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HomeMy WebLinkAboutMO #3196MUNICIPAL ORDER NO. 3196 A MUNICIPAL ORDER APPROVING A DEVELOPMENT AGREEMENT PROVIDING CERTAIN INCENTIVES FOR THE PROPERTY LOCATED AT 3470 JAMES SANDERS BOULEVARD AND AUTHORIZING THE MAYOR TO EXECUTE ALL DOCUMENTS RELATED THERETO WHEREAS, Kentucky Oaks Mall Company, an Ohio Limited Partnership (the "Developer"), holds fee title to property located at or near 3470 James Sanders Boulevard, Paducah, Kentucky, within the Kentucky Oaks Mall development; and WHEREAS, the Developer proposes the construction and development of a Bass Pro Shops retail store on a portion of the property (the "Project"), which is anticipated to include an approximately 70,000+ square foot destination retail store; and WHEREAS, the City recognizes that the Project is expected to enhance tourism, job creation, and economic development within the City and the surrounding region; and WHEREAS, the City and the Developer have negotiated a Development Agreement setting forth certain terms, conditions, and performance obligations related to the Project, including certain incentives and reimbursements to support the Project; and WHEREAS, the City Commission finds that approval of the Development Agreement is in the best interests of the City of Paducah and is consistent with the City's economic development goals. KENTUCKY: NOW THEREFORE, BE IT ORDERED BY THE CITY OF PADUCAH, SECTION 1. That the City of Paducah hereby approves and authorizes a Development Agreement with Bass Pro Shops in substantially the form attached hereto and made part hereof (Exhibit A). SECTION 2. That the Mayor is hereby authorized to execute the Development Agreement approved in Section 1 above, together with such other agreements, instruments, certifications, and documents as may be necessary or appropriate to accomplish the transaction contemplated by the Development Agreement, with such changes therein as are not inconsistent with this Municipal Order and are not substantially adverse to the City, as may be approved by the official executing the same on behalf of the City. Approval of such changes shall be conclusively evidenced by execution of the Development Agreement and related documents. SECTION 3. This Order shall be in full force and effect from and after the date of its adoption. George Bray, Mayor A�TTTEE.T.^+I l 41 A 'essay Parish, C ty C eerrk Adopted by the Board of Commissioners, February 10, 2026 Recorded by Lindsay Parish, City Clerk, February 10, 2026 \mo\Development Agreement — Bass Pro Shops BASS PRO SHOPS DEVELOPMENT AGREEMENT This DEVELOPMENT AGREEMENT (the "Agreement") is made and executed on this day of February, 2026 (the "Effective Date"), by and between the CITY OF PADUCAH, a Kentucky home rule class city, with an address of 300 South 5th Street, Paducah, Kentucky 42001, (hereinafter referred to as the "City"), and KENTUCKY OAKS MALL COMPANY, an Ohio Limited Partnership, with an address of 5577 Youngstown -Warren Road, Niles, OH 44446-4803 (hereinafter referred to as the "Developer"). WITNESSETH: WHEREAS, Developer holds fee title to property identified as the Kentucky Oaks Mall in Paducah, Kentucky, a portion of which has an address of 3470 James Sanders Blvd., which is generally described as the "Development Site" as depicted in Exhibit A, which is attached hereto and incorporated herein; and WHEREAS, the City and Developer discussed and negotiated the location by Developer of a Bass Pro Shops store on part of the Development Site (hereinafter referred to as the "Project') to be operated by proposed tenant, Bass Pro Outdoor World, LLC (hereinafter referred to as "Retailer"); and WHEREAS, Bass Pro Shops stores are premier, massive destination retail locations specializing in hunting, fishing, camping and outdoor recreation gear, and which will enhance outdoor tourism in the city, county, region and Commonwealth; and WHEREAS, the City recognizes that the location, construction and operation of an approximate 70,000+ square foot Bass Pro Shops on an approximate 8+ acre parcel with an estimated construction cost exceeding $25 Million Dollars, aligns with the City's goals of enhancing tourism, job creation, and local business growth and involves significant capital investment and risk by Developer; and WHEREAS, the parties are negotiating and reviewing a proposed Bass Pro Shops site plan for the Development Site, which negotiations includes certain incentives and reimbursements without which Developer and Retailer would not agree to develop the Project; and NOW THEREFORE, in consideration of the foregoing recitals, the mutual covenants and obligations set forth herein and other good and valuable consideration, the parties do hereby covenant and agree as follows: 1. Development of the Project and Obligations of Developer. Developer agrees to the following terms and conditions: a. Within a reasonable time not to exceed sixty (60) days after the execution of this Agreement (the "Construction Commencement Date"), Developer will Page 1 of 9 commence initial site preparation, before turning onsite development, site grading, and construction work over to Retailer's selected development company, based upon plans that are mutually agreeable to the Developer, Retailer and the City. Construction shall be done in a good and workman like manner. The Developer agrees that the Project shall be constructed in compliance with all existing City design and construction standards as well as all applicable state and federal laws and regulations. b. Developer agrees that construction of the Project shall be substantially completed within eighteen (18) months of the Construction Commencement Date, subject to any force majeure event and other reasonable delays outside of the control of the Developer and Retailer. If Developer and Retailer fail to substantially complete construction of the Project within eighteen (18) months of the Construction Commencement Date, the City may, in its sole discretion, elect to withhold the incentives provided in Section 2 below. C. Developer agrees that it will obtain and maintain all licensing, permitting and certification requirements for the lawful construction of the Project. d. Developer agrees to obtain and maintain, at its sole cost and expense, comprehensive commercial general liability insurance and builders' risk insurance covering the development and construction of the Project, subject to deductibles and/or self-insurance maintained by the City, Developer, and Retailer. Developer and Retailer shall maintain workers' compensation insurance in compliance with state law. Except for workers' compensation insurance, the City shall be named as a certificate holder (to the extent available) on all insurance policies associated with the Project. e. Developer shall be responsible for all the costs of the construction work on the Project, including but not limited to materials and labor costs and shall secure all necessary funding or financing to complete such construction. 2. Developer Costs, Payroll and Property Tax Incentives and Obligations of the City. In recognition of the capital investment of Developer and Retailer and the risk in constructing and operating the Project, City agrees to the following three (3) incentives and abatements: a. The City agrees to provide a development costs incentive in an amount not to exceed Five Hundred Fifty Thousand Dollars ($550,000.00) as follows. Developer and Retailer shall pay for all Project costs and expenses and only upon meeting all terms and conditions of this Agreement shall Developer be entitled to receive reimbursement funding from the City. Upon presentation and verification of the requests for reimbursement, City agrees to reimburse Developer for Developer's and Retailer's development, permitting, inspection, connection and/or tap on fees, design, permits, and site preparation related to the approvals or the design and construction of the Project incurred after the execution of this Agreement. Appropriate reimbursement documentation shall include, but not be limited to, proof of payment, expense billing statements, cancelled Page 2 of 9 checks, bank statements and/or verified affidavits. Requests for reimbursement by Developer shall be submitted to the City Manager and the City's Finance Director and may only be submitted and paid on a quarterly basis. b. The City agrees to provide an annual payroll tax incentive in an amount not to exceed two percent (2%) of the gross annual payroll paid to new full-time permanent employees hired in connection with the Project. The total amount of this incentive shall not exceed Four Hundred Thousand Dollars ($400,000.00). This incentive shall not commence until the opening of the retail store. Retailer shall be obligated to pay all payroll taxes as required by local and state law in a timely fashion. Again, only upon meeting all terms and conditions of this Agreement shall Developer receive reimbursement. City agrees to reimburse Developer for Retailer's payroll taxes paid to the City of Paducah only. Appropriate documentation from Retailer, but submitted by Developer, shall include, but not be limited to, proof ofpayments, expense billing statements, cancelled checks, bank statements and/or verified affidavits. Requests for reimbursement may only be submitted once each calendar year, and again only after the store opening of the Retailer's retail business. If Retailer does not reach the maximum amount in payroll taxes after the fifth anniversary of Retailer's initial opening, there shall be no rollover to subsequent years. C. The City agrees to provide an ad valorem property taxes incentive in an amount not to exceed Sixty Thousand Dollars ($60,000.00) per calendar year for a period of five (5) years for a total amount not to exceed Three Hundred Thousand Dollars ($300,000.00). Developer shall continue to pay all ad valorem real estate taxes owed to the City, McCracken County, the Commonwealth of Kentucky, the school district, and any other special taxing district in a timely fashion. Again, only upon meeting all terms and conditions of this Agreement shall Developer receive reimbursement for the increase in the ad valorem taxes above the current tax liability on parcel ID 086-10-00-014.14 in the amount of $8,943.00. Developer shall continue to pay this base floor amount ($8,943.00) for each of the five (5) years, with year 1 of the reimbursement period commencing January I` after reassessment post substantial