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Home My WebLink About08-05-2008 Council Economic Development Committee AGENDA City of Iowa City City Council Economic Development Committee Tuesday, AugustS, 2008 8:00 a.m. Lobby Conference Room Iowa City City Hall 1. Call to Order 2. Consider approval of the Minutes of the May 30 and June 10, 2008 Economic Development Committee meetings 3. Consider Amendment to Sycamore Mall Development Agreement 4. Consider Request for Amendment to Gluten Evolution CDBG loan S. Staff time 6. Committee time 7. Adjournment draft MINUTES CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE MAY 30, 2008 CITY HALL, LOBBY CONFERENCE ROOM, 8:00 A.M. Members Present: Staff Present: Others Present: Regenia Bailey, Connie Champion, Matt Hayek Wendy Ford, Jeff Davidson Tim Geshay and Ron Kim (Davidson Hotel Representatives) RECOMMENDATIONS CALL MEETING TO ORDER: Chairperson Regenia Bailey called the meeting to order at 8:02 A.M. APPROVAL OF MINUTES OF THE APRIL 22.2008 MEETING: Hayek moved to approve the minutes of the April 22, 2008 meeting as submitted, seconded by Champion. Carried 3-0. CONSIDER OPTIONS FOR SHERATON HOTEL: Ford noted that the first part of the packet on the Sheraton options contains the update to their request. She noted that they discovered, after looking closely at TIF law, that the base value for the hotel, which is used to determine the increment, is determined by the year prior to the first TIF project that was certified in the downtown TIF district. She added that this would have been in November of 2003. This means that the January 2002 valuation is what would be used in determining the base value for the hotel. After discussing this and noting that the resulting increment would be substantially smaller than what it might have been using the current valuation, Davidson Hotels rescinded the TIF request. Ford continued, stating that their request to renegotiate the parking agreement with the City was also changed. Instead, they now simply request the option to lease 80 parking spaces at market rate, for their employees. They are maintaining their request for the vacation of the interior easement that goes through the hotel along Dubuque Street. If the interior easement is vacated, the hotel requests financial assistance for enhancing the exterior Dubuque Street walkway, to the west side of the building. Ford then briefly noted that the second part of the memo to the Committee covers some of the questions raised at the last meeting. She added that one question had to do with the use of public assistance for this renovation. She explained that the vacation of this easement through the lobby would support their being able to put more money into the project, upwards of $11 million. This would create a new lobby/foyer area with new meeting rooms and other additional space. Ford asked Jeff Davidson to address the request for 80 parking spaces at market rate. Bailey asked how long the waiting list for parking is, and Davidson noted that it varies by facility, and that there are also multiple people on each list. He added that typically the list has between 100 to 200 names for individual permits. Davidson stated that he has talked to the parking director, and that this request could be accommodated, if Council chooses to grant it. He added that the permits would be split up with 30 in the Dubuque St. ramp, and 50 in the Court St. ramp. Ron Kim from Davidson Hotels asked about the parking waiting list, noting that he has seen a lot of empty spots in the ramps. Davidson the balance of keeping more short-term parking available in the Capitol Street ramp than the Dubuque Street ramp, and also further explained the parking permit situation with the University. He added that with the University out for the summer, the Economic Development Committee Meeting May 30, 2008 parking situation has changed, as well. The discussion continued, with Davidson explaining the parking deck situation in the downtown area. Kim asked for further clarification on the parking, and what they could expect with their request. The discussion continued, with Hayek and Champion suggesting other alternatives to the parking issue. The Davidson Hotel rep further stated what they would like to see as far as spaces available for their employees, and the rate that they would be charged for this. Hayek stated that he would be open to what is laid out in the memo, as far as pricing. This led to a continued discussion of the parking situation, and Kim noted that they are planning to pay for their employees' parking, which many downtown businesses do not. Ford then explained the Sheraton's request for the vacation of the public easement. She noted that the last page of the packet is a map showing exactly where this public easement is. She noted again the reasoning behind the Sheraton's request, giving the Members some further history on the hotel. She then asked Thom Geshay to speak about the designs as proposed. He raised the question of whether the Dubuque St. exterior walkway area is part of the public easement, and Davidson noted that for clarification of the meeting minutes, the hotel's ownership is to the wall of the brick building (currently Martini's bar), and that there is an easement through the walkway area. Geshay continued, pointing out the walkway area and the proposed changes in this area. He noted that the enhanced brick path would help this area, as well. Geshay continued, giving the Committee a feel for how they would like to improve the "curb appeal" of the Sheraton, and improve the look from the Burlington/Dubuque Street