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HomeMy WebLinkAbout12-86Resolution No. 12 -86 RESOLUTION AUTHORIZING EXECUTION OF AN ECONOMIC INCENTIVE AGREEMENT WITH AMERICAN NTN BEARING MANUFACTURING CORPORATION (1700 Holmes Road) BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that David J. Kaptain, Mayor, and Kimberly A. Dewis, City Clerk, be and are hereby authorized and directed to execute an Economic Incentive Agreement with American NTN Bearing Manufacturing Corporation on behalf of the City of Elgin for economic development assistance in connection with the development of 1700 Holmes Road, a copy of which is attached hereto and made a part hereof by reference. s/ David J. Kaptain David J. Kaptain, Mayor Presented: April 25, 2012 Adopted: April 25, 2012 Omnibus Vote: Yeas: 5 Nays: 0 Attest: s/ Kimberly Dewis Kimberly Dewis, City Clerk ECONOMIC INCENTIVE AGREEMENT This Economic Incentive Agreement (the "Agreement ") is made and entered into as of this 25th day of April 2012, by and between the City of Elgin, an Illinois municipal corpo- ration (hereinafter referred to as the "City "), and American NTN Bearing Manufacturing Corporation, an Illinois corporation ( "NTN "). WHEREAS, NTN is a leading manufacturer of anti - friction bearings and constant velocity (CV) joints in the United States; and WHEREAS, NTN is Elgin -based and was founded in 1971 as a subsidiary of NTN USA Corporation; and WHEREAS, NTN USA Corporation is a subsidiary of NTN, a Japanese multi- national corporation that was founded in 1918; and WHEREAS, NTN is the first Japanese industrial manufacturer to be awarded the prestigious Deming Prize for statistical quality control; and WHEREAS, NTN operates eleven state -of- the -art plants in the United States and Canada, and over 80 percent of its products sold in the United States are locally pro- duced; and WHEREAS, NTN makes its products available through an extensive network of dis- tributors across the country to ensure prompt, just -in -time delivery at any time, anywhere in the country; and WHEREAS, NTN's core business has always involved bearing manufacturing and to this day, NTN is recognized as one of the most trusted brand names in the market; and WHEREAS, NTN is seeking to expand its Elgin operations with the construction of a 70,000- 100,000 square foot facility at 1700 Holmes Road that ultimately contemplates the creation of 200 -240 new jobs ( "Subject Project "); and WHEREAS, to induce NTN into proceeding with the Subject Project, the City will waive the building permit fees associated with the construction of the Subject Project, and; WHEREAS, NTN would not have been inclined to proceed with the Subject Project in Elgin without certain economic development assistance from the City; and WHEREAS, section 8 -11 -20 of the Illinois Municipal Code (65 ILCS 5/8- 11 -20) au- thorizes municipalities including the City to enter into economic incentive agreements relat- ing to the development or redevelopment of lands within the corporate limits of a munici- pality; and WHEREAS, the City is a home rule unit authorized to exercise any power and per- form any function relating to its government and affairs; WHEREAS, economic incentive agreements including the economic incentive agreement as provided for in this agreement pertain to the government and affairs of the City; and WHEREAS, the real property for the Subject Property has remained vacant for at least one (1) year; and WHEREAS, the Subject Project is expected to create job opportunities within the City; and WHEREAS, the Subject Project will serve to further the development of adjacent ar- eas; and WHEREAS, NTN meets high standards of credit worthiness and financial strength; MIMI WHEREAS, the Subject Project will strengthen the commercial and industrial sector of the City; and WHEREAS, the Subject Project will enhance the tax base of the City; and WHEREAS, this agreement is made in the best interests of the City. NOW, THEREFORE, for and in consideration of the mutual promises and undertak- ings contained herein, and other good and valuable consideration, the receipt and suffi- ciency of which are hereby acknowledged, the parties hereto agree as follows: 1. Recitals. The foregoing recitals are incorporated into this Agreement in their entirety. 