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175948
MUNICIPAL ORDER NO. 1783
A MUNICIPAL ORDER APPROVING AND AUTHORIZING THE
EXECUTION OF AN ASSIGNMENT AND REAFFIRMATION AGREEMENT
AMONG CITY OF PADUCAH, KENTUCKY, MCCRACKEN COUNTY,
KENTUCKY, G.P.E.D.C., INC., AND PADUCAH ECONOMIC
DEVELOPMENT FOUNDATION, INC., RELATING TO A PUBLIC PROJECT
WHEREAS, City of Paducah ("City") and McCracken County ("County") are the owners of
a certain industrial building and real estate located at 5400 Commerce Drive, in Paducah, McCracken
County, Kentucky (the "Premises"); and
WHEREAS, City and County have determined that it is in the best interest of citizens of the
City of Paducah and McCracken County that they lease the Premises to Genova Products, Inc., a
Michigan corporation ("Genova") for the purposes of locating, equipping, operating and managing a
manufacturing and distribution facility of vinyl building products, and the hiring and maintaining an
estimated 125 new full-time employees at the Premises (the "Project"), all as more particularly set
forth in that certain Memorandum of Understanding among G.P.E.D.C., Inc., and Genova relating to
the Project, executed by the respective parties thereto with an effective date of June 29, 2014 (the
"MOU"); and
WHEREAS, City has determined that the Project will promote the public purposes of City in
fostering economic development and promoting the development of a skilled workforce, all to the
benefit of the citizens and residents of the city of Paducah; and
WHEREAS, on June 30, 2014, City and County entered into a lease of the Premises
subject to such terms and conditions as set forth in the lease agreement and the MOU (the
"Lease") and
WHEREAS, the Lease was entered into by City in reliance upon certain obligations and
liabilities of GPEDC to City and County as set forth in the MOU; and
WHEREAS, GPEDC now desires to acknowledge and affirm these certain obligations
and liabilities to City and County under the MOU and to subsequently assign these certain
obligations and liabilities to the Paducah Economic Development Foundation, Inc., a Kentucky
not -for -profit -corporation ("PED Foundation"); and PED Foundation is agreeable to accepting
this assignment from GPEDC and PED Foundation is further agreeable to affirming and
reaffirming these certain obligations and liabilities to City and County; and
WHEREAS, it is beneficial for the City of Paducah to execute this assignment and
reaffirmation agreement among City, County, GPEDC, and PED Foundation.
NOW, THEREFORE, BE IT ORDERED BY THE CITY OF PADUCAH, KENTUCKY, AS
FOLLOWS:
Section 1. The Board of Commissioners hereby approves the Assignment and
Reaffirmation Agreement among City, County, GPEDC, and PED Foundation in substantially
the form attached hereto as Exhibit A and made part hereof. It is further determined that it is
necessary and desirable and in the best interests of the City to enter into the Assignment and
Reaffirmation Agreement for the purposes therein specified, and the execution and delivery of
the Assignment and Reaffirmation Agreement is hereby authorized and approved. The Mayor of
the City is hereby authorized to execute the Assignment and Reaffirmation Agreement, together
with such other agreements, instruments or certifications which may be necessary to accomplish
the transaction contemplated by the Assignment and Reaffirmation Agreement and the MOU.
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Section 2. All motions, orders, resolutions and parts thereof in conflict herewith,
are hereby repealed to the extent of such conflict, and this Municipal Order shall be effective
immediately.
Section 3. This Municipal Order shall be in full force and effect immediately upon its
adoption.
INTRODUCED, PUBLICLY READ, AND FINALLY APPROVED on one reading.
