HomeMy WebLinkAboutMO #2347MUNICIPAL ORDER NO. 2347
A MUNICIPAL ORDER AUTHORIZING THE MAYOR TO EXECUTE
AMENDMENT NO. 1 TO THE MEMORANDUM OF UNDERSTANDING BETWEEN
SPROCKET, INC. AND THE CITY OF PADUCAH FOR THE CONSTRUCTION OF A CO -
WORKING AND BUSINESS START-UP INCUBATOR
WHEREAS, in late 2018, Sprocket Inc. received notice they were eligible to
receive up to a $600,000 capital grant from the Regional Innovation for Startups and
Entrepreneurs (RISE) program; and
WHEREAS, on May 14, 2019, the City of Paducah adopted Municipal Order No.
2238 authorizing the City Manager to make a monetary contribution for economic development
to Sprocket, Inc. in the amount of $150,000 to be used as local matching funds for the Kentucky
Cabinet for Economic Development's RISE CapX Grant; and
WHEREAS, on August 13, 2019, the City of Paducah adopted Municipal Order
No. 2271 authorizing the City Manager to make an additional monetary contribution to Sprocket,
Inc. in the amount of $50,000 for matching funds for the RISE CapX program; and
WHEREAS, on February 25, 2020, the City of Paducah adopted Municipal Order
No. 2326 to enter into a Memorandum of Understanding with Sprocket, Inc. to set forth the
respective responsibilities of Sprocket and the City for the completion of the approximately
8,800 square feet to 15,000 square feet of co -working and business startup -incubator space in the
Coke Plant located at 3121 Broadway; and
WHEREAS, in May of 2020, Sprocket Inc. received notice they were eligible to
receive up to a 1.2 million grant from the Cares Act FY 2020 EDA Public Works and Economic
Adjustment Assistance Program (EAA); and
WHEREAS, the City of Paducah now wishes to enter into Amendment No. 1 to
the Memorandum of Understanding to amend the grant funding information from the Kentucky
Cabinet for Economic Development RISE CapX Program to the Economic Development
Administration (EDA) Cares Act Economic Adjustment Assistance Program; amend funding
designations with $40,000 for grant writing assistance and 2 payments of $80,000 each upon
submission of certain documents relating to the goals stated within the Amendment.
KENTUCKY
NOW, THEREFORE, BE IT ORDERED BY THE CITY OF PADUCAH,
SECTION 1. That the City of Paducah hereby authorizes the Mayor to execute
Amendment No. 1 to the Memorandum of Understanding with Sprocket, Inc., in substantially the
form attached hereto and made part hereof, between the City of Paducah and Sprocket, Inc. for
the construction of a Co -working and Business Start-up Incubator.
SECTION 2. This Amendment commits no additional funds from the City of
Paducah. This expenditure will be charged to the Services Other (Sprocket Grant Match)
Account No. 2400 0401 523070 provided that budgeted funds from the FY21 budget are so
adopted.
SECTION 3. All ordinances, resolutions, orders or parts thereof in conflict with
the provisions of this Municipal Order are, to the extent of such conflict, hereby repealed and the
provisions of this Municipal Order shall prevail and be given effect.
SECTION 4. This Order shall be in full force and effect from and after the date of
its adoption.
Mayo
ATTEST:
ndsay Parish, City Glerk
Adopted by the Board of Commissioners, June 9, 2020
Recorded by Lindsay Parish, City Clerk, June 9, 2020
\mo\1VI0U Amendment 1 -Sprocket Co -Working and Business Start-up Incubator
Amendment No. I to Memorandum of Understanding with Sprocket, Inc.
This Amendment No. 1 to the Memorandum of Understanding (MOU) sets forth the terms and
understanding between SPROCKET INC., ("Sprocket") a Kentucky non-profit corporation and
the CITY OF PADUCAH ("City") to construct a Co -Working and Business Start-up Incubator
within Paducah, Kentucky.
Background
In May of 2020, Sprocket Inc. received notice they were eligible to receive up to a 1.2 million
grant from the Cares Act FY 2020 EDA Public Works and Economic Adjustment Assistance
Program (EAA). The EDA grant provides assistance to nuclear closure communities under the
EAA Program. The EDA provides strategic investments to support economic development,
foster job creation and attract private investments. The EDA grant is designed to leverage
existing regional assets and support the implementation of economic development strategies that
advance new ideas and creative approaches to advance economic prosperity in communities that
have been negatively impacted by closure of a nuclear facility.
Sprocket's EDA application is to build out approximately 8,800 square feet of undeveloped
warehouse space in the Coke Plant for a co -working and business start-up incubator. Co -
working is an emerging business model that attracts individuals to specially designed spaces to
work independently, or collaboratively, in a shared office environment. The typical user is
entrepreneurial and self-employed. There are currently no such spaces in the local market.
Sprocket needs financial assistance from the City and other partners to complete the construction
and furnishings in the warehouse space of the Coke Plant. The total buildout is expected to cost
approximately $1,290,000. It is expected that the owners of the Coke Plant will offer Sprocket a
lease with the initial term being at a nominal cost.
To operate the facility to its maximum potential and start programming that creates jobs & tech
based companies, Sprocket is partnering with Codefi, a Cape Girardeau, Missouri company.
Codefi effectively manages a similar space in downtown Cape Girardeau. Codefi will use its
considerable experience and expertise to assist with the design, build -out and furnishing of the
facility; hire and manage all staff; create and disseminate all marketing communications; recruit
members and sponsors; and organize and oversee all programing. For these services, Codefi will
be paid management fees by Sprocket. The force multiplier is Codefi's experience and access to
capital. Codefi is expected to identify and assist certain technical entrepreneurs to create tech -
based businesses in the Paducah and McCracken County Kentucky area.
Purpose
This MOU sets forth the respective responsibilities of Sprocket and City for the completion of
the following;
Goal 1- Buildout of approximately 8,800 square feet of co -working and business startup -
incubator space in the Coke Plant located at 3121 Broadway.
The above stated goal will be accomplished by undertaking the following activities:
(A) Sprocket will be the fiscal agent for this collaboration. It will have financial
responsibility for the capital costs and operation of the coworking center, in addition to
its current make -space operations.
(B) Sprocket will secure grant agreements with the Cares Act FY 2020 EDA Public Works
and Economic Adjustment Assistance Program.
(C) Sprocket will design the space in accordance with all City of Paducah development
policies and ordinances including zoning and building/electrical permits.
(D) Sprocket will seek proposals and contract for the construction of the space and
furnishings.
(E) Sprocket will secure an acceptable lease from Edward and Meghan Musselman for the
use of the space.
(F) Sprocket will identify and secure all the sources of funding needed to minimally build
out the space and operate the project; and
Goal 2 - Sprocket will secure a contract with Codefi for a new Workforce & Economy
Development Program. The Workforce & Economy Development Program will be
accomplished by undertaking the following activities:
a. Codefi will start a Workforce Development program called Code Labs ONE
Training Program. This program is a boot camp -style introduction to computer
programming for trainees with no previous coding experience. Outcomes include
30 - 40 admissions per course.
b. Codefi will start a Workforce Development program called Code Labs TWO
Training Program. This program is an intermediate -level computer .programming
course building on the concepts learned in Code Labs ONE. Outcomes include 10
15 admissions per course.
c. Codefi will start a Workforce Development program called Youth Coding
League. The Youth Coding League is a fully packaged after-school program for
grades 5-8 that introduces students to computer science in an innovative, project
based learning environment. Outcomes include 20 - 30 admissions per course.
d. Codefi will start a New Business program called 1St 50k Startup Competition. The
1`50k is a startup competition that provides investments and pro-bono mentoring
services to founders of technology-based startups. Outcomes include 25 - 30 Pitch
Day Participants.
e. Codefi will start a New Business program called Seed Fund Development. A seed
fund will be developed to provide on-going local investments into new expanding
technology-based businesses. Outcomes include 3-5 new business launch or
expansion and $100,000 funds raised and invested.
f. Codefi will assist in Funding, Design and Project Development of the Remote and
Co -Work Center at the Coke Plat. Outcomes include 4-6 new grants submitted,
150 design and construction management hours, 75 project development hours
andl.2 — 3M funds raised.
g. Codefi will assist in the promotion and management of the Co -Work Center at the
Coke Plant during at least the first year of operation, services will be provided to
ensure a successful launch and operation of the remote and co -work center.
Outcomes include 100 new members within 12 months, and 20 private offices for
businesses.
Reporting
Sprocket will make regular reports on the progress of the project to the Paducah Board of
Commissioners through the City Manager's Office or upon request.
Payment
The City of Paducah will contribute in an amount of $40,000.00 for grant writing assistance for
the Cares Act FY 2020 EDA Public Works and Economic Adjustment Assistance Program.
Upon submission of documents demonstrating completion of activities (A thru F) of Goal No. 1
by Sprocket, as listed above, the City will contribute $80,000.00 to Sprocket.
Upon submission of documents demonstrating plan for activities (A thru G) of Goal No. 2 by
Sprocket, as listed above, and acceptable to the City of Paducah, the City will contribute
$80,000.00 to Sprocket.
Funding
The funding for the project is expected as follows:
Sources Commitment
EDA EAA Grant 1,032,000
City of Paducah $ 200,000
McCracken County Library $ 200,000
McCracken County $ 200,000
TOTAL $ 1,632,000
Duration
This MOU is at -will and may be modified by mutual consent of the parties. This MOU shall
become effective upon signature by the authorized officials from Sprocket and the Mayor of the
City of Paducah and will remain in effect until modified or terminated by any one of the partners
by mutual consent. In the absence of mutual agreement by the authorized officials this MOU
shall end on June 30, 2021.
Assurances
Each member of the group hereby assures and represents that it:
(A) Agrees to be bound to every statement and assurance described in this MOU;
(B) Has all requisite power and authority to execute this MOU;
(C) Is familiar with the co -working buildout and is committed to working collaboratively to meet
the responsibilities specified in this MOU in order to ensure the project's success;
(D) Will comply with all the terms of the Grant, all applicable State laws, local ordinances and
regulations.
Contact Information
SPROCKET INC.
Monica Bilak
Board Chair
3121 Broadway, Suite
270-556-8240
monica@sprocketpaducah.com
CITY OF PADUCAH
Brandi Harless
Mayor
300 South 5"' Street
270-444-8503
bharlessgpaducahky_.gov
Date:
Brandi Harless
Mayor, City of Paducah
Date:
Monica Bilak
Sprocket Board Chair