intersection. Ford asked Geshay to further describe the hotel lobby, and asked if the Ped Mall will still be seen from there. Geshay touched on this, further explaining how the lobby/foyer area will be laid out. Kim explained the Sheraton's desires to change the lobby area for a more inviting feeling. Champion then voiced her concerns for the walkway area. Bailey noted that she likes the changes being proposed. Members then briefly touched on the problems that have been seen with the walkway and lobby areas of the Sheraton, mainly during weekend evenings with college students. Members continued to weigh in on how they feel about a possible vacation of the easement. The history of the Sheraton Hotel and how things came about when the hotel was built were also discussed. It was noted that vacating this easement would be permanent; that once it is done it will be forever private property. Bailey noted that they have the opportunity, with these changes, to make new pathways, and that perhaps through the hotel is not a good path. She asked that they look at the entire vision for the downtown area when considering this. Bailey added that if they are going to continue this easement, then she believes they need to encourage some change in the area. She asked if there isn't a middle ground here. Kim stated that the existing easement is not visible, and that with their proposal, this visibility would be huge compared to what is currently there. He added that he believes about 90% of people use one access point - the hotel - to access the Ped Mall area. The discussion continued, with Kim further explaining how they want to bring a more cohesive feeling to the Sheraton lobby and to integrate this space with the rest of the hotel. Ford asked what would happen if the easement were not granted. Bailey asked the Members what they are willing to look at in this proposal. She added that she is willing to vacate this easement, but that she wants to know what the others are willing to do. Hayek stated that he is not willing to give up both the easement and the public walkway, which he considers one and the same. He added that he would be open to modifications to this area, whether in terms of schedules or actual layouts. Champion stated that she feels the concept is beautiful and the drawings terrific, but that she herself would not walk through the Dubuque walkway at night. She would use the hotel lobby. Bailey then brought up the issue of allowing the hotel to lock the lobby doors during specific hours. She asked if Hayek would be open to this, to which he responded he is. Kim then spoke about the possibility of "shrinking" this area down, having a six-foot wide shot through the lobby instead. This would allow them to expand their lobby by about 12 feet. He added that he does believe, however, that having a six-foot walkway through the middle of the hotel lobby area will make it worse. Bailey noted the lack of consensus with the Committee to recommend vacating this easement, and if the hotel reps want to further discuss it, they can. Geshay pointed Economic Development Committee Meeting May 30, 2008 out another possible scenario to the Members, with Bailey stating that they would be interested in seeing anything the hotel can bring back to them, but at this point, there is not a majority for the vacation. Kim thanked the Committee for their consideration in this matter. The discussion then turned to the Dubuque Street walkway improvements, with Bailey stating that she is not sure if this is the time to discuss it. Members briefly discussed the idea of improving this walkway, in order to start getting pedestrian traffic through it, instead of the hotel lobby. Geshay pointed out some possible enhancements to the walkway, including the addition of art, a new graphics on the wall, and improved lighting. This would take away the tunnel feel of this area. The discussion continued, with Geshay further explaining improvements to this area. Bailey noted that if they do allow the hotel to lock their doors during certain times, they would then have to do some enhancement of the walkway area. Hayek noted that this would be during the late evening hours, and that this would be the most dangerous time for this area. Bailey noted that so far they have a willingness to discuss the parking arrangements, and that there is not a majority in favor of granting the vacation of the easement. Bailey asked if there is anything the others are willing to consider. Discussion touched briefly on the walkway area, with Members commenting on the restricted size of the pathway.. Bailey asked if Members wanted to discuss the parking issue next. Hayek added that he is open to the request, and Champion agreed. Hayek said he believes that this is an anchor business and that it is essential for the downtown. Champion stated that she would agree. Ford noted that she would be happy to look closer at the larger, community-side economic impact of the difference between what they would do with the easement granted, versus without, and that this comes in terms of property taxes and also hotel/motel tax revenues. She asked whether they would like further information on financial trade-offs they not allowing or not allowing consideration of the grander lobby concept. Hayek noted that he is not necessarily interested in this at this point. Champion agreed. Davidson will check into the parking arrangements and will let the Committee know where this stands. Champion noted for the Davidson Hotel reps that they do have the right to bring their proposal before the entire Council, if they so choose. The details of this were briefly