HomeMy WebLinkAbout14015RESOLUTION NO. 14015
A RESOLUTION APPROVING A FIRST AMENDMENT TO
AN AGREEMENT BETWEEN THE CITY OF PUEBLO, A
COLORADO MUNICIPAL CORPORATION AND CREATIVE
STONE MFG. D/B/A CORONADO STONE PRODUCTS, A
CALIFORNIA CORPORATION AND AUTHORIZING THE
PRESIDENT OF CITY COUNCIL TO EXECUTE SAME AND
APPROVING A FIRST AMENDMENT TO DEED OF TRUST
TO BE EXECUTED BY CMB PROPERTY HOLDINGS LLC,
A NEW YORK LIMITED LIABILITY COMPANY
WHEREAS, On August 8, 2016, by Resolution No. 13493, the City transferred
$750,000 from the 1992-2021 Sales and Use Tax Capital Improvement Projects Fund
to Creative Stone Mfg. d/b/a Coronado Stone Products, a California corporation (the
“Company”) to assist in the Company’s purchase of its manufacturing facility located at
33865 United Ave., Pueblo, CO 81001; and
WHEREAS, Resolution No. 13493 also approved an Employment Agreement in
which the Company agreed to employ not less than fifty-one (51) full time employees
whose annual compensation shall average at least $30,400, not including benefits, for
a minimum of 7 years, beginning October 1, 2019; and
WHEREAS, Section 4 (a) of the Employment Agreement contains a calculation
error because the Company’s Repayment Obligation was calculated on a monthly basis
when it should have been calculated on a quarterly basis. NOW THEREFORE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PUEBLO, that:
SECTION 1.
The First Amendment to the Agreement between the City of Pueblo, a Colorado
Municipal Corporation and Creative Stone Mfg. d/b/a Coronado Stone Products, a
California corporation, dated July 23, 2018, a copy of which is attached hereto, having
been approved as to form by the City Attorney, is hereby approved. The President of
City Council is authorized to execute and deliver First Amendment in the name of the
City and the Acting City Clerk is directed to affix the seal of the City thereto and attest
same.
SECTION 2.
The First Amendment to Deed of Trust which to be executed by CMB Property
Holdings LLC, dated July 23, 2018, a copy of which is attached hereto, having been
approved as to form by the City Attorney, is also hereby approved.
SECTION 3.
The officers and staff of the City are authorized and directed to perform any and
all acts consistent with this Resolution and the attached First Amendment to Agreement
and First Amendment to Deed of Trust, which are necessary or appropriate to implement
the transactions described therein.
SECTION 4.
This Resolution shall become effective immediately upon final passage.
INTRODUCED July 23, 2018
BY: Ed Brown
MEMBER OF CITY COUNCIL
APPROVED:
PRESIDENT OF CITY COUNCIL
ATTESTED BY:
ACTING CITY CLERK
City Clerk’s Office Item # M-7
Background Paper for Proposed
Resolution
COUNCIL MEETING DATE: July 23, 2018
TO: Christopher A. Nicoll and Members of City Council
VIA: Brenda Armijo, Acting City Clerk
COPY: Sam Azad, City Manager
FROM: Daniel C. Kogovsek, City Attorney
SUBJECT: A RESOLUTION APPROVING A FIRST AMENDMENT TO AN AGREEMENT
BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION
AND CREATIVE STONE MFG. D/B/A CORONADO STONE PRODUCTS, A
CALIFORNIA CORPORATION AND AUTHORIZING THE PRESIDENT OF CITY
COUNCIL TO EXECUTE SAME AND APPROVING A FIRST AMENDMENT TO
DEED OF TRUST TO BE EXECUTED BY CMB PROPERTY HOLDINGS LLC, A
NEW YORK LIMITED LIABILITY COMPANY
SUMMARY:
Attached is a proposed Resolution approving and authorizing the President of the City Council to
sign a First Amendment to the Employment Agreement with Creative Stone Mfg. d/b/a Coronado
Stone Products (the “Company”). The Employment Agreement was secured by a first priority
Deed of Trust encumbering 33865 United Ave. in the Airport Industrial Park. The attached
Resolution also approves a corresponding First Amendment to Deed of Trust which is to be signed
by CMB Property Holdings LLC.
PREVIOUS COUNCIL ACTION:
On August 8, 2016, by Resolution No. 13493, the City transferred $750,000 from the 1992-2021
Sales and Use Tax Capital Improvement Projects Fund to go towards the Company’s purchase
of its manufacturing facility located at 33865 United Ave., Pueblo, CO 81001. Beginning October
1, 2019, the Company has agreed to employ not less than fifty-one full time employees whose
annual compensation shall average at least $30,400, not including benefits. The Company’s
employment commitment is for a minimum of seven years.
The City’s economic incentive payment is secured by a first deed of trust on the Company’s
manufacturing facility located at 33865 United Avenue, Pueblo, Colorado 81001.
BACKGROUND:
Section 4 (a) of the July 25, 2016 Employment Agreement contains a calculation error. The
Company’s Repayment Obligation was calculated on a monthly basis when it should have been
calculated on a quarterly basis. The purpose of Amendment No. 1 to the Employment Agreement
is to correct the calculation error.
FINANCIAL IMPLICATIONS:
None
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Resolution.
STAKEHOLDER PROCESS:
Not applicable to this Resolution.
ALTERNATIVES:
If this Resolution is not approved, the calculation error in the July 25, 2016 Employment
Agreement will remain uncorrected.
RECOMMENDATION:
Approve this Resolution.
Attachments:
Proposed Resolution; proposed First Amendment to Employment Agreement;
proposed First Amendment to Deed of Trust
FIRST AMENDMENT TO AGREEMENT
1.0 PARTIES. This First Amendment to Agreement ("First Amendment") is made
and entered into effective as of July 23, 2018, by and among the CITY OF PUEBLO, a
Colorado municipal corporation and a home-rule municipality (the "City") and Creative
Stone Mfg. d/b/a Coronado Stone Products, a California corporation (the "Company").
The parties are sometimes referred to herein collectively as the "Parties" and
individually as a "Party".
2.0 RECITALS. The following recitals are incorporated in and made a part of this
First Amendment.
2.1 Company and City are parties to that certain Agreement dated July 25, 2016 (the
"2016 Agreement"), whereby Grantor agreed to comply with certain employment and
other requirements enumerated in the Agreement in consideration of an advance from
the City of Pueblo to Grantor in the amount of Seven Hundred Fifty Thousand Dollars
($750,000.00); and
2.2 Section 4 (a) of the 2016 Agreement contains a calculation error because the
Company's Repayment Obligations were calculated on a monthly basis when they
should have been calculated on a quarterly basis; and
2.3 Company desires by this First Amendment to correct the Repayment Obligations
error contained in Section 4 (a) of the 2016 Agreement.
3.0 AGREEMENT. In consideration of the mutual covenants, agreements, and
promises in this First Amendment and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Parties agree as set forth in
this First Amendment.
4.0 DEFINITIONS. Unless otherwise stated herein, all capitalized terms in this First
Amendment shall have the meaning set forth in the Agreement.
5.0 CORRECTION. Section 4 (a) of the 2016 Agreement is hereby amended to
read as follows:
4. (a). During the seven (7) year period starting on the Employment Commitment
Date and ending on September 30, 2026 (the "Repayment Period") Company shall pay to City an
amount each Quarter equal to the Quarterly Employees less than fifty-one (51) Full-Time
Employees employed at the Facility by Company multiplied by $525.21 (the "Company's
Quarterly Payments"). For example, if for the second Quarter of the third year after the
Employment Commitment Date the actual number of such Quarterly Employees is 40, the
amount payable by Company to City on or before the fifteenth (15th) day of the next calendar
month would be (51 - 40) x $525.21 = $5,777.31.
6.0 EFFECT OF AMENDMENT. Except as modified by this First Amendment, the
provisions of the 2016 Agreement are hereby ratified and shall remain unchanged and
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in full force and effect and fully binding on the Parties, their successors and assigns,
and the 2016 Agreement and this First Amendment shall be construed together as a
single integrated document.
IN WITNESS WHEREOF, this First Amendment is executed by the Parties
hereto in their respective names as of the date first above written.
CITY OF PUEBLO, A M "AL
CORPe ' ', or: .
ATTEST:
l _ President of the City Council
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(1c:{'i City Clerk
Approved as to form by:
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City Attorney
CMB Prop ty •' res, C, a New York limited liability company
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By: r= ', C_
Name: d o�1/ I/ //
As Manager of CMB Property Holdings, LLC
STATE OF 1e--\gcs )
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County of ,Ua )
The foregoing instrument w s acknowledged before me this 2q day of t_L__(-A(Y\ber
2018, by �j�,l� )00,-)r�jLGl,v as Manager of CMB Property
Holdings, LLC.
