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10-182 Resolution No. 10-182 RESOLUTION AUTHORIZING EXECUTION OF AN ECONOMIC INCENTIVE AGREEMENT WITH ROSEN HYUNDAI OF ALGONQUIN, LLC D/B/A ROSEN KIA OF ELGIN (845 East Chicago Street) BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that Ed Schock, Mayor, and Diane Robertson, City Clerk,be and are hereby authorized and directed to execute an Economic Incentive Agreement with Rosen Hyundai of Algonquin LLC d/b/a Rosen Kia of Elgin on behalf of the City of Elgin for economic development assistance in connection with the property commonly known as 845 East Chicago Street,a copy of which is attached hereto and made a part hereof by reference. s/Ed Schock Ed Schock, Mayor Presented: September 22, 2010 Adopted: September 22, 2010 Vote: Yeas: 6 Nays: 0 Attest: s/Diane Robertson Diane Robertson, City Clerk ELGIN THE CITY IN THE SUBURBS- Date: October 13, 2010 To: Rick Kozal, Assistant City Manager and Chief Operating Officer From: Jennifer Quinton, Deputy City Clerk Subject: Resolution No. 10-182, Adopted at the September 22, 2010 Council Meeting Enclosed you will find the agreement listed below. Please retain a copy for your records. If you have any questions please feel free to contact our office 847-931-5660 and we will do our best to assist you. Thank you. • Economic Incentive Agreement with Rosen Hyundai of Algonquin, LLC d/b/a Rosen Kia of Elgin • ECONOMIC INCENTIVE AGREEMENT This Economic Incentive Agreement (the "Agreement") is made and entered into as of the 22nd day of September, 2010, by and between the City of Elgin, an Illinois municipal corpo- ration (hereinafter referred to as the "City"), and Rosen Hyundai of Algonquin, LLC, an Illinois limited liability company d/b/a Rosen Kia of Elgin (hereinafter referred to as the "Developer"). WHEREAS, the Developer acquired the right to own and operate a Kia automobile fran- chise in 2010 and began searching for a suitable location to establish a new car dealership within a territory that includes the City and neighboring municipalities; and WHEREAS, the Developer would be unable to proceed with the establishment of the Kia automobile franchise in the City and to own and operate a dealership facility without certain economic development assistance from the City as hereinafter described;and WHEREAS, the Developer entered into a Lease Agreement in March, 2010, and reno- vated the premises commonly known as 845 East Chicago Street, Elgin, Illinois, and made sub- stantial improvements to a vacant,one-story masonry structure formerly occupied by a Lincoln- Mercury automobile dealership; and WHEREAS,the Developer has established a Kia automobile franchise at 845 East Chicago Street, Elgin, Illinois (the "Dealership") and the Developer will be completing various facade and other improvements to buildings on the Dealership at an estimated cost of$200,000; 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 Dealership has remained vacant for at least one (1)year; and WHEREAS, the buildings established at the Dealership no longer comply with current building codes;and WHEREAS, the buildings established at the Dealership have remained less than signifi- cantly underutilized for a period of at least one year; and WHEREAS,the Dealership is expected to create job opportunities within the City; and WHEREAS,the Dealership will serve to further the development of adjacent areas; and WHEREAS,without this Agreement the Dealership would not be possible;and WHEREAS, the Developer meets high standards of credit worthiness and financial strength as demonstrated by equity financing for not less than ten percent (10%) of the total project costs; and WHEREAS,the Dealership will strengthen the commercial sector of the City; and WHEREAS,the 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 contained 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 May 1, 2010. B. "Sales Tax Revenues" means for the ten (10) 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.) and the Illinois Retailer's Occupation Tax (35 ILCS 120/1 et seq.) derived solely from the sale of automobiles and/or motor vehicles at the Dealership. 3. 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 Agreement, in order to reimburse the Developer for a portion of the costs incurred by Developer in conjunction with the establishment of the Dealership,all as set forth and detailed below. B. The City shall pay to the Developer a rebate of a portion of Sales Tax Revenues received by the City over the ten-year period following the Commencement Date. Such rebate of Sales Tax Revenues from the City 2 to the Developer shall be paid in annual installments according to the fol- lowing formula: The City shall rebate to Developer twenty-five percent (25%) of the Sales Tax Revenues received by the City that have been derived solely from the sale of automobiles and/or motor vehicles 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 Revenues provided herein have been agreed to based upon the current share of sales taxes received by the City in the amount of 1%. It is further agreed and understood that in the event the City's share of sales taxes is reduced from the current amount of 1% during the five years following the Commencement Date that the subsequent rebate of Sales Tax Reve- nues from the City to the Developer shall be reduced proportionately. For the purposes of clarification and example, in the event the City's share of sales taxes currently in the amount of 1% 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 provisions 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 one hundred and eighty (180) days of each of the first ten (10) annual anniversaries of the Com- mencement Date and the City having 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 to the Developer. In such event, the City shall make the required Sales Tax Revenue rebate pay- ment to the Developer within sixty (60) days after the date on which the City actually receives the supporting documentation for the applicable payment. E. At the time of each filing of an Illinois Department of Revenue form ST-1 or any successor reporting form with the Illinois Department of Revenue by the Dealership, the Developer shall cause a copy of such form to be filed with the Treasurer of the City or such other official as the City may designate. Within twenty (20) days after the Treasurer or other official receives an ST-1 Form, the Treasurer or other official shall calculate and certify to the City the amount of sales tax revenues due to the Developer in accordance with this Agreement. The City and its Treasurer and other 3 officials shall keep strictly confidential all information in the ST-1 Form, except to the extent that disclosure is necessary to third parties for the proper administration of this Agreement, or is required by law or under this Agreement. F. 