This Agreement is made and entered into this day of , 1997, by and between Sherman Hill Association, Inc., an Iowa nonprofit corporation (hereinafter "Owners", and the City of Des Moines, a municipal corporation (hereinafter "City").

WHEREAS, a Petition to establish the Sherman Hill Historic Street Lighting Self-Supported Municipal Improvement District has been filed with the City of Des Moines seeking to have a decorative pedestrian oriented street lighting system (the "historic street lighting system") installed and maintained along Woodland Avenue between 15th and 20th Streets and along 15th Street between Woodland Avenue and Center Street; and,

WHEREAS, if the City establishes the Sherman Hill Historic Street Lighting Self-Supported Municipal Improvement District in accordance with the Petition, the City may levy and Operation Tax upon property within the District for the purpose of paying (or reimbursing the City with respect thereto) all or part of the costs incurred in connection with the operation and maintenance of the historic street lighting system; and,

WHEREAS, the Premises described above is within the proposed Sherman Hill Historic Street Lighting Self-Supported Municipal Improvement District, but is presently classified as tax exempt and therefore exempt from the levy of the Operation Tax; and,

WHEREAS, the Owners are the sole owners of the Premises described above; and,

WHEREAS, to induce the City to approve the Petition and to construct the historic street lighting system, and in consideration of the obligations the City must undertake to receive federal funding for the system, the Owners hereby agree to make payment in lieu of taxes in an amount equal to the taxes that would have been levied if the Premises were subject to the levy of the Operation Tax;

THEREFORE, the Owners and City hereby agree as follows:

1. Payment in Lieu of Taxes:

1. Commencing with the fiscal year starting July 1, 1998, the Owners shall pay to the City of Des Moines for the support of the Sherman Hill Historic Street Lighting Self-Supported Municipal Improvement District a payment in lieu of taxes (herein referred to as the "PILOT") in an amount equal to the taxes that would be generated by the levy of the Operation Tax upon the assessed value of the Premises as finally determined by the Assessor for that fiscal year, after all appeals, in the manner provided by Iowa Code Chapter 441.
2. In no event shall the amount of the Operation Tax levy used in calculating the amount of the PILOT exceed the amount per thousand dollars ($1,000) of assessed value of the property in any one year specified by the table below:

3. Fiscal Years of Levy	Levy per thousand dollars taxable value
   1998/9 to 2002/3	$1.50
   2003/4 to 2007/8	$2.00
   2008/9 to 2012/13	$2.50
   2013/14 to 2017/18	$3.00
   2018/19 and thereafter	$3.50

   
   
   
   
4. The PILOT shall be paid in two equal installments on or before October 1 and April 1 of each fiscal year. Each installment to be mailed or delivered to the City at the following address, or such other address as the City may hereafter direct by written notice to the Owners:

5. 
   Finance Department
   City Hall
   400 East First Street
   Des Moines, IA 50309

   Each payment shall be accompanied by a statement to the effect that: "This payment is a PILOT to the Sherman Hill Historic Street Lighting Self-Supported Municipal Improvement District for the Premises at 1902 Woodland."

6. Any installment not timely paid by Owners shall draw interest from and after the due date until paid at the rate of five hundredths of one percent (0.05 %) per day until paid. However, no interest shall accrue upon any installment unless and until the City has mailed the statement identified in sub-paragraph E, below
7. City shall send the Owners a statement of the amount of the Pilot installments due in each fiscal year at least twenty (20) days prior to the date the first installment for that fiscal year is due. However, failure by the City to send such statement shall not excuse the Owners from their duty to timely make the installments.

1. Contingencies/Term:

1. The obligation of the Owners to pay the PILOT in the amount provided herein is contingent upon the City of Des Moines having first taken all necessary action in accordance with Chapter 386 of the Iowa Code (1995) to approve the Petition identified above and to adopt an ordinance prior to December 31, 1997, establishing the Sherman Hill Historic Street Lighting Self-Supported Municipal Improvement District.
2. The obligation of the Owners to pay the PILOT in the amount provided herein shall continue until the Sherman Hill Historic Street Lighting Self-Supported Municipal Improvement District is dissolved and terminated by the City in the manner provided by Iowa Code Chapter 386.
3. In the event that the Premises hereafter loses its tax exempt status, the obligation of the Owners to pay any further installments on the PILOT shall be abated during any fiscal year in which general ad valorem taxes and the Operation Tax levied upon the Premises become due.

1. Amendment of District. The City may expand the boundaries of the Sherman Hill Historic Street Lighting Self-Supported Municipal Improvement District for the purpose of providing extending the decorative pedestrian oriented street lighting system along additional streets. However, in no event shall the PILOT exceed the maximum amount determined in accordance with paragraph no. 1, above.
2. Warranty of Title. The Owners hereby covenant with the City that the Owners hold the Premises by title in fee simple, and that Owners have good and lawful authority to subject the Premises to the covenants and conditions imposed by this Agreement.
3. Binding Upon Heirs and Assigns. The obligation of the Owners to pay the PILOT in the amount provided herein shall run with the land and shall be binding upon the present Owners, their heirs, successors, and assigns. No present or future owner of the Premises shall have any obligation to pay any portion of the PILOT, which accrues after the termination of their interest in the Premises.
4. Recording. The City shall cause this Agreement to be recorded in the office of the Polk County Recorder.
5. Notice.

1. Any notice by the City to the Owners pursuant to this Agreement shall be effective if personally delivered or mailed by certified mail to the owner(s) of the Premises at the address for mailing of property tax statements as shown by the records of the Polk County Auditor.
2. Any notice by the Owners to City pursuant to this Agreement shall be effective if mailed by certified mail to the City at the following address:

SHERMAN HILL ASSOCIATION, INC., an Iowa nonprofit corporation

By: .

By: .

) ss:

On this day of , 1997, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared and to me personally known, who, being by me duly sworn, did say that they are the and of SHERMAN HILL ASSOCIATION, INC., and Iowa nonprofit corporation, and said instrument was signed on behalf of the corporation by authority of the corporation's Board of Directors; and that they, as such officers, acknowledged the execution of said instrument to be the voluntary act and deed of the corporation, by it and by officers voluntarily executed.

"CITY"

CITY OF DES MOINES, IOWA

By: .

Arthur Davis, Mayor

) ss:

On this day of , 1997, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared ARTHUR DAVIS and DONNA V. BOETEL-BAKER to me personally known, who, being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of the City of Des Moines, Iowa; that the seal affixed to the foregoing instrument is the seal of the corporation, and that the instrument was signed on behalf of the corporation by authority of the City Council; as contained in the Resolution and Roll Call No. adopted by the City Council on the day of , 1997, and that Arthur Davis and Donna V. Boetel-Baker acknowledged execution of said instrument to be the voluntary act and deed of the corporation, by it and by officers voluntarily executed.