Loading...
HomeMy WebLinkAbout08893RESOLUTION NO. 8893 A RESOLUTION APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND STONECRAFT INDUSTRIES, INC. RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AND AUTHORIZING THE EXPENDITURE OF $300,000 THEREFOR FROM THE 1992 -2001 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND WHEREAS, StoneCraft Industries, Inc. (the "Company ") has expressed a willingness to locate its business activities at the Pueblo Memorial Airport Industrial Park and has committed to employ sixty (60) full time employees, and WHEREAS, Company through the Pueblo Economic Development Corporation has made application for funds from the 1992 -2001 Sales and Use Capital Improvement Projects Fund, and WHEREAS, the City Council is willing to approve such application for funds upon the terms and conditions set forth herein; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The City Council does hereby find and determine that StoneCraft Industries, Inc.'s application for funds meets and complies with the criteria and standards established by Ordinance No. 6381 and will create employment opportunities justifying the expenditure of public funds. SECTION 2 The Agreement dated as of January 10, 2000 between Pueblo, a municipal corporation and StoneCraft Industries, Inc., having been approved as to form by the City Attorney, is hereby approved. The President of the City Council is authorized to execute and deliver the Agreement in the name of the City and the City Clerk is authorized and directed to affix the seal of the City thereto and attest same. SECTION 3 Funds in an amount of $300,000 are hereby authorized to be expended and made available to StoneCraft Industries, Inc. out of the 1992 -2001 Sales and Use Tax Capital Improvement Projects Fund for the sole purpose of the job creating capital improvement project described in the attached Agreement. The funds hereby authorized to be expended shall be released and paid by the Director of Finance to or for the benefit of StoneCraft Industries, Inc. after receipt (i) by the City Clerk of the documents required to be filed pursuant to paragraph 2(d) of the Agreement and (ii) by the Director of Finance of written requests for payment required by paragraph 2(e) of the Agreement. SECTION 4 This Resolution shall become effective upon final passage. INTRODUCED: January 10, 2000 By Al Gurule ATTEST: City rk Councilperson APP V D: of the City Council F:\ CITY\AIRPORT\STNCRAFT\RESOLUTN. WPD _2 JANUARY 10, 2000 AGENDA CITY COUNCIL BACKGROUND MEMORANDUM RESOLUTION APPROVING AGREEMENTS WITH STONECRAFT INDUSTRIES, INC. AND PUEBLO DEVELOPMENT FOUNDATION RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AT PUEBLO MEMORIAL AIRPORT INDUSTRIAL PARK Two Resolutions are being presented to City Council for approval of Agreements with StoneCraft Industries, Inc. (the "Company ") and Pueblo Development Foundation (the "PDF "). Company intends to locate its manufacturing business at Pueblo Memorial Airport and has committed to employ 60 full -time employees during a 7 year Repayment Period starting no later than July 1, 2001. City will advance $300,000 to Company ( "City Funds "). City Funds will be spent for renovations to the 25,650 foot shell building located on Lot 58, Pueblo Memorial Airport Industrial Park ( "Lot 58 ") to be transferred by the City to Pueblo Development Foundation and leased to the Company for a ten year term with an option to purchase. PDF will spend $776,059 including the City's $300,000 to renovate the shell building. Company will repay to PDF $476,059 over the ten year lease term. Company will also pay $7,482 per month rent starting after the first year of the lease term. Company is given the option to purchase the renovated shell building for $600,000, as well as the right if first refusal to acquire the adjoining Lot 57. If Company defaults in its employment commitment during the 7 year repayment period, Company shall repay to City a pro -rata share of City Funds based upon employees actually employed by Company. The financial details of Company's project including job commitment and repayment obligations were negotiated by the Executive Committee of Pueblo Economic Development Corporation ( "Executive Committee "). The Executive Committee evaluated the business and financial ability of Company to fulfill its employment commitment, financial and other contractual obligations under Company's Agreement, and recommended that the City Council approve Company's project and related transactions. AGREEMENT THIS AGREEMENT entered into as of January 10, 2000 between Pueblo, a municipal corporation (the "City ") and StoneCraft Industries, Inc., a California Corporation (the "Company "). WHEREAS, Company has expressed a willingness to locate its business within the Pueblo Municipal Airport Industrial Park, and in furtherance thereof has through the Pueblo Economic Development Corporation made application for funds and land with the City, and WHEREAS, the City has approved such application and will make funds and land available to Company subject to and upon the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Company agree as follows: 1. The following terms as used in this Agreement shall have the following meaning unless the context clearly indicates otherwise: "Employment Commitment Date" means the earlier of (i) the first day of the twelfth (12th) calendar month after the calendar month in which the commencement date of the Lease occurs, or (ii) July 1, 2001. "Facility" means the approximately 25,650 square foot building located on Lot 58, Pueblo Memorial Airport Industrial Park Subdivision, Pueblo, Colorado. "Full -Time Employee" means a person who actually performs work at the Facility for not