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13-149 Resolution No. 13-149 RESOLUTION AUTHORIZING EXECUTION OF AN ECONOMIC INCENTIVE AGREEMENT WITH BUTERA FINER FOODS, INC. d/b/a BUTERA MARKET (20 Tyler Creek Plaza) 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 with Butera Finer Foods, Inc. d/b/a Butera Market on behalf of the City of Elgin for economic development assistance in connection with the development of 20 Tyler Creek Plaza, a copy of which is attached hereto and made a part hereof by reference. s/David J. Kaptain David J. Kaptain, Mayor Presented: September 11, 2013 Adopted: September 11, 2013 Vote: Yeas: 7 Nays: 1 Abstained. 1 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 11th day of September, 2013, by and between the City of Elgin, an Illinois municipal corporation (hereinafter referred to as the "City"), and Butera Finer Foods, Inc., an Illinois corporation d/b/a Butera Market (hereinafter referred to as the "Developer"). WHEREAS, Developer currently operates nine grocery stores with locations in Elgin, South Elgin, St. Charles, Algonquin, Roselle, Harwood Heights, Norridge, Lindenhurst and Naperville; and WHEREAS, the northwest area of Elgin's community is viewed as having low access to fresh fruits and vegetables and other grocery items; and WHEREAS, the last grocery store serving Elgin's northwest area community closed in 2003 and the area has remained devoid of any grocery stores since that time; and WHEREAS, the Developer wishes to expand the number of grocery stores it operates in Elgin while continuing to operate its existing Elgin grocery store at 1 Clock Tower Plaza; and WHEREAS, the Developer (either directly or through an entity controlled by one or more of its shareholders) is purchasing an approximately 37,786 square-foot commercial property at 20 Tyler Creek Plaza in which it plans to operate a Butera Market grocery store (Butera Market Tyler Creek Plaza and sometimes referred to herein as the Subject Project); and WHEREAS, the Developer will be investing approximately $4 million to expand its business within the City with the establishment of Butera Market Tyler Creek Plaza; and WHEREAS, the Developer is unable to proceed with the development of Butera Market Tyler Creek Plaza without certain economic development assistance from the City as hereinafter described; 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, 20 Tyler Creek Plaza has remained significantly underutilized for a period of approximately ten years (since the original grocery store closed in 2003) and for approximately one year under its current ownership; and WHEREAS, Butera Market Tyler Creek Plaza is expected to create job opportunities within the City; and WHEREAS, Butera Market Tyler Creek Plaza will serve to further the development of adjacent retail space in the Tyler Creek Plaza and surrounding areas; and WHEREAS, without this Agreement Butera Market Tyler Creek Plaza 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, Butera Market Tyler Creek Plaza will strengthen the commercial sector of the City; and WHEREAS, Butera Market Tyler Creek Plaza 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. Definitions. A. "Commencement Date" means the earlier of the date Butera Market Tyler Creek Plaza opens to the public, or March 1, 2014. B. "Sales Tax Revenues" means for the ten (10) years following the Commencement 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 from the sale of food and merchandise at Butera Market Tyler Creek Plaza, and all sales tax revenues the City receives from retail sales of alcoholic liquor in original packages for consumption off the premises derived from Butera Market Tyler Creek 2 Plaza pursuant to Chapter 4.21 of the Elgin Municipal Code, 1976, as amended. 3. "Fast-Track" Permitting Process and Waiver of Building Permit Fees for the Subject Project. A. The City agrees to conduct a "fast-track" permitting process for the Subject Project and agrees to waive and not require Developer to pay any building permit fees which would otherwise be due and payable to the City in connection with the establishment of Butera Market Tyler Creek Plaza. The provisions of this section are intended and shall be construed to apply only to the building permit fees. 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. 4. Issuance of Local Alcoholic Liquor Dealers License for Retail Sale of Package Liquors. A. The City agrees to issue a Class B alcoholic liquor dealer's license for license for Butera Market Tyler Creek Plaza store authorizing the retail sale of alcoholic liquor, on the premises specified, solely in the original package not for consumption on the premises. B. The City's issuance of a Class B alcoholic liquor dealer's license for Butera Market Tyler Creek Plaza is expressly conditioned on Developer or Butera Market Tyler Creek Plaza otherwise meeting all applicable ordinances and statutes governing the issuance of a local alcoholic liquor dealer's license. C. Any and all application fees, license fees or other fees which may be due and owing to the City and/or any other governmental entity in connection with the issuance of a Class B alcoholic liquor dealer's license for Butera Market Tyler Creek Plaza shall be paid by Developer or Butera Market Tyler Creek Plaza. 