05-168 Resolution No.05-168
RESOLUTION
AUTHORIZING EXECUTION OF A DEVELOPM:NT AGREEMENT WITH
RIEKE OFFICE INTERIORS, INC.
BE IT RESOLVED BY THE CITY COUNCIL OF THI CITY OF ELGIN, ILLINOIS,that
Ed Schock, Mayor, and Dolonna Mecum, City Clerk,be and .i e hereby authorized and directed to
execute an agreement on behalf of the City of Elgin with Rie. e Office Interiors, for development
assistance, a copy of which is attached hereto and made a part hereof by reference.
s/ Ed Schock
Ed S•hock, Mayor
Presented: May 25, 2005
Adopted: May 25, 2005
Omnibus Vote: Yeas: 7 Nays: 0
Attest:
s/Dolonna Mecum
Dolonna Mecum, City Clerk
DRAFT 3/9/05
DEVELOPMENT AGREEMENT
This Development Agreement is made and entered into this
day ofrC , 2005 , by and between the CITY OF ELGIN, an
Illinois municipal corporation (hereinafter referred to as the
"City" ) and RIEKE OFFICE INTERIORS, an Illinois Corporation
(hereinafter referred to as "Developer" ) .
WITNESSETH
WHEREAS, Developer has entered into a lease with an option to
purchase the property commonly known as 2000 Fox Lane, Elgin,
Illinois, such property being legally described in Exhibit A
attached hereto (hereinafter referred to as the "Subject
Property" ) ; and
WHEREAS, Developer intends to develop the Subject Property
with its corporate facility consisting of its corporate offices,
sales and showroom facilities according to the plans dated
Decernber \3 , 204 , prepared by -1-0,1 a R;e k c, , attached
hereto as Exhibit B (hereinafter referred to as the "Subject
Development" ) ; and
WHEREAS, Developer, after consultations and negotiations with
the City concerning certain development assistance has determined
to proceed with the Subject Development of the Subject Property;
and
WHEREAS, the Subject Development of the Subject Property is
currently estimated to represent aJOOo dollar investment by the
Developer resulting in the retention in the City of Elgin of not
less than 55 full-time jobs with 20 of such jobs having salaries
equal to or greater than $40 , 000 per year; and
WHEREAS, it is unlikely that the de elopment of the Subject
Property will occur in the absence of limited economic assistance;
and
WHEREAS, Developer' s business operations are currently located
within the City of Elgin and the City h.:s determined that it is
desirable to seek to retain the business of the Developer in the
City of Elgin; and
WHEREAS, the City providing busine..s retention development
assistance to Developer for the Subject D velopment will result in
maintaining the City' s tax base and retai employment opportunities
in the City of Elgin; and
WHEREAS, in order to provide for the continued development of
the City including the development of th= Subject Property by the
Developer with its corporate headquarte s facility the City has
agreed to provide certain development a%sistance as hereinafter
described; and
WHEREAS, the City of Elgin is a home rule unit authorized to
exercise or perform any function relati g to its government and
affairs; and
WHEREAS, economic development initiatives as provided herein
and maintaining the City of Elgin' s tax base and employment
opportunities within the City of Elgin are matters within the
government and affairs of the City of Elgin.
NOW, THEREFORE, for and in consiseration of the mutual
promises and undertakings contained her:in, and other good and
valuable consideration, the receipt and %ufficiency of which are
hereby acknowledged, the parties hereto a:ree as follows :
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1 . That the foregoing recitals a e incorporated into this
agreement in their entirety.
2 . That the Developer shall develop the Subject Property
with the Subject Development which consists of Developer' s
corporate offices, sales and showroom facilities . Developer shall
complete all improvements for the Subject Development on the
Subject Property, occupy same and com ence operations at the
Subject Property with its corporate offices, sales and showroom
facilities on or before 17U9US-1- 1.. , 2805 .
3 . That for a period of not less than five (5) years
following Developer' s occupancy of the Su•ject Property as required
in the preceding paragraph 2, Developer s all maintain the Subject
Development on the Subject Property including operating its
corporate offices, sales and showroom fac ' lities and shall retain a
minimum of 55 full time jobs at the Su.ject Development on the
Subject Property and employing all of its employees from and out of
the Subject Property.
4 . That in consideration of Develo.er completing, occupying
and commencing operations of the Subject •evelopment on the Subject
Property on or before ,r4u3is-{- , 2005, and Developer maintaining
its corporate offices, sales and showroom facilities at the Subject
Property and retaining a minimum of 55 full time jobs at the
Subject Property as described in the preceding paragraphs 2 and 3
hereof, the City agrees to provide t e economic development
assistance to the Developer as set forth in this paragraph to be
used by the Developer solely and only for osts associated with the
Developer relocating its operations to t e Subject Development on
the Subject Property. Such economic dev-lopment assistance from
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the City to the Developer for the Subj .ct Development shall be
provided to the Developer as follows : I the event of and upon
Developer' s completing the Subject Dev:lopment on the Subject
Property, occupying same and commencing ol.erations of Developer' s
corporate offices, sales and showroom f.cilities at the Subject
Property on or before AO9u3+ , 2005, ani retaining not less than
55 full time jobs at the Subject Dev:lopment on the Subject
Property on or before such date, the City shall pay to the
Developer the total sum of Twenty Thousani Dollars ($20, 000) . The
total payment by the City under this agree ent shall not exceed the
total amount of Twenty Thousand Dollars ($20, 000) .
5 . That the parties understand an. agree that the economic
development assistance being provided by the City to Developer as
set forth herein is expressly conti gent upon Developer' s
development of the Subject Development o the Subject Property as
set forth herein. In the event Developer ' ails to complete, occupy
and commence operations of the Subject De elopment on the Subject
Property on or before 1_cern be,- 1. , 2105 , and/or in the event
Developer fails to maintain its corpo ate offices_, sales and
showroom facilities on the Subject Properly and/or employ not less
than 55 full time employees out of and from the Subject Property
for a period of not less than fiv- (5) years following
Ali)Si' j. , 2005, as required in th- preceding Paragraphs 2
and 3 hereof, the parties understand and agree that the City will
not be providing any economic development assistance to Developer
for the Subject Development pursuant to this agreement or
otherwise, and that the Developer shall r:imburse the City in full
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any funds distributed to the Develo;.er under the economic
development grant provided for the preceding Paragraph 4 hereof.
6 . That this agreement shall not se deemed or construed to
create an employment , joint venture, par nership, or other agency
relationship between the parties hereto.
7 . That all notices or other comm nications hereunder shall
be made in writing and shall be dee ed given if personally
delivered, sent by overnight courier or mailed by registered or
certified mail , return receipt requested , to the parties at the
following addresses, or at such other . ddresses for a party as
shall be specified by a like notice and siall 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 T E DEVELOPER:
City of Elgin Chri_ Matus, President
150 Dexter Court Riek- Office Interiors
Elgin, Illinois 60120-5555 2000 Fox Lane
Elgi , Illinois 60123
Attention: City Manager
8 . That the failure by a party to enforce any provision of
this agreement against the other party sh_11 not be deemed a waiver
of the right to do so thereafter.
9 . That this agreement may be modified or amended only in
writing signed by both parties hereuo, or their permitted
successors or assigns, as the case may b: .
10 . That this agreement contains ' he entire agreement and
understanding of the parties hereto wit respect to the subject
matter as set forth herein, all prior agr-ements and understandings
having been merged herein and extinguish:d hereby.
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11 . That this agreement is and shall be deemed and construed
to be a joint and collective work product of the City and Developer
and, as such, this agreement shall not •e construed against the
other party, as the otherwise purported drafter of same, by any
court of competent jurisdiction and order to resolve any
inconsistency, ambiguity, vagueness or conflict, if any, in the
terms or provisions contained herein.
12 . That this agreement is subject to and shall be governed
by the laws of the State of Illinois. Ve ue 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 r=cover the monies the City
has agreed to pay pursuant to preceding paragraph 4 hereof, and
notwithstanding anything else to the cont ary in this agreement, no
action shall be commenced by the Developer against the City for
monetary damages. In the event legal act 'on is brought by the City
for the enforcement of any of the obligations of Developer in this
agreement and the City is the prevailing .arty in such action, the
City shall also be entitled to recover rom Developer reasonable
interest and reasonable attorney' s fees .
13 . That this agreement shall be binding on the parties
hereto and their respective successors an. permitted assigns. This
agreement and the obligations herein may not be assigned without
the express written consent of each of he parties hereto which
consent may be withheld at the sole dis' retion of either of the
parties hereto.
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14 . That upon Developer' s compliant= with the requirements of
the preceding Paragraphs 2 and 3 hereof, Developer shall provide
the City reasonable data and records of meveloper which documents
Developer' s compliance with the requir-ments of the preceding
Paragraphs 2 and 3 hereof .
15 . That time is of the essence of this agreement .
16 . That the City and Developer agr_e that, in the event of a
default by the other party, the other par y shall, prior to taking
any such action as may be available to ii , provide written notice
to the defaulting party stating they are •iving the defaulted party
thirty (30) days within which to cure suc default . If the default
shall not be cured within the thirty (3 • ) day period aforesaid,
then the party giving such notice shall be permitted to avail of
itself of remedies to which it may 6e entitled under this
agreement .
17 . That notwithstanding any otter provision of this
agreement it is expressly agreed and un.erstood by the Developer
that the Subject Development of the •,ubject Property by the
Developei and the use of the Subjec Property shall be in
accordance and in compliance with all a•plicable federal , state,
city and other requirements of law. The Developer shall also at
its expense procure all permits and licenses, pay all charges and
fees, and give all other notices necessar, and incident to the due
and lawful prosecution of the work nece..sary to provide for the
Subject Development of the Subject Prope ty as described in this
Agreement .
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18 . That to the fullest extent permitted by law, the
Developer agrees to and shall indemnify, defend and hold harmless
the City, its officials, officers, employees, attorneys, agents,
boards and commissions from and against any and all claims, suits,
judgments, costs, attorneys fees, damages or other relief,
including but not limited to worker' s compensation claims, in any
way resulting from or arising out of negligent actions or omissions
of the Developer in connection herewith, including negligence or
omissions of employees or agents of the Developer or arising out of
the performance of this agreement, and/or arising from or arising
out of an alleged breach of this agreement by the Developer or the
Developer ' s employees or agents . In the event of any action
against the City, its officials, officers, employees, attorneys,
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
paragraph shall survive any termination and/or expiration of this
agreement .
IN WITNESS WHEREOF, the parties have entered into and executed
this agreement on the date and year first written above .
CITY OF ELGIN, a municipal RIEKE OFFICE INTERIORS,
corporation an Illinois corporation
By = •s-�
_ ,41,
Ed Sc oc , Mayor
Title
A e �
•e_,e)s..Ato
Dolonna Mecum, City Clerk
F:\Legal Dept\Agreement\Development Agr-Reike Office Interiors.doc
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EXHIBIT A
Legal Description of SubjecI Property
4
5 THAT PART OF THE ,30UTHWEST 1/4 OF THE NORTHWEST 1/4 OF SECTION 32. TOWNSHIP 42
6 NORTH, RANGE 8 EAST OF THE THIRD PRINCIPAL MERIDIAN DESCRIBED AS FOLLOWS:
7 BEGINNING AT THE SOUTHWEST CORNER OF SAID NORTH ST 1/4; THENCE NORTH 0 DEGREES
8 EAST ALONG THE WEST LINE OF SAID NORTHEAST 1/4 016 24 FEET TO THE SOUTHERLY RIGHT
9 OF WAY LINE. AS MONUMEENTED. OF PARCEL NO. N-4D-58 A. ACQUIRED BY THE ILLINOIS STATE
10 TOLL HIGHWAY COMMISSION THROUGH PROCEEDINGS FIL!D IN THE CIRCUIT COURT OF KANE
11 COUNTY, ILLINOIS AS CASE NO. 57-449; THENCE SOUTH 60 DEGREES 07 MINUTES 42.SECONDS
12 EAST ALONG SAID SOUTHERLY RIGHT OP WAY LINE OF TI-lEN•RTHWFST TOLL HIGHWAY 1231,41
13 FEET TO THE SOUTH LINE OF SAID NORTHEAST 114; THENC; SOUTH 89 DEGREES, 50 MINUTES,
14 34 SECONDS WEST ALONG SAID SOUTH LINE 1067.81 FEET 0 THE POINT OF BEGINNING, IN THE
15 CITY OF ELGIN, KANE COUNTY, ILLINOIS.
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1
vo" `\:"1, Agenda Item No. VV
City of Elgin
op
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December 10, 2004 '
N P
TO: Mayor and Members of the City Counci ECONOMIC GROWTH
FROM: David M. Dorgan, City Manager
Raymond H. Moller, Director of Economic De elopment
SUBJECT: Request for Financial Assistance for Rieke Off ce Interiors
PURPOSE
The purpose of this memorandum is to provide the Mayor an. members of the City Council with
information to consider a request from Rieke Office Interiors for financial assistance which will
assist the local company as it relocates its business to 2000 Foy Lane in Elgin.
