -expected returns in a rental project. In analyzing a project involving the sale of condo or apartment units, returns are estimated based on the value of the sale at the end of the financing amortization period which would require waiting until the end of the amortization to track. In a `for sale' project, if the entire project was sold before the end of the financing period, and if some of the sale price was based on a buyer's expectation that TIF rebates would come with it, then returns to the seller and the need of the owner for continuing to receive the rebate can be evaluated as part of the City's approval of that sale and reassignment of the development agreement. The City's agreements currently require City approval of the assignment of a development agreement; the buyer has no automatic right to a continuation of the rebate. For projects with planned near term sales (residential condos, commercial park lots, etc.), sales that outpace projections — in terms of price or timing — could trigger whether the developer received a rebate or not. While it is in the best interests of the City to benefit from the higher property taxes resulting from the faster paced, higher priced sales, it would be possible to design an incentive that could split the benefits of such. We will continue to review these issues. A "claw back" is different. The City has employed claw backs in the past for employee based incentives when the employer failed to meet the promise of a certain number of new jobs. Each year in preparation of TIF rebates, the City staff would review payroll numbers and wages and for every job short of the promised number of jobs created, a fixed dollar amount was subtracted from the TIF rebate. Structuring City participation as a rebate greatly reduces the risk to the City and requires proof of compliance annually to secure the rebate, thereby lessening the need for claw backs. Your second question was about whether the actual calculations by our financial analyst, Tom Jackson, with the National Development Council (NDC), are made available to the City. They are not. Staff relies on NDC's expertise and receives only NDC's final report, which includes a summary of the financial analysis. I hope this helps to answer the two questions you pose in your email. Please feel free to contact me for further information. Sincerely, Wendy Ford Economic Development Coordinator City of Iowa City From: Peter Byler [mailto:peterbyler@yahoo.com] Sent: Friday, March 27, 2015 12:49 PM To: Tom Markus Cc: Council; Peter Byler Subject: "Gap" finance agreement information request Hello Mr. Markus and City Councilors, I am requesting that someone address two items with regard to recent development agreements. Thank you in advance for you time, and your continued service to the city. First, at the council meeting of February 23, a question was raised by a member of the public (Mr. Eastham I think) as to the ability of these development agreements to allow for adjustment over time based on better-than- expected financial results of the developer. Mr. Markus, you indicated you thought this was a good point, as I recall, and said you would "internalize" it. What exactly does that mean, and when will the public be made aware of progress on this issue? I note that no such "claw -back" type clause was apparently included in the agreement that was approved for the Hilton Garden Inn hotel project. Is that correct? Will the next project have one? If not, why not? That is a fantastic, common sense idea that would almost certainly add money to city coffers over time. My second, and related request, is brought on by something our consultant, Mr. Jackson, mentioned to me in the cheap seats of the March 23 meeting after we had each spoken to the council. It was, before that conversation, my understanding that the actual calculations (other than the repeatedly wrong sums in the summary letter) that NDC uses in their reports were not made available to the city. But Mr. Jackson told me that the entire financial analysis IS given to the city. I cannot find this in the public record anywhere. Could someone point me to it, or, if it is not in the public record, explain why something so fundamental to such a huge city expense would be kept secret? It would be very interesting, for example, to compare the actual rents for 316 Madison when it opens to what was assumed in the analysis, or compare actual off street prices at the Hilton to that analysis. But interested members of the tax -paying public can't do that without the information. Thanks again for your time and diligence, Peter Byler 30 Ashwood Dr. i.wauna March 31, 2015 Dear Iowa City City Council Members: Iowa United Nations Association 20 East Market Street Iowa City, IA 52240 319-337-7290 www.unaiowa.org 4f(6) On behalf of the Iowa United Nations Association and its Johnson County Chapter, I am pleased to inform you of a public forum on the topic: Iowa, the United Nations and Climate Change Saturday, April 18, 9:30 a.m. — 2:30 p.m. University Club, 1360 Melrose Avenue, Iowa City Luncheon Keynote Speaker: Jerald Schnoor UI Center for Global and Environmental Research Panels: Student Activism, featuring Johnson County high school and university students Voices from around the world, with representatives of our county's diverse international community Opportunities for local, state, national and international citizen action to address climate change The forum is one of several such events in cities across Iowa in advance of a major UN -sponsored conference in Paris in December scheduled to complete work on an international climate treaty. The goals of these forums are to inform residents about the importance of the Paris talks, to signal to policymakers and opinion shapers that there is a vocal constituency supporting international cooperation on these topics, and to expand the grassroots climate action movement. We would be honored if you could attend all or part of the forum, and help publicize this event with you constituents. Registration is $10 per person (including lunch). To register please call (319) 337-7290 or online at www.iowauna.org/climate and click on Johnson County. Thank you for your consideration. Sincerely, - 2✓-�� Xx '* -.s n. Matthew Wolf, Executive Director Iowa United Nations Association A Jim Olson, President Iowa United Nations Association Katy Hansen, President Johnson County Chapter, UNA-USA CD Cs Matthew Wolf • Executive Director I Jim Olson 9 Board President I Dorothy Paul 9 General Chairwoman CITY OF IOWA CITY www.icgov.org Office of the City Manager Thomas M. Markus City Manager tom-markus@iowa-city.org Geoff E. Fruin Assistant to the City Manager geoff-fruin@iowa-city.org Simon D. Andrew Administrative Analyst simon-andrew@iowa-city.org M. co P4C_.)_ � April 8, 2015 BY REGULAR MAIL AND EMAIL Ms. Debi Durham Iowa Economic Development Authority 200 E. Grand Ave. Des Moines, IA 50309 Dear Ms. Durham, At the City Council meeting on April 7, 2015, the attached letter was approved for submittal to the Iowa Economic Development Authority regarding the relocation of Iowa City -based Leepfrog Technologies, Inc. to Coralville. You will note that the letter of support includes two conditions. The first relates to the City Council's desire to establish a Communications Protocol with Coralville to avoid precisely the situation we find ourselves in. i reiterate that we would entertain revisions to a Communications Protocol that has already been adopted in Iowa City. The second condition is that Coralville pass a resolution stating that Coralville will not object to a subsequent move by Leepfrog from Coralville back to Iowa City. At 2:30 p.m. on April 7, 1 received an email from Coralville City Administrator, Kelly Hayworth stating that he had read the staff recommendation in the City Council packet regarding to Leepfrog's State of Iowa grant application, and that the conditions placed on the recommendation were not acceptable to the City of Coralville and that the City and Leepfrog would be withdrawing the application for state assistance. Lee Brintle, CEO of Leepfrog Technologies was in attendance at the Iowa City City Council meeting that evening and when I had a chance to ask him about the withdrawal of the application, he said he had not withdrawn their application. Today Mr. Brintle indicated that he would withdraw their application. Regardless of whether the application is submitted, Iowa City will support the move and expansion of one of its businesses to Coralville, if Coralville accepts the conditions expressed above. Sincerely, omas M. Markus City Manager lMco r"Ilj� � y��'�w�11 P4,-� CITY OF IOWA CITY April 8, 2015 BY REGULAR MAIL AND EMAIL www.icgov.org Ms. Debi Durham Iowa Economic Development Authority 200 E. Grand Ave. Des Moines, IA 50309 Office of the City Dear Ms. Durham, Manager By letter dated March 17, 2015 the City of Coralville informed the City of Iowa City that Leepfrog Thomas M. Markus Technologies, Inc. is being offered incentives from the State and Coralville to expand the Leepfrog City Manager business in Coralville, which expansion will result in a substantial reduction in Leepfrog's tom-markus@iowa-city.org Iowa-city.org operations in Iowa City. The letter requests that Iowa City submit a letter to IEDA indicating that Iowa City has no objection to the move. Leepfrog submitted a Business Financial Assistance Geoff E. Fruin Assistant to the City Manager Application to IEDA on February 5, 2015 that was sponsored by the City of Coralville. Attached is geoff-fruin@iowa-city.org a copy of Coralville's March 17 letter, which includes an outline from the Iowa City Area Development group (ICAD) on Leepfrog's history and plans. Simon D. Andrew Administrative Analyst It is our understanding that the State is offering assistance under the High Quality Jobs Program simon-andrew@iowa-city.org and that a letter from Iowa City is being requested in accordance with the provisions of Iowa Code Section 15.329, which sets forth the following eligibility requirements and provides that IEDA will consider a letter of support from the affected local community in determining whether the eligibility requirements have been met: 1) the "business shall not be solely relocating operations from one area of the state while seeking state or local incentives"; 2) the "business shall not be in the process of reducing operations in one community while simultaneously applying for assistance under the program"; and, 3) expansion is not prohibited "if existing operations of a similar nature in this state are not closed or substantially reduced." As you know, a similar provision was added to the Iowa Code in 2012 to prohibit the use of TIF when the project will result in the substantial reduction of a business's existing operations in another area of the State. Leepfrog's February 5 Application to the State, which was sponsored by Coralville, reveals that Coralville is providing a local match of $495,000. We understand from the ICAD outline attached to Coralville's March 17 letter that the source of these funds is TIF. Thus, while Coralville has asked only for a letter to the State, the package of assistance being offered also will require a written agreement approving the use of TIF funds pursuant to Iowa Code Section 403.19(9). As set forth in (CAD's outline, Leepfrog is a software company serving higher education that has been headquartered in Iowa City at 2105 ACT Circle since its founding in the early 90's. It is our understanding that in connection with its expansion in Coralville for which incentives are being proposed, Leepfrog will be substantially reducing operations in Iowa City. According to ICAD: "Leepfrog will maintain ownership of its Iowa City facility on ACT Circle as its main data center, but will move most of the remaining staff from this building to the new office space to put their April 8, 2015 Page 2 (� team under one roof." Leepfrog's Application to the State submitted February 5, 2015 states that the type of project is both the "Expansion of [an] Iowa Company" and a "New location in Iowa." Coralville's March 17 request puts both Iowa City and Leepfrog in a difficult position, and one which we believe could have been avoided had there been earlier conversations between the two communities. We do not relish impeding the ability of any company in our region from maximizing its potential to expand with the use of economic development incentives. However, the law clearly expresses the State policy that state and local incentives should not be available to assist with a relocation or expansion when there is a substantial reduction of the company's operations in another jurisdiction in the State. Iowa City knows firsthand the harm that can result both to a community and region when incentives are used in this manner. Since receiving Coralville's March 17 letter City staff has met with Leepfrog CEO Lee Brintle to better understand the company's plans and to explain the City's concerns. Unfortunately, it is our understanding that prior to Coralville's letter of March 17 Leepfrog was unaware of the need for Iowa City's approval and the State laws regarding relocation and expansion. We recognize that businesses seek locations based on a variety of factors. Over the last two plus years I have worked with the Administrators in Coralville and North Liberty to develop a communication protocol to facilitate positive and early interaction between the communities in the Iowa City area on issues of business expansion and migration. The ICAD Board of Directors, including the Coralville City Administrator, voted unanimously to support the communication protocol, noting: "For our area to be successful, we believe the various communities all need to be working together to compete for the best jobs and investment." The protocol has been approved by the City Council of Iowa City. The Iowa City Area Chamber of Commerce also endorsed the concept of a communication protocol. While press accounts indicate that Coralville is not interested in signing the protocol, the agreement has not been placed on its formal agenda for Council consideration. Had this protocol been in place, Iowa City would have been involved in the discussions at the outset and Leepfrog would have been made aware of the State law and the need for Iowa City's endorsement. A copy of the protocol and ICAD's endorsement is attached. Iowa City believes that this is an untenable situation that a communication protocol could have prevented. We support Leepfrog's efforts to expand but hope to prevent a similar situation from occurring in the future. To that end, Iowa City will support Leepfrog's expansion to Coralville subject to the following conditions being met prior to release of IEDA funds: 1. Coralville places the Agreement Establishing a Communication Protocol for Economic Development Activity endorsed by ICAD on a formal Council agenda and approves the protocol or a substantially similar agreement that assures communication and interaction with the host city when a business is considering relocation. Press comments indicate that Coralville has concerns about the language of the agreement as it relates to public disclosure of a business's plans. The communication protocol does not contemplate public disclosure at the early stages of business development. The cities currently are subject to open records requests regarding development activity, and staff already conducts itself with an appreciation for a business's privacy concerns in the early stages of development. Issues of relocation would be treated in the same fashion. Iowa City does not resist amendments consistent with the State open records law that are designed to keep the business plans private until the time that Council action is necessary. 