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HomeMy WebLinkAboutResolution No. 09-087 RESOLUTION NO. 09- 09V A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS, APPROVING THE ECONOMIC DEVELOPMENT AGREEMENT BY AND BETWEEN THE COLONY ECONOMIC DEVELOPMENT CORPORATION AND LAKELAND MARKETING, LLC, WHICH IS ATTACHED HERETO AND INCORPORATED HEREIN AS EXHIBIT A; AUTHORIZING THE MAYOR TO EXECUTE SAID RELEASE; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the Bylaws of The Colony Economic Development Corporation, a Type A Economic Development Corporation as defined by state law, require that economic development grants in excess of one hundred thousand ($100,000.00) dollars be approved by the City Council; and WHEREAS, Lakeland Marketing, LLC., has applied for a grant of funds and The Colony Economic Development Corporation has determined, and finds that the relocation of the Company to the City will promote new and expanded business enterprises in the City and qualifies as a "project" under the Act; and WHEREAS, the City Council, after review of the Agreement, hereby approves the Economic Development Agreement by and between The Colony Economic Development Corporation and Lakeland Marketing, LLC, and hereby authorizes the Mayor to execute all documents, if any, related to said Agreement on behalf of the City of The Colony. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS THAT: Section 1. The City Council hereby approves the Economic Development Agreement by and between The Colony Economic Development Corporation and Lakeland Marketing, LLC, which is attached hereto and incorporated herein as Exhibit A. Section 2. The Mayor is hereby authorized to execute any and all documents necessary, if any, relative to the Economic Development Agreement. Section 3. This Resolution shall become effective immediately from and after its passage, as the law and charter in such cases provides. i PASSED, APPROVED and EFFECTIVE this ~ lay of,9 . 2009. e McCou , Mayor ATTEST: Christie Wilson, City Secretary, t, APPROY-M AST FORM: Robert E. Hager, CWAttorney (REH/cdb) TM 40760.76.1113009 ORIGINAL STATE OF TEXAS § § ECONOMIC DEVELOPMENT AGREEMENT COUNTY OF DENTON § This Economic Development Agreement ("Agreement") is made by and between The Colony Economic Development Corporation ("TCEDC") and Lakeland Marketing LLC., a Texas limited liability company ("Company"), acting by and through their respective authorized officers. WITNESSETH: WHEREAS, the Company operates a food broker business which services the food service industry and desires to expand its operations in the City; and WHEREAS, Company has leased or intends to lease approximately 8,000 square feet of space in the Cascades located at 6304 Fallwater, The City of the Colony, Texas 75056 (the "Improvements") for a period of at least five (5) years (the" Lease") and intends to relocate its food broker operations to the Improvements; and WHEREAS, the Company had advised TCEDC that a contributing factor that would induce the Company to continue to relocate to and occupy the Improvements would be an agreement by TCEDC to provide an economic development grant to defray a portion of the costs of relocation to the Improvements; and WHEREAS, TCEDC has adopted programs for promoting economic development; and WHEREAS, the Development Corporation Act, Chapters 501-505 of the Texas Local Government Code (the "Act"), authorizes TCEDC to provide economic development grants for expenditures to promote or develop new or expanded business enterprises and other projects as defined by the Act; and WHEREAS, the TCEDC Board of Directors has determined, and finds that the relocation of the Company to the City will promote new and expanded business enterprises in the City and qualifies as a "project" under the Act; and WHEREAS, TCEDC has determined that making economic development grants to Company in accordance with this Agreement will further the objectives of TCEDC and will benefit TCEDC and the inhabitants of the City; NOW THEREFORE, in consideration of the foregoing, and on the terms and conditions hereinafter set forth, and for other valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: TCEDC/Lakeland Marketing LLC. Economic Development Agreement - Page 1 40264 Article I Definitions Wherever used in this Agreement, the following terms shall have the meanings ascribed to them: "Annual Grant" shall mean five (5) annual payments consisting of the aggregate payment of the Hotel Tax Grant and the Sales Tax Grant not to exceed the Maximum Grant Amount. "Capital Investment" shall