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HomeMy WebLinkAbout2010-6-7693125641 ORDINANCE NO. 2010-6-7693 AN ORDINANCE OF THE CITY OF PADUCAH, KENTUCKY, APPROVING A MEMORANDUM OF UNDERSTANDING AMONG THE CITY OF PADUCAH, KENTUCKY AND PADUCAH & LOUISVILLE RAILWAY, INC., WITH RESPECT TO A PUBLIC PROJECT; AND AUTHORIZING THE EXECUTION OF VARIOUS DOCUMENTS RELATED TO SUCH MEMORANDUM OF UNDERSTANDING WHEREAS, the City of Paducah, Kentucky (the "City") has previously determined, and hereby further determines, that it is a public purpose to reduce unemployment in the City, to increase the City's tax base, to foster economic development within the City and to promote the development of a skilled workforce, all to the benefit of the citizens and residents of the City; and WHEREAS, The City have further determined that it is necessary and desirable to accomplish such public purposes that the City must proceed at this time to provide certain economic incentives to the Paducah & Louisville Railway, Inc., a Kentucky corporation, ("Company") in order to induce Company to relocate and establish a new corporate headquarters and office building within the downtown Paducah area (the "Project"); and WHEREAS, The City and the Company find it necessary and advisable to set forth in summary form the intention of the Project and the economic incentives to be provided to partially defray the costs of the Project; and WHEREAS, in order to further the above described public purposes, it is necessary and desirable that the City now authorize the Memorandum of Understanding among the City and the Company with respect to the Project and the economic incentives to be provided. NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF PADUCAH, KENTUCKY, AS FOLLOWS: Section 1. Recitals and Authorization. The City hereby approves the Memorandum of Understanding among the City and the Company (the "MOU") 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 MOU for the purposes therein specified, and the execution and delivery of the MOU is hereby authorized and approved. The Mayor of the City is hereby authorized to execute the MOU, together with such other agreements, instruments or certifications which may be necessary to accomplish the transaction contemplated by the MOU with such changes in the MOU not inconsistent with this Ordinance and not substantially adverse to the City as may be approved by the official executing the same on behalf of the City. The approval of such changes by said official, and that such are not substantially adverse to the City, shall be conclusively evidenced by the execution of such MOU by such official. Section 2. Severability. If any section, paragraph or provision of this Ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this Ordinance. Section 3. Compliance With Open Meetings Laws. The City Commission hereby finds and determines that all formal actions relative to the adoption of this Ordinance were taken in an open meeting of this City Commission, and that all deliberations of this City Commission and of its committees, if any, which resulted in formal action, were in meetings open to the public, in full compliance with applicable legal requirements. Section 4. Conflicts. All ordinances, resolutions, orders or parts thereof in conflict with the provisions of this Ordinance are, to the extent of such conflict, hereby repealed and the provisions of this Ordinance shall prevail and be given effect. Section 5. Effective Date. This Ordinance shall be read on two separate days and will become effective upon summary publication pursuant to KRS Chapter 424. .ATTEST: jC��lalli � Tammara S. Brock, City Clerk Inttoduced by the Board of Commissioners, June 8, 2010 Adopted by the Board of Commissioners, June 22, 2010 Recorded by Tammara S. Brock, City Clerk, June 22, 2010 Published by The Paducah Sun, June 28, 2010 \ord\MOU-P&L Railway 123627ver2 clean EXHIBIT A MEMORANDUM OF UNDERSTANDING This is a Memorandum of Understanding (this "Agreement") between PADUCAH & LOUISVILLE RAILWAY, INC., a Kentucky for-profit corporation, whose address is 1500 Kentucky Avenue, Paducah, Kentucky 42003 ("Company"); and the CITY OF PADUCAH, KENTUCKY, a municipal corporation of the second class and a body politic and corporate, whose address is P.O. Box 2267, Paducah, Kentucky 42002-2267 ("City"). WHEREAS, Company proposes to establish a new corporate headquarters and office building within the downtown Paducah area (the "Project") on a certain tract of land owned by the City and located at the intersection of Marine Way (formerly 2nd Street) and Clark Street (the "Property") in Paducah, McCracken County and more particularly described in Exhibit A; and WHEREAS, the Project will have a positive impact on the entire community by stimulating the local economy, expanding the tax base, and rejuvenating and stimulating development within the downtown Paducah area; and WHEREAS, the City leadership strongly supports the location of the Project in downtown Paducah, McCracken County, Kentucky; and WHEREAS, the community leaders recognize the importance of the future contributions of