HomeMy WebLinkAbout2005-9-7007470
ORDINANCE NO. 2005-9-7007
AN ORDINANCE OF THE CITY OF PADUCAH, KENTUCKY,
APPROVING A MEMORANDUM OF UNDERSTANDING AMONG THE CITY OF
PADUCAH, KENTUCKY, THE COUNTY OF MCCRACKEN, KENTUCKY, THE
GREATER PADUCAH ECONOMIC DEVELOPMENT COUNCIL, AND
MARQUETTE TRANSPORTATION, 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 and the County of McCracken, Kentucky (the
"County") have further determined that it is necessary and desirable to accomplish such
public purposes that the City and the County must proceed at this time to provide certain
economic incentives to Marquette Transportation, Inc., ("Marquette") in order to induce
Marquette to expand its existing business and industry by expanding and relocating its
C, new corporate headquarters and warehouse operations (the "Project") within the
boundaries of the City of Paducah and McCracken County, Kentucky; and
WHEREAS, The City, County, Marquette and the Greater Paducah
Economic Development Council ("GPEDC") 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 County, the GPEDC and Marquette 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
Marquette, the City, the County and the GPEDC (the "MOU") in substantially the form
attached hereto as Exhibit anp
d made art hereof. It is further determined that it is
A
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 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
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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:
44910V a
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Tammara S. Brock, City Clerk
Introduced by the Board of Commissioners, August 23, 2005
Adopted by the Board of Commissioners, September 13, 2005
Recorded by Tammara S. Brock, City Clerk, September 13, 2005
Published by The Paducah Sun, September 20, 2005
Ord\Contract-Marquette
472
EXHIBIT A
69789Ver13
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding (MOU) is made and entered into between
MARQUETTE TRANSPORTATION COMPANY, INC., Delaware corporation
("Marquette Transportation"), the GREATER PADUCAH ECONOMIC
DEVELOPMENT COUNCIL ("GPEDC"), the CITY OF PADUCAH, KENTUCKY
("City"); and MCCRACKEN COUNTY, KENTUCKY ("County");
WHEREAS GPEDC, City, and County leadership and boards strongly support
Marquette Transportation's decision to expand and locate its new corporate headquarters
and warehouse operations (the "Project") within the Information Age Park ("IAP"),
situated within the boundaries of the City of Paducah and McCracken County; and
WHEREAS, Marquette Transportation's development of the Project will have a
positive impact on the entire community by stimulating the local economy, expanding the
tax base, reducing the unemployment rate and enhancing the river activity; and
WHEREAS, the community leaders recognize the importance of Marquette
Transportation's current and future contributions to the economic base of the City and
County; and
WHEREAS, in order to induce the acquisition, construction, installation, and
equipping of the Project by Marquette Transportation, the City, County, and GPEDC
have agreed to provide certain economic incentives to Marquette Transportation for
purposes of defraying some of the costs of acquiring, installing, and equipping the
Project; and
WHEREAS, it is deemed necessary and advisable that this MOU be entered into
by the parties setting forth in summary form the parties' intent as to the basic aspects of
the Project, a like -kind exchange transaction relating to the Project, and the acquisition,
construction, installation, and the economic incentives to be provided to partially defray
the costs of the Project; and
WHEREAS, the economic incentives to be provided to Marquette Transportation
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 County and City.
Now, THEREFORE, Marquette Transportation, the City, GPEDC, and County
hereby express their understanding as to the following:
A. Marquette Transportation commits to:
1. Acquire from GPEDC through the utilization of a qualified
intermediary designated by Marquette ("Qualified Intermediary")
in a deferred like -kind exchange qualifying for tax free treatment
under Section 1031 of the Internal Revenue Code, and locate its
new corporate headquarters and warehouse operations thereon, a
certain 12.4009 acre tract of real property located within the
m� Information Age Park, which tract of real property is more
particularly described as being Tract 14, consisting of 12.4009
acres, in the Paducah Information Age Park Subdivision, Section
as shown on Plat Section "_," page (to be provided)
in the McCracken County Court Clerk's office (the "Land").