mean the total capitalized cost of the Company for the relocation to the Improvements. "City" shall mean The City of The Colony, Texas. "Commencement Date" shall mean the Lease Inception Date, but no later than January 31, 2010. "Company" shall mean Lakeland Marketing LLC., a Texas limited liability company. "Consummated" shall have the same meaning assigned by the Texas Tax Code. "Employment Positions" shall mean non-temporary, full-time Primary Jobs eligible for employee benefits that have been created, maintained and filled at the Improvements. In the event of voluntary or involuntary termination of an employee, which termination causes the number of Employment Positions to fall below the number of required Employment Positions pursuant to this Agreement, the Company shall not be in default provided the required number of Employment Positions is re-established within sixty (60) days of the employee termination. Two (2) or more part-time employees totaling thirty (30) hours or more per week may be substituted for one (1) full-time employee. "Event of Bankruptcy or Insolvency" shall mean the dissolution or termination of a party's existence as a going business, insolvency, appointment of receiver for any part of such party's Land and such appointment is not terminated within ninety (90) days after such appointment is initially made, any general assignment for the benefit of creditors, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against such parry and such proceeding is not dismissed within ninety (90) days after the filing thereof. "Expiration Date" shall mean the sixth (6t") anniversary date of the Lease Inception Date. TCEDC/Lakeland Marketing LLC. Economic Development Agreement - Page 2 40264 "Force Majeure" shall mean any contingency or cause beyond the reasonable control of a party including, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, government or de facto governmental action (unless caused by acts of omissions of the party), fires, explosions or floods, strikes, slowdowns or work stoppages. "Grant Period" shall mean twelve (12) consecutive months immediately preceding the Annual Payment Date except the first Grant Period shall begin on the first day of the calendar month in which the Commencement Date occurs and end the last date of the twelfth (12'') calendar month thereafter. Thereafter, Grant Period shall mean each of four (4) consecutive periods of twelve (12) consecutive calendar months each, following the first Grant Period. For example, assume the Commencement Date is January 15, 2010 then the first Grant Period would be January 1, 2010 through and including December 31, 2010. "Grants" shall collectively mean the Hotel Tax Grant, the Sales Tax Grant and the Relocation Grant. "Hotel Tax" shall mean the municipal hotel tax imposed by the City pursuant to Chapter 351, Texas Tax Code, as amended, collected by Hotels from the Company and received by the City for Company customers and clients. "Hotel Tax Grant" shall mean the annual economic development grant contribution to the Annual Grant equal to one hundred percent (100%) of the Hotel Tax for the applicable Grant Period. "Hotels" shall have the meaning assigned by Chapter 351, Texas Tax Code, as amended, that are located within the City. "Impositions" shall mean all taxes, assessments, use and occupancy taxes, charges, excises, license and permit fees, and other charges by public or governmental authority, general and special, ordinary and extraordinary, foreseen and unforeseen, which are or may be assessed, charged, levied, or imposed by any public or governmental authority on the Company and/or any of the respective owners of the Land with respect to any property or any business owned or controlled by Company and/or the respective owners of the Land within the City. "Improvements" shall mean 8,000 square feet of space in the Cascades located at 6304 Fallwater, The City of The Colony, Texas. "Lease" shall mean the Company's lease of the Improvements for a period of at least five (5) years beginning the Lease Inception Date. "Lease Inception Date" shall mean the commencement date of the Lease term for the Improvements, but no later than January 31, 2010. TCEDC[Lakeland Marketing LLC. Economic Development Agreement - Page 3 40264 "Maximum Grant Amount" shall mean the collective annual aggregate payment of the Hotel Tax Grant and Sales Tax Grant of $20,000.00 for each Grant Period. "Payment Request" shall mean a written request from the Company to the TCEDC for payment of the Relocation Grant or the Annual Grant accompanied by receipts and invoices for the moving costs incurred and paid by the Company to relocate to the Improvements, and the amount of Hotel Tax and Sales Tax for the applicable Grant Period, and such other evidence as may be reasonably requested by the TCEDC, as the case may be. "Primary Jobs" shall have the same meaning as assigned by Section 501.002(12) of the Texas Local Government Code and shall mean non-temporary, full-time Company employment positions eligible for employee benefits and located at the Improvements. "Relocation Grant" shall mean an economic development grant equal to the actual costs paid and incurred by the Company for moving expenses to the Improvements not to exceed $43,000.00, to be paid as set forth herein. "Required Use" shall mean the Company's continuous lease and occupancy of the Improvements and the Company's continuous operation of wholesale food broker business which services the food service industry at the Improvements. "Sales Tax Grant" shall mean an annual economic development grant contribution to the Annual Grant equal to one hundred percent (100 of the Sales and Use Tax for the applicable Grant Period "Sales and Use Tax" shall mean City's receipts from the State of Texas from the collection of the local sales tax in the amount of two percent (2%) imposed by the City pursuant to Chapter 321, Texas Tax Code and the Development Corporation Act, Chapters 501-505 of the Texas Local Government Code (it being expressly understood that the City's two percent (2%) sales and use tax receipts are being used only as a measurement for its participation), as the result of the purchase of Taxable Items by the Company Consummated in the City for the applicable Grant Period "Taxable Items" shall mean taxable services and taxable items as those terms are defined by the Texas Tax Code. "TCEDC" shall mean The Colony Economic Development Corporation. TCEDC/Lakeland Marketing LLC. Economic Development Agreement - Page 4 40264 Article II Term The term of this Agreement shall begin on the last date of execution hereof (the "Effective Date") and continue until the Expiration Date, unless sooner terminated as provided herein. Article III Economic Development Grants 3.1 Annual Grants. Subject to the continued satisfaction of all the terms and conditions of this Agreement by the Company and the obligation of the Company to repay the Grants pursuant to Section 5.2 hereof, the TCEDC agrees to provide Company with five (5) Annual Grants. The Annual Grants shall be paid within thirty (30) days after TCEDC receipt of a Payment Request following the anniversary date of the end of the first Grant Period (the "Annual Grant Payment Date"). Each Payment Request for payment of the Annual Grant shall be submitted to the TCEDC not later than thirty (30) days prior to the Grant Payment Date of each calendar year. For illustration purposes, assume the Commencement Date is January 15, 2010, in which case the first Grant Period would begin January 1, 2010 and end December 31, 2010, and the first Annual Grant would be paid within thirty (30) days after TCEDC receipt of the Payment Request following December 31, 2010 (the "Annual Grant Payment Date"), and the applicable Grant Period would be January 1, 2010 through and including December 31, 2010. Thereafter, the Grant Period would be the consecutive twelve (12) month period of January 1 through and including December 31 of the calendar year. The amount of the first Annual Grant shall be the aggregate contribution of the Sales Tax Grant and the Hotel Tax Grant for the first Grant Period not to exceed the Maximum Grant Amount. 3.2 Relocation Grant. Subject to the continued satisfaction of all the terms and conditions of this Agreement by the Company and the obligation of the Company to repay the Grants pursuant to Section 5.2 hereof, the TCEDC agrees to provide Company with the Relocation Grant to be paid within thirty (30) days after TCEDC receipt of a Payment Request following the Commencement Date. 3.3 Current Revenue. The Grants made hereunder shall be paid solely from lawful available funds that have been appropriated by TCEDC. Under no circumstances shall the obligations of TCEDC hereunder be deemed to create any debt within the meaning of any constitutional or statutory provision. Consequently, notwithstanding any other provision of this Agreement, TCEDC shall have no obligation or liability to pay any portion of the Grant unless the TCEDC appropriates funds to make such payment during the budget year in which the Grant is payable. Further, TCEDC shall not be obligated to pay any commercial bank, lender or similar institution for any loan or credit agreement made by Company. None of the obligations of the TCEDC under this Agreement shall be pledged or otherwise encumbered in favor of any commercial lender and/or similar financial institution. TCEDC/Lakeland Marketing LLC. Economic Development Agreement - Page 5 40264 Article IV Conditions to Economic Development Grant The obligation of the TCEDC to pay the Grants hereunder shall be conditioned upon the continued compliance and satisfaction of the terms and conditions of the Agreement by the Company and each of the following conditions. 