HomeMy WebLinkAbout2026-08-8888ORDINANCE NO. 2026-08-8888
AN ORDINANCE OF THE CITY OF PADUCAH, KENTUCKY,
APPROVING AND AUTHORIZING THE EXECUTION OF AN
INTERLOCAL COOPERATIVE AGREEMENT WITH THE
PADUCAH-McCRACKEN COUNTY INDUSTRIAL DEVELOPMENT
AUTHORITY RELATED TO THE CONSTRUCTION OF A 100,000 -
SQUARE -FOOT SPECULATIVE INDUSTRIAL BUILDING TO BE
CONSTRUCTED AT 5800 COMMERCE DRIVE IN INDUSTRIAL
PARK WEST
WHEREAS, the Commonwealth of Kentucky has awarded funding in the amount of
Two Million Dollars ($2,000,000.00) through the Kentucky Product Development Initiative
("KPDF') program for the development of a speculative industrial building and related site
improvements in Paducah, Kentucky, the total estimated cost of which project is estimated to be
Eight Million Dollars ($8,000,000.00); and
WHEREAS, the City is the Grantee under the KPDI Grant Agreement and the IDA is the
beneficiary and developer of the Project; and
WHEREAS, the City and the Paducah -McCracken County Industrial Development
Authority ("IDA") desire to construct a 100,000 -square -foot speculative industrial building at
5800 Commerce Drive in the Industrial Park West (the "Project'); and
WHEREAS, the City adopted Municipal Order No. 3073 on July 8, 2025, to authorize
participation in the Project and pledged up to Six Million Dollars ($6,000,000.00) in local
participation funding for the Project; and
WHEREAS, the City desires to enter into an agreement with the IDA as authorized by
Sections 65.210 to 65.300, inclusive, of the Kentucky Revised Statutes, as amended, to establish
their respective responsibilities regarding design, procurement, construction, administration,
funding, ownership, marketing, and disposition of the Project.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF PADUCAH, KENTUCKY, AS FOLLOWS:
Section 1. Recitals and Authorizations. The City of Paducah, Kentucky, hereby
approves the Interlocal Cooperative Agreement between the City of Paducah and the IDA, in
substantially the form attached hereto and made part hereof (Exhibit A). It is hereby found and
determined that the Interlocal Cooperative Agreement furthers the public purposes of the City
and it is in the best interest of the citizens, residents and inhabitants of the City that the City enter
into the Interlocal Cooperative Agreement for the purposes therein specified and the execution
and delivery of the Interlocal Cooperative Agreement is hereby authorized and approved. The
Mayor is hereby authorized to execute the Interlocal Cooperative Agreement, together with such
other agreements, instruments or certifications which may be necessary to accomplish the
transaction contemplated by the Interlocal Cooperative Agreement with such changes in the
Interlocal Cooperative Agreement 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 Interlocal Cooperative Agreement
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 KPIS Chapter 424.
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ATTEST:
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Introduced by the Board of Commissioners, July 28, 2026
Adopted by the Board of Commissioners, August 11, 2026
Recorded by Lindsay Parish, City Clerk, August 11, 2026
Published by The Paducah Sun, August 14, 2026
ORDUA — IDA Spec Building 5800 Commerce Drive
INTERLOCAL AGREEMENT
This Interlocal Agreement ("Agreement') is entered into this _ day of August, 2026,
by and between the CITY OF PADUCAH, KENTUCKY, a Kentucky home rule city ("City"),
and the PADUCAH-MCCRACKEN COUNTY INDUSTRIAL DEVELOPMENT
AUTHORITY, a governmental agency and instrumentality of the City of Paducah and County of
McCracken, Kentucky ("IDA").
WHEREAS, the Commonwealth of Kentucky has awarded funding in the amount of Two
Million Dollars ($2,000,000.00) through the Kentucky Product Development Initiative ("KPDI")
program for the development of a speculative industrial building and related site improvements
in Paducah, Kentucky, the total estimated cost of which project is estimated to be Eight Million
Dollars ($8,000,000.00); and
WHEREAS, the City is the Grantee under the KPDI Grant Agreement and the IDA is the
beneficiary and developer of the Project; and
WHEREAS, the City Commission has authorized participation in the Project and pledged
up to Six Million Dollars ($6,000,000.00) in local participation funding for the Project; and
WHEREAS, the parties desire to enter into this agreement as authorized by Sections
65.210 to 65.300, inclusive, of the Kentucky Revised Statutes, as amended (the "Interlocal Act'),
to establish their respective responsibilities regarding design, procurement, construction,
administration, funding, ownership, marketing, and disposition of the Project; and
WHEREAS, the parties find and declare that the Project serves a valid and substantial
public purpose by encouraging economic development, attracting industrial investment, creating
employment opportunities, expanding the local tax base, and promoting the economic welfare of
the citizens of Paducah; and
WHEREAS, the parties desire to memorialize their understanding regarding the Project
and provide accountability for the expenditure of public funds, all in accordance with the
Interlocal Act.
