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HomeMy WebLinkAbout08-97 Resolution No. 08-97 RESOLUTION AUTHORIZING EXECUTION OF AN E-ELGIN INCENTIVE AGREEMENT WITH TONGUE N CHIC (14-16 Douglas Avenue) BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that Olufemi Folarin,City Manager,and Diane Robertson,City Clerk,be and are hereby authorized and directed to execute an e-Elgin Incentive Agreement on behalf of the City of Elgin with Tongue N Chic for the property located at 14-16 Douglas Avenue,a copy of which is attached hereto and made a part hereof by reference. s/Ed Schock Ed Schock, Mayor Presented: April 9, 2008 Adopted: April 9, 2008 Omnibus Vote: Yeas: 6 Nays: 0 Attest: s/Diane Robertson Diane Robertson, City Clerk 1 CITY OF ELGIN e-Elgin Incentive Agreement THIS AGREEMENT is made and entered into this 9th day of April , 2008 , by and between the City of Elgin, Illinois, a municipal corporation (hereinafter referred to as "City" ) , and Tongue N Chic, an Illinois Corporation, (hereinafter referred to as "Owner" ) . WHEREAS, City has established an e-elgin Incentive Program (hereinafter referred to as "Program" ) for application within a certain area of the corporate limits of the City designated by City as appropriate for such application (hereinafter referred to as "Target Area" ) , the provisions of the Program being attached to and incorporated into this Agreement by reference as "Exhibit "A" ; " : and WHEREAS, Program is administered and funded by the City for purposes of promoting opportunities to further both economic growth and community development by taking advantage of the shift in the national economy toward e-commerce, the Internet and advances in telecommunication areas; and WHEREAS, pursuant to the Program, City has developed a program to offer assistance to property and business owner (s) for expenses related to technology infrastructure improvements, moving expenses, and advertising costs, by which the City shall pay to Owner a maximum of $5, 000 for installation fees, and $2 , 500 for advertising expenses, pursuant to the criteria of the Program and as set forth herein; and WHEREAS, Owner owns at least 50% of a building, or is the owner of one or more business-related buildings located within the Target area, and owner desires to participate in Program pursuant to the terms and provisions of this Agreement . NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows : Section 1 . City shall pay to Owner the sum of $4403 . 00 for improvements approved pursuant to the provisions of this Agreement (hereinafter referred to as "Eligible Costs" ) for the Structure referred to at Section 16 herein (hereinafter referred to as "Structure" ) . All parties hereto agree that all payments from the City provided for herein shall be made to Tongue N Chic, who shall provide the City with a full release upon receipt . 1 I Section 2 . Eligible Costs shall include labor, material and equipment costs, and such other costs as may be reasonably necessary for the execution and completion of the improvements hereby provided for (hereinafter referred to as the "Work" ) and as designated in Owner' s application for participation in the Program dated March 4th 2008 and the application' s supporting documentation, said documents being attached to and incorporated into this Agreement as "Exhibit B" . Section 3 . No Work shall be undertaken or shall be considered to constitute the basis for an Eligible Cost until Owner' s proposal for such Work has been submitted to and approved in writing by the City' s Director of Economic Development and Business Services . All work shall be completed within 180 days from the date of this agreement, unless Owner obtains the written consent of the City' s Project Review Team. Section 4 . The City' s Project Review Team shall be permitted access to Structure to periodically review the progress of the Work. Such review shall not be in lieu of any other inspections which may otherwise by required by law or by City. Any and all portions of the work which do not, in the sole discretion of the City staff, conform to the Plans within a time solely determined by the City or other applicable terms of this Agreement, shall be made to conform to the plans for the Work and other applicable Terms of this agreement upon written notice of the existence of such non-conforming portions . Section 5 . Upon completion of the Work, and upon final inspection and written approval by the City staff and such other final inspections and approvals as may be required by law, Owner shall submit to City: (1) an executed, notarized itemized contractor statement reflecting the total cost of the Work and each portion thereof, including, but not limited to, the cost of labor (whether provided by any contractor or subcontractor) , materials and equipment; (2) copies of all bids, contracts and invoices submitted, executed or incurred pursuant to the Work; and (3) reasonable proof of payment of all costs incurred pursuant to the Work. Section 6 . City shall pay Owner in accordance with Section 1 herein within thirty (30) days of Owner' s compliance with the provisions of Section 5 herein. In no event shall the amount paid Owner exceed the amount specified in this Agreement nor shall the City pay the Owner an amount greater than the cost specified in an invoice submitted by a contractor for any approved work set forth in Exhibit B. Section 7 . In the event Owner fails to complete the Work in accordance with the terms of this Agreement, or otherwise 