discussed with Kim and Geshay. The idea of having a "clear path" directly through the Sheraton was touched on again, with Members stating that they do not want to vacate the easement, but that they are open to other ideas. This led back to the Davidson Hotel reps discussing the possibilities for the lobby area. Hayek asked if the easement stays as it is, does the City have much control over how it gets built out, and Davidson stated that he would have to go back to the original agreement to see what was stipulated. The Committee Members continued to discuss how this issue could be addressed. The original agreement on this easement was then reviewed briefly, with Hayek noting the specifics. Davidson added that perhaps there is a design that would not promote a "congregation" area here. The discussion wrapped up, with Members stating that they are willing to hear more on the possibilities for the easement area, and also improvements to the walkway. Further questions were asked of the Davidson Hotel reps about the lobby area and meeting room areas. The Committee suggested that they review any changes at another meeting, before this issue is taken to the full Council. Kim briefly expressed his concerns to the Members. Ford stated that they would check with Legal to see how fast they can get answers on build out restrictions in the interior easement area. Tentatively the meeting is set for June 1ih. STAFF TIME: Ford stated that the Towncrest redevelopment plans are in the queue waiting on scheduling in Urban Planning. Davidson noted that they do have a mailing list and other preliminary paperwork Economic Development Committee Meeting May 30,2008 ready to go, but that the bottom line is lack of time to address this. He added that the Urban Planning division will work with them on this, but they are currently busy with the Subdivision Regulations. COMMITTEE TIME: Champion noted that her new store would open August 15' with the name CR Champion Clothier. ADJOURNMENT: Hayek moved to adjourn the meeting at 9:34 a.m., seconded by Champion. Meeting adjourned. Economic Development Committee Meeting May 30, 2008 Council Economic Development Committee ATTENDANCE RECORD 2008 TERM ..... ~ ~ ~ :e: CJ'l - W NAME EXP. ..... ..... ~ ~ ~ CJ'l (0 0> -.j ~ 0 Regenia 01102/10 X X x X X X Bailey Matt 01/02/10 X X X X X X Hayek Connie 01/02/10 X X x x X X Champion Key: X = Present o = Absent OlE = Absent/Excused draft MINUTES CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE JUNE 10, 2008 CITY HALL, LOBBY CONFERENCE ROOM, 7:00 AM. Members Present: Staff Present: Others Present: Regenia Bailey, Matt Hayek Wendy Ford Joe Raso and Mark Nolte, Iowa City Area Development Group Daniel Abbott and Burkhard Kleffman, Kleffman North America RECOMMENDATIONS Hayek moved to recommend the CEBA application be granted to Kleffmann North America as discussed, seconded by Bailey. Carried 2-0 (Champion absent). CALL MEETING TO ORDER: Chairperson Regenia Bailey called the meeting to order at 7:04 AM. CONSIDER APPLICATION FOR CEBA FUNDS - KLEFFMANN NORTH AMERICA INC.: Ford noted that the Members' packet has a memo detailing the Kleffmann North America application. She said Kleffman North America is planning a $300,000 expansion project for their offices in downtown Iowa City. They are requesting that the City sponsor their application to the State for a CEBA (Community Economic Betterment Account) loan in the amount of $40,000, for which there would need to be a match from the City. Ford stated that staff has suggested $15,000 for this loan. She then asked the representatives of ICAD Group and Kleffmann North America to talk about their company. Additionally, Ford noted a typographical error in the application to the City. [Section 2, 2.1, page 4 of the Iowa City application, what type and amount of financial assistance are you requesting from the City? $15,000, 5-year no-interest loan is still correct; for State funds of $40,000 - not $60,000 as stated.] Joe Raso, President of the Iowa City Area Development Group spoke to Members first, stating that they have enjoyed working with Kleffmann North America and he is looking forward to talking to more European companies. Burkhart Kleffman then spoke to Members, stating that he and his family have been in Iowa City now for several months. He further explained how Kleffmann chose the Iowa City area, and gave the Committee a brief history of the company. He talked about the application, stating that they are requesting this support as they are poised to take on more growth and need to be able to move quickly. He added that this expansion is quite large and therefore and that they need assistance to capitalize the growth they as they take on more clients. Ford noted that the expansion includes 12 new jobs over the next three years. She asked Burkhart to describe the jobs. He spoke to this briefly, noting that they have call center that will employ a few temporary workers. He added that they like this area for its recruiting potential - as they will also need employees with varying degree levels to staff this expansion. He spoke about needing project managers and project leaders, as well as other qualified individuals for these positions. He spoke about the need for people educated in research, and talked about how they will be working with their new product, the Amis program, as well. He pinpointed the need for highly qualified people with and research experience.. Bailey asked if Ford had a business plan for Kleffmann, and Ford noted that they do not yet have this, but they do have financial information. Dan Abbott stated that he would get the