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15-99 Resolution No. 15-99 RESOLUTION AUTHORIZING EXECUTION OF AN ECONOMIC INCENTIVE AGREEMENT WITH RUSSO HARDWARE, INC. D/B/A RUSSO POWER EQUIPMENT (1001 North Randall Road) 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 Russo Hardware,Inc.d/b/a Russo Power Equipment on behalf of the City of Elgin for economic development assistance in connection with the development of 1001 North Randall Road, a copy of which is attached hereto and made a part hereof by reference. s/David J. Kaptain David J. Kaptain, Mayor Presented: July 8, 2015 Adopted: July 8, 2015 Omnibus Vote: Yeas: 9 Nays: 0 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 9th day of July, 2015, by and between the City of Elgin, an Illinois municipal corporation (hereinafter referred to as the "City"), and Russo Hardware, Inc., an Illinois corporation d/b/a Russo Power Equipment(hereinafter referred to as the "Russo"). WHEREAS, Russo has been searching for a suitable location to establish a new power equipment retail store within a territory that includes the City and neighboring municipalities; and WHEREAS, Russo would be unable to proceed with the establishment of the power equipment store in the City and to own and operate the facility without certain economic de- velopment assistance from the City as hereinafter described; and WHEREAS, Russo will establish a new power equipment retail store and service facility (Dealership) on the vacant property commonly known as 1001 North Randall Road, Elgin at an estimated cost of$4.5 million; 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, 1001 North Randall Road, Elgin has remained vacant for at least one (1)year; and WHEREAS, the building at 1001 North Randall Road, Elgin has remained significantly un- derutilized 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, Russo 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 [TO BE DETERMINED BASED ON CLOSING DATE WITH WALMART). B. "Sales Tax Revenues" means for the ten (10) years following the Com- mencement Date, all revenues that the City receives from retail sales tax- es 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.) and the Home Rule Municipal Retailer's Occupation Tax (65 ILCS 5/8-11-1) derived solely from the sale of power equipment products, parts and other related retail items at the Dealership. 3. "Fast-Track" Permitting Process. The City agrees to conduct a "fast-track" per- mitting process for Russo's construction of the Dealership. Any and all building permit fees, impact fees or other fees which may be due and owing to the City and/or any governmental entity other than the City shall be paid by Russo. 4. Rebate of a Portion of Sales Tax Revenues. A. The City hereby agrees to rebate and pay to Russo a portion of the Sales Tax Revenues received by the City in accordance with this Agreement, in order to reimburse Russo for a portion of the costs incurred by Russo in conjunction with the establishment of the Dealership, all as set forth and detailed below. 2 B. The City shall pay to Russo a rebate of a portion of Sales Tax Revenues re- ceived by the City over the ten-year period following the Commencement Date. Such rebate of Sales Tax Revenues from the City to Russo shall be paid in annual installments according to the following formula: The City shall rebate to Russo twenty-five percent (25%) of the Sales Tax Revenues received by the City that have been derived solely from the sale of power equipment, parts and other related retail items 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 from the State of Illinois in the amount of one percent (1%) plus the the City's Home Rule Municipal Re- tailer's Occupation Tax, currently in the amount of one and one-quarter percent (1.25%). It is further agreed and understood that in the event the City's share of sales taxes from the State of Illinois is reduced from the current amount of one percent (1%) during the ten years following the Commencement Date that the subsequent rebate of Sales Tax Revenues from the City to Russo 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 one percent (1%) is reduced by ten percent, then the amount of the subsequent rebate of a portion of Sales Tax Rev- enues from the City to Russo will also be reduced by ten percent. The same analysis shall reply in the event the City reduces its Home Rule Mu- nicipal Retailer's Occupation Tax during the ten years following the Commencement Date. In the event of any conflict between the provi- sions 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 Russo 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 Commence- ment 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 Dealer- ship in sufficient time for the City to make the annual payments, then the City shall provide notice of such fact to Russo. In such event, the City shall make the required Sales Tax Revenue rebate payment to Russo within sixty (60) days after the date on which the City actually receives the sup- porting documentation for the applicable payment. 3 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, Russo 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 Russo in accordance with this Agreement. The City and its treasurer and other 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. Russo, 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 Russo 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 4 with the Illinois Department of Revenue by Russo and/or the Dealership. (vi) Allow the City the right, upon reasonable notice to Russo and/or the Dealership,to audit the Dealership records in order to confirm Sales Tax Revenues being generated by the Dealership. G. Russo and the City agree to cooperate and take all additional actions as may reasonably be necessary in order to obtain the necessary infor- mation and to insure the accurate collection of deposits of Sales Tax Rev- enues. 