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HomeMy WebLinkAbout2013-04-8026158643 ORDINANCE NO. 2013 — 4 -- 8026 AN ORDINANCE OF THE CITY OF PADUCAH, KENTUCKY, APPROVING A MEMORANDUM OF UNDERSTANDING AMONG THE CITY OF PADUCAH, KENTUCKY, THE COUNTY OF MCCRACKEN, KENTUCKY, G.P.E.D.C., INC., DOING BUSINESS UNDER THE ASSUMED NAME OF THE GREATER PADUCAH ECONOMIC DEVELOPMENT COUNCIL, INC., PADUCAH-MCCRACKEN COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, ANDMACCO ORGANIQUES, INC., WITH RESPECT TO A PUBLIC PROJECT; AUTHORIZING THE EXECUTION OF THE MEMORANDUM OF UNDERSTANDING AND OTHER DOCUMENTS RELATED THERETO 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 Macco Organiques Incorporated, a Canadian corporation ("Corporation") in order to induce Corporation to develop and locate an industrial and distribution facility (the "Project") to a certain Spec building located at 5455 Commerce Drive, Paducah, Kentucky (the "Property") within the boundaries of the Paducah, McCracken County, Kentucky; and WHEREAS, the City, the County, the Paducah -McCracken County Industrial Development Authority ("IDA"), and G.P.E.D.C., Inc., doing business under the assumed name of the Greater Paducah Economic Development Council ("GPEDC"), find it necessary and advisable to set forth in summary form the intention 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 City, County, IDA, GPEDC , and Corporation 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 City, County, GPEDC, IDA, and Corporation (the "MOU") in substantially the form attached hereto as Exhibit A and made part hereof. It is further 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 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 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, and 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: City Clerk Introduced by the Board of Commissioners, March 28, 2013 Adopted by the Board of Commissioners, April 9, 2013 Recorded by City Clerk, April 9, 2013 Published by The Paducah Sun, April 29 , 2013 EXHIBIT A MEMORANDUM OF UNDERSTANDING 156894 MEMORANDUM OF UNDERSTANDING This ;is a MEMORANDUM OF UNDERSTANDING ("MOU") between Macco €3rganiques Incorporated, a Canadian company ("Corporation" }, with a. principal mailing address of 100 .McArthur, Valleyfield, Quebec, Canada 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) with a principal mailing address of Post Office Box 1155, Paducah, Kentucky 42002-1155; PADUCAH-MSC RACKEN COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY ("IDA') a governmental agency and instrumentality of the City of Paducah and the County of McCracken, Kentucky, with a principal mailing address of Post Office Box 1155, Paducah, Kentucky 42002-1155; MCCRACKEN COUNTY, KENTUCKY ("County'), with a principal mailing address of 300 South 7th Street, Paducah, Kentucky 42003; and CITY OF PADUCAH, KENTUCKY ("City"), with a principal mailing address of Post Office Box 2267, Paducah, Kentucky 42002-2257. (Corporation, City, and County, IDA. and GPEDC may collectively be referred to as the "Parties„ and singularly be referred to as a "Party"); WHEREAS, Corporation proposes to develop and locate an industrial/distribution facility (the "Project") at a certain Spec Building located at 5455 Commerce Drive (the "Property"}, within the boundaries of Paducah, McCracken County, Kentucky; VVHER.EAS, the Project would have a positive impact on the entire community by stimulating the local economy, expanding the tax base, and reducing unemployment; WHEREAS, County, City, and GPEDC leadership strongly support the location of the Project in Paducah, McCracken County, Kentucky; WHEREAS, Corporation will establish a U.S. subsidiary in the State of Kentucky prior to executing any lease; WHEREAS, in order to induce the acquisition, construction, installation, and equipping of the Project by Corporation, GPEDC has agreed to provide certain economic incentives to Corporation as provided in this MOU for purposes of defraying the costs of acquiring, constructing, installing, and equipping the Project and Corporation, in consideration of such inducement, has agreed to undertake the project specified herein at the subject location; and WHEREAS, the Corporation is very interested in pursuing the Project; and the Parties wish to enter into this MOU to clearly set forth the framework of a subsequent agreement regarding the construction, installation, and equipping of the Project and the economic incentives to be provided to partially defray the costs thereof; and WHEREAS, the Parties intend to work cooperatively to move forward with the Project as set forth in this MOU, Now, THEREFORE, the Parties agree to the following; A. Commitments of City/County, The City and County will each invest $1.25 million into the Project for purposes of facility improvements to the Property for Corporation's sale use for a total of $2.5 million. Any of the $2.5 million in excess cash which is not used for construction related to site preparation and facility improvements shall be used by Corporation for installation, equipping, or adding a rail spur for the Project. The $2.5 million will be held in a designated project account managed by the GPEDC and visible to the Corporation for tracking direct payment of constriction related invoices to be paid directly by GPEDC to vendor within a period not to exceed 30 days from the date of invoice. B. Commitment of Corporation. In consideration of the public incentives to be provided, Corporation agrees as follows; 1. To obtain and maintain all licensing, permitting and certification requirements for the lawfirl construction, installation, and equipping of the Project and the operation of the Project including but not limited to, all City development, zoning, building code ordinances and policies, and all other federal, state and local applicable laws and regulations (collectively, "Governmental Permits"). The community will work closely with the Corporation and the contractor to ensure these permits are provided in a timely and expedited manner. 2. To acknowledge that the financial and other assistance it would receive, as described herein, would be made possible, in part, by reason of local businesses, governmental entities, and citizens contributing to. support the economic development efforts of GPEDC. Corporation agrees to be a good corporate citizen and become a GPEDC investor at alevel of $5,000/year. 3. To provide to GPEDC, at its sole cost and expense, written reports of the Corporation's progress in satisfying its Emplo)ment Commitments herein at the request of GPEDC. 4. Corporation shall hire and employ 40 new full-time employees at the Property. The average hourly salary of the aforesaid employees at the Project shall be a minimum of $16 per hour and would include health insurance benefits with an estimate of 50% employer contribution. 5. Corporation shall invest a minimum of $9 million in the project. Corporation shall make, or cause to be made, at its sole cost and expense, the installation and equipping of the building with equipment and trade fixtures for the management and operation of the Project on the Property. 6. Corporation shall assume management and operation of the Project at the Property within six(6) months of the issuance of the certificate of occupancy by the local governmental authority. C. Additional Commitments of the Parties.. 1. Lease of Property that is built -to -suit The Parties shall negotiate in good faith the terms of a lease agreement for the Project on the Property on or before May 31, 2013, at which time plans for construction shall begin between the Parties. Upon the signing of this MOU, Corporation shall be entitled the exclusive right to negotiate a binding agreement with City/County until the expiration date of May 31, 2013. During such period, City/County shall not contact, negotiate with, or enter into any agreement with any other party regarding the lease, sale, or use of the property. Failure to enter into the lease agreement within this tirne frame shall result in the termination of this MOU and neither Party shall have any further liabilities or obligations to the other hereunder. Corporation will begin paying maintenance, repair, insurance, utilities, and taxes immediately upon the issuance of the certificate of occupancy by the local governmental authority. Corporation shall lease the Property for an initial term of five (5) years with an option to renew for one (1) additional term of five (5) years. Corporation shall pay rent at the base rental rate of $1.00 per year for a period of five (5) years. If the number of jobs identified in Section B.4 above is not created and maintained for either 24 consecutive months during the initial 5 year lease or by the. last 12 consecutive months of the initial 5 year lease term beginning at the date at which certificate of occupancy is granted, Corporation shall pay market lease rate for the renewal period based on comparable rates for light industrial in the Paducah market as certified by three (3) local appraisers or $3/sq. It. N -NN x 60,000 sq. ft. whichever figure is less. If such jobs have been created as described in this section, the lease rate will remain at Sl per year for the additional 5 year term. This process shall repeat itself each 5 years. Corporation will not be evicted if employment goals are not met, but they will pay the market rent as defined herein after the 5 Lb year if the jobs goals are not met. D. Commitments of GPEDC: Additional Incentives, GPEDC will in good faith petition the State of KY and other partners for the following: a. KBI state income tax credit and wage assessment (4% payroll Want for 10 years) offsets state corporate income taxes and payroll withholding taxes. b. KFIA (sales & use tax refund for building/construction material,,.,, & income tax abatement excluding those sates & use taxes related the $2.5M Ruided by the, GPEDC and any M&E, that is determined sales & use tax exempt by the State of Kentucky). c. KY Training Incentives d. Total City and County Real Property tax abatements for as long as the building is owned by the Industrial Development Authority. E. Miscellaneous Provision. This MOU represents the entire understanding and MOU reached between the parties, and all prior covenants, agreements, and presentations are merged herein. This MOU shall be fully binding upon and shall inure to the benefit of the parties and all of their respective successors and assigns; provided, however, that Corporation shall have no right to assign this MOU or its rights hereunder; nor shall Corporation have the right to relet or sublease any portion of the Property. There is no third party beneficiary to this MOU, and the provisions oft1iis MOU shall not impart rights enforceable by any person or entity other than the parties originally hereto. If any provision of this MOU shall be held invalid under any applicable laws, such invalidity shall not affect any other provision of this MOU than can be given affect without the invalid provision, and, to this end, the provisions hereof are severable. Each Party herein shall be responsible for its own professional fees, costs, charges and expenses. This document shall, in all respects, be governed by the laws of the State of Kentucky. Venue shall be with the McCracken Circuit Court. This MOU may not be modified or amended unless by writing signed by both parties hereto. All times referred herein shall be strictly construed, as all of such times shall be deemed of the essence. This MOU may be executed simultaneously or in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement. All notices provided for herein will be in writing and addressed to the parties at the addresses as referenced above. F. Effective Date. This MOU shall not become effective and binding until fully executed and delivered by all Parties hereto and approved by duly adopted ordinances or resolutions by the McCracken Fiscal Court, the Paducah City Commission, and the Boards of Directors of GPEDC and IDA. All required approvals must be completed within 30 days from the initial signature dates of the agreement in older for the MOU to be effective (the "Effective Date"). This MOU shall continue in force and effect for the same term as the definitive lease agreement for the use and occupancy of the Property to be entered into between the parties pursuant to this MOU. IN WITNESS WHEREOF, the parties hereto have set their hands. CORPORATION By: Title: Date: , - i 20 i MCCRACKEN COUNTY, KENTUCKY By: Title: c7✓PZ er— Date: 71�2,-9/ f2 33Y. Date: PAnTTC-,All JEC4DIIT<>MXC Y>UVJEIL<)IPMJCN'F U4DUN-CIJL., INCC. Sy: c-L- I>at.: PADIXX. A-14 Ck-.PXYI',I'rV F3 Y: Ti Cl.: Date: