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HomeMy WebLinkAbout08043ORDINANCE NO. 8043 AN ORDINANCE APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION AND VESTAS TOWERS AMERICA, INC. RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME, AND TRANSFERRING AND APPROPRIATING $2 MILLION THEREFOR BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO. that: SECTION 1 The Agreement dated July 27, 2009 between Pueblo, a municipal corporation and Vestas Towers America, Inc. ( "Vestas Agreement') relating to a job creating capital improvement project, a copy of which is attached hereto, having been approved by the City Attorney as to form, is hereby approved. The President of the City Council is authorized to execute and deliver the Vestas 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 2 $2 million is transferred and appropriated from Capital Improvement Project No. PB06EQ, Pueblo Justice Center FF &E, 2009 Capital Budget to the General Fund, and $2 million is hereby budgeted and appropriated out of the General Fund for payment under the Vestas Agreement. SECTION 3 This Ordinance shall become effective upon final passage and approval. A77TSTDD SY: CITY CLERK INTRODUCED: July 27, 2009 BY: Randy Thurston COUNCIL PERSON APPR D' } �- PRESIDENTaf Cfty Council PASSED AND APPROVED: August 10, 2009 [ D E ED Background Paper for Proposed ORDINANCE AGENDA ITEM # M -4 DATE: July 27, 2009 DEPARTMENT: Law Department TITLE AN ORDINANCE APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION AND VESTAS TOWERS AMERICA, INC. RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME, AND TRANSFERRING AND APPROPRIATING $2 MILLION THEREFOR ISSUE Should City Council approve the agreement between the City and Vestas Towers America, Inc.? RECOMMENDATION Approve the agreement. BACKGROUND Vestas Towers America, Inc ( "Vestas ") has committed to employ 150 full -time low- and moderate - income persons to perform work at its Facility in the City of Pueblo ( "Employment Commitment "). "Low- and moderate - income person" means a person whose annual gross income from all sources is $31,550 or less at the time of hire. In order to obtain credit for employment of a low- and moderate - income person, the person must meet the income guidelines at the time of hire and be employed to perform work at the Facility for a period of not less than 8 continuous months after the date of hire. In consideration of Vestas employing low- and moderate - income persons, the City, in cooperation with the Colorado Office of Economic Development and International Trade and the Colorado Department of Local Affairs, will make $2 million available to Vestas for the actual cost of construction of the Facility infrastructure, including improvements related to water, wastewater, storm water, roadway, electric service, gas service and telecommunications. Vestas has until July 1, 2012 to comply with its Employment Commitment. If Vestas does not comply with its Employment Commitment, Vestas will repay City's $2 million on a pro -rata basis. The 150 full -time low- and moderate - income employee commitment is not in addition to, but is not included in Vestas' initial 450 full - time employee commitment. FINANCIAL IMPACT The City received a $2 million DOLA Energy Mineral Impact Assistance Program grant for acquisition of furniture, fixtures or equipment for the Pueblo Municipal Justice Center. The $2 million grant was budgeted and appropriated as an increase in Capital Improvement Project No. PB06EQ, Pueblo Justice Center FF &E, 2009 Capital Budget ( "Project Account'). $2 million will be appropriated and transferred from the Project Account to the General Fund, and $2 million will be appropriated out of the General Fund for payment to Vestas. C AGREEMENT THIS AGREEMENT entered into as of July 27, 2009, between Pueblo, a municipal corporation (the "City") and Vestas Towers America, Inc., a Delaware corporation authorized to do business in the State of Colorado (the "Company "). WHEREAS, in order to encourage employment for low- and moderate - income persons by the Company, City, in cooperation with, the Colorado Office of Economic Development and International Trade and the Colorado Department of Local Affairs, is willing to advance $2,000,000.00 to Company as provided herein, and WHEREAS, the Company is willing to employ low- and moderate - income persons to perform work in its wind tower manufacturing facility and business (the "Tower Operations ") within the City of Pueblo upon the terms and conditions hereinafter set forth. 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, City and Company agree as follows: 1. The following terms as used in this Agreement shall have the following meaning unless the context clearly indicates otherwise: "Facility" means the wind tower manufacturing facility constructed by, or on behalf of, the Company, within the jurisdictional boundaries of the City of Pueblo, Colorado and from which the Company will conduct its Tower Operations. "Facility Infrastructure" means the on -site and off -site infrastructure constructed by the Company or by a third party for the use and benefit of the Company within the jurisdictional boundaries of the City of Pueblo, Colorado where Company will conduct its Tower Operations, generally located in the St. Charles Industrial Park. For the purposes of this Agreement, Facility Infrastructure includes constructed improvements related to water, wastewater, storm water, roadway, electric service, gas service, and telecommunications. "Full -Time Employee" means a person who actually performs work at the Facility for not less than thirty-two (32) hours per week, whether employed by Company or by an outside entity acting as an agency to provide Full -Time Employees for Company. The term "Full Time Employee" shall include independent contractors with a domicile in Pueblo, Colorado, but only to the extent such independent contractors do not exceed ten percent (10 %) of the total number of Full -Time Employees. "Low- and moderate - income person" means a person whose annual gross income from all sources is $31,550.00 or less at the time of hire. "Low- Income Employee" means a Full -Time Employee who is at the time of initial hire a low - and moderate - income person and who continues to perform work at the Facility for a period of not less than eight (8) continuous months from the date of hire. 2. City will, on or before December 31, 2009, advance to or for the benefit of Company funds in the amount of $2,000,000.00 (the "City Funds "), subject to and contingent upon the following conditions and covenants which Company agrees to perform and comply with: (a) City Funds shall be used solely for the construction and related cost of the Facility Infrastructure, which shall be located within the jurisdictional boundaries of the City of Pueblo, Colorado; (b) Company shall file in the office of the City Clerk the following: (i) copies of 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 in the name of Company, and (iii) reasonable evidence that Company has entered into enforceable construction contracts for the construction of the Facility Infrastructure adequate for Company's Tower Operations. The date of the last to occur of the filings required under (i), (ii), and (iii) of this Paragraph 2(b) shall be referred to herein as "Closing." If Closing does not occur on or before December 31, 2009, or such later date as Company and City shall mutually agree, City, at its sole option, may terminate this Agreement and City and Company shall thereafter be released and discharged from all obligations hereunder. (c) As conditions precedent to disbursement or payment of City Funds, Company shall file (i) with the City Clerk the documents required by (b) above and (ii) file with City's Director of Finance a written request for payment certified to be true and correct by an officer of Company that the amounts included in the request for payment have not been included in any prior request for payment and are for the actual cost of construction of the Facility Infrastructure, identifying the work and materials for which payment is sought. All City Funds, if any, received by Company shall be used by Company for the sole and only purpose of paying for the construction and related cost of the Facility Infrastructure. (d) Company in awarding contracts for the construction of the Facility shall allow local contractors a reasonable opportunity to participate in the competitive bidding, or other selection procedure used by Company. For purposes hereof, the term "local" means having its principal place of business in the City or County of Pueblo, Colorado. 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 full -time employment for Low- and moderate - income persons. Therefore, Company represents, covenants, and agrees that, other than during the duration of a delay caused by a Force Majeure Event (as hereinafter defined) which prohibits or materially interferes with the contemplated Tower Operations; provided, that over the life of this Agreement, all such delays, when taken together in the aggregate, cannot exceed 12 months, Company shall on or before June 1, 2012 ( "Employment Commitment Date ") employ not less than one hundred fifty (150) Low- Income Employees who perform work at the Facility ( "Employment Commitment "). 4. Notwithstanding anything contained in this Agreement to the contrary, if Company shall for any reason default in its Employment Commitment set forth in Paragraph 3 above, Company shall repay to City a pro -rata share of the City Funds advanced by City under Paragraph 2 hereof based upon the number of Low - Income Employees employed by Company at the Facility (the "Repayment Obligation "), as follows: (a) Company shall pay to City an amount equal to the number one hundred fifty (150) minus the total number of Low- Income Employees employed by Company who perform work at the Facility on or before the Employment Commitment Date, multiplied by $13,333.00 ( "Company's Repayment Obligation "). For example, if by June 1, 2012, Company has employed a total of 140 Low - Income Employees, the amount payable to City on or before September 15, 2012 ( "Repayment Date ") would be (150 - 140) x $13,333.00 = $133,333.00. (b) Company's Repayment Obligation, if any, shall be paid to the City without notice, demand, deduction or set -off on or before the Repayment Date at the office of the Director of 2 Finance of City, 1 City Hall Place, Pueblo, Colorado, 81003, or such other person or location as the City may designate. (c) Company shall verify and document each Low- Income Employee's status as a Low- and moderate - income person at the time of hire and maintain such records and documentation for a period of one (1) year after the date the Company certifies its employment of one hundred fifty (150) Low - Income Employees as herein provided. Company shall on or before September 15, 2012, submit to City's Director of Finance a statement certified by an officer of the Company to be true and correct listing the name of each Low - Income Employee employed by Company at the Facility and the period of his or her employment. For purposes of verifying such employment, City shall have access, upon reasonable prior written notice to the Company and during regular working hours, to Company's records relating to Company's Low- Income Employees employed at the Facility to the extent necessary to verify such employment. Except with respect to the number of Low - Income Employees, City shall treat such information as confidential and shall not disclose (except pursuant to a subpoena or court order) such information to any party other than those City employees who have a need to know such information. (d) Except as otherwise provided in Paragraphs 7 and 13 hereof, City's damages for breach of Company's Employment Commitment set forth in Paragraph 3 above or the Repayment Obligation and the Company's total Repayment Obligation shall not exceed $2,000,000.00. The maximum $2,000,000.00 shall be referred to herein as the "Outstanding City Funds Obligation." INTENTIONALLY DELETED. 6. (a) Prior to instituting any proceeding to enforce Company's Repayment Obligation under Paragraph 4, City shall notify Company in writing of its intention to institute such proceedings. Company may request relief from its Repayment Obligation by delivering to City within thirty (30) days after date of City's notice, Company's written request for relief specifying the grounds upon which such relief is sought together with documents supporting said grounds. Within ninety (90) days after receipt of Company's request, City will schedule a meeting with the City Council at which Company may appear. City will notify Company of the time and place of the meeting at least ten (10) days before the meeting. Failure of Company to timely deliver its complete written request for relief or to appear at the scheduled meeting with the City Council shall entitle City to immediately institute proceedings to enforce Company's Repayment Obligation. (b) City Council may or may not, in its sole and absolute discretion, relieve Company, in whole or in part, from Company's Repayment Obligation. Any action taken by the City Council relating to a request for relief shall be final and binding on Company, and not subject to judicial review. Any such action by City Council is, and shall constitute, a legislative measure. Nothing contained in this Paragraph 6 shall grant or be construed to grant to Company any right or claim to relief from its Repayment Obligation or hearing with respect thereto. (c) No delay by the City in scheduling a meeting, or failure by City to exercise its right to enforce this Agreement, including Company's Repayment Obligation, and no partial or single exercise of that right, shall constitute a waiver of that right. 7. In the event of any litigation arising under this Agreement, the court shall award to, and the prevailing party shall recover its costs together with all internal and out -of- pocket expenses of any kind relating to the litigation including, but not limited to, reasonable attorney's fees. Venue for any such litigation shall be in the United States District Court for the District of Colorado. All such litigation shall be filed in such Federal District Court and each party submits to the jurisdiction of such Federal District Court. To the extent allowed by law, each party waives its right to a jury trial. 8. This Agreement expresses the entire understanding of the parties and supersedes and abrogates any and all prior dealings and commitments, whether oral or written, with respect to the employment of Low - Income Employees and may not be amended or modified except in writing signed by City and Company. 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. 9. 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. 10. Any notices hereunder shall be sufficiently given if given in writing personally or mailed by first class, registered, or certified mail, postage prepaid, addressed: (a) if to City, City Manager, City of Pueblo, 1 City Hall Place, Pueblo, Colorado, 81003, with copy to Thomas E. Jagger, City Attorney, 503 N. Main Street, Suite 127, Pueblo, Colorado, 81003, or (b) if to the Company, Erik Iversen, Vice President, Engdraget 20, 6800 Varde, Denmark, with copy to Mark A. Senn, Senn Visciano P.C., 1801 California Street, Suite 4300, Denver, Colorado 80202, or to such other person or address within the State of Colorado as either party shall specify in written notice given to the other party pursuant to the provisions of this Paragraph 10. Notice shall be effective (i) upon receipt, if delivered personally, or (ii) three (3) business days after deposit in the mails, if mailed. H. 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 assign this Agreement or any interest herein except to an affiliate without the express written consent of the City which shall not be unreasonably withheld, conditioned or delayed. Any assignment or attempted assignment of this Agreement by Company without such consent shall be null and void. No assignment of this Agreement or any interest herein by Company shall release or discharge Company from any of its obligations under this Agreement unless otherwise agreed by City at the time consent to assignment is given. 12. 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 and legally binding obligation of Company enforceable against Company in accordance with its terms. The persons signing this Agreement in the name of and on behalf of City represent and warrant that they and the City have the requisite power and authority to enter into, execute, and deliver this Agreement, and that this Agreement is a valid and legally binding obligation of the City enforceable against the City in accordance with its terms. 13. Company represents and warrants that, except as contemplated by City and Company with respect to the Low- and moderate - income persons to be hired in connection with the Tower Operations, 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 payment or receipt of which is contingent upon approval of this Agreement by City or City's advancement of City Funds to Company hereunder. For breach or violation of this warranty, City shall have the right to terminate this Agreement, or recover from Company the full amount of such commission, percentage, contingent fee or other remuneration, or to seek such other remedies legally available to City, which Ell remedies shall be cumulative. 14. In no event shall either party hereto or their respective officers, agents or employees be liable to the other party hereto for punitive, indirect, special or consequential damages, resulting from or arising out of or related to this Agreement or the performance or breach thereof by such party or the failure or delay of such party in the performance of any covenant or provision under this Agreement on its part to be performed. In consideration of each party entering into this Agreement, the other party hereby waives and discharges such party and its officers, agents and employees from all claims for any and all such damages. No breach, default, delay or failure of City under this Agreement shall be or be construed to be a waiver, discharge or release of Company's Repayment Obligation under Paragraph 4 hereof with respect to the Outstanding City Funds Obligation. Notwithstanding the foregoing, Company and /or City may institute an action in specific performance to enforce the performance of the other party's obligations under this Agreement. 15. 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. 16. Neither party shall be, or hold itself out as, agent of the other or as joint ventures under this Agreement. 17. 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. 18. The provisions of this Agreement are for the exclusive benefit of the parties hereto, and no third party shall be a beneficiary, or have any rights by virtue of, this Agreement. 19, 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. 20. (a) "Force Majeure Event" shall mean any cause beyond the reasonable control of, and not due to the fault or negligence of the Company or which by the exercise of due diligence by Company, it is unable to overcome, including, as applicable, acts of the non - affected party, drought, flood, landslide, earthquake, hurricane, tornado, storm or other unusually adverse weather condition, fire, lightning, epidemic, war, blockade, riot, civil disturbance, famine, accident, sabotage, explosions, theft, casualty, embargo, injunction, shortages of rolling stock, third party strikes, lockouts or other third party labor difficulties, restrictions or restraints imposed by a change in the law by the federal, state or local government or regulatory authority that would prohibit or materially interfere with the contemplated Tower Operations upon all or any material portion of the Facility, a release of a hazardous material by a party other than Company which prohibits or materially interferes with the contemplated Tower Operations, unforeseen subsurface conditions, orders or judgments of any governmental entity, the absence, suspension, termination, interruption, delay in issuance, denial, or failure of renewal of any permit, or any changes in law which prohibits or materially interferes with the contemplated Tower Operations. Force Majeure includes an act or failure of a third party to furnish materials or equipment to Company, if such failure arises as a result of a Force Majeure Event which prohibits or materially interferes with the contemplated Tower Operations. (b) If Company is affected by any event described in Paragraph 20(a) which prohibits or materially interferes with the contemplated Tower Operations, Company shall promptly upon learning of such event, give written notice to City stating the nature of the event, its anticipated duration, how and in what manner the event prohibits or materially interferes with the contemplated Tower Operations,. and any action taken by Company to amend or minimize its effect. (c) Upon the occurrence of a Force Majeure Event, the Employment Commitment Date, the Repayment Date, or both may be extended by the duration of delay caused by the Force Majeure Event. Over the life of this Agreement, all of the extensions, when taken together in the aggregate, cannot exceed 12 months. The period of time attributable to each such extension shall be tacked to the end of the Employment Commitment Date and Repayment Date and each party's performance, and each milestone or deadline, contemplated hereunder shall be adjusted accordingly. Without limiting the generality of the foregoing and by way of example only, if, as a result of a Force Majeure Event, Company has extended the Employment Commitment Date by 2 months, the Repayment Date will be delayed by 2 months. As another example, if, during construction of the Facility, Company experiences a Force Majeure Event, it may delay the Employment Commitment Date and the Repayment Date in accordance herewith. As used herein throughout, the terms "Repayment Date" and 'Employment Commitment Date" shall include any extensions made thereto. 21. The Agreement dated August 25, 2008 by and between Company and City (the "2008 Agreement ") is not intended to be and is not affected, modified or amended in any manner by this Agreement. For purposes of clarification, the one hundred fifty (150) Low - Income Employees referred to in this Agreement are not in addition to the four hundred fifty (450) Full -Time Employees referred to in the 2008 Agreement but are included within said 450 Full -Time Employees. Executed at Pueblo, Colorado, the day and year first above written. [SEAL] Attest: City-C rk , Pueblo, a Municipal Corporation By President of the City Council VESTAS TOWERS AMERICA, INC. a Delaware C_ o o B Erik Iversen, Vice President STATE OF COLORADO ss. COUNTY OF PUEBLO ) �u yNS� The foregoing instrument was acknowledged before me this 0 day of IWF, 2009 by Vera Ortegon as President of the City Council and Gina Dutcher as City Clerk of Pueblo, a municipal corporation. . WWitness my hand and official seal. My commission expires: ���/ .. . STATE OF COIG COUNTY OF 12 -x4 AWo $7. ) _ a. �Iz sl V&- I The foregoing instrument was acknowledged before me this a f day of-diy, 2009 by Erik Iversen as Vice President of Vestas Towers America, Inc, a Delaware corporation. Witness my hand and official seal. My commission expires: ,?03 [ S `rtY PL f ��.. '•. j E DWIGHT E. KELLOGG sd� ° • •� OF COQ G: \Airport \Vestas \7- 27- 09 \$2MM Agreement 7 -27 -09 Redraft.doc Notary Public 7