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10-209 Resolution No. 10-209 RESOLUTION AUTHORIZING EXECUTION OF AN ECONOMIC INCENTIVE AGREEMENT WITH GIVAUDAN FLAVORS CORPORATION (580 Tollgate Road) 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 Givaudan Flavors Corporation on behalf of the City of Elgin for economic development assistance in connection with the development of 580 Tollgate Road, a copy of which is attached hereto and made a part hereof by reference. s/ Ed Schock Ed Schock, Mayor Presented: December 1, 2010 Adopted: December 1, 2010 Vote: Yeas: 6 Nays: 1 Attest: s/Diane Robertson Diane Robertson, City Clerk ELGIN THE CITY IN THE SUBURBS- DATE: December 3, 2010 TO: Rick Kozal, Assistant City Manager and Chief Operating Officer FROM: Jennifer Quinton, Deputy City Clerk SUBJECT: Resolution No. 10-209, Adopted at the December 1, 2010, Council Meeting Enclosed you will find the agreement listed below. Please distribute this agreement to the other party and keep a copy for your records if you wish. 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 Givaudan Flavors Corporation (580 Tollgate Road) ECONOMIC INCENTIVE AGREEMENT This Economic Incentive Agreement (the "Agreement") is made and entered into as of the 3rd day of November 2010, by and between the City of Elgin, an Illinois municipal corporation (hereinafter referred to as the "City"), and Givaudan Flavors Corporation, Delaware corporation ("Givaudan" or "Givaudan Flavor Division") that is ultimately owned by Givaudan S.A. WHEREAS, Givaudan S.A. is the leading company in the fragrance and flavor industry, with headquarters in Vernier, Switzerland, it operates a worldwide organization of approximately 8500 employees at 82 sites, including 33 production sites; and WHEREAS, Givaudan S.A. has operated in the United States since 1924 with U.S. headquarters in Cincinnati, Ohio (Flavors) and East Hanover, New Jersey (Fragrances), employing approximately 2000 people in various locations across the country with annual sales of approximately $1 billion; and WHEREAS, Givaudan's Flavor Division develops and manufactures flavors for food and beverage companies throughout the world, operating in the market segments of beverages, citrus, savory, dairy and confectionery products; and WHEREAS, Givaudan's Flavor Division closely works with food and beverage manufacturers to develop and produce flavors that respect local tastes with a focus on expedient and efficient response, quality control, regulatory compliance and product consistency; and WHEREAS, Givaudan is proposing to establish operations for 22 employees in the City of Elgin in an approximately 14,000 square foot existing facility at 580 Tollgate Road, Elgin, Illinois ("Subject Property"), the wages for the 22 Givaudan employees ranging from $40,000 to over $100,000, with the average salary being in excess of $77,000 ("Subject Project"); and WHEREAS, Givaudan may not be inclined to proceed with the Subject Project 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) 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 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 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 areas; and WHEREAS, the Givaudan meets high standards of credit worthiness and financial strength; and WHEREAS, the Subject Project will strengthen the commercial 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 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 entirety. 2. Subject Project. A. Givaudan, at its cost, shall develop the Subject Project. The development of the Subject Project shall conform in all respects with all applicable legal requirements, 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 ordinances, 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 responsibility of and shall be paid for by the Givaudan. B. Givaudan shall commence business operations for the Subject Project not later than November 1, 2010 ("Completion Date"), provided, however, such Completion Date for the Subject Project shall be extended by one day for each day of which any construction relating to the Subject Project is delayed or stopped due to accidents, strikes, shortage of materials, extreme weather, acts of God or other causes not within the Givaudan's reasonable control. In the event Givaudan requires any extension of the Completion Date for the Subject Project, any request shall be submitted to the City in writing specifying the reasons for such an extension and the amount of additional time being requested. Any agreement by the City to extend the Completion Date for the Subject Project shall be at the sole discretion of the city council of the City. The Subject Project shall be deemed ready to commence business operations when the City has issued to Givaudan a certificate of occupancy and general business license for the Subject Project. The City shall not withhold the certificate of occupancy or general business license for the Subject Project if Givaudan otherwise complies with this agreement and all City codes, ordinances and other requirements of law as to the Subject Project. C. Givaudan agrees that it shall continue the Subject Project, including maintaining not less than 22 full-time