2. Subject Project. NTN, at its cost, shall develop the Subject Project. The devel- opment of the Subject Project shall conform in all respects with all applicable legal re- quirements, including, but not limited to, city ordinances and codes, the terms of this Agreement, or as otherwise directed by the City as is necessary to comply with ordinanc- es, building codes or other requirements of law. Except as otherwise provided in this Agreement, all costs and expenses relating to the Subject Project shall be the responsibil- ity of and shall be paid for by NTN. E 3. Economic Incentives. In consideration for NTN's undertaking of the Subject Pro- ject, the City agrees to provide economic incentives to NTN to be used by NTN solely and only for the Subject Project. Such economic incentives shall consist of and be distributed to NTN as follows: "Fast- Track" Permitting Process and Waiver of Building Permit Fees for the Subject Project. The City agrees to conduct a "fast- track" permitting process for the Subject Project and agrees to waive and not require NTN to pay any building permit fees which would otherwise be due and payable to the City in connection with the es- tablishment of the Subject Project. The provisions of this section are intended and shall be construed to apply only to the building permit fees. Any and all impact fees or other fees which may be due and owing to the City and /or any other governmen- tal entity other than the City shall be paid by NTN. The City's reimbursement build- ing permit fees paid by NTN for the Subject Project shall be paid to NTN within thir- ty (30) days of NTN obtaining a certificate of occupancy from the City for the Sub- ject Project. 4. Miscellaneous. A. That this Agreement shall not be deemed or construed to create an employment, joint venture, partnership, or other agency relationship between the parties hereto. B. That all notices or other communications hereunder shall be made in writing and shall be deemed given if personally delivered or mailed by registered or certified mail, re- turn receipt requested, to the parties at the following addresses, or at such other ad- dressed for a party as shall be specified by like notice, and shall be deemed received on the date on which said hand delivered or the second business day following the date on which so mailed: TO THE CITY: City of Elgin 150 Dexter Court Elgin, IL 60120 -5555 Attention: Richard G. Kozal Assistant City Manager With a copy of any such notice to: City of Elgin 150 Dexter Court Elgin, IL 60120 -5555 Attention: William A. Cogley, Corporation Counsel TO NTN: Mr. Sham Rawal Vice President — Finance and Administration 1500 Holmes Road Elgin, IL 60123 -1206 3 C. That the failure by a parry to enforce any provision of this Agreement against the other parry shall not be deemed a waiver of the right to do so thereafter. D. 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. E. That this Agreement contains the entire agreement and understanding of the par- ties hereto with respect to the subject matter as set forth herein, all prior agreements and understandings having been merged herein and extinguished hereby. F. That this Agreement is and shall be deemed and construed to be a joint and col- lective work product of the City and NTN and, as such, this Agreement shall not be con- strued against the other party, as the otherwise purported drafter of same, by any court of competent jurisdiction in order to resolve any inconsistency, ambiguity, vagueness or con- flict, if any, in the terms or provisions contained herein. G. That this Agreement is subject to and shall be governed by the laws of the State of Illinois. H. That this Agreement shall be binding on the parties hereto and their respective 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 consent may be withheld at the sole discretion of either the parties hereto. The City may record a Memorandum of Agreement placing of record the terms and provisions of this Agreement. I. The City and NTN agree that, in the event of a default by the other parry, the other party shall, prior to taking any such actions 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) days peri- od aforesaid, then the party giving such notice shall be permitted to avail itself of remedies to which it may be entitled under this Agreement. J. If either party fails or refuses to carry out any of the material covenants or obliga- tions hereunder, the other party shall be entitled to pursue any and all available remedies as specified herein or otherwise available at law, equity or otherwise. Notwithstanding the foregoing or anything else to the contrary in this Agreement, with the sole exception of an action to recover the monies the City has agreed to pay pursuant to the preceding para- graph 3 of this Agreement, no action shall be commenced by NTN against the City for monetary damages. 