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HomeMy WebLinkAbout10033 ORDINANCE NO. 10033 AN ORDINANCE APPROVING AN EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND ECOLOGIC MATERIALS, LLC, A WYOMING LIMITED LIABILITY COMPANY RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AND AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT AND TRANSFERRING THREE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($375,000) FROM THE 1992-2026 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR PURPOSES THEREOF BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The City Council finds and determines that the expenditure of $375,000 for a new job creating capital improvement project with Ecologic Materials, LLC, a Wyoming limited liability company (the “Company”) described in the attached Employment Agreement, is for a public purpose and in furtherance of a municipal function and will create employment opportunities justifying the expenditure of public funds. SECTION 2. The Employment Agreement dated November 8, 2021, between the City and the 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 to execute and deliver said Employment Agreement in the name of the City and the City Clerk is authorized to affix the seal of the City thereto and attest same. SECTION 3. Funds in the aggregate amount of $375,000 are hereby authorized to be transferred, expended and made available out of the 1992-2026 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 attached Employment Agreement. The funds are hereby authorized to be transferred and expended and shall be released, disbursed and paid by the City’s Director of Finance as specified in the attached Employment Agreement. SECTION 4. The officers and staff of the City are authorized to perform any and all acts consistent with this Ordinance and the attached Employment Agreement which are necessary or appropriate to implement transactions described therein. SECTION 5. 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 25, 2021 . Final adoption of Ordinance by City Council on November 8, 2021 . President of City Council Action by the Mayor: ☒ Approved on November 10, 2021 . □ 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-1 Background Paper for Proposed Ordinance COUNCIL MEETING DATE: October 25, 2021 TO: President Lawrence W. Atencio and Members of City Council CC: Mayor Nicholas A. Gradisar VIA: Marisa Stoller, City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: AN ORDINANCE APPROVING AN EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND ECOLOGIC MATERIALS, LLC, A WYOMING LIMITED LIABILITY COMPANY RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AND AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT AND TRANSFERRING THREE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($375,000) FROM THE 1992-2026 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR PURPOSES THEREOF SUMMARY: Attached is an Ordinance approving and authorizing the Mayor to sign an employment agreement with Ecologic Materials, LLC, a Wyoming Limited Liability Company (the “Company”). PREVIOUS COUNCIL ACTION: Not applicable to this Ordinance. BACKGROUND: Company’s business plan, as it pertains to Pueblo County, is centered on the utilization of plastic material mixed with a Dow Chemical product to form a binder for use in the asphalt paving process. The asphalt binder additive will be manufactured in the City of Pueblo for distribution outside of Pueblo County. The Company plans to lease a manufacturing facility located at 1107 S. Santa Fe Ave. Pueblo, CO 81006. On and after the employment commitment date of April 1, 2022, Company has set the goal of employing not less than seventeen (17) full-time employees at its manufacturing facility whose annual compensation shall average at least Forty-Four Thousand Eight Hundred Dollars ($44,800), not including benefits, for a period of seven (7) years following the employment commitment date. FINANCIAL IMPLICATIONS: At the end of the first quarter following the employment commitment date and continuing for the next twenty-seven (27) quarters, Company shall be entitled to receive from the City, in arrears, monetary reimbursement for the payment of rent paid during the preceding quarter, equal to the quarterly payment per employee ($787.82) times the number of quarterly employees employed by the Company at its manufacturing facility during the preceding quarter. For example, if during the third quarter of the fourth year following execution of the Employment Agreement, the number of quarterly employees is 10, the amount of rent reimbursement to be paid to the Company by the City would be 10 x $787.82 = $7,878.20. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Ordinance. STAKEHOLDER PROCESS: Not applicable to this Ordinance. ALTERNATIVES: If this Ordinance is not approved, the Company will not locate its manufacturing and distribution facility in the City and the City will lose the opportunity to create seventeen (17) new jobs. RECOMMENDATION: The Pueblo Economic Development Corporation recommends approval of this Ordinance. Attachments: Proposed Ordinance Proposed Employment Agreement EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of this 8th day of November, 2021, between the City of Pueblo, a Colorado municipal corporation (the "City"), and Ecologic Materials, LLC, a Wyoming limited liability company (the "Company"). The Company and the City are referred to collectively in this Agreement as the "Parties" and individually, without differentiation, each as a "Party." WHEREAS, the Company has expressed a willingness to establish a manufacturing center and business administration offices in the City of Pueblo, and in furtherance thereof has, through the Pueblo Economic Development Corporation, made application for economic development funds from the City; and WHEREAS, the City has approved such application and will make economic development funds available to Company subject to and upon the terms and conditions of this Agreement; and WHEREAS, Company's business plan, as it pertains to Pueblo County, is centered on the utilization of plastic material mixed with a Dow Chemical product to form a binder for use in the asphalt paving process. The asphalt binder additive will be manufactured in the City of Pueblo for distribution outside of Pueblo County ("Company's Business"); and WHEREAS, the City has determined that Company's Business will create primary jobs and will not materially and substantially compete with any existing activity or business within the City; and WHEREAS, in connection with its application, the Company plans to lease a manufacturing facility located at 1107 S. Santa Fe Ave. Pueblo, CO 81006 and has committed to provide the employment described in Section 3 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, the Parties agree as follows: 1. The following terms as used in this Agreement shall have the following meaning unless the context clearly indicates otherwise: "Effective Date" means the date of approval of this Agreement by City Council of City. "Employment Commitment Date" means April 1, 2022. "Facility" means the manufacturing center and business administration offices located at 1107 S. Santa Fe Ave. Pueblo, CO 81006, or another facility subsequently selected by the Company, provided it is located in the City of Pueblo or the Pueblo Memorial Airport Industrial Park. 1 "Full-Time Employee" means a person who actually performs work at the Facility for not less than thirty-five (35) hours per week at an average annual salary of not less than $44,800 per year not including benefits. "Operations Date" means the date when the Company begins the manufacture of an asphalt binder at the Facility. "Quarter" means three consecutive calendar months commencing January 1, April 1, July 1 and October 1 of each calendar year. "Quarterly Employees" means the sum of the aggregate number of Full -Time Employees on each business day of a Quarter, divided by the number of business days in such Quarter. "Quarterly Payment Per Employee" means $375,000 (the total funds authorized to be transferred under this Agreement) divided by 28 (the number of quarters in the seven (7) year rent reimbursement period) divided by 17 (employment goal): $375,000 T 28 = $13,392.86 T 17 = $787.82. 2. If the Company is not in default under this Agreement, City will transfer to or for the benefit of Company funds in the amount of Three Hundred Seventy-Five Thousand Dollars ($375,000) (the "City Funds"), subject to and contingent upon the following conditions and covenants which Company agrees to perform and comply with: (a) City Funds will be used to reimburse the Company, in arrears, for rent payments made for its manufacturing Facility. (b) Company shall file 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 board of Company approving this Agreement and authorizing its officers to execute and deliver this Agreement and related documents in the name of Company; (iii) duly executed copies of this Agreement; and (iv) evidence reasonably satisfactory to City that Company will establish business operations at the Facility. The date of the last to occur of the filings required under (i), (ii), (iii) and (iv) of this paragraph 2(b) shall be referred to herein as "Closing." If Closing does not occur on or before March 31, 2022, or such later date as the Parties shall mutually agree, City, at its sole option, may terminate this Agreement and the Parties shall thereafter be released and discharged from all obligations hereunder. (c) As a condition precedent to the disbursement of City Funds, Company shall file (i)with the City Clerk the documents described in Paragraph (b) above, and (ii) and shall file with the City's Director of Finance a duly executed copy of the Company's Lease of the Facility. 2 (d) At the end of the first quarter following the Employment Commitment Date, and continuing for the next twenty-seven (27) quarters, Company shall be entitled to receive from the City, in arrears, monetary reimbursement for the payment of rent paid during the preceding quarter, equal to the Quarterly Payment Per Employee times the number of Quarterly Employees employed by the Company at the Facility during the preceding quarter. For example, if during the third quarter of the fourth year following execution of this Agreement, the number of Quarterly Employees is 10, the amount of rent reimbursement to be paid to the Company by the City would be 10 x $787.82 = $7,878.20. The Parties agree that during the term of this Agreement, Company shall be entitled to receive a rent reimbursement up to a maximum of Seventeen (17) employees per quarter. (e) Company shall not submit requests for payment which exceed, in the aggregate, Three Hundred Seventy-Five Thousand Dollars ($375,000). The City agrees to disburse funds within thirty (30) days of submission of the Company's written request for payment, if such request is accompanied by supporting documentation as set forth herein. 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 after the Effective Date of this Agreement continuously conduct its business operations and employ Full -Time Employees at the Facility as follows: (i) during the Period from the Effective Date of this Agreement to the Employment Commitment Date, Company shall use commercially reasonable efforts in good faith to employ as many Full-Time Employees as reasonably justified by its business operations; (ii) on and after the Employment Commitment Date continuously conduct its business operations at the Facility with the goal of employing not less than Seventeen (17) Full-Time Employees at the Facility whose annual compensation shall average at least Forty-Four Thousand Eight Hundred Dollars ($44,800), not including benefits, for a period of seven (7) years following the Employment Commitment Date. Company will use good faith efforts, in accordance with its sound business practices, to 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 County of Pueblo (collectively the "Employment Commitment"). 4. 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 extent allowed by law, each Party waives its right to a jury trial. 5. This Agreement expresses the entire understanding of the Parties and supersedes and abrogates any and all prior dealings and commitments, whether oral or 3 written, with respect to the subject matter of this Agreement and this Agreement may not be amended or modified except in writing signed by both Parties. Any waiver of any provision of this Agreement must be in writing and signed by the Party whose rights are being waived. No waiver of any breach of any provision hereof shall be or be deemed to be a waiver of any preceding or subsequent breach of the same or any other provision of this Agreement. The failure of either Party to enforce or seek enforcement of the terms of this Agreement following any breach shall not be construed as a waiver of such breach. 6. This Agreement shall be construed in accordance with and be governed by the laws of the State of Colorado without regard to conflict of law principles. 7. 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 reputable national overnight courier service: (a) if to City, Mayor, City of Pueblo, 1 City Hall Place, Second Floor, Pueblo, CO 81003 with a copy to City Attorney, 1 City Hall Place, Third Floor, Pueblo, Colorado 81003, or (b) if to the Company, Ecologic Materials LLC, Attn: Manager, 601 16th Street, Golden, CO 80401 or to such other address or person as any Party may from time to time specify in a writing delivered to the other Party in the manner provided in this paragraph. 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 and one (1) business day after deposit in the case of overnight courier. 8. 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 may not, except as provided below, assign this Agreement or any interest herein without the express written consent of the City, which consent may be arbitrarily withheld, conditioned or delayed. Any assignment or attempted assignment of this Agreement by Company without such consent shall be null and void. 9. 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 legally binding obligation of Company enforceable against Company in accordance with its terms. 10. 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 or payment which is contingent upon approval of this Agreement or City's transfer of City Funds to Company hereunder. For breach or violation of this warranty, City shall have the right to terminate 4 this Agreement, or recover the full amount of such commission, percentage, contingent fee or other remuneration, and/or to seek such other remedies legally available to City, which remedies shall be cumulative. 11. 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 all claims for any and all such damages. In the event of a breach of this Agreement by the City, Company's sole and exclusive remedy shall be to bring an equitable action for specific performance in the District Court of Pueblo County, Colorado. Such violations may be restrained or such obligations enforced by injunction at the instance and request of Company without the showing of any special damages or an inadequate remedy at law. 12. 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. 13. Neither Party shall be, or hold itself out as, agent of the other or as joint venturers or partners under this Agreement. 14. Each Party acknowledges that this Agreement was fully negotiated by the Parties and, therefore, no provision of this Agreement shall be interpreted against any Party because such Party or its legal representative drafted such provision. 15. The provisions of this Agreement are for the exclusive benefit of the Parties hereto and their successors and Permitted assigns, and no third party shall be a beneficiary, or have any rights by virtue of this Agreement. 16. This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed for all purposes to be an original, and all such counterparts shall together constitute but one and the same original. Executed effective the day and year first above written. CITY OF PUEBLO, a Colorado municipal corporation Attest: y By ..� Zgodesqsi CitY Ct�er.k 'cholas A. Grad r, Mayor [ SEAL ] 5 [SEAL] ECOLOGIC MATERIALS, LLC a Wyoming limited liability company By: \A40,C)--e (Print Name) 1r CIC. LO 03_541,e (Print Title)'D‘Alex L?( I G�1 e T S 6k11 O ti V STATE OF COLORADO ) ) ss. COUNTY OF NeY ) The foregoing instrument was acknowledged before me this M day of c !!( , 2021 by Wkt \ \ \ as T;ZWAy\ CSO of Ecologic Materials LLC, a Wyoming limited liability company. Witness my hand and official seal My commission expires: ``)..Q") k��� '�� msn— SANCHEZ kiMila STATE OF COLORADO Notary Public NOTARY ID 20174043453 MY COMMISSION EXPIRES OCTOBER 18,2021 6