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HomeMy WebLinkAbout2008-1-7386527 ORDINANCE NO. 2008-1-7386 AN ORDINANCE OF THE CITY OF PADUCAH, KENTUCKY, APPROVING A MEMORANDUM OF UNDERSTANDING AMONG THE CITY OF PADUCAH, KENTUCKY, AND NUNEZ NORTE, LLC, ET AL., WITH RESPECT TO A PRIVATE PROJECT AND 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 has further determined that it is necessary and desirable to accomplish such public purposes and that the City must proceed at this time to provide certain economic incentives to Nunez Norte, LLC, et al, ("Nunez") in order to induce Nunez to develop a business (the "Project") within the boundaries of the City of Paducah; and WHEREAS, The City and Nunez 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 the City and Nunez 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 the City and Nunez (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. 528 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 424. ATTEST: Tammara S. Brock, City Clerk Introduced by the Board of Commissioners, January 8, 2008 Adopted by the Board of Commissioners, January 22, 2008 Recorded by Tammara S. Brock, City Clerk, January 22, 2008 Published by The Paducah Sun, January 29, 2008 Ord\Incentives-Argentine Grill MOU C -I'm-/- 9386 MEMORANDUM OF UNDERSTANDING This is a Memorandum of Understanding made and entered into on the 1j d, day of 2008, by and between the CITY OF PADUCAH, KENTUCKY ("City"), a municipalit of the second class, NUNEZ NORTE, LLC ("Buyer"), and NESTOR W. NUNEZ, LAURA N. NUNEZ, EUGENIO NUNEZ, and SANTIAGO NORTE ("Guarantors"). WHEREAS, Campbell Downtown Properties, LLC, ("Seller") presently owns certain real estate upon which is situated a condominium space, which property is located at 312 Broadway, Paducah, Kentucky 42001 (the "Property"); and WHEREAS, Seller desires to sell, and Buyer desires to acquire, the Property, with Buyers having the specific intent and purpose to use the condominium space to operate a restaurant; and WHEREAS, such restaurant use will have a positive impact on the local community by stimulating the local economy, expanding the tax base, and promoting the redevelopment of downtown Paducah; and WHEREAS, it is deemed necessary and advisable that this Memorandum of Understanding be entered into by the parties setting forth their agreement with respect to the economic incentives to be provided to defray the costs of the acquisition, renovation, redevelopment, installation, and equipping of the Property. NOW, THEREFORE, in consideration of the foregoing premises, and for other value consideration, the legal adequacy and sufficiency of which is hereby acknowledged by all parties hereto, the parties do covenant and agree as follows: A. Nunez Norte, LLC commits to: Locate a restaurant at the Property, to be fully operational and open to the public within six (6) months of the Closing date agreed upon by the Seller and Buyer. 2. Cause the restaurant to be open to the public a minimum of '}5 Sundays per year and to be open to the public for lunch a minimum of 300 weekdays per year. This obligation shall be prorated during the first and fifth calendar years following the Closing date. Maintain a restaurant on the Property that is fully operational and open to the public for a period of five (5) years. B. The City of Paducah, Kentucky commits to: Provide a loan to Nunez Norte, LLC of Twenty Five Thousand Dollars ($25,000) with interest thereon at the rate of zero percent (0%) per annum for a period of five (5) years. C. Guarantors commit to: Jointly and severally, unconditionally and absolutely guarantee the punctual and faithful performance and observance by Buyer of all payments, obligations and undertakings to be performed and observed pursuant to this Memorandum of Understanding. 2. Promptly perform or observe or cause to be performed or observed any payment, obligation, undertaking or condition in the Memorandum of Understanding or any associated documents, to be performed or observed by the Buyer, that Buyer fails to observe or perform for any reason. Upon demand by the City, pay to the City the costs and expenses incurred by the City in connection with enforcement of the City's rights under this Memorandum of Understanding, including, without limitation, the reasonable fees and expenses of counsel. 4. Undertake these obligations without regard to any setoff or counterclaim which Buyer may have to assert, and regardless of whetherthe City or anyone on behalf of the City shall have instituted any suit, action or proceeding or exhausted its remedies or taken any steps to enforce any rights against the Buyer, and regardless of any other condition or contingency. Guarantors' obligations hereunder shall terminate on January 1, 2018, if Buyer has not already completed in full its payments, obligations and undertakings pursuant to this Memorandum of Understanding. However, Guarantors shall remain liable on this Guaranty for all obligations incurred prior to that date plus costs and fees incurred thereafter as permitted by applicable law. D. The maturity date of this loan shall be the first to occur of (i) the date title to the Property, which shall secure this loan obligation, is transferred, whether by deed, inheritance, or otherwise; or (ii) if Buyer fails to perform or continue to perform any of the obligations enumerated in Paragraph A; or (iii) five years from the date of execution of the Mortgage and Promissory Note memorializing the terms of this Memorandum of Understanding. E. In the event that the Property is subject to any condemnation proceeding or damaged or destroyed by fire, windstorm, casualty, rainwater, or the like, the abovementioned five (5) year period shall be tolled for a reasonable period, not to exceed nine (9) months, to allow Buyer to repair or rebuild the Property and reopen the restaurant to the public. If Buyer and/or 314 Condominiums Association Corp. elects not to repair or rebuild the Property, the outstanding balance of the loan shall become due and payable. F. On the five-year anniversary date of the Mortgage and Promissory Note referenced above, the entire amount of the loan shall be forgiven provided an event of default has not occurred and is continuing. G. The Mortgage memorializing the terms of this Memorandum of Understanding shall be subordinate to any purchase money mortgage used by Buyer to acquire the Property, and it shall be subordinate to any lien of 314 Condominiums Association Corp. pursuant to the terms of the condominium association agreement. H. The obligations and benefits of this Memorandum of Understanding shall not inure to the benefit of the heirs, successors, or assigns of the parties hereto. I. Upon execution of the Mortgage and Promissory Note memorializing the terms of the agreement between Buyer, Guarantors and the City, the terms of this Memorandum of Understanding shall be superceded by the terms of the Mortgage and PromissoryNote and shall have no further force and effect. J. All notices to the City, Buyer, and Guarantors hereunder shall be given by certified or registered mail, addressed: To the City at: City of Paducah, Kentucky ATTENTION: Mr. William F. Paxton, Mayor 300 South 5th Street Paducah, KY 42003 copy to: James R. Coltharp, Jr. Whitlow, Roberts, Houston & Straub, PLLC 300 Broadway Paducah, KY 42001 To Buyer at: Nunez Norte, Inc. 3820 Minnich Avenue Paducah, Kentucky 42001 To Guarantors at: Nestor W. Nunez Laura N. Nunez Eugenio Nunez Santiago Norte K. This Memorandum of Understanding may be modified by written agreement, signed by all of the parties hereto. WITNESS signatures of the parties as of the year and date first above written. Eugenio Nunez 326123.3 H NUNEZ NORTE, LLC LOM Title