Company to the economic and employment base of the City; and WHEREAS, Company has the option to locate the Project in another state; and WHEREAS, in order to induce the acquisition, location, and construction of the Project in Paducah, McCracken County, Kentucky, City has agreed to provide certain economic incentives to Company for purposes of defraying the cost of construction, installation and equipping of the Project; and WHEREAS, it is deemed necessary and advisable that this Agreement be entered into by the parties setting forth their agreement with respect to the location, construction, installation of the Project and the maintenance of acceptable levels of employment relating to the Project and the economic incentives to be provided to defray some of the costs thereof; and WHEREAS, the economic incentives to be provided to Company are in conformity with the "Guidelines For Providing Economic Incentives To Qualified Projects Located Within The Boundaries of the City of Paducah" previously adopted by the City. THEREFORE, Company and City agree to the following: A. Company commits to the following: 1. Acquire from City and locate its new corporate headquarters and office building on the Property. Company's commitment to so acquire the Property is subject to City delivering to Company at Closing (as defined herein) good record and merchantable title to the Property free and clear of all claims, mortgages, liens, encumbrances, or any other adverse interest, and any other adverse matters shown by an accurate survey, by general warranty deed. Each party shall be responsible for their respective costs customary in real estate transactions of this nature and size. _ 2. Construct, install and equip, at its sole cost and expense, an 18,000 square foot. corporate headquarters and office building (the Property, such corporate headquarters and office building collectively herein referred to as the "Company Headquarters") upon the Property within 14 months of the Closing. Company estimates that the completion date of the Company Headquarters will be approximately 14 months after the Closing (the "Estimated Completion Date"). Although Company cannot guarantee the Estimated Completion Date, it will diligently pursue the completion of construction of the Company Headquarters and will use its best efforts to cause completion of construction by no later than the Estimated Completion Date. 3. Invest over $3.5 Million Dollars in the construction, installation, and equipping of the Company Headquarters within 14 months of the Closing. 4. Retain and relocate to the Company Headquarters the existing corporate headquarters staff of 46 employees, which employees shall continue to pay all license fees as defined under Article IV of the Paducah Code of Ordinance, Section 106-183. Company shall continue to withhold and report such taxes and fees to the City. 5. Hire a minimum of 12 new full time employees to work at the Company Headquarters, earning an average salary of at least $74,000.00, and paying all license fees as defined under Article IV of the Paducah Code of Ordinance, Section 106-183 for at least two (2) years following Company's relocation to the Company Headquarter. Company shall withhold and report such taxes and fees to the City. All new employees hired as a result of the Project shall receive a competitive benefits package. 6. Company shall provide to City, at its sole cost and expense, a detailed, verified progress report, reasonably satisfactory to City, its progress in completing the capital investment and employment goals committed herein. Such progress reports will be provided within 6, 12, and 24 months from Closing. 7. In consideration for City conveying and transferring to Company the Property, Company has granted, transferred and conveyed to City Company's property located off of Cairo Road, in Paducah, McCracken, Kentucky, for use by the City in its Greenway Trial project. The quit claim deed from Company to City is dated December 18, 2009 and is of record in Deed Book 1182, page 323, in the McCracken County Court Clerk's office. B. City commits to following_ 1. At Closing, City shall grant, transfer, and convey to Company the Property. The Property shall be conveyed to Company by general warranty deed. 2. City shall provide a maximum cash grant of $350,000.00 to Company, commencing at such time as the construction contract for the Company Headquarters is awarded by Company. This grant shall be used only to assist defray the cost of constructing, installing, and equipping the Company Headquarters. 3. After Closing, City shall cause to be removed and relocated underground, at its sole cost, all electric utility lines and poles encumbering the Property in order to accommodate the construction of the Company Headquarters on the Property. 