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HomeMy WebLinkAbout10520ORDINANCE NO. 10520 AN ORDINANCE (1) APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE AN EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION, AND FOMCORE, A MICHIGAN LIMITED LIABILITY COMPANY, RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AND (2) APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE A REAL PROPERTY CONVEYANCE AGREEMENT AND RELATED QUITCLAIM DEED BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION, AND THE PUEBLO DEVELOPMENT FOUNDATION, A COLORADO NONPROFIT CORPORATION, RELATING TO A PARCEL OF IMPROVED LAND LOCATED IN THE PUEBLO MINNEQUA INDUSTRIAL PARK AND (3) TRANSFERRING SIX MILLION FIVE HUNDRED THOUSAND DOLLARS ($6,500,000) FROM THE 1992-2026 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR THE PURPOSE OF SAID CONVEYANCE AGREEMENT AND (4) TRANSFERRING ONE MILLION SEVEN HUNDRED AND FORTY THOUSAND DOLLARS ($1,740,000) FROM THE 1992-2026 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR THE PURPOSE OF THE CITY OF PUEBLO’S COMPLIANCE WITH SAID EMPLOYMENT AGREEMENT BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The City Council finds and determines that (1) the expenditure of up $6,500,000 improvements of the building located at 200 Greenhorn Dr., Pueblo, for the job creating capital improvement project by the Pueblo Development Foundation, a Colorado nonprofit corporation (“PDF”) described in the attached Real Property Conveyance Agreement, meets and complies with the criteria and standards established by Section 14-4-85.5 of the Pueblo Municipal Code and will create employment opportunities justifying the expenditure of public funds; and (2) the expenditure of $1,740,000 for a job creating capital improvement project with Fomcore LLC a Michigan limited liability company (“Fomcorp”) 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. The City Council further finds the incentives granted to the Formcorp hereby meet the standards established by Section 14-4-85 of the Pueblo Municipal Code. SECTION 2. The following agreements, all dated August 14, 2023, copies of which are attached hereto and are incorporated herein by this reference, having been approved as to form by the City Attorney, are hereby approved:  Employment Agreement between the City of Pueblo and Fomrcorp;  Real Property Conveyance Agreement between the City of Pueblo and the Pueblo Development Foundation (“PDF”) and with respect to the transfer of 200 Greenhorn Dr, Pueblo, CO 81003 to PDF to be leased by PDF to Fomcorp; The Mayor is authorized to execute and deliver said agreements in the name of the City and the City Clerk is authorized to fix the seal of the City thereto and attest same. The Mayor is further authorized to execute and deliver a Special Warranty Deed and related documents at closing, transferring 200 Greenhorn Dr, Pueblo, CO 81003 to PDF. SECTION 3. Funds in the aggregate amount of $6,500,000 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 Real Property Conveyance Agreement. The funds hereby authorized to be transferred and expended shall be released, disbursed and paid by the City’s Director of Finance as specified in the attached Real Property Conveyance Agreement. SECTION 4. Funds in the aggregate amount of $1,740,000 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 hereby authorized to be transferred and expended shall be released, disbursed and paid by the City’s Director of Finance as specified in the attached Employment Agreement. SECTION 5. The officers and staff of the City are authorized to perform any and all acts consistent with this Ordinance and the attached agreements which are necessary or appropriate to implement the transactions described therein. SECTION 6. 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 July 24, 2023. Final adoption of Ordinance by City Council on August14, 2023. ____________________________ President of City Council Action by the Mayor: ☒ Approved on August 17, 2023 . ☐ 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 # R1 Background Paper for Proposed Ordinance COUNCIL MEETING DATE: August 14, 2023 TO: President Heather Graham and Members of City Council CC: Mayor Nicholas A. Gradisar VIA: Marisa Stoller, City Clerk FROM: Nicholas Gradisar, Mayor SUBJECT: AN ORDINANCE (1) APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE AN EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION, AND FOMCORE, A MICHIGAN LIMITED LIABILITY COMPANY, RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AND (2) APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE A REAL PROPERTY CONVEYANCE AGREEMENT AND RELATED QUITCLAIM DEED BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION, AND THE PUEBLO DEVELOPMENT FOUNDATION, A COLORADO NONPROFIT CORPORATION, RELATING