HomeMy WebLinkAbout09621RESOLUTION NO. 9621
A RESOLUTION APPROVING AN AGREEMENT BETWEEN
PUEBLO, A MUNICIPAL CORPORATION AND STONE -
CRAFT INDUSTRIES, LLC, RELATING TOAJOB CREATING
CAPITAL IMPROVEMENT PROJECT AND AUTHORIZING
THE EXPENDITURE OF $200,000 THEREFOR FROM THE
1992 -2006 SALES AND USE TAX CAPITAL IMPROVEMENT
PROJECTS FUND AND APPROVING THE SUBORDINATION
OF CITY'S INTEREST IN DEED OF TRUST
WHEREAS, StoneCraft Industries, LLC (the "Company ") has expressed a
willingness to expand its business activities at the Pueblo Memorial Airport Industrial Park
and has committed to employ an additional fifty (50) full time employees, and
WHEREAS, Companythrough the Pueblo Economic Development Corporation has
made application for funds from the 1992 -2006 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, LLC'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 June 10, 2002 between Pueblo, a municipal corporation
and StoneCraft Industries, LLC, in substantially the form and content attached hereto, is
hereby approved. The President of the City Council is authorized to execute and deliver
the Agreement in the name of the City, with such modification thereto as the President of
the City Council and the City Attorney shall approve, 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 $200,000 are hereby authorized to be expended and made
available to StoneCraft Industries, LLC out of the 1992 -2006 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, LLC 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
The President of the City Council is authorized to execute and deliver in the name
of the City a subordination agreement in form and content approved by the City Attorney,
subordinating the City's right, title and interest in and to the Deed of Trust recorded
January 26, 2000 as Instrument No. 1317692 in the office of the Pueblo County Clerk and
Recorder, to a Deed of Trust to be executed and delivered by Pueblo Development
Foundation as security for the payment of Pueblo Development Foundation's loan in the
approximate amount of $550,000 to construct the approximately 22,500 square foot
expansion to the building and facility located on Lot 58, Pueblo Memorial Airport Industrial
Park Subdivision, Pueblo County, Colorado, presently leased to and occupied by
StoneCraft Industries, LLC.
-2-
SECTION 5
This Resolution shall become effective upon final passage.
INTRODUCED: June 10, 2002
By: Robert Schilling
COUNCILPERSON
APPROVED:
PRESIDENT OF THE CITY COUNCIL
ATTESTED BY: `tom
CITY CLERK
F:\ CITYIAIRPORT \STNCRAFT\Expansion \RESOLUTN. WPD —3
Reso. 9621
X1
AGREEMENT
THIS AGREEMENT entered into as of June 10, 2002 between Pueblo, a municipal
corporation (the "City ") and StoneCraft Industries, LLC, a Delaware limited liability company (the
"Company ")
WHEREAS, City and StoneCraft Industries, Inc., a California Corporation entered into a
certain Agreement dated January 10, 2000 for a j ob creating capital improvement project (the "2000
Agreement "), and
WHEREAS, StoneCraft Industries, Inc. under the 2000 Agreement committed to employ
sixty (60) full -time employees at its facilities located at the Pueblo Memorial Airport Industrial Park
( "Original Employment Commitment "), and
WHEREAS, Company is the successor in interest in and to StoneCraft Industries, Inc. and
has assumed and agreed to perform and be bound by the terms and provisions of the 2000
Agreement, including, without limitation, the Original Employment Commitment, and
WHEREAS, Company has expressed a willingness to expand its business at the Pueblo
Memorial Airport Industrial Park, and in furtherance thereof has through the Pueblo Economic
Development Corporation made application for funds with the City, and
WHEREAS, the City has approved such application and will make funds 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. In addition to the terms "Original Employment Commitment" and "2000 Agreement"
defined above and other terms defined herein, the following terms shall have the following meaning,
unless the context clearly indicates otherwise:
"Employment Commitment Date" means the earlier of (i) the first day of the sixth (6th)
calendar month after the calendar month in which the Expansion is substantially completed, or (ii)
May 1, 2003.