completion of the Project. Upon presentation and verification of the appropriate documentation evidencing payment of all such taxes, the City agrees to reimburse Developer up to and not to exceed Sixty Thousand Dollars ($60,000.00) towards its increased ad valorem property taxes paid to the City, County, State, school district, and any other special taxing district per calendar year. Appropriate documentation shall include tax bills, proof of payments, cancelled checks, bank statement and/or sworn affidavits. Requests for reimbursement may only be submitted once each calendar year but may be submitted as soon as payments to City, County, State, and any other taxing district have been made in full. If Developer does not reach the annual maximum ($60,000.00) amount in ad valorem property taxes in any calendar year, there shall be no rollover to a subsequent year or years and shall not compound. d. All incentives offered herein shall be contingent upon Developer substantially meeting the milestones, dates and benchmarks set for the in the Project Schedule discussed in numbered paragraph one (1). Failure to meet the agreed upon benchmarks (i.e. project construction date, construction completion date, etc.) shall be Page 3 of 9 deemed a material breach of this Agreement and in such event, the City shall, upon written notice to Developer, have the option to suspend or terminate any future incentive reimbursement payments until Developer cures the breach to the sole satisfaction of the City. e. Except as herein contemplated between Developer and Retailer, all incentives offered herein are not assignable without the prior written consent of the City. Any sale, transfer or abandonment of Development Site or Project, including closure of the retail store within the first five (5) years, shall halt and/or end all incentive payments due to Developer hereunder, and be forfeited. f The total amount of reimbursements available under the incentives identified above shall not exceed One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) under any circumstances. 3. Progress Reporting. Developer or its designee shall submit a monthly progress status update in the form of an e-mail to the City Manager, on or before the twenty- fifth (25') day of each month. The e-mail shall detail the status of the Project, including, but not limited to work completed, milestones, work pending, photos of the Project and estimated time to completion and opening. The status updates shall commence the month after the signing of this Agreement. 4. Time of Essence. Time will be of the essence with respect to the performance of the terms and conditions of this Agreement. 5. Force Majeure. Neither the City nor the Developer shall be liable for any delay or failure in performance of any part of this Agreement from any cause beyond its control and without its fault or negligence, including, but not limited to, acts of nature, acts of civil or military authority, governmental regulation, embargoes, epidemics or pandemics, terrorist acts, riots, vandalism, insurrections, fires, explosions, earthquakes, nuclear accidents, floods, work stoppages (including strikes), events of casualty, power blackouts, volcanic action, other major environmental disturbances, or unusually severe weather conditions (each a "Force Majeure Event"). Inability to secure products or services of other persons or transportation facilities or acts or omissions of transportation carriers shall be considered Force Majeure Events to the extent any delay or failure inperformance caused by these circumstances is beyond the control of the Developer and without its fault or negligence. In the event of a Force Majeure Event, the party claiming the benefit of this section shall notify the other and shall be excused from performance of its obligations hereunder on a day-to-day basis to the extent those obligations are prevented by the Force Majeure Event. 6. Indemnity. Developer shall indemnify and defend City and their respective representatives, officer, employees, agents, insurers, successor and assigns, and hold them harmless from and against any and all claims, demands, administrative proceedings and causes of action that relate to or arise from the development and construction of the Project, and from any and all damages, losses, judgments, Page 4 of 9 obligations, liabilities, costs and expenses, including legal costs and expenses, that result therefrom. This indemnity shall specifically apply, but not be limited to, all acts of contractors or subcontractors. This indemnity shall remain in full force and effect until all claims, demands and causes of action are frilly and finally adjudicated. 7. Governing Law; Venue; Waiver of Jury Trial. This Agreement will be governed by and construed in accordance with the laws of the Commonwealth of Kentucky. Any litigation regarding this Agreement or its subject matter shall be submitted to McCracken Circuit Court or the U.S. District Court for the Western District of Kentucky. Each party irrevocably agrees and submits to the jurisdiction of those courts, and waives all rights to protest either jurisdiction. Each party also waives their right to a jury trial. 