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RESOLUTION NO. 12795
A RESOLUTION APPROVING A SECOND AMENDMENT
TO THE AGREEMENT BETWEEN PUEBLO, A MUNICIPAL
CORPORATION, AND ROCLA CONCRETE TIE, INC.
RELATING TO A JOB CREATING CAPITAL
IMPROVEMENT PROJECT, AND AUTHORIZING THE
PRESIDENT OF CITY COUNCIL TO EXECUTE SAID
AMENDMENT AND TRANSFERRING $700,000 FROM THE
1992–2016 SALES AND USE TAX CAPITAL
IMPROVEMENT PROJECTS FUND THEREFOR
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The City Council finds and determines that the expenditure of $700,000 for the
job creating capital improvement project with Rocla Concrete Tie, Inc. described in the
attached Amendment to the Agreement, meets and complies with the criteria and
standards established by Section 14-4-85 of the Pueblo Municipal Code and will create
employment opportunities justifying the expenditure of public funds.
SECTION 2.
The Second Amendment to the Employment Agreement dated September 23,
2013 between Pueblo, a Municipal Corporation, and Rocla Concrete Tie, Inc., a Texas
corporation, relating to a job creating capital improvement project, a copy of which is
attached hereto ("Amendment"), 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 Amendment in the name of the City and the City Clerk is directed to affix the
seal of the City thereto and attest same.
SECTION 3.
Funds in the aggregate amount of $700,000 are hereby authorized to be
transferred, expended and made available out of the 1992 – 2016 Sales and Use Tax
Capital Improvement Projects Fund for the sole purpose of the job creating capital
improvement project authorized herein and in the manner described in the Amendment.
The funds hereby authorized to be transferred and expended shall be held by the City
and released, disbursed and paid by the Director of Finance to Rocla Concrete Tie, Inc.
SECTION 4.
The officers and staff of the City are directed and authorized to perform any and
all acts consistent with the intent of this Resolution and attached Amendment which are
necessary or desirable to effectuate the transactions described therein.
SECTION 5.
This Resolution shall become effective upon passage and approval.
INTRODUCED: September 23, 2013
BY: Chris Kaufman
Background Paper for Proposed
RESOLUTION
DATE: SEPTEMBER 23, 2013 AGENDA ITEM # Q-1
DEPARTMENT: Law Department
Daniel C. Kogovsek, City Attorney
TITLE
A RESOLUTION APPROVING AN AMENDMENT TO THE EMPLOYMENT
AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND ROCLA
CONCRETE TIE, INC. RELATING TO A JOB CREATING CAPITAL IMPROVEMENT
PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE
SAID AMENDMENT AND TRANSFERRING $700,000 FROM THE 1992-2016 SALES
AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND THEREFOR
ISSUE
Should City Council approve a second amendment to the April 9, 2012 agreement
(“Original Employment Agreement”) with Rocla Concrete Tie, Inc. (“Company”) which
increases the Company’s employment commitment by an additional fifty (50) employees
and authorizes the expenditure of an additional $700,000 from the 1992-2016 Sales and
Use Tax Capital Improvement Projects Fund (“Half Cent Tax Fund”) and secures the
Company’s repayment obligation by a second deed of trust on the Company’s real
estate located in Pueblo County?
BACKGROUND
On April 9, 2012, the City of Pueblo entered into the Original Employment Agreement
with the Company which authorized the expenditure of $2,300,000 of Half Cent Tax
Funds as an employment incentive to the Company which committed to employ at least
one hundred (100) full-time employees whose annual compensation would average at
least $26,000. All but $100,000 of the transferred funds were used to construct railroad
lead track and switches which are currently available to the Company and other
companies on a non-exclusive basis. The track which was constructed is approximately
4,000 feet longer than was necessary for the Company in order to open the area for
further industrial development.
After the execution of the Original Employment Agreement, the Company incurred
unforeseen costs in the amount of $362,621 to construct the lead track and switches.
