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HomeMy WebLinkAbout2007-5-7283287 ORDINANCE NO. 2007-5-7283 AN ORDINANCE OF THE CITY OF PADUCAH, KENTUCKY, RATIFYING AND APPROVING A MEMORANDUM OF UNDERSTANDING AMONG THE CITY OF PADUCAH, KENTUCKY, THE GREATER PADUCAH ECONOMIC DEVELOPMENT COUNCIL, PADUCAH-MCCRACKEN COUNTY RIVERPORT AUTHORITY, AND WESTERN RIVERS BOAT MANAGEMENT, 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 has further determined that it is necessary and desirable to accomplish such public purposes, the City must proceed at this time to provide certain economic incentives to Western Rivers Boat Management, Inc., ("Western Rivers") in order to induce Western Rivers to establish a new corporate 1 headquarters operation (the "Project") located at 2308 South 4th Street within the boundaries of the City of Paducah, Kentucky; and WHEREAS, the City, Western Rivers, the Greater Paducah Economic Development Council ("GPEDC"), and Paducah -McCracken County Riverport Authority ("Riverport Authority") find it necessary and advisable to set forth in summary form the intention of each party as to the basic aspects 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, the GPEDC, Riverport Authority, and Western Rivers with respect to the Project and the economic incentives to be provided. WHEREAS,: the economic incentives to be provided to Developer are in conformity with the "Guidelines for Providing Economic Incentives To Qualified Projects Located Within The Boundaries Of The County Of McCracken and the City of Paducah" previously adopted by the City. 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 Western Rivers, the City, Riverport Authority, and the GPEDC (the "MOU") in substantially the form attached hereto as Exhibit A and made part hereof. It is further M determined that it is necessary and desirable and in the best interest 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 City of Paducah hereby ratifies the Mayor's execution of the MOU, together with such other agreements, instruments or certifications which were 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, 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: JMVM" Tammara S. Brock, City Clerk Introduced by the Board of Commissioners, May 8, 2007 Adopted by the Board of Commissioners, May 22, 2007 Recorded by Tammara S. Brock, City Clerk, May 22, 2007 Published by The Paducah Sun, May 28, 2007 Ord\Incentives-Western Rivers Boat Mgmt MOU 04/24/2007 15:19 RU 2704426000 DENTON&KEULER Q002/007 MEMORANDUM OF UNDERSTANDING This is a Memorandum of Understanding (MOU) between WESTERN RIVERS BOAT MANAGEMENT, INC., an Arkansas corporation ("WESTERN RIVERS", or "Project", or "Company"), with principal offices located in Ash Flat,; Arkansas; the CITY OF PADUCAH, KENTUCKY ("City"); and G.P.E.D.C., INC., doing, business under the assumed name of the GREATER PADUCAH ECONOMIC DEVELOPMENT COUNCIL, INC., a Kentucky not -for- profit -corporation ("GPEDC"); and the PADUCAH-MCCRACKEN COUNTY RIVERPORT AUTHORITY (Riverport Authority). WHEREAS, WESTERN RIVERS proposes to establish a new corporate headquarters operation at 2308 South 4th Street in Paducah/McCracken County; and WHEREAS, the Project will have a positive impact on the entire community by stimulating the local economy, expanding the tax base, and reducing unemployment; and WHEREAS, the City, Riverport Authority, and GPEDC leadership strongly support the location of the Project in Paducah, McCracken County, Kentucky; and WHEREAS, the community leaders recognize the importance of the future contributions of WESTERN RIVERS to the economic and employment base of the City; and WHEREAS, WESTERN RIVERS has the option to locate the project in another state; and WHEREAS, in order to induce the acquisition, location, and installation of the WESTERN RIVERS Project in Paducah, McCracken County, Kentucky, the City, Riverport Authority, and GPEDC have agreed to provide certain economic incentives to WESTERN RIVERS for purposes of defraying site development costs, and relocation expenses ; 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, installation, investment and employment of 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 Developer are inconformity with the "Guidelines For Providing Economic Incentives To Qualified Projects Located Within The Boundaries Of The County Of McCracken and the City of Paducah" previously adopted by the City. THEREFORE, WESTERN RIVERS, the City, Riverport Authority, and GPEDC agree to the following: A. WESTERN RIVERS commits to: M 290 04/24/2007 15:19 FAX 2704426000 DENTON&KEULER Relocate its current corporate headquarters from Arkansas to a facility with the primary operations at 2308 South 4th Street in Paducah/McCracken County, Kentucky. 11003/007 2. Adhere to all of the regulations and requirements of the City of Paducah Zoning Ordinance. WESTERN RIVERS will use its best faith efforts to adhere to the following timeline: April 30, 2007 - WESTERN RIVERS executes the MOU. May 1, 2007 — WESTERN RIVERS commences desired due diligence on the land and headquarters. May 7, 2007- receive approval of Kentucky State incentive package. Transaction closing and WESTERN RIVERS takes possession. 4. Employment thresholds: Relocate/hire a minimum of 23 net new full-time employees which shall be Kentucky residents before year-end 2007. Relocate/hire an additional minimum of 10 net new, full time employees which shall be Kentucky residents before year-end 2008. 5. Payroll thresholds: Achieve an annual Paducah/McCracken County payroll for the 23 net new employees of $1,400,000 by year-end 2007. Achieve an annual Paducah/McCracken County payroll for the 10 net new employees of $800,000 by year-end 2008. 6. Achieve the following pay thresholds by the end of 2008, averaged across each employee skill base: Semi -skilled employees: 3 employees earning a.minimum of $14.42 per hour or $30,000 average annual salary. Skilled employees: 23 employees earning a minimum of $24.04 per hour or $50,000 average annual salary. Managerial: 7 employees earning a minimum of $38.46 per hour or 2 0 291 04/24/2007 15:20 FAX 2704426000 DENTON&KEULER 0 004/007 $80,000 average annual salary. 7. The Riverport Authority is given first right of refusal at the agreed upon purchase price should the WESTERN RIVERS elect to sell the property. 