Marquette Transportation's commitment to so acquire the Land
through the utilization of the Qualified Intermediary is subject to
the negotiation and execution of a definitive Purchase Agreement
with terms satisfactory to the parties. The Purchase Agreement
will contain representations, warranties, covenants, conditions, and
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indemnification provisions customary in transactions of this size
and type. GPEDC shall deliver to the Qualified Intermediary at
Closing good record and merchantable title to the Land 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. If such definitive
agreement is not agreed upon and signed by both parties within 45
days after the Effective Date (as hereinafter defined) of this MOU,
either party may refuse to proceed with the transaction
contemplated hereby without liability to the other party.
2. Construct, install and equip, at its sole cost and expense, a 24,000
sq. ft. corporate headquarters and adjacent warehouse (the Land,
such corporate headquarters and such adjacent warehouse
collectively herein referred to as the "Marquette Replacement
Headquarters") within 12 months of the Closing (as defined
herein).
3. Invest over $2 million, exclusive of the cost of the Land, in the
construction, installation, and equipping of the Marquette
Replacement Headquarters within 12 months of the Closing (as
defined herein).
4. Retain and relocate to the Marquette Replacement Headquarters
the existing corporate headquarters staff of 40 employees, which
employees shall continue to pay all license fees as defined under
Article IV of the Paducah Code of Ordinance, Section 106-183.
Marquette Transportation 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
Marquette Replacement Headquarters, earning an average salary of
at least $50,000, and paying all license fees as defined under
Article IV of the Paducah Code of Ordinance, Section 106-183
within 3 years of the Effective Date of this agreement. Marquette
Transportation will withhold and report such taxes and fees to the
City.
6. All new employees hired as a result of the Project shall receive a
competitive benefits package.
7. Marquette Transportation shall provide to the City and County, at
its sole cost and expense, a detailed, verified progress report,
reasonably satisfactory to the City and County, of its progress in
completing the capital investment and employment goals
committed herein. Such progress reports will be provided within
12, 24 and 36 months from Closing (as defined herein) and at any
other time(s) as the City and the County may require, in their sole
discretion.
8. At the Closing Marquette Transportation will grant, convey and
sell to the GPEDC the property located at 2308 S. 4th Street in
Paducah, Kentucky which it currently uses as its corporate
headquarters (the "4th Street Property") in consideration for the
GPEDC transferring to the Qualified Intermediary the Land plus
$1,163,986.501 of cash adjusted for any usual or allowable offsets
or credits, including but not limited to the satisfaction of any
indebtedness secured by the 4th Street Property and the proration of
taxes (the Land plus the $1,163,986.50 of cash as so adjusted
t This cash amount represents the appraised value of the 4th Street Property ($1,200,000.00) less the fair
market value of only 2.4009 acres of the Land ($36,013.50).
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hereinafter collectively referred to as the "Net Sale Proceeds").
Marquette Transportation shall execute and deliver to GPEDC a
general warranty deed at Closing. Marquette Transportation is
willing to sell the 0' Street Property but only as part of a deferred
like -kind exchange qualifying for tax free treatment under Section
1031 of the Internal Revenue Code.
9. The Qualified Intermediary will be responsible for using the Net
Sale Proceeds it receives from GPEDC at the Closing to construct
the Marquette Replacement Headquarters. Marquette
Transportation agrees that the total construction cost of the
Marquette Replacement Headquarters, exclusive of the cost of the
Land, will be no less than $2,000,000.00, and that it, or its
representative, will be retained by the Qualified Intermediary to act
as construction manager on the Qualified Intermediary's behalf
during construction. At such time as the Qualified Intermediary
has spent the cash (net of administrative expenses) it has received
from GPEDC at Closing in partially completing the construction of
the Marquette Replacement Headquarters (but in no event later
than 180 days following the Closing) the Qualified Intermediary
will transfer title to the Land to Marquette Transportation together
with the improvements thereon thus far completed, and Marquette
Transportation will thereafter use its own additional funds to
promptly complete the construction of the Marquette Replacement
Headquarters.
1 o . Marquette Transportation understands, acknowledges and agrees
that the Land will be conveyed subject to, but not limited to, the
covenants, conditions, easements and restrictions for the
Information Age Park Subdivision (the "IAP Covenants and
Restrictions"). The IAP Covenants and Restrictions will apply to
and run with the Land being conveyed, and Marquette
Transportation and all successive future owners and occupants will
be fully and completely bound thereby.
11. Marquette Transportation will covenant and agree that no outside
storage of products or parts of any kind will be permitted on the
Land. In addition, no on -street vehicle loading shall be permitted.
This restriction shall be a covenant running with the Land, and
Marquette Transportation and all successive future owners and
occupants of the Land will be fully and completely bound by such
restriction.
12. Marquette Transportation will agree that all parking areas and
internal roadways serving the corporate headquarters and
warehouse operation shall be a hard surface in accordance with the
IAP Covenants and Restrictions.
B. The Cily, County, and GPEDC commit to:
1. At Closing and simultaneously with GPEDC's purchase of the 4th
Street Property, GPEDC will transfer the Net Sale Proceeds to the
Qualified Intermediary. The Land will be conveyed to the
\- Qualified Intermediary by general warranty deed.
2. The City will provide a maximum cash grant of $30,000 to
Marquette Transportation in three equal annual installments of
$10,000.00 each. The grant cycle commences at such time as the
construction contract for the warehouse facility is awarded by
Marquette Transportation. This grant shall be used only to help
defray the cost of installing a brick facing on the exterior of the
Marquette Replacement Headquarters..
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3 . The County will provide a maximum cash grant of $30,000 to
Marquette Transportation in three equal annual installments of
$10,000.00 each. The grant cycle commences at such time as the
construction contract for the warehouse facility is awarded by
Marquette Transportation. This grant shall be used only for the
purposes described in paragraph B.2.
4. In the event it is necessary to relocate the underground electric
utility line encumbering the Property in order to accommodate the
construction of the Marquette Replacement Headquarters and
warehouse on the Property, the underground electric utility line
will relocated at no cost to Marquette.
5. GPEDC will purchase from Marquette Transportation the 4th Street
Property in consideration for its payment of the Net Sale Proceeds
at Closing to the Qualified Intermediary. This commitment is
subject to the negotiation and execution of a definitive Purchase
Agreement with terms satisfactory to the parties. The Purchase
Agreement will contain representations, warranties, covenants,
conditions, and indemnification provisions customary in
transactions of this size and type. Marquette Transportation will
deliver at Closing good record and merchantable title to the 4th
Street 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. If
such definitive Purchase Agreement is not agreed upon and signed
by both parties within 45 days after the Effective Date of this
MOU, either party may refuse to proceed with the transaction
contemplated hereby without liability to the other party.
6. Marquette Transportation estimates that the completion date of the !"
Marquette Replacement Headquarters will be approximately 12
months after the Closing (the "Estimated Completion Date").
Although Marquette Transportation cannot guarantee the
Estimated Completion Date, it will diligently pursue the
completion of construction of the Marquette Replacement
Headquarters and will use its best efforts to cause completion of
construction by no later than the Estimated Completion Date.
Marquette Transportations shall remain in possession of the 4th
Street Property on a rent-free basis after the Closing and until
forty-five (45) days after the date the construction of the Marquette
Replacement Headquarters is completed (the "Rent Free Period").
Marquette Transportation shall not be responsible for rental
payments during the Rent Free Period. Marquette Transportation
shall deliver possession to GPEDC, or its successors and assigns,
upon the expiration of the Rent Free Period. If Marquette
Transportation holds over in possession of the 4th Street Property
after the expiration of the Rent Free Period, the resulting tenancy
shall be on a month-to-month basis. During such month-to-month
tenancy, Marquette Transportation shall pay to GPEDC, or its
successors and assigns, as rent an amount equal to the fair market
rental rate (hereinafter defined) for the 4th Street Property on a
monthly basis. "Fair Market Rental Rate" shall be the fair
market rental rate of the 4th Street Property determined by GPEDC,
or its successors and assigns, based on a survey of annual rental
rates being charged in the market area which encompasses the 4th
Street Property for space comparable to the 4th Street Property (
herein called "Rent'). Rent shall be paid in advance on the first
day of each and every month that Marquette Transportation holds
over in possession of the 4th Street Property.
