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HomeMy WebLinkAbout02-05 OrdinanceRECORD OF ORDINANCES Dayton Legal Blank Inc. Form No. 30043 ~ 02-05 ~_ Ordinance No. Passed , 20 AN ORDINANCE AUTHORIZING THE PROVISION OF CERTAIN INCENTIVES FOR PURPOSES OF RELOCATING THE OPERATIONS OF AUTOMATION AND CONTROL TECHNOLOGY, INC. (ACT) AND ITS WORKFORCE TO THE CITY, AND AUTHORIZING THE EXECUTION OF AN ECONOMIC DEVELOPMENT AGREEMENT. WHEREAS, consistent with its Economic Development Strategy approved by Dublin City Council Resolution 07-94 adopted on June 20, 1994, and the updated strategy approved by Dublin City Council Resolution 30-04 adopted July 6, 2004, the City desires to encourage commercial office development and provide for the creation of employment opportunities within the City; and WHEREAS, based on the results of Automation and Control Technology, Inc.'s ("ACT") recent comprehensive examination of operations and facilities, ACT is desirous of relocating to and expanding its existing workforce within the City of Dublin in consideration for the provision by the City of additional economic development incentives; and WHEREAS, this Council has determined to offer additional economic development incentives, the terms of which are set forth in a substantially final form of Economic Development Agreement presently on file in the office of the Clerk of Council, to induce ACT to relocate and expand its workforce within the City, to create additional jobs and employment opportunities and to improve the economic welfare of the people of the State of Ohio and the City, all as authorized in Article VIII, Section 13 of the Ohio Constitution; and WHEREAS, this Council finds that it is in the best interest of the City to provide those economic development incentives to induce ACT to expand its operations and workforce within the City and to provide for the execution and delivery of that Economic Development Agreement with ACT; NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, Franklin, Union and Delaware Counties, Ohio, ~ of the elected members concurring that: Section 1. The Economic Development Agreement by and between the City and ACT, in the form presently on file with the Clerk of Council, providing for, among other thin s, the rovision of incentives to ACT in consideration for ACT's agreement to g p relocate and expand its workforce within the City, is hereby approved and authorized with changes therein not inconsistent with this Ordinance and not substantially adverse to this City and which shall be approved by the City Manager and Director of Finance. The hereb h name of this Cit are Cit Mana er and Director of Finance for and in t e Y Y Y g authorized to execute that Economic Development Agreement, provided further that the approval of changes thereto by those officials, and their character as not being substantially adverse to the City, shall be evidenced conclusively by their execution thereof. This Council further authorizes the City Manager and the Director of Finance, for and in the name of the City, to execute any amendments to the Economic Development Agreement, which amendments are not inconsistent with this Ordinance ', and not substantially adverse to this City. Section 2. This Council further hereby authorizes and directs the City Manager, the Clerk of Council, the Director of Law, the Director of Finance, or other appropriate officers of the City to prepare and sign all agreements and instruments and to take any other actions as maybe appropriate to implement this Ordinance. Section 3. This Council finds and determines that all formal actions of this Council concerning and relating to the passage of this Ordinance were taken in an open meeting RECORD OF ORDINANCES Dayton Legs] Blank, Inc. Form No. 30043 _._-- 02-05 Page 2 i Ordinance No. Passed 20 --- -- { of this Council and that all deliberations of this Council that resulted in those formal actions were in meetings open to the public in compliance with the law. Section 4. This Ordinance shall be in full force and effect on the earliest date permitted by law. Signed: ~, Mayor -- Presiding Officer Attest: Clerk of Council Passed: a ~:J 2005 i ~ , 'v 2005 Effects e. GL-YG~t , I hereby certify that copies of this Ordinance/Resolution were posted in the City of Dublin in accordance with Section 731.25 of the Ohio Revised Code. uty Clerk of Council, Dublin, Ohio CITY OF DUBLIN Division of Economic Development 5800 Shier-Rings Road, Dublin, Ohio 43016-1236 Phone: 614-410-4600 • Fax: 614-761-6506 To: Members of Dublin City Council From: Jane S. Brautigam, City Manager~5• Date: December 28, 2005 Memo Initiated By: Dana L. McDaniel, Deputy City Manager/Director of Economic Development Colleen M. Gilger, Economic Development Specialist Re: Ordinance 02-05 -Economic Development Agreement -ACT Summary: Staff has been in discussion with Automation and Control Technology, Inc., regarding the