less than thirty -two (32) hours per week whether employed by Company or by an outside entity acting as an agency to provide Full -Time Employees for Company. The term "Full -Time Employee" does not include independent contractors nor employees of independent contractors except as described herein. "Lease" means an enforceable and binding long -term lease of the Facility between Company and Pueblo Development Foundation for a term of not less than ten (10) years. "Quarterly Employees" means the sum of the number of Full -Time Employees on each business day of a Quarter divided by the sum of the business days in such Quarter. "Quarter" means three consecutive calendar months commencing January 1, April 1, July 1 and October 1 of each calendar year. "Renovations" means the remodeling of the Facility and installation of landscaping in accordance with plans and specifications approved by Company and Pueblo Development Foundation. 2. City will advance to or for the benefit of Company funds in the amount of $300,000.00 (the "City Funds "), subject to and contingent upon the following conditions and covenants which Company agrees to perform and comply with: (a) Company shall use and all City Funds shall be spent solely for the Renovations. (b) All contracts for construction of Renovations shall be awarded after competitive bidding which allows qualified local contractors to participate in the competitive bidding procedures. (c) Company causing the Facility to be leased and equipped in an expeditious manner. (d) Company filing in the office of the City Clerk copies of the following: (i) Company's certificate or other evidence of authority to transact business in the State of Colorado issued by the Colorado Secretary of State, (ii) certified copy of the resolution of the governing board of Company approving this Agreement and Lease, and authorizing its officers to execute and deliver this Agreement and Lease in the name of Company, (iii) an executed copy of the Lease; and (iv) evidence satisfactory to City that Company has located its business in the Facility. The date of such filings is herein referred to as "Closing." If Closing does not occur on or before July 1, 2000, or such later date as Company and City shall mutually agree, this Agreement shall terminate and City and Company shall be released and discharged from all obligations hereunder. (e) Company filing with the Director of Finance of City written request for payment certified by an officer of Company that the amounts included in the requests for payment have not been included in any prior request for payment and are for the actual cost of Renovations identifying the Renovations for which payment is sought, including certificates of the architect and general contractor that such Renovations have been installed. 3. Company acknowledges and agrees that the primary purpose of City in entering into this Agreement and the sole benefit to the City for making City Funds available to Company hereunder is the creation of jobs. Therefore, Company represents, covenants, and agrees that it will employ not less than sixty (60) Full -Time Employees at the Facility by the Employment Commitment Date and thereafter (the "Employment Commitment "). 4. Notwithstanding anything contained herein to the contrary, if Company shall for any reason default in its Employment Commitment set forth in paragraph 3 hereof, Company shall repay to City a pro -rata share of the City Funds advanced by City under paragraph 2 hereof based upon the number of Full -Time Employees employed by Company at the Facility (the "Repayment Obligation "), as follows: (a) During the seven (7) year period starting on the Employment Commitment -2- Date and ending eighty -four (84) months thereafter (the "Repayment Period ") Company shall pay to City an amount each Quarter equal to the Quarterly Employees less than sixty (60) employed at the Facility by Company multiplied by $178.57 (the "Company's Quarterly Payments "). For example, if for the Quarter ending June 2003 the Quarterly Employees is 50, the amount payable by Company to City on or before July 15, 2003 would be (60 - 50) x $178.57 = $1785.70. (b) Company's Quarterly Payments, if any, shall be paid to the City without notice, demand, deduction or setoff on or before the fifteenth (15th) day of the month after the end of each Quarter during the Repayment Period and for one month thereafter at the office of the Director of Finance of City, 1 City Hall Place, Pueblo, Colorado, 81003. All past due Company's Quarterly Payments shall bear interest at the rate of ten (10) percent per annum until paid. (c) Within fifteen (15) days after the end of each Quarter after the Employment Commitment Date and for one calendar month after the Repayment Period, Company will submit to City's Director of Finance Company's statements showing the Quarterly Employees for the preceding Quarter and the basis upon which Quarterly Employees and Company's Quarterly Payment, if any, were computed certified by an officer of the Company to be true and correct. For purposes of verifying such employment, City shall have access to Company's payroll records relating to Company's employment at the Facility. City will, however, respect the right of employees and Company as to confidentiality of personnel records. (d) If Company defaults in its Repayment Obligation, Employment Commitment, and/or the Lease, and such default is not cured within sixty (60) days after written notice specifying the default is given by City to Company, then in such event, City may declare the entire balance of Company's Repayment Obligation due and owing together with interest thereon at the rate of ten (10) percent per annum, and for such purpose, the entire balance of Company's Repayment Obligation shall be an amount equal to 60 times $178.57 multiplied by the remaining Quarters of the Repayment Period plus the amount of Company's unpaid Quarterly Payments, if any, but in no event more than the amount of City Funds advanced by City under paragraph 2 hereof and interest as herein provided. Company's Repayment Obligation is absolute and unconditional and shall not be abated, reduced, diminished, modified, withheld or otherwise offset for any cause or reason whatsoever. 