NOW THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree as follows:
ARTICLE I. DEFINITIONS
"Project" means the development, design, engineering, site preparation, utility work,
surveying, geotechnical services, permitting, construction, marketing, and sale of an
approximately 100,000 -square -foot speculative industrial building and associated improvements.
"KPDI Grant Agreement" means the grant agreement between the Commonwealth of
Kentucky and the City relating to the Project, together with all amendments thereto, dated
September 25, 2025.
"Eligible Costs" means costs reasonably incurred for the design, development,
construction, financing, administration, and completion of the Project.
"Net Sale Proceeds" means gross sale proceeds less customary closing costs and
expenses directly attributable to the sale.
ARTICLE II. PUBLIC PURPOSE
2.1 Public Purpose Findings. The parties expressly find and declare that this
Agreement and the expenditures contemplated herein serve a valid public purpose by:
(a) promoting economic development;
(b) attracting industrial users and private investment;
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(c) creating and retaining jobs;
(d) increasing local and state tax revenues;
(e) promoting industrial site readiness;
(f) enhancing the competitiveness of Paducah;
(g) furthering the purposes of KRS Chapter 154 and the KPDI program; and
(h) advancing the general welfare of the citizens of the City.
2.2 No Gift of Public Funds. The parties acknowledge that City funds expended
pursuant to this Agreement are not gifts, grants, or donations to a private entity. Such funds are
expended in furtherance of a governmental economic development project for which the City
receives substantial public benefits and repayment rights.
ARTICLE III. PROJECT MANAGEMENT
3.1 Project Manager. The parties acknowledge that:
(a) the City is the grant recipient and funding participant;
(b) the City is not the project manager; and
(c) the IDA shall serve as the project manager and developer of the Project.
3.2 Authority of IDA. The IDA shall have responsibility for:
(a) project planning;
(b) design and engineering;
(c) procurement;
(d) contracting;
(e) construction administration;
(f) project scheduling;
(g) project marketing;
(h) project disposition, including but not limited to leasing or sale of the
Project; and
(i) performance of all other duties incident to the completion of this Project
and this Agreement.
3.3 Decision -Making Authority. Except as otherwise provided herein, operational
decisions relating to the Project shall be made by the IDA.
ARTICLE IV. PROCUREMENT AND CONTRACTING
4.1 Procurement Authority. The City agrees that the IDA may proceed with the
engagement of architects, engineers, contractors, consultants, and other professionals selected by
the IDA.
4.2 Procurement Procedures. The IDA shall conduct procurement in accordance
with its procurement procedures and applicable law.
4.3 Existing Engineering and Architectural Contract. The City acknowledges the
engagement of Bacon Farmer Workman Engineering & Testing, Inc. for engineering and
architectural services, with compensation equal to 5.7% of estimated construction costs and a
contract amount not to exceed $313,500.00.
4.4 Contract Administration. All design, construction, and consultant contracts
shall be administered by the IDA.
ARTICLE V. CITY FUNDING COMMITMENT
5.1 Funding Commitment. The parties acknowledge that the total estimated Project
cost is Eight Million Dollars ($8,000,000.00). Subject to annual appropriation and availability of
funds, the City shall reimburse the IDA for Eligible Costs actually incurred by the IDA in an
aggregate amount not to exceed Six Million Dollars ($6,000,000.00).
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5.2 No Obligation Beyond Maximum Amount. Nothing herein shall obligate the
City to provide funding in excess of Six Million Dollars ($6,000,000.00), unless separately
approved by the City.
5.3 Funding Source. The City may utilize cash reserves, grants, debt financing, bond
proceeds, notes, or other legally available sources to satisfy its obligations under this Agreement.
ARTICLE VI. REIMBURSEMENT PROCEDURES
6.1 Requests for Payment. Upon the IDA's receipt of invoices from its contractors,
the IDA shall review the invoices for accuracy and submit them to the City for review and
payment. The IDA anticipates submitting payment requests no more often than monthly, but may
submit more frequently, if needed
6.2 Required Documentation. Each payment request submitted by the IDA to the
City shall include:
(a) invoices;
(b) contractor applications for payment;
(c) lien waivers when applicable;
(d) progress reports;
(e) budget updates; and
(f) such other information as reasonably requested by the City.
