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HomeMy WebLinkAbout59-06 Ordinance RECORD OF ORDINANCES Dayton Legal Blank, Inc. Fonn No. 30043 59-06 Ordinance No. Passed 20 AN ORDINANCE AUTHORIZING THE PROVISIONS OF CERTAIN INCENTIVES FOR PURPOSES OF ENCOURAGING THE ESTABLISHMENT BY MOQVO, LLC OF ITS OPERATIONS AND WORKFORCE WITHIN THE CITY AND AUTHORIZING THE EXECUTION OF AN ECONOMIC DEVELOPMENT AGREEMENT. WHEREAS, consistent with its Economic Development Strategy (the "Strategy") approved by Dublin City Council Resolution No. 07-94 adopted on June 20, 1994, and the updated strategy approved by Dublin City Council Resolution No. 30-04 adopted on July 6, 2004, the City desires to encourage commercial office and retail development and provide for the creation of employment opportunities within the City; and WHEREAS, MoQvo LLC ("MoQvo is desirous of establishing its operations and workforce within the City in consideration for the provision by the City of economic development incentives; and WHEREAS, this Council has determined to offer 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 MoQvo to 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, this Council finds that it is in the best interest of the City to provide those economic development incentives to induce MoQvo to establish its operations and workforce within the City and to provide for the execution and delivery of that Economic Development Agreement with MoQvo; NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, Franklin, Union and Delaware Counties, State of Ohio, of the elected members concurring, that: Section 1. The Economic Development Agreement by and between the City and MoQvo, in the form presently on file with the Clerk of Council, providing for, among other things, the provision of incentives to MoQvo in consideration for MoQvo's agreement to establish its operations and 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 City Manager and Director of Finance, for and in the name of this City, are hereby 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 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. RECORD OF ORDINANCES Duyton Legal Blank, Inc. Form No. 30043 59-06 Page 2 Ordinance No. Passed . 20 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: ~'c~Q ~ , 2006 Effective: ~~O Ueln.(~~Y ~ , 2006 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. D ty Clerk of Council, Dublin, Ohio Office of the City Manager 5200 Emerald Parkway, Dublin, Ohio 43016 CITY OF DUBLIN Phone: 614-410-4400 • Fax: 614-410-4490 Memo To: Members of Dublin City Council From: Jane S. Brautigam, City Managerv~Q,,,~ `J . ~ Date: September 12, 2006 Initiated By: Colleen M. Gilger, Acring Director of Economic Development Re: Ord. 59-06 -Economic Development Agreement with MoQvo Summary Staff has been in discussions with MoQvo regarding the possibility of a Dublin location for its start-up company. The State of Ohio was competing with New York and Los Angeles for this company's offices. MoQvo is a provider of RSS (Real Simple Syndication)-based social media technology. They provide an easy-to-use aggregation service for on-line content providers and users. Simply put, the company will make it easier for any Internet user to view, organize and share digital content. Ordinance 59-06 authorizes an Economic Development Agreement between the City and MoQvo that provides a $15,000 Technology Grant (paid annually for four years in $3,750 increments) tied to the company committing to a five-year lease and meeting predetermined, annual job and payroll growth commitments. The company secured a Job Creation Tax Credit (JCTC) from the State of Ohio on August 28, 2006. The attached Economic Development Agreement (EDA) offering by the City of Dublin would serve as the required 25% local-match component toward the State's $55,000 package. MoQvo is committing to the hiring of at least 17 employees with an average salary of $80,000, equating to an annual payroll of $1.26 million by 2010; these jobs will locate to 5131 Post Road by year's end. MoQvo is projected to add $82,800 in new income tax withholding revenue to Dublin during the term of the Agreement and $108,000 during the term of their lease. In addition to MoQvo choosing Dublin as its home, two additional affiliate companies, Fugent and FDN, also will co-locate in the MoQvo office space. All three companies are owned and managed by similar interests, and co-locating provides efficiencies and eliminates redundancies for the three operations. The combined projections for Fugent and FDN initially include eight employees, growing to 13 in five years, and $72,000 in new income tax over MoQvo's five year lease. Recommendation Staff recommends the Economic Development Agreement and Ordinance No. 59-06 be approved by City Council on October 2, 2006. ECONOMIC DEVELOPMENT AGREEMENT THIS ECONOMIC DEVELOPMENT AGREEMENT (the "Agreement' is made and entered into this day of , 2006, 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 MoQvo LLC ("MoQvo") an Ohio corporation, under the circumstances summarized in the following recitals. RECITALS: WHEREAS, consistent with its Economic Development Strategy (the "Strategy") approved by Dublin City Council Resolution No. 07-94 adopted on June 20, 1994, and the updated strategy approved by Dublin City Council Resolution No. 30-04 adopted on July 6, 2004, the City desires to encourage commercial office and retail development and provide for the retention and creation of employment opportunities within the City; and WHEREAS, MoQvo desires to locate its operations and initial workforce of approximately 9 fulltime employees within the City of Dublin in 2007, growing to 17 employees by 2011; and WHEREAS, pursuant to Ordinance No. 59-06 passed , 2006 (the "Ordinance"), the City has determined to offer economic development incentives described herein to induce MoQvo 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 MoQvo have determined to enter into this Agreement to provide these incentives to induce MoQvo to locate its operations and create its workforce within the City. Now, THEREFORE, the City and MoQvo covenant agree and obligate themselves as follows: Section 1. Mho Agreement to Create Jobs. MoQvo agrees that it will establish its office at 5131 Post Road in the City of Dublin (the "Dublin Facility'. MoQvo will occupy the Dublin Facility no later than January 1, 2007, and by December 31, 2007 will employ at least 9 fiilltime employees within the City of Dublin as part of its operations, growing that workforce with the addition of 2 employees annually for afoot-year period. The average annual wage of these employees for this period is estimated to be approximately $80,000 with total estimated payroll withholdings of approximately $82,800 over afoot-year period. MoQvo will lease its Dublm Facility for a minimum of five (5) years. Proof of such lease will be presented to the City of Dublin as soon as practical after execution and prior to receiving any incentive from the City of Dublin. -i- Section 2. City Agreement to Provide Incentives. (a) General. In consideration for MoQvo's agreement to locate its operations' workforce and associated payroll within the City, the City agrees to provide economic development incentives to MoQvo in accordance with this Section. (b) Technolo~y Grant. MoQvo will update needed equipment and property as a result of its corporate start-up in the Dublin Facility. In consideration of that agreement to update such equipment and otherwise locate its operations' workforce within the City, the City agrees to provide a grant to MoQvo in the amount of $15,000 (the "Grant"). The City will make four annual installment payment of $3,750 each to MoQvo (1) after MoQvo submits an executed copy of a lease agreement providing for a lease to MoQvo of the Dublin Facility for a term of not less than five years, (2) after the City validates MoQvo has met or exceeded annual payroll withholdings targets, net of refunds, in calendar years 2007, 2008, 2009 and 2010, and (3) no later than April 30 of calendar years 2008, 2009, 2010 and 2011. At its sole discretion, and prior to the payment(s) of the Grant, the City may request any reasonable documentation with respect to how MoQvo intends to use the Grant, to ensure that the Grant achieves the purpose for which it has been granted under this Agreement. (i) Calculation of Actual Withholdings. On or before March 15 of each of the years 2008 thru 2011 the City shall determine whether the actual payroll withholding taxes collected during the preceding calendar years 2007 thru 2010, net of refunds, by the City from all Employees (the "Actual Withholdings") meet or exceed the target withholdings for that preceding calendar year (the "Target Withholdings"), all in accordance with the schedule set forth in subparagraph (iii) below. For purposes of this Section 2, "Employees" shall include all individuals employed by MoQvo in the City of Dublin and working at the Dublin Facility. MoQvo agrees that, in accordance with the Dublin City Code, the annual payroll reconciliation relating to the Employees will be provided to the City prior to February 28 of each calendar year. (ii) Payments to MoQvo. If the Actual Withholdings meets or exceeds the Target Withholdings for the preceding calendar year, the City shall, on or before Apri130 of the then current calendar year, pay to MoQvo, solely from non-tax revenues, $3,750 (the "Grant Payment"). (iii) Withholdings and Incentive Pa menu. With respect to the Actual Withholdings collected during each of the calendar years 2007 thru 2010, inclusive, the Target Withholdings and Grant Payment to be paid in respect of each of those calendar years shall be paid in accordance with the following schedule: -2- Calendar Year Tar et Withholdin s 1 Grant Payment 2007 $15,600 N/A 2008 $19,200 $3,750 2009 $22,800 $3,'750 2010 $25,200 $3,750 2011 N/A $3,750 (1) Assumes 9 FTEs in 2007, 12 FTEs in 2008, 15 in 2009, and 17 in 2010. The payments provided for in this Section 2 shall be made by the City to MoQvo by electronic funds transfer or by such other manner as is mutually agreed to by the City and MoQvo. The total maximum payment cap associated with the Agreement is $15,000. (c) Forfeiture of Incentive Payment and Repayment of Grant. MoQvo agrees that if the Tazget Withholdings is not met, as set forth in 2(b)(iii) above for any given year, the City is not obligated to make any Grant Payment to MoQvo for the year in which the Tazget Witholdings was not met. Failure to meet the Tazget Withholdings in any one incentive yeaz does not prohibit MoQvo from receiving a Grant Payment for any subsequent year in which the Tazget Withholdings is met. No financial obligation is incurred by MoQvo for failure to meet the Tazget Withholdings set forth in Section 2(b)(iii). (d) City's Obli a~ tion 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 MoQvo 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 Dvrector of Finance of the City as to the availability of such non- tax revenues. (e) Applicable CityPayroll 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%). 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 -3- 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: 5800 Shier Rings Road Dublin, Ohio 43016-7295 Attention: Economic Development Director (ii) MoQvo at: Post Road Dublin, OH 43017 Attention: Dan Easley 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 MoQvo in other than his or her official capacity. No official executing or approving the City's or MoQvo'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 MoQvo and its successors and assigns. (d) Recitals. The City and MoQvo acknowledge and agree that the facts and circumstances as described in the Recitals hereto are an integral part of this Agreement and as such aze incorporated herein by reference. (e) Amendments. This Agreement may only be amended by written instrument executed by the City and MoQvo. (f) Executed Counterparts. 'This Agreement maybe executed in several counterparts, each of which shall be regazded 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, -4- (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 deems 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 MoQvo, 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 MoQvo 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 MoQvo 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. Remainder of Page Intentionally Left Blank -5- IN WITNESS WxE1tEOF, the City and MoQvo have caused this Agreement to be executed in their respective names by their duly authorized representatives, all as of the date first written above. CITY OF DUBLIN, OffiO By: Printed: Jane S. Brauti~am Title: City Manager Approved as to Form: By: Printed: Stephen J. Smith Title: Director of Law MoQvo LLC 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: , 2006 Marsha I. Grigsby Deputy City Manager/Director of Finance City of Dublin, Ohio