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HomeMy WebLinkAbout08-220 Resolution No. 08-220 RESOLUTION AUTHORIZING EXECUTION OF A DEVELOPMENT AGREEMENT WITH GEKA BRUSH FOR PARTICIPATION IN THE JOBS INCENTIVES GRANT PROGRAM BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that Ed Schock, Mayor, and Diane Robertson, City Clerk,be and are hereby authorized and directed to execute a Development Agreement on behalf of the City of Elgin with GEKA Brush to participate in the Jobs Incentives Grant Program, a copy of which is attached hereto and made a part hereof by reference. s/Ed Schock Ed Schock, Mayor Presented: September 24, 2008 Adopted: September 24, 2008 Omnibus Vote: Yeas: 5 Nays: 0 Attest: s/Diane Robertson Diane Robertson, City Clerk DEVELOPMENT AGREEMENT This Development Agreement is made and entered into this (2c.9 day of ,, 2,pie,-e1,- 2008, by and between the CITY OF ELGIN, an Illinois municipal cor- poration, (hereinafter referred to as the"City") and GEKA Brush, Inc., a Delaware corpo- ration(hereinafter referred to as"Company"). WITNESSETH WHEREAS, Company intends to lease property located at 1670 Cambridge Drive, Elgin, Kane County, Illinois, and legally described on Exhibit A attached hereto (such property is hereinafter referred to as the"Subject Property"); and WHEREAS, Company intends to lease, occupy and utilize the Subject Property for the location of its premium brush and cosmetic container business (hereinafter re- ferred to as the"Subject Development"); and WHEREAS, Company, after consultations and negotiations with the City con- cerning certain development assistance has determined to proceed with the Subject De- velopment of the Subject Property; and WHEREAS, the Subject Development of the Subject Property is currently esti- mated to result in the creation of 145 full-time employees in the City of Elgin by Decem- ber 31, 2012; and WHEREAS, it is unlikely that the development of the Subject Property will occur in the absence of limited economic assistance; and WHEREAS, the City providing development assistance to Company for the Sub- ject Development will provide new and additional employment opportunities in the City of Elgin; and WHEREAS, in order to provide for the continued development of the City includ- ing the leasing of the Subject Property by the Company with its consulting service reloca- tion, the City has agreed to provide certain development assistance as hereinafter de- scribed; and WHEREAS, the City of Elgin is a home rule unit authorized to exercise or per- form any function relating to its government and affairs; and WHEREAS, economic development initiatives as provided herein and resulting in significant increases in the City of Elgin's employment opportunities within the City of Elgin are matters within the government and affairs of the City of Elgin. NOW, THEREFORE, for and in consideration of the mutual promises and under- takings contained herein, and other good and valuable consideration, the receipt and suf- ficiency of which are hereby acknowledged,the parties hereto agree as follows: 1. That the foregoing recitals are incorporated into this agreement in their entirety. 2. That Company shall lease 38,400 square feet of the Subject Property on or before December 31, 2008 for a minimum of five years. 3. A. That by December 31, 2008 the Company shall create and main- tain at the Subject Property not less than ten(10)new, full-time jobs, each with an annual salary in excess of$40,000, in the following type of position: Production Management, Machine Engineers, Tooling Engineers, Technicians, Quality Management and Support Staff.. B. That by December 31, 2009 the Company shall create and maintain at the Subject Property not less than fifteen (15) new, full-time jobs, each with an annual salary in ex- 3 cess of$40,000, in the following types of positions: Production Management, Machine Engineers, Tooling Engineers, Technicians, Quality Management and Support Staff. C. That by December 31, 2010 the Company shall create and maintain at the Subject Property not less than fifteen (15) new full-time jobs, each with an annual salary in ex- cess of$40,000, in the following types of positions: Production Management, Machine Engineers, Tooling Engineers, Technicians, Quality Management and Support Staff. 4. That in consideration of Company's intention to lease the Subject Property and providing for the creation of jobs as set forth herein, the City agrees to provide the economic development assistance to Company as set forth in this paragraph to be used by Company for costs associated with the relocation to the Subject Property. Such economic development assistance from the City to Company for the Subject Development shall be provided to Company as follows: In the event of and upon Company's occupancy of and the commencing operations of the Subject Development at the Subject Property on or be- fore December 31, 2008, as required in the preceding Paragraph 2 hereof, and in the event of Company creating and establishing not less than ten (10) new full-time jobs at the Subject Development on or before December 31, 2008, as required in the preceding Paragraph 3A hereof, the City shall pay to the Company the sum of$1,000 for each such full-time job created and established by the Company at the Subject Development on the Subject Property with the total monies to be paid by the City to the Company pursuant to this provision of the agreement not to exceed$10,000. In the event of Company creating and establishing not less than fifteen (15) new full-time jobs at the Subject Development on or before December 31, 2009, as required in the preceding Paragraph 3B hereof, the City shall pay to the Company the sum of$1,000 for each such full-time job created and 4 established by the Company at the Subject Development