business plan for them to review. Bailey inquired about the company's community involvement, and Dan Economic Development Committee Meeting June 10, 2008 Abbott stated that he would like to look into this, and that he had planned to get in touch with Joe Raso in the next week to discuss just this. Members continued the discussion, all unanimously agreeing with staffs recommendation for this application. Hayek moved to recommend the CEBA application be granted to Kleffmann North America as discussed, seconded by Bailey. Carried 2-0 (Champion absent). STAFF TIME: Ford noted that the next meeting will be the third Tuesday in July at 8:00 AM. - July 15, 2008. COMMITTEE TIME: None. ADJOURNMENT: Hayek moved to adjourn the meeting at 7:45 a.m. seconded by Bailey, meeting adjourned. Economic Development Committee Meeting June 10, 2008 Council Economic Development Committee ATTENDANCE RECORD 2008 TERM ..... ~ w ~ -""' ~ ~ NAME EXP. ::. i':5 i':5 w C,11 co en -..j N 0 0 Regenia 01/02/10 X X x X X X X Bailey Matt 01/02/10 X X X X X X X Hayek Connie 01102/10 X X x x X X OlE Champion Key: X = Present o = Absent OlE = Absent/Excused 1 ~ 1 ~~S_u:,.... !~W~~ ~~~aa.' ~- CITY OF IOWA CITY MEMORANDUM Date: August 1, 2008 From: Economic Development Committee Wendy Ford, Economic Development Coordinator (oj-. Proposed 3rd Amendment to MGD L.C. (Sycamore Mall) Developer's Agreement To: Re: MGD L.C., and those L.C.'s owned by the individual members of MGD L.C., as owners of Sycamore Mall seek an amendment to the Developer's Agreement for the Sycamore Mall. The co-owners desire to sell and transfer their interest in Sycamore Mall to a new buyer, Core Investors and are required to obtain approval of the City before assigning their interest in the property or agreement to any party. MGD L.C., owners of Sycamore Mall desire to sell the entire property except for an undeveloped outlot on the western end. Hodge Commercial Management, Inc., will be retained by the new owners to continue the day to day management of the property and, as a condition of the sale, will also submit annual certification materials and if certification criteria are met, will remain the recipients of the final two remaining Economic Development Grants. See the following page for information on the status of the Sycamore Development Agreement and the tax increment financing rebates that have been awarded to date. In June, 2008, the fifth of seven possible rebates was awarded to MGD L.C. As the following status report for the Sycamore Mall project suggests, the City's goal to realize an increase in overall property taxes due to an increase in assessed value has in large part, been met. The valuations of the Mall have increased more than $10 million since the January 2000 valuation. The Development Agreement was first executed on September 19, 2000. Because the agreement requires approval of the City before owners may assign their interest in the property to any party, a first amendment was executed in March, 2004 which allowed for the dissolution of the owners' development entity, comprised of multiple parties, to divide into individually owned L.C.s as tenants in common. The second amendment followed in May, 2004 when the group of individually owned L.C.s bought out Gerry Ambrose's interest in the mall. The third amendment will allow the individually owned L.C.s to transfer their interests as tenants in common to three CORE Investment entities in order to reinvest in other local development projects. Hodge Commercial Management will continue to operate the mall, and to ensure continued performance, MGD L.C. will continue to receive the TIF rebates if the performance terms of the agreement are met (i.e. 40,000 sq. ft. anchor store, 80% occupancy rate, payment of property taxes) . 1 ~ i ~:.=--~.... ~~~~~ ~~~aa.~ .... - DATE: RE: CITY OF IOWA CITY MEMORANDUM December 1 , 2007 MGD L.e. (Sycamore Mall) Developer's Agreement Status (Sycamore & First Avenue Urban Renewal Area) The following table provides a review of the MGD L.C. (a.k.a. Sycamore Mall) TIF project, associated property values, taxes collected and taxes rebated. The Council, by resolution, adopted the MGD L.C. Agreement for Private Redevelopment on September 19, 2000. The signed agreement rebates the value of property taxes paid in excess of the base year's assessed value. The January 1, 2000 assessment is the base year for the Sycamore & First Avenue Urban Renewal Area and this specific private redevelopment agreement. Valuation Year Jan-98 Jan-99 Jan-OO a Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Fiscal Year 99-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007 -08 2008-09 Assessed Value $9,879,450 $7,500,000 $4,662,900 $4,662,900 $10,168,280 $11,073,730 $11,457,180 $12,696,150 $14,610,400 $15,051,730 Property Taxes Paid $317,256 $245,238 $152,958 $163,000 $378,736 $406,796 $439,444 $481,200 $558,494 $575,634 Total Rebate Taxes Rebated NA NA NA NA $167,957 $192,862 $213,971 $252,149 $320,926 $335,164 b $1,483,030 Rebate Pay dates 6/1/04 6/1/05 6/1/06 6/1/07 6/1/08 6/1/09 Property Taxes Paid Include the City, County and School District. Net Taxes Paid NA NA NA NA $210,779 $213,934 $225,4 73 $229,050 $237,568 $240,200 $1,357,004 After the adoption of the Sycamore and First Avenue Urban Renewal Area, over $7.1 million in building permits were issued for the Sycamore Mall. The January 1, 2007 assessment is an approximate $10.3 million increase from the January 1, 2000 assessment. Rebate Schedule: 7 Years - 100%, $2,000,000 maximum Parcel #: 10-14-457-004 a Base year. b Estimate. Calculated (($15,051,730-4,662,900)/1,000) x Est. 08-09 TIF