2 breaches the terms of this Agreement, City may terminate this Agreement upon written notice of breach and termination to Owner, and any and all financial or other obligations on the part of City shall cease and become null and void. Section 8 . Upon completion of the Work, and for the term of the Owner' s occupancy of the property thereafter, or for a period of three (3) years thereafter, whichever is less, Owner shall properly maintain the Work in its finished form, without alteration or change thereto, and shall not enter into any Agreement, or take any other steps to alter, change or remove such Work without prior written approval from the City' s Project Review Team in its sole discretion. Section 9 . Nothing herein is intended to limit, restrict or prohibit the Owner from undertaking any other work in or about the subject property which is unrelated to the improvement provided for in this Agreement . Section 10 . This Agreement shall be binding upon City, and upon Owner, Owner' s successors and assigns for a period of five (5) years from and after the date of completion and approval of the work. Owner shall provide subsequent owner (s) of Structure with a copy of this Agreement . This Agreement shall run with the land underlying Structure . Section 11 . If Owner does not own the underlying property for which work is being done, Owner warrants and represents to City that Owner has a lease at the location for which the work is proposed for a term of at least three (3) years . Owner further warrants and represents that he has received authorization from all owners of the property for which work is to be done to accept funds under this program and to undertake the work. A copy of said written authorization is attached hereto as Exhibit B. Section 12 . To the fullest extent permitted by law, the Owner agrees to indemnify, defend and hold harmless the City, its officers, employees, boards and commissions from and against any and all claims, suits, judgments, costs, attorney' s fees, damages or other relief arising out of or resulting from or through or alleged to arise out of any reckless or negligent acts or omissions of Owner' s officers, employees or agents as a result of or in the performance of this Agreement . In the event of any action against the City, its officers, employees, agents, boards or commissions covered by the foregoing duty to indemnify, defend and hold harmless, such action shall be defended by legal counsel of the City' s choosing. The provisions of this section shall survive any combination and/or expiration of this agreement . Section 13 . This Agreement shall not be construed so as to create a joint venture, partnership, employment or other agency relationship between the parties hereto . Section 14 . This Agreement shall be subject to and governed by the laws of the State of Illinois . The parties hereto hereby agree that venue for any and all actions which may be brought by each and either of them to enforce the provisions of this Agreement shall be in the Circuit Court of Kane County, Illinois . Section 15 . The terms of this Agreement shall be severable . In the event that any of the terms or provisions of this Agreement are deemed to be void or otherwise unenforceable for any reason, the remainder of this Agreement shall remain in full force and effect . Section 16 . Owner' s Name : Tongue N Chic Address : 14-16 Douglas Avenue, City: Elgin State : IL Zip Code : 60120 Telephone Number: (708) 369-1016 Property Location of Structure : 14-16 Douglas Avenue, Elgin, Illinois . Ownership Interest : Owner Contact Person: Brandon Becker Section 17 . The City of Elgin e-Elgin Incentive Guidelines dated March 27, 2000, as such guidelines may be amended from time to time by the City, are hereby incorporated into this Agreement as if fully set forth herein. Section 18 . This Agreement is the only agreement between the parties hereto. There are no other agreements, either oral or implied between the parties hereto . Regarding the subject matter here of . Section 19 . Owner' s sole remedy for breach of this agreement shall be compensatory damages . Owner shall not be entitled to consequential, incidental or indirect damages, or attorney' s fees resulting from any alleged breach of this agreement . " In the event of any conflict between the terms of such e- Elgin Incentive Guidelines and the terms of this Agreement, the terms of the e-Elgin Incentive Guidelines shall control . IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first appearing above . O /'E: CITY OF ELG / I By: /141�. / WI' Brandon Becker O1 / emi Folarin,/ City M ATTEST: ,` \ .3,.,.„ � Dianne Robertson, City Clerk t March 21, 2008 NoI2TxWEST ARIL To: Mayor and Members of the City Council From: Olufemi Folarin, City Manager '; Lindsay Stanton, Economic Development Coordinator Jennifer Fritz-Williams, Historic Preservation Specialist Subject: Application for Facade Improvement, Center City Business Loan Program and e- Elgin Incentive from Tongue N Chic 14-16 Douglas Ave. PURPOSE The purpose of this memorandum is to provide the Mayor and members of the City Council with the information regarding participation by Tongue N Chic cosmetic dentistry in the Facade Improvement Program, e-Elgin Incentive Program and subsidized interest building loan program. RECOMMENDATION It is recommended that the City Council approve the applications of Tongue N Chic to participate in the Special Business Loan Program in the amount of $44,733, e-Elgin Incentive Program in the amount of $4,403, and the Facade Improvement Program in the amount of $21,920. BACKGROUND In April 2000, the City Council approved the e-Elgin Incentive Program Assistance that may be provided in the following areas: 1. Capital costs 2. Line service fees 3. Advertising Downtown commercial property owners and downtown businesses may qualify for up to 50% of capital cost, not to exceed a total expenditure of $60,000 ($30,000 maximum by the City), in funding for technology infrastructure improvements including; installation of or upgrades to new Category 5 or better wiring; backup power generators for technology equipment; high speed Internet access capabilities, including necessary hardware; or other technology infrastructure improvements approved by Technology Action Team and City Council. Application for Facade Improvement by Tongue N Chic ! March 21, 2008 Page 2 Eligible expenses do not include computer equipment, but could include routers for Digital Subscriber Service (DSL) service. High-tech businesses relocating to downtown Elgin and downtown-based technology companies that are growing and planning to remain in downtown Elgin are eligible for a 100% rebate of the service and installation fees associated with relocation costs for DSL and T-1 service, with a not-to-exceed limit of$5,000. Tongue N Chic will be a new business located at 14-16 Douglas Ave. Brandon Becker obtained the following quotes for DSL and T-1 Service: Sullivan-Schein Dental Talkswitch Tweeter Direct $35,833.00 $3,275.00 $3,550.86 Based on the DSL and T-1 installation, Tongue N Chic is eligible for a $4,403 reimbursement, $1,128 of Fiber optic systems from the $35,833 Sullivan-Schein Dental bid and $3,275 for T-1 phone system. The $35,833 includes advanced dental equipment not included with in the other two bids. In order to participate in the Center City Business Loan Program, the applicant must seek financing through and receive approval from a lending institution and file an application for interest subsidy with the City. The maximum loan amount is $200,000 per building project, based on a 10 year amortization, at or above prime, and used for the acquisition or lease of the operating facility, equipment or fixtures, space build out, or inventory. Interest payments by the City shall be at the following rates payable over a period of five years: 1st year—90% of first year interest costs 2nd year—80% of second year interest costs 3rd year—70% of third year interest costs 4th year—60% of fourth year interest costs 5th year—50% of fifth year interest costs Tongue N Chic has secured a $346,000 loan and based on $200,000 at 7.35% interest with a 10 year maturity, the interest subsidy would be the following: Year Annual Interest Payment City% City Payment 1 $14,700 90% $13,230 2 $13,654 80% $10,923 3 $12,530 70% $8,771 4 $11,324 60% $6,794 5 $10,030 50% $5,015 The interest subsidy for the five year period is $44,733. The primary portion of the building is comprised of the facade facing Douglas Avenue. It contains a unique original design on the second story but currently has an altered first floor Application for Facade Improvement by Tongue N Chic March 21, 2008 Page 3 storefront. The owner, Mr. Brandon Becker, is requesting funding from the Facade Improvement Program to complete exterior improvements on the building's storefront. The property owner proposes to replace storefront windows, install awnings and new signage, repair masonry and paint the storefront. No work is currently proposed for the second story on the facade. The total eligible cost of the project amounts to $62,628. At 35%, the City's participation on the project would be $21,920. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED Downtown Neighborhood Association FINANCIAL IMPACT The total incentive request for Tongue and Chic totals $71,056. A portion of the incentive would be charged to the Riverboat Lease Fund, account number 276-0000791.80-27, "Economic Development Incentives," project number 17711G where $49,137 is budgeted and available. Following the approval of this project $998,934 will be available for economic development incentives. There are sufficient funds in the 2008 Downtown Business Facade Improvement Program, Riverboat Fund account number 275-0000-791.78-99, Downtown Business Façade Project No. 07900R. The Downtown Business Facade Improvement Program has a FY2008 budget of $75,000. The grant amount requested to be allocated to the facade project at 14-16 Douglas Avenue is $21,920. LEGAL IMPACT If funding is approved, agreements will be required. ALTERNATIVES 1. The Council may choose to approve all three applications by Tongue N Chic totaling $71,056. 2. The Council may choose to approve one or more of the incentive programs. 3. The Council may choose to reject all requested assistance applications. Respectfully submitted for Council consideration. LKS, JFW Attachment(s) • Application for Facade Improvement by Tongue N Chic March 21, 2008 Page 4 Tongue-N-Chic 14-16 Douglas Ave Facade Improvement Program - eligible costs Scope of work Contractor 1 Cost Contractor 2 Cost Estimate Estimate Awning Sure Light $3,949.00 Thatcher Oaks $3,610.00 Sign New sign Sure Light $2,960.00 Signs and Stripes $1,975.00 Sign Exterior Lighting Salemi $3,611.00 RWB Design $3,300.00 Storefront demo, D. Stratos $57,500.00 JP Salemi $53,743.00 rebuild and painting Total $68,020.00 low id b $62,628.00 Total eligible costs: $62,628.00 (based on lower bids) City's participation: 35% Total Façade Improvement Grant allocation: $21,919.80