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 Agreement, in order to reimburse the Developer for a portion of the costs incurred by Developer in conjunction with the establishment of Butera Market Tyler Creek Plaza, all as set forth and detailed below. 3 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 to the Developer shall be paid in annual installments according to the following formula: L The City shall rebate to Developer fifty percent (50%) of the Sales Tax Revenues received by the City that have been derived from the retail sale offood, merchandise a chandise and alcoholic liquor at Butera Market Tyler Creek Plaza. ii. The Developer, when eligible, may apply for a fifty percent (50%) Sales Tax Revenues rebate annually for ten (10) consecutive periods. The first annual period shall commence on Commencement Date and shall terminate on December 31, 2015. Each of the nine remaining periods shall commence annually on January 1st and terminate on December 31st. iii. The City and Developer agree that the City shall not reimburse Developer more than five hundred thousand dollars ($500,000.00) under the terms of this Agreement (the Reimbursement Cap Amount) iv. The terms and conditions of this Agreement shall cease upon Developer's receipt of payments totaling the Reimbursement Cap Amount without need for further acts or actions by either the Developer or the City. 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 2.25 percent, being 1 percent from the State of Illinois and 1.25 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 or increased from the current amount of 2.25 percent during the ten years following the Commencement Date that the subsequent rebate of Sales Tax Revenues from the City to the Developer shall be reduced or increased proportionately. 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, when eligible, the annual installments of the rebates of Sales Tax Revenues provided for herein within ninety (90) days of each of the ten (10) annual anniversaries of the 4 Commencement Date. The City shall determine the amount of sales and Sales Tax Revenues generated by Butera Market Tyler Creek Plaza 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 Butera Market Tyler Creek Plaza 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 use reasonable efforts to notify the Developer upon its receipt of the State of Illinois documentation and the City shall make the required Sales Tax Revenue rebate payment 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 by Butera Market Tyler Creek Plaza of an Illinois Department of Revenue form ST-1 or ST-2, or any successor reporting form with the Illinois Department of Revenue, 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 or ST-2 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 officials shall keep strictly confidential all information in the ST-1 or ST-2 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 "Butera Market Tyler Creek Plaza 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 an annual basis a letter certifying the amount of Sales Tax Revenues received by the City for Butera Market Tyler Creek Plaza 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 Butera Market Tyler Creek Plaza being hereinafter referred to as a "IDOR Sales Tax Revenue Certification Letter." (ii) Take all additional actions as may reasonably be necessary in order to for the City to obtain the information to insure the accurate calculation of Sales Tax Revenues from Butera Market Tyler Creek Plaza; 5 (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 Butera Market Tyler Creek Plaza (subject to the terms and conditions regarding Developer's consolidated data). (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 reasonably required 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, form ST-2 or form ST-556, or any successor reporting forms, filed with the Illinois Department of Revenue by Butera Market Tyler Creek Plaza. G. Developer and the City agree to cooperate and take all additional actions as may reasonably be necessary in order to obtain the necessary information and to insure the accurate collection of deposits of Sales Tax Revenues. The City agrees to take all actions necessary to provide for the systematic receipt of sales tax information for Butera Market Tyler Creek Plaza from the Illinois Department of Revenue. 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 Butera Market Tyler Creek Plaza. 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 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 rebate of any Sales Tax Revenues. 6. Contingencies. 