Witness my hand and official seal. = TONYAOWEN
i.: ,i My Notary ID#128878963
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My commission expires: f4/,1))
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Nota • is
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FIRST AMENDMENT TO DEED OF TRUST
THIS FIRST AMENDMENT TO DEED OF TRUST ("First Amendment"), with an
effective date of July 23, 2018, is made between CMB Property Holdings LLC, a New
York limited liability company, whose address is 33865 United Avenue, Pueblo, CO
81001 hereinafter referred to as ("Grantor") and the Public Trustee of the County of
Pueblo, State of Colorado, hereinafter referred to as ("Public Trustee") for the benefit of
the City of Pueblo, a municipal corporation whose address is One City Hall Place,
Pueblo, CO 81003 ("City of Pueblo" or "beneficiary") and amends that certain Deed of
Trust dated August 10, 2016 executed by Grantor for the benefit of the City of Pueblo
and recorded at Reception Number 2044964 in the Records of the County Clerk and
Recorder of the County of Pueblo, State of Colorado on August 11, 2016 (the "Deed of
Trust"). Terms not otherwise defined in this First Amendment to Deed of Trust shall
have the meanings assigned to them in the Deed of Trust.
WITNESSETH THAT, WHEREAS, Grantor and the City of Pueblo are parties to
that certain Agreement dated July 25, 2016 (the "2016 Agreement"), whereby Grantor
agreed to comply with certain employment and other requirements enumerated in the
2016 Agreement in consideration of an advance from the City of Pueblo to Grantor in
the amount of Seven Hundred Fifty Thousand Dollars ($750,000.00);
AND WHEREAS the Deed of Trust was duly executed by Grantor and later
recorded to secure Grantor's compliance with the Repayment Obligations and other
covenants contained in the 2016 Agreement;
AND WHEREAS, Section 4 (a) of the 2016 Agreement contains a calculation
error because the Company's Repayment Obligations were calculated on a monthly
basis when they should have been calculated on a quarterly basis;
AND WHEREAS, Grantor and the City of Pueblo are parties to that certain First
Amendment to Agreement dated July 23, 2018 (the "2018 Amendment"), whereby the
calculation error in Section 4 (a) of the 2016 Agreement is corrected;
AND WHEREAS, Grantor is desirous of securing performance of its Repayment
Obligations under the 2016 Agreement as corrected by the 2018 Amendment;
AND WHEREAS, for the purposes aforesaid, the Grantor desires by this First
Amendment to Deed of Trust to correct the Repayment Obligations contained in Section
4 (a) of the 2016 Agreement with those Repayment Obligations contained in Section 4
(a) of the 2018 Amendment, a true, complete and correct copy of which is attached
hereto as Exhibit A;
AND WHEREAS, the Grantor is desirous of securing all of its obligations under
the 2016 Agreement, as corrected by the 2018 Amendment, including but not limited to
payment of the Repayment Obligation (the "Obligations").
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NOW THEREFORE, the Grantor, in consideration of the premises and for the
purposes aforesaid and for good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, does hereby grant, bargain, sell and convey unto the
said Public Trustee in trust until the full payment and performance of the Obligations,
the following described property, situate in the County of Pueblo, State of Colorado, to
wit:
LOT 74, PUEBLO MEMORIAL AIRPORT INDUSTRIAL PARK
SUBDIVISION, PUEBLO COUNTY, STATE OF COLORADO
also known by street and number as 33865 United Ave., Pueblo, CO
81001
assessor's schedule or parcel number: 329001012
THE DEED OF TRUST is hereby ratified and shall remain in full force and effect
in accordance with its terms, except as expressly modified by the terms of this First
Amendment to Deed of Trust.
Executed to be effective the date first above written.
GRANTOR:
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CMB Propt Ioldi e •', -LC, a New York limited liability company
By• , t �,
Name: ''''/W? ,7'` `1e4�-(
As Manager of CMB Property Holdings, LLC
STATE OF T-e.YCLS )
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County of )
The foregoin instrument was acknowledged before me this l.2 day of C21)41994018, by
1L €x 4- 1 Lu412e Gw as Manager of CMB Property Holdin:s LLC.
Witness myhand and official seal. .:*- NoTOtary ID
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.. My Notary ID#128878963
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EXHIBIT A
2018 Amendment
See attached
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