ATTEST:
Tammara S. Sanderson, City Clerk
Adopted by the Board of Commissioners, July 22, 2014
Recorded by Tammara S. Sanderson, City Clerk, July 22, 2014
\mo\agree-genova-assignment & reaffirmation
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EXHIBIT A
ASSIGNMENT AND REAFFIRMATION AGREEMENT
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ASSIGNMENT AND REAFFIRMATIONAGREEMENT
This is an ASSIGNMENT AND REAFFIRAMATION AGREEMENT (this
"Agreement") made and entered into this day of July, 2014 (the "Effective Date") among
G.P.E.D.C., INC., d/b/a the Greater Paducah Economic Development Council, Inc., a Kentucky
not -for -profit -corporation ("GPEDC'), with a principal mailing address of Post Office Box 1155,
Paducah, Kentucky 42002-1155; Paducah Economic Development Foundation, Inc., a
Kentucky not -for -profit -corporation ("PED"), with a principal mailing address of Post Office
Box 1155, Paducah, Kentucky 42002-1155; MCCRACKEN COUNTY, KENTUCKY
("County"), with a principal mailing address of 300 South 7th Street, Paducah, Kentucky 42003;
and CITY OF PADUCAH, KENTUCKY ("City"), with a principal mailing address of Post
Office Box 2267, Paducah, Kentucky 42.002-2267; (County and City shall collectively be
referred to as the "Lessor") (GPEDC, PED, City, and County may collectively be referred to as
the "Parties" and singularly be referred to as a "Party");
WITNESSETH:
WHEREAS, capitalized terms used and not otherwise defined in this Agreement shall have
the respective meanings ascribed thereto as set forth in the lease agreement dated as of June 30, 2014,
by and between the Lessor and Genova Products, Inc., a Michigan corporation ("Genova"); and
WHEREAS, the Lessor has a compelling public interest in fostering economic development
and promoting the development of a skilled workforce, all to the benefit of the citizens and residents
of the city of Paducah and the county of McCracken, Kentucky; and
WHEREAS, the Lessor owns the Building and has determined that it is in the best interest of
citizens of the City of Paducah and McCracken County that Lessor rent the Building and the Project
Site (collectively, the "Premises") to Genova for the purposes of locating, equipping, operating and
managing a manufacturing and distribution facility of vinyl building products, and the hiring and
maintaining an estimated 125 new full-time employees at the Premises (the "Project"), all as more
particularly set forth in that certain Memorandum of Understanding among GPEDC and Genova
relating to the Project, executed by the respective parties thereto with an effective date of June 29, 2014
(a copy of which is attached hereto and made a part hereof as Exhibit A) (the "MOU"); and
WHEREAS, the Lessor has determined that the Project will promote the public purpose of the
Lessor; and
WHEREAS, on June 30, 2014, the Lessor and Genova entered into a lease of the
Premises subject to such terms and conditions as set forth in the lease agreement and the MOU
(the "Lease") and
WHEREAS, the Lease was entered into by the Lessor in reliance upon certain obligations
and liabilities of GPEDC to Lessor as set forth in the MOU; and
WHEREAS, GPEDC desires to acknowledge and affirm these certain obligations and
liabilities to the Lessor and to subsequently assign these certain obligations and liabilities to
PED; and PED is agreeable to accepting this assignment from GPEDC and PED is further
agreeable to affirming and reaffirming these certain obligations and liabilities to the Lessor; and
Now, THEREFORE, City, County, GPEDC and PED agree to the following:
A. Affirmation of GPEDC and Assignment to PED.
1. Pursuant to this Agreement, GPEDC hereby agrees, acknowledges, affirms
and reaffirms its obligations and liabilities to the Lessor under Sections A.2. and A.4. of the
MOU (the "Obligations").
2. For valuable consideration, the receipt of which is acknowledged by the
parties, GPEDC hereby assigns and transfers unto PED the Obligations.
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B. Assumption of Obligations and Liabilities. In consideration of the
aforementioned, PED hereby agrees to assume and faithfully perform the Obligations to the
Lessor from and after the Effective Date of this Agreement. It is understood and agreed that PED
shall be fully bound to the Lessor for the performance of the Obligations in accordance with the
terms and conditions of the MOU.
C. Miscellaneous Provisions. This Agreement shall be fully binding upon the
parties hereto and their successors and assigns. This Agreement shall be enforceable,
exclusively, in the McCracken Circuit Court and the governing law shall be the Commonwealth
of Kentucky. Time shall be of the essence with respect to the performance of the Obligations.
D. Effective Date. The effective date of this Agreement shall be July 1, 2014.
IN WITNESS WHEREOF, the parties hereto have set their hands.