The City may audit any payment request and supporting documentation.
6.3 Review. The City shall review payment requests within thirty (30) days of receipt
of complete documentation. Upon approval, the City shall pay the approved amount to the IDA
from available funds. Thereafter, the IDA shall remit payment to the contractor(s). The IDA shall
provide the City with proof of payment to the contractor(s).
ARTICLE VII. PROJECT SCHEDULE
7.1 Schedule. Within thirty (30) days after execution of this Agreement, the IDA
shall provide an anticipated Project schedule.
ARTICLE VIII. PROJECT REPORTING
8.1 Monthly Reports. The IDA shall provide monthly written reports to the City
regarding:
(a)
construction progress;
(b)
expenditures;
(c)
budget status;
(d)
anticipated funding needs;
(e)
change orders;
(f)
schedule updates.
8.2 Commission Presentations. Upon request, the IDA shall present Project updates
to the City.
8.3 Annual Report. The IDA shall provide an annual report summarizing Project
status, marketing efforts, prospective purchasers, and economic development outcomes, if
requested.
ARTICLE IX. COMPLIANCE WITH KPDI REQUIREMENTS
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9.1 Compliance and Cooperation. The IDA shall comply with all requirements
applicable to the Project under the KPDI Grant Agreement and shall provide all information
reasonably necessary for the City to fulfill its obligations as Grantee.
9.2 Priority of Grant Requirements. If a conflict exists between this Agreement and
the KPDI Grant Agreement, the KPDI Grant Agreement shall control.
9.3 Grant Repayment Liability. If grant funds must be repaid due to the acts,
omissions, negligence, misconduct, or noncompliance of the IDA, the IDA shall reimburse the
City for such amounts.
ARTICLE X. OWNERSHIP, INSURANCE, AND RISK MANAGEMENT
10.1 Ownership. The IDA shall own the Project, including the real property and
improvements to be constructed.
10.2 Insurance. The IDA shall maintain:
(a) commercial general liability insurance;
(b) workers' compensation insurance;
(c) builder's risk insurance;
(d) professional liability insurance, if applicable;
(e) any other insurance reasonably necessary to protect the Project.
Certificates of insurance shall be provided to the City upon request.
ARTICLE XI. CHANGE ORDERS AND BUDGET OVERSIGHT
11.1 Budget. The initial Project budget shall be submitted to the City for review.
11.2 Change Orders. The IDA may approve individual change orders within the
approved Project budget without obtaining City approval.
11.3 Material Budget Changes. City approval shall be required for:
(a) any increase to the total Project budget;
(b) cumulative change orders exceeding ten percent (10%) of the original
construction contract amount; or
(c) any action reasonably expected to increase the City's funding obligation.
ARTICLE XII. MARKETING AND SALE OF PROJECT
12.1 Marketing. Upon substantial completion, the IDA shall cause the Project to be
marketed to industrial and commercial users.
12.2 Sale Price. The IDA shall obtain an appraisal or other valuationof the completed Project,
and shall make commercially reasonable efforts to obtain fair market value for the Project upon
its sale.
ARTICLE XIII. REPAYMENT OF CITY COSTS
13.1 Repayment Obligation. Upon sale of the Project, the City shall be reimbursed
one hundred percent (100%) of its actual costs incurred in funding, financing, underwriting,
administering, and supporting the Project. If a sale is contemplated wherein the City would not
be reimbursed one hundred percent (100%) of its actual costs, then the IDA shall prior consult
with the City and seek the City's prior approval of the contemplated transaction.
13.2 Actual Costs. For purposes of this Agreement, the City's actual costs shall
include:
(a) principal advanced;
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(b) interest expense;
(c) issuance costs;
(d) legal fees;
(e) financial advisory fees;
(f) administrative costs directly attributable to the Project;
(g) other financing -related expenses.
13.3 Distribution of Sale Proceeds. Net Sale Proceeds shall be distributed in the
following order:
• First: customary closing costs;
• Second: obligations required by law or the KPDI Grant Agreement;
• Third: $180,425.00 to the IDA for IDA spec building engineering;
• Fourth: reimbursement of the City's actual costs under Section 13.1;
• Fifth: any remaining amounts to the IDA.
13.4 Deficiency. If Net Sale Proceeds are insufficient to reimburse the City in full, all
available Net Sale Proceeds shall be paid to the City. The parties acknowledge that no
representation is made that sale proceeds will fully reimburse the City.