4. After Closing, City shall, at its sole cost and expense, construct and maintain a parking lot upon the property more particular described in Exhibit B for the joint use of both Company and Four Rivers Center for the Performing Arts, Inc., ("Four Rivers Center") in accordance with the terms of the Second Addendum to the Lease and Construction Agreement dated , 2010, (the "Second Addendum to Lease") by and among Four Rivers Center, City, and Company. C. Closing: Subject to the satisfaction or waiver of all of the conditions to Closing set forth herein, Closing of the transaction contemplated hereby shall be not later than the date which is 30 days following the Effective Date of this Agreement ("Closing"). Closing shall be conducted at the offices of Denton & Keuler at a time to be mutually agreed upon by the parties hereto. D. Rescission and Reimbursement of Grant Monies: If construction has not begun on the Company Headquarters within 6 months after Closing the parties will promptly take all reasonable steps to cause the transfers, conveyances and other transactions which occurred at Closing to be rescinded, at no out-of-pocket cost to City, such that as nearly as practicable the parties are restored to the respective positions they were in prior to Closing. In the event construction has not begun within this 6 month period due to unforeseeable causes beyond Company's control and without its fault or negligence, including, but not restricted to, acts of God, acts of a public enemy, unforeseen underground conditions, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, shortage of materials, unusually severe weather, or delays caused by the failure of contractors or subcontractors to perform, this 6 month period shall be extended for the period of the force majeure delay to a date mutually agreeable to the parties. If at the times designated in paragraph A., 4 and 5 above, Company has failed to meet the covenanted employment levels it will fully reimburse the City for the cash grant. The aforesaid reimbursement shall include interest at N.Y. prime, as published in the Wall Street Journal, on the date of the receipt of the grant money by Company. Notwithstanding the foregoing, the City may, at their sole discretion: (a) seek only a pro rata reimbursement based on employment actually achieved, or, (b) waive any reimbursement. E. Contingencies: The transactions contemplated by this Agreement shall be contingent upon: (i) the completion by Company, to its satisfaction, of due diligence on the Property, (ii) satisfactory completion of legal due diligence, including review of title examinations, surveys, and environmental reports, (iii) approval and consent to the sale and purchase and the terms of this Agreement by the board of directors of Company and the Paducah City Commission; and (iv) the approval and execution of the Second Addendum to Lease by all of the parties thereto. F. Miscellaneous Provisions: 1. This Memorandum of Understanding is intended to be, and shall be construed as a binding agreement upon the Effective Date. 2. No party shall assign this Agreement without first obtaining the written consent of the other party. 3. Each party shall be responsible for its own professional fees. G. Effective Date This Agreement shall not become effective until fully executed and delivered by all the parties hereto and approved by duly adopted ordinances or motions by the Paducah City Commission (the "Effective Date"). [For signatures see next page.] IN WITNESS WHEREOF, the parties hereto have set their hands. PADUCAH AND LOUISVILLE CITY OF PADUCAH, KENTUCKY RAILWAY, INC. Signature:_ Title: Date: .... Signature: .... Title: .... Date: EXHIBIT A Being Tract A, containing 1.5286 acres, as shown on the Waiver of Subdivision plat of Marine Way in Paducah, McCracken County, Kentucky, for the City of Paducah recorded in Plat Section "M", page 295, in the McCracken County Court Clerk's Office. Being part of the same property conveyed to The City of Paducah, Kentucky by Quitclaim Deed dated October 12, 2001, of record in Deed Book 967, page 244, in the McCracken County Court Clerk's Office. Being part of the same property conveyed to The City of Paducah, Kentucky by deed dated February 25, 2000, of record in Deed Book 931, page 682, in the McCracken County Court Clerk's Office. Being part of the same property conveyed to The City of Paducah, a Kentucky municipal corporation of the second class, by Quitclaim Deed dated March 18, 2004, of record in Deed Book 1037, page 71, in the McCracken County Court Clerk's Office. EXHIBIT B Being Tract B, containing 0.7722 acres, as shown on the Waiver of Subdivision plat of Marine Way in Paducah, McCracken County, Kentucky, for the City of Paducah recorded in Plat Section "M", page 295, in the McCracken County Court Clerk's Office. Being part of the same property conveyed to The City of Paducah, Kentucky by Quitclaim Deed dated October 12, 2001, of record in Deed Book 967, page 244, in the McCracken County Court Clerk's Office. Being part of the same property conveyed to The City of Paducah, Kentucky by deed dated February 25, 2000, of record in Deed Book 931, page 682, in the McCracken County Court Clerk's Office. Being part of the same property conveyed to The City of Paducah, a Kentucky municipal corporation of the second class, by Quitclaim Deed dated March 18, 2004, of record in Deed Book 1037, page 71, in the McCracken County Court Clerk's Office.