03-16 Resolution No. 03-16
RESOLUTION
AUTHORIZING EXECUTION OF AN E-ELGIN INCENTIVE AGREEMENT
WITH EFOODUSA, INC.
(245 Fulton Street)
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,
ILLINOIS, that Olufemi Folarin, Interim City Manager, and Dolonna
Mecum, City Clerk, be and are hereby authorized and directed to
execute an e-Elgin Incentive Agreement on behalf of the City of
Elgin with eFoodUSA, Inc . for the property located at 245 Fulton
Street, a copy of which is attached hereto and made a part hereof
by reference .
s/ Ed Schock
Ed Schock, Mayor
Presented: January 22 , 2003
Adopted: January 22 , 2003
Vote : Yeas : 7 Nays : 0
Attest :
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
CITY OF ELGIN
e-Elgin Incentive Agreement
THIS AGREEMENT is made and entered into this ,,?glt day of , 2003,
by and between the City of Elgin, Illinois, a municipal corporation (hereinafter eferred to as
"City"), and eFoodUSA, Inc., an Illinois Corporation, (hereinafter referred to as "Tenant").
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"): 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/tenant for expenses related to technology infrastructure
improvements, moving expenses, advertising costs and infrastructure capital costs, 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 the building, or is the tenant of a business
related building(s) located within the project 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 Tenant a sum not to exceed $8,605.05 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
eFoodUSA, Inc., who shall provide the City with a full release upon receipt.
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"), as designated from
the proposal and price quotation approved by the City on December 18, 2002, pursuant to the
provisions of Section 3 herein, as identified in Exhibit A, attached hereto and made part hereof
this Agreement.
1
Section 3. No Work shall be undertaken or shall be considered to constitute the basis for
an Eligible Cost until the Proposal for such Work has been submitted to and approved in writing
by the Project Review Team, consisting of the City's Director of Economic Development and
Business Services and the Technology Action Team, consisting of the following Member
Organizations: Ameritech; Boys & Girls Club; Citizen Volunteers; City of Elgin; Community
Crisis Center; Downtown Neighborhood Association; Elgin Area Chamber of Commerce; Elgin
Community College; Elgin Recreation Center; Gail Borden Public Library; Judson College;
Local businesses; NICOR; School District U-46; Sherman Hospital; State of Illinois; State
Senator Rauschenberger's office; and United Way. Such proposals shall include, but not be
limited to, a date certain by which the Work shall be completed. All work shall be completed
within 180 days from the date of the Agreement, unless Tenant obtains the written consent of the
Project Review Team.
Section 4. The 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 Project Review Team, 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 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 Project Review Team and such other final inspections and approvals as may be required
by law, Tenant 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 Tenant in accordance with Section 1 herein within thirty (30)
days of tenant's compliance with the provisions of Section 5 herein. In no event shall the amount
paid Tenant exceed the amount specified in this Agreement nor shall the City pay the Tenant an
amount greater than the cost specified in an invoice submitted by a contractor for any approved
work set forth in Exhibit A.
Section 7. In the event Tenant fails to complete the Work in accordance with the terms of
this Agreement, or otherwise breaches the terms of this Agreement, City may terminate this
Agreement upon written notice of breach and termination to Tenant, 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 Tenant's occupancy of
the property thereafter, or for a period of three (3) years thereafter, whichever is less, Tenant 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 this Project Review Team in its sole discretion.
2
Section 9. Nothing herein is intended to limit, restrict or prohibit the Tenant 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 Tenant, Tenant's
successors and assigns for a period of five (5) years from and after the date of completion and
approval of the work. Tenant shall provide subsequent Tenant(s) of Structure with a copy of this
Agreement. This Agreement shall run with the land underlying Structure.
Section 11. If Tenant does not own the underlying property for which work is being
done, Tenant warrants and represents to City that Tenant has a lease at the location for which the
work is proposed for a term of at least three(3) years. Tenant 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 Tenant 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 Tenant'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.
Section 13. This Agreement is not intended and shall not be construed to create a
partnership,joint venture or employment 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. Tenant's Name: eFoodUSA, Inc.
Address: 245 Fulton St.
City: Elgin State: IL Zip Code: 60120
Telephone Number: (847) 390-8064
Property Location of Structure: 245 Fulton St. Elgin, Illinois.
Ownership Interest: Tenant
Contact Person: James Whetstone
3
Owner's Name: Shales McNutt Construction
Address: 749 N. State Street
City: Elgin State: IL Zip: 60123
Contact names: Mike Shales and Jack Shales.
