I-3 - Development Agreement -MD Real Estate - Draft

4. Property Tax Payment Certification. For purposes of this Agreement, “Annual Percentage” shall mean the annual percentage in effect from time to time as set forth in the following table: Payment Year Annual Percentage First Payment Year 50% Second Payment Year 33% Third Payment Year 33% Fourth Payment Year 33% Fifth Payment Year 33% The Clinic agrees to certify to the City by no later than October 15 of each year, commencing October 15, 2021, an amount (the “Clinic’s Estimate”) equal to the estimated Incremental Property Tax Revenues (as hereinafter defined) anticipated to be paid in the fiscal year immediately following such certification with respect to the taxable valuation of the Property factored by the Annual Percentage. In submitting each such Clinic’s Estimate, the Clinic will complete and submit the worksheet attached hereto as Exhibit B. The City reserves the right to review and request revisions to each such Clinic’s Estimate to ensure the accuracy of the figures submitted. For purposes of this Agreement, Incremental Property Tax Revenues are calculated by: (1) determining the consolidated property tax levy (city, county, school, etc.) then in effect with respect to taxation of the Property; (2) subtracting (a) the debt service levies of all taxing jurisdictions, (b) the school district instructional support and physical plant and equipment levies and (c) any other levies which may be exempted from such calculation by action of the Iowa General Assembly; (3) multiplying the resulting modified consolidated levy rate times any incremental growth in the taxable valuation of the Property, as shown on the property tax rolls of Johnson County, above and beyond the Base Valuation; and (4) deducting any property tax credits which shall be available with respect to the incremental valuation of the Property. Upon request, the City staff shall provide reasonable assistance to the Clinic in completing the worksheet required under this Section A.4. 5. Legal Fees and Administrative Costs. The Clinic hereby agrees to cover the legal fees and administrative costs incurred by the City in connection with the drafting, negotiation and authorization of this Agreement up to an amount not in excess of $7,000. The Clinic agrees to remit payment to the City within thirty (30) days of the submission of reasonable documentation by the City to the Clinic evidencing such costs. 6. Default Provisions. A. Events of Default. The following shall be “Events of Default” under this Agreement, and the term “Event of Default” shall mean, whenever it is used in this Agreement (unless otherwise provided), any one or more of the following events: -2- 4820-9541-0390\1