Debt Levy of 32.26199). Prepared by and return to: Kirsten H. Frey, A 10002699,920 S. Dubuque Street - P.O. Box 2000, Iowa City, IA 52240 (3 I 9) 35 I -81 81 THIRD AMENDMENT TO THE AGREEMENT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE CITY OF IOWA CITY AND MGD, L.c. THIS AMENDMENT TO AGREEMENT FOR PRIVATE REDEVELOPMENT, (hereinafter called "Agreement") is made this _ day of August 2008 by and among the City of Iowa City, Iowa, a municipality, (hereinafter called "City"), established pursuant to the Code oflowa of the State oflowa; MGD, L.C., an Iowa limited liability company having an office for the transaction of business in Iowa City, Iowa (hereinafter the "Developer"); MEHSM, L.C., an limited liability company, GASM, L.C., an Iowa limited liability company, DVHSM, L.C., an Iowa limited liability company, DGOSM, L.c., an Iowa limited liability company, KDDSM, L.C., an Iowa limited liability company, Hodge Development Company, an Iowa corporation, and Oakes Development Ltd., an Iowa corporation, (hereinafter jointly and severally referred to as the "Co-Owners");Hodge Commercial Management, Inc., an Iowa corporation; and each of the entities listed on Exhibit A hereto, as tenants in common, together with their permitted successors and assigns, (hereinafter collectively referred to as "Buyer"). WITNESSETH: WHEREAS, the City and the Developer entered into an certain Agreement for Private Redevelopment dated September 19, 2000, which involved the use of Tax Increment Financing pursuant to the Sycamore and First A venue Urban Renewal Plan; and WHEREAS, Developer was the owner of Sycamore Mall, and said Agreement for Private Redevelopment involved the redevelopment and revitalization of Sycamore Mall by Developer; and WHEREAS, pursuant to a First Amendment to the Agreement for Private Redevelop- ment between the City of Iowa City and MGD, L.C., the ownership of Sycamore Mall was transferred from Developer to individually-owned limited liability companies owned by the members of Developer; and WHEREAS, the Co-Owners desire to sell and transfer its interest in Sycamore Mall to Buyer; and WHEREAS, said Agreement for Private Development requires that the Developer and Co-Owners obtain the approval of the City before assigning its interest in the agreement to any other party; and WHEREAS, the City has consented to the sale of Sycamore Mall and the assignment of the Agreement of Private Redevelopment to Buyer upon certain conditions; and NOW, THEREFORE, in light of the mutual consideration exchanged herein, the receipt and sufficiency of which is hereby acknowledged, each of the parties hereto does hereby covenant and agree with the others as follows: 1. The parties hereby acknowledge and the City of Iowa City hereby expressly con- sents to the assignment of the Agreement for Private Redevelopment and the transfer of Co-Owners' interests in Sycamore Mall to the Buyer such that fol- lowing the approval and execution of this Third Amendment Agreement, the real estate locally known as Sycamore Mall which is legally described as: All of lots 2, 3, 4, 7 and a part of Lots 5 and 6 of Mall First Addition to Iowa City, Iowa, as per plat thereof recorded in Plat Book 9, Page 41, Records of Johnson County, Iowa, and a parcel of land in the Northeast Quarter of Section 23, Township 79 North, Range 6 West of the 5th P.M. and being more particularly described as follows: Commencing as a point of reference at the Northeast corner of the intersection of Sycamore Street and U.S. Highway No.6 in Iowa City, Iowa, thence NO degrees 26 minutes East (this is an assumed bearing for purposes of this description) 225.05 feet along said East right-of-way line of Sycamore Street to a point; thence North 04 degrees 09 minutes West 212.68 feet along said East right-of-way line of Sycamore Street to a point; thence North 0 degrees 26 minutes East 168.98 feet along said East right-of-way line of Sycamore Street to the point of beginning of tract herein described; thence South 89 degrees 34 minutes East 454.81 feet to a point; thence South 0 degrees 26 minutes West 610.29 feet to a point of intersection with the Northerly right-of-way of U.S. Highway No.6; thence Easterly 685.18 feet along a 3015.0 foot radius curve and the Northerly right-of-way line of said Highway being concave Southerly to a point of intersection with the Northwesterly right-of-way of First Avenue 287.52 feet along a 804.00 foot radius curve concave Southeasterly (chord North 33 degrees 36 minutes 28 second East 285.99 feet) to a point of intersection with the Easterly line of said Lot 6; thence continuing Northeasterly on the Northwesterly right-of- way line of First Avenue, 35.56 feet along an 804.00 foot radius curve concave Southeasterly (chord North 45 degrees 07 minutes 11 seconds East 35.56 feet) to a point; thence North 2 degrees 31 minutes 00 seconds East 28.51 feet to a point of intersection with the Southwesterly right-of-way of line of Lower Muscatine Road; thence North along the Southwesterly right-of-way line of Lower Muscatine Road 37.42 feet to a point of intersection with the Easterly Kf32\r69aI799-1 Kf32\r69aI799-1 line of Lot 6; thence north 42 degrees 43 minutes 30 seconds West along the Southwesterly right-of-way line of Lower Muscatine Road 608.79 feet to a point; thence North 42 degrees 33 minutes West 646.86 feet along the Southwesterly right-of-way of Lower Muscatine Road to a point of intersection with the East line of Lot One, Part Two, of Marion Subdivision, Iowa City, Iowa, as per plat thereof recorded in Plat Book 2, Page 20, Records of Johnson County, Iowa; thence South 0 degrees 58 minutes West 57.36 feet along the East line of said Marion's Subdivision to a point; thence South 47 degrees 28 minutes West 413.83 feet along the Southeasterly line of said Marion's Subdivision to a point; thence North 89 degrees 34 minutes West 147.61 feet along the Southerly line of said Marion's Subdivision to a point of intersection with the Easterly right-of-way line of said Sycamore Street; thence South 0 degrees 26 minutes West 143.0 feet along the Easterly right-of-way of said Sycamore Street to the point of beginning. AND A parcel of land in the Southwest quarter of the Southeast quarter of Section 14, Township 79 North, Range 6 West of the 5th P.M., and the Northwest Quarter of the Northeast Quarter of Section 23, Township 79 North, Range 6 West of the 5th P.M., Johnson County, Iowa, as more particularly described as follows: Beginning at the Northeast corner of the intersection of Sycamore Street and U.S. Highway No.6 in Iowa City, Iowa; thence North 0 degrees 26 minutes East 225.05 feet along said east line of Sycamore Street to a point; thence North 4 degrees 09 minutes West 212.68 feet along said East line of Sycamore Street to a point; thence North 0 degrees 26 minutes East 168.98 feet along said east line of Sycamore Street to a point; thence South 89 degrees 34 minutes East 454.81 feet to a point; thence South 0 degrees 26 minutes West 610.29 feet to a point of intersection with the northerly right-of-way line of U.S. Highway No.6; thence Westerly 210.15 feet along a 3015.0 foot radius curve and the Northerly right-of-way line of said Highway, being concave Southerly (said are being subtended by a chord of 210.10 feet with a bearing of North 87 degrees 58 minutes 12 seconds West) to the end of the curve; thence North 89 degrees 58 minutes West (this is an assumed bearing for purposes of this description) 227.80 feet along the Northerly right-of-way line of said highway to point of beginning. will be held by Buyer. The undeveloped outlot legally described as: Lot 1 of Mall First Addition to Iowa City, Iowa, as per plat thereof recorded in Plat Book 9, Page 41, Records of Johnson County, Iowa, shall continue to be held and owned by Co-Owners. 2. Buyer hereby assumes the responsibilities of Developer and Co-Owners under the Agreement for Private Redevelopment dated September 19, 2000 and shall be responsible for the same. 3. Hodge Commercial Management, Inc., an Iowa corporation, principally owned and operated by the same individuals as the Developer, shall become the managing entity of Sycamore Mall. Hodge Commercial Management and Buyer shall be jointly and severally responsible for each and every obligation, other than the payment of Real Estate Taxes, of the Developer pursuant to the initial agreement for Private Redevelopment and the Amendments thereto. Buyer is solely responsible for the timely payment of Real Estate Taxes. 4. Notwithstanding the assignment of the Agreement for Private Redevelopment dated September 19, 2000 and the transfer of ownership of Sycamore Mall to the Buyer, the parties hereto agree and acknowledge that all payments owed by the City of Iowa City pursuant to the Agreement for Private Redevelopment dated September 19, 2000 for the rebate of real estate taxes paid by the owner of Sycamore Mall shall continue to be made to MGD, L.C, at 711 S. Gilbert Street, Iowa City, Iowa 52240. 5. The parties further acknowledge that any subsequent assignment of any owner- ship interest in Sycamore Mall shall require the consent of the City as provided in Paragraph 7.1 of the Agreement. 6. In all other respects the Agreement for Private Redevelopment and the First and Second Amendment thereto remains unchanged as if this Third Amendment did not exist. DATED this _ day of August 2008. City of Iowa City MGD, L.C. By: Regenia D. Bailey, Mayor By: Michael E. Hodge, Manager MEHSM, L.C. Attested By: Marian K. Karr, City Clerk By: Michael E. Hodge, Manager and Sole Member Kf3 2\r69a 1799-1 DVHSM, L.c. GASM, L.C. By: David V. Hodge, Manager and Sole Member By: Gregory A. Apel, Manager and Sole Member DGOSM, L.C. KDDSM, L.C. By: Dean G. Oakes, Manager and Sole Member By: Kevin D. Digmann, Manager and Sole Member Hodge Development Company Oakes Development, Ltd. By: Michael E. Hodge, President By: Dean G. Oakes, President CORE Sycamore Town Center P, LLC Hodge Commercial Management, Inc. By: Name: Its: By: Michael E. Hodge, President TIC Sycamore 1, LLC By: Name: Its: TIC Sycamore 2, LLC By: Name: Its: Kt32\r69a1799-1 STATE OF IOWA JOHNSON COUNTY) ) ) ss: On this _ day of ,2008, before me, a Notary Public in and for said county, personally appeared Michael E. Hodge, to me personally known, who being by me duly sworn did say that that person is the Manager and sole member of said limited liability company, that no seal has been procured by the said limited liability company, and that said instrument was signed on behalf of said limited liability company by authority of its Manager and the said Michael E. Hodge acknowledged the execution of said instrument to be the voluntary act and deed of said limited liability company and by it voluntarily executed. Notary Public in and for the State oflowa STATE OF IOWA ) ) SS: JOHNSON COUNTY ) On this _ day of , 2008, before me, a Notary Public in and for said county, personally appeared Gregory A. Apel, to me personally known, who being by me duly sworn did say that that person is the Manager and sole member of said limited liability company, that no seal has been procured by the said limited liability company and that said instrument was signed on behalf of said limited liability company by authority