GPEDC:
G.P.E.D.C., Inc.
By:
Title:
Date:
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PED:
Paducah Economic Development Foundation, Inc.
LI -M
Title:
Date:
LESSOR:
CITY OF PADUCAH, KENTUCKY
By:
Title:
Date:
MCCRACKEN COUNTY, KENTUCKY
By:
Title:
Date:
Cel
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EXHIBIT A.
THE MOU
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June9. 2014..1:30gm
MEMORANDUM OF UNDERSTANDING
This is a MEMORANDUM OF UNDERSTANDING ("MOU'5 between GENOVA
PRODUCTS, INC., ("Company" or "Genova!% With a principal mailing address of Post Offtee
Box 309, Davison, Mielrigan 48423, and G.P.E.D4, INC., d/b/a the Greater Paducah l eonomic
Development Council, Inc., a Kentucky uotfor=profit-corporation ("GPEDC'5, with a principal
mailing address of Post Office Box 1155, Paducah, Kentucky 42002.1155. Company and
OPEDC may be referred to herein 'individually as a'Patty", and collect iveiy as the "Patties",
Recital*:
W. WU-A$, flteCity of Paducah, Kentucky ("City's, add County of .McCracken
("County) !told fee simple title to a certain industrial building and related unpi'ovomats (the
'Building') situated upon a certain tract of real property at 5400 Connerce Drive fit Paducah,
McCracken County, Kentucky (the 'Property% for industrial development;
'WOUMAS, Contpany proposes to locate, equip, and operate a maftufachtring and
distribution t'aeitity of vinyl building products (the "Froject') within the Building aiul ort the
Property;
t tAS, the Project would have a positive itppaFt oia the entire cor>amurtity by
sta'dulating the local economy, expanding the tax base, and reducing unemployment within the
boundaries of -Paducah, McCracken County, Kentucky;
WHERIAS; GPFDC leade{ship strongly support the ldcation of the Projeot in
Paducah, WrackenCounty,K?-atucky;
WWgWAS, in order to induce tho location, equipping, and oporation of the Project
by Company our the Property , GPEDC or its assigns has agreed to provide cortain
economic incentives to Coniphny as provided in this MOU fot puiposas of defraying the. costs
of locating dad equipping the Project on the Property;
wBEREAS; Company is very interested in pursuing the Project and the Iiarties wish
to enter into this MOU to clearly set forth the fiamework of a 'subsequent agreenient regarding
the location en0 equipping of the Project and the economic incentives to be provided to paitiaily
defray the costs• thereof; and
WHEiREAS , the Parties intend to work cooperatively to move forward with the
Project as set forth in this MOU.
Now, TIIBREFORE, Company and GP.EDC agree to the following:
A. ,Cgm�tmenfs from. Paducah.
1. CPEDC or its assigns agrees to extend a revolving loan to Company for the sole
purpose of purchasing trade fixtures, equipment, and fixtures for the Project that enhances its
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operations on the Property and creates additional and newjob opportunities to Kentucky
residents up to the aggregate amount of $1.1 million, which loan shall be repaid with
interest at the rate of 4.5% per annum amortized over a ten (10) year period. Advances up
to and not to exceed $900,000.00 from the revoiving loan shall be expressly conditioned
upon Company having hired and retained a minimum of 18 new full-time employees
("FTEs", at the Premises/Project Site and upon providing current financial statements.
Additional advances from the revolving loan after the aforesaid initial advance of the first
$900,000.00 are expressly conditioned upon Company having hired and retained a
minimum of 50 new FTEs and upon providing current financial statements, FTEs are
defined as new full-time employed workers with an, verage hourly compensation of
$13:11 per hour, plus Ifealth insurance benefits with a minimum of 50% Lessee
contribution, which employed workers are subject to the city of Paducah's license fees as
defined under Article IV of the Paducah Code of Ordinance, .Sections 106:183 and i06-184,
and Who satisfy the Kentucky residency criteria under the provisions of the Kentucky
Ec6riotnic Development Finance Acithbrity ("KEDFA'l Direct Loan Programs. Said loan to be
evidenced by a Revolving Loan Credit Agreement and secured by a security agreement
wherein GPEDC or Its assigns are accorded a first and superior security interest in the. trade
fixtures, equipment, and fixtures acquired for and used in the gperafion of the Project.