8. Notices. All notices, communications, or deliveries under this Agreement shall be in writing, shall specify the section of this Agreement pursuant to which it is given, and shall be deemed given: a. When received if given in person or by courier or courier service. b. On the date of transmission if sent by facsimile or other wire transmission and a copy of such transmission is sent by overnight courier for delivery on the following business day. C. Three business days after being deposited in the mail, certified mail, return receipt requested, postage prepaid, and addressed to the parties as set forth below: If to City: City Manager City of Paducah 300 South 5"' Street P. 0. Box 2267 Paducah, KY 42002-2267 If to Developer: Anthony M. Cafaro Jr. Kentucky Oaks Mall Company 5577 Youngstown Warren Road Niles, OH 44446-4803 or to such other address as may hereafter be designated by a party to the other. If notice is given pursuant to this section of a permitted successor or assign of a party to this Agreement, then notice shall be given as set forth above to such successor or assign of such party. Page 5 of 9 9. Assignment. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their respective legal representatives, heirs, successors, and permitted assigns. Neither party may assign any of its rights and obligations arising from this Agreement without the prior, written agreement signed by both parties. Notwithstanding anything to the contrary herein, the City acknowledges and agrees that Developer shall have the right to delegate any or all of its duties, obligations, and performance requirements under this Agreement to Retailer. Such delegation shall not require further consent from the City, provided that no such delegation shall relieve Developer of its primary liability for the full and faithful performance of its obligations under this Agreement. 10. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become a binding agreement when one or more counterparts have been signed by each of the parties and delivered to the other party, provided each appears in its original typewritten form, without deletions, strike-throughs or modifications of any type. 11. Singular or Plural; Gender. In this Agreement, where applicable, references to the singular shall include the plural and references to the plural shall include the singular. Any reference in this Agreement to the masculine shall include the feminine or neuter and any reference in this Agreement to the feminine shall include the masculine or neuter. 12. Headings. The headings of this Agreement are included for convenience of reference only, and shall not affect the construction or interpretation of any of its provisions. 13. Entire Agreement: Modifications; Waivers; Construction. This Agreement (including, without limitation, the exhibit(s) hereto) constitutes the entire agreement of the parties with respect to the subject matter hereof, all prior and contemporaneous oral and written discussions and agreements of the parties with respect thereto being merged herein and superseded hereby. This Agreement may be amended only by written instrument executed by all the parties hereto. The failure of any party hereto at any time to require performance of any of the provisions hereof shall in no manner affect the right to enforce the same. No waiver of any party hereto of any condition, or of the breach of any term, provision, warranty, representation agreement or covenant contained in this Agreement whether by conduct or otherwise, in any one or more instances, shall be deemed or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of the breach of any other term, provision, warranty, representation agreement or covenant herein contained. Should any provision of this Agreement require judicial interpretation, the parties hereto agree that the court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that a document is to be construed more strictly against the party who itself or through its agents drafted the same. 14. Attorneys' Fees. In the event either party asserts a claim or legal action to enforce or interpret this Agreement, the prevailing party shall be entitled to Page 6 of 9 reimbursement from the other for its reasonable attorneys' fees and costs incurred in connection with said enforcement or interpretation, in addition to any other sums recoverable by, or remedies available to, such prevailing party. 15. Exhibits. All exhibits attached hereto are incorporated by reference herein. IN WITNESS WHEREOF, the parties have hereunto set their hands and as of the date first set forth above. DEVELOPER: KENTUCKY OAKS MALL COMPANY, an Ohio Limited Partnership C CITY: CITY OF PADUCAH, KENTUCKY LN Print Name: Print Title: Title: STATE OF OHIO COUNTY OF Subscribed, sworn to, and acknowledged before me this day of February, 2026, by I (title) on behalf of Kentucky Oaks Mall Company, an Ohio Limited Partnership, Developer. My commission expires Notary Public, State at Large Page 7 of 9 STATE OF KENTUCKY COUNTY OF MCCRACKEN Subscribed, sworn to, and acknowledged before me this day of February, 2026, by George P. Bray, Mayor, on behalf of the City of Paducah, Kentucky. My commission expires Notary Public, State at Large Page 8 of 9 A EXHIBIT A PROPOSED BASS PRO SHOPS SITE PLAN EgA(j im Page 9 of 9 I