Telephone Number: 847-622-1214.
Property Location: 245 Fulton St. Elgin, Illinois
Ownership Interest: Owner
Owner's Name:
Address:
City: State: Zip Code:
Telephone Number:
Property Location:
Ownership Interest:
Owner's Name:
Address:
City: State: Zip Code:
Telephone Number:
Property Location:
Ownership Interest:
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.
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.
TENANT CITY OF ELGIN
By _AP" ,/,41,f■
Kenneth M. Nagel, Preside Olufemi olan :- ity Manager
eFoodsUSA, Inc.
ATTEST: /1241A ,----42 (-ec--44---
Dolonna Mecum, City Clerk
4
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December 13 , 2002 1
N r�; 1
TO: Mayor and Members of the City Council ECONOMIC GROWTH
FROM: Olufemi Folarin, Interim City Manager
SUBJECT: e-elgin Incentive and Jobs Grant Program Application
From eFoodUSA, Inc . 245 Fulton Street, Elgin, Illinois
PURPOSE
The purpose of this memorandum is to provide the Mayor and members
of the City Council with information regarding an application from
eFoodUSA, Inc . to participate in the e-elgin Incentive Program and
the Jobs Grant Incentive Program.
BACKGROUND
In April of 2000 , the Mayor and City Council approved the e-elgin
'` Incentive Program. Assistance was provided for within the
following areas :
1 . Capital Costs
2 . Line Service Fees
3 . Advertising
Downtown commercial property owners and downtown business owners
can qualify for up to 50% of capital costs not to exceed a total
expenditure of $60, 000 ($30, 000 maximum City contribution) in
funding for technology infrastructure improvements that include
installation of new Category 5 or better wiring, upgrade to
Category 5 or better wiring, backup power generators for
technology equipment, or high-speed Internet access capabilities,
including necessary hardware or other technology infrastructure
improvements approved by the Technology Action Team and City
Council . Eligible expenses do not include computer equipment, but
could include routers for Digital Subscriber Service (DSL) .
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 .
Downtown commercial property owners and downtown businesses are
eligible for up to $2, 500 annually in co-op advertising funds when
rft e-elgin Incentive Grant, eFoodUSA, Inc .
December 13 , 2002
Page 2
they promote e-elgin in their ads . This grant will pay for 25% of
advertising placement costs, up to $2 , 500 annually. To qualify,
ads must bear the e-elgin logo and tag line as provided by the
Technology Action Team and ads must appear in newspapers and
magazines of general distribution. Participation in the
advertising assistance shall be reviewed on an annual basis by the
program administrator.
Also, the City has on a number of occasions provided $1, 000 job
grants to new businesses to our community when new jobs paying in
excess of $40, 000 annually were being added to the labor market .
eFoodUSA, Inc . , a Chicago area based corporation located at 200
East Howard Street in Des Plaines, is an internet-based
application service provider for the food service distribution
industry which plans to relocate its business-to-business
operation to 245 Fulton Street in Elgin in the next few weeks .
eFoodUSA, Inc . provides an internet ordering, inventory and
reporting system; features of its services provide the food
service distribution chain with efficient business systems that
are not available through existing processes . eFoodUSA, Inc . plans
to relocate a total of seven positions to Elgin at this time, five
of which have salaries greater than $40, 000, and include sales
representatives, web developers and technicians . eFoodUSA, Inc .
plans to hire additional employees in the future, as company
management expects the business to grow.
The application from eFoodUSA, Inc . includes initial cost
estimates for the following costs :
Labor and materials to provide
and install Category 5 wiring
and T-1 line for internet access:
Vertical Technologies Inc . $21 , 946 . 95
CDW $15, 612 . 10
Labor and material to
install computer jacks
in the conference room:
Continental Elec . Const . Co. 1, 700 . 00
Kadlec Electric, Inc . 1, 598 . 00
Total cost estimate $17, 210 . 10 $23, 646 . 95
•
eft e-elgin Incentive Grant, eFoodUSA, Inc.
December 13 , 2002
Page 3
This capital improvement is eligible for funding at 50% of total
cost of the lower estimate of $17, 210 . 10 under the e-elgin
program, which would result in a grant in the amount of $8 , 605 . 05
if awarded. The award of a grant to eFoodUSA, Inc . would be the
seventh grant funded through the e-elgin Incentive Program.
eFoodUSA, Inc . also requested a $5, 000 job grant based upon the
addition office jobs assoiaed with their move to the Center City.