4.1 Payment Request. Company shall have submitted the applicable Payment Request. 4.2 Good Standing. Company shall not have an uncured breach or default of this Agreement. 4.3 Capital Investment. The Capital Investment shall be $80,000.00 as of January 2011. 4.4 Employment Positions. During the term of this Agreement following the Lease Commencement Date and continuing thereafter until the Expiration Date the Company shall create, fill and maintain at least fifteen (15) Employment Positions. 4.5 Required Use. During the term of this Agreement following the Lease Commencement Date and continuing thereafter until the Expiration Date, the Company agrees to continuously lease and occupy the Improvements and shall not allow the operation of the Improvements in conformance with the Required Use to cease for more than thirty (30) days except in connection with, and to the extent of an event of a Force Majeure. 4.6 Lease. The Company shall have entered into the Lease on or before January 31, 2010; and provided a fully executed copy thereof to the TCEDC on or before January 31, 2010. Article V Termination 5.1 This Agreement shall terminate upon any one or more of the following: (a) by written agreement of the parties; (b) Expiration Date; (c) by either party in the event the other party breaches any of the terms or conditions of this Agreement and such breach is not cured within thirty (30) days after written notice thereof; (d) by TCEDC if Company suffers an Event of Bankruptcy or Insolvency; (e) by TCEDC if any Impositions owed to the City and/or the State of Texas by Company shall become delinquent (provided, however the Company retains the right to timely and properly protest and contest any such Impositions); and TCEDC/Lakeland Marketing LLC. Economic Development Agreement - Page 6 40264 (f) by TCEDC if any subsequent Federal or State legislation or any decision of a court of competent jurisdiction declares or renders this Agreement invalid, illegal or unenforceable. 5.2 In the event the Agreement is terminated pursuant to Section 5.1(c), (d), (e), or (f) the Company shall immediately repay to TCEDC the total amount of the Grant paid to the Company as of the date of termination, plus interest at the rate of interest periodically announced by the Wall Street Journal as the prime or base commercial lending rate, or if the Wall Street Journal shall ever cease to exist or cease to announce a prime or base lending rate, then at the annual rate of interest from time to time announced by Citibank, N.A. (or by any other New York money center bank selected by TCEDC) as its prime or base commercial lending rate, from the Effective Date until paid. The payment obligation of Company set forth in this section 5.2 shall survive termination. 5.3 Right of Offset. The TCEDC may at its option, offset any amounts due and payable under this Agreement against any debt (including taxes) lawfully due to the City and/or the TCEDC from the Company, regardless of whether the amount due arises pursuant to the terms of this Agreement or otherwise and regardless of whether or not the debt due the City and/or the TCEDC has been reduced to judgment by a court. Article VI Miscellaneous 6.1 Binding Agreement. The terms and conditions of this Agreement are binding upon the successors and assigns of all parties hereto. This Agreement may not be assigned without the prior written consent of TCEDC. 6.2 Limitation on Liability. It is acknowledged and agreed by the parties that the terms hereof are not intended to and shall not be deemed to create a partnership or joint venture among the parties. It is understood and agreed between the parties that Company, in satisfying the conditions of this Agreement, has acted independently and TCEDC assumes no responsibilities or liabilities to third parties in connection with these actions. Company agrees to indemnify and hold harmless TCEDC and the City from all such claims, suits, and causes of actions, liabilities and expenses, including reasonable attorney's fees, of any nature whatsoever arising out of the Company's performance of the conditions under this Agreement. 