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. In the event any action is brought by the City against NTN or its permitted assigns with re- spect to this Agreement and the City is the prevailing party in such action, the City shall also be entitled to recover from NTN reasonable interest and reasonable attorney's fees. 0 Notwithstanding anything to the contrary stated herein or otherwise, NTN'S AGGREGATE LIABILITY UNDER THIS AGREEMENT AND IN CONNECTION WITH ITS RECEIPT OF THE ECONOMIC INCENTIVE DESCRIBED HEREIN SHALL BE EXPRESSLY LIMITED TO THE AMOUNTS RECEIVED BY NTN FROM THE CITY IN CONNECTION WITH THIS AGREE- MENT AND SUCH ECONOMIC INCENTIVE. NTN shall have no other liability whatsoever, whether based on breach of contract, negligence, strict liability or any other claim and un- der no circumstances shall NTN be liable for lost profits or revenues, special incidental, indirect, consequential or exemplary damages incurred by the City or any third party. K. Time is of the essence of this Agreement. L. This Agreement shall be construed, and the rights and obligations of the City and NTN hereunder shall be determined in accordance with the laws of the State of Illinois without reference to its conflict of laws rules. M. No past, present or future elected or appointed official, officer, employee, attor- ney, agent or independent contractor of the City shall be charged personally or held con- tractually liable under any term or provision of this Agreement including, but not limited to, because of their negotiation, approval, execution or attempted execution of this Agree- ment. N. Notwithstanding any other provisions of this Agreement, it is expressly agreed and understood by NTN and the City that in connection with the performance of this Agreement, that NTN shall comply with all applicable federal, state, city and other require- ments of law including, but not limited to, any applicable requirements regarding prevailing wages, minimum wage, workplace safety and legal status of employees. Without limiting the foregoing, NTN hereby certifies, represents and warrants to the City that all of NTN's employees and /or agents who will be employed for the Subject Project shall be legal resi- dents of the United States. Without limiting the foregoing, and notwithstanding anything to the contrary in this Agreement, NTN and its contractors and subcontractors shall comply with the Prevailing Wage Act in all respects relating to the Subject Project. The City shall have the right to audit any records in the possession or control of NTN to determine NTN's compliance with the provisions of this section. In the event the City proceeds with such an audit, NTN shall make available to the City NTN's relevant records at no cost to the City. NTN shall also pay any and all costs associated with any such audit. If so desired by NTN, the audit shall, to the extent permitted by law, be subject to reasonable confidentiality re- strictions set forth in a confidentiality agreement agreed to by the parties. The provisions of this section shall survive any termination, completion and /or expiration of this Agreement. O. NTN, on behalf of itself and its respective successors, assigns and grantees hereby acknowledges the propriety, necessity and legality of all of the terms and provisions of this Agreement and does hereby further agree and does waive any and all rights to any and all legal or other challenges or defenses to any of the terms and provisions of this Agreement and hereby agrees and covenants on behalf of itself and its successors, as- 5 signs and grantees of the Subject Property, not to sue the City or maintain any legal action or other defenses against the City with respect to any challenges of the terms and provi- sions of this Agreement. The provisions of this section shall survive any termination, com- pletion and /or expiration of this Agreement. IN WITNESS WHEREOF, the City and NTN have executed this Agreement on the date and year first written above. CITY OF ELGIN, i Attest: �blt-tly Kimberly Dewis, C y Clerk AMERICAN NTN BEARING MANUFACTURING CORPORATION Its: V Y' �Y�G /jL 1Y\ REPORT TO MAYOR & MEMBERS OF O[TY COUNCIL AGENDA ITEM: MEETING DATE 0 March 7, 2012 ELGIN THE CITY IN THE SUBURBS ITEM: Economic Incentive Agreement with American NTN Bearing Manufacturing Corporation (No Outflow of Funds) OBJECTIVE: Entering into an economic incentive agreement to induce the development of a 70,000 to 100,000 square -foot commercial and industrial building that will create 200 -240 new jobs. RECOMMENDATION: Approve the economic incentive agreement with American NTN Bearing Manufacturing Corporation. BACKGROUND American NTN Bearing Manufacturing Corporation ( "NTN ") is a leading