5. All City Funds advanced to Company by City under this Agreement shall be deemed to be a debt of Company payable to City until Company performs and discharges its obligations hereunder including its Repayment Obligation contained in paragraph 4. 6. (a) City Council of City may, in its sole discretion, relieve Company, in whole or in part, from Company's Repayment Obligation set forth in paragraph 4, if the City Council, after public hearing, finds and determines based upon competent evidence presented at such hearing that Company was prevented from complying with its Employment Commitment by reason of an act of God, or the elements, fire, explosion, strike, insurrection, riot, shortage or unavailability of materials, supplies or labor, interruption of transportation facilities, governmental laws, regulations or restrictions, or other causes beyond Company's reasonable control. The findings and decision of the City Council shall be final and binding upon Company and City. -3- (b) Prior to instituting any proceedings to enforce Company's Repayment Obligation under paragraph 4, City shall notify Company in writing of its intention to institute such proceedings. If Company desires to seek relief pursuant to paragraph 6(a), Company, within twenty (20) days after receipt of City's notice, shall deliver to City its written request for relief specifying the grounds upon which such relief is sought. Within sixty (60) days after receipt of Company's request, City will schedule a hearing before the City Council and give written notice to Company of the time and place of such hearing. Failure of Company to timely deliver its written request for relief or to appear and submit evidence in support of its request at a scheduled hearing shall constitute a waiver of any right of Company to a hearing before City Council. (c) No delay by the City in scheduling a hearing, or failure by City to exercise its right to enforce this Agreement, including Company's Repayment Obligation, and no partial or single exercise of that right, shall constitute a waiver of that right, unless the City Council otherwise expressly provides in its findings and decision made pursuant to paragraph 6(a). 7. In the event of any litigation arising out of this Agreement, the court shall award to the prevailing party its costs and reasonable attorney fees. Venue for any such litigation shall be in Pueblo County, Colorado. All such litigation shall be filed in the District Court, County of Pueblo, State of Colorado and each party submits to the jurisdiction of that Court. To the extent allowed by law, each party waives its right to a jury trial. 8. This Agreement expresses the entire understanding of the parties and supersedes any and all prior dealings and commitments with respect to the subject matter of this Agreement and may not be amended except in writing signed by City and Company. 9. This Agreement shall be construed in accordance with and governed by the laws of the State of Colorado without regard to conflict of law principles. 10. The covenants, representations and warranties made by each party herein shall survive the Closing for the benefit of the other party. 11. Company acknowledges and agrees that City reserves the right, without any obligation on its part to do so, to maintain and keep in repair the landing area of the airport and other public areas or facilities at Pueblo Memorial Airport and to develop, modify, change, relocate, abandon, or improve the Pueblo Memorial Airport, or any part thereof as it may determine in its sole and absolute discretion, at any time, and Company further acknowledges and agrees that City has not made, nor by any provision of this Agreement shall City be construed to have made any representation or warranty to the contrary with respect thereto. 12. Any notices hereunder shall be sufficiently given if given personally or mailed by first class mail, postage prepaid, addressed: (a) if to City, City Manager, City of Pueblo, 1 City Hall Place, Pueblo, Colorado, no 81003, with copy to Thomas E. Jagger, City Attorney, 127 Thatcher Building, Pueblo, Colorado, 81003, or (b) if to the Company, 1370 Grand Avenue, Building B, San Marcos, California, 92069, or to such other address as either party shall specify in written notice given to the other party. 13. Time is of the essence hereof. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, provided Company shall not voluntarily or by operation of law assign this Agreement or any interest herein without the express written consent of the City, which consent shall not be unreasonably withheld. City may withhold its consent if the proposed assignee's financial standing and responsibility at the time of the proposed assignment is insufficient in the City's sole discretion to give assurance of performance and compliance with all the terms and conditions of this Agreement including without limitation the Employment Commitment. Upon such an assignment and consent, Company shall be released from all obligations arising or occurring under this Agreement after the effective date of such assignment and consent, provided that such assignee shall execute, acknowledge and deliver to City an assumption agreement in form and substance satisfactory to City, whereby assignee agrees to observe, perform and keep all the terms, provisions, covenants and conditions required to be observed, performed and kept by Company under this Agreement including without limitation, the Employment Commitment. Any assignment or attempted assignment of this Agreement or any interest herein by Company without City's express written consent shall be null and void.. 14. The persons signing this Agreement in the name of and on behalf of Company represent and warrant that they and Company have the requisite power and authority to enter into, execute, and deliver this Agreement, and that this Agreement is a valid and legally binding obligation of Company enforceable against Company in accordance with its terms. 