8. WESTERN RIVERS is responsible for all taxes, insurance and maintenance cost of the facility. The Riverport Authority will be named as an additional insured on the project's insurance policy for the facility. 9. All net new full-time employees as a result of the Project will be offered a competitive benefits package. 10. WESTERN RIVERS agrees to give primary and special consideration to PaducaWcCracken County for any future employment and capital investment expansions resulting from the corporate headquarters relocation. 11. WESTERN RIVERS agrees that in the event it fails to meet the required levels of employment and investment for the Project during the times previously noted, unless another time has been mutually agreed to, then the cash grant funds provided herein by the City and shall be fully reimbursed, plus interest calculated using New York prime rates. The City further agrees that in the event the failure to attain or maintain the required levels of employment of employment or investment by WESTERN RIVERS, in spite of the its good faith best efforts, were the result of unavoidable and unforeseen circumstances, including, but, not limited to an Act of God or national emergencies, then the City, at their sole discretion, may: (a) seek a pro rata reimbursement, or (b) waive any reimbursement. 12. WESTERN RIVERS shall provide, at the company's expense; detailed verification reasonably satisfactory to the City of the company's progress on the capital investment and employment goals committed herein. Such progress reports will be provided at 12, 18, 24, and 36 months from the date of the execution of this Agreement by the company and at such other time(s) as the City may require. The City reserves the right to require any reasonable verification procedures or process. 13. The Company acknowledges that the financial and other assistance it has received, as described herein, has been made possible, in part, by reason of local businesses, governmental entities, and citizens contributing to support the economic development efforts of GPEDC. The Company, as a good corporate citizen, does, hereby 292 04/24/2007 15:20 FAX 2704426000 DENTON&KEULER U005/007 agree that to the best of its ability and means it will also become a contributor to GPEDC. B. The City, Riverport Authority, ancLPEDC commit to: 1. The City shall provide to WESTERN RIVERS a cash grant of $300,000 to offset part of the costs associated with relocating the corporate headquarters from Arkansas to Paducah/McCracken County. This grant will be payable within 30 days of occupying and establishing operations in the new corporate headquarters facility. 2. (a). The Riverport Authority agrees to sell and convey to WESTERN RIVERS for use as a corporate headquarters and main service center, of the existing area of property located at 2308 South 4th Street in Paducah/McCracken County for a purchase price of $1.1 million dollars. (b). As the seller, the Riverport Authority will have the first mortgage. Personal guarantees of Company's owners shall not be required. monthly Mortgage payments shall be paid in advance. (c). The Company, and it principals, financial statements may be reviewed by the Chair of the Riverport Authority and it's CPA. The purpose of the review is to determine that the loan is based on satisfactory credit. The financial statements, and their content, shall be treated as strictly Confidential; however, the Riverport Authority Chair may make a report of his findings to the full Board; which likewise will treat the information as Confidential. The Riverport Authority will finance $ 1.1 million or the final purchase price at an interest rate of 100 basis points below the U.S. Prime Rate as published in the Wall Street Journal on closing day. For so long as the indebtedness remains unpaid the interest rate shall be adjusted on each fifth anniversary date of closing; provided, however, the applicable interest rate shall never exceed a maximum of 10 per cent, nor, be lower than 5 per cent. 4. Should the Company desire to pre -pay the purchase price at any time during the 15 years, it may do so and incur no penalty. The finance term will be for 15 years. The adjacent upstream land, with approximately 265 feet of river frontage, shall be leased to Company for a term of 5 years with 3 additional 5 year 4 0 J 04/24/2007 15:20 FAX 2704426000 DENTON&KEULER U006/007 options. The lease rate shall be $1000 per month for the initial term and each option period. The Company shall not; however, be charged any rental rate from the time of closing until it commences to utilize the property by either starting to fleet and/or tie off on the land, or for twelve (12) months, whichever occurs firsi. Monthly lease payments shall be paid in advance. 7. The Riverport Authority owns adjacent property commonly referred to as the Buckeye Terminal. For so long as the Riverport Authority has no user or purchaser for the river frontage of the Buckeye Terminal, the Company may tie off its vessels to the property, without charge. Further, the company shall name Riverport as an "additional insured" on its umbrella liability insurance policy, which shall remain in effect throughout the term and all extensions for liability purposes. Further, the Riverport Authority, will consider, but, shall under no legal obligation to do so, approaching the Company about the possibilities of its purchasing, leasing or partnering the property. The City will use its best efforts to expedite local permitting and waive or reduce all permit fees. 9. The City agrees to provide the required match for the Kentucky Cabinet for Economic Development KDJA incentive and thus allowing the project to receive maximum state benefit. 10. GYEDC will use its best efforts to assist in coordination of project and incentive related activities. 11. Each party shall be responsible for its own professional fees, closing costs and recording fees. WESTERN RIVERS BOAT MANAGEMENT, INC. Signature: CITY OF 1 Signature: Title: Title: r � � Date: Date_ 5 293 294 04/24/2007 15:20 FAX 2704426000 DENTON&KEULER Uoo7/007 GREATER PADUCAH ECONOMIC DEVELOPMENT COUNCIL, INC. Signature ` < Title:r�.�,�-s-� r Date: PADUCAH-MCCRACKEN RIVERPORT AUTHORITY Signature:&,�, / / 11 z1 - Title: , Date: _ �2 4 lo 7 88833 M 0