manufacturer of anti - friction bearings and constant velocity (CV) joints in the United States. NTN is Elgin -based and was founded in 1971 as a subsidiary of NTN USA Corporation. NTN USA Corporation is a subsidiary of NTN, a Japanese multi - national corporation that was founded in 1918. NTN is the first Japanese industrial manufacturer to be awarded the prestigious Deming Prize for statistical quality control. NTN's growth accelerated during the 1950s and 1960s as additional factories were built and NTN sales operations expanded to Europe. NTN operates eleven state -of- the -art plants in the United States and Canada, and over 80 percent of its products sold in the United States are locally produced. NTN makes its products available through an extensive network of distributors across the country to ensure prompt, just -in -time delivery at any time, anywhere in the country. NTN's core business has always involved bearing manufacturing and to this day, NTN is recognized as one of the most trusted brand names in the market. NTN manufactures and offers one of the broadest lines of super precision and precision grade ball and roller bearings available from a single source supplier. NTN's product lines are engineered to serve every industry where lower friction coefficients and higher energy efficiency are needed. With special focus on the automotive market, NTN is actively engaged in the engineering of automotive parts that increase driving efficiency and lower fuel consumption. In this way, NTN supports today's automotive market and helps meet the increasing demands for vehicles that are safer, more comfortable and environmentally friendly. NTN also holds the protection of the environment as one of its fundamental, long -term goals, with serious, constant effort to reduce energy consumption, recycle materials, and reduce the volume of exhaust and waste. OPERATIONAL ANALYSIS The city's economic incentive proposal provides NTN with a "fast- track" permitting process for the construction of NTN's proposed location in Elgin. The city will also commit to waiving building permit fees estimated in the amount of $100,000 for NTN's proposed construction of a 70,000- 100,000 square foot facility at 1700 Holmes Road. That facility ultimately contemplates the creation of 200 -240 new jobs. Permit fees required by local government agencies, such as the Kane County Stormwater Management permit and review fees, are excluded from this waiver, as are any city water impact fees. INTERESTED PERSONS CONTACTED The Elgin Area Chamber of Commerce has been consulted regarding the proposed economic incentive agreement with American NTN Bearing Manufacturing Corporation. FINANCIAL ANALYSIS This economic incentive proposal reflects the city council's policy directive to eliminate direct cash incentives for business expansion or retention initiatives outside the Central Area TIF District. The threshold principles that must be satisfied in every economic incentive award now considered by the city are whether the business provides additional tax revenue to the city (i.e., contributes to the General Fund); pays above - average wages (i.e., more than minimum wage) and; offers benefits to its employees, and; otherwise provides a significant enhancement to the city. The expansion of NTN's Elgin facility will provide additional property tax revenue to the General Fund and create 200 -240 jobs with above - average wages. Being a global manufacturer, NTN's expanded presence in Elgin enhances the city's reputation as a favorable location for multinational corporations from both Asia and Europe. NTN considered the consolidation of its facilities in Macomb, Illinois and is also working with the Illinois Department of Economic Opportunity for economic development incentives related to its proposed expansion in Elgin. The city's competitive economic development incentive offer is expected to positively affect NTN's decision to expand its operations in Elgin rather than at its other facilities in Illinois or the United States and Canada. It 2 BUDGET IMPACT FUND(S) ACCOUNT(S) PROJECT #(S) AMOUNT BUDGETED AMOUNT AVAILABLE NA NA NA NA NA LEGAL IMPACT None. ALTERNATIVES The city council may choose not to enter into an economic incentive agreement with American NTN Bearing Manufacturing Corporation. NEXT STEPS Execute an economic incentive agreement with American NTN Bearing Manufacturing Corporation. Originators: Richard G. Kozal, Assistant City Manager Final Review: Colleen Lavery, Chief Financial Officer William A. Cogley, Corporation Counsel /Chief Development Officer Sean R. Stegall, City Manager ATTACHMENTS None. i s e