of its Manager and the said Gregory A. Apel acknowledged the execution of said instrument to be the voluntary act and deed of said limited liability company by it voluntarily executed. Notary Public in and for the State of Iowa STATE OF IOWA ) ) SS: JOHNSON COUNTY ) On this _ day of , 2008, before me, a Notary Public in and for said county, personally appeared Dean G. Oakes, to me personally known, who being by me duly sworn did say that that person is the Manager and sole member of said limited liability company, that no seal has been procured by the said limited liability company and that said instrument was signed on behalf of said limited liability company by authority of its Manager, and the said Dean G. Oakes acknowledged the execution of said instrument to be the voluntary of said limited liability company and by it voluntarily executed. Notary Public in and for the State of Iowa Kf32\r69a1799-1 STATE OF IOWA ) ) SS: JOHNSON COUNTY ) On this _ day of ,2008, before me, a Notary Public in and for said county, personally appeared Kevin D. Digmann, to me personally known, who being by me duly sworn did say that that person is the Manager and sole member of said limited liability company, that no seal has been procured by the said limited liability company and that said instrument was signed on behalf of said limited liability company by authority of its Manager and the said Kevin D. Digmann acknowledged the execution of said instrument to be the voluntary act and deed of said limited liability company by it voluntarily executed. Notary Public in and for the State of Iowa STATE OF IOWA ) ) SS: JOHNSON COUNTY ) On this _ day of ,2008, before me, the undersigned, a Notary Public in and for said County, in said State, personally appeared Michael E. Hodge, to me personally known, who being by me duly sworn, did say that he is the President, that no seal has been procured by the said corporation; that said instrument was signed on behalf of said corporation by authority of its Board of Directors; and that the said Michael E. Hodge as such officer, acknowledged the execution of said instrument to be the voluntary act and deed of said corporation by it and by him voluntarily executed. Notary Public in and for the State of Iowa STATE OF IOWA ) ) SS: JOHNSON COUNTY ) On this _ day of , 2008, before me, the undersigned, a Notary Public in and for said County, in said State, personally appeared Dean G. Oakes, to me personally known, who being by me duly sworn, did say that he is the President, that no seal has been procured by the said corporation; that said instrument was signed on behalf of said corporation by authority of its Board of Directors; and that the said Dean G. Oakes as such officer, acknowledged the execution of said instrument to be the voluntary act and deed of said corporation by it and by him voluntarily executed. Notary Public in and for the State of Iowa Kf32\r69a1799-1 STATE OF IOWA ) ) SS: JOHNSON COUNTY ) On this _ day of ,2008, before me, a Notary Public in and for said county, personally appeared David V. Hodge, to me personally known, who being by me duly sworn did say that that person is the Manager of said limited liability company, that no seal has been procured by the said limited liability company and that said instrument was signed on behalf of said limited liability company by authority of its Manager and the said David V. Hodge acknowledged the execution of said instrument to be the voluntary act and deed of said limited liability company by it voluntarily executed. Notary Public in and for the State of Iowa STATE OF IOWA ) ) SS. JOHNSON COUNTY) On this _ day of , 2008, before me, the undersigned, a notary public in and for the State of Iowa, personally appeared Regenia D. Bailey and Marian K. Karr, to me personally known, who being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of said municipal corporation executing the within and foregoing instrument; that the seal affixed thereto is the seal of said municipal corporation; that said instrument was signed and sealed on behalf of said municipal corporation by authority of its City Council; and that the said Mayor and City Clerk as such officers acknowledged the execution of said instrument to be the voluntary act and deed of said corporation, by it and by them voluntarily executed. Notary Public in and for the State of Iowa STATE OF DELAWARE ) ) SS: COUNTY ) On this _ day of ,2008, before me, a Notary Public in and for said county, personally appeared , to me personally known, who being by me duly sworn did say that that person is the of said limited liability company, that no seal has been procured by the said limited liability company and that said instrument was signed on behalf of said limited liability company by authority of its and the said acknowledged the execution of said instrument to be the voluntary act and deed of said limited liability company by it voluntarily executed. Notary Public in and for the State of Delaware STATE OF DELAWARE ) ) SS: COUNTY ) Kf32\r69a1799-1 On this _ day of , 2008, before me, a Notary Public in and for said county, personally appeared , to me personally known, who being by me duly sworn did say that that person is the of said limited liability company, that no seal has been procured by the said limited liability company and that said instrument was signed on behalf of said limited liability company by authority of its and the said acknowledged the execution of said instrument to be the voluntary act and deed of said limited liability company by it voluntarily executed. Notary Public in and for the State of Delaware STATE OF DELAWARE ) ) SS: COUNTY ) On this _ day of , 2008, before me, a Notary Public in and for said county, personally appeared , to me personally known, who being by me duly sworn did say that that person is the of said limited liability company, that no seal has been procured by the said limited liability company and that said instrument was signed on behalf of said limited liability company by authority of its and the said acknowledged the execution of said instrument to be the voluntary act and deed of said limited liability company by it voluntarily executed. Notary Public in and for the State of Delaware STATE OF IOWA ) ) SS: JOHNSON COUNTY ) On this _ day of , 2008, before me, the undersigned, a Notary Public in and for said County, in said State, personally appeared Michael E. Hodge, to me personally known, who being by me duly sworn, did say that he is the President, that no seal has been KG 2\r69a 1799-1 procured by the said corporation; that said instrument was signed on behalf of said corporation by authority of its Board of Directors; and that the said Michael E. Hodge as such officer, acknowledged the execution of said instrument to be the voluntary act and deed of said corporation by it and by him voluntarily executed. Notary Public in and for the State of Iowa Kf32\r69aI799-1 CORE Sycamore Town Center P, LLC, a Delaware limited liability company TIC Sycamore 1, LLC, a Delaware limited liability company TIC Sycamore 2, LLC, a Delaware limited liability company Kf32\r69aI799-1 EXHIBIT A ,~ 1 ~:'5._~..,. ~~~!:~ ~~..aa.' -.. - CITY OF IOWA CITY MEMORANDUM Date: To: August 1, 2008 Re: Economic Development Committee Tracy Hightshoe, Associate Planner Gluten Evolution - Request for an Amendment From: Staff Recommendation: The owner of Gluten Evolution LLC, a test kitchen and creator of the Bread Mixes, Breads from Anna, has requested an amendment to her CDBG loan. Gluten Evolution entered a CDBG agreement on September 6, 2007 to provide $50,000 for working capital at 3% interest to be repaid over 7 years. The business is current with all payments. The owner requests to reduce the interest rate from 3% to 0% to decrease monthly expenses and states that the reduction would make her debt more acceptable to potential investors to allow her business to expand. Please see the attached request. To review this request staff asked the owner to submit the most recent financials for the business. Sales are doing well with 2007 sales increasing by 22% over the 2006 figures ($185,526 to $227,418). Based on the financial information submitted current liabilities exceed current assets and the owner will be seeking ways to reduce expenses, such as interest expense. Currently, the businesses has a monthly interest expense of approximately $125, the average interest expense over the life of the loan is $65 per month. In staff's opinion, the monthly savings from a 3% interest rate to a no interest loan would not support a large expansion loan. For example, a monthly payment of $125 at 7% interest, over 7 years would support a principal amount of $8,300. Staff does not recommend altering the terms of the original agreement at this time. 3% interest loans with a repayment term of 7 years for working capital are desirable financial terms. With increasing sales the owner will be looking to expand. The owner stated she is looking to expand in the local area; however she has not found an Iowa City location that is both feasible and affordable for the business. The owner has also been looking outside of Iowa City. The City is interested in having the business expand in Iowa City. Staff recommends that if expansion plans remain in Iowa City, staff would recommend lowering the interest rate as in incentive to retain the business in Iowa City. Depending on the location other financing incentives such as Tax Increment Financing (TIF) may be possible. Staff has discussed this option with the owner. She is currently not interested in proceeding if it is contingent upon the business (warehouse and manufacturing facility) staying in Iowa City. 8aEAD$ FL\O~NA: Gluten-Free Mixes Gluten Evolution, LLC, 358 Westside Drive, Iowa City, IA 52246 · 319-354-3886 · Fax 319-358- 9920 June 3, 2008 Dear Iowa City Council, I am writing to thank you for the block grant I received and to express how much it has helped stabilize some of my costs while I grow my business. As I am now paying off the loan, I am looking to expand my business to include manufacturing. Much of the capitol I will need to hire more employees, set up manufacturing, and move into a larger facility will have to come from investor money I am in the process of raising. It would be a tremendous help in attracting investors if I could decrease my monthly expenses as much as possible. Along these lines, I am inquiring if it would be possible to reduce the interest on my loan 3% to 0%. This was an option that was briefly raised when my loan was initiated. Such an arrangement would immediately make my debt far more acceptable to potential investors, and, consequently, allow my business to expand. I believe that Breads from Anna enthusiastically represents the new spirit of Iowa City entrepreneurship, and I am firmly convinced that we could not be making these new steps without your gracious support. Thank you for taking the time to consider this request and for you continued encouragement. Attached you will find both my recent profit and loss statement and balance sheet. I am happy to provide any other information that may help with this decision. Sincerely, Anna Sobaski Owner, Gluten Evolution, LLC "Breads From Anna" (9) glutenevolution.com