Such documents are to contain such terms and conditions as are acceptable to GPEDC or
Its assigns.
-1. GPEDC agrees t6 pay directly tb City and County (a) the base rental payments
coivtneneing with the Lease Coram ncement Date (Suly 1,10'14) (defined below) and
terminatitigon the Base Rent Commencdment Date (September 1, 2015) (defined
below), and .(b) the equipment loan Installment payments du&g the first year of the loan,
3. Additional Incentives: GPEDC will in good faith pedtioti the State of
Ketttncky and other partners. for file following s
(1) A ODPA 3% payroll rebate for 10 years;
(ii) YJ31 tax credit (offsets state corporate income taxes by 50% of
lease paynionts per year for 10 Yeats,);
(iu)
Ki BIA (sales & use tax refund for buildingleonstruction materials &
income tax abatement); and
(Iv) Itenfucky Training Incentives
4. At its sole cost, GPBDC agrees to complete a Phase I environmental assessment
of the Property prior to June. 30i 2414, and 'if 'indicated, a Phase H etmirotimedtal assessment,
and agrees to indemnify Company ftoftt any environmental damages that were caused: prior to
the Lease Cotn ueucement Dote (defined below).
5. A$ an incentive and an inducement to Company to locate, equip and*operate
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the Project on the Property, GPEDC agrees not to offer cash incentives to attract the
companies expressly listed below within the boundaries of McCracken County, Kentucky for
a five (5) year period from the Effective Date of this MOU, provided, however, such
covenant shall not apply in the event: (i) any of the listed companies agree to pay an
average salary of $20/hour or more; (ii) a building owned by GPEDC, City, or County
Ioses a tenant (such as Whitehall or lYlacco) ; or (iii) Company is in default of any of its
obligations under this MOU, the lease, or the loan documents. The listed companies
GPEDC is restricted from providing cash incentives are as follows: Charlotte,.Nibco,
Laseo, Mueller, Tigre, Spears, Amerimax, KP Building Products, Trex, Timbertech,
Azek, Fiberon, Gossen, Kleer Decking, Taraleo, and Universal Forest Products. This
does not prohibit the City, County, or State from granting statutory incentives as
permissible by law.
B. Commitmenis of Company. in consideration of the public incentives to be
provided, .Company agrees as follows:
1. Company reasonably projects and In.good faith anticipates hiring and
maintaining 125 neer FTEs at the Property within ten (10) years of the Effeedve Date of
this MOU with health insurance benefits. Further, Company shall provide to GPEDC, at
its sole cost and expense, the following:
(i) Written reports of the Company's progress in satisfying the foresaid
employment commitments. Such progress reports shall be provided bi-
annually commencing upon commencement of the lease agreement and
silall be cerdOod as. apbufate by Coinpany. Upon a reasbnable request by
GitS+:andJoi Cbutxty, Garnpai7y shall provide support documentgtion
ilei`ifying the afordsaid pro&ess reports.
(ii) A year-end financial statement and balance sheet, in reasonable detail and
with all supporting schedules and comments, duly certified by Company's
oertifted public accountant by April 30th following each fiscal year-end of
the Company.
2. To obtain and maintain all licensing, permitting and certification
requirements for the lawfal constnccttdn, installation, and equipping of the prbject
and the operation of the Project including bqt not limited to, alt:city development,
zoning, building code ordinances andpolicies, and all other federal, state and local
applicable IgWi and regttlatiotjs (collectively, "Goverrimental Permits"). GPEDC
will work olosely with the Company to ensure these Governmental Permits are
provided in a timely and expedited manner.
3. To acknowledge that the financial and other assistance it would receive,
as described herein would be made possible, in part, by reason of local businesses,
govgromentgl entifips, and citizens contributing to support the economic development
efforts of GPEDC. Company agrees to be a good corporate citizen and become a
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GPEDC investor at a level of $7;500/year, the first annual contribution to be paid upon
the execution of the definitive lease agreement for the Building and the Property.