ARTICLE XIV. RECORDS AND AUDITS
14.1 Records. The IDA shall maintain all Project records for at least five (5) years
after final disposition of the Project or longer if required by law or the KPDI Grant Agreement.
14.2 Inspection Rights. The City, Commonwealth of Kentucky, Auditor of Public
Accounts, and other authorized governmental agencies may inspect and audit Project records.
ARTICLE XV. TERM
15.1 Effective Date. This Agreement will take effect upon its execution by the parties
and approval by the Department for Local Government (pursuant to KRS 65.260) and the filing
of this Agreement with the McCracken County Clerk.
15.2 Term. This Agreement shall continue until completion of the Project and through
(and including) the fiscal year end after all financing obligations incurred by the parties pursuant
to this Agreement are paid in full, whereupon this Agreement shall terminate.
ARTICLE XVI. DEFAULT
16.1 Events of Default. The following shall constitute an Event of Default:
(a) material breach of this Agreement;
(b) misuse of Project funds;
(c) material violation of the KPDI Grant Agreement;
(d) material misrepresentation;
(e) failure to provide required reports.
16.2 Remedies. Upon default, the non -defaulting party may:
(a) suspend payments;
(b) require corrective action;
(c) seek reimbursement of previously disbursed funds;
(d) pursue all available legal or equitable remedies.
ARTICLE XVII. GENERAL PROVISIONS
17.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Kentucky. Venue for any legal dispute shall
be in McCracken Circuit Court.
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17.2 Open Records. The parties recognize that any documents, papers, or other
records relating to the Project may be subject to disclosure under the Kentucky Open
Records Act, KRS 61.870 to 61.884 and agree to comply with the requirements thereof.
17.3 Entire Agreement. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof.
17.4 Amendments. This Agreement may be amended or modified only by a written
document authorized, executed, and delivered by each of the parties hereto.
17.5 Assignment. This Agreement shall be binding upon the parties hereto and upon
their respective permitted successors and transferees. No party shall assign this Agreement or
any rights or obligations hereunder without the prior written consent of the other party.
17.6 Severability. If one or more provisions of this Agreement, or the applicability of
any such provisions for any set of circumstances, shall be determined to be invalid or ineffective
for any reason, such determination shall not affect the validity and enforceability of the
remaining provisions of this Agreement or the applicability of the provisions found to be invalid
or ineffective for a specific set of circumstances to other circumstances.
17.7 Notices. Notices made or given by either party in connection with this Agreement
must be in writing to be effective. Notices shall be deemed given if delivered personally,
including by messenger, or if delivered by U.S. mail. Notices shall be provided to each party at
the address below:
If to City: City of Paducah
Attn: City Manager
P.O. Box 2267
Paducah, KY 42002-2267
With courtesy copy to: City of Paducah
Attn: Audray Kyle
P. O. Box 2267
Paducah, KY 42002-2267
If to IDA: Paducah -McCracken County Industrial Development Authority
Attn: Bruce Wilcox
P.O. Box 1155
Paducah, KY 42002-1155
17.8 Nature of Agreement. The City and the IDA agree to engage in this joint and
cooperative undertaking only within the scope set out in this Agreement and do not intend to
create among them any relationship of surety, indemnification or responsibilities for debts,
claims, or liabilities incurred by any party in their operations, other than as specifically set out
herein. Furthermore, the execution of this Agreement shall not constitute a waiver of any
defense or immunity that a party would otherwise be entitled to under any applicable law.
17.9 Counterparts. This Agreement may be executed in one or more counterparts and
when each party hereto has executed at least one counterpart, this Agreement shall become
binding on all parties and such counterparts shall be deemed to be one and the same document.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
CITY OF PADUCAH, KENTUCKY
PADUCAH-MCCRACKEN COUNTY
INDUSTRIAL DEVELOPMENT
AUTHORITY
By: By:
George Bray, Mayor Bruce Wilcox, Manager
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ATTEST:
ATTEST:
Lindsay Parish, City Clerk Kacey P. Key, Director of Operations
APPROVAL
Office of the Governor
Department for Local Government
100 Airport Road, Third Floor
Frankfort, Kentucky 40601
The foregoing Interlocal Cooperation Agreement is in proper form and is compatible withthe
laws of the Commonwealth of Kentucky. Therefore, it is approved and certified for filing with
the Kentucky Secretary of State on this the day of 2026.
OFFICE OF THE GOVERNOR
DEPARTMENT FOR LOCAL
GOVERNMENT
LIM
Title:
Date:
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