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HomeMy WebLinkAbout08024ORDINANCE NO. 8024 AN ORDINANCE APPROVING A COOPERATION AGREE- MENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND THE URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO, A BODY CORPORATE AND POLITIC OF THE STATE OF COLORADO RELATING TO THE SAINT CHARLES INDUSTRIAL PARK URBAN RENEWAL PROJECT AND TAX INCREMENT FINANCING, AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: (brackets indicate matter being deleted, underscoring indicates new matter being added) SECTION 1 The Cooperation Agreement between Pueblo and the Urban Renewal Authority of Pueblo, Colorado, dated as of June 8, 2009, relating to the Saint Charles Industrial Park Urban Renewal Project and tax increment financing ( "Cooperation Agreement'), a copy of which is attached hereto, having been approved as to form by the City Attorney, is hereby approved. SFrTinN 9 The President of the City Council is authorized to execute and deliver the Cooperation Agreement in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 3 This Ordinance shall become effective immediately upon final passage and approval. INTRODUCED: June 8, 2009 f:W A77TSTFD SY: CITY CLERK Randy Thurston COUNCIL PERSON APPR D' } �. PRESIDENTaf Cfty Council PASSED AND APPROVED: June 22, 2009 ED Background Paper for Proposed ORDINANCE DATE: June 8, 2009 DEPARTMENT: Law Department TITLE AGENDA ITEM # 16 AN ORDINANCE APPROVING A COOPERATION AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND THE URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO, A BODY CORPORATE AND POLITIC OF THE STATE OF COLORADO RELATING TO THE SAINT CHARLES INDUSTRIAL PARK URBAN RENEWAL PROJECT AND TAX INCREMENT FINANCING, AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME ISSUE Should City Council approve the Cooperation Agreement between the City and Urban Renewal Authority of Pueblo, Colorado relating to the Vestas project? RECOMMENDATION Approve the Cooperation Agreement. BACKGROUND The Cooperation Agreement between the Urban Renewal Authority of Pueblo, Colorado ( "Authority ") and City of Pueblo relates to the Saint Charles Industrial Park Urban Renewal Project ( "Vestas ") and tax increment financing with respect to the following payments to be paid out of net TIF revenue: (a) Vestas - $12.5 million plus interest at 4.5% per annum as priority payment in reimbursement for documented and certified eligible costs of eligible public improvements; a list of eligible public improvements is attached. (b) Pueblo County - $4,122,000 to reimburse Pueblo County for general property tax revenue contributed to the Vestas Project, and the Board of Water Works of Pueblo - $2,704,000 to reimburse the Board of Water Works for costs associated with water storage /mains; both payable in parity with one another. Net TIF revenue is computed after deducting (a) TIF revenue equal to City's mill levy, to be paid directly to the City, and (b) TIF revenue equal to 50% of Pueblo County's personal property tax paid by Vestas, to be paid directly to Vestas. It is intended that after Vestas, Pueblo County and the Board of Water Works are reimbursed in full in approximately nine years, TIF will expire and all taxing entities will receive their full mill levy tax revenues, unless Vestas commits by December 31, 2015 to construct Phase 2. In such event, TIF will continue to reimburse Vestas for eligible public improvements associated with Phase 2 as City and Authority agree after consultation with Pueblo County. FINANCIAL IMPACT See Background. COOPERATION AGREEMENT Saint Charles Industrial Park Urban Renewal Project 1.0 PARTIES The parties to this Cooperation Agreement (the "Agreement') are the CITY OF PUEBLO, a Colorado municipal corporation (the "City ") and the URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO, a body corporate and politic of the State of Colorado (the "Authority "). The City and the Authority are sometimes referred to herein collectively as the Parties and individually as a Party. 2.0 RECITALS The recitals to this Agreement are incorporated herein by this reference as though fully set forth in the body of this Agreement. 2.01 The Urban Renewal Plan The Authority is carrying out the Urban Renewal Plan for the Saint Charles Industrial Park Urban Renewal Project (the "Plan"), which was approved by the City Council of the City on December 21, 2008. The Plan provides maximum opportunity, consistent with the sound needs of the City, for the development and redevelopment of the Urban Renewal Area described in the Plan by private enterprise. The Plan provides for financing the activities and undertakings of the Authority and other public and private entities in the Urban Renewal Area by means of property tax allocation or tax increment financing in accordance with Section 31- 25- 107(9)(a) of the Act. 2.02. Reimbursement Agreement In furtherance of the Plan, the Authority intends to enter into a Reimbursement Agreement with Vestas Towers America, Inc. (the "Owner ") wherein the Authority will reimburse the Owner for the documented and certified Eligible Costs (as defined below) of those public improvements listed in Exhibit A (the "Eligible Public Improvements "). 