2. A written agreement between Iowa City and Coralville regarding the relocation of Leepfrog prior to the use of TIF funds as required by Iowa Code Section 403.19(9), which includes an agreement by Coralville to support a subsequent move by Leepfrog (or its spinoff or created subsidiaries) back to Iowa City. April 8, 2015 Page 3 Please contact me if you have any questions or comments. Thank you. Very truI yours, Th as M. Markus Enclosures Cc: City of Coralville Lee Brintle, CEO Leepfrog Technologies, Inc. ftrr r March 17, 2015 Mr. Tom Markus City Manager City of Iowa City 410 E. Washington St. Iowa City, IA 52240 RE: Leepfrog Technologies, Inc. Dear Tom: I am writing to you in reference to Leepfrog Technologies, Inc. Leepfrog Technologies currently operates a facility in Iowa City on ACT Circle and a facility in Coralville on Oakdale Blvd. Leepfrog, with the assistance of ICAD, conducted a process of looking for additional space for their expansion and have entered into a letter of intent with a developer to build a new facility on Oakdale Blvd in Coralville. I have attached an outline from Mark Nolte, ICAD President, outlining the process the company has went through. The company has indicated to us that they intend to keep the facility in Iowa City as an expanded data center for the company. Leepfrog has submitted a request for assistance from the State of Iowa and the City of Coralville. The State of Iowa has asked for a letter from the City of Iowa City indicating you have no objection to the Leepfrog expansion in Coralville. Please let me know if you have any questions or need further information. Sincerely, eily J. worth City Administrator Enclosure CC: Mark Nolte City Administrallon PO Box 5127 1512 7th Street Coralville, lows 52241.0127 312.248-1700 Fax: 319-248-1894 Timeline of LeepFrog Technologies Space Planning Leepfrog Technologies, a software company serving higher education, has been headquartered at 2105 ACT Circle in Iowa City since its founding in the early 90's. As the company expanded they sought additional office space in the area to accommodate their growth. In 2013 they moved some of their staff into an available office property at 2300 Oakdale Blvd with the mindset that this would be a temporary location until they could find a more longterm solution. ICAD communicated this move to the City of Iowa City and there was no financial incentive at the city or state level offered or provided. In October of 2013 the company contacted ICAD Group about finding space for a new building. ICAD sent project information to the developers, construction companies, real estate professionals and banks who are investors in ICAD to gauge interest and identify properties. City of Iowa City staff was included in this request and submitted several Iowa City sites. Initial interest focused on the Larson Farms property near ACT, this land was under contract at the time to Liberty Development and meetings were had to discuss site layout and City of Iowa City staff were engaged. Leepfrog decided at this time to enter into an agreement with Proximity, a Des Moines based construction advisory consultant to take the lead on site selection and negotiations with builders. Communication from this point forward with ICAD was very limited. By fall of 2014 Liberty Growth had offered lease terms for a build to lease property to the company via Proximity but were informed other sites were being considered. Liberty Growth, having not secured a tenant, let their option expire on this land. ICAD continued to share ideas on sites and buildings directly with the company leaders. Through Proximity's guidance, a lease agreement has been negotiated with Build to Suit to occupy a floor of anew building to be constructed on the UI Research Park. Per the company, an employee survey was conducted which showed strong support for this location as the most accessible option for their staff. Leepfrog will maintain ownership of its Iowa City facility on ACT Circle as its main data center, but will move most of the remaining staff from this building to the new office space to put their team under one roof. At this time, the company would like to apply for state assistance to add additional jobs and has made an application to the Iowa Economic Development Authority. Build to Suit has worked independently with the City of Coralville on a TIF application for the property. Before the company can apply for state assistance, it would need the City of Iowa City to provide a letter to IEDA Director Durham indicating does not oppose the company leasing space in Coralville. ICAD believes every effort was made to help the company identify all existing buildings and sites in Iowa City. Ultimately however, the company's decision at this point is to pursue this new building in Coralville. An Agreement Establishing a Communication Protocol for Economic Development Activity in the Three Jurisdictions of Iowa City, Coralville, and North Liberty Purpose The cities of Iowa City, Coralville, and North Liberty (hereinafter "communities" or "participating communities") join in the prospect of encouraging economic development within their own Jurisdictions and throughout the region. Working together, these communities seek to highlight the region's strengths and focus on maintaining an attractive environment for business growth and expansion. The communities seek to expand business opportunities within their own boundaries, but do not wish to do so at the expense of those participating in this Communication Plan Agreement, inevitably, for various reasons, businesses may seek to migrate from one jurisdiction to another. In such cases, this agreement outlines a process that seeks to enhance communication and promote equity between the communities. With the exception of a business on Its own initiating with another community a discussion about relocating, the communities agree that actively pursuing businesses to migrate from one participating community to another shall be prohibited and practices of performing such actions restricted. The purpose of this agreement is to: 1. Establish and facilitate interaction between communities to promote economic development in the region; 2. Express commitment from communities that they will not actively pursue the relocation of a business that has not Independently indicated an Interest in moving from one participating community to another and further not propose or offer incentives to a business In support of its relocation until the actions set forth in the Economic Development Communication Plan have been fully satisfied; 3. Establish a process that balances the Interests of the business' home community and other participating communities; and 4. Establish a point of contact within each Jurisdiction for communication about economic development matters. Definitions For the purposes of this agreement, "relocation" means the closure or substantial reduction of an enterprise's existing operations in one participating community and the initiation of substantially the same operation In another participating community. This agreement does not prohibit an enterprise from expanding its operations In another participating community provided that existing operations of a similar nature are not closed or substantially reduced. For the purposes of this agreement, "expansion" and "consolidation" shall be defined in a manner consistent with state law. 1 Economic Development Principles a. t In the interest of promoting economic wellbeing and growth of our cities, we, the undersigned, agree to the following principles: Business Attraction and Retention. The regional economy will grow stronger and be more attractive for business growth if communities work together on economic development, rather than against one another. The communities In this agreement seek to grow the regional economy knowing that regional growth will translate Into jurisdictional growth. The communities in this agreement are committed to attracting new businesses, retaining or expanding existing businesses, and promoting their cities as good places for business. While business migration will occur, the communities are dedicated to refraining from actively encouraging business migration from one city to another. Active Pursuit. The communities agree that when a business has not taken the Initiative to express an interest In moving from one city to another, the communities will not actively pursue that business to encourage it to relocate. "Actively pursue" means to initiate contact with the business directly, with the Intent of luring the business through cold calls, visits, mail solicitations, marketing, or through a third party. This does not preclude the communities from marketing themselves as a good place to do business, generally promoting the benefits of starting, expanding, or locating a business in their city, or responding to questions and requests for information posed by a business. If a community provides Incentives for a speculative building or infrastructure, the community agrees to discourage developers, realtors and others Involved with the project from recruiting businesses from the other participating communities. Moreover, in these cases, each participating community shall develop an agreement which each community would use with developers, realtors, and others involved with the project in their respective communities that specifically disallows this type of recruitment. The communities agree that businesses located In an incubator (designated space for business incubation) or other similar facilities supported In whole or in part by the Iowa City Area Development Group or the University of Iowa are not subject to the rules of this agreement when it relates to the relocation of a business from one of the above described facilities In one participating community to another participating community. Economic Development Communication Plan In the event a business residing in a different community ("the home community") contacts another community ("the contacted community") to discuss possible relocation or in the event a business desires to consolidate its operations (already established in two or more of the participating communities) to the contacted community, whether that contact be directly or through a representative, the following communication plan will be implemented: 1. The contacted community or its third party representative will advise the business that It wants to assist the business so that it Is successful. 2. The contacted community or its third party representative will ask the business whether it has advised the home community that It is considering relocation, and if not, whether it objects to the contacted community advising the home community of the inquiry, 2 3. If the home community has not been advised and the business does not object, the contacted community or its third party representative will promptly notify the point of contact from the home community in writing of the inquiry. 4. If the home community has not been advised and the business does object, the contacted community or Its third party representative will inform the company of the general terms of this agreement and applicable state law, and that no further discussions regarding relocation will take place until the home community is notified. 5. The communities or their third party representatives will not propose or offer incentives to the business in support of Its relocation until the home community has approved in writing that incentives can be used. 6. In the event that participating communities learn of a business considering relocation or consolidating operations from a participating community to a non -participating community, It will be the responsibility of those participating communities to Inform each other of such. Priority of this Agreement The provisions of this agreement cannot be superseded by agreements for confidentiality or other contracts between a local government or nonprofit economic development organizations and a business. Local business will be made aware of this agreement immediately upon contacting a local government about relocating within the participating communities. Addition of Participants The communities strongly encourage other communities within the region to join this agreement. Upon request, the communities will consider the addition of other participating communities. Point of Contact For the purposes of this agreement, the points of contacts for the participating communities are as follows: 1. Iowa City: City Manager, 2. Coralvllle: City Administrator, 3. North Liberty: City Administrator. Term The agreement shall be effective when the agreement is signed by all communities and shall remain In effect until terminated In accordance with subparagraph 1 of the General Provisions below. Non-Substltution This agreement shall not constitute a "written agreement concerning the general use of economic incentives to attract commercial or Industrial development" for purposes of Iowa Code Section 403.19(9)(a)(1). 3 r: i 3. If the home community has not been advised and the business does not object, the contacted community or its third party representative will promptly notify the point of contact from the home community in writing of the inquiry. 4. If the home community has not been advised and the business does object, the contacted community or Its third party representative will inform the company of the general terms of this agreement and applicable state law, and that no further discussions regarding relocation will take place until the home community is notified. 5. The communities or their third party representatives will not propose or offer incentives to the business in support of Its relocation until the home community has approved in writing that incentives can be used. 6. In the event that participating communities learn of a business considering relocation or consolidating operations from a participating community to a non -participating community, It will be the responsibility of those participating communities to Inform each other of such. Priority of this Agreement The provisions of this agreement cannot be superseded by agreements for confidentiality or other contracts between a local government or nonprofit economic development organizations and a business. Local business will be made aware of this agreement immediately upon contacting a local government about relocating within the participating communities. Addition of Participants The communities strongly encourage other communities within the region to join this agreement. Upon request, the communities will consider the addition of other participating communities. Point of Contact For the purposes of this agreement, the points of contacts for the participating communities are as follows: 1. Iowa City: City Manager, 2. Coralvllle: City Administrator, 3. North Liberty: City Administrator. Term The agreement shall be effective when the agreement is signed by all communities and shall remain In effect until terminated In accordance with subparagraph 1 of the General Provisions below. Non-Substltution This agreement shall not constitute a "written agreement concerning the general use of economic incentives to attract commercial or Industrial development" for purposes of Iowa Code Section 403.19(9)(a)(1). 3 General Provisions J 1. Termination: Any community can end Its participation In this agreement by providing at least 180 days notice to the other communities. Such termination shall be effective as of the date stated on such a notice, In the event only one participating community remains, the agreement shall no longer be In effect, 2. Amendment or Modification: This agreement may be amended or modified by the participating communities, provided that any such modification or amendment shall only be effective upon written agreement of all participating communities. 3. Capacity to Execute: The undersigned hereby certifies that all actions necessary to execute this agreement were taken, and the person executing this agreement is authorized to do so and has the power to bind the Jurisdiction to the terms and conditions herein. 4, No Third -party Beneflclaries. This agreement is not intended to benefit any person or entity not a party to this agreement and shall not be construed to do so. 5. No Agency Relationship. Nothing herein creates an agency relationship between the participants and nothing herein authorizes one participant to act as an agent of another participant or participants. CITY OF IOWA CiTY Dated this 23rd cday of February 20 15 By: -- E'er" ��A MAYOR ATTEST: Ci LER CITY OF CORALVILLE Dated this day of 20 By: r MAYOR G(iu I11� ATTEST: ��%J /(%/ CITY CLERK � CITY OF NORTH LIBERTY Dated this day of 20 17671-A By: MAYOR ATTEST: CITY CLERK 2 Iowa City Area DeveloprYierit Group To: The Honorable Mayors Hayek, Lundell and Nielsen and the City Councils of Iowa City, Coralville and North Liberty Re: Support for Establishing an Inter -Jurisdictional Communication Protocol for Economic Development Dear Mayors and City Councilors, On behalf of the board of directors of the Iowa City Area Development Group, we express our support for the adoption of the Communication Protocol for Economic Development among our respective communities. We understand that a draft of the document has been developed by our respective city administrators which outlines a process by which a clear standard for engagement and communication will be agreed to regarding economic development projects. For our area to be successful, we believe the various communities all need to be working together to compete for the best jobs and investment. Competition among our communities can become a detriment to this goal and create situations where our communities are pitted against each other. This agreement does not limit a community from assisting a company during a location search, but spells out a transparent process which helps the host community leadership better understand and react when a company may wish to move. Signing this agreement will enhance the trust and cooperation between our communities and pave the way for more collaborative approaches to problem solving and planning. Working together is the best way to benefit the residents of all communities and our area as a whole. We urge you to support this vital step towards a strong local economy and approve the signing of this agreement. It is our hope that your leadership will encourage the other communities and counties in Iowa's Creative Corridor to follow in your footsteps and sign on to this agreement as well. If we can provide any additional information or clarification of our position publicly, please let us know how we might best serve your needs. Sincerely, Tom Goedken, Board Chair Mark Nolte, President 316 t_ Court Street, Iowa City IA 52240 319 354.3939 0715 � =..