C. Additional Commitinentg of the Parties.
1. GPEDC, as agent for City and County, and Company agree to negotiate in
good faith the terms of a lease agreement for the Building and the .Property on or before
June 30, 2014. Failure to enter into the lease agreement within this time frame shall result
in the termination of this MOU and neither Party shalt have any further liabilities or
obligations to the other hereunder. Company shall lease the Building and the Property for an
initial term of ten (10) years with an option to renew for one (1) additional term of ten (10)
years. The lease shall commence on July 1, 2014 (the "Lease Commencement Date"), with base
rentals paymenfs being paid by GPEDC from the Lease Commencement Date and terminating
on the Base Rent Commencement Dote (September 1, 2015). Company shdll commence base
rental payments an Sgptember 1, 2015 (the Tase Rent Commerteetnent Date"). The base rental
rate shall bd $289;000 per year, Base rentals shall be paid in advance in equal monthly
installments commencing on the Lease Commencement Date: Also commencing on the Lease
Commencement Date and continuing during the term of the lease, Company shall timely pay, at
its sole cost and expense, as additional rentals, any and all other customary costs arlsing out of
the use and occupancy of the Building and the Property, including without limitation
maintenance, repair, insurance, utilities, and taxes. Any failure by GPEDC to pay flte base
rental payments described above shall not constitute a de€atilt by Company under the lease.
D. Canditiabs..to. Closine. The Patties acknowledge that Genova's execution of this
MOU is contingent upon the approval by the Commonwealth of Kentucky approving the
KEDFA incentives described above.'lie Parties acknowledge and agree that any obligations
of the Parties to consummate the transactions contemplated under the terms of this MOU
are expressly conditioned upon of the following:
1. Execution of it binding definitive lease agreement of the Building and the
Property among City, County, and Company on or before June 30, 2014;
2. Execution and delivery by Company of all loan documents required in this MOU
for the Revolving Loan Credit Agreement on of before June 30, 2014;
3. Approval ofthe KEDFA incentives described above by the State of Kentucky; and
4. Approval by the governing legislative bodies of-GPEDC, City, and County of
the terms of this MQU and the consummation of the transactions contemplated under
this MOU.
lit the event .the condition is riot satisfied or waived by the Parties hereto on or
before lime 30, 2014, this MOU shall terminate and thereafter neither Patty shall have arty
further liabilities or obligations to the other hereuitder.
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E Exnenses. Except as otherwise provided herein and the definitive documentation
to be entered among the Parties, City and County, each Party shall be responsible for its
own attorneys' fees and other costs and expenses, anticipated or otherwise.
F. Assignability. GPEDC may assign any or all of its rights and obligations
hereunder to the City of Paducah, McCracken County; and/or the Paducah McCracken
County Industrial Development Authority.
G. Roverning Taw: Counter jorts: Miscellaneous. This MOU shall be governed by
and construed in accordance with the laws of the *State of Kentucky, without regard to any
conflict of laws principles. Venue shall be in the McCracken Circuit Court. This Agreement
may be executed in counterparts (including counterparts executed and transmitted via faze or
e-mail), each of which shall be deemed an original but all of which together shall constitute
one and the same instrument. This MOU shall continue in force and effect for the same term
as the lease agreement for the use and occupancy of the Property to be entered pursuant to
Us MOU, Marry provision of this MOU shall be held invalid under any applicable laws,
such invalidity shall not affect any other provision of this MOU than can be given affect
without the invalid provision, arid, to this and, the provisions hereof are severable.
I3. Bffeetive Date. This MOU shall not become affective And binding until My
approved, executed, and delivered by all Parties hereto and City and County.
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IN WITNESS WHEREOF, the parties hereto have set their hands.
OENOVAPRODUCTS, INC.
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Date: . r/ F
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G.P.E.D.C.,
By:
Title:—_:(d2a &o
Date:
13
Ntwlt_3l064j9j
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HAVE SEEN AND AGREED TO:
CITY OF PADUCAH, KENTUCKY
BYl C _
Title: _
Date: )
MCCRACKEN COUNTY,KENTUCKY
By: I a7_ -
Title:UDGsd'�rJ9/!/G�
Date:
I Tleuoil 3906419 I
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