The following positions will be added:
E-Commerce Coordinator $44 , 000
Web Developer $46, 000
Senior Web Developer $50, 000
Network Engineer $70, 000
V. P. of Sales and Marketing $75, 500
Based on the limited amount of funding available for economic
development assistance in 2003 , staff is not recommending award of
these job grant funds .
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
Technology Action Team
FINANCIAL IMPACT
The total incentive amount would be $8 , 605 . 05 , which consists of
50% of the total of the two lower cost estimates of $17, 210 . 10 .
Expenses related to the e-elgin Incentive Program would be funded
through account number 276-0000-791 . 80-27, Economic Development
Incentives . Upon passage and approval of the 2003 City of Elgin
budget, sufficient funds will be budgeted ($110, 000) in this
account to cover the cost of this grant if it is awarded.
LEGAL IMPACT
An agreement will be required.
ALTERNATIVES
1. Fund the proposed e-elgin Incentive and Jobs Program grant
applications submitted by eFoodUSA, Inc .
rik 2. Do not fund the proposed e-elgin Incentive and Jobs Program
grant applications submitted by eFoodUSA, Inc .
few e-elgin Incentive Grant, eFoodUSA, Inc .
December 13 , 2002
Page 4
3. Fund the proposed Jobs Program grant application only.
4. Fund the proposed e-elgin Incentive Program grant application
only.
RECOMMENDATION
It is recommended that the Mayor and members of the City Council
approve the application by eFoodUSA, Inc . for participation in the
e-elgin Incentive Program in the amount of $8, 605 . 05 .
Respectfully submitted,
Olufemi Folarin
Interim City Manager
OF:RHM
Attachments
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•
• EXHIBIT A Page 1
• Rb M, ►LOES QUOTATION
ii;;;JP QUOTF..NO. ACCOUNT NO. DATE
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wwcdw.com IF98457 5876720 11/05/2002
8010-800-4239
EFOODUSA INC EFOODUSA INC
B 200 HOWARD AVE STE 232 H 200 HOWARD AVE STE 232
L I
L ACCTS PAYABLE P MARK WEINSTEIN
T DES PLAINES, IL 60018-5908 T DES PLAINES, IL 60018-5908
O O Contact: MARK WEINSTEIN 847-390-8064
Customer Phone# 8473908064 Customer P.O.# 821105 QUOTE
ACCOUNT MANAGER SHIPPING METHOD TERMS EXEMPTION CERTIFICATE
DAN LYMAN 866-301-5739 NET 30 DAYS-2K
OTY ITEM NUMBER DESCRIPTION UNIT PRICE EXTENDED PRICE
1 151005 CISCO E-SMARTNET 24X7X4 CATS 635.00 635.00
Mfg#: CSV-CON-SNTP-PKG5
1 415782 NETGEAR 8PT 10/100 SWITCH 49.00 49.00
Mfg#: NTG-FS608NA
2 435513 FATPIPE BLAZE MULTIPATH ROUTER 4998.00 9996.00
Mfg#: FAT-1811-MPRC
1 093072 APC SMART UPS 2200 RM NET 120V 20AMP 856.00 856.00
Mfg#: AME-SU2200RM3U
1 349447 APC NETSHELTER VX BASE ENCL 42UX ELK 1145.00 1145.00
Mfg#: AME-AR2100BLK
1 223124 HP PROCURVE 100/1000 BT MOD CAT 5 365.00 365.00
Mfg#: HPN-J4115B
2 287841 NETGEAR G3508T 8-PORT 1000BT SWITCH 529.00 1058.00
Mfg#: NTG-GS508TNA
1 389147 CISCO PIX 515/515E 168BIT 3DES VPN 375.00 375.00
Mfg#: CIS-PIX-515-VPN-3DES=
1 353369 APC SMARTSLOT NETWORK MANAGE CARD 219.00 219.00
Mfg#: AME-AP9617
SUBTOTAL
TOTAL 0 15,612.10
14,698.00 914.10 .00
BUY WITH CONFIDENCE. CDW IS A FORTUNE 500 COMPANY. Please remit payment to:
VERNON HILLS SHOWROOM CHICAGO SHOWROOM COW Computer Centers, Inc.
PO Box 75723
200 N.Milwaukee Avenue,Vernon Hills,IL 60061 315 W.Grand Avenue,Chicago,IL 60610 Chicago,IL 60675-5723
Phone:847-465-6000 Fax:847-465-6800 Phone:312-527-2700 Fax:312-527-2798
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