- CITY OF IOWA CITY -$- 1 it MEMORANDUM To: Tom Markus, City Manager From: Wendy Ford, Economic Development Coordinator Date: March 27, 2015 Re: Letter approving of Leepfrog Technologies proposed expansion Introduction The City of Coralville has requested a letter approving of Iowa City -based Leepfrog Technology's expansion to Coralville. The request for the letter is standard procedure when a business based in one community applies for state funding from the Iowa Economic Development Authority (IEDA) Business Financial Assistance program and the business expansion involves another Iowa community. Staff's review of the Leepfrog Business Financial Assistance Application to the State submitted February 5, 2015 reveals that proposed financing for the project includes $495,000 from the City of Coralville. ICAD's outline attached to Coralville's March 17 letter states that the source of funding being provided by Coralville is TIF. Such funding triggers the state's TIF rules regarding the use of TIF by one community to assist in the "relocation" from another Iowa community, which is defined as a "substantial reduction of an enterprise's existing operations." ICAD's outline states that Leepfrog will maintain its data center but will move most of the remaining staff from this building to the new office space to put their team under one roof. Leepfrog's State application describes the project as both an expansion and a "new location in Iowa." In 2012, State TIF law reform was implemented which limits the ability of an Iowa municipality to use TIF incentives if the project includes the relocation of a business from another Iowa municipality without a written agreement from the city of origin. Background Leepfrog Technologies Inc. is a software developer for higher education and has been in business since 1994. Their original office was located on ACT Circle in Iowa City. In 2013 they announced plans to expand from approximately 27 employees to 70. City of Iowa City staff worked with them extensively to find suitable office space in Iowa City. Ultimately, because they found an existing building suiting their needs, Leepfrog opted to locate in a building in the University of Iowa Research Park on Oakdale Boulevard in Coralville. The Coralville location was characterized to us by Leepfrog as a temporary location for two years. They expressed a desire to ultimately relocate back to Iowa City. Later in 2013, Leepfrog contacted ICAD to begin the search for a permanent new location. City staff worked with ICAD and submitted several suitable sites in Iowa City focusing on properties in the vicinity of North Dodge Street and 1-80 near their Iowa City office on ACT circle, because Leepfrog had stated the desirability of locating close to their dedicated fiber line. Negotiations progressed as far as discussing specific concept building plans for a preferred site, but this did not go forward, and the property option was allowed to expire. Leepfrog subsequently hired a third party site selection and advisory consultant, Proximity, to assist in their permanent location search. From this point forward communication between Leepfrog, ICAD, and the City of Iowa City was Limited. Discussion On Tuesday, March 23, City staff invited Lee Brintle, Leepfrog CEO, to a meeting to help staff better understand events leading to the decision to locate permanently in Coralville. Mr. Brintle gave a detailed history of the company's growth and investment in the Iowa City office on ACT Circle, citing that in their early business years, they also operated as an ISP (internet service provider) and because of that, invested in their own fiber optic network infrastructure between ACT Circle and West Liberty, Iowa. Because of that investment, the ACT Circle site will remain the data center for the company, but most of the staff will move to Coralville. Mr. Brintle said it takes one to six people to run the operations at the ACT Circle data center. Proximity, the site consultant from Des Moines, was asked to make a recommendation on site selection for Leepfrog. Mr. Brintle had held the strong opinion that the business locate permanently in Iowa City, but Class A office space and the property on which to build new Class A office space was not readily available. Proximity provided a summary of three preferred sites in March, 2014 and asked builders to submit plans. The preferred sites were the Larsen Farm property in Iowa City, and two sites in the UI Research Park. The builders for the Iowa City site were not competitive, due in part, to having to build substantially more infrastructure to make it work. The remaining two sites are in the UI Research Park owned by the State of Iowa and the proposed building and construction plans would be done by the design build firm of Build to Suit. Proximity encouraged Leepfrog to choose a building design that afforded room for future growth, providing an additional 5,000 square feet of office space that would build in project space needs required for new product development and production. In order to afford the additional square footage, the subsidy from Coralville would be required. Solution For more than two years, the City Manager and ICAD (Iowa City Area Development Group) have championed the establishment of a Communication Protocol for Economic Development Activity, which, had it been adopted, might have precluded the awkward situation at hand. Staff's due diligence on the issue includes working with [CAD to establish a meeting with Proximity to better understand their role in this process. According to ICAD, that meeting is not likely to take place until early next week. Additionally, we are aware of a very suitable building for Leepfrog in Iowa City with many of the qualities they seek and in close proximity to their existing; facility. We have shared detailed information and contacts with Mark Nolte at ICAD to convey to Lee Brintle, however, we had not heard back from them at the time we drafted this report. We believe, based on a discussion with the owner representatives of the Iowa City site that they would move as soon as possible to develop a lease and start the build -out to suit Leepfrog. The City of Iowa City is progressive and will work diligently to keep its Iowa City based businesses in Iowa City. We recognize the awkward position the lack of communication protocol has created for Leepfrog. While we understand there may still be a way we can remain the home base of Leepfrog, and are working with the landlords of specific properties to fully exhaust those possibilities, we also understand the business' need to move forward. Recommendation Staff is recommending that a letter be sent to the State in response to the request from IEDA asking for our review of the Leepfrog request. We propose sending the attached draft letter with the following specific conditions: • the Communication Protocol for Economic Development Activity be ratified by the City of Coralville • a written agreement between the City of Iowa City and the City of Coralville regarding the relocation of Leepfrog prior to the use of TIF funds as required by Iowa Code Section 403.19, to include an agreement by Coralville to supporta subsequent move by Leepfrog (or spinoff or created subsidiary) back to Iowa City. Additional attachments provide further background information. Please feel free to contact me with any questions. CITY OF IOWA CITY www.icgov.org Office of the City Manager Thomas M. Markus City Manager tom-markus@iowa-city.org Geoff E. Fruin Assistant to the City Manager geoff-fruin@iowa-city.org Simon D. Andrew Administrative Analyst limon-andrew@iowa-city.org DRAFT FOR COUNCIL APPROVAL April 2, 2015 BY REGULAR MAIL AND EMAIL Ms. Debi Durham Iowa Economic Development Authority 200 E. Grand Ave. Des Moines, IA 50309 Dear Ms. Durham, By letter dated March 17, 2015 the City of Coralville informed the City of Iowa City that Leepfrog Technologies, Inc. is being offered incentives from the State and Coralville to expand the Leepfrog business in Coralville, which expansion will result in a substantial reduction in Leepfrog's operations in Iowa City. The letter requests that Iowa City submit a letter to IEDA indicating that Iowa City has no objection to the move. Leepfrog submitted a Business Financial Assistance Application to IEDA on February 5, 2015 that was sponsored by the City of Coralville. Attached is a copy of Coralville's March 17 letter, which includes an outline from the Iowa City Area Development group (ICAD) on Leepfrog's history and plans. It is our understanding that the State is offering assistance under the High Quality Jobs Program and that a letter from Iowa City is being requested in accordance with the provisions of Iowa Code Section 15.329, which sets forth the following eligibility requirements and provides that IEDA will consider a letter of support from the affected local community in determining whether the eligibility requirements have been met: 1) the "business shall not be solely relocating operations from one area of the state while seeking state or local incentives"; 2) the "business shall not be in the process of reducing operations in one community while simultaneously applying for assistance under the program"; and, 3) expansion is not prohibited "if existing operations of a similar nature in this state are not closed or substantially reduced." As you know, a similar provision was added to the Iowa Code in 2012 to prohibit the use of TIF when the project will result in the substantial reduction of a business's existing operations in another area of the State. Leepfrog's February 5 Application to the State, which was sponsored by Coralville, reveals that Coralville is providing a local match of $495,000. We understand from the ICAD outline attached to Coralville's March 17 letter that the source of these funds is TIF. Thus, while Coralville has asked only for a letter to the State, the package of assistance being offered also will require a written agreement approving the use of TIF funds pursuant to Iowa Code Section 403.19(9). As set forth in ICAD's outline, Leepfrog is a software company serving higher education that has been headquartered in Iowa City at 2105 ACT Circle since its founding in the early 90's. It is our understanding that in connection with its expansion in Coralville for which incentives are being proposed, Leepfrog will be substantially reducing operations in Iowa City. According to ICAD: "Leepfrog will maintain ownership of its Iowa City facility on ACT Circle as its main data center, but will move most of the remaining staff from this building to the new office space to put their Page 2 team under one roof." Leepfrog's Application to the State submitted February 5, 2015 states that the type of project is both the "Expansion of [an] Iowa Company" and a "New location in Iowa." Coralville's March 17 request puts both Iowa City and Leepfrog in a difficult position, and one which we believe could have been avoided had there been earlier conversations between the two communities. We do not relish impeding the ability of any company in our region from maximizing its potential to expand with the use of economic development incentives. However, the law clearly expresses the State policy that state and local incentives should not be available to assist with a relocation or expansion when there is a substantial reduction of the company's operations in another jurisdiction in the State. Iowa City knows firsthand the harm that can result both to a community and region when incentives are used in this manner. Since receiving Coralville's March 17 letter City staff has met with Leepfrog CEO Lee Brintle to better understand the company's plans and to explain the City's concerns. Unfortunately, it is our understanding that prior to Coralville's letter of March 17 Leepfrog was unaware of the need for Iowa City's approval and the State laws regarding relocation and expansion. We recognize that businesses seek locations based on a variety of factors. Over the last two plus years I have worked with the Administrators in Coralville and North Liberty to develop a communication protocol to facilitate positive and early interaction between the communities in the Iowa City area on issues of business expansion and migration. The ICAD Board of Directors, including the Coralville City Administrator, voted unanimously to support the communication protocol, noting: "For our area to be successful, we believe the various communities all need to be working together to compete for the best jobs and investment." The protocol has been approved by the City Council of Iowa City. The Iowa City Area Chamber of Commerce also endorsed the concept of a communication protocol. While press accounts indicate that Coralville is not interested in signing the protocol, the agreement has not been placed on its formal agenda for Council consideration. Had this protocol been in place, Iowa City would have been involved in the discussions at the outset and Leepfrog would have been made aware of the State law and the need for Iowa City's endorsement. A copy of the protocol and ICAD's endorsement is attached. Iowa City believes that this is an untenable situation that a communication protocol could have prevented. We support Leepfrog's efforts to expand but hope to prevent a similar situation from occurring in the future. To that end, Iowa City will support Leepfrog's expansion to Coralville subject to the following conditions being met prior to release of IEDA funds: 1. Coralville places the Agreement Establishing a Communication Protocol for Economic Development Activity endorsed by ICAD on a formal Council agenda and approves the protocol or a substantially similar agreement that assures communication and interaction with the host city when a business is considering relocation. Press comments indicate that Coralville has concerns about the language of the agreement as it relates to public disclosure of a business's plans. The communication protocol does not contemplate public disclosure at the early stages of business development. The cities currently are subject to open records requests regarding development activity, and staff already conducts itself with an appreciation for a business's privacy concerns in the early stages of development. Issues of relocation would be treated in the same fashion. Iowa City does not resist amendments consistent with the State open records law that are designed to keep the business plans private until the time that Council action is necessary. 2. A written agreement between Iowa City and Coralville regarding the relocation of Leepfrog prior to the use of TIF funds as required by Iowa Code Section 403.19(9), which includes an agreement by Coralville to support a subsequent move by Leepfrog (or its spinoff or created subsidiaries) back to Iowa City. Page 3 Please contact me if you have any questions or comments. Thank you. Very truly yours, Thomas M. Markus Enclosures Cc: City of Coralville Lee Brintle, CEO Leepfrog Technologies, Inc. ��.4 CITY OF IOWA CITY •- MEMORANDUM Date: April 2, 2015 To: Tom Markus, City Manager From: Simon Andrew, Administrative Analyst Re: Communication Protocol for Economic Development Activity Introduction: Below is a summary of the development of the Communication Protocol and how this background relates to recent media coverage of the agreement approved by City Council. History/Background: A draft agreement was first sent to the City Administrators of Coralville and North Liberty as well as the Executive Director of the Iowa City Area Development Group on September 26, 2012. City Manager Tom Markus met with both administrators to discuss this draft on October 31, 2012. In an email from Mr. Markus' office to the administrators two days later, two outstanding issues for discussion were noted and an email from Mr. Markus' office on November 6, 2012 stated Iowa City's intention to present the draft agreement to our City Council by the end of 2012. The other communities were asked to submit proposed amendments or additional language for the draft. Emails from each administrator the following day stated their general agreement with the protocol concept with some reservations. Subsequent drafts of the protocol attempted to address these concerns. The City Attorneys for both Coralville and North Liberty reviewed the document and Iowa City was asked to allow additional time for this review. In an email on December 11, 2012 Mr. Markus agreed to wait until the first meeting in January 2013 to present the draft to our City Council. A draft of the document was presented to City Council on January 3, 2013, having received no proposed amendments from the other communities. On February 17, 2013 the cities of Coralville and North Liberty submitted an alternate document entitled the South Corridor Economic Development Agreement. The Iowa City City Attorney's Office had concerns with this document, especially insofar as it was affected by state law. Managers and attorneys representing the three cities met on April 9, 2013 to discuss the differences between the two documents. After the April meeting, we made contact with the other cities on May 6, June 11, and June 21, 2013 and received commitments for their suggested amendments. North Liberty's City Attorney sent us a revised draft on August 1, 2013. The format of the draft provided by North Liberty is the basis for the current proposed agreement. Due to an error on our part we did not review this draft until September 2013 and discussions resumed at this point. We communicated our suggested revisions to the City Administrators on September 17, 2013 and Mr. Markus met with representatives from the cities on October 10, 2013 to discuss the most recent version. On October 15, 2013 the City Administrator of North Liberty provided an additional example from the Quad Cities to help further the discussion. Worked continued over the subsequent months and in January 2014 the North Liberty City Administrator submitted a revised document with suggestions from both him and North Liberty's City Attorney. At this point, the only substantial difference between the two drafts was whether the protocol should be initiated when a city is contacted by a business considering relocation or April 2, 2015 Page 2 when incentives are formally requested. Mr. Markus again met with representatives from the other communities on January 17, 2014 and sent a revised version of the document to the city administrators that same day. This is the version that ICAD and the City Council recently approved. Mr. Markus discussed this version on February 14, 2014 with the city administrators. At this point Iowa City staff became discouraged that the other communities had any intention of executing an agreement. In August of 2014, the ICAD Executive Director informed the three managers and the President of the Iowa City Chamber of Commerce that he believed the best strategy for economic development collaboration in our region is to have a signed agreement and his intention to discuss at the following ICAD board meeting. The ICAD Board of Directors has since unanimously approved the agreement, a meeting at which Coralville's City Administrator did not articulate any concerns with the document and was recorded as voting in support of the agreement. Our neighbors have provided input for the document for approximately two and a half years. The document reflects many of their suggested revisions and is based on a format that North Liberty staff provided. The Chamber of Commerce has also supported the concept of a communication protocol, as have editorials in the Press Citizen. We have been receptive to our neighbors concerns and have been willing to amend the proposal accordingly and are open to further discussions if they are done in a good faith effort to execute an agreement. March 27, 2015 Press -Citizen Article: An article posted on the Press -Citizen's website on March 27 contained statements by local officials that warrant a response. The article states that the protocol "is intended to prevent Iowa City, Coralville and North Liberty from actively recruiting businesses from one city to another by using financial incentives". The Communication Protocol provides that incentives may be offered if the business' home community provides