15. Company represents and warrants that no person, entity, or organization has been employed or retained or will receive or be paid, directly or indirectly, any commission, percentage, contingent fee or any other remuneration payment or receipt of which is contingent upon approval of this Agreement or City's advancement of funds to Company hereunder. For breach or violation of this warranty, City shall have the right to terminate this Agreement, or recover the full amount of such commission, percentage, contingent fee or other remuneration, or to seek such other remedies legally available to City, which remedies shall be cumulative. 16. In no event shall City, its officers, agents or employees be liable to Company for damages, including without limitation, compensatory, punitive, indirect, special or consequential damages, resulting from or arising out of or related to this Agreement or the performance or breach thereof by City or the failure or delay of City in the performance of any covenant or provision under this Agreement on its part to be performed. In consideration of City entering into this Agreement, Company hereby waives and discharges City, its officers, agents and employees from any and all -5- claims for any and all such damages. No breach, default, delay or failure of City under this Agreement shall be or be construed to be a waiver or release of Company's Repayment Obligation under paragraph 4 hereof with respect to the amount of City Funds actually advanced or paid by City to or for the benefit of Company pursuant to paragraph 2 hereof. Company shall have the right to file an action to specifically enforce City's obligations under this Agreement without showing or proof of an inadequate remedy at law. 17. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 18. If any provision of this Agreement is declared by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the other provisions of this Agreement which shall remain in full force and effect. Executed at Pueblo, Colorado, the day and year first above written. [SEAL] Attest: S : ; _� By City C k Puebl , a Municipal Co poration President of the City Council u Attest: By Name: Name: Title: / fe. G , Title: Industries, Inc. -6- CERTIFICATION OF RESOLUTION OF THE BOARD OF DIRECTORS' OF STONECRAFT INDUSTRIES, INC., A CALIFORNIA CORPORATION I CERTIFY THAT: I am duly qualified and acting Secretary of StoneCraft Industries, Inc., a California Corporation. Attached to this Certification and marked as Exhibit A hereto is a true and correct copy of a Resolution duly adopted by the Board of Directors of the Corporation at a special meeting held on Th l0 2000. The Resolution has not been modified or rescinded and is in full force and affect at the date of this Certificate. Date: Z h . 10 2.0 GO Mike Lewis, Corporate Secretary CERTIFICATION OF RESOLUTION PAGE I OF I BOARD OF DIRECTORS' RESOLUTION STONECRAFT INDUSTRIES, INC. WHEREAS, the Corporation will benefit from the use and possible, eventual acquisition of manufacturing facilities in the vicinity of Denver, Colorado; and W HEREAS , the Pueblo Economic Development Corporation (hereinafter "Pedco "), in cooperation with the City of Pueblo, Colorado (hereinafter "City "), and the Pueblo Development Foundation (hereinafter "PDF ") have proposed an attractive lease /option arrangement to the Corporation with respect to suitable facilities in the City; and WHEREAS, the Board of Directors of the Corporation finds that execution of the following documents herein referred to as the "Agreement" and the transactions contemplated thereby are in the best interest of the Corporation: ► Lease between PDF and StoneCraft Industries, Inc. ► Warranty Deed between City and PDF ► Easement and Right -of -Way between City and PDF ► Agreement between City and StoneCraft Industries, Inc. NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Corporation hereby approves the Corporation's entering into the transactions contemplated by the Agreement. RESOLVED THEREFORE, that the Agreement and the execution, delivery and performance thereof, are hereby ratified, confirmed and approved in all respects. RESOLVED FURTHER, that the Officers of the Corporation, specifically, Mike Lewis, Vice- President, one, and each individually are authorized, on behalf of the Corporation, to consummate the transaction contemplated by the Agreement and to cause the Corporation to perform all of its duties and obligations thereunder. BOARD OF DIRECTORS' RESOLUTION PAGE I OF 2 RESOLVED FURTHER, that a portion of the Corporation's enterprise is authorized to locate to the facilities which are the subject of the Agreement in Pueblo, Colorado and begin conducting business as soon as practically feasible. IT IS UNANIMOUSLY RESOLVED AS FOLLOWS: The Corporation will execute, deliver and perform all aspects of the Agreement as specified herein. Date: 4biL- -G Date: ! /G /00 Mike L /wIs, Director Date: ' ^- I d — 00 BOARD OF DIRECI'ORS' RESOLUTION PAGE 2 OF 2 /� i wz�&� Parker Mahnke, Dire for