relocation of its operations and workforce to Dublin. ACT is nearing the end of its lease at 650 Ackerman Road in Columbus (on the ABB campus) and needs to vacate the property because ABB is selling the 26-acre complex to Ohio State University. ACT company executives were looking to purchase an existing facility containing lab space that was appropriately zoned for light manufacturing and research and development in the Central Ohio area. They have identified 6141 Avery Road (the former C.C. Technologies building) as its preferred location. ACT, a technology solutions company focusing on process management, data acquisition and decision support for continuous manufacturing processes, currently employs 28 people with an average annual payroll exceeding $2.1 million. The company plans to grow to 78 employees with nearly $7.5 million in annual payroll by 2013. The company, a 1999 spin-off of ABB, also considers software development, engineering design, application fabrication, hardware fabrication and electronic platforms, controls and monitoring as areas of expertise. Ordinance No. 02-OS legislates an Economic Development Agreement between the City and ACT that includes a relocation grant of $70,000 in the first two years tied to the purchase of 6141 Avery Road, followed by an eight-year, 10 percent income tax rebate incentive tied to job creation and payroll growth. The projected payout to ACT over the term of the agreement is expected to be $148,602. Over the term of this 10-year agreement, the City is estimated to net approximately $680,325 in income tax withholdings. Staff is comfortable with this incentive structure because ACT is prepared to make along-term commitment to Dublin through the purchase of a vacant Dublin facility, and the company must annually meet its projected growth targets in order to qualify for incentive payments. Conclusion: Staff recommends that the Economic Development Agreement be approved by Ordinance 02-OS on January 18, 2005. C Automation and Control Technology, Inc. (ACT) Site ECONOMIC DEVELOPMENT AGREEMENT THIS ECONOMIC DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into this day of , 2005, by and between the CITY of DUBLIN, OHIO (the "City"), a municipal corporation duly organized and validly existing under the Constitution and the laws of the State of Ohio (the "State") and its Charter, and Automation and control Technology Inc. (`ACT Inc. ") an Ohio corporation with its offices located in Columbus, Ohio, under the circumstances summarized in the following recitals. RECITALS: WHEREAS, consistent with its Economic Development Strategy approved by Dublin City Council Resolution No. 30-04 adopted on July 6, 2004, the City desires to encourage commercial office development and provide for the creation of employment opportunities within the City; and WHEREAS, ACT Inc. desires to locate its operations and related workforce of 28 fulltime employees within the City of Dublin; and WHEREAS, the City has determined to offer economic development incentives described herein to induce ACT Inc. to locate and establish its operations and workforce within the City to create jobs and employment opportunities and to improve the economic welfare of the people of the State of Ohio and the City, all as authorized in Article VIII, Section 13 of the Ohio Constitution; and WHEREAS, the City and ACT Inc. have determined to enter into this Agreement to provide these incentives to induce ACT Inc. to locate its operations within the City. Now THEREFORE, the City and ACT Inc. covenant agree and obligate themselves as follows: Section 1. ACT Inc. A~,reement to Locate Jobs. ACT Inc. will establish its operations at 6141 Avery Road in the City of Dublin. ACT Inc. will occupy the Dublin facility no later than April 1, 2005 and will employ and maintain at least 28 fulltime employees within the City of Dublin as part of its operations. The average initial annual wage of these 28 employees is estimated to be $71,492, and the workforce is expected to grow to 78 fulltime employees with an average annual wage of $93,281 by 2013, with a total estimated payroll withholdings of $828,927 over a nine year period (2005 through 2013). ACT Inc. will purchase the 6141 Avery Road, Dublin facility. Proof of such purchase will be presented to the City of Dublin as soon as practical after execution and prior to receiving any incentive or grant from the City of Dublin. Section 2. City Agreement to Provide Incentives. (a) General. In consideration for ACT Inc.'s agreement to locate its operations' workforce and associated payroll within the City, the City agrees to provide economic development incentives to ACT Inc. in accordance with this Section. (b) Relocation Grant. ACT Inc. will update needed infrastructure and the property as a result of its move to the Dublin facility totaling approximately $200,000. The City agrees to provide a grant to be used for this purpose. The City's grant to ACT Inc. will total $70,000. The City will execute a payment of $30,000 to ACT Inc. upon occupancy of the facility but no earlier than April 1, 2005. The City will execute a second payment of $40,000 to ACT Inc. no later than March 1, 2006 providing the 2005 prorated Target Withholdings is met (see 2(c)(iii) below) . (c) Withholding Rebate Incentive. (i) Calculation of Actual Withholdings. On or before March 15 of each of the years 2006 thru 2013 the City shall determine whether the actual payroll withholding taxes collected during the preceding calendar year by the City from all Employees (the "Actual Withholdings") meet or exceed the Target Withholdings for that preceding calendar year, all in accordance with the schedule set forth below. For purposes of this Section 2, "Employees" shall include all individuals employed by ACT Inc. in the City of Dublin and working at the Dublin facility. ACT Inc. agrees that, in accordance with the Dublin City Code, the annual payroll reconciliation relating to ACT Inc.'s Employees will be provided to the City prior to February 28 of each calendar year. (ii) Payments to ACT Inc.. If the Actual Withholdings meet or exceed the Target Withholdings for the preceding calendar year, the City shall, on or before April 15 of the then current calendar year, pay to ACT Inc., solely from non-tax revenues, the incentive amount set forth in the following schedule. (ii) Target Withholdings and Incentive Payments. With respect to the Actual Withholdings collected during each of the calendar years 2006 thru 2013 (8 years), the Target Withholdings and Incentive Payment to be paid in respect of each of those calendar years shall be paid in accordance with the following schedule: -2- Calendar Year 2005 (prorated, 9 months) 2006 2007 2008 2009 2010 2011 2012 2013 2014 Target Withholdings $32,182 $56,547 $66,338 $78,315 $91,002 $101,016 $113,344 $129,990 $149,465 $0 Incentive Payment (10% of Actual Withholdings for the Preceding Calendar Year) $0 $0 $5,655 $6,634 $7,832 $9,100 $10,102 $11,334 $12,999 $14,947 The payments provided for in this Section 2 shall be made by the City to ACT Inc. by electronic funds transfer or by such other manner as is mutually agreed to by the City and ACT Inc.. (d) Forfeiture of Incentive Payment. ACT Inc. agrees that if the target withholding is not met, as set forth in 2(c) above for any given year, the City is not obligated to make any incentive payment to ACT Inc. for the year in which the target was not met. Failure to meet the withholding target in any one calendar year does not prohibit ACT Inc. from receiving an Incentive Payment for any subsequent year in which the target is met in accordance with the above schedule. (e) City's Obligation to Make Payments Not Debt; Payments Limited to Non-tax Revenues. Notwithstanding anything to the contrary herein, the obligations of the City pursuant to this Agreement shall not be a general obligation debt or bonded indebtedness, or a pledge of the general credit or taxes levied by the City, and ACT Inc. shall have no right to have excises or taxes levied by the City, the State or any other political subdivision of the State for the performance of any obligations of the City herein. Consistent with Section 13 of Article VIII, Ohio Constitution, any payments or advances required to be made by the City pursuant to this Section 2 shall be payable solely from the City's non-tax revenues. Further, since Ohio law limits the City to appropriating monies for such expenditures only on an annual basis, the obligation of the City to make payments pursuant to this Section 2 shall be subject to annual appropriations by the City Council and certification by the Director of Finance of the City as to the availability of such non-tax revenues. (f) Applicable Cit~Payroll Tax Rate. For purposes of calculating the Actual Withholdings in each calendar year under this Section 2, the City's payroll tax rate shall be assumed to be two percent (2%). -3- Section 3. Miscellaneous. (a) Notices. Except as otherwise specifically set forth in this Agreement, all notices, demands, requests, consents or approvals given, required or permitted to be given hereunder shall be in writing and shall be deemed sufficiently given if actually received or ifhand-delivered or sent by recognized, overnight delivery service or by certified mail, postage prepaid and return receipt requested, addressed to the other party at the address set forth in this Agreement or any addendum to or counterpart of this Agreement, or to such other address as the recipient shall have previously notified the sender of in writing, and shall be deemed received upon actual receipt, unless sent by certified mail, in which event such notice shall be deemed to have been received when the return receipt is signed or refused. For purposes of this agreement, notices shall be addressed to: (i) the City at: (ii) ACT Inc. at: City of Dublin, Ohio 5800 Shier Rings Road Dublin, Ohio 43016-7295 Attention: Economic Development Director Automation and Control Technology, Inc. PO Box 82186 Columbus, Ohio 43202 Attention: Charles A. Totel, President The parties, by notice given hereunder, may designate any further or different addresses to which subsequent notices; certificates, requests or other communications shall be sent. (b) Extent of Provisions; No Personal Liability. All rights, remedies, representations, warranties, covenants, agreements and obligations of the City under this Agreement shall be effective to the extent authorized and permitted by applicable law. No representation, warranty, covenant, agreement, obligation or stipulation contained in this Agreement shall be deemed to constitute a representation, warranty, covenant, agreement, obligation or stipulation of any present or future trustee, member, officer, agent or employee of the City or ACT Inc. in other than his or her official capacity. No official executing or approving the City's or ACT Inc.'s participation in this Agreement shall be liable personally under this Agreement or be subject to any personal liability or accountability by reason of the issuance thereof. (c) Successors. This Agreement shall be binding upon and inure to the benefit of ACT Inc. and its successors and assigns. (d) Recitals. The City and ACT Inc. acknowledge and agree that the facts and circumstances as described in the Recitals hereto are an integral part of this Agreement and as such are incorporated herein by reference. (e) Amendments. This Agreement may only be amended by written instrument executed by the City and ACT Inc. -4- (f) Executed Counterparts. This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute but one and the same agreement. It shall not be necessary in proving this Agreement to produce or account for more than one of those counterparts. (g) Severability. In case any section or provision of this Agreement, or any covenant, agreement, obligation or action, or part thereof, made, assumed, entered into or taken, or any application thereof, is held to be illegal or invalid for any reason, (i) that illegality or invalidity shall not affect the remainder hereof or thereof, any other section or provision hereof, or any other covenant, agreement, obligation or action, or part thereof, made, assumed, entered into or taken, all of which shall be construed and enforced as if the illegal or invalid portion were not contained herein or therein, (ii) the illegality or invalidity of any application hereof or thereof shall not affect any legal and valid application hereof or thereof, and (iii) each section, provision, covenant, agreement, obligation or action, or part thereof, shall be deemed to be effective, operative, made, assumed, entered into or taken in the manner and to the full extent permitted by law. (h) Captions. The captions and headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement. (i) Governing Law and Choice of Forum. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio or applicable federal law. All claims, counterclaims, disputes and other matters in question between the City, its agents and employees, and ACT Inc., its employees and agents, arising out of or relating to this Agreement or its breach will be decided in a court of competent jurisdiction within Franklin County, Ohio. (j) Survival of Representations and Warranties. All representations and warranties of ACT Inc. and the City in this Agreement shall survive the execution and delivery of this Agreement. (k) Notwithstanding any clause or provision of this Agreement to the contrary, in no event shall City or ACT Inc. be liable to each other for punitive, special, consequential, or indirect damages of any type and regardless of whether such damages are claimed under contract, tort (including negligence and strict liability) or any other theory of law. (Signature Pages to Follow) -5- Itv Wi~ss WxExEOF, the City and ACT Inc. have caused this Agreement to be executed in their respective names by their duly authorized representatives, all as of the date first written above. Approved as to Form: By: Printed: Stephen J. Smith Title: Director of Law CITY OF DUBLIN, OHIO By: Printed: Jane Brauti~am Title: City Manager ACT Inc. By: Printed: Title: -6- FISCAL OFFICER'S CERTIFICATE The undersigned, Director of Finance of the City under the foregoing Agreement, certifies hereby that the moneys required to meet the obligations of the City under the foregoing Agreement have been appropriated lawfully for that purpose, and are in the Treasury of the City or in the process of collection to the credit of an appropriate fund, free from any previous encumbrances. This Certificate is given in compliance with Sections 5705.41 and 5705.44, Ohio Revised Code. Dated: , 2004 Marsha I. Grigsby Deputy City ManagerlDirector of Finance City of Dublin, Ohio -7-