a letter supporting the relocation. The City of Coralville is currently requesting a letter in this case anyway. Having the agreement in place would have simply informed us sooner to allow for collaboration. We would have had the information we need to make an informed decision on whether we can provide a letter of support sooner. Furthermore, according to the protocol if a business has "independently indicated an interest in moving" it is not defined as "active pursuit". The article goes on to quote Coralville's City Administrator. Coralville City Administrator Kelly Hayworth said Wednesday he does not think the communication protocol agreement would have made a significant difference in this case, and said the city of Coralville is not interested in signing the document. "There has been plenty of communication from the Iowa City Area Development Group, and I don't think the compact has anything to do with this at all," Hayworth said. The Communication Protocol would have absolutely had a positive effect on communications in this instance. Coralville requested a letter from us, but we don't have the information necessary to make an informed decision on that matter. Earlier communication would clearly have made a difference. Had we known the details of this proposal sooner and been able to complete our due diligence, it is conceivable that we would have already provided a letter. We simply did not have the information to know if we could support this relocation and the communication agreement would have facilitated this information being shared upfront. Furthermore, if the City of Coralville "is not interested in signing the document", communicating this position to the partners who have invested years in refining the proposal would be April 2, 2015 Page 3 beneficial. Understanding the rationale behind the opposition to the concept of a communication framework will help inform future conversations with local businesses and ICAD. Coralville's Mayor is quoted in the article. `7t asks, as written, for a great deal of information from the private sector business community to provide one city with information that would then be shared with the second city, " Lundell said. "It would require the business to share information about their intent to either expand or move their business to another community with that city, and once that happens, it would be subject to freedom of information and, frankly, oftentimes the business community would be very uncomfortable if their plans for expansion or movement were to be shared with the public for obvious proprietary reasons. Their competition would find out what their plans are. " This same provision already appears in the State of Iowa TIF law. The protocol requires minimal information that would already be subject to open records requests if incentives are being discussed with a public entity. The cities currently are subject to open records requests regarding development activity, and staff already conducts itself with an appreciation for a business's privacy concerns in the early stages of development. Iowa City does not resist amendments consistent with the State open records law that are designed to keep the business plans private until the time that Council action is necessary. Furthermore, these concerns could have been addressed in the two and a half years the three communities worked on this agreement or when the ICAD board unanimously approved the draft. North Liberty City Administrator Ryan Heiar was quoted, saying `7 think the biggest sticking point is when to begin the communication. At what point do we need to communicate with each other? When a business begins asking about one of the neighboring communities?" Heiar said. "7 think ultimately it's the right thing to do, but it has to be something that we all can agree with. The existing document is, at least from what I've seen, not something we're all going to agree with. " The protocol explicitly spells out when communication between the communities is to begin and this timing was part of the lengthy discussions when drafting the agreement. Mr. Heiar has provided several proposed amendments to the agreement and on this matter we remain open to further amendments that accomplish the broader goal. As noted above, the ICAD Board of Directors, the Chamber of Commerce, the Press Citizen editorial board, and the Iowa City City Council have all supported this document or at a minimum the concept of a communication protocol. The City Administrators of Coralville and North Liberty have communicated that they agree with the concept. We have been drafting the document for over two years. If there are specific concerns the other communities wish to address we would like these concerns communicated to us so that we can find compromise. If other communities are opposed to any agreement at all we would appreciate communication to this effect and the rationale for their opposition. March 17, 2015 Mr. Tom Markus City Manager City of Iowa City 410 E. Washington St. Iowa City, IA 52240 RE: Leepfrog Technologies, Inc. Dear Tom: I am writing to you in reference to Leepfrog Technologies, Inc. Leepfrog Technologies currently operates a facility in Iowa City on ACT Circle and a facility in Coralville on Oakdale Blvd. Leepfrog, with the assistance of ICAD, conducted a process of looking for additional space for their expansion and have entered into a letter of intent with a developer to build a new facility on Oakdale Blvd in Coralville. I have attached an outline from Mark Nolte, ICAD President, outlining the process the company has went through. The company has indicated to us that they intend to keep the facility in Iowa City as an expanded data center for the company. Leepfrog has submitted a request for assistance from the State of Iowa and the City of Coralville. The State of Iowa has asked for a letter from the City of Iowa City indicating you have no objection to the Leepfrog expansion in Coralville. Please let me know if you have any questions or need further information. Sincerely, r7 elly J. worth City Administrator Enclosure CC: Mark Nolte j 8 N City Administration PQ Box 5127 1512 7th Street Coralville, Iowa 52241-0127 319-248-1700 Fax: 319-248-1894 Timeline'of LeepFrog Technologies Space Planning Leepfrog Technologies, a software company serving higher education, has been headquartered at 2105 ACT Circle In Iowa City since its founding in the early 90's. As the company expanded they sought additional office space in the area to accommodate their growth. In 2013 they moved some of their staff into an available office property at 2300 Oakdale Blvd with the mindset that this would be a temporary location until they could find a more longterm solution. ICAD communicated this move to the City of Iowa City and there was no financial incentive at the city or state level offered or provided. In October of 2013 the company contacted ICAD Group about finding space for a new building. ]CAD sent project information to the developers, construction companies, real estate professionals and banks who are investors in ICAD to gauge interest and identify properties. City of Iowa City staff was Included in this request and submitted several Iowa City sites. Initial interest focused on the Larson Farms property near ACT, this land was under contract at the time to Liberty Development and meetings were had to discuss site layout and City of Iowa City staff were engaged. Leepfrog decided at this time to enter into an agreement with Proximity, a Des Moines based construction advisory consultant to take the lead on site selection and negotiations with builders. Communication from this point forward with ICAD was very limited. By fall of 2014 Liberty Growth had offered lease terms for a build to lease property to the company via Proximity but were informed other sites were being considered. Liberty Growth, having not secured a tenant, let their option expire on this land. ICAD continued to share ideas on sites and buildings directly with the company leaders. Through Proximity's guidance, a lease agreement has been negotiated with Build to Suit to occupy a floor of anew building to be constructed on the UI Research Park. Per the company, an employee survey was conducted which showed strong support for this location as the most accessible option for their staff. Leepfrog will maintain ownership of its Iowa City facility on ACT Circle as its main data center, but will move most of the remaining staff from this building to the new office space to put their team under one roof. At this time, the company would like to apply for state assistance to add additional jobs and has made an application to the Iowa Economic Development Authority. Build to Suit has worked independently with the City of Coralville on a TIF application for the property. Before the company can apply for state assistance, it would need the City of Iowa City to provide a letter to IEDA Director Durham indicating does not oppose the company leasing space in Coralville. [CAD believes every effort was made to help the company identify all existing buildings and sites in Iowa City. Ultimately however, the company's decision at this point is to pursue this new building in Coralville. Marian Karr From: Tom Markus Sent: Wednesday, April 01, 2015 11:28 AM To: Wendy Ford Subject: FW: Leepfrog Technologies, Inc. Attachments: 1072_001. pdf Follow Up Flag: Follow up Flag Status: Completed Per your request From: Kelly Hayworth[ma iIto: khayworth@ci.coralville. ia.us] Sent: Monday, March 23, 2015 2:58 PM To: Tom Markus Cc: Mark Nolte Subject: FW: Leepfrog Technologies, Inc. In response to your questions find the following: 1. The application for Iowa Business Financial Assistance is attached. Pages 9 and 10 have been removed because the company has asked for their wage rates to remain confidential. The City of Coralville does not have a separate application for TIF assistance. We obtain our information from the State Business Assistance application. 2. I do not have a letter from the State of Iowa. The correspondence with the State of Iowa has gone through Mark Nolte. I have copied him on this e-mail. 3. We do not have a TIF Agreement Between Coralville, Build to Suit, and Leepfrog Technologies developed yet. 4. I do not have a copy of the lease agreement between Build to Suit and Leepfrog. This is not information that we ask for. 5. The company has not made a final decision on how many employees will be at the Iowa City facility. Their e-mail response was: In 2015, Leepfrog will be increasing the bandwidth to its Iowa City data center by a factor of four. Our newest product -- ASOC -- is the first that has heavy data process load by *students*, and we have already begun building out our Iowa City -based infrastructure in anticipation of the proj ect. Leepfrog currently employs a sysadmin administration staff of four; this is expected to at least double based on our growth projections. The majority of the sysadmin staff is based in the Iowa City office. 1 As Wes says, we haven't decided whether the data center will be minimally staffed or not after the new bulding is built From: Tom Markus [mailto:Tom-Markusgiowa-cit�org] Sent: Wednesday, March 18, 2015 10:58 AM To: Kelly Hayworth Cc: Jeff Davidson; Wendy Ford; Eleanor M. Dilkes; Sue Dulek; Sara Greenwood Hektoen; Geoff Fruin; Marian Karr; Mark Nolte (mnolte(cr�,icadgroup.com) Subject: Leepfrog Technologies, Inc. Kelly: In response to your email/letter; I do have some additional requests for information. As you know, Iowa City previously sent a letter to Debbi V. Durham on behalf of ConnectFive when they sought financial assistance through the FDA's High Quality Jobs Program. In your letter re: Leepfrog, you note that Leepfrog has requested funding assistance from both the State of Iowa and the City of Coralville. Funding assistance from Coralville may also require an agreement under Section 403.19 of the state code. The Timeline provided by ICAD enclosed with your letter has a significant gap of time which leaves out critical information that we need to know in order to make an informed decision. In order to determine if those state code provisions apply I would ask you to provide the following: 1. Applications by Leepfrog for assistance from the state and the city. 2. Correspondence from Debbi V. Durham requesting a letter from Iowa City indicating that we have no objection to the Leepfrog relocation in Coralville. 3. Copy of the TIF agreement between Coralville and Build to Suit. 4. Lease agreement between Build to Suit and Leepfrog. 5. How many employees will remain at the Iowa City location? Until we know this information we cannot properly analyze the extent to which state law applies to this request and whether the City of Iowa City would object to your requests. While we are happy for Leepfrog's success, we need to make sure our city is doing everything we can do to retain our businesses. We are still interested in having Leepfrog remain in Iowa City. The information that led to Leepfrog's decision may help us shape our future policies to be able retain our businesses. I can't help but think the regular communication that was to be established through the Communications Protocol agreement would have gone a long way to improving the relationship between our communities and provided a more transparent playing field for economic development, especially for businesses already existing in our communities. Tom Lehi V. Durham, Director Iowa Economic Develolin7e nt Authority ill lip lill ll L -;sine- ss --inance - Business Development Division Dv,,, a Eco,,-tot-nic: i_)evclopinent Authority ^ a Avenue jus iowa 50309-1819 Vb'\+/'UV,i(.1L1/x3G.,;Otl ��(il ii;Ci c"Velr>��rnFrit.�;f)rn - T!::�= (illCil".' 515,7/5.3'34 Efiiaol" r)�JSIf18Ssilil<7r1C:E?(Ci%ICivN:J.C�0�1 Application Instructions To Complete Electronic Form: Click on TEXT BOX to add text. Double click on YES/NO boxes and select "Checked". 1. All applicants must complete the Business Financial Assistance Application and attach only those additional sections for the components to which the applicant is applying. STATE of IOWA — Financial Assistance Program High Quality .fobs Program (HQJP) ® Tax Credits ❑ Direct Financial Assistance 2. Before filling out this application form, please read all applicable sections of the Iowa Code and Iowa Administrative Code (rules). www, lea is. state.ia.us/Iowa Law.html 3. Only typed or computer-generated applications will be accepted and reviewed. Any material change to the format, questions, or wording of questions presented in this application will render the application invalid and it will not be accepted. 4. Complete the applicable sections of the application fully. If questions are left unanswered or required attachments are not submitted, an explanation must be included. 5. Use clear and concise language. Attachments should only be used when requested or as supporting documentation. 6. Any inaccurate information of a significant nature may disqualify the application from consideration. 7. The following must be submitted to Business Finance at IEDA in order to initiate the review process: • One original, signed application form and all required attachments • One electronic copy of the application form and all required attachments Facsimile copies will not be accepted. Applications must be submitted to Ill Business Finance before 4:00pm on the fourth Monday of the month. Applications will be reviewed by the IEDA Board on the third Friday of the following month. Public Records Policies During the application process, the information submitted by you to IEDA is exempt from disclosure under the "industrial prospects" exemption found in Section 22.7(8). However, once you receive an award, the industrial prospects exemption no longer applies and all documents submitted and generated during the application and negotiation process become public records under Iowa's Open Records Law (Iowa Code, Chapter 22), unless 1) The information belongs to one of the classes of records automatically treated as confidential; or 2) You have applied for and received written notice that your information will be treated as confidential. Automatically Confidential Records IEDA automatically treats the following records as confidential and will withhold them from public inspection even without a request for confidential treatment: • Tax Records and Tax Liability Information • Quarterly Iowa Employer's Contribution and Payroll Report prepared for the Iowa Workforce Development Department • Payroll Registers • Business Financial Statements and Projections (unless those statements are already publicly available elsewhere, e.g., 10-K filings) • Personal Financial Statements Exemptions to the Open Records Law If you wish to have additional information treated as confidential, you must fill out the confidential treatment request form. Under the Open Records Law, IEDA may lawfully treat certain information as confidential if that information falls within an exemption to the Open Records Law. The following exemptions represent records which may lawfully be treated as confidential under the Open Records law and which are most often applicable to the information submitted to IEDA: • Release of information would give an unfair advantage to competitors — Iowa Code Sec. 15.118 • Trade secrets — See Iowa Code section 22.7(3), see also Iowa Code Ch. 550 • Information on an industrial prospect with which the IEDA is currently negotiating — See Iowa Code section 22.7(8) • Communications not required by law, rule or regulation made to IEDA by persons outside the government to the extent that IEDA could reasonably believe that those persons would be discouraged from making them to IEDA if they were made available for general public examination — Iowa Code section 22.7(18) Non -Confidential Information Information that is submitted to IEDA as part of the application process or that is contained in a contract for program benefits is generally considered material to the eligibility requirements of the program or to the amount of incentives or assistance to be provided. Such information is generally not given confidential treatment. Such information includes but is not limited to, the number and type of jobs incented, the wage levels for the incented jobs, your company's employee