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Home My WebLink About13812 RESOLUTION NO. 13812 A RESOLUTION APPROVING A FIRST AMENDMENT TO AN EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION AND PUEBLO HOTEL SUPPLY COMPANY D/B/A/ GRADY’S RESTAURANT AND BAR SUPPLY, A COLORADO CORPORATION AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAID FIRST AMENDMENT BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The City Council finds and determines that good cause exists to amend the August 14, 2017 employment Agreement with Pueblo Hotel Supply Company d/b/a/ Grady’s Restaurant and Bar Supply, a Colorado corporation (“Company”) to change the form of securitization from a First Deed of Trust on 170 Greenhorn Drive, Pueblo, Colorado 81004 to a Letter of Credit in the amount of $638,000 issued by Legacy Bank. The First Amendment to an employment Agreement dated October 23, 2017, a copy of which is attached hereto and incorporated herein by this reference, having been approved as to from by the City Attorney, is hereby approved. The President of the City Council is authorized to execute and deliver said 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 2. 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 the attached First Amendment to an employment Agreement which are necessary or desirable to implement the transactions described therein. SECTION 3. This Resolution shall become effective immediately upon final passage. INTRODUCED October 23, 2017 BY: Ed Brown City Clerk’s Office Item # M-10 Background Paper for Proposed Resolution COUNCIL MEETING DATE: October 23, 2017 TO: President Stephen G. Nawrocki and Members of City Council CC: Sam Azad, City Manager VIA: Gina Dutcher, City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: A RESOLUTION APPROVING A FIRST AMENDMENT TO AN EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION AND PUEBLO HOTEL SUPPLY COMPANY D/B/A/ GRADY’S RESTAURANT AND BAR SUPPLY, A COLORADO CORPORATION AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAID FIRST AMENDMENT SUMMARY: Attached is a Resolution approving and authorizing the President of City Council to sign a Frist Amendment to an employment Agreement between the City of Pueblo and Pueblo Hotel Supply Company d/b/a Grady’s Restaurant and Bar Supply, a Colorado corporation (“Company”). The attached First Amendment to employment Agreement changes the securitization of the Company’s employment commitment from a First Deed of Trust to 170 Greenhorn Drive, Pueblo, Colorado 81004 to a Letter of Credit in the amount of $638,000 issued by Legacy Bank. PREVIOUS COUNCIL ACTION: On August 14, 2017, by Resolution No.13748, the City entered into an original employment Agreement dated August 14, 2017 which provided for the advancement of funds in the amount of $638,000 to the Company in exchange for the Company’s commitment to employ for a seven- year period, forty-five full-time employees at its distribution center located at 170 Greenhorn Drive, Pueblo, Colorado 81004. BACKGROUND: The Company wishes to change the form of its securitization of its employment commitment from a First Deed of Trust on 170 Greenhorn Drive, Pueblo, Colorado 81004 to a Letter of Credit in the amount of $638,000 issued by Legacy Bank. FINANCIAL IMPLICATIONS: There will be no financial impact on the City if the City approves the form of securitization. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Resolution. STAKEHOLDER PROCESS: Not applicable to this Resolution. ALTERNATIVES: If this Resolution is not approved, the Company’s purchase of 170 Greenhorn Drive, Pueblo, Colorado 81004 may be jeopardized. RECOMMENDATION: The Pueblo Economic Development Corporation recommends approval of this Resolution. Attachments: Proposed Resolution, First Amendment to employment Agreement FIRST AMENDMENT TO EMPLOYMENT AGREEMENT THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT ("First Amendment") entered into this 23rd day of October, 2017 between Pueblo, a municipal corporation (the "City") and Pueblo Hotel Supply Company dba Grady's Restaurant and Bar Supply, a Colorado corporation "Company"). WHEREAS, Company and City entered into an original Employment Agreement ("Employment Agreement") dated August 14, 2017 which provided, inter alia, for the advancement of funds in the amount of $638,000.00 to the Company in exchange for the Company's commitment to employ, for a seven (7) year period, forty-five (45) new full time employees at its distribution facility located at 170 Greenhorn Drive, Pueblo, CO 81004 ("Distribution Facility"); and WHEREAS, the Company has requested that the City allow the Company to change the securitization of the Company's Employment Commitment from a first deed of trust on the Company's Distribution Facility to a Letter of Credit in the amount of $638,000.00 issued by Legacy Bank. NOW, THEREFORE, in consideration of the foregoing and 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: A. Section 5 of the Employment Agreement is hereby amended to read as follows: 5. (a) 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 Section 4 of this Agreement. (b) At the closing of the sale of the Distribution Facility by City to the Company, Company shall deliver to City a Letter of Credit in the principal amount of Six Hundred Thirty- Eight Thousand Dollars ($638,000.00). Said Letter of Credit shall have a ten (10) year term. During the seven(7)year period starting on the Employment Commitment Date and ending eighty- four(84) months thereafter(the "Repayment Period"), the principal balance of the Letter of Credit will be decreased on a quarterly basis consistent with the Company's compliance with its Employment Commitment as set forth in Section 3 of this Agreement. At the conclusion of the Repayment Period, subject to Section 3 of this Agreement,the entire principal balance of the Letter of Credit shall be due and payable by the Company to the City. The Parties anticipate that the Company will fully comply with its Employment Commitment as specified in Section 3 of this Agreement and that at the end of the Repayment Period, the principal balance of the Letter of Credit shall be zero. The issuer and format of the Irrevocable Letter of Credit shall require the consent of the City, which consent shall not be arbitrarily withheld, conditioned or delayed. 1 B. The Employment Agreement between the Parties, which is incorporated herein by this reference, shall remain in full force and effect, except as amended by this First Amendment Agreement. Executed at Pueblo, Colorado, the day and year first above written. [ SEAL] Pueblo, a Munji cipal-earperation Attest: �\ , � �� By .�. City perk Prestdent of the City Council 2 Company will fully comply with its Employment Commitment as specified in Section 3 of this Agreement and that at the end of the Repayment Period, the principal balance of the Letter of Credit shall be zero. The issuer and format of the Irrevocable Letter of Credit shall require the consent of the City, which consent shall not be arbitrarily withheld, conditioned or delayed. B. The Employment Agreement between the Parties, which is incorporated herein by this reference, shall remain in full force and effect, except as amended by this First Amendment Agreement. Executed at Pueblo, Colorado, the day and year first above written. [SEAL] Pueblo, a Municipal ? se : 'on Attest: B - ,.�• — City Clerk President of the City Council PUEBLO HOTEL SUPPLY COMPANY a Colorado corporation �/ Attest: �a- ,�1 G t�c�u� 4 By- ,' � Name: Lyne Gradishar Name: _ ( c $ x tr Title: Owner Title: President STATE OF COLORADO ) ) ss. COUNTY OF PUEBLO ) a> The foregoing instrument was acknowledged before me this d Le day of October, 2017 by ‘,,os as President and Lynette Gradishar as Owner of Pueblo Hotel Supply Company, a \\b Colorado corporation. cam , 2 Witness my hand and official seal. c� My commission expires: ..k 3-1 ( . [ SEAL] c Notary Public KRISTIE L GACA NOTARY PUBLIC STATE OF COLORADO ) NOTARY ID#20114036606 MY COMMISSION EXPIRES JUNE 13 2019 3