"Facility" means the expanded building located on Lot 58, Pueblo Memorial Airport
Industrial Park Subdivision, Pueblo County, 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 Modification" means an enforceable modification agreement between Company and
Pueblo Development Foundation modifying that certain Lease Agreement dated January 10, 2000
between StoneCraft Industries, Inc. and Pueblo Development Foundation ("2000 Lease "), which
modification agreement will provide for the construction of the approximately 22,500 square foot
Expansion of the Facility.
"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.
"Expansion" means the approximately 22,500 square foot expansion of the Facility 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
$200,000.00 (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 Expansion.
(b) All contracts for construction of the Expansion shall be awarded after
competitive bidding which allows qualified local contractors to participate in the competitive bidding
procedures.
(c) Company causing the Expansion to be completed 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 Modification, and authorizing its officers to
execute and deliver this Agreement and Lease Modification in the name of Company, (iii) an
executed copy of the Lease Modification; and (iv) evidence satisfactory to City that Company has
commenced the Expansion. The date of such filings is herein referred to as "Closing." If Closing
does not occur on or before August 31, 2002, 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 or its duly authorized representative 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 Expansion identifying the Expansion for which payment is sought,
including certificates of the architect and general contractor that such Expansion has 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
-2-
hereunder is the creation of j obs. Therefore, Company represents, covenants, and agrees that it will
employ not less than fifty (50) Full -Time Employees in addition to the Original Employment
Commitment or sixty (60) Full-Time Employees at the Facility by the Employment Commitment
Date and thereafter (the "Expansion Employment Commitment ").
4. Notwithstanding anything contained herein to the contrary, if Company shall for any
reason default in its Expansion 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
"Expansion Repayment Obligation "), as follows:
(a) During the seven (7) year period starting on the Employment Commitment
Date and ending eighty -four (84) months thereafter (the "Expansion Repayment Period ") Company
shall pay to City an amount each Quarter equal to the Quarterly Employees less than one hundred
ten (110) employed at the Facility by Company multiplied by $142.85 (the "Company's Expansion
Quarterly Payments "). For example, if for the Quarter ending June 2004 the Quarterly Employees
is 100, the amount payable by Company to City on or before July 15, 2004 would be (110 - 100) x
$142.85 = $1428.50.
(b) Company's Expansion 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 Expansion 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 Expansion 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 Expansion 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 Expansion
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 Expansion Repayment Obligation, Expansion
Employment Commitment, 2000 Agreement, 2000 Lease, and/or the Lease Modification, 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 Expansion
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 Expansion Repayment Obligation
shall be an amount equal to 50 times $142.85 multiplied by the remaining Quarters of the Expansion
Repayment Period plus the amount of Company's unpaid Expansion 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 Expansion Repayment Obligation is absolute and
unconditional and shall not be abated, reduced, diminished, modified, withheld or otherwise offset
for any cause or reason whatsoever.
&a
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) ifto City, City Manager, City of Pueblo, l City Hall Place, Pueblo, Colorado,
81003, with copy to Thomas E. Jagger, City Attorney, 127 Thatcher Building, Pueblo, Colorado,
81003, or
(b) ifto 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 ifthe 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
Expansion 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
Expansion 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
-5-
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
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.
19. No person or entity other than City and Company shall have any rights or remedies
under this Agreement.
20. No provision of this Agreement shall be interpreted or construed to modify or amend
any provision of the 2000 Agreement and all obligations of Company under this Agreement shall
be in addition to Company's obligations under the 2000 Agreement.
Executed at Pueblo, Colorado, the day and year first above written.
[SEAL] Pueblo, a Municipal Corporation
Attest: L am_ By �2 .
City A President of the City Council
StoneCraft Industries, LLC
Attest: By .
Name: Name: / 3e-
Title: Title: GAe
F:T nY IAIRPORT\Ma(AF'LlExps=on4\ga t- 6-10 -M(Era dn@).wpd -6-