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HomeMy WebLinkAbout21-85 Resolution No. 21-85 RESOLUTION AUTHORIZING EXECUTION OF AN ECONOMIC INCENTIVE AGREEMENT WITH BIGGERS MOTORS, INC., AN ILLINOIS CORPORATION DB/A BIGGERS MAZDA (2100 N. Randall 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 on behalf of the City of Elgin with Biggers Motors, Inc., an Illinois corporation d/b/a Biggers Mazda, for economic development assistance in connection with the development of 2100 N. Randall Road, a copy of which is attached hereto and made a part hereof by reference. s/David J. Kaptain David J. Kaptain, Mayor Presented: May 26, 2021 Adopted: May 26, 2021 Omnibus Vote: Yeas: 8 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 the 26th day of May, 2021, by and between the City of Elgin, an Illinois municipal corporation (here- inafter referred to as the "City"), and Biggers Motors, Inc., an Illinois corporation d/b/a Biggers Mazda (hereinafter referred to as the "Developer"). WHEREAS, the Developer has been operating a Mazda automobile franchise at 1320 East Chicago Street since 2002 and employs approximately 26 employees and generates approxi- mately$20 million in annual revenues from its 15,000 square-foot facility; and WHEREAS, Mazda Motor Corporation is requiringthe Developer to make capital improve- ments to its automobile dealership to comport with the current corporate image program; and WHEREAS, Mazda Motor Corporation's required capital improvements for its "Retail Evo- lution" corporate image program are estimated to cost the Developer approximately$10 million in capital improvements; and WHEREAS,the Developer is unable to continue owning and operating its automobile deal- ership in Elgin without certain economic development assistance from the City as hereinafter described; and WHEREAS, the Developer is the contract purchaser of the property commonly known as 15N440 North Randall Road, such property being currently located within the corporate bound- aries of the Village of Sleepy Hollow (the "Subject Property"); and WHEREAS, the Developer is agreeing to disconnect the Subject Property from the Village of Sleepy Hollow and annex the Subject Property into the City of Elgin and construct a new, multi- million dollar Mazda automobile dealership on the Subject Property (the "New Dealership") in return for a fifty percent share of the sales tax generated by the automobile dealership and re- ceived by the City for fifteen years along with "fast-track" permitting and a waiver of building and development permit fees for its New Dealership improvements; and WHEREAS, the Subject Property is currently located within the corporate boundaries of the Village of Sleepy Hollow and is not currently located with the City's corporate boundaries; and WHEREAS, the Developer will seek the disconnection of the Subject Property from the Village of Sleepy Hollow and annexation of the Subject Property into the City as provided by law and pursuant to the provision of Section 8 of the "Intergovernmental Agreement Between the Village of Sleepy Hollow and the City of Elgin Regarding Jurisdictional Boundaries," dated 31 Au- gust 2005 and recorder as Document No. 2005K110046 with the Kane County Recorder on 15 September 2005, that agreement being incorporated into this document by reference; and WHEREAS, Section 8-11-20 of the Illinois Municipal Code (65 ILCS 5/8-11-20) authorizes municipalities including the City to enter into economic incentive agreements relating to the development or redevelopment of lands within the corporate limits of a municipality and under such agreements the municipality may agree to share or rebate a portion of any Retailer's Occupation Taxes received by the municipality that were generated by the development or redevelopment over a finite period of time; and WHEREAS,the City is a home rule unit authorized to exercise any power and perform 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 New Dealership is expected to maintain and create job opportunities within the City; and WHEREAS, the New Dealership will serve to further the development of adjacent areas; and WHEREAS, without this Agreement the development of the New Dealership would not be possible; and WHEREAS, the Developer meets high standards of credit worthiness and financial strength; and WHEREAS, the New Dealership will stabilize and strengthen the commercial sector of the City; and WHEREAS, the New Dealership 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 undertakings con- tained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Recitals. The foregoing recitals are incorporated into this Agreement in their en- tirety. 2. Definitions. A. "Commencement Date" means the date on which all the construction work associated with City of Elgin building and development permits is- sued to the Developer for the New Dealership on the Subject Project has 2 been successfully completed as determined by the City of Elgin. The calen- dar date for the purposes of establishing the starting date for the rebate for a portion of the sales tax revenues as described in paragraph 6 of this Agreement shall be the first day of the month immediately following the date on which the City of Elgin makes its final approval of all building or development permits issued for work on the Subject Project. B. "New Dealership" means the new Mazda automobile franchise that will be constructed at 15N440 North Randall Road operating within an approxi- mately 25,000 square-foot facility employing approximately 26 employ- ees. C. "Developer" means Biggers Motors, Inc., an Illinois corporation d/b/a Big- gers Mazda. D. "Sales Tax Revenues" means for the fifteen (15) years following the Com- mencement Date, all revenues that the City receives from retail sales taxes from the State of Illinois pursuant to the Illinois Service Occupation Tax (35 ILCS 115/1 et seq.), the Illinois Retailer's Occupation Tax (35 ILCS 120/1 et seq.), and the Home Rule Municipal Retailer's Occupation Tax(65 ILCS 5/8- 11-1) derived solely from the sale of automobiles and/or motor vehicles, parts and other related retail items at the New Dealership. E. "Subject Project" means the new Mazda automobile dealership to be con- structed by the Developer at the Subject Property. 3. Development of the Subject Property. Developer shall develop the Subject Prop- erty with the New Dealership in conformance with the Planned Area Business (PAB) Zoning District Ordinance to be adopted by the City for the Subject Property and in conformance with the terms of this Agreement. 4. Fast-Track" Permitting Process and Waiver of Building Permit Fees for the Sub- ject Project. A. The City agrees to conduct a "fast-track" permitting process for the Devel- oper's improvements at the New Dealership and agrees to waive and not require Developer to pay any building or development permit fees which would otherwise be due and payable to the City in connection with the redevelopment of the Subject Property with the New Dealership. B. Any and all impact fees or other fees which may be due and owing to the City and/or any other governmental entity other than the City shall be paid by Developer. 3 5. Rebate of a Portion of Sales Tax Revenues. A. The City hereby agrees to rebate and pay to the Developer a portion of the Sales Tax Revenues received by the City in accordance with this Agree- ment, in order to reimburse the Developer for a portion of the costs in- curred by Developer in conjunction with the establishment of the New Dealership at the Subject Property. B. The City shall pay to the Developer a rebate of a portion of Sales Tax Rev- enues received by the City over the 15-year period following the Com- mencement Date. Such rebate of Sales Tax Revenues from the City to the Developer shall be paid in annual installments according to the following formula: The City shall rebate to Developer 50 percent of the Sales Tax Revenues received by the City that have been derived solely from the sale of auto- mobiles and/or motor vehicles, parts and other related retail items at the Dealership. C. Notwithstanding any other provision of this Agreement to the contrary, it is agreed and understood that the amount of the rebates of Sales Tax Rev- enues provided herein have been agreed to be based upon the current share of sales taxes received by the City in the amount of 2.50 percent, being 1 percent from the State of Illinois and 1.50 percent of the City's home rule tax. It is further agreed and understood that in the event the City's share of sales taxes is reduced from the current amount of 2.50 per- cent following the Commencement Date that the subsequent rebate of Sales Tax Revenues from the City to the Developer shall be reduced pro- portionately. For the purposes of clarification and example, in the event the City's share of sales taxes currently in the amount of 2.50 percent is reduced by 10 percent, then the amount of the subsequent rebate of a portion of Sales Tax Revenues from the City to the Developer will also be reduced by 10 percent. In the event of any conflict between the provisions of this paragraph and any other provisions of this Agreement, the provi- sions of this paragraph shall supersede and control. D. The City shall pay to the Developer the annual installments of the rebates of Sales Tax Revenues provided for herein within 180 days of each of the first 15 annual anniversaries of the Commencement Date and the City hav- ing determined the amount of sales and Sales Tax Revenues generated by the Dealership in the preceding year. In the event the State of Illinois fails to distribute documentation to the City providing for the sales and Sales Tax Revenues generated by the Dealership in sufficient time for the City to make the annual payments, then the City shall provide notice of such fact 4 to the Developer. In such event, the City shall make the required Sales Tax Revenue rebate payment to the Developer within 60 days after the date on which the City actually receives the supporting documentation for the applicable payment. E. Developer, as a condition of the City's obligation to pay to such Sales Tax Revenue rebate, shall be required to perform and observe the following covenants, collectively referred to as the "Dealership Reporting and Compliance Obligations": (i) Make written request that the Local Tax Division of the Illinois Department of Revenue ("LTD-IDOR"), or such successor to such agency, supply to the City on a semi-annual basis a letter certifying the amount of Sales Tax Revenues received by the City for the Dealership operations during the preceding twelve (12) month period, with such letter from the LTD-IDOR certifying the amount of sales tax revenue received by the City from the Dealership being hereinafter referred to as a "IDOR Sales Tax Revenue Certification Letter." (ii) Take all additional actions as may reasonably be necessary in order for the City to obtain the information to insure the accurate calculation of Sales Tax Revenues from the Dealership; (iii) Supply or cause to be supplied to the City appropriate authorizations for the Illinois Department of Revenue to provide such information, including copies of filings with the Illinois Department of Revenue made by the Developer and/or the Dealership. (iv) Upon written request of the City, provide a power of attorney in favor of the City in a form reasonably satisfactory to the LTD-IDOR, authorizing the City to request and retrieve gross revenue and other information necessary to allow the City to compute the Sales Tax Revenues. (v) Upon the request of the City, provide to the City copies of any form ST-1 or form ST-556, or any successor reporting forms, filed with the Illinois Department of Revenue by the Dealership. (vi) Allow the City the right, upon reasonable notice to the Developer and/or Dealership, to audit Dealership records in order to confirm Sales Tax Revenues being generated by the Dealership. 5 F. Developer and the City agree to cooperate and take all additional actions as may reasonably be necessary in order to obtain the necessary infor- mation and to insure the accurate collection of deposits of Sales Tax Rev- enues. The City agrees to take all actions necessary to provide for the sys- tematic receipt of sales tax information for the Dealership from the Illinois Department of Revenue. To assist the City, Developer will supply or cause to be supplied to the City appropriate authorizations forthe Illinois Depart- ment of Revenue to provide such information, including copies of filings with the Illinois Department of Revenue made by Dealership. Developer shall cause Dealership, upon written request of the City, to provide a Power of Attorney in a form reasonably satisfactory to the Illinois Depart- ment of Revenue, authorizing the City to request and receive gross reve- nue and other information necessary to allow the City to compute the amount of Sales Tax Revenues. G. Notwithstanding any other provision of this Agreement to the contrary, it is agreed and understood that the City's obligation under this Agreement to rebate a portion of Sales Tax Revenues shall not be a general debt of the City on or a charge against its general credit or taxing powers, and shall constitute a special limited obligation payable solely and only out of the Sales Tax Revenues received by the Dealership. The Developer shall have no right, and agrees that it shall not, compel any exercise of the taxing power of the City to pay the Sales Tax Revenues rebates, and no execution of any claim, demand, cause of action, or judgment shall be levied upon or collected from the general credit, general funds, or any other property of the City. The payments of a rebate of a portion of Sales Tax Revenues by the City to the Developer as provided for in this Agreement shall not con- stitute an indebtedness of the City or a loan or a liability of the City within the meaning of any constitutional or statutory provision. No interest shall be due, owing or paid by the City with respect to the rebate of any Sales Tax Revenues. Notwithstanding same, nothing herein shall bar the Devel- oper from enforcing the terms and obligations of this Agreement in the event of non-compliance by the City. 6. Additional Contingencies. Notwithstanding any other provision of this Agree- ment to the contrary, it shall also be conditions precedent to the obligations of the City under this Agreement that (1) the Developer shall complete all work as- sociated with the Subject Project at the New Dealership, receive final approval from the City for the Subject Project and commence operations of the New Deal- ership at the Subject Property on or before August 31, 2022,and (2)that the New Dealership continues with its operations at the New Dealership at the Subject Property for a period of not less than 15 years after the Commencement Date. In the event that any of the foregoing contingencies are not satisfied, then the City, upon written notice to the Developer, may elect to terminate this Agreement, and 6 thereupon this Agreement shall be null and void and of no further force and effect without any further obligations of the City hereto. 7. Miscellaneous. A. That this Agreement shall not be deemed or construed to create an em- ployment, joint venture, partnership, or other agency relationship be- tween the parties hereto. B. That all notices or other communications hereunder shall be made in writ- ing and shall be deemed given if personally delivered or mailed by regis- tered or certified mail, return receipt requested, to the parties at the fol- lowing addresses, or at such other addressed for a party as shall be speci- fied 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: TO THE DEVELOPER: City of Elgin Biggers Motors, Inc. 150 Dexter Court 1320 E. Chicago Street Elgin, IL 60120-5555 Elgin, IL 60120 Attn: Richard G. Kozal Attn: James Leichter With a copy of any such notice to: City of Elgin John J. Butera 150 Dexter Court John J. Butera, Ltd. Elgin, IL 60120-5555 Attorney at Law Attn: William A. Cogley, 1033 W. Golf Road Corporation Counsel Hoffman Estates, IL 60169 C. 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. 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 parties hereto with respect to the subject matter as set forth herein, 7 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 collective work product of the City and the Developer and, as such, this Agreement shall not be construed against the other party, as the oth- erwise purported drafter of same, by any court of competent jurisdiction in order to resolve any inconsistency, ambiguity, vagueness or conflict, 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 re- spective successors and permitted assigns. This Agreement and the obli- gations 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. I. The City and Developer agree that, in the event of a default by the other party,the other party shall, priorto taking any such actions as may be avail- able 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 period 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 obligations hereunder, the other party shall be entitled to pursue any and all available remedies as specified herein or otherwise available at law, eq- uity 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 Section 6 hereof, no action shall be commenced by the Developer against the City for monetary damages. Venue for the resolution of any disputes or the en- forcement 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 the Developer or its permitted assigns with respect to this Agree- ment and the City is the prevailing party in such action, the City shall also be entitled to recover from the Developer reasonable interest and reason- able attorney's fees. K. Time is of the essence of this Agreement. 8 L. This Agreement shall be construed, and the rights and obligations of the City and the Developer 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, attorney, agent or independent contractor of the City shall be charged per- sonally or held contractually liable under any term or provision of this Agreement including, but not limited to, because of their negotiation, ap- proval, execution or attempted execution of this Agreement. N. Notwithstanding any other provisions of this Agreement, it is expressly agreed and understood by the Developer and the City that in connection with the performance of this Agreement, including, but not limited to, providing for improvements to the Dealership, and that Developer shall comply with all applicable federal, state, city and other requirements of law. Developer shall also at its expense secure all permits and licenses, pay all charges and fees and give notices necessary and incident to the due and lawful prosecution of the work necessary to provide for the improvements to the Dealership. Without limiting the foregoing, and notwithstanding an- ything to the contrary in this Agreement, Developer and its contractors and subcontractors shall comply with the Prevailing Wage Act in all respects relating to the improvements to the Dealership. O. To the fullest extent permitted by law, Developer agrees to and shall in- demnify, defend and hold harmless, the City, its officials, officers, employ- ees, attorneys, agents, boards and commissions from and against any and all claims, suits,judgments, costs, attorney's fees, damages or other relief, including but not limited to workers' compensation claims, in any way re- sulting from or arising out of or alleged to be resulting from or arising out of negligent actions or omissions of the Developer in connection herewith, including negligence or omissions of employees, agents or subcontractors of the Developer arising out of the performance of this Agreement, or in any way resulting from or arising out of or alleged to be resulting from or arising out of any violation and/or breach of the terms or provisions of this Agreement by the Developer, including any violation and/or breach by em- ployees, agents or subcontractors of the Developer. In the event of any action against the City, its officials, officers, employees, agents, attorneys, boards or commissions covered by the foregoing duty to indemnify, de- fend and hold harmless such action shall be defended by legal counsel of the City's choosing the costs of which shall be paid by the Developer. The provisions of this paragraph shall survive any termination, completion and/or expiration of this Agreement. 9 P. To the fullest extent permitted by law, Developer agrees to and shall in- demnify, defend and hold harmless the City, its officials, officers, employ- ees, attorneys, agents, boards and commissions,from and against any and all third party claims, suits, judgments, costs, attorneys' fees, expert wit- ness fees and expenses, damages or other relief, in any resulting from or arising out of or alleged to be resulting from or arising out of the existence of this Agreement, the provisions of this Agreement, the performance of this Agreement, and/or any other actions to the parties hereto provided for or arising from this Agreement. In the event of any action against the City, its officials, officers, employees,agents, attorneys, boards or commis- sions, covered by the foregoing duty to indemnify, and defend and hold harmless, such action shall be defended by legal counsel of the City's choosing and the costs of which will be paid for by the Developer. Addi- tionally, in the event of such third-party action the Developer to the extent permitted by law shall upon the request of the City attempt to intervene in such proceedings and join the City in the defense thereof. Q. Developer agrees prior to the commencement of operations of the New Dealership at the Subject Property to and shall provide to the City written reports on the status of the Dealership. Such written reports shall be pro- vided to the City upon request of the City. Such written reports shall con- tain a status report on construction activities and such other information as may be requested by the City. R. Developer, on behalf of itself and its respective successors, assigns and grantees of the Dealership 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, assigns and grantees of the Dealership, 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 provisions of this Agreement. The pro- visions of this paragraph shall survive any termination, completion and/or expiration of this Agreement. S. This Agreement may be executed in counter-parts, each of which shall be an original and all of which shall constitute one in the same Agreement. This Agreement may be executed electronically and any signed copy of this Agreement transmitted by fax machine or e-mail shall be treated in all manners and respects as an original document. The signature of any party on a copy of this Agreement transmitted by fax machine or e-mail shall be considered for these purposes as an original signature and shall have the same legal effect as an original signature. 10 IN WITNESS WHEREOF, the City and Biggers Motors, Inc., an Illinois corporation d/b/a Biggers Mazda, have executed this Agreement on the date first set forth above. CITY OF ELGIN, BIGGERS MOTORS, INC. an Illinois municipal corporation d/b/a BIGGERS MAZDA, an Illinois corporation By: By: David Kapt In, M yor Attest: Kimberly Dewis, Clerk FALegal Dept\Agreement\Economic Incentive-Biggers Motors-Mazda-15N440 N Randall Rd-clean-5-18-21.docx 11