On February 25, 2013, City Council passed a Resolution which approved a first
amendment to the Original Employment Agreement. The first amended employment
agreement authorized the transfer of $362,621 of Half Cent Tax Funds to the Company
in exchange for an extension of the term of the Company’s employment commitment by
two (2) years from seven (7) to nine (9) years. The employment commitment date
begins on April 1, 2014 and will end on March 31, 2023.
The Company has notified the City that the Company wishes to expand its
manufacturing operations by installing two (2) new production lines and by purchasing
additional manufacturing equipment having a value of approximately Three Million
Dollars ($3,000,000). In exchange for an additional $700,000 in Half Cent Tax funds,
the Company has agreed to increase its employment commitment by an additional fifty
employees from 100 employees to 150 employees.
The Company has also agreed to secure the Company’s repayment obligation by a
second deed of trust on the Company’s real estate located in Pueblo County.
RECOMMENDATION
PEDCO recommends that City Council approve the second amendment to the Original
Employment Agreement.
FINANCIAL IMPACT
Payment of $700,000 in Half Cent Tax Funds to Rocla Concrete Tie, Inc.
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
THIS SECOND AMENDMENT TO EMPLOYMENT AGREEMENT ( "Second
Amendment ") is entered into as of this 23rd day of September, 2013 between Pueblo, a
municipal corporation (the "City ") and Rocla Concrete Tie, Inc., a Texas corporation (the
"Company "). The City and the Company are each sometimes referred to herein as a "Party" or
collectively as the "Parties."
RECITALS
A. The Parties agreed upon the terms and conditions of that certain Agreement which
was approved by City Council of the City by Resolution adopted on April 9, 2012 (the "Original
Employment Agreement "). After the execution of the Original Employment Agreement the
Parties agreed upon the terms and conditions of that certain first Amendment to Employment
Agreement which was approved by City Council of the City by Resolution adopted on February
25, 2013 (the "First Amendment to the Employment Agreement "). Capitalized terms not defined
herein shall have the same meaning set forth in the Original Employment Agreement.
B. Company wishes to expand its manufacturing operations in the City by installing
two (2) new production lines and by purchasing additional manufacturing equipment having a
value of approximately Three Million Dollars ($3,000,000).
C. The Parties now wish to increase the total economic incentives provided by City
for the benefit of the Company by an additional Seven Hundred Thousand Dollars ($700,000)
and to increase the Company's employment commitment by an additional fifty (50) employees
and to secure the Company's Repayment Obligation.
AGREEMENT
In accordance with the foregoing recitals, which are incorporated herein by this reference,
and in consideration of the 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 First Amendment to the Employment Agreement is hereby rescinded and
shall not be enforceable by either the Company or the City.
2. Section 4 of the Original Employment Agreement is hereby deleted and replaced
with the following:
4. City and Company stipulate and agree that the total economic incentives
provided by City for the benefit of Company under this Agreement is $2,462,621,
computed as follows: City Funds for that portion of Railroad Lead Track serving the Site
on a non - exclusive basis - $1,662,621, and Lime Road improvements — $100,000; and
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reimbursement in the amount of $700,000 for the acquisition of new manufacturing
equipment (the "Total Economic Incentives ").
