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

I. Failure by the Clinic to keep the completed Project in service as part of the business operations of a medical clinic on the Property throughout the Term (as hereinafter defined). II. Failure by the Clinic to fully and timely remit payment of property taxes when due and owing. III. Failure by the Clinic to comply with Sections A.2, A.3, A.4 or A.5 of this Agreement. IV. Failure by the Clinic to observe or perform any other material covenant on its part, to be observed or performed hereunder. B. Notice and Remedies. Whenever any event of default described in this Agreement occurs, the City shall provide written notice to the Clinic describing the cause of the default and the steps that must be taken by the Clinic in order to cure the default. The Clinic shall have thirty (30) days after receipt of the notice to cure the default or to provide assurances satisfactory to City that the default will be cured as soon as reasonably possible. If the Clinic fails to cure the default or provide assurances, the City shall then have the right to: I. Pursue any action available to it, at law or in equity, in order to enforce the terms of this Agreement. II. Withhold the Payments provided for under Section B.1 below. B. City’s Obligations 1. Payments. In recognition of the Clinic’s obligations set out above, the City agrees to make five (5) annual economic development tax increment payments (the “Payments” and, individually each, a “Payment”) to the Clinic during the Term (as hereinafter defined) pursuant to Chapters 15A and 403 of the Code of Iowa, provided however that the aggregate, total amount of the Payments to be made under this Agreement during the Term (as hereinafter defined) shall not exceed $87,000 (the “Maximum Payment Total”). All Payments under this Agreement shall be subject to annual appropriation by the City Council, as provided hereunder. The Payments shall not constitute general obligations of the City, but shall be made solely and only from Incremental Property Tax Revenues received by the City from the Johnson County Treasurer attributable to the taxable valuation of the Property. Each Payment shall not exceed an amount which represents the then-current Annual Percentage factored against the Incremental Property Tax Revenues available to the City with respect to the Property during the twelve (12) months immediately preceding each Payment date. Assuming all annual appropriation determinations are approved affirmatively by the City Council under Section B.2 below, then Payments will be made on June 1 of each fiscal year, beginning on June 1, 2021 and continuing to, and including, June 1, 2025, or until such earlier date upon which total Payments equal to the Maximum Payment Total have been made. 2. Annual Appropriation. Each Payment shall be subject to annual appropriation by the City Council. The City Council has already taken action to appropriate Incremental Property Tax Revenues to fund the Payments scheduled to become due on June 1, -3- 4820-9541-0390\1