6.3 Authorization. Each party represents that it has full capacity and authority to grant all rights and assume all obligations that are granted and assumed under this Agreement. 6.4 Notice. Any notice required or permitted to be delivered hereunder shall be deemed received three (3) days thereafter sent by United States Mail, postage prepaid, certified mail, return receipt requested, addressed to the party at the address set forth below or on the day actually received as sent by courier or otherwise hand delivered. TCEDC/Lakeland Marketing LLC. Economic Development Agreement - Page 7 40264 If Intended for TCEDC, to: With a copy to: Attn: Keri Samford Attn: Peter G. Smith Interim Director of Economic Development Nichols, Jackson, Dillard, Hager The Colony Economic Development Corp. & Smith, L.L.P. 6800 Main Street 1800 Lincoln Plaza The Colony, Texas 75056 500 North Akard Dallas, Texas 75201 If Intended for Company, to: Attn: Bobby Cimrhanzel Lakeland Marketing LLC. 3330 Earhart, Suite 204 Carrollton, Texas 75006 6.5 Entire Agreement. This Agreement is the entire Agreement between the parties with respect to the subject matter covered in this Agreement. There is no other collateral oral or written Agreement between the parties that in any manner relates to the subject matter of this Agreement. 6.6 Governing Law. The Agreement shall be governed by the laws of the State of Texas; and venue for any action concerning this Agreement shall be in the State District Court of Denton County, Texas. The parties agree to submit to the personal and subject matter jurisdiction of said court. 6.7 Legal Construction. In the event any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect other provisions, and it is the intention of the parties to this Agreement that in lieu of each provision that is found to be illegal, invalid, or unenforceable, a provision be added to this Agreement which is legal, valid and enforceable and is as similar in terms as possible to the provision found to be illegal, invalid or unenforceable. 6.8 Recitals. The recitals to this Agreement are incorporated herein. 6.9 Counterparts. This Agreement may be executed in counterparts. Each of the counterparts shall be deemed an original instrument, but all of the counterparts shall constitute one and the same instrument. 6.10 Exhibits. All exhibits to this Agreement are incorporated herein by reference for all purposes wherever reference is made to the same. 6.11 Survival of Covenants. Any of the representations, warranties, covenants, and obligations of the parties, as well as any rights and benefits of the parties, TCEDC/Lakeland Marketing LLC. Economic Development Agreement - Page 8 40264 pertaining to a period of time following the termination of this Agreement shall survive termination. 6.12 Employment of Undocumented Workers. During the term of this Agreement the Company agrees not to knowingly employ any undocumented workers and if convicted of a violation under 8 U.S.C. Section 1324a (f), the Company shall repay the amount of the Grant and any other funds received by the Company from the TCEDC as of the date of such violation within 120 business days after the date the Company is notified by the TCEDC of such violation, plus interest at the rate periodically announced by the Wall Street Journal as the prime or base commercial lending rate, or if the Wall Street Journal shall ever cease to exist or cease to announce a prime or base lending rate, then at the annual rate of interest from time to time announced by Citibank, N.A. (or by any other New York money center bank selected by the TCEDC) as its prime or base commercial lending rate, from the date of such notice until paid. 6.13 Conditions Precedent. This Agreement is subject to and conditioned upon the Company: (i) entering into the Lease on or before January 31, 2010; and (ii) the Company providing the TCEDC with a fully executed copy of the Lease on or before January 31, 2010. (signature page to follow) TCEDC/Lakeland Marketing LLC. Economic Development Agreement - Page 9 40264 Executed on this 2„ day of NOW"t'. .12009. THE COLONY ECONOMIC DEVELOPMENT CORPORATION By: Tom Tvardzik, President APPROVED BY: THE CITY OF THE COLONY By: D"L Joe McCo rry, Mayor Executed on this day of , 2009. LAKELAND MARKETING LLC. 00, By: •J/ Bobby Cimrhanzel, President TCEDC/Lakeland Marketing LLC. Economic Development Agreement - Page 10 40264