3. Section 5 of the Original Employment Agreement is hereby deleted and replaced
with the following:
5. Company acknowledges and agrees that the primary purpose of City in
entering into this Agreement and the sole benefit to the City for making the Total
Economic Incentives available to Company hereunder is the creation of jobs. Therefore,
Company represents, covenants, and agrees that during the Commitment Period as
defined in Section 6(a), Company will continuously conduct its business operations at the
Facility and employ not less than one hundred fifty (150) Full -Time Employees at the
Facility each of whose salary and /or hourly wage compensation including overtime, but
not including benefits, shall be at least $30,386 per year (or approximately $14.61/hour)
(the "Employment Commitment "). Provided, however, that if by reason of war, acts of
God, casualties, severe and unusual weather, labor strikes or other substantial causes
beyond Company's reasonable control, Company is prevented from conducting
operations at the Facility during any Quarter, then, while so prevented, the Company's
Employment Commitment for that Quarter shall be suspended and the Commitment
Period shall be comparably extended for so long as Company is so prevented from
conducting operations. Company shall also use good faith efforts in accordance with its
sound business practices to (i) employ residents of the County of Pueblo as Full -Time
Employees including, without limitation, engaging in reasonable programs and posting of
employment openings in the City of Pueblo, and (ii) engage engineers, architects,
contractors and suppliers whose principal places of business are located in Pueblo
County, Colorado, in all construction work for or related to the Facility.
4. Section 6(a) of the Original Employment Agreement is hereby deleted and
replaced with the following:
6. Notwithstanding anything contained in this Agreement to the contrary, if
Company shall fail to meet the Employment Commitment, Company shall pay to City
compensating amounts calculated as follows:
(a) During the nine (9) year period starting on the Employment
Commitment Date and ending one hundred eight (108) months thereafter (the
"Commitment Period ") Company shall pay to City a compensating amount for
each Quarter in the Commitment Period calculated by subtracting the number of
Quarterly Employees from the commitment of one hundred (150) Full -Time
Employees and then multiplying the result by $456.04. For example, if for the
second Quarter of the third year after the Employment Commitment Date the
number of Quarterly Employees is 120 the amount payable by Company to City
on or before the fifteenth (15th) day of the next calendar month would be (150 -
120) x $456.04 = $13,681.04.
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5. The Repayment Obligation set forth in Section 6 of the Original Employment
Agreement and the Second Amendment to the Employment Agreement shall be secured by a
Deed of Trust, a copy of which, marked as Exhibit 1, is attached hereto and is incorporated
herein by reference.
6. Except as specifically modified by this Second Amendment to Employment
Agreement, the Original Employment Agreement shall not be amended or modified hereby. As
modified by this Second Amendment, the Original Employment Agreement shall continue in full
force and effect.
[SEAL] Pueblo, a - • ipal CI.* . • .
S1ie
Attest: ; y --
City ' resi e .f the City Council
✓' __
-
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[ S E,A L-]-� ROCLA CONCRETE TIE,INC.,
- --- - - - "r-. - a Tex. _ corporation - , -,. ._ Att / 1142 1 ! 1 E'f B
Name: y1(,t / Yttj (r; S Peter Urqu . rt
Title: / iriaV . i f -AC& L , President
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Gilbert Ortiz Clerk /Recorder, Pueblo County, Co
III
Pi UM 11111
DEED OF TRUST
THIS INDENTURE (the "Deed of Trust ") is made this 27 day of September, 2013, by
and between Rocla Concrete Tie, Inc., a Texas corporation, whose address is 1819 Denver West
Drive, Lakewood, CO 80401 (hereinafter referred to as "Borrower ") and the Public Trustee of
Pueblo County, State of Colorado (hereinafter referred to as "Trustee "), for the benefit of Pueblo,
a Colorado municipal corporation ( "Lender ").
WITNESSETH:
WHEREAS, Borrower has executed an Employment Agreement with Lender, dated April
9, 2012 (the "Original Employment Agreement ") and a second Amendment to Employment
Agreement with Lender dated September 23, 2013 (the "Second Amendment to the Employment
Agreement ") whereby Company agreed to pay to Lender, as a repayment obligation, if Borrower
fails to meet its employment commitment, a principal sum in an amount not to exceed Two
Million Four Hundred Sixty Two Thousand Six Hundred Twenty One Dollars ($2,462,621) or
such lesser amount as may be outstanding ( "Repayment Obligation "); and
WHEREAS, Borrower desires to secure the prompt payment of the aforesaid Repayment
Obligation;
NOW, THEREFORE, in consideration of Two Million Four Hundred Sixty Two
Thousand Six Hundred Twenty One Dollars ($2,462,621) and other good and valuable
consideration and for the purpose aforesaid, Borrower hereby grants, bargains, sells and conveys
unto Trustee in trust the real property located in the City of Pueblo, Pueblo County, Colorado,
described in Exhibit A attached hereto and incorporated by reference herein, and all of
Borrower's right, title and interest therein subject to the Prior Encumbrances described in Exhibit
B attached hereto and incorporated by reference herein ( "Prior Encumbrances ").
