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HomeMy WebLinkAbout09684RESOLUTION NO. 9684 A RESOLUTION APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND HADDONSTONE (USA) LTD. RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME AND TRANSFERRING $115,000 FROM THE 1992 -2006 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR SUCH PURPOSE BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The City Council finds and determines that the expenditure of $115,000 for the job creating capital improvement project with Haddonstone (USA) Ltd. described in the attached Agreement 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 September 23, 2002 between Pueblo, a Municipal Corporation and Haddonstone (USA) Ltd., a copy of which is attached hereto, having been approved as to form by the City Attorney, is hereby approved, and the President of the City Council is authorized to execute and deliver the Agreement in the name of the City. SECTION 3 Funds in an amount of $115,000 are hereby authorized to be transferred, expended and made available to Haddonstone (USA) Ltd. out of the 1992 -2006 Sales and Use Tax Capital Improvement Projects Fund for the sole purpose of the job creating capital improvement project and in the manner described in the attached Agreement. The funds hereby authorized to be transferred and expended shall be released and paid by the Director of Finance to or for the benefit of Haddonstone (USA) Ltd. 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 approval and passage. INTRODUCED September 23, 2002 BY Al Gurule Councilperson APPROVED: resident of City Council ATTEST: city c o � 0 O E Background Paper for Proposed RESOLUTION AGENDA ITEM # 1 DATE: September 23, 2002 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND HADDONSTONE (USA) LTD. RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME AND TRANSFER- RING $115,000 FROM THE 1992 -2006 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR SUCH PURPOSE ISSUE Should City Council approve the job creating capital improvement project with Haddonstone (USA) Ltd. described in the Agreement attached to the Resolution? RECOMMENDATION See Background. BACKGROUND An Agreement is being presented to City Council for approval relating to the job creating capital improvement project with Haddonstone (USA) Ltd. ( "Company "). Company intends to expand its facility at the Pueblo Memorial Airport Industrial Park by approximately 12,000 square feet. Company has committed to employ 15 full - time employees in addition to its current 30 full -time employment commitment. The financial details of the project were negotiated by PEDCO. PEDCO evaluated the business and financial ability of Company to fulfill its employment commitment, financial and other contractual obligations under Company's Agreement, and recommends that the City Council approve Company's project and related transactions and documents. FINANCIAL IMPACT City will transfer from the one -half cent sales and use tax fund $115,000 to expand Company's facility. f I AGREEMENT THIS AGREEMENT entered into as of 91so 7_e& &X .23 2002 between Pueblo, a municipal corporation (the "City ") and Haddonstone (USA) Ltd., a Delaware corporation (the "Company "). WHEREAS, City and Company entered into a certain Agreement dated May 28, 1996 for a job creating capital improvement project (the "1996 Agreement "), and WHEREAS, Company under the 1996 Agreement committed to employ thirty (30) full -time employees at its facilities located at the Pueblo Memorial Airport Industrial Park ( "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 "1996 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) July 1, 2003. "Facility" means the expanded building located on Parcel "A ", Lot Line Rearrangement No. 97 -09, 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 June 6, 1996 between Company and Pueblo Development Foundation ( "1996 Lease "), which modification agreement will provide for the construction of an approximately 12,000 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 12,000 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 $115,000.00 (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 body 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 November 30, 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 hereunder is the creation of jobs. Therefore, Company represents, covenants, and agrees that it will employ not less than fifteen (15) Full -Time Employees in addition to the Original Employment Commitment of thirty (30) Full -Time Employees at the Facility by the Employment Commitment Date and thereafter (the "Expansion Employment Commitment "). Iya 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 forty-five (45) employed at the Facility by Company multiplied by $273.81 (the "Company's Expansion Quarterly Payments "). For example, if for the Quarter ending June 2004 the Quarterly Employees is 40, the amount payable by Company to City on or before July 15, 2004 would be (45 - 40) x $273.81 = $1369.05. (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, 1996 Agreement, 1996 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 15 times $273.81 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 uncondi- tional 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 Expansion Repayment Obligation contained in paragraph 4. 6. (a) Prior to instituting any proceeding to enforce Company's Expansion IRE Repayment Obligation under paragraph 4, City shall notify Company in writing of its intention to institute such proceedings. Company may request relief from its Expansion Repayment Obligation by delivering to City within twenty (20) days after date of City's notice, Company's written request for relief specifying the grounds upon which such relief is sought together with documents supporting said grounds. Within ninety (90) days after receipt of Company's request, City will schedule a meeting with the City Council at which Company may appear. City will notify Company of the time and place of the meeting. Failure of Company to timely deliver its complete written request for relief or to appear at the scheduled meeting with the City Council shall entitle City to immediately institute proceedings to enforce Company's Expansion Repayment Obligation. (b) City Council may or may not, in its sole and absolute discretion, relieve Company, in whole or in part, from Company's Expansion Repayment Obligation. Any action taken by the City Council relating to a request for relief shall be final and binding on Company, and not subject to judicial review. Any such action by City Council is, and shall constitute, a legislative measure. Nothing contained in this paragraph 6 shall grant or be construed to grant to Company any right or claim to relief from its Repayment Obligation or hearing with respect thereto. (c) No delay by the City in scheduling a meeting, or failure by City to exercise its right to enforce this Agreement, including Company's Expansion Repayment Obligation, and no partial or single exercise of that right, shall constitute a waiver of that right. 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 parry 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 or liability 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 IEN 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) if to the Company, 32207 United Avenue, Pueblo, Colorado, 81001, 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 ofthe 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 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. 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 1996 Agreement and all obligations of Company under this Agreement shall be in addition to Company's obligations under the 1996 Agreement. Executed at Pueblo, Colorado, the day and year first above written. [ S E A L] Pueblo, a Municipal Corporation r Attest: B City elgrk President of the City Council Attest: Name: Title: Haddonstone (USA) Ltd. Title: Q����� F: \CITY\AMORTEDDNSTON\E"ANSN\AW a t- 2002 (6[ dmft)."d —6