benefit information, and your project budget. Additional Information Available. Copies of Iowa's Open Record law and IEDA's administrative rules relating to public records are available from the IEDA upon request. SECTION A Applicant Information Date Application Submitted: 2/5/15 1. Name of Business: Leepfrog Technologies, Inc. 2. Entity Name (for contracting purposes): 3. Address: 2105 ACT Circle 4. City, State & Zip Code: Iowa City IA 52245 5. Contact Person: Deb Walton Title: Human Resources Manager 6. Phone: 319-337-3877 Fax: Email: dwalton@leepfrog.com 7. FEIN: 42-1442334 8. NAICS Code for primary business operations: 541511 9. US DOT Number: 10. Does the Business file a consolidated tax return under a different tax ID number? ❑ Yes (If yes, please also provide that tax ID number) ® No a. Is the contact person listed above authorized to obligate the Business? ❑ Yes ONo If no, please provide the name and title of a company officer authorized to obligate the Business: 1) Wes Bachman, Director of IT and owner 2) Frederick Zawojewski, Operations Director and owner 3) Lee Brintle, CEO/President and owner 11. If the application was prepared by someone other than the contact person listed above, please complete the following: Name of Business: Proxymity, Attn: Jason Jones Clifton Larson Allen, Attn: Mark Wyzgowski Address: 400 Locust Street, Suite 220 5550 Wild Rose Lane, Suite 300 City, State & Zip Code: Des Moines IA 50309 West Des Moines IA 50266 Contact Person: Title: Phone: Proxymity=(515)202-4806 CLA=(515)222-4400 Fax: Email: jjonesPproxymity.com mark.wyzgowski _CLAconnect.com Sponsor Information (A sponsor organization is a city or county) 12. Sponsor Organization: City of Coralville 13. Official Contact (e.g. Mayor, Chairperson, etc.): Kelly Hayworth Title: City Administrator 14. Address: 1512 7th Street, PO Box 5127 15. City, State & Zip Code: Coralville IA 52241 16. Phone: 319-248-1700 Fax: 319-248-1894 Email: khayworth(cD_ci.coralville.ia.us • Sponsor Organization: Iowa City Area Development (ICAD) • Official Contact (e.g. Mayor, Chairperson, etc.): Mark Nolte Title: President & Bus Dev Director • Address: 316 E Court Street • City, State & Zip Code: Iowa City IA 52240 • Phone: 319-354-3939 Fax: 888-722-5603 Email: mnolteoicadgroup.com 17. If IEDA needs to contact the sponsor organization with questions, should we contact the person listed above? ® Yes ❑ No, please contact the following person: Name: Title: Address: City, State & Zip Code: Phone: Fax: Email: If necessary, please list information on additional sponsors in an attachment. SECTION B Business Information 1. Provide a brief description and history of the Business. Include information about the Business' products or services and its markets and/or customers. Leepfrog Technologies got its start in 1994 as a group of passionate people excited about providing innovative web solutions for its clients. Combining the strengths of customized and turn -key software, we provide our clients with a 100% web solution on a competitive timeline. While technology continues to change, our dedication to crafting quality products and services remains consistent. Leepfrog Technologies' CourseLeaf software is used by over one hundred of the nation's most academically complex universities and colleges to manage their online academic catalogs and curriculum processes. 2. Business Structure: ❑ Cooperative ❑ Corporation ❑ Limited Liability Company ❑ Partnership ® S -Corporation ❑ Sole Proprietorship 3. State of Incorporation: Iowa 4. Identify the Business' owners and percent ownership: Lee Brintle 75%, Wes Bachman 12.5%, Frederick Zawojewski 12.5% 5. Does a woman, minority, or person with a disability own the Business? ❑ Yes ® No 6. List the Business' Iowa locations and the most current number of employees at each location. 2105 ACT Circle, Iowa City IA 52245 (14 employees), 2300 Oakdale Blvd, Coralville IA 52241 (33 employees) 7. What is the Business' worldwide employment? (Please include employees of parent company, subsidiaries, and other affiliated entities in this figure.) 56 Project Information 8. Project Street Address: Lot 11, U of I Research Park, Oakdale Blvd Project City & Zip Code: Coralville, IA 52241 Project County: Johnson 9. Type of Business Project: ❑ Startup ® Expansion of Iowa Company ® New Location in Iowa 10. Does the project site qualify as a "Brownfield" or "Grayfield" site? ❑ Yes ® No If yes, please explain and document as Attachment A6. n/a 11. Describe the proposed project for which assistance is being sought. (Include project timeline with dates, facility size, infrastructure improvements, proposed products/services, any new markets, etc.) The expansion and relocation project will consist of leasing approximately 16,500 to 20,000 square feet in a new office building in the University of Iowa Research Park in order to house the current and future employees. 12. Project Timeline add additional rows as needed Beginning Activity Date Activity Completion Date Design new office building January 2015 May 2015 Build new office building Aril 2015 January 2016 13. Has any part of the project started*? ❑ Yes ® No If yes, please explain. . For IEDA's purposes, starting the project includes: the start of construction or rehabilitation, the purchase of a building, the execution of a lease, or the installation of equipment to be used in the project. 14. Identify the Business' competitors. If any of these competitors have Iowa locations, please explain the nature of the competition (e.g. competitive business segment, estimated market share, etc.) and explain what impact the proposed project may have on the Iowa competitor. None of Leepfrog's competitors are headquartered in Iowa, but they have sales forces responsible for the state of Iowa and sell into the state. Our main competitors are: DigArc - based out of Lakeland Florida, Smart Catalog - �!_(;:,:_I headquartered in Portland ME, and CurrictUNET is located in Idaho Falls, ID. In terms of the number of clients held in this market, Leepfrog is #2. 15. Will any of the current Iowa employees lose their jobs if this project does not proceed? ❑ Yes ® No If yes, please explain why and identify those jobs as "retained jobs" in the Project Jobs Section E. 16. Is the Business actively considering locations outside of Iowa? ❑ Yes ® No If yes, where and what assistance is being offered? 17. Please identify the company project management for the project location and experience. Proxymity SECTION C Applicant's Project Budget 1. Does the Business plan to lease the facility? ® Yes ❑ No If yes, please provide the Annual Base Rent Payment (lease payment minus property taxes, insurance, and operating/maintenance expenses) for three years in the budget below, and only major renovation costs your company expects to incur. Administrative rules require that the lease be in place for a minimum of five years. 2. Please complete the budget below. Include only costs the company plans to incur directly: Use of Funds Cost Source A Source B Source C Source D Source E Source F Base Rent 3 ears 636,075 Tenant Improvements 907,500 495,000 Land Acquisition $ Site Preparation Building Acquisition $495,000 Building Construction Pending Fall 2015 Building Remodeling $ Mfg. Machinery & Equip. Other Machinery & Equip. $ Racking, Shelving, etc.' Computer Hardware $ Computer Software Furniture & Fixtures 200,000 Working Capital Research & Development 100,000 Other TOTAL $1,843,575 $ $495,000 $ $ $ $ Raddng, sneiving and conveyor equipment used in distribution center projects only 3. Please complete the chart below with proposed financing for the project (tax benefits should be reflected as indirect finnnrinn rrnHor fit; halnwl- PROPOSED FINANCING Source of Funds Amount Form of Funds (Loan, Grant, In- Rate and Kind, Donation, Term etc.) Conditions/Additional Information Commitment Include when funds will be Status disbursed; If loan, whether payments are a level term, balloon, etc Add additional lines as needed Source A: IEDA (see #4 below $ Source B: Local Government $495,000 Loan or Grant Unknown Pending Fall 2015 Source C: Business $ Source D: Other Source $ Source E: Other Source $ Source F: Other Source $ TOTAL $ 4. Direct financial assistance (loans/forgivable loans) must be secured with acceptable collateral. Please select the type of collateral your company will pledge to secure the IEDA financing, and document its value in Attachment A5. Explain: No collateral, funding disbursed at the end of the 5 -year contract Irrevocable letter of credit Amount Description Dedicated certificate of deposit CD Unknown at this time Surety bond Mortgage on real estate Ll Cor orateguaranty Personal guarantee El * The IEDA Board has the final discretion on what collateral will be accepted. 5. Please complete the chart below with tax credits and other indirect financing expected for the project: TAX CREDITS AND INDIRECT FINANCING Source of Funds Amount Description Investment Tax Credit Unknown at this time Sales Service & Use Tax Refund 35.000 Estimate by re arer Research Activities Credit 3%/10% 10,000 Estimate by preparer Local Propertv Tax Exemption Tax Increment Financing 260E Job Training funds In-kind Contribution Other TOTAL $45,000 6. There are three justifiable reasons for providing assistance. Check the box next to the reason why assistance is needed to complete this project. ® Financing Gap - A gap exists between the financing required and the financing on -hand and the provision of tax incentives or assistance is necessary to fill the gap. ❑ Rate of Return Gap —The likely returns of the project are inadequate to motivate a company decision maker to proceed with the project even if sufficient debt or equity can be raised to finance the project, and the project's risks outweigh its rewards, making the provision of tax incentives or assistance necessary to reduce the project's risks. ❑ Location Disadvantage (Incentive) —The business is deciding between a site in Iowa ("Iowa site") and a site in another state ("out-of-state site") for its project and the cost of completing the project at the out-of-state site is demonstrably lower, making tax incentives or assistance necessary to equalize the cost differential between the two sites. Note: The authority will attempt to quantify the cost differential between the sites. 7. Please provide a brief explanation of the need for assistance. Incentives would provide funds to accelerate current and new product development which would then drive additional employment, revenue and profits, and thus addition payroll and income taxes. SECTION D Employee Benefits There are three options to meeting the sufficient benefit requirement. These options are detailed in the chart below. Please complete questions 1-3. If your company meets Option 1 or 2, no additional information is requi id. If you would like to utilize Option 3, pli Option 1 80% single Coverage Total Number of Pay 80% of premium costs Employees in for a standard medical plan, Iowa single coverage. 1250 maximum se also complete puss Option 2 50% Familvcoverne 10% of premium costs for a standard medical plan, family coverage. 00 maximum deductible )0 maximum deductible on 3 Provide medical and pay the monetary equivalent of Option 1 or Option 2 in supplemental employee benefits. Benefits Counted Toward Monetary Equivalent: Medical coverage, Dental coverage, Vision insurance, Life insurance, Pension, 401(k) (company's Average contribution, Short /long-term disability insurance, Child care services, Other nonwage 1. How many full-time, permanent employees does your company currently employ within the State of Iowa? 47 2. What is the total premium cost for a standard medical plan for single employee coverage? $465.96/month a. What portion of this cost is paid by the business? 99.8% b. What is the deductible associated with this plan? $ 500.00 3. What is the total premium cost for a standard medical plan for family coverage? $ 1.430.03/month a. What portion of this cost is paid by the business? 70% b. What is the deductible associated with this plan? $ 1.000 *** Employees who are covered under another health insurance plan are reimbursed $350/month. No additional information required in this section if Your company meets the requirement for Option 1 or Option 2 4. Does your company provide additional benefits to full time employees? ®Yes ❑No .r. _ff-A I% thn hneinacc ner omninvns in thA Chart hBlow- Benefit Annual amount paid by the business(ver em to ee : Dental Insurance — Single plan $ 403.92 Dental Insurance —Family Ian $ 993.60 Pension Use 3 -year average calculated below $ 0.00 Retirement Plan - i.e. 401 k Use 3 -year average calculated below $ 1,754.31 Profit Sharia Plan Use 3 -year average calculated below $ 0.00 Childcare Services $ 0.00 Supplemental Life Insurance coverage $ 22.43 Disability & Life Insurance coverage $ 571.59 Health Savings Account HSA contribution $120.00 TOTAL $ 3,865.85 5. Does the Business offer a pension plan, 401(k) plan, and/or retirement -plan? ® Yes ❑ No If yes, please indicate the amount contributed on a per employee basis by the Business to the plan for the last three years. For 401(k) plans, please provide information on the company match and indicate the average annual match per employee. Year Ending Average Actual Match per Employee $ 2012 $1,351.76 2013 $ 1,804.18 2014 $2,106.98 Three-year Average: $ 1,754.31 (Leepfrog matches 100% of employee's contribution up to 4% of gross wage) 6. Does the Business offer a profit-sharing plan? ❑ Yes ® No If yes, please indicate total amount paid out each year for the past three years and then, determine the average annual bonus or contribution ow emdovee for that three near period. Year Ending Average Actual Share per Employee $ Three-year Average: $ Notes. 1. A qualified plan must be offered to all full-time permanent employees. 2. If you have multiple health insurance plans, please provide information on each plan. ')r ()620iA SECTION G Attachments Please attach the following documents: Al Project Plan Overview of products now, and future products. Please provide an executive summary for your project. This information should include, at a minimum, expanded information about the company's products and services and any other project related information that has not already been described in the application for financial assistance. • We want to build up a dedicated R&D team rather than squeezing R&D out of existing staff. • We need to bring new products to market or we will be acquired by an out-of-state firm because our clients want integrated solutions from a small number of vendors. • We need to develop new products much faster (18 months) than we have in the past (36 months for CLSS) Leepfrog currently provides solutions for academic catalog production, curriculum management, and course scheduling. As with most industries, it is a time within higher education for accelerated deployment of technologies that reduce cost and provide enhanced end-user experiences. Our most recent product, CLSS, was created over a three-year timespan with collaboration from five development partners -- Yale, University of Alabama, Northwestern, Marquette, and Stanford. Two existing clients - Brown and Yale -- have indicated a need for a new product in a slightly different space, which we have code named ASOC. Both institutions are willing to pre -order the software to help fund its development. Additionally, both schools have indicated that they prefer a cloud -based solution. Based on feedback from other academic institutions, the product has broad appeal across the industry. Historically, Leepfrog has self-funded R&D and new product development, using existing cash flow to fund new products. The development of ASOC is required to be done in half the time that the development of CLSS tool -- eighteen months rather than three years. Looking forward at the next two projects after this, similar aggressive timeframes seem necessary for the market acceptance. This grant is being requested in order to broaden Leepfrog's Iowa -based R&D capacities to bring products to market faster, as well as mature Leepfrog's existing Iowa -based data center and software hosting platforms. As with the successful CLSS project, Leepfrog will hire dedicated staff for this new product line, allowing them to focus exclusively on bringing the product to market. This acceleration of timelines is seen throughout the academic data processing industry. Recently, Ellucian -- one of the two major ERP vendors -- halved all of their timelines in response to market pressure. We have seen a diminished time between introduction of a new feature and the copying of that feature within competitor's software. A dedicated R&D staff is critical to maintaining our significant lead in this space. Leepfrog's CourseLeaf products -- from the catalog through the scheduling -- have all been developed jointly with our clients. The new product allows Leepfrog to expand our presence at institutions to two other administrative departments, providing a path for future products and services to be jointly developed. Broadening product line is important. According to a Gartner Research study, academic CIOs prefer integrated solutions from a small number of vendors. It will be increasingly important that the breadth of product offering from a vendor be sufficient to provide a justification for an institution building a relationship with that vendor. Historically, some vendors in this space have achieved a broad portfolio through acquisition and consolidation; however, Leepfrog's unique client base, existing capabilities, and software framework provide a clear and attainable path to growing to provide an integrated suite of configurable, turn -key applications. Please note, a traditional business plan, including an executive summary, market analysis, organization and management structure, marketing and sales management, service and product line narrative, financial projections, feasibility study and patent status, as well as any other relevant information, may be requested by the Iowa Economic Development Authority to evaluate the feasibility of this project. SECTION H Certification & Release of Information 1. Are there any judgments or court actions completed or pending against the applicant entity, or any current or prospective officer, principal, director, or owner? ❑ Yes ® No 2. Has any current or prospective officer, principal, director, or owner been accused or convicted of any wrongdoing or crime, other than a simple misdemeanor? ❑ Yes ® No 3. Have there been any current or past bankruptcies on the part of the applicant entity (or predecessor entities), or on the part of any current (or prospective) officer, principal, owner or in any business dealings of current (or prospective) officers, principals, or owners of the applicant entity? ❑ Yes ® No 4. In the last five years have there been, or are there currently any investigations of potential violations of public health, safety (including workplace safety) or environmental laws by the applicant entity, or any current or prospective officer, principal, director, or owner? ❑ Yes ® No 5. In the last five years have there been, or are there currently any violations of antitrust laws by the applicant entity, or any current or prospective officer, principal, director, or owner? ❑ Yes ® No 6. If yes to any of the above, please provide additional explanation: I hereby give permission to the Iowa Economic Development Authority (IEDA) to research the Business' history, make credit checks, contact the Business' financial institutions, insurance carriers, and perform other related activities necessary for reasonable evaluation of this application. I also hereby authorize the Iowa Department of Revenue to provide to IEDA state tax information pertinent to the Business' state income tax, sales and use tax, and state tax credits claimed. I understand that all information submitted to IEDA related to this application is subject to Iowa's Open Record Law (Iowa Code, Chapter 22), unless specifically marked as confidential section. I understand that IEDA reserves the right to negotiate the financial assistance. I understand this application is subject to final approval by IEDA and the Project may not be initiated until final approval is secured. Furthermore, I am aware that funds will not be disbursed until a contract has been executed and the appropriate terms have been met. I hereby certify that all representations, warranties, or statements made or furnished to IEDA in connection with this application are true and correct in all material respect. 