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. 4 G. Developer and the City agree to cooperate and take all additional actions as may reasonably be necessary in order to obtain the necessary informa- tion and to insure the accurate collection of deposits of Sales Tax Reve- nues. The City agrees to take all actions necessary to provide for the sys- tematic receipt of sales tax information for the Dealership from the Illi- nois Department of Revenue. To assist the City, Developer will 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 Dealership. De- veloper shall cause Dealership, upon written request of the City, to pro- vide a Power of Attorney in a form reasonably satisfactory to the Illinois Department of Revenue,authorizing the City to request and receive gross revenue and other information necessary to allow the City to compute the amount of Sales Tax Revenues. H. 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 tax- ing power of the City to pay the Sales Tax Revenues rebates, and no exe- cution 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 constitute 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 re- bate of any Sales Tax Revenues. 4. Contingency. Notwithstanding any other provision of this Agreement to the con- trary, it shall be a condition precedent to the obligations of the City under this Agreement that the Developer commences operations at the Dealership on or before July 1, 2010, and that the Dealership continues with its operations at the Dealership location or another location in Elgin approved by the City for a period of not less than ten (10)years after so commencing Dealership operations. 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 thereupon this Agreement shall be null and void and of no further force and effect without any further obligations of the City hereto. 5 5. 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 writing and shall be deemed given if personally delivered or mailed by registered or certified mail, return receipt requested,to the parties at the following addresses, or at such other addressed 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: TO THE DEVELOPER: City of Elgin Steven P. Bloomberg 150 Dexter Court Principal Elgin, IL 60120-5555 Chuhak&Tecson, P.0 30 South Wacker Drive Attention: Richard G. Kozal Chicago, Illinois 60606 With a copy of any such notice to: City of Elgin 150 Dexter Court Elgin, IL 60120-5555 Attention: William A. Cogley, Corporation Counsel 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, 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, 6 this Agreement shall not be construed against the other party, as the otherwise purported drafter of same, by any court of competent jurisdic- tion 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 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. The City and Developer agree that, in the event of a default by the other party, 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 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, 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 Section 3 hereof, no action shall be commenced by the Developer 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 the Developer or its permitted assigns with respect to this Agreement and the City is the prevailing party in such ac- tion,the City shall also be entitled to recover from the Developer reason- able interest and reasonable attorney's fees. K. Time is of the essence of this Agreement. 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. 7 M. No past, present or future elected or appointed official, officer, em- ployee, attorney, agent or independent contractor of the City shall be charged personally or held contractually liable under any term or provi- sion of this Agreement including, but not limited to, because of their ne- gotiation, approval, 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 im- provements to the Dealership. Without limiting the foregoing, and not- withstanding anything 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. 0. To the fullest extent permitted by law, Developer agrees to and shall in- demnify, defend and hold harmless, the City, its officials, officers, em- ployees, 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 resulting from or arising out of or alleged to be resulting from or aris- ing out of negligent actions or omissions of the Developer in connection herewith, including negligence or omissions of employees, agents or sub- contractors 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 employees, agents or subcontractors of the Developer. In the event of any action against the City, its officials, officers, employ- ees, agents, attorneys, boards or commissions covered by the foregoing duty to indemnify, defend and hold harmless such action shall be de- fended 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. P. To the fullest extent permitted by law, Developer agrees to and shall in- demnify, defend and hold harmless the City, its officials, officers, em- ployees, attorneys, agents, boards and commissions, from and against any and all third party claims, suits,judgments, costs, attorneys' fees, ex- pert witness 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 8 • • existence of this Agreement, the provisions of this Agreement, the per- formance 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 commissions, 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 De- veloper. Additionally, in the event of such third party action the Devel- oper to the extent permitted by law shall upon the request of the City at- tempt to intervene in such proceedings and join the City in the defense thereof. Q. Developer agrees to and shall provide to the City written reports on the status of the Dealership. Such written reports shall be provided to the City upon request of the City. Such written reports shall contain 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 provisions of this paragraph shall survive any termination, completion and/or expiration of this Agreement. IN WITNESS WHEREOF, the City and Rosen Hyundai of Algonquin, LLC, d/b/a Rosen Kia of Elgin. have executed this Agreement on the date first set forth above. CITY OF ELGIN, ROSEN HYUNDAI OF ALGONQUIN, LLC d/b/a ROSEN KIA OF ELGIN., a limited liability an Illinois municipal corporation company By: ,s•� . E {64%-- d Schock, Mayor 576tAL'14A 6.4) ikkG4 Attest: 9