During the Rent Free Period, Marquette Transportation shall, at its
sole cost, (i) maintain the 4th Street Property in its present
operating condition, normal wear and tear excepted; (ii) pay for all
gas, electricity, sewer, refuse, and water charges which may be
serving the 4th Street Property; and (iii) maintain casualty
insurance to cover the replacement cost of the improvements
located upon the 4th Street Property and maintain comprehensive
general liability coverage covering the 4th Street Property, under
which the GPEDC will be held harmless and named as an
additional insured and loss payee, with an insurance company
authorized to transact business within the Commonwealth of
Kentucky.
Upon delivery of possession of the 4th Street Property, Marquette
Transportation shall deliver and surrender the 4th Street Property,
free and clear of the claims, rights and interests of any party to the
use or possession of the 4th Street Property and deliver and
surrender same in a clean, sanitary and orderly condition, free of
debris and waste materials.
7. The City and County will use its best faith efforts to expedite local
permitting and waive or reduce all permit fees.
C. Closing:
Subject to the full performance or waiver of performance of all parties of
their respective duties set forth in the definitive Purchase Agreement and
the satisfaction or waiver of all of the conditions to Closing set forth
therein, the Closing of the transactions contemplated hereby shall be not
later than the date which is 75 days following the Effective Date of this
MOU ("Closing"). The 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:
1. If construction has not begun on the Marquette Replacement
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 the Closing
to be rescinded, at no out-of-pocket cost to the City, County, or
GPEDC, such that as nearly as practicable the parties are restored
to the respective positions they were in prior to the Closing. In the
event construction has not begun within this 6 month period due to
unforeseeable causes beyond Marquette Transportation'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.
2. If at the times designated in paragraph A., 7, above, Marquette
Transportation has failed to meet the covenanted employment
levels it will fully reimburse the City and County for the cash
grants. 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 Marquette Transportation.
Notwithstanding the foregoing, the City and County may, at their
joint and sole discretion: (a) seek only a pro rata reimbursement
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based on employment actually achieved, or, (b) waive any
reimbursement.
E. Miscellaneous Provisions:
1. This Memorandum of Understanding is intended to be, and shall
be construed only as, an expression of the parties' understanding
and intent and is not intended to be a binding agreement. None of
the parties shall be under any obligation to the others unless and
until a definitive Purchase Agreement is executed.
2. No party shall assign this MOU or its rights and obligations under
any definitive Purchase Agreement without first obtaining the
written consent of the other parties, which written consent shall not
be unreasonably withheld.
F. Contingencies:
The transactions contemplated by this MOU shall be contingent upon: (i) the
completion by each party, to its satisfaction, of due diligence on the respective
properties, (ii) satisfactory completion of legal due diligence, including review of
title examinations, surveys, and environmental reports, (iii) approval and consent
to each sale and purchase and the terms of this agreement by the board of
directors of each party; (iv) the continued accuracy of the representations and
warranties of each party as of the Closing, and (v) the execution of a definitive
purchase agreement by all of the parties.
G. Effective Date
This MOU 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 McCracken County Fiscal
Court and the Board of Directors of the GPEDC (the "Effective Date"). In
no event shall this MOU become effective unless it has been fully
executed and delivered by all the parties hereto by no later than September
15, 2005.
IN WITNESS WHEREOF, the parties hereto have set their hands.
MARQUETTE TRANSPORTATION
Signature:
Title:
Date:
CITY OF PADUCAH, KENTUCKY
Signature:
Title:
Date:
MCCRACKEN COUNTY, KENTUCKY GREATERPADUCAH ECONOMIC
DEVELOPMENT COUNCIL
Signature: Signature:
Title: Title:
Date:
Date:
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