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 subdivision. For the Sponsor(s); Signature Date Printed Name Title IEDA 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 prior to discovery of the Incorrect, false, or misleading representation, IEDA may initiate legal action to recover Incentives and assistance awarded to the Business. SECTION H Certification & Release of Information 1, Are there any judgments or court actions completed or pending against the applicant entity, or any current or prospective officer, principal, director, or owner? ❑ Yes No 2. Has any current or prospective officer, principal, director, or owner been accused or convicted of any wrongdoing or crime, other than a simple misdemeanor? ❑ Yes Q No 3 Have there been any current or past bankruptcies on the part of the applicant entity (or predecessor entities), or on the part of any current (or prospective) officer, principal, owner or in any business dealings of current (or prospective) officers, principals, or owners of the applicant entity? ❑ Yes N No 4 In the last five years have there been, or are there currently any investigations of potential violations of public health, safety (including workplace safety) or environmental laws by the applicant entity, or any current or prospective officer, principal, director, or owner? ❑ Yes [D No 5, In the last five years have there been, or are there currently any violations of antitrust laws by the applicant entity, or any current or prospective officer, principal, director, or owner? ❑ Yes No 6 If yes to any of the above, please provide additional explanation: I hereby give permission to the Iowa Economic Development Authority (IEDA) to research the Business' history, make credit checks, contact the Business' financial institutions, insurance carriers, and perform other related activities necessary for reasonable evaluation of this application. I also hereby authorize the Iowa Department of Revenue to provide to IEDA state tax information pertinent to the Business' state income tax, sales and use tax, and state tax credits claimed. I understand that all information submitted to IEDA related to this application is subject to Iowa's Open Record Law (Iowa Code, Chapter 22), unless specifically marked as confidential section. I understand that IEDA reserves the right to negotiate the financial assistance. I understand this application is subject to final approval by IEDA and the Project may not be initiated until final approval is secured. Furthermore, I am aware that funds will not be disbursed until a contract has been executed and the appropriate terms have been mel, I hereby certify that all representations, warranties, or statements made or furnished to IEDA in connection with this application are true and correct in all material respect. 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 subdivision. For the Business: Signature For the Sponsor(s): i 7 Date Signature Date~ Frederick Zawojewski, Director of Operations Name and Title (typed or printed) IEDA 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 prior to discovery of the incorrect, false, or misleading representation, IEDA may initiate legal action to recover incentives and assistance awarded to the Business. A2 Payroll Information (Confidential) • Copies of the Business' Quarterly Iowa Employer's Contribution and Payroll Report for the past year. This report should include the monthly employment totals. • A copy of the most recent payroll report for one pay period. The copy of the most recent payroll report for one pay period must be in Excel format and include the following information: o Company name, date of payroll and source of payroll information o Employee name and/or employee identification number Q Current hourly wage - do not include bonuses or other benefit values o Indicate if the employee is full time (40 hours per week, 52 weeks per year) or part time. o A sample Excel spreadsheet can be found at htti):/tiowaeconomicdevelopment.com/BusinessDev/application A3 Affidavit that states the Business has not, within the last five years, violated state or federal statutes, rules, and regulations, including environmental, worker safety regulations and antitrust laws, or, if such violations have occurred, that there were mitigating circumstances or such violations did not seriously affect public health or safety or the environment. A sample affidavit can be found at htti)://iowaeconomicdevelopment.com/BusinessDev/application A4 Financial Information (Confidential, unless already publicly available) (Existing Businesses Only) • Profit and loss statements and balance sheets for past three year -ends; • Current YTD profit and loss statement and balance sheet; • Schedule of aged accounts receivable; • Schedule of aged accounts payable; and • Schedule of other debts. A5 Collateral documentation (If requesting direct financial assistance only) A6 Brownfield or Grayfield site documentation (if applicable) Attachment A3 Affidavit State of Iowa County of Johnson I, Frederick Zawojewski, depose and say that I have examined the following statement and have found it to the best of my knowledge to be accurate and true. Leepfrog Technologies, Inc. has not, within the last five years, violated state or federal statutes, rules, and regulations, including environmental and worker safety regulations, or, if such violations have occurred, that there were mitigating circumstances or such violations did not seriously affect public health or safety or the environment. I have submitted a report detailing the circumstances of all such violations to the Economic Development Authority and such report represents a full and complete description of such circumstances. I hereby certify that the information presented to the Iowa Economic Development Authority on February 24, 2015 is fully complete, true, and correct. 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 subdivision, as provided in Iowa Code section 15A.3 and other applicable law. Furthermore, I understand that providing false, misleading, or fraudulent information to the Board may result in civil and/or criminal liabilities and penalties against the Recipient and its representatives. I further depose that the signature below is my own proper signature. Dated: 2/24/15 S� 'a U Subscribed and sworn to before me on this day of;;2012 �d VICTORIA V MERKLE c (Notary Public)CanmuSim Number 787303 • r ti :"'.'.' County , °w MyC9rP!Arssign�Expires My commission expires on i 7;18(12 Date: December 12.2DI3 To; Tom Markus, City Manager From; Jeff Davidson, Planning and Community Dievetopmertt Director Re'. ConnectFlve Podocaetion tatter, December 17, 2043 Court NWAV Connect We, a umbfifty, straiM and design firm based in Iowa City at 1210 Hwy S Vii., Suite 440 in taws Cly has bean trwMng and is seeking bigger cffice spore. Histofi9►J�nktrotxnd Economk Development staff from the City of Iowa City has boort worlift wilt Corms +e to find office space in laws City. Staff has been working with the firm for the past 0 months to MW a span of 5,000-7,000 square feet that could be bulli out to suit their needs. However, hone of the mulbpte locations viewed have been suitable. 9NWAMMhOn Of Soiattoh rs Connecifte has deWw*W Were Is a space in Commits that Wit meat #v* sp ioa . The City of ComMite is not prom financial incentTv�es for the rte. ftwever, the owner of the builder into which the firm win be moving 19 ..provkling, Incentives for them move. Vdit CameWWO may be relocating to Commits. #" are a gn wrirhg company and ffM in the futre relocate back to Iowa City. Iowa_ City Chas asked the City of Commits to awrove any future reboallon tusk to intoe City. CvtuhecOis YAN be seeking financial assistance from the We Econhohnic Development Authority (IES High Quality Jobs Program to enpand their operatiordk If a lirm relocafts into another city while seeking assistance, IEDA requires a Teter from the city in vwh** the firm is cun+a * based staling they apprrove of the relocation. phue ud lowel: V*je there is no direct financial cost to the city to write the approval later, there is potential lost Income to the building owner because the firm is movkV out of loom City. Is add cif% Connect=ive employees would have been spending money in Iowa City If they would have rued to another Iowa City Location. Reoonnhmenon Stat recommends the City Council pass a resolution authoriike the City Manager to submit a letter to the Iowa Ezonomlc Development Authority approving the relocation of Cennecrive to CDraty kit. The City of CoraNille has indicated they will provide a leer stag they► will not mspoee Con nectFlve Coming back to Iowa City in the future. Construction of ofiiCe space In lowe City that to suitable for these types of stertup businesses should be encouraged. Cit; Steve Long, CommunityDevelopment Coordinator VV r Foal, Economic Development Coordinator Prepared by: Jeff Davidson. Planning and Co mminNy DevebpmeM oireda, 410 E. WoOngton St., low®Clly, !A 52240 (318) :9W45280 RESOLUTION NO. I3-353 RESOLUTION FOR SUBMITTAL OF A LETTER TO THE IOWA ECONORVC tDg1i E OPiMdENT AUTHORf TY APPROVING THE RELOCAYM OF CO NNECTFIVE TO CORALVILLE, IOWA WHEREAS, ConnectFive Is a usability, strategy and design firm based In Iowa City at 121`0 Hwy 6 W, Suite 400 Iowa Citi, Iowa; and WHEREAS, ConnectFive has applied for financial assistance from the High Quality Jobs. Progrem et the lowe Economic Development:Authorlty (IEDA); and WHEREAS, as explained in the letter attached hereto, CorknedFive has decided to move Its operations to the: University of lows Research Path in Corgdvili Ie, Iowa; and V#IHena, in order to qualify for assistance from the IF. DA Coilne Wive must provide a letter fr m the City of Iowa City, as the city In which ConnsctFive is currenlly.located, stating that Iowa City does not object to the move from Iowa City to Corelvdlle; and WHEREAS, the City of Iowa City wishes to help Connec#Fhre find suitable office space and assist them in quaiifping for financial assistants from the IEDA; and WHEREAS, ConnedFive may in the future consider moving back to Iowa City and the City of Cvralville has agreed to provide a letter to the City of Iowa City stadng that Coralville will not. object to a move by ConnectFive back to Iowa City In the future. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, THAT: 1. The City of Iowa City does not at4ect to the relocadort of ConneclFive to Coraly lls as described In the attached letter. 2. Upon recelpt of a letter fritm the City of Corelville stating that Coralvik Will approve any future CwmeOFtve rebcetion beck to lewe City, the City Manager of Iowa City is hereby auitiorid.:ta sign a Isttar app.rgvk V the reftation of ConnectFive operations to the Univerefty of lowra ,Research Park In Coralvills, Iowa. Passed and approved this 174` day of Decembeit, 2013. MAYOR ATTEST: 1E . i >'t • ~ CITY'CLERK City Attorney's Office jr December 16, 2013 CITY OF IOWA CITY 410 East Washlaaton Street Debbi V. Durham, Director Iowa city, Iowa 32240-1326 Iowa Economic Development Authority (3 I9) 356 -soon (319) 356-3009 FAX 200 East Grand wwwAgov.ora Des Moines, IA 50309 Re: Relocation of ConnectFlve Dear Director Durham: The City of Iowa City has been notified by ConnectFive of its Intentions to relocate from leased space at 1210 Highway 6 West, Suite 400 In Iowa City to leased space located In Coralville, Iowa. Company representatives indicate they desire to lease 5000-7000 square feet of office space on a single continuous floor plate. Company representatives indicated they evaluated several buildings within Iowa City, but were unable to find a location that fits within their desired offioe parameters. The company has indicated it may make an application to the Iowa Economic Development Authority High Quality Jobs program for financial assistance, and has requested the City of Iowa City to provide a letter that it will not object to such application. I hereby state that we do not object to such an application. While disappointed that the company was unable to find a suitable location within Iowa City, we hope to be part of this growing company's future plans. The City of CoralWle has indicated they will provide a letter stating they will not oppose ConnectFive relocating back to Iowa City in the future. Sincerely, Thomas M. Markus City Manager cc: Kelly Hayworth, City Manager, City of Coralville December 12, 2013 Mr. Tom Markus City Mariner City of Iowa City 410 R Walton SL Iowa City, Iowa 52240 RE: Conned Five rp-7PIT4 ! I am following upon our conversation about Connect Five, Connect Five ho aid a desire to lease apace in the University of Iowa Rose" Park and Inas scwiht Stats of Iowa Assistance for their relocation. The City of Coniville will not be provk1iiing any assistamec for the move to the ww location,. Tic City of Coralville cues not. have an issue with Caumd Five moving back to Iowan City in the future ifdwy should decide to do so. Siincerely$ Kelly J. a yvwo CityAdudntwator cc Meek Nolte Jim Pause# Connect Lx:rCxperionce Stray ovail t l'sat:stily Matrk:s u,. Tout Markus, City Mang and City Cmwfl of bra City Fro= Sean f1 CKAX ft"it* COMWdFive Mu Markus and Metrtbers tat° the City CouW % ft r t{it past saveraf ruoattts we have been engaged in a ditigent search for oW" spear b rm" our quickly expawws sofWam busLwm We hawse worw d W& City of lom Cita► staff; ICAD Coup, Ve Iowa City Downtown D3etrict and other real oute P"MIOMk IM #aur and CVWU- . aft a varkty of apaat Options. unfortunately we were not to id mv&' y an avatiabk ofFtoe spoor drat meet our mads o€ betw een S.000.7AW squm €eableet wit# an opals floor plum at a tentt l rate tlutt our young mapuW tbtdd tach flow whin the My of Iowa City. Woo have sub w gently brei} able to Eby a Wsm dist met RU of our tw@& On llte UdwnWtY Of 10" Rema ch Park and have negWaled prAWnary lease tmm Tb aomm mdale this inmv9e and help asda our ompany gamer the Iowa P.com ak Dwv+xlapmetwt Autitcrlty is coidetmg provming ilrtancki asslstam to our ompany at thekboatd mee tg cm Dwelt 201h. pwsm* to Iowa Ceder we are salable to qualify for this amblum wldmt submitting to the state a w dtwn wttm dist you am not In OblecWn to lids move. VW wouid hire to plop W aasnre um dist at no pow wvem any offers of ftaancfai saskbiaae by the City of C ondvilk mule to ettc =age "move. This relocation derision is rxd based an any dduutirting facsm Other than the av*&WHty of mduble ofce spm 6ca our ooempany We oertainiy appedak all of the mistame pmvlded by city staf. We kk s;tp xdW area encouraged the the process. I hopes that you can understand the situation we am In mW fire need to der what is bast for our +may. To fids end, W* tespectfuiiy request writhm nMft- cation tndkadrW you are riot in objection to our move subtitled Ina WHer to Debt Durham, t kedor of the Iowa Eco r Der Attdunity. Debi V. Durham, Director Iowa Economic Developn3enl Abffhority Business Financlial Assistance AppliGatioll Blusiness ;:�Incal"iCe - Business (Develop en Division >= V':'a 'co nniric Development 1`i lopment uthor ity ;:'Cis? Las! Avenue De,,, it/�oines, low a ` 0300-1319 \iV?I4"v'1.t(iV1�-?G:'!)rlCjytllG'Cl!'JE'.It,r7I`Y:f Y1t.C:(}iYi T(-.flq}doll,;' 515,7!55.31. 4 Email: i)U ililESS'1(1%ar1Ct{():iQNtc1,QCV Application Instructions To Complete Electronic Form: Click on TEXT BOX to add text. Double click on YES/NO boxes and select "Checked" 1. All applicants must complete the Business Financial Assistance Application and attach only those additional sections for the components to which the applicant is applying. STATE of IOWA — Financial Assistance Program High Quality Jobs Program (HQJP) ® Tax Credits ❑ Direct Financial Assistance 2. Before filling out this application form, please read all applicable sections of the Iowa Code and Iowa Administrative Code (rules). www. leg is. state.ia.us/Iowa Law. htm1 3. Only typed or computer-generated applications will be accepted and reviewed. Any material change to the format, questions, or wording of questions presented in this application will render the application invalid and it will not be accepted. 