jobs referenced in paragraph 3A of this Agreement, for a period of not less than five (5) years from the Completion Date. 3. Economic Incentives. In consideration for Givaudan's undertaking of the Subject Project, the City agrees to provide economic incentives to the Givaudan to be used by the Givaudan solely and only for the Subject Project. Such economic incentives shall consist of and be distributed to the Givaudan as follows: A. Job Incentive Grant. The City will provide Givaudan with a job incentive grant as described in this section in a total amount not to exceed $50,000. (i). The City shall pay Givaudan $1000 for each such full-time job established for the Subject Project within sixty (60) days of the Completion Date having an annual salary in excess of $40,000 (excluding benefits ("Initial Job Incentive Grant"). Prior to the City's payment of the Initial Job Incentive Grant, Givaudan shall provide written verification acceptable to the City's chief financial officer demonstrating that Givaudan has established not less than 22 full-time jobs for the Subject Project earning direct wages of not less than $40,000 on an annual basis (excluding benefits) and that the average salary for all such 22 full-time employees shall be in excess of $77,000. The City's payment of the job incentive grant shall be paid to Givaudan within thirty (30) days of the Givaudan providing to the City such written verification regarding the establishment of jobs. (ii). Following the expiration of the Initial Job Incentive Grant, the City shall pay Givaudan $1000 for each additional full-time job established for the Subject Project in excess of the 22 full-time jobs referred to in Section 3(A)(i) of this Agreement having an annual salary in excess of $40,000 (excluding benefits). Prior to the City's payment of such additional job incentive grants, Givaudan shall provide written verification acceptable to the City's chief financial officer demonstrating Givaudan has established such full-time jobs for the Subject Project. The payment of any such additional job incentive grants will be paid by the City to Givaudan on each anniversary of the City's payment of the Initial Job Incentive Grant. Givaudan shall be eligible for such additional job incentive grants for a period of four (4) years following the expiration of the Initial Job Incentive Grant, provided, however, than in no event shall the City's combined payment of the Initial job Incentive Grant and any subsequent job incentive grants to Givaudan exceed the sum of fifty thousand dollars ($50,000). B. Waiver of Building Permit Fees for the Subject Project. The City agrees to waive and not require Givaudan to pay any building permit fees which would otherwise be due and payable to the City in connection with the establishment 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 governmental entity other than the City shall be paid by Givaudan. 4. Givaudan to Recruit and Hire Elgin Residents. Givaudan agrees to and shall make all reasonable efforts to recruit and hire Elgin residents for employment opportunities for the Subject Project. Givaudan shall provide an annual report to the City on its efforts to recruit and hire Elgin residents for employment opportunities at the Subject Project. Such written report shall include, among other matters, recruitment efforts directed toward Elgin residents, the number of Elgin residents applying for employment and the number of Elgin residents hired for employment positions for the Subject Project. The reporting requirements in this section shall remain in effect for a period of four (4) years following the Completion Date of the Subject Project. 5. Centre of Elgin. Full-time Givaudan employees employed at the Subject Project shall qualify for the Elgin resident annual rate for membership at the City's Elgin family recreation center, known as the Centre of Elgin, regardless of the location of such employee's residence. This provision shall remain in effect as long as Givaudan maintains for the Subject Project. 6. Elgin Promotion. Within sixty (60) days of Givaudan closing on the purchase of the Subject Property, the City Manager of the City and other City staff will attend a Givaudan company meeting to discuss and promote the City of Elgin to all of the Givaudan's employees. The City Manager of the City shall designate a liaison for Givaudan's employees to contact in the event such employees have any questions regarding the Elgin community. The City shall also coordinate with the Elgin Area Chamber of Commerce for the purpose of conducting a groundbreaking and ribbon cutting ceremonies for the Subject Project. 