2.03. Other Reimbursements Pursuant to Section 112 of the Act, the County and the Water Works (as defined herein) have agreed to advance certain funds to assist the Owner and Authority in carrying the Project, and the Authority desires to reimburse the County and the Water Works for such assistance. In addition, the Parties desire to establish the terms and conditions relating to certain other matters set forth below. 3.0 TERMS AND CONDITIONS In consideration of the mutual covenants and promises of the Parties contained herein, and other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as set forth in this Agreement. 4.0 DEFINITIONS Unless a contrary meaning is clearly stated, capitalized terms in this Agreement shall be defined as follows: "Act" means the Colorado Urban Renewal Law, Sections 31 -25 -101, et seg. C.R.S. " Additional Revenue means the revenue contributed to the Project by the County, and the Water Works. " Agreement " means this agreement as it may be amended or supplemented in writing. " Authority Fee means the lesser of $100,000 or 50% of the total amount of property tax revenue received by the Authority each year (commencing with the year 2010) from the Pueblo County Treasurer pursuant to Section 31 -25- 107(9), C.R.S.; provided, however, the Authority Fee shall terminate December 31 of the calendar year in which Property Tax TIF expires pursuant to Section 6.03. Authority may increase the Authority Fee each year in accordance with the C.P.I. Index for the Denver - Boulder Area, but not more than 3% over the Authority Fee for the prior year. "City" means the City of Pueblo, Colorado, a home rule city of the State of Colorado. " City Property Tax TIF means the property tax revenues calculated, produced, allocated and paid to the Authority as a result of or based on City's mill levy. "Coun "means Pueblo County, Colorado, apolitical subdivision of the State of Colorado. " County Tax Contribution means 50% of the County personal property tax paid by the Owner for personal property located within the Urban Renewal Area for a period of 10 years starting with payments made in 2010. " Eligible Costs means the documented and certified costs of the Eligible Public Improvements. " Eligible Public Improvements means the public improvements listed in Exhibit A. " Party or Parties means the parties to this Agreement defined in Section 1.0 or their successors and assigns. " Plan or Urban Renewal Plan means the plan described in Section 2.01. " Pledged Revenue means the revenue described in Section 6.0. "Proi ect" means the Owner's wind turbine tower manufacturing facility to be constructed and installed within the Urban Renewal Area and related on and off -site utilities and infrastructure. " Recovered Costs means any amounts reimbursed to the Owner pursuant to City ordinances by any third party as a condition of connecting to, using, or gaining access to the Eligible Public Improvements or any portion thereof. " Reimbursement Obli ae tion means the obligation of the Authority to reimburse the Owner for the Eligible Costs in accordance with the Reimbursement Agreement. " Special Fund means the fund described in Section 6.0. " Subordinate Obligations means the obligations described in Section 6.O1b. "Term" means the first to occur after date hereof of (a) payment in full of all Project Debt listed in Section 6.01 plus the Additional Project Debt, if any, as may be approved by the Parties in accordance with Section 6.03 or (b) expiration of the tax allocation provisions currently in Section 31- 25- 107(9)(a) of the Act. " Urban Renewal Area means the area included in and subject to the Plan. " Water Works means the Board of Water Works of Pueblo, Colorado. 5.0 PROJECT ADMINISTRATION The Authority shall be responsible for administering this Agreement and the Reimbursement Agreement and for carrying out the Plan in accordance with the Act. The Authority shall retain from the Property Tax TIF revenue received from the Pueblo County Treasurer the Authority Fee to pay its reasonable costs and expenses in connection with such administration. 6.0 SPECIAL FUND; THE PLEDGED REVENUE In accordance with Section 31-25 - 107(9)(a)(II) of the Act, the Authority shall establish the Special Fund and deposit therein the Property Tax TIF, which consists of that portion of the annual ad valorem property tax revenue the Authority receives each year from the Pueblo County Treasurer in excess of the amount produced by the levy of those taxing bodies that levy property taxes against the base assessed value of taxable property in the Urban Renewal Area, as such base value is calculated and adjusted from time to time by the Pueblo County Assessor in accordance with the Act and regulations of the Property Tax Administrator of the State of Colorado, less the Authority Fee, the County Tax Contribution, the City Property Tax TIF, and any funds offset by the Pueblo County Treasurer or placed in a reserve fund by the Authority as mandated by Section 31- 25- 107(9)(a)(III) of the Act. The Authority shall also deposit in the Special Fund any and all Recovered Costs it receives. At all times while it is holding and maintaining the Special Fund, the Authority will earn interest on (and credit interest to) the Special Fund in accordance with its normal practices and procedures. The Pledged Revenue consists of the Property Tax TIF deposited in the Special Fund, the Recovered Costs received by the Authority, and the interest earned on the amounts in the Special Fund. The Pledged Revenue shall be used in accordance with this Agreement. 6.01 Payment of Obligations The Authority shall use the Pledged Revenue solely to pay the following obligations: (herein the "Project Debt") a. First, $12.5 million to the Owner to reimburse the Owner for the documented and certified Eligible Costs of the Eligible Public Improvements, plus interest at a rate of four and one -half percent (4.5 %) per annum. b. Next, to reimburse the County and the Water Works after the Owner has been paid $12.5 million in full pursuant to a. above, but in parity with one another as follows: (herein the "Subordinate Obligations ") (1) The County in the amount of $4,122,000; and (2) The Water Works in the amount of $2,704,000. C. The Project Debt and Additional Project Debt, as defined in Section 6.03, if any, shall be an indebtedness of the Authority pursuant to Section 31- 25- 107(9)(a)(11) of the Act. d. After all Project Debt and Additional Project Debt as defined in Section 6.03, if any, is paid in full, any monies remaining in the Special Fund shall be disbursed by the Authority to the taxing bodies, except the City, in proportion to their prior year's mill levies. 6.02 Terms of Payment The Authority has agreed to reimburse the Owner, the County, and the Water Works pursuant to separate agreements with each entity. Unless the Owner otherwise agrees in writing, the obligation of the Authority to pay the Owner $12.5 million pursuant to Section 6.01(a)shall have priority over the Subordinate Obligations. To the extent that the rights of the Parties are not adversely affected hereunder, the Authority may, subject to the approval of the City, issue bonds to advance refund or pay directly any or all of the obligations listed in Section 6.01. 6.03 Approval Required for Additional Financial Obligations It is the intention of the Parties to retire all Project Debt as soon as possible and, when all Project Debt is retired, Property Tax TIF shall expire. Except for the obligations listed in Section 6.01, the Authority agrees that it will not issue any other debt or obligation payable out of Property Tax TIF; provided, however, the Parties are aware that the Owner may commit to construct additional public and private improvements ( "Phase 2 ") comparable in size and scope to those now under construction in the Urban Renewal Area. The Parties agree that should the Owner commit to undertake Phase 2 prior to December 31, 2015, the Parties will give favorable consideration to such additional and further reimbursement for additional public improvements as they may deem reasonable and necessary to facilitate the construction of Phase 2 or other development or redevelopment within the Urban Renewal Area consistent with the sound needs of the municipality and the goals of the Act and Plan ( "Additional Project Debt "). The Parties agree to consult with the Board of County Commissioners of Pueblo County prior to agreement by the Parties for Authority to incur any financial obligations in excess of those listed in Section 6.01. 7.0 TRANSFER OF PROPERTY TAX TIF a. City Property Tax TIF Commencing on the date of this Agreement and continuing during the Term, the Authority shall transfer to City quarterly, or as otherwise agreed in writing by the Parties, all of the City Property Tax TIF received by the Authority. b. County Tax Contribution Unless otherwise agreed in writing between the County and Authority, commencing January 1, 2010 and continuing until the earlier or (i) the end of the Term, or (ii) December 31, 2019, the Authority shall transfer to the Owner quarterly, or as otherwise agreed in writing by the Parties, all of the County Tax Contribution received by the Authority on or after January 1, 2010. 8.0 DELAYS Any delays in or failure of performance by any Party of its obligations under this Agreement shall be excused if such delays or failure are a result of acts of God, fires, floods, strikes, labor disputes, accidents, regulations or order of civil or military authorities, shortages of labor or materials, or other causes, similar or dissimilar, which are beyond the control of such Party. 9.0 DEFAULT Time is of the essence. Subject to Section 7.0, above, if any payment or any other material condition, obligation, or duty is not timely made, tendered, or performed by either Party, then either Parry may exercise any and all rights available at law or in equity, including damages, but such damages shall be limited to the actual amount that such Party is entitled to receive or retain under this Agreement. No special or punitive damages shall be payable hereunder. 10.0 OBLIGATIONS SUBJECT TO CHARTER AND CONSTITUTION The covenants, duties and actions required of the parties under this Agreement shall be subject to and performed in accordance with the provisions and procedures required and permitted by the City Charter, the Act, any other applicable provision of law and the Colorado Constitution. 11.0 CAPTIONS The captions of the Sections are set forth only for the convenience and reference of the Parties and are not intended in any way to define, limit, or describe the scope or intent of this Agreement. 12.0 ADDITIONAL DOCUMENTATION OR ACTION The Parties agree to execute any additional documents or take any additional action that is necessary to carry out this Agreement. 13.0 INTEGRATION AND AMENDMENT This Agreement represents the entire agreement between the Parties with respect to the subject matter and there are no oral or collateral agreements or understandings with respect to the subject matter. This Agreement may be amended only by an instrument in writing signed by the Parties. 14.0 WAIV ER 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 subsequent breach by either Party. 15.0 GOVERNING LAW This Agreement shall be governed by the laws of the State of Colorado. 165.0 EXECUTION IN COUNTERPARTS This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument. 17.0 THIRD -PARTY BENEFICIARIES This Agreement is intended to describe the rights and responsibilities only as to the Parties hereto. This Agreement is not intended and shall not be deemed to confer any rights on any person or entity not named as a Party hereto. 18.0 MINOR CHANGES The Parties executing this Agreement are authorized to make non - substantive corrections to this Agreement and attached exhibits, if any, as the Parties mutually consider necessary. I 19.0 GOOD FAITH OF PARTIES In the performance of this Agreement or in considering any requested approval, acceptance, or extension of time, the Parties agree that each will act in good faith and will not act unreasonably, arbitrarily, capriciously, or unreasonably withhold, condition, or delay any approval, acceptance, or extension of time required or requested pursuant to this Agreement. 20.0 PARTIES NOT PARTNERS Notwithstanding any language in this Agreement or any other agreement, representation, or warranty to the contrary, the Parties shall not be deemed to be partners orj oint venturers, and neither Party shall be responsible for any debt or liability of the other Party or any other party. IN WITNESS WHEREOF, this Agreement is executed by the Parties hereto in their respective names.as of June 8, 2009. PUEBLO, A MUNICIPAL CORPORATION ATTEST: City Nrk By President of the City Council THE URBAN RENEWAL AUTHORITY OF ESTIMATE FOR VESTAS (LOT 1) PUBLIC INFRASTRUCTURE Revised i t MAY 2009 DISCLARSER: TMs spreadsheet represents a goodPfahh ~ W estlmite current costs lased on Rrm esdmme and, In most eases, actual isles. Theralore, this spreadsheet Is much more accuratr and canplere Nan prier w t o Iers. Ho,ea er, Vesta espeets and reeulres Nst any TIF mimbursemats be darned born acbwl, mrUW costs as dug Ma relmbunene rd agreamard exclusnely beMeen the Urban Renewal AmMortly aPUeblo and Vesfis. Mile Vesta expects Nat Me City of Pueblo MII rely upon vie sum total bgure represented In Nis d=ument, Me specific ga teems eenftlned herein are fer lahu a Ixrtpaa only and MII not W lending on Vatss. Type D(!SCFI NOD � =ESGmawuTtMal CD$1F c'��v €��CaO$}. �.r' {��Ig/9��i{I� - n'v3TIFR86D{R1}6861eDt ... 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Rp s i'd.i_ _ "SSD,RYS Total EW ha msted OPm Coats Ptd by Olhets S4,425,— x y I Total TIFRehnbunementsto Vaders ' , $13,859,280