4. Complete the applicable sections of the application fully. If questions are left unanswered or required attachments are not submitted, an explanation must be included. 5. Use clear and concise language. Attachments should only be used when requested or as supporting documentation. 6. Any inaccurate information of a significant nature may disqualify the application from consideration. 7. The following must be submitted to Business Finance at IEDA in order to initiate the review process: • One original, signed application form and all required attachments • One electronic copy of the application form and all required attachments Facsimile copies will not be accepted. Applications must be submitted to IEDA Business Finance before 4:00pm on the fourth Monday of the month. Applications will be reviewed by the IEDA Board on the third Friday of the following month. Public Records Policies During the application process, the information submitted by you to IEDA is exempt from disclosure under the "industrial prospects" exemption found in Section 22.7(8). However, once you receive an award, the industrial prospects exemption no longer applies and all documents submitted and generated during the application and negotiation process become public records under Iowa's Open Records Law (Iowa Code, Chapter 22), unless 1) The information belongs to one of the classes of records automatically treated as confidential; or 2) You have applied for and received written notice that your information will be treated as confidential. Automatically Confidential Records IEDA automatically treats the following records as confidential and will withhold them from public inspection even without a request for confidential treatment: Tax Records and Tax Liability Information • Quarterly Iowa Employer's Contribution and Payroll Report prepared for the Iowa Workforce Development Department • Payroll Registers • Business Financial Statements and Projections (unless those statements are already publicly available elsewhere, e.g., 10-K filings) • Personal Financial Statements Exemptions to the Open Records Law If you wish to have additional information treated as confidential, you must fill out the confidential treatment request form. Under the Open Records Law, IEDA may lawfully treat certain information as confidential if that information falls within an exemption to the Open Records Law. The following exemptions represent records which may lawfully be treated as confidential under the Open Records law and which are most often applicable to the information submitted to IEDA: • Release of information would give an unfair advantage to competitors — Iowa Code Sec. 15.118 • Trade secrets — See Iowa Code section 22.7(3), see also Iowa Code Ch. 550 • Information on an industrial prospect with which the IEDA is currently negotiating — See Iowa Code section 22.7(8) • Communications not required by law, rule or regulation made to IEDA by persons outside the government to the extent that IEDA could reasonably believe that those persons would be discouraged from making them to IEDA if they were made available for general public examination — Iowa Code section 22.7(18) Non -Confidential Information Information that is submitted to IEDA as part of the application process or that is contained in a contract for program benefits is generally considered material to the eligibility requirements of the program or to the amount of incentives or assistance to be provided. Such information is generally not given confidential treatment. Such information includes but is not limited to, the number and type of jobs incented, the wage levels for the incented jobs, your company's employee benefit information, and your project budget. Additional Information Available. Copies of Iowa's Open Record law and IEDA's administrative rules relating to public records are available from the IEDA upon request. SECTION A Applicant Information Date Application Submitted: 2/5/15 1. Name of Business: Leepfrog Technologies, Inc. 2. Entity Name (for contracting purposes): 3. Address: 2105 ACT Circle 4. City, State & Zip Code: Iowa City IA 52245 5. Contact Person: Deb Walton Title: Human Resources Manager 6. Phone: 319-337-3877 Fax: Email: dwalton@leepfrog.com 7. FEIN: 42-1442334 8. NAICS Code for primary business operations: 541511 9. US DOT Number: 10. Does the Business file a consolidated tax return under a different tax ID number? ❑ Yes (If yes, please also provide that tax ID number) ® No a. Is the contact person listed above authorized to obligate the Business? ❑ Yes ®No If no, please provide the name and title of a company officer authorized to obligate the Business: 1) Wes Bachman, Director of IT and owner 2) Frederick Zawojewski, Operations Director and owner 3) Lee Brintle, CEO/President and owner 11. If the application was prepared by someone other than the contact person listed above, please complete the following: Name of Business: Proxymity, Attn: Jason Jones Clifton Larson Allen, Attn: Mark Wyzgowski Address: 400 Locust Street, Suite 220 5550 Wild Rose Lane, Suite 300 City, State & Zip Code: Des Moines IA 50309 West Des Moines IA 50266 Contact Person: Title: Phone: Proxymity=(515)202-4806 CLA=(515)222-4400 Fax: Email: ijones@proxymity.com mark.wyzgowskiC&CLAconnect.com Sponsor Information (A sponsor organization is a city or county) 12. Sponsor Organization: City of Coralville 13, Official Contact (e.g. Mayor, Chairperson, etc.): Kelly Hayworth Title: City Administrator 14. Address: 1512 7'h Street, PO Box 5127 15. City, State & Zip Code: Coralville IA 52241 16. Phone: 319-248-1700 Fax: 319-248-1894 Email: khayworth(a)ci.coralville.ia.us • Sponsor Organization: Iowa City Area Development (ICAD) • Official Contact (e.g. Mayor, Chairperson, etc.): Mark Nolte Title: President & Bus Dev Director • Address: 316 E Court Street • City, State& Zip Code: Iowa City IA 52240 • Phone: 319-354-3939 Fax: 888-722-5603 Email: mnolte(cDicadgroup.com 17. If IEDA needs to contact the sponsor organization with questions, should we contact the person listed above? ® Yes ❑ No, please contact the following person: Name: Title: Address: City, State & Zip Code, Phone: Fax: Email: If necessary, please list information on additional sponsors in an attachment. SECTION B Business Information 1. Provide a brief description and history of the Business. Include information about the Business' products or services and its markets and/or customers. Leepfrog Technologies got its start in 1994 as a group of passionate people excited about providing innovative web solutions for its clients. Combining the strengths of customized and turn -key software, we provide our clients with a 100% web solution on a competitive timeline. While technology continues to change, our dedication to crafting quality products and services remains consistent. Leepfrog Technologies' CourseLeaf software is used by over one hundred of the nation's most academically complex universities and colleges to manage their online academic catalogs and curriculum processes. 2. Business Structure: El Cooperative ❑ Corporation ❑ Limited Liability Company ❑ Partnership ® S -Corporation ❑ Sole Proprietorship 3. State of Incorporation: Iowa 4. Identify the Business' owners and percent ownership: Lee Brintle 75%, Wes Bachman 12.5%, Frederick Zawojewski 12.5% 5. Does a woman, minority, or person with a disability own the Business? ❑ Yes ® No 6. List the Business' Iowa locations and the most current number of employees at each location. 2105 ACT Circle, Iowa City IA 52245 (14 employees), 2300 Oakdale Blvd, Coralville IA 52241 (33 employees) 7. What is the Business' worldwide employment? (Please include employees of parent company, subsidiaries, and other affiliated entities in this figure.) 56 Project Information 8. Project Street Address: Lot 11, U of I Research Park, Oakdale Blvd Project City & Zip Code: Coralville, IA 52241 Project County: Johnson 9. Type of Business Project: ❑ Startup ® Expansion of Iowa Company ® New Location in Iowa 10. Does the project site qualify as a "Brownfield" or "Grayfield" site? ❑ Yes ® No If yes, please explain and document as Attachment A6. n/a 11. Describe the proposed project for which assistance is being sought. (Include project timeline with dates, facility size, infrastructure improvements, proposed products/services, any new markets, etc.) The expansion and relocation project will consist of leasing approximately 16,500 to 20,000 square feet in a new office building in the University of Iowa Research Park in order to house the current and future employees. 12. Project Timeline add additional rows as needed Beginning Activity Date Activity Completion Date Design new office building January 2015 May 2015 Build new office building Aril 2015 January 2016 13. Has any part of the project started*? ❑ Yes ® No If yes, please explain. * For IEDA's purposes, starting the project includes: the start of construction or rehabilitation, the purchase of a building, the execution of a lease, or the Installation of equipment to be used in the project. 14. Identify the Business' competitors. If any of these competitors have Iowa locations, please explain the nature of the competition (e.g. competitive business segment, estimated market share, etc.) and explain what impact the proposed project may have on the Iowa competitor. None of Leepfrog's competitors are headquartered in Iowa, but they have sales forces responsible for the state of Iowa and sell into the state. Our main competitors are: DigArc — based out of Lakeland Florida, Smart Catalog - r✓': headquartered in Portland ME, and CurricUNET is located in Idaho Falls, ID. In terms of the number of clients held in this market, Leepfrog is #2. 15. Will any of the current Iowa employees lose their jobs if this project does not proceed? ❑ Yes ® No If yes, please explain why and identify those jobs as "retained jobs" in the Project Jobs Section E. 16. Is the Business actively considering locations outside of Iowa? ❑ Yes ® No If yes, where and what assistance is being offered? 17. Please identify the company project management for the project location and experience. Proxymity SECTION C Applicant's Project Budget 1. Does the Business plan to lease the facility? ® Yes ❑ No If yes, please provide the Annual Base Rent Payment (lease payment minus property taxes, insurance, and operating/maintenance expenses) for three years in the budget below, and only major renovation costs your company expects to incur. Administrative rules require that the lease be in place for a minimum of five years. 2. Please complete the budget below. Include only costs the company plans to incur directly: Use of Funds Cost Source A Source B Source C Source D Source E Source F Base Rent 3 ears 636,075 Tenant Improvements 907,500 495,000 Land Acquisition Source A: IEDA see #4 below Site Preparation Building Acquisition Source B: Local Government Building Construction Loan or Grant Building Remodeling Source C: Business Mfg. Machiner & Equip. Other Machinery & Equip. Source D: Other Source Racking, Shelving, etc.' Computer Hardware Source E: Other Source Computer Software Furniture & Fixtures 200,000 Working Capital Research & Development 100,000 Other I TOTAL $1,843,575 $ $495,000 $ $ $ $ - Raddny, sneiving ana conveyor equipment usea in aistnouuon center protects only 3. Please complete the chart below with proposed financing for the project (tax benefits should be reflected as indirect finnneinn i inrlpr #.r, hpltNuh PROPOSED FINANCING Source of Funds Amount Form of Funds Conditions/Additional Information Rate and Commitment include when funds will be Term Status disbursed; If loan, whether payments are a level tern, balloon, etc Add additional lines as needed (Loan, Grant, In- Kind, Donation, etc.) Source A: IEDA see #4 below $ Source B: Local Government $495,000 Loan or Grant Unknown Pending Fall 2015 Source C: Business $ Source D: Other Source $ Source E: Other Source $ Source F: Other Source $ TOTAL $ 4. Direct financial assistance (loans/forgivable loans) must be secured with acceptable collateral. Please select the type of collateral your company will pledge to secure the IEDA financing, and document its value in Attachment A5. Explain: No collateral, funding disbursed at the end of the 5 -year contract Irrevocable letter of credit Dedicated certificate of deposit CD Surety bond Mortgage on real estate Corporate guaranty Personal guarantee The IEDA Board has the final discretion on what collateral will be accepted. 5. Please complete the chart below with tax credits and other indirect financing expected for the project: TAX CREDITS AND INDIRECT FINANCING Source of Funds Amount Description Investment Tax Credit Unknown at this time Sales Service & Use Tax Refund 35,000 Estimate by preparer Research Activities Credit 3%/10% 10,000 Estimate by preparer Local Propertv Tax Exemption Tax Increment Financing 260E Job Training Funds In-kind Contribution Other TOTAL $45,000 6. There are three justifiable reasons for providing assistance. Check the box next to the reason why assistance is needed to complete this project. ® Financing Gap A gap exists between the financing required and the financing on -hand and the provision of tax incentives or assistance is necessary to fill the gap. ❑ Rate of Return Gap —The likely returns of the project are inadequate to motivate a company decision maker to proceed with the project even if sufficient debt or equity can be raised to finance the project, and the project's risks outweigh its rewards, making the provision of tax incentives or assistance necessary to reduce the project's risks. ❑ Location Disadvantage (incentive) —The business is deciding between a site in Iowa ("Iowa site") and a site in another state ("out-of-state site') for its project and the cost of completing the project at the out-of-state site is demonstrably lower, making tax incentives or assistance necessary to equalize the cost differential between the two sites. Note: The authority will attempt to quantify the cost differential between the sites. 7. Please provide a brief explanation of the need for assistance. Incentives would provide funds to accelerate current and new product development which would then drive additional employment, revenue and profits, and thus addition payroll and income taxes. SECTION D Employee Benefits There are three options to meeting the sufficient benefit requirement. These options are detailed in the chart below. Please complete questions 1-3. If your company meets Option 1 or 2, no additional information is required If you would like to utilize Option 3, please also complete questions 4-6. 1. How many full-time, permanent employees does your company currently employ within the State of Iowa? 47 2. What is the total premium cost for a standard medical plan for single employee coverage? $465.96/month a. What portion of this cost is paid by the business? 99.8% b. What is the deductible associated with this plan? $ 500.00 3. What is the total premium cost for a standard medical plan for family coverage? $ 1,430.03/month a. What portion of this cost is paid by the business? 70% b. What is the deductible associated with this plan? $ 1,000 *** Employees who are covered under another health insurance plan are reimbursed $350/month. No additional information required in this section if your company meets the requirement for Option 1 or Option 2 4. Does your company provide additional benefits to full time employees? ®Yes ❑No If ..nc niaaca nrnv4ia tha annual amniint nffered by the business. Der emDlovee in the chart below: Benefit Option 1 Option 2 Option 3 Dental Insurance — Family Ian 80% single Coverage 506/o Family coverage Monetary Equivalent Total Number of Pay 80% of premium costs Pay 50% of premium costs for Provide medical and pay the Employees in for a standard medical plan, a standard medical plan, monetary equivalent of Option Iowa single coverage. family coverage. 1 or Option 2 in supplemental employee benefits. Benefits Counted Toward Monetary Equivalent: Medical coverage, Dental coverage, 250+ $750 maximum deductible $1,500 maximum deductible 50-249 $1250 maximum deductible $2500 maximum deductible 0-50 $1750 maximum deductible $3500 Maximum deductible Vision insurance, Life insurance, Pension, 401(k) (company's Average contribution, Short /song -term disability insurance, Child care services, Other nonwage compensation 1. How many full-time, permanent employees does your company currently employ within the State of Iowa? 47 2. What is the total premium cost for a standard medical plan for single employee coverage? $465.96/month a. What portion of this cost is paid by the business? 99.8% b. What is the deductible associated with this plan? $ 500.00 3. What is the total premium cost for a standard medical plan for family coverage? $ 1,430.03/month a. What portion of this cost is paid by the business? 70% b. What is the deductible associated with this plan? $ 1,000 *** Employees who are covered under another health insurance plan are reimbursed $350/month. No additional information required in this section if your company meets the requirement for Option 1 or Option 2 4. Does your company provide additional benefits to full time employees? ®Yes ❑No If ..nc niaaca nrnv4ia tha annual amniint nffered by the business. Der emDlovee in the chart below: Benefit Annual amount paid by the business e em to ee : Dental Insurance —Single lan $ 403.92 Dental Insurance — Family Ian $ 993.60 Pension Use 3 -year average calculated below $ 0.00 Retirement Plan - i.e. 401 k Use 3 -year acalculated below $ 1,754.31 Profit Sharia Plan Use 3 -year average calculated below $ 0.00 Childcare Services $ 0.00 Supplemental Life Insurance coverage $ 22.43 Disability & Life Insurance coverage $ 571.59 Health Savings Account HSA contribution $120.00 TOTAL $ 3,865.85 5. Does the Business offer a pension plan, 401(k) plan, and/or retirement -plan? ® Yes ❑ No If yes, please indicate the amount contributed on a per employee basis by the Business to the plan for the last three years. For 401(k) plans, please provide information on the company match and indicate the average annual match per employee. Year Ending Average Actual Match per Employee $ 2012 $1,351.76 2013 $ 1,804.18 2014 $2,106.98 Three-year Average: $11754.31 (Leepfrog matches 100% of employee's contribution up to 4% of gross wage) 6. Does the Business offer a profit-sharing plan? ❑ Yes ® No If yes, please indicate total amount paid out each year for the past three years and then, determine the average annual bonus or contribution per emolovee for that three year period. Year Ending Average Actual Share per Employee $ Three-year Avera e: $ Notes: 1. A qualified plan must be offered to all full-time permanent employees. 