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HomeMy WebLinkAbout09580 ORDINANCE NO. 9580 AN ORDINANCE APPROVING A TRACK ACCESS AGREEMENT BETWEEN THE PUEBLO MUNICIPAL RAIL CORPORATION, A COLORADO NON-PROFIT CORPORATION AND PUEBLO SCIP, LLC, A COLORADO LIMITED LIABILITY COMPANY AND AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT AS PRESIDENT OF THE PUEBLO MUNICIPAL RAIL CORPORATION BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Track Access Agreement dated October 28, 2019 between the Pueblo Municipal Rail Corporation, a Colorado non-profit corporation and Pueblo SCIP, LLC, a Colorado limited liability company, a copy of which is attached hereto and incorporated herein by this reference, having been approved as to form by the City Attorney is hereby approved. The Mayor is authorized, as President of the Pueblo Municipal Rail Corporation, to execute and deliver said Track Access Agreement in the name of the Pueblo Municipal Rail Corporation and the City Clerk is directed to attest same. SECTION 2. The officers and staff of the City are authorized and directed to perform any and all acts consistent with this Ordinance and the attached Track Access Agreement which are necessary or appropriate to effectuate the transactions described therein. SECTION 3. This Ordinance shall become effective on the date of final action by the Mayor and City Council. Action by City Council: Introduced and initial adoption of Ordinance by City Council on October 15, 2019. Final adoption of Ordinance by City Council on October 28, 2019 . President of City Council Action by the Mayor: ☒ Approved on November 1, 2019 . □ Disapproved on based on the following objections: Mayor Action by City Council After Disapproval by the Mayor: □ Council did not act to override the Mayor's veto. □ Ordinance re-adopted on a vote of , on □ Council action on _______ failed to override the Mayor’s veto. President of City Council ATTEST City Clerk City Clerk’s Office Item # R-8 Background Paper for Proposed Ordinance COUNCIL MEETING DATE: October 15, 2019 TO: President Dennis E. Flores and Members of City Council CC: Mayor Nicholas A. Gradisar VIA: Brenda Armijo, City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: AN ORDINANCE APPROVING A TRACK ACCESS AGREEMENT BETWEEN THE PUEBLO MUNICIPAL RAIL CORPORATION, A COLORADO NON-PROFIT CORPORATION AND PUEBLO SCIP, LLC, A COLORADO LIMITED LIABILITY COMPANY AND AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT AS PRESIDENT OF THE PUEBLO MUNICIPAL RAIL CORPORATION SUMMARY: Attached is an Ordinance approving and authorizing the Mayor to sign a track access agreement between the Pueblo Municipal Rail Corporation, a Colorado non-profit corporation and Pueblo SCIP, LLC, a Colorado limited liability company (“Pueblo SCIP”). PREVIOUS COUNCIL ACTION: Not applicable to this Ordinance. BACKGROUND: On February 24, 2012, the City of Pueblo created the Pueblo Municipal Rail Corporation for purposes of owning and operating two (2) lines of railroad lead track and switches located in the St. Charles Industrial Park. Pueblo SCIP (or its assignees as approved by the municipal railroad) desires to use the two (2) lines of railroad lead track in the future when Pueblo SCIP develops or sells adjacent parcels of land located in the St. Charles Industrial Park. The attached track access agreement authorizes Pueblo SCIP to use the municipal railroad’s lead track on the following conditions:  Pueblo SCIP must construct, at its sole cost and expense, a rail spur track, according to rail industry standards, from the parcels of land which it owns to the lead track owned by the municipal railroad;  Pueblo SCIP must pay a per railcar use and storage fee set by the municipal railroad;  Pueblo SCIP must pay a switching fee to a company selected by the municipal railroad for rail car switching services;  Pueblo SCIP must comply with the obligations of the municipal railroad set forth in a BNSF Industry Track Agreement between the municipal railroad and the Burlington Northern & Sant Fe Railway Company; and  Pueblo SCIP must procure and maintain all insurance required under the BNSF Industry Track Agreement, naming the municipal railroad as an additional insured. FINANCIAL IMPLICATIONS: The proposed track access agreement is intended to be revenue neutral for the Pueblo Municipal Rail Corporation and the City. Pueblo SCIP is required to pay a per railcar use and storage fee to the municipal railroad in order for the municipal railroad to maintain its two (2) lines of lead rail track. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Ordinance. STAKEHOLDER PROCESS: Not applicable to this Ordinance. ALTERNATIVES: The attached track access agreement is a requirement in order for Pueblo SCIP to sign the agreement for the City to purchase 450 acres of land owned by Pueblo SCIP in the St. Charles Industrial Park. If this Ordinance is not approved, the City will lose the opportunity to purchase the 450 acres for future economic development. RECOMMENDATION: The Pueblo Economic Development Corporation recommends approval of this Ordinance. Attachments: Proposed Ordinance and proposed rail access agreement TRACK ACCESS AGREEMENT THIS AGREEMENT ("Agreement") is entered into as of this 28th day of October, 2019 by and between Pueblo Municipal Rail Corporation, a Colorado nonprofit corporation ("PMRC") and Pueblo SCIP, LLC a Colorado limited liability company (the "Seller"). The PMRC and Seller may be individually referred to as "Party" or collectively referred to as "Parties." WHEREAS, PMRC has constructed and is the owner of two lines of railroad lead track and switches located in the St. Charles Industrial Park ("Industry Track"); and WHEREAS, PMRC has previously entered into a BNSF Railway Company Industry Track Agreement ("Industry Track Agreement") a true and correct copy of which, marked as Exhibit A, is attached hereto and incorporated herein by reference; and WHEREAS, Seller desires to use the Industry Track owned by PMRC; and WHEREAS, PMRC desires to allow such Industry Track use by Seller subject to the terms and conditions set forth in this Agreement. NOW THEREFORE, in consideration of the foregoing and the mutual covenants contained herein and other good and reasonable consideration, the receipt and sufficiency of which is hereby acknowledged, PMRC and Seller agree as follows: 1. The following terms as used in this Agreement shall have the following meanings: "City" means the City of Pueblo, a Colorado municipal corporation. "Condition Precedent" means execution by Seller of the following documents: (i) this Agreement; (ii)the Contract to Buy and Sell Real Estate, dated October 28, 2019 and furnished PMRC acceptable proof thereof. "Effective Date" means the date Seller has completed, at its sole cost and expense, construction of rail spur track, according to rail industry standards, from the Site to the Industry Track. "Industry Track" means rail, ties, ballast and appurtenances thereto. "Site" means all real property owned by Seller located north of the St. Charles River and east of Interstate 25, as highlighted in the attached map, marked as Exhibit B, which is incorporated herein by reference. 2. Subject to the Condition Precedent, on the Effective Date, Seller is granted reasonable and nonexclusive use of the Industry Track, on the same terms and conditions 1 as offered to all future users of the property being sold to the City by Seller pursuant to the Contract to Buy and Sell Real Estate dated October 28, 2019. Said terms shall include a per railcar use and or storage fee in order to access the rail that currently exists or is constructed in the future. The railcar use or storage fee will be a fixed amount based on railcar usage or storage and shall be in an amount set in the sole discretion of PMRC. This Track Access Agreement does not include any rail switching or delivery requirements placed on PMRC. Seller, along with any other future user of the Industry Track, shall be required to contract with any future company hired by PMRC for rail switching. The terms and conditions for switching and delivery shall be in addition to the fees established for the use and access of the current or future Industry Track. 3. On the Effective Date, Seller further agrees to (a) perform any and all of the obligations of PMRC pursuant to the BNSF Industry Track Agreement(Exhibit A)accruing after the Effective Date, and (b) procure and maintain during the life of this Agreement, at its sole cost and expense, all insurance required under the BNSF Industry Track Agreement and naming PMRC as an additional insured with respect to such insurance. 4. This Agreement will be in force for a term commencing on the Effective Date and shall continue thereafter until terminated by either party pursuant to this Section 4 of the Agreement. Seller may terminate this Agreement, with or without cause, by giving PMRC thirty (30) days advance written notice of its desire to terminate this Agreement. PMRC may terminate this Agreement only for cause in the event of a breach of this Agreement by Seller. In addition and separate from the foregoing, this Agreement will terminate upon the termination of the BNSF Industry Track Agreement (Exhibit A) for any reason. PMRC may terminate this Agreement for cause or upon the termination of the BNSF Industry Track Agreement (Exhibit A) without incurring any liability to Seller. 