This Deed of Trust includes, and Borrower hereby grants, bargains, sells and conveys
unto Trustee in trust, all buildings, structures and improvements now or hereafter placed thereon,
all fixtures now or hereafter attached thereto and all the rights (including water rights), permits,
hereditaments and appurtenances thereto belonging or in any way appertaining, together with
any after acquired property interest in the above described property and real estate which
Borrower may at any time hereafter have or acquire, and also all of the rents, issues, uses, profits
and income of the above described personal property and real estate from now until the
Repayment Obligation secured hereby is paid in full or Borrower has completed its employment
commitment subject to the Prior Encumbrances. All the above described property is herein
referred to as the "Mortgaged Property ".
Trustee shall have and hold the Mortgaged Property subject to the Prior Encumbrances,
together with all the privileges and appurtenances thereunto belonging: In trust nevertheless, in
case of default by Borrower hereunder, then upon notice and demand in writing filed with the
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Gilbert Ortiz Clerk /Recorder, Pueblo County, Co
MFAVIR l ti6 lt KId A3/49141 III
Trustee as provided by law, it shall and may be lawful for Trustee to foreclose this Deed of
Trust, and to sell and dispose of the Mortgaged Property (or any part thereof as may be
designated in the notice of such sale) and all the right, title and interest of Borrower therein, in
the manner as may then be provided by law, and to issue, execute and deliver a certificate of
purchase, trustee's deed or certificate of redemption all as then may be provided by law. Trustee
shall, out of the proceeds or avails of such sale, after first paying and retaining all fees, charges,
the costs of making said sale and advertising the Mortgaged Property, and attorney's fees as
herein provided, pay to Lender the amount of such proceeds to be applied against the Repayment
Obligation, and all moneys advanced by Lender for any purpose authorized herein or by law,
with interest thereon at the Applicable Interest Rate as set forth in Section 6(b) of the Original
Employment Agreement, rendering the over plus, if any, as provided by applicable law. The sale
or sales and said deed or deeds so made shall be a perpetual bar, both in law and equity, against
Borrower and all other persons claiming the Mortgaged Property or any part thereof by, from,
through, over or under Borrower. The legal holder of the indebtedness may purchase the
Mortgaged Property or any part thereof and it shall not be obligatory upon the purchaser or
purchasers at any such sale to see to the application of the purchase money. If a release deed is
required, Borrower hereby agrees to pay all the expenses thereof.
Borrower hereby warrants title to the Mortgaged Property, subject to taxes not yet due
and payable and the Prior Encumbrances.
Borrower hereby further covenants, acknowledges and agrees to perform the Repayment
Obligation.
Borrower agrees to and shall promptly pay all costs, charges and expenses incurred by
Lender, including reasonable attorneys' fees arising out of or in connection with any action,
proceeding or hearing, in any way affecting or relating to the Mortgaged Property, the above
described Original Employment Agreement with Lender and the Second Amendment to the
Employment Agreement with Lender.
Upon the occurrence of default in the timely performance of Borrower's Repayment
Obligations, the outstanding amount of the indebtedness secured hereby and the interest thereon
may at once, at the option of Lender, subject to the Prior Encumbrances, be declared
immediately due and payable, and the Mortgaged Property may be sold in the manner and with
the same effect as if the indebtedness had matured and remained unpaid after maturity. If
foreclosure is made by Trustee, a reasonable attorney's fee for services in the supervision of such
foreclosure proceedings shall be allowed and added by Trustee as a part of the cost of
foreclosure. If foreclosure be by action in court, reasonable attorneys' fees shall be taxed by the
court as part of the cost of such foreclosure proceedings. All such reasonable attorneys' fees as
well as the costs, charges and expenses, shall be and become a part of the indebtedness secured
hereby.
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III k Ir A PIM kii. % Iii i1 kJ, 11111
If the Mortgaged Property, or any part thereof, is sold (whether by land contract or
otherwise), conveyed or transferred, the outstanding indebtedness secured hereby shall become
immediately due and payable, at Lender's option, unless written consent for such sale,
conveyance or transfer has been obtained from Lender.
Time is of the essence hereof.
This Deed of Trust shall be interpreted, construed and enforced according to the laws of
the State of Colorado.
IN WITNESS WHEREOF, Borrower has executed this Deed of Trust on the day and
year first appearing above.
BORROWER:
ROCLA CONCRETE TIE, INC.,
a Texas orporatio
By ,./ ( Peter Urquha
President
COUNTY OF J- a- C X'5 (l )
) ss.
STATE OF G)16r c b )
The foregoing instrument was acknowleg ed before me in the County of TSdr7 ,
W
State of I3rtckt, this IS day of , 2013 by Peter Urquhart, as President of
Rocla Concrete Tie, Inc., a Texas corporation.
Witness my hand and official seal.
My commission expires: t 7 k 1 Ile •
6i/ fil! Y''
IAIUA MCMORRIS Notary Public
'
State of Notary Colorado Public 0
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I',CHI, MI111
EXHIBIT A
Legal Description
Lot 1, Block 1, St. Charles Industrial Park Filing No. 1, County of Pueblo, State of Colorado
Pueblo County Assessor Parcel No. 2501003001
Having the common address of 3201 Lime Road, Pueblo, CO 81004
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Gilbert Ortiz Cler / Recorder00 D .
, Pueblo Cou
k i NAPA dr k' � 1 II
EXHIBIT B
Prior Encumbrances
1. Unpatented mining claims; reservations or exceptions in patents or in Acts
authorizing the issuance thereof.
2. Reservation of a 35/65 interest in oil, gas and other mineral as reserved in Special
Warranty Deed recorded June 15, 1988, in Book 2401 at Page 577, and any and all
assignments thereof or interests therein.
3. Terms, conditions, provisions, obligations, easements and agreements as set forth in
the San Isabel Electric Association, Inc. Easement I recorded February 13, 2009, at
Reception No.1795898, and as shown on the ALTA/ACSM Land Title Survey
prepared by David M. Stravia, Registered Professional Surveyor, Colorado
Registration No. 12933, dated April 8, 2013, last revised May 3, 2013, Job No
1200404 (the "Survey ").
4. Resolution No. P &D 12 -10 of the Pueblo County Board of County Commissioners
permitting the construction of a major facility of a public utility recorded February
23, 2012, at Reception No.1899746.
5. The effect of Annexation Map of St. Charles Industrial Park - Phase 1 Annexation to
the City of Pueblo recorded May 08, 2012, at Reception No. 1906839.
6. Terms, conditions, provisions, obligations and agreements as set forth in the
Annexation Agreement Case No. A -12 -01 St. Charles Industrial Park Annexation
Phase 1 recorded May 08, 2012, at Reception No. 1906840.
7. Ordinance No. 8461, for annexing the area commonly known as St. Charles Industrial
Park, Phase I, recorded May 24, 2012, at Reception No. 1908391.
8. Reservation of an easement or right of way to install and have functionally useable
railroad access, including access to and use of lead track and switches and incidental
purposes as set forth in the Warranty Deed recorded May 29, 2012, at Reception No.
1908611.