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, Russo will supply or cause to be supplied to the City appropriate authorizations for the Illinois De- partment of Revenue to provide such information, including copies of fil- ings with the Illinois Department of Revenue made by Dealership. Russo shall cause Dealership, upon written request of the City, to provide a power of attorney in a form reasonably satisfactory to the Illinois De- partment 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. Russo shall have no right, and agrees that it shall not, compel any exercise of the taxing pow- er 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 Russo 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. Notwithstanding same, nothing herein shall bar Russo from enforcing the terms and obligations of this Agreement in the event of non-compliance by the City. 5. 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 Russo begins operations at the Dealership on or before the Commencement Date, and that the Dealership continues with its operations at 5 the Dealership location or another location in Elgin approved by the City for a period of not less than ten (10) years from the Commencement Date. In the event that any of the foregoing contingencies are not satisfied, then the City, upon written notice to Russo, may elect to terminate this Agreement, and there- upon this Agreement shall be null and void and of no further force and effect without any further obligations of the City hereto. 6. 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 RUSSO: City of Elgin Eric Adams 150 Dexter Court 9525 Irving Park Road Elgin, IL 60120-5555 Schiller Park, IL 60176 Attention: Richard G. Kozal With a copy of any such notice to: City of Elgin Russell Robinson 150 Dexter Court 2800 W. Higgins Road Elgin, IL 60120-5555 Suite 160 Attention: William A. Cogley Hoffman Estates, IL 60169 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. 6 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 Russo and, as such, this Agreement shall not be construed against the other party, as the other- wise 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 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 Russo agree that, in the event of a default by the other par- ty, the other party shall, prior to taking any such actions as may be avail- able 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 it- self 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 4 hereof, no action shall be commenced by Russo 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 Cir- cuit Court of Kane County, Illinois. In the event any action is brought by the City against Russo 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 Russo reasonable interest and rea- sonable attorney's fees. K. Time is of the essence of this Agreement. 7 L. This Agreement shall be construed, and the rights and obligations of the City and Russo 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, employ- ee, 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 Russo 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 Russo shall comply with all applicable federal, state, city and other requirements of law. Russo 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 prose- cution of the work necessary to provide for the improvements to the Dealership. Without limiting the foregoing, and notwithstanding anything to the contrary in this Agreement, Russo and its contractors and subcon- tractors 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, Russo agrees to and shall indemni- fy, 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 re- sulting from or arising out of or alleged to be resulting from or arising out of negligent actions or omissions of Russo in connection herewith, includ- ing negligence or omissions of employees, agents or subcontractors of Russo arising out of the performance of this Agreement, or in any way re- sulting 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 Agree- ment by Russo, including any violation and/or breach by employees, agents or subcontractors of Russo. In the event of any action against the City, its officials, officers, employees, agents, attorneys, boards or com- missions 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 Russo. The provisions of this paragraph shall survive any termination, completion and/or expiration of this Agreement. 8 P. To the fullest extent permitted by law, Russo agrees to and shall indemni- fy, defend and hold harmless the City, its officials, officers, employees, at- torneys, 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 aris- ing 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, attorneys, boards or com- missions, 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 Russo. Additionally, in the event of such third party action Russo to the extent permitted by law shall upon the request of the City attempt to intervene in such proceed- ings and join the City in the defense thereof. Q. Russo 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. Russo, on behalf of itself and its respective successors, assigns and grant- ees 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. S. This agreement may be executed in counterparts, each of which shall be an original and all of which shall constitute one and the same agreement. For the purposes of executing this agreement, any signed copy of this agreement transmitted by email or facsimile shall be treated in all man- ners and respects as an original document. The signature of any party on a copy of this agreement transmitted by email or facsimile shall be con- sidered for these purposes as an original signature and shall have the same legal effect as an original signature. Any such emailed or faxed copy of this agreement shall be considered to have the same binding legal ef- fect as an original document. At the request of either party, any email or 9 facsimile copy of this agreement shall be re-executed by the parties in an original form. No party to this agreement shall raise the use of e-mail or facsimile as a defense to this agreement and shall forever waive such de- fense. IN WITNESS WHEREOF,the City and Russo have executed this Agreement on the date first set forth above. CITY OF ELGIN, RUSSO HARDWARE, INC. an Illinois municipal corporation d/b/a Russo Power Equipment, an Illinois corpora- tion By: /. ///.%i%.1,e/'_ By: David Kapt. M.or Eric Adams, President Attest: Kimberly Dewis, City Cl-rk 10