on the Subject Property with the total monies to be paid by the City to the Company pursuant to this provision of the agreement not to exceed $15,000. In the event of Company creating and establishing not less than fifteen (15)new full-time jobs at the Subject Development on or before Decem- ber 31, 2010, as required in the preceding Paragraph 3C hereof, the City shall pay to the Company the sum of$1,000 for each such full-time job created and established by the Company at the Subject Development on the Subject Property with the total monies to be paid by the City to the Company pursuant to this provision of the agreement not to ex- ceed $15,000. The City shall pay such monies not to exceed the total amount of$40,000 to the Company upon receipt of acceptable documentation verifying the creation and es- tablishment of such full-time jobs at the Subject Development and the issuance of a final certificate of occupancy for the Subject Development at the Subject Property, provided however, and notwithstanding anything to the contrary provided in this agreement, pay- ment by the City shall not be made to the Company prior to December 31,2008. It is fur- ther expressly understood and agreed by the parties hereto that the City's sole and only financial contribution for the Subject Development on the Subject Property shall be the financial assistance not to exceed$40,000 as described in this paragraph and that the City shall have no other responsibility for any other costs or expenses relating to the Subject Development of the Subject Property. 5. That Company shall continue with its operations at the Subject Develop- ment on the Subject Property and maintain the full-time jobs at the Subject Property ref- erenced in paragraph 3 hereof for a period of not less than five (5) years following Com- 5 pany completing, occupying and commencing operations of the Subject Development on the Subject Property. 6. That the parties understand and agree that the economic development as- sistance being provided by the City to Company as set forth herein is expressly contin- gent upon Company's relocation to the Subject Property as set forth herein. In the event Company fails to occupy and commence operations of the Subject Development on the Subject Property on or before December 31, 2008, as required in the preceding Paragraph 2 hereof and/or in the event Company fails to provide for the creation and establishment of jobs at the Subject Development as required in the preceding Paragraph 3 hereof, and/or in the event the Company fails to continue with operations at the Subject Devel- opment as required in the preceding Paragraph 5 hereof,the parties understand and agree that the City will not be providing the economic development assistance to Company for the Subject Property pursuant to this agreement or otherwise, and that the Company shall reimburse the City in full the funds distributed to the Company under the economic de- velopment grants provided for the preceding Paragraph 4 hereof. 7. That this agreement shall not be deemed or construed to create an em- ployment, joint venture, partnership, or other agency relationship between the parties hereto. 8. That all notices or other communications hereunder shall be made in writ- ing and shall be deemed given if personally delivered, send by overnight courier or mailed by registered or certified mail, return receipt requested, to the parties at the fol- lowing addresses, or at such other addresses for a party as shall be specified by a like no- 6 Lice and shall be deemed received on the date which said notice is hand delivered or the second business day following the date on which so mailed: TO THE CITY: TO THE COMPANY: City of Elgin GEKA Brush, Inc. 150 Dexter Court 1670 Cambridge Dr. Elgin, IL 60120-5555 Elgin, Illinois 60123 Attention: City Manager 9. That the failure by a party to enforce any provision of this agreement against the other party shall not be deemed a waiver of the right to do so thereafter. 10. That this agreement may be modified or amended only in writing signed by both parties hereto, or their permitted successors or assigns, as the case may be. 11. That this agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter as set forth herein, all prior agree- ments and understandings having been merged herein and extinguished hereby. 12. That this agreement is and shall be deemed and construed to be a joint and collective work product of the City and Company and, as such, this agreement shall not be construed against the other party, as the otherwise purported drafter of same, by any court of competent jurisdiction and in order to resolve any inconsistency, ambiguity, vagueness or conflict, if any, in the terms or provisions contained herein. 13. That the City and Company agree that, in the event of a default by the other party, the other party shall,prior to taking any such action as may be available to it, provide written notice to the defaulting party stating that they are giving the defaulting party thirty(30) days within which to cure such default. If the default shall not be cured within the thirty(30) day period aforesaid, then the party giving such notice shall be per- mitted to avail itself of remedies to which it may be entitled under this agreement. 7 14. That notwithstanding any other provision of this agreement it is expressly agreed and understood by the Company and the City that the development of the Subject Property by the Company shall be in accordance and compliance with all applicable fed- eral, state, city and other requirements of law. Company shall also at its expense procure all permits and licenses,pay all charges and fees, and give all other notices necessary and incident to the due and lawful prosecution of the work necessary to provide for the lease of the Subject Property as described in this agreement. 