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HomeMy WebLinkAbout09562RESOLUTION NO. 9562 A RESOLUTION APPROVING AN EXTENSION AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND IRON PHOENIX CORPORATION RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The Extension Agreement dated as of April 1, 2002 between Pueblo, a Municipal Corporation and Iron Phoenix Corporation relating to a job creating capital improvement project, a copy of which is attached hereto and incorporated herein, having been approved as to form by the City Attorney, is hereby approved. SECTION 2 The President of the City Council is authorized to execute and deliver the Extension Agreement in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. INTRODUCED: March 25, 2002 By: Ted Lopez, Jr. COUNCILPERSON APPROVED: PRESIDENT OF THE CITY COUNCIL ATTESTED BY: CITY CLERK a mg = City of Pueblo OFFICE OF THE CITY ATTORNEY 503 N. Main Street, Suite 127 Pueblo, Colorado 81003 Telephone: (719) 545 -4412 Fax No.: (719) 545 -4301 Background Paper for Proposed RESOLUTION AGENDA ITEM # DATE: March 25, 2002 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING AN EXTENSION AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND IRON PHOENIX CORPORATION RELATING TO A JOB CREATING CAPITAL IMPROVE- MENT PROJECT AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME ISSUE Should City Council approve the Extension Agreement? RECOMMENDATION City Council should approve the Extension Agreement. BACKGROUND The attached Resolution approves an Extension Agreement between the City and Iron Phoenix Corporation (the "Corporation "). The City, Wheelstar Corporation, and Corporation on October 11, 1994 entered into a job - creating capital improvement project agreement under which the City was to advance $400,000 to renovate buildings and property purchased from Rockwool Industries, Inc. ( "Property "). Company agreed to employ an additional 40 full -time employees. The City actually advanced $235,359 before the project, through no fault of Wheelstar Corporation, failed. According to Corporation, it has spent approximately $785,000 of its and Wheelstar's funds remodeling the Property. The City funds are secured by a deed of trust on the Property. Wheelstar Corporation has been dissolved and the Corporation is the owner of the Property. The Corporation will repay the $235,359 plus interest at 7% per annum in 96 monthly installments of $3,208.82 FINANCIAL IMPACT The $235,359 advanced by City out of the one -half cent sales tax fund for the job creating capital improvement project will be repaid with interest at the rate of 7% per annum. EXTENSION AGREEMENT This Extension Agreement entered into as of April 1, 2002 between the City of Pueblo, a municipal corporation (the "City "), and Iron Phoenix Corporation, a Colorado corporation (the "Company "), WITNESSETH WHEREAS, Wheelstar Corporation (the "Wheelstar ") and City entered into an agreement dated October 11, 1994 whereby City advanced funds to Wheelstar and Wheelstar agreed to repay the City funds if it did not meet its Employment Commitment thereunder (the "Agreement "), and WHEREAS, Company assumed and agreed to perform the Agreement and make the payments under the Agreement and executed its deed of trust as security for such performance and payment which was recorded December 29, 1994 in Book 2776, Page 697 of the records of the Pueblo County Clerk and Recorder (the "Deed of Trust "), and WHEREAS, Wheelstar has been dissolved and is no longer a viable legal entity under the laws of the State of Colorado, and WHEREAS, Wheelstar and Company are in default under the Agreement and Deed of Trust and Company has requested City to defer filing any action or proceeding to enforce the Agreement and Deed of Trust, and WHEREAS, City is willing to defer filing any such action or proceeding subject to and upon the terms and conditions herein set forth, NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained herein, City and Company agree as follows: 1. City advanced to Wheelstar pursuant to the terms of the Agreement the sum of $235,359.00. Company acknowledges, stipulates and agrees that it is now indebted to and owes City the sum of $235,359.00 (the "Indebtedness ") and that the payment of the Indebtedness is secured by the Deed of Trust. 2. Interest on the unpaid balance of the Indebtedness shall accrue interest at the rate of seven (7) percent per annum from March 10, 2002 until paid in full. The Indebtedness plus accrued interest shall be paid in ninety -six (96) consecutive monthly installments of $3,208.82 commencing April 10, 2002 and on the 10 day of each month thereafter ( "Monthly Installments "). Monthly Installments shall be paid without notice, demand, deduction or off -set at the office of the Director of Finance, 1 City Hall Place, Pueblo, Colorado, 81003, or such other address as the City may designate. If not sooner paid, the entire principal balance of the Indebtedness and accrued interest shall be due and payable on March 10, 2010. 3. If any Monthly Installment is not paid when due, the entire principal balance of the Indebtedness and accrued interest thereon shall at once become due and payable, without notice, at the option of the City in which event, City shall be entitled to foreclose the Deed of Trust. City shall be entitled to collect all reasonable costs and expenses if a collection and/or suit is instituted to collect the Indebtedness, including, but not limited to, reasonable attorney fees. 4. Company may prepay the principal balance of the Indebtedness, in whole or in part, at any time without penalty. Any partial repayment shall be applied against the outstanding balance of the Indebtedness and shall not postpone the due date of any subsequent Monthly Installment or the amount of such Monthly Installment. 5. Notwithstanding anything contained herein to the contrary, Company further acknowledges, stipulates and agrees that: (a) the City has not by entering into this Extension Agreement or by any other acts or conduct, or statements made by City's officers, employees or agents, in any manner waived, released or discharged Company from its obligations under the Agreement and Deed of Trust, including without limitation the payment of the Indebtedness. (b) Company waives any and all applicable period of limitations, statutory of otherwise, laches, and all other defenses to any action or proceeding the City may take or institute to enforce this Extension Agreement, the Agreement and Deed of Trust and/or to collect the Indebtedness, provided any such action or proceeding shall be instituted on or before December 31, 2011. (c) Company waives any and all right to a notice and hearing set forth in paragraph 6 of the Agreement. (d) The term "note" or "promissory note" contained in the Deed of Trust shall mean and include the Agreement and this Extension Agreement. 6. This Extension Agreement shall be construed in accordance with and governed by the laws of the State of Colorado. 7. 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, 81003, with copy to Thomas E. Jagger, City Attorney, 127 Thatcher Building, Pueblo, Colorado, 81003, or (b) if to the Company, 520 Van Buren St., Pueblo, Colorado, 81004 or to such other address as either party shall specify in written notice given to the other party. -2- 8. Time is of the essence hereof. This Extension Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, provided Company may not assign this Extension Agreement or any interest herein. Any assignment of this Extension Agreement by Company shall be null and void. 9. The persons signing this Extension Agreement on behalf of Company represents and warrants that such persons and Company have the requisite power and authority to enter into, execute, and deliver this Extension Agreement and that this Extension Agreement, Agreement and Deed of Trust are valid and legally binding obligations of Company enforceable against the Company in accordance with their terms. 10. The Agreement and Deed of Trust as modified by this Extension Agreement shall remain in full force and effect enforceable according to their terms, provided, that in the event of any conflict between the provisions of this Extension Agreement and the Agreement and/or Deed of Trust, the provisions of this Extension Agreement shall control to the extent of such conflict. 11. The Extension Agreement dated June 1, 1999 between City and Company is hereby terminated and cancelled and each party is released from all obligations thereunder. Executed at Pueblo, Colorado, the day and year first above written. [SEAL] PUEBL, , A MUNICIPAL CORPORATION ATTEST: By City k President of the City Council APPROVED AS TO FORM: City Atto [SEAL] ATTEST: Secretary IRON PHOENIX CORPORATION, a Colorado Corporation By �� �)� President -3-