5. Any notice required or permitted to be given or delivered under this Agreement shall be in writing and shall be given by personal delivery, or by the United States Postal Service, by registered or certified mail, postage prepaid, or by reputable national overnight courier service: (a) If to PMRC: Pueblo Municipal Rail Corporation Attn: Mayor One City Hall Place, Second Floor Pueblo, CO 81003 with a copy to: City Attorney 1 City Hall Place, Third Floor Pueblo, CO 81003 (b) If to Seller, addressed to: Pueblo SCIP, LLC 2 Attn: John H.F. Scanio P.O. Son ‘lte►37 Corpus Christi, TX 70401 1 %4 gb with copy to: Donald J. Banner Banner & Bower, P.C. 115 E. Riverwalk, Suite 400 Pueblo, CO 81003 or to such other person or address as either Party shall specify in written notice given to the other Party pursuant to the provisions of this Section 5. Any notice shall be deemed delivered on the day on which personal delivery is made or three (3) days after deposit in the mail in the case of registered or certified mail, or one (1) business day in the case of overnight courier. 6. Miscellaneous Provisions. (a) Additional Documents. The Parties agree to execute any additional documents or take any additional action that may be necessary to carry out this Agreement. (b) Integrations, Severability, Amendment, and Counterparts. This Agreement represents the entire agreement between the Parties and supersedes all prior discussions and written agreements or understandings. This Agreement may be amended only by an instrument in writing signed by the Parties. If any provision of this Agreement is held invalid or unenforceable, no other provision shall be affected by such holding, and all the remaining provisions of this Agreement shall continue in full force and effect. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together constitute one and the same agreement. (c) No Third Party Beneficiaries; No Waiver of Immunities. Nothing in this Agreement is intended, nor should it be construed, to create any rights, claims, or benefits or assume any liability for or on behalf of any third party, or to waive any immunities or limitation conferred under federal or state law, including but not limited to the Colorado Governmental Immunity Act, §24-10-101 et seq., C.R.S. (d) Waiver of Breach. A waiver by any Party to this Agreement of the breach of any term or provision of this Agreement shall not operate or be construed as a waiver of any prior or subsequent breach by either Party. (e) Governing Law. This Agreement shall be governed by the laws of the State of Colorado (without giving effect to its choice of law principles). 3 (f) Litigation. In the event of any litigation arising under this Agreement, the court shall award to the prevailing Party its costs and reasonable attorney fees. Exclusive venue for any such litigation shall be Pueblo County, Colorado. All such litigation shall be filed in the District Court, County of Pueblo, State of Colorado and each Party submits to the personal and subject matter jurisdiction of such District Court. To the full extent allowed by law, each Party hereby waives its right to a jury trial. (g) Assignment. This Agreement shall not be assigned by Seller without the prior written consent of PMRC, which consent may be granted, denied, or conditioned in PMRC's sole and absolute discretion. Any assignment or attempted assignment of this Agreement by Seller without such consent shall be null and void. However, if Seller proposed to assign this Agreement to a purchaser of all or a portion of the Site, the transaction is an arms-length transaction, the proposed purchaser is creditworthy and has sufficient business experience and is capable of performing Seller's obligations under this Agreement and the purchaser assumes and agrees to perform Seller's obligations under this Agreement, then in such events, the assignment may be made only with the express consent of PMRC, but such consent may not be unreasonably delayed, conditioned or withheld. Executed at Pueblo, CO, the date and year first above written. PUEBLO MUNICIPAL RAIL CORPORATION A Colorado Nonprofit Corporation ATTESTED: By: 7444//(0.AhAfei Brenda Armijo Mayor Nicholas A. Gradisar City Clerk President Approved as to form: [Seal] City Attorney SELLER: PUEBLO SCIP, LLC a Colorado limited liability company by: 4 • SCANIO FAMILY, LTD., a Texas Limited Partnership Sole Member and Sole Manager By: The Scanio Family GP, LLC, General Partner n By: <-) xty - Fra k J. Scanio, Ill, Manager By: Robert M. rown, Manager BY:/' vlM, 414 John H. F. Scanio, Manager STATE OF c ,, O ) ss. COUNTY OF Po zraL-C) ) The foregoing instrument was acknowledged before me this t SSI- day of beccu.. , , 2019 by Frank J. Scanio, Ill, Robert M. Brown and John H.F. Scanio as Managers of Pueblo SCIP, LLC a Colorado limited liability company. Witness my hand and official seal. My commission expires: u.. /t.t /Zi [ SEAL ] ! Dc.)%-tax- (33-44- Notary Public DONALD J.BANNER NOTARY PUBLIC STATE OF COLORADO NOTARY ID 19874009263 My Commission Expires 10-11-2021 5