7. City's Obligations Contingent Upon Givaudan's Performance. The parties understand and agree that the economic incentive grants being provided by the City to Givaudan as set forth in paragraphs 3 and 5 of this Agreement are expressly subject to and contingent upon Givaudan's relocation to the City of Elgin and the establishment of the Subject Project as set forth in this Agreement. In the event the Givaudan fails to establish the Subject Property as required in this Agreement, or fails to occupy and commence operations for the Subject Project as required in this Agreement, and/or in the event Givaudan fails to provide for the creation and establishment of the jobs as provided for in Section 3A of this Agreement, the parties understand and agree that the City will not be providing the economic incentive grants or economic assistance to the Givaudan for the Subject Project pursuant to this Agreement or otherwise. In the event Givaudan fails to continue the Subject Project for the five (5) year period as required in this Agreement, and/or in the event Givaudan fails to maintain the full-time jobs at the Subject Project for the five (5)-year period as required in this Agreement, the parties understand and agree that Givaudan shall reimburse the City on a pro-rata basis the economic incentive grants provided for in Section 3 of this Agreement. For the purposes of clarification and example, the reimbursement on the pro rata basis shall mean a percentage reimbursement based upon the percentage of the five year time period the Givaudan has failed to continue the Subject Project. For the purpose of further clarification and example, in the event Givaudan continues the Subject Project for four years instead of five years, Givaudan shall reimburse to the City 20 percent of the economic incentive grants and assistance paid or provided by the City to the Givaudan pursuant to Section 3 of this Agreement. 8. 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, 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 GIVAUDAN: City of Elgin Daniel R. Larsen 150 Dexter Court Director of Taxation Elgin, IL 60120-5555 Givaudan Flavors Corporation Attention: Richard G. Kozal 1199 Edison Drive Cincinnati, OH 45216 With a copy of any such notice to: City of Elgin Givaudan Flavors Corporation 150 Dexter Court 1199 Edison Drive Elgin, IL 60120-5555 Cincinnati, OH 45216 Attention: William A. Cogley, Attn: Jane E. Garfinkel, Senior Vice Corporation Counsel President and General 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 Givaudan and, as such, this Agreement shall not be construed 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 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 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 Givaudan 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 paragraph 3A of this Agreement, no action shall be commenced by the Givaudan 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 Givaudan or its permitted assigns with respect to this Agreement and the City is the prevailing party in such action, the City shall also be entitled to recover from Givaudan reasonable interest and reasonable attorney's fees. Notwithstanding anything to the contrary stated herein or otherwise, GIVAUDAN'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 GIVAUDAN FROM THE CITY IN CONNECTION WITH THIS AGREEMENT AND SUCH ECONOMIC INCENTIVE. Givaudan shall have no other liability whatsoever, whether based on breach of contract, negligence, strict liability or any other claim and under no circumstances shall Givaudan 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 Givaudan 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 personally or held contractually 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 Agreement. N. Notwithstanding any other provisions of this Agreement, it is expressly agreed and understood by Givaudan and the City that in connection with the performance of this Agreement, that Givaudan shall comply with all applicable federal, state, city and other requirements 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, Givaudan hereby certifies, represents and warrants to the City that all of Givaudan's employees and/or agents who will be employed for the Subject Project shall be legal residents of the United States. Without limiting the foregoing, and notwithstanding anything to the contrary in this Agreement, Givaudan 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 the Givaudan to determine the Givaudan's compliance with the provisions of this section. In the event the City proceeds with such an audit, the Givaudan shall make available to the City the Givaudan's relevant records at no cost to the City. Givaudan shall also pay any and all costs associated with any such audit. If so desired by Givaudan, the audit shall, to the extent permitted by law, be subject to reasonable confidentiality restrictions 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. 0. Givaudan agrees to and shall provide to the City written reports on the status of the Subject Project. Such written reports shall be provided to the City on a quarterly basis following the Completion Date. P. Givaudan, 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, assigns 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 provisions of this Agreement. The provisions of this section shall survive any termination, completion and/or expiration of this Agreement. IN WITNESS WHEREOF, the City and Givaudan have executed this Agreement on the date and year first written above. CITY OF ELGIN, GIVAUDAN FLAVORS CORPORATION an Illinois municipal corporation By: � By: Ir�� Ed Schock, Mayor Ste an Giezendanner `-b`& Its: Senior Vice President and Chief Financial Officer Attest: Diane Robertson, Cit Clerk