2. if you have multiple health insurance plans, please provide information on each plan. Nin, ra; �,,.,r,t:�� �. �.�.!I� tit `i <,� 06 201 SECTION G Attachments Please attach the following documents: Al Project Plan Overview of products now, and future products. Please provide an executive summary for your project. This information should include, at a minimum, expanded information about the company's products and services and any other project related information that has not already been described in the application for financial assistance. • We want to build up a dedicated R&D team rather than squeezing R&D out of existing staff. • We need to bring new products to market or we will be acquired by an out-of-state firm because our clients want integrated solutions from a small number of vendors. • We need to develop new products much faster (18 months) than we have in the past (36 months for CLSS) Leepfrog currently provides solutions for academic catalog production, curriculum management, and course scheduling. As with most industries, it is a time within higher education for accelerated deployment of technologies that reduce cost and provide enhanced end-user experiences. Our most recent product, CLSS, was created over a three-year timespan with collaboration from five development partners -- Yale, University of Alabama, Northwestern, Marquette, and Stanford. Two existing clients -- Brown and Yale -- have indicated a need for a new product in a slightly different space, which we have code named ASOC. Both institutions are willing to pre -order the software to help fund its development. Additionally, both schools have indicated that they prefer a cloud -based solution. Based on feedback from other academic institutions, the product has broad appeal across the industry. Historically, Leepfrog has self-funded R&D and new product development, using existing cash flow to fund new products. The development of ASOC is required to be done in half the time that the development of CLSS tool -- eighteen months rather than three years. Looking forward at the next two projects after this, similar aggressive timeframes seem necessary for the market acceptance. This grant is being requested in order to broaden Leepfrog's Iowa -based R&D capacities to bring products to market faster, as well as mature Leepfrog's existing Iowa -based data center and software hosting platforms. As with the successful CLSS project, Leepfrog will hire dedicated staff for this new product line, allowing them to focus exclusively on bringing the product to market. This acceleration of timelines is seen throughout the academic data processing industry. Recently, Ellucian -- one of the two major ERP vendors -- halved all of their timelines in response to market pressure. We have seen a diminished time between introduction of a new feature and the copying of that feature within competitor's software. A dedicated R&D staff is critical to maintaining our significant lead in this space. Leepfrog's CourseLeaf products -- from the catalog through the scheduling -- have all been developed jointly with our clients. The new product allows Leepfrog to expand our presence at institutions to two other administrative departments, providing a path for future products and services to be jointly developed. Broadening product line is important. According to a Gartner Research study, academic CIOs prefer integrated solutions from a small number of vendors. It will be increasingly important that the breadth of product offering from a vendor be sufficient to provide a justification for an institution building a relationship with that vendor. Historically, some vendors in this space have achieved a broad portfolio through acquisition and consolidation; however, Leepfrog's unique client base, existing capabilities, and software framework provide a clear and attainable path to growing to provide an integrated suite of configurable, turn -key applications. Please note, a traditional business plan, including an executive summary, market analysis, organization and management structure, marketing and sales management, service and product line narrative, financial projections, feasibility study and patent status, as well as any other relevant information, may be requested by the Iowa Economic Development Authority to evaluate the feasibility of this project. SECTION H Certification & Release of Information 1. Are there any judgments or court actions completed or pending against the applicant entity, or any current or prospective officer, principal, director, or owner? ❑ Yes ® No 2. Has any current or prospective officer, principal, director, or owner been accused or convicted of any wrongdoing or crime, other than a simple misdemeanor? ❑ Yes ® No 3. Have there been any current or past bankruptcies on the part of the applicant entity (or predecessor entities), or on the part of any current (or prospective) officer, principal, owner or in any business dealings of current (or prospective) officers, principals, or owners of the applicant entity? ❑ Yes ® No 4. In the last five years have there been, or are there currently any investigations of potential violations of public health, safety (including workplace safety) or environmental laws by the applicant entity, or any current or prospective officer, principal, director, or owner? ❑ Yes ® No 5. In the last five years have there been, or are there currently any violations of antitrust laws by the applicant entity, or any current or prospective officer, principal, director, or owner? ❑ Yes ® No 6. If yes to any of the above, please provide additional explanation I hereby give permission to the Iowa Economic Development Authority (IEDA) to research the Business' history, make credit checks, contact the Business' financial institutions, insurance carriers, and perform other related activities necessary for reasonable evaluation of this application. I also hereby authorize the Iowa Department of Revenue to provide to IEDA state tax information pertinent to the Business' state income tax, sales and use tax, and state tax credits claimed. I understand that all information submitted to IEDA related to this application is subject to Iowa's Open Record Law (Iowa Code, Chapter 22), unless specifically marked as confidential section. I understand that IEDA reserves the right to negotiate the financial assistance. I understand this application is subject to final approval by IEDA and the Project may not be initiated until final approval is secured. Furthermore, I am aware that funds will not be disbursed until a contract has been executed and the appropriate terms have been met. I hereby certify that all representations, warranties, or statements made or furnished to IEDA in connection with this application are true and correct in all material respect. 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 subdivision. For the Sponsor(sl: Signature Printed Name Date Title IEDA 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 prior to discovery of the incorrect, false, or misleading representation, IEDA may initiate legal action to recover incentives and assistance awarded to the Business. �'" F 0.'')"it SECTION H Certification & Release of Information 1, Are there any judgments or court actions completed or pending against the applicant entity, or any current or prospective officer, principal, director, or owner? ❑ Yes No 2. Has any current or prospective officer, principal, director, or owner been accused or convicted of any wrongdoing or crime. other than a simple misdemeanor? ❑ Yes © No 3 Have there been any current or past bankruptcies on the part of the applicant entity (or predecessor entities), or on the part of any current (or prospective) officer, principal, owner or in any business dealings of current (or prospective) officers, principals, or owners of the applicant entity? ❑ Yes E No 4 In the last five years have there been, or are there currently any investigations of potential violations of public health, safety (including workplace safety) or environmental, laws by the applicant entity, or any current or prospective officer, principal, director, or owner? ❑ Yes yam' No 5. In the last five years have there been, or are there currently any violations of antitrust laws by the applicant entity, or any current or prospective officer, principal, director, or owner? ❑ Yes No 6 If yes to any of the above, please provide additional explanation: I hereby give permission to the Iowa Economic Development Authority (IEDA) to research the Business' history, make credit checks, contact the Business' financial institutions, insurance carriers, and perform other related activities necessary for reasonable evaluation of this application. I also hereby authorize the Iowa Department of Revenue to provide to IEDA state tax information pertinent to the Business' state income tax, sales and use tax, and slate tax credits claimed. I understand that all information submitted to IEDA related to this application is subject to Iowa's Open Record Law (Iowa Code. Chapter 22), unless specifically marked as confidential section. I understand that IEDA reserves the right to negotiate the financial assistance. I understand this application is subject to final approval by IEDA and the Project may not be initiated until final approval. is secured: Fwthermore, I am aware that funds will not be disbursed until a contract has been executed and the appropriate terms have been met. I hereby certify that all representations, warranties, or statements made or furnished to IEDA in connection with this application are true and correct in all material respect, 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 subdivision. For the Business: For the Sponsor(s): Signature Date Frederick Zawojewski, Director of Operations } Signature Date Name and Title (typed or printed) IEDA 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 prior to discovery of the incorrect, false, or misleading representation, IEDA may initiate legal action to recover incentives and assistance awarded to the Business. A2 Payroll Information (Confidential) • Copies of the Business' Quarterly Iowa Employer's Contribution and Payroll Report for the past year. This report should include the monthly employment totals. • A copy of the most recent payroll report for one pay period. The copy of the most recent payroll report for one pay period must be in Excel format and include the following information: o Company name, date of payroll and source of payroll information o Employee name and/or employee identification number o Current hourly wage - do not include bonuses or other benefit values o Indicate if the employee is full time (40 hours per week, 52 weeks per year) or part time. o A sample Excel spreadsheet can be found at htto:/Iiowaeconomicdevelopment.com/BusinessDev/application A3 Affidavit that states the Business has not, within the last five years, violated state or federal statutes, rules, and regulations, including environmental, worker safety regulations and antitrust laws, or, if such violations have occurred, that there were mitigating circumstances or such violations did not seriously affect public health or safety or the environment. A sample affidavit can be found at htti)://iowaeconomicdevelopment.com/BusinessDev/application A4 Financial Information (Confidential, unless already publicly available) (Existing Businesses Only) • Profit and loss statements and balance sheets for past three year -ends; • Current YTD profit and loss statement and balance sheet; • Schedule of aged accounts receivable; • Schedule of aged accounts payable; and • Schedule of other debts. A5 Collateral documentation (If requesting direct financial assistance only) A6 Brownfield or Grayfield site documentation (if applicable) Attachment A3 Affidavit Slate of Iowa County of Johnson I, Frederick Zawojewski, depose and say that I have examined the following statement and have found it to the best of my knowledge to be accurate and true. Leepfrog Technologies, Inc. has not, within the last five years, violated state or federal statutes, rules, and regulations, including environmental and worker safety regulations, or, if such violations have occurred, that there were mitigating circumstances or such violations did not seriously affect public health or safety or the environment. I have submitted a report detailing the circumstances of all such violations to the Economic Development Authority and such report represents a full and complete description of such circumstances. I hereby certify that the information presented to the Iowa Economic Development Authority on February 24, 2015 is fully complete, true, and correct. l 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 subdivision, as provided in Iowa Code section 15A.3 and other applicable law. Furthermore, I understand that providing false, misleading, or fraudulent information to the Board may result in civil and/or criminal liabilities and penalties against the Recipient and its representatives. I further depose that the signature below is my own proper signature. Dated: 2/24/15 S� U Subscribed and sworn to before me on this day of,-, � 2pt2 "r (Notary pu ic) County r r My commission expires on i 7118112 VICTORIA V MERKLE 00MOssian Number 787303 • or My CW. T($jigp Expires Marian Karr From: Tom Markus Sent: Tuesday, April 07, 2015 2:42 PM To: Marian Karr Subject: FW: Leepfrog Please include in late distribution packet. From: Kelly Hayworth[ma i Ito: khayworth @ci.coralville. ia. us] Sent: Tuesday, April 07, 2015 2:30 PM To: Tom Markus Cc: John Lundell; Ellen Habel Subject: Leepfrog Tom: I have read the staff recommendation that was a part of your City Council packet in regards to Leepfrog's State of Iowa grant application. The conditions put in the recommendation are not acceptable to the City of Coralville so the City and company are withdrawing the application for state assistance. Kelly Kelly J. Hayworth City Administrator City of Coralville 15127 1h St. Coralville, IA 52241 319-248-1700 Marian Karr From: Jason Jones <jjones@proxymity.com> Sent: Tuesday, April 07, 2015 3:13 PM To: Marian Karr Cc: Council Subject: RE: Leepfrog information in meeting agenda packet Marian, Thank you for getting back to me. I appreciate you sharing where the information came from, and it now make sense. I have shared this information with Leepfrog. Respectfully, Jason Jones Proxyrnity From: Marian Karr [mailto:Marian-Karr(&iowa-cit�org] Sent: Tuesday, April 7, 2015 11:53 AM To: 'Jason Jones' Cc: Council Subject: RE: Leepfrog information in meeting agenda packet Re: Response to email of Monday, April 6 regarding the inclusion of confidential materials. Dear Mr. Jones, The IEDA application was provided to the City by Coralville Administrator Kelly Hayworth. His email to me of March 23, which is also included in the Council's agenda packet states: "The application for Iowa Business Financial Assistance is attached. Pages 9 and 10 have been removed because the company has asked for their wage rates to remain confidential." Based on this communication Iowa City staff understood that Coralville had redacted the information that Leepfrog had requested remain confidential and provided Iowa City with the remainder of the application. The information provided by Mr. Hayworth at my request was used to help formulate a response to the State's request for a letter of support from Iowa City for Leepfrog's relocation from Iowa City to Coralville and specifically, to understand the sources and uses of public financing being considered for use in relocating the company from one Iowa municipality to another. As explained in the agenda materials provided by staff, this letter is one of the eligibility requirements for State funding. After receipt of the information from Mr. Hayworth, staff reviewed the materials for state and local sources of revenue and learned that amounts of state financing shown in the application were not current. Staff then worked with ICAD to get updated state funding amounts by phone. The current application materials have not been shared. This latest exchange is indicative of the poor communication that exists between our communities on economic development matters. It is clear that the state requires home city approval for assistance related to relocations. Had there been an established communication protocol between the cities or if Proxymity had reached out us prior to the request for our approval of the relocation this situation could have been avoided. We would be pleased to review the updated application materials. Tom Markus City Manager From: Jason Jones [mailto:jjonesAproxymity.com] Sent: Monday, April 06, 2015 5:54 PM To: Matt Hayek; Susan Mims; Council Cc: Deb Walton Subject: Leepfrog information in meeting agenda packet Importance: High Mayor Hayek and council, I am writing you regarding the IEDA application that was placed in the upcoming agenda packet. This application has confidential information in it (benefits info, private email addresses, etc) and is an old preliminary version that is not correct. Leepfrog requests that this be removed immediately. Leepfrog is able to provide you with the most current version with the confidential information removed. The sensitive information will have no bearing regarding the purpose for the review. I have copied Deb Walton from Leepfrog in this email She will be able to provide you with the current version. Thank you for your prompt attention to this matter Jason Jones Proxymity® 400 Locust, Suite 220 Des Moines, IA 50309 Cell: 515-202-4806 Fax: 515-864-0267 www.Proxymity.com The Proxymity® team holds expertise or licenses in Architecture, Commercial Property Appraisal, Law, Real Estate Brokerage, Accounting, Construction Engineering, Project Management, Organization Management and Development, Facilitation, Ontological Coaching® and Corporate Communication.