9. Easements, notes, covenants, restrictions and rights -of -way as shown on the plat of
St. Charles Industrial Park, Filing No. 1, recorded June 04, 2012, at Reception No.
1909383.
10. Ordinance No. 8480, for approving the St. Charles Industrial Park, Filing No. 1
Subdivision Plat, recorded June 06, 2012, at Reception No. 1909654.
11. Terms, conditions, provisions, obligations, easements and agreements as set forth in
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Gilbert Ortiz Clerk /Recorder, Pueblo County, Co
111 relf � h 1111
the Easement and Right of Way recorded November 28, 2012, at Reception No.
1926687, and as shown on the Survey.
12. Terms, conditions, provisions, obligations, easements and agreements as set forth in
the San Isabel Electric Association, Inc. Easement I recorded December 07, 2012, at
Reception No. 1927651, and as shown on the Survey.
13. Rights of United Railroad Services Co. as tenant under that certain lease agreement
dated as of October 19, 2012.
14. Terms, conditions, provisions, obligations, easements and agreements as set forth in
the Electric Service Agreement between San Isabel Electric Association, Inc. and
ROCLA Concrete Tie, Inc. recorded December 19, 2012 at Reception No. 1928779.
15. Terms, conditions, provisions, obligations, easements and agreements as set forth in
the San Isabel Electric Association, Inc., Line Extension Contract and Agreement for
Permanent Monthly Electric Service recorded March 5, 2013 at Reception No.
1935739.
16. Terms, conditions, provisions, obligations, easements and agreements as set forth in
the San Isabel Electric Association, Inc. Easement 1 recorded March 5, 2013 at
Reception No. 1935750 as shown on the Survey.
17. Terms, conditions, provisions, obligations, easements and agreements as set forth in
the Easement and Right of Way recorded March 27, 2013 at Reception No. 1938054
as shown on the Survey.
18. Matters as shown on ALTA/ACSM LAND TITLE SURVEY prepared by David M.
Stravia, Registered Professional Surveyor, Colorado Registration No. 12933, dated
April 8, 2012, last revised May 3, 2013, Job No. 1200404 as follows:
a. Gas meter that appears to serve the adjacent property to the South.
19. Taxes or assessments approved, levied or enacted by the State, County, Municipality,
Township or similar taxing authority, but not yet certified to the tax duplicate of the
County in which the land is situated, including but not limited to any retroactive
increases in taxes or assessments resulting from any retroactive increase in the
valuation of the land by the State, County, Municipality, Township, or other taxing
authority.
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20. A Deed of Trust to secure an original indebtedness of $17,000,000.00 recorded May
14, 2013 as 1942782 of Official Records.
Dated: May 8, 2013
Trustor: Rocla Concrete Tie, Inc., a Texas corporation
Trustee: The Public Trustee of Pueblo County, Colorado
Beneficiary: CoBiz Bank, a Colorado corporation dba CoBiz Structured Finance
Rw.evAe'l w.4. rt s *s∎'�eol L ou.v ,
n
onck Sec r , 4y A r es v„a,,t \o
As amended by that certain a ,,,, r k ,,,,,,,,� �„ 1n7ohk , dated September 27. 2013
c o lorocIa e( for*. • i Ova 01 \ �.6� S�'i'v� �-to( t i�Wv.te
s A ew oonot o. \ruder, av,ck Qoc10 Comic re'
21. UCC Financing Statement by and between Rocla Concrete Tie, Inc., Debtor and
CoBiz Bank, Secured Party, recorded May 13, 2013 at Reception No. 1942783.
As amended by that certain cmontsmd e wAl 5'c-�r �'y A "e4""k b1
n
gives 0 , vuv ..o, t o Q' t ' , v` CG ��u r. u cur ,�rn'a Gov. �‘Do-
Co P%� 5}yvvl�,. J. T;ncw��e o.Z ay. cu o� \evl�ef,
� oc ,1q Con, V< 1.
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