15. That this agreement is subject to and shall be governed by the laws of the State of Illinois. Venue for the resolution of any disputes or the enforcement of any rights pursuant to this agreement shall be in the Circuit Court of Kane County, Illinois. With the sole exception of an action to recover the monies the City has agreed to pay pur- suant to the preceding Paragraph 4 hereof, and notwithstanding anything else to the con- trary in this agreement, no action shall be commenced by the Company against the City for monetary damages. In the event any legal action is brought by the City for the en- forcement of any of the obligations of Company in this agreement and the City is the pre- vailing party in such action, the City shall also be entitled to recover from Company rea- sonable interest and reasonable attorney's fees. 16. That this agreement shall be binding on the parties hereto and their respec- tive successors and permitted assigns. This agreement and the obligations herein may not be assigned without the express written consent of each of the parties hereto which con- sent may be withheld at the sole discretion of either of the parties hereto. 17. That upon Company's compliance with the requirements of the preceding Paragraph 2 and 3 hereof, Company shall provide the City reasonable data and records of 8 Company which documents Company's compliance with the requirements of the preced- ing Paragraphs 2 and 3 hereof. 18. That time is of the essence of this agreement. IN WITNESS WHEREOF, the parties have entered into and executed this agree- ment on the date and year first written above. CITY OF ELGIN, a municipal GEKA BRUSH, INC. corporation By ■ Ed Schock, Mayor !`eSt Attest: Diane Robertson, City Cl k 9 C AL TA A CSM LAND TITLE S UR VE Y LOT 16 IN WINDSORS COMMERCE CENTER, BEING A SUBDIVISION OF PART OF SECTION 3 & 4, TOWNSHIP 41 NORTH, RANGE 8 EAST OF THE THIRD PRINCIPAL MERIDIAN IN THE CITY OF ELGIN, KANE COUNTY, ILLINOIS. G P . I . N . : 06- 04- 431 - 043 r• NOTES CORRESPONDING TO SCHEDULE B ,,C C. 0 Declaration of Restrictive Covenants per Document No. U 1545000 is not plotted or shown on survey. (Document not provided to surveyor.) ® A 25 foot building line as shown on the plat subdivision of Windsors Commerce Center per Document No. 93K66505 is plotted and shown on survey to the extent possible and practical. ® An easement for public utilities as shown on the plat subdivision of Windsors Commerce Center per Document No. Q. 93K66505 is plotted and shown on survey to the extent U possible and practical. e A Declaration of Protective Covenants and Conditions for Windsors Commence Center per Document No. 93K105236 is not plotted or shown on survey. (Document not provided 184 to surveyor.) Date August 7, 2008 NORTHWEST TO: Mayor and Members of the City Council - . FROM: Olufemi Folarin, City Manager Raymond H. Moller, Director of Economic Development SUBJECT: GEKA Brush Development Assistance PURPOSE The purpose of this memorandum is to provide the Mayor and members of the City Council with information to consider a request from GEKA Brush to participate in the Jobs Incentives Grant Program in order to locate their business to 1670 Cambridge Drive in Elgin. RECOMMENDATION It is recommended that the City Council enter into a development agreement with GEKA Brush to participate in the Jobs Incentives Grant Program in the amount of$40,000. BACKGROUND GEKA Brush (GEKA) was established in Germany in 1925 by George Karl. The company concentrated on the manufacture of brushes for a variety of different applications. Since the beginning of the 1980's, GEKA has specialized in the development and production of premium brushes and applicators for the comedic industry. At the same time, the company has greatly expanded upon its operations, diversifying into plastics processing, molding, assembly and decorating to produce complete packing and application systems to meet the requirements of prestige cosmetic houses around the world. GEKA now provides solutions for an increasing range of cosmetic products which includes mascara, eyeliner, nail lacquer, lip gloss, liquid eye shadow and correction fluid packs. GEKA is in the process of moving toward production at the proposed 38,400 square foot facility at 1670 Cambridge Drive in Elgin. It is anticipated that over the next three years, GEKA will commit to a $10,000,000 investment at the site. The company is in the process of employing the first six employees that will become the nucleus of the new production facility. The new employees will be spending several weeks of training at GEKA's headquarters in Germany. • GEKA Brush Development Assistance August 7, 2008 Page 2 GEKA forecasts that it will employ up to 40 employees earning $40,000 per year not including benefits within the next three years, 10 by the end of 2008, 25 by the end of 2009, and 40 by the end of 2010. The total number of full time jobs created is forecasted at 145, within the next three years. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None FINANCIAL IMPACT The cost of the proposed assistance for GEKA Brush is $40,000. The original 2008 budget for the Economic Development Program was $727,460. There is $329,301 remaining. Funding to enter into this agreement in the amount of $44,000 is budgeted in the Riverboat Lease Fund, account number 276-0000-791-80-27, "Economic Development Incentives," project number 17711Q. LEGAL IMPACT A Development Agreement will be required. ALTERNATIVES 1. The City Council may choose to enter into a Development Agreement with GEKA Brush to participate in the Jobs Incentives Grant Program in the amount of$40,000. 2. The City Council may choose not to enter into a Development Agreement with GEKA Brush. Respectfully submitted for Council consideration. Attachment