6 A. Notwithstanding any other provision of this Agreement to the contrary, it shall be a condition precedent to the obligations of the City under this Agreement that Developer, or a successor thereof, continues operating both Butera Market Tyler Creek Plaza and the Butera Market grocery store at 1 Clock Tower Plaza, Elgin, Illinois simultaneously for a period of not less than ten (10) years following the Commencement Date. B. Developer shall post or cause to be posted in favor of the City a performance bond, letter of credit, personal guarantee, or such other instrument acceptable to the City,provided that in lieu thereof and at Developer's option, Developer may permit the City to file a property lien at Butera Market Tyler Creek Plaza, before any sales tax rebate is paid to Developer. The performance bond, letter of credit or such other instrument shall be in an amount equal to any sales tax rebate being sought by Developer plus the amount of any sales tax rebate previously paid by the City to Developer under the terms of this Agreement. C. In the event Developer, or a successor thereof, fails to continue simultaneously operating both Butera Market Tyler Creek Plaza and the Butera Market grocery store at 1 Clock Tower Plaza, Elgin, Illinois for a period while the Reimbursement Cap Amount is outstanding, anticipated to be not less than ten (10) years following the Commencement Date, or in the event that any other of the foregoing contingencies of this Agreement 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. All funds paid by the City to Developer pursuant to this Agreement shall be returned to the City by Developer within ten (10) days. 7. 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: 7 TO THE CITY: TO THE DEVELOPER: City of Elgin Paul Butera, Jr. 150 Dexter Court Vice President Elgin, IL 60120-5555 Butera Market 1 Clock Tower Plaza Attention: Richard G. Kozal Elgin, IL 60120 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, 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 reasonable discretion of either the parties hereto. 8 I. 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, extended as required as set forth hereinafter if Developer diligently begins curing such failure after notice from the City and diligently proceeds to complete the cure and it reasonably takes more than 30 days to cure, in which event Developer shall cure within said longer reasonable time, not to exceed ninety (90) days, 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, provided that the City's remedy shall be limited to collection of the Reimbursement Cap Amount monies previously advanced by the City to the Developer as set forth in this Agreement. Notwithstanding the foregoing or anything else to the contrary in this Agreement, with the sole exception of an action to recover the Reimbursement Cap Amount monies the City has paid to Developer pursuant to paragraph 5.B.iii., 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 action, the City shall also be entitled to recover from the Developer reasonable 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. 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. 9 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, establishing Butera Market Tyler Creek Plaza, 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 establishment of Butera Market Tyler Creek Plaza. Without limiting the foregoing, and notwithstanding 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 Butera Market Tyler Creek Plaza. 0. To the fullest extent permitted by law, 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, 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 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 employees, 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, defend 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. P. To the fullest extent permitted by law, 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 third party claims, suits, judgments, costs, attorneys' fees, expert 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 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, 10 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 Developer. Additionally, 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 to and shall from time to time provide to the City written reports on the status of Butera Market Tyler Creek Plaza. Such written reports shall be provided to the City upon request of the City at such intervals as is reasonably agreed upon by the parties. Such written reports shall contain a status report on construction activities and such other information as may be requested by the City. R. Each party hereto, 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, not to sue the other party or maintain any legal action or other defenses against the other party 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 Butera Finer Foods, Inc. have executed this Agreement on the date first set forth above. CITY OF ELGIN, BUTERA FINER FOODS, INC., an Illinois municipal corporation an Illinois corporation By: 441 B . � � -F- David J. ptain ayor Attest: %9' J'U, Kimberly Dewis, City Clerk AA11 ELGIN THE CITY IN THE SUBURBS- DATE: September 20, 2013 TO: Rick Kozal, Assistant City Manager and Chief Operating Officer FROM: Jennifer Quinton, Deputy City Clerk SUBJECT: Resolution No. 13-149 Adopted at the September 11, 2013, 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 Butera Finer Foods, Inc. d/b/a Butera Market (20 Tyler Creek Plaza)