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HomeMy WebLinkAbout2010-6-7694125609 ORDINANCE NO. 2010-6-7694 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, PADUCAH- MCCRACKEN COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, THE H. T. HACKNEY CO., AND WOODSTONE ENTERPRISES, L.P., WITH RESPECT TO A PUBLIC PROJECT; 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 The H. T. Hackney Co., a Tennessee corporation, ("Company") and Woodstone Enterprises, L.P., a Tennessee limited partnership, ("Affiliate") in order to induce Company to relocate its existing distribution center to an office and warehouse facility to be owned and built by Affiliate and leased to Company on a site in the Industrial Park West within the boundaries of the Paducah, McCracken County, Kentucky (the "Project"); and WHEREAS, The City, County, the Greater Paducah Economic Development Council ("GPEDC"), the Paducah -McCracken County Industrial Development Authority ("IDA"), Company, and Affiliate 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, GPEDC , IDA, Company, and Affiliate 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, Company, and Affiliate (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 interests 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: Tammara S. Brock, City Clerk Introduced by the Board of Commissioners, June 8, 2010 Adopted by the Board of Commissioners, June 22, 2010 Recorded by City Clerk, June 22, 2010 Published by The Paducah Sun, June 28, 2010 \ord\incentives-H T Hackney 125610finalclean EXHIBIT A MEMORANDUM OF UNDERSTANDING This is a Memorandum of Understanding (MOU) made and entered into on this the day of , 2010 (the "Effective Date', between and among THE H. T. HACKNEY CO. ("Company'), a Tennessee based corporation, with local operations located at 3000 Shelbourne St., Paducah, KY 42001; the CITY OF PADUCAH, KENTUCKY ("City"); MCCRACKEN COUNTY, KENTUCKY ("County"), ` PADUCAH-MCCRACKEN INDUSTRIAL DEVELOPMENT AUTHORITY ("IDA"), G.P.E.D.C., INC., doing business under the assumed name of the GREATER PADUCAH ECONOMIC DEVELOPMENT COUNCIL, a Kentucky not-for-profit corporation ("GPEDC"), and WOODSTONE ENTERPRISES, L.P., a Tennessee limited partnership ("Woodstone"). WHEREAS, Woodstone proposes to acquire a site in the Industrial Park West in Paducah/McCracken County. consisting of approximately 23.42 acres (the "Property") and construct an office and warehouse facility (the "Improvements" and, together with the Property shall be referred to herein collectively as the "Project"); and WHEREAS, Company proposes to lease the Project from Woodstone and relocate its existing distribution center located at 3000 Shelbourne St. to the Project; and WHEREAS, the Project will have a positive impact on the entire community by stimulating the local economy, expanding the tax base, reducing unemployment, offering unique products and services to residents in a multi -state region; and WHEREAS, the City, County, IDA, and GPEDC leadership strongly support the expansion of the Project in Paducah, McCracken County, Kentucky; and WHEREAS, the community leaders recognize the importance of the current and future contributions of Company to the economic and employment base of the City; and WHEREAS, in order to induce the Project and additional operations in Paducah/McCracken County, Kentucky, the City, County, IDA, and GPEDC have agreed to provide certain economic incentives to Woodstone and the Company for purposes of defraying some of the site development and construction costs of the Project; and WHEREAS, it is deemed necessary and advisable that this MOU be entered into by the parties setting forth their agreement with respect to the expansion, acquisition, installation, investment and employment of the Project and the economic incentives to be provided to defray some of the site improvement costs thereof; and WHEREAS, the economic incentives to be provided to Company are in general conformity with the "Guidelines For Providing Economic Incentives To Qualified Projects Located Within The Boundaries Of The City Of Paducah" previously adopted by the City. THEREFORE, Company, Woodstone, the City, the County, the IDA, and GPEDC agree to the following: A. Commitments: 1. Upon completion the Project, the Company commits to lease the Project from Woodstone and Woodstone commits to lease the Project to the Company. 2. Woodstone commits to adhere to all of the regulations and requirements of the City Zoning Ordinance during the construction of the Project and the Company commits to adhere to all of the regulations and requirements of the City Zoning Ordinance upon taking possession. 3. Woodstone and the Company commit to adhere to all covenants and restrictions of the Industrial Park West. 4. Woodstone commits to satisfy its obligations under the Purchase Agreement for the Property by and among Woodstone, the IDA, the City, and the County dated , 2010 (the "Purchase Agreement', making specific reference to Woodstone's obligations regarding the construction, equipping of, and completion of the Improvements. 