TO A PARCEL OF IMPROVED LAND LOCATED IN THE PUEBLO MINNEQUA INDUSTRIAL PARK AND (3) TRANSFERRING SIX MILLION FIVE HUNDRED THOUSAND DOLLARS ($6,500,000) FROM THE 1992-2026 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR THE PURPOSE OF SAID CONVEYANCE AGREEMENT AND (4) TRANSFERRING ONE MILLION SEVEN HUNDRED AND FORTY THOUSAND DOLLARS ($1,740,000) FROM THE 1992-2026 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR THE PURPOSE OF THE CITY OF PUEBLO’S COMPLIANCE WITH SAID EMPLOYMENT AGREEMENT SUMMARY: Attached is an Ordinance approving and authorizing the Mayor to sign the following agreements:  Employment Agreement between the City of Pueblo and Fomcore LLC, a Michigan limited liability company (“Fomcorp”);  Real Property Conveyance Agreement between the City of Pueblo and the Pueblo Development Foundation (“PDF”) for the transfer of 200 Greenhorn Dr, Pueblo, CO 81003 to PDF to be leased by PDF to Fomcorp;  Special Warranty Deed transferring 200 Greenhorn Dr., Pueblo, CO 81003 to PDF PREVIOUS COUNCIL ACTION: Ordinance No. 9712 (June 8, 2020) approved an agreement wherein the facility located at 200 Greenhorn Dr., Pueblo, CO 81008 was previously constructed by PDF as a shell building and transferred to the City of Pueblo following construction. BACKGROUND: Fomcorp is a Michigan company specializing in the manufacturing of foam furniture for nd educational and healthcare facilities. Fomcorp has a need to open a 2 manufacturing facility in the United States regionally located to serve the western portion of the United States. Fomcorp plans to lease the facility located at 200 Greenhorn Dr., Pueblo, CO 81004. Fomcorp plans to employee a minimum of 87 full time employees for not less than thirty-five (35) hours per week with an average annual salary for full-time employees of not less than $41,000 plus benefits. Fomcorp will receive a rent abatement in an amount not to exceed One Million Seven Hundred Forty Thousand Dollars ($1,740,000). The facility located at 200 Greenhorn Dr., Pueblo, CO 81008 was previously constructed by PDF as a shell building. The facility was transferred to the City of Pueblo following construction. In order to lease the facility, certain improvements need to be completed. It is estimated that an addition $6.5 Million dollars is necessary to complete the improvements. This is in addition to the previously allocated dollars for the construction of the building. With respect to such construction and related Real Property Conveyance Agreement with Pueblo Development Foundation (“PDF”), PDF was formed in 1964 as a Colorado nonprofit corporation to promote economic development within the City of Pueblo and the areas surrounding the City. For more than fifty years, PDF has helped start up businesses and assisted existing businesses in relocating to Pueblo County and thereby has acquired expertise in economic development. Section 14-4-85.5 of the Pueblo Municipal Code (“Criteria Ordinance”) provides that the City Council may authorize the expenditure of monies from the 1992-2026 Sales and Use Tax Capital Improvement Projects Fund (“Half-Cent Tax Fund”) for the acquisition of land and construction of so-called shell buildings or the acquisition, remodeling and renovation of existing buildings for the purpose of making such buildings available for applicants or potential applicants who meet the standards and criteria of this Chapter. FINANCIAL IMPLICATIONS: With respect to the Real Property Conveyance Agreement, the City has agreed to transfer up to $6.5 million dollars from the Half-Cent Tax Fund to PDF for the construction improvements needed for the purpose of making the building available and in order to lease to Fomcorp based upon plans and specifications already prepared by Nakai & Associates for the work contemplated by this Agreement. With respect to the Employment Agreement, City funds will be made available out of the 1992-2026 Sales and Use Tax Capital Improvement Projects Fund for rent abatements to Fomcorp as follows: Dates Location Maximum Abatement of Rents March 1, 2024 to June 30, 200 Greenhorn Dr. No rent 2024 July 1, 2024 to March 31, 200 Greenhorn Dr. $ 1,740,000 2031 Total $ 1,740,000 BOARD/COMMISSION RECOMMENDATION: Not applicable to this Ordinance. STAKEHOLDER PROCESS: Not applicable to this Ordinance. ALTERNATIVES: If this Ordinance is not approved, Fomcorp will not locate its new facility to Pueblo, CO. RECOMMENDATION: The Pueblo Economic Development Corporation recommends approval of this Ordinance. ATTACHMENTS: 1. Conveyance Agreement between City and PDF 2. Lease between Fomcorp and PDF 3. PDF Deed of Trust -200 Greenhorn Dr 4. Special Warranty Deed - City to PDF 200 Greenhorn 5. Redlined Background Paper - As Amended by CA Office 6. Redlined Ordinance - As amended by CA Office