RECOMMENDATION
It is recommended that the City Council authorize a develop ent agreement with Rieke Office
Interiors in the amount of$20,000 to provide a one time gra t of$1,000 per employee as a job
retention incentive.
BACKGROUND
Rieke Office Interiors is relocating its business from 800 . State Street to 2000 Fox Lane.
Initially Rieke will lease the property with an option to purchi se at a future time. The ownership
has requested that the City support the relocation within Elg n by providing the following level
of assistance:
1. At a future date authorize Industrial Bonds for the .urchase of the new site.
2. Allow for a"Watchman Quarters" at the new loca lion.
3. Authorize a retention grant of$1,000 per employee for 20 jobs.
4. Allow signage on all exterior sides of the building.
5. Enter into a 10-year sales tax sharing agreement.
At this time staff recommends approval of item 3. Items 1, ', 4 and 5 will be addressed in the
following manner:
1. IRB's— When Rieke is ready to move forward wi h the property acquisition, the city
will process an IRB application.
2. "Watchman Quarters" are permissible under cit code. This item will be reviewed
during the plan review process.
Rieke Office Interiors Request
reb. December 10,2004
Page 2
3. External signage will be reviewed as part of the pl• review process.
4. Sales tax sharing is not being recommended.
Rieke Office Interiors (ROI) currently employs 55 individu.1s at its North State Street facility.
Twenty of the employees have salaries equal to or greater then $40,000. Prior to selecting 2000
Fox Lane in Elgin as its new location, ROI gave serious con•ideration to relocating to Rockford
Illinois. The Rockford incentive package included the acquis tion of a relatively new building at
an attractive price as well as possible tax relief. It should be noted that for the past twelve
months,ROI has paid approximately$64,000 to the City of E gin in sales tax revenue.
COMMUNITY GROUPS/INTERESTED PERSONS CO TACTED
None
%! FINANCIAL IMPACT
The total cost associated with the development agreement wi h Rieke Office Interiors is $20,000.
The total 2004 budget for Economic Development Incenti es in fund 276-0000-791-80-27 is
$905,000. To date $890,760 has been spent or encumbered. This project will be considered for
funding in 2005. The 2005 budget includes $400,000 in fun. 276-000-791-80-27 for Economic
Development Incentives.
/LEGAL IMPACT
vv4VLEGAL
A development agreement is required.
ALTERNATIVES
1. Approve the request for$20,000 for a job retention want.
2. Choose not to approve the request for assistance fro Rieke Office Interiors.
Respectfully submitted for Council consideration.
rhm
Attachment
r
RI
AIEKE OFFICE IIVTEAIOA6
Dave Dorgan
City Manager
I wanted to do a recap of the items that ROI discussed ani the mutual agreement that we
will be working on over the next few months. Because o i the outcome of this meeting,
Todd signed the 10 year lease that gives us the option to .urchase in 18months. So I
wanted to say thank you for making it happen and keepin: ROI in Elgin.
•
• ROI would have access to next years IRB to borr.w @ 4%when we are ready to
purchase. Through the City of Elgin's help,they ill contact a IRB attorney
advisor so that we can fully understand how they ork
• 'The second floor of our showroom can be conve ped into a living space that will
act as showroom and"watchman quarters"
• $1,000 per employee one time grant for employ-,s earning over 40K or more.
ROI must generate report with payroll verificatio l records.
• Signage use on all sides of the building done in a `tasteful"manner. Prior to any
sign request,ROI will show all ideas to you to re iew for changes.
• 10 year sales tax share. ROI to provide a 10 year plan of growth. ROI and the
City of Elgin will share the tax revenues that incr-ase over our current sales
volume figure.
I took the liberty of adding one more on if possible....
• A temporary sign on the building of"Coming S. n ROI"
Please review these items &I would like to receive an eement letter from you stating
that ROI&the City of Elgin will be working on these d.tails.
Thank u,
Chris Matus
President
Rieke Office Interiors •
Soon to be 2000 Fox Lane
Elgin, IL 60123
10-8-2004
•
elk
900 N.State Street 3601 Edison Place
Elgin,L 60123 ' Rolling Meadows,IL 60008
Ph:647-622-971 1 www.r`ieke.l�o Ph:B47-396-8711
FX:847-82279750 Fx:847-259-0834•