5. Employment: • Maintain or exceed the current employment of 117 people within 5 years of the execution of this MOU. • Demonstrate good faith effort to hire between 25-40 net new employees within 5 years of the execution of this MOU. 6. Achieve an employee payroll in Paducah between $3,700,000- 4,225,000 within 5 years of the execution of this MOU. 7. Company agrees that in the event it fails to meet the required levels of employment and/or Woodstone fails to make the capital investment for the Project as required under the Purchase Agreement, unless another time has been mutually agreed to, then the cash incentive given to Company shall be fully reimbursed, plus interest calculated using the Wall Street Journal prime rate. The City, the County, the IDA, and GPEDC further agree that in the event the failure to attain or maintain the required levels of employment or investment by Company, in spite of its good faith best efforts, were the result of unavoidable and unforseen circumstances, including, but, not limited to an Act of God or national emergencies, then the City, the County, the IDA, and GPEDC, at their sole discretion, may: (a) seek a pro rata reimbursement, or (b) waive any reimbursement. 8. Company shall provide or cause Woodstone to provide, at the Company's expense, detailed verification reasonably satisfactory to the City, the County, the IDA, and GPEDC of the Company's progress on the capital investment and employment goals committed herein. Such progress reports will be provided at 12, 18, 24, 36, 48, and 60 months from the date of the execution of this Agreement by the Company and at such other time(s) as the City, the County, the IDA, and GPEDC may reasonably require. The City, , the County, the IDA, and GPEDC reserve the right to require any reasonable verification procedures or process. 9. The Company acknowledges that the financial and other assistance it has received, as described herein, has been made possible, in part, by reason of local businesses, governmental entities, and citizens contributing to support the economic development efforts of GPEDC. The Company, as a good corporate citizen, does, hereby agree, that it will also become an investor in GPEDC. B. The City, the County, the IDA, and GPEDC commit to: 1. The IDA agrees to sell the Property to Woodstone for $1.00. 2. The City and County will advance to Woodstone or the Company up to $100,000 in cash incentives to offset the cost of local utility extensions and local permits. A check will be paid to the Woodstone or the Company when satisfactory invoices are received by the City's finance director noting these expenditures. 3. The City agrees to rebate property taxes collected on behalf of city government for five (5) years starting after a certificate of occupancy has been issued the Company by the city inspector. It is understood that the City shall not be required to rebate any tax dollars which are in addition to the property taxes assessed upon completion of the Project collected by the City on behalf of local governmental districts, including, local school districts, pursuant to levies as authorized by the laws of the Commonwealth of Kentucky. 4. The County agrees to rebate property taxes collected for county operations for 5 years starting after a certificate of occupancy has been issued the Company by the city inspector. It is understood that the County shall not be required to rebate any tax dollars which are in addition to the property taxes assessed upon completion of the Project. collected by it on behalf of local governmental districts, including, local school districts, pursuant to levies as authorized by the laws of the Commonwealth of Kentucky. 5. The City and the County will each use its best efforts to expedite local permitting and will waive or reduce all permit fees. 6. GPEDC will use its best efforts to assist in coordination of Project and incentive related activities. C. Miscellaneous Provision: This Agreement and the Purchase Agreement represent the entire understanding and agreement reached between the parties, and all prior covenants, agreements, and representations are merged herein. The transaction contemplated by this MOU shall be contingent upon the approval and consent to the incentives, and the terms of this MOU by the governing body of the IDA, GPEDC, City, and the County. Subject to approval by the governing bodies of the City and the County, this MOU shall be fully binding upon the parties hereto and shall be deemed fully enforceable in accordance with the terms and provisions hereof. Neither Woodstone nor Company shall assign this MOU without first obtaining the written consent of the other parties, which written consent shall not be unreasonably withheld. 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 effect without the invalid provision, and, to this end, the provisions hereof are severable. This MOU shall be construed under the laws of the Commonwealth of Kentucky. At the time of closing all parties agree to execute all definitive documents required to effectuate the agreements and understandings herein above enumerated. D. Payroll Sharing: 1. The City hereby agrees that as the ""host" government it will share with the County (50) percent of all payroll taxes and business license taxes associated both with the construction of the expansion project and with the operation of the Company as agreed upon in the city/county interlocal cooperation agreement titled ""Economic Development Revenue Sharing Agreement" executed on February 13, 2006. 2. The revenue sharing for the Company's expansion will end February 2021 per Section 4 of the interlocal cooperation agreement noted in the previous paragraph. IN WITNESS WHEREOF the parties hereto have set their hands on the day and year written below. THE H.T. HACKNEY CO. Signature: Title: CITY OF PADUCAH, KENTUCKY Signature: . Title: �1 Date: Date: �_- MCCRACKEN COUNTY, KENTUCKY PADUCAH-MCCRACKEN COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY Signature: Title: Date: G.P.E.D.C., INC. Signature: Title: Date: . Signature: . Title: Date: WOODSTONE ENTERPRISES, L.P. Signature: . Title: Date: