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HomeMy WebLinkAbout11-07 OrdinanceRECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 3U(143 1) -07 ~rdi~ance Na. _ Pissed 20 1 AN ORDINANCE AUTHORIZING THE PROVISION OF AN ECONOMIC DEVELOPMENT INCENTIVE TO XCELERATE MEDIA TO INDUCE THE EXPANSION OF THE XCELERATE MEDIA WORKFORCE WITHIN THE CITY OF DUBLIN, AND AUTHORIZING THE EXECUTION OF AN ECONOMIC DEVELOPMENT AGREEMENT. WHEREAS, consistent with its Economic Development Strategy approved by Dublin City Council Resolution No. 07-94 adopted on dune 20,1994, and the updated strategy approved by Dublin City CauncilResolution 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, based on the results of a Xcelerate Media, Inc. the "Company"} comprehensive examination of workforce needs, and induced by and in reliance on the economic development incentives provided in the proposed Economic Development Agreerr~ent, the Company is desirous of retaining its existing workforce within the City, and expanding its workforce to achieve the payroll withholding targets set forth in the Economic Development Agreement; and WHEREAS, this Council has determined to offer certain 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 the Company to expand its workforce within the City, thereby creating additional jabs and employment opportunities and improving the economic welfare of the people of the State of Ohia 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 this economic development incentive to induce the Company to expand its workforce within the City and to provide for the execution and delivery of that Economic Development Agreement with the Company; 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 City hereby finds and determines that the provision of an economic development incentive, as described in the Economic Development Agreement described below} is necessary and appropriate and in the best interests of the City to provide for the creation of 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. Section 2. The Economic Development Agreement by and between the City and the Company, in the form presently on file with the Clerk of Council, providing for, among other things, the provision of an economic development incentive in consideration for the Company's agreement to 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 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 authorises 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. RECORD OF ORDINANCES I Dayton Legal Blank, {ne. Form No. 30043 Ordinance No, ~ ~ ~7 Passed Page ~ 20 Economic Development Agreement, which amendments are not inconsistent with this Ordinance and not substantially adverse to this City. Section 3. This Council further hereby authorizes and directs the City Manager, the Director of Finance, the Director of Law, the Clerk of Council, or other appropriate officers of the City to prepare and sign all agreements and instruments and to take any other actions as may be appropriate to implement this Ordinance. Section 4. This Council Ends 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. Section 5. This Ordinance shall be in full force and effect on the earliest date permitted bylaw. Signed: Mayor -Presiding Officer Attest: ' Clerk o ouncil Passed: ~~r~j ~ , 2007 Effective: , 2007 r CITY ~F DUELIN Office of the City Manager 5200 Emerald Parkway, Dublin, Ohio 43016 Phone: 614-410-4400 • Fax: 614-410-4490 To: Members of Dublin City Council From: Jane S. Brautigam, City Manager Date: February 14, 2007 Initiated By: Colleen M. Gilger, Economic Development Administrator Memo Re: Ordinance 11-07-Economic Development Agreement with Xcelerate Media, Inc. Summary Staff has been in discussions with Xcelerate Media, Inc. regarding its expanding Dublin office, which serves as the company's headquarters. The company is preparing for a workforce expansion, and is working toward finding more suitable space for its future growth needs. Alternate buildings were identified, both in Dublin and around the central Ohio region. Xcelerate Media creates customized e-learning courseware. Founded in 1999, Xcelerate Media's one core competency allows it to create high-quality multi-media courseware at a fair price and in a relatively short time frame. Clients include many Fortune 500 companies. In late 2006, Xcelerate received a $1 million investment from Reservoir Venture Partners LP of Columbus. (Reservoir Venture Partners is one of the few early-stage venture capital firms in Central Ohio; its focus is to provide venture investment focused primarily on Central Ohio-based emerging technology companies.} Xcelerate Media presently employs 10 full-time employees at 25 W. Bridge Street and one other satellite office, both in Historic Dublin. The annual payroll of those employees is approximately $475,000 (average salary: $47,500). For consideration of the economic development incentive to be provided by the City, Xcelerate Media agrees that it will retain its current workforce, and create approximately 62 new jobs by December 31, 2011, equating to an annual payroll of nearly $4.5 million (average salary: $62,000) by 2011. Ordinance 11-07 authorizes an Economic Development Agreement (EDA) between the City and Xcelerate Media that provides fora $31,000 workforce expansion and performance incentive. The EDA will require Xcelerate Media to reach predetermined annual payroll withholdings tied to its j ob creation commitments in order to not owe repayment to the City for the lump-sum grant. Xcelerate Media expects to add over $222,100 in new payroll withholding income tax revenue over the five-year term of the agreement. The City also will retain Xcelerate's current $9,500 in annual payroll withholdings. Recommendation Staff recommends that City Council adopt Ordinance 11-07 authorizing this economic development agreement at the second reading/public hearing on March 5, 2007. ECONOMIC DEVELOPMENT AGREEMENT THIS ECONOMIC DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into this day of , 2007, 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 XCELERATE MEDIA, INC., an Ohio corporation (the "Company"), with its facilities located in the City, 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, the Clty deSlreS t0 increase employment opportunities and improve the economic welfare of the people of the City; and WHEREAS, based on the results of the Company's recent comprehensive examination of workforce needs, and induced by and in reliance on the economic development incentive provided in this Agreement, the Company is desirous of retaining and expanding its workforce within the city; and WHEREAS, pursuant to Ordinance No. 11-07 passed , 2007 (the "Ordinance"), the City has determined to offer the economic development incentive described herein to induce the Company to retain and expand its workforce within the City in order to create jobs and employment opportunities and 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 the Company have determined to enter into this Agreement to provide the incentives described herein to induce the Company to retain and expand its workforce within the City; Now THEREFORE, the City and the Company covenant agree and obligate themselves as follows: Section 1. Compan,~greement to Retain Current Workforce at its Current Facility and Create Jobs; Renewal of Lease. The Company presently employs ten (10) full time employees at its site located at 25 West Bridge Street, in the City (the "Company Facility"). The aggregate annual payroll of those employees is approximately $475,000. For consideration of the economic development incentive to be provided by the City herein, the Company agrees that it will retain its current workforce often (10) fulltime employees at the Company Facility, and expand its workforce at the Company Facility, or other Dublin-based facilities, in an amount sufficient to achieve the annual Target Withholdings (as defined below) set forth in Section 2. The Company expects to create such additional jobs that the total estimated payroll for all of its employees in the City by the year 2011 will equal or exceed $4,000,000. The Company hereby agrees to renew or extend its current lease for its occupation and use of the Company Facility through at least December 31, 2011. Once the renewal or extension of such lease is completed, the Company agrees to provide written evidence of such renewal or extension to the City which shall be in a form which is reasonably acceptable to the City. The Company agrees that the City shall not be required to make any payment under this Agreement until such written evidence of such new or extended lease has been delivered to and accepted by the City. Section 2. City Agreement to Provide Incentive. (a) Incentive Payment to the Company. In consideration for the Company's agreement to expand its operations, workforce and associated payroll within the City, the City agrees to make a one time payment to the Company, solely from non-tax revenues, in the amount of $31,000 (the "Incentive Payment"), payable within thirty days of the date of this Agreement provided that the Company has delivered evidence to the City of the renewal or extension of its lease as provided in Section 1. (b) Workforce Expansion Incentive. (i) Calculation of Withholdings. On or before March 15 of each of the years 2008 thru 2012 the City shall determine whether the actual payroll withholding taxes collected during the preceding calendar year by the City from all Employees, net of refunds (the "Actual Withholdings") meet or exceed the withholding targets for that preceding calendar year (the "Target Withholdings"), in accordance with the schedule set forth in Section 2(d) below. For purposes of this Section 2, "Employees" shall include only those individuals employed fulltime by the Company working at any Company facility located within the City. (ii) Information Relating to Compan, Employ. The Company agrees that, in accordance with the Dublin City Code, the annual payroll reconciliation and related W-2 forms relating to Company Employees will be provided to the City prior to February 28 of each calendar year. (c) Company Incentive Repayment to the City. In each of the calendar years 2008 through 2012, if the City determines that the Actual Withholdings do not meet or exceed the Target Withholdings for that preceding calendar year, the Company shall, no later than March 31 of the then current calendar year, pay to the City, an amount equal to one-fifth (1 /5) of the Incentive Payment ($6,200.00) ("Company Incentive Repayment") for that calendar year. -2- (d) Target Withholdings. The Target Withholdings for each calendar year shall be: Calendar Year Target Withholdings 2007 $21,600 2008 $31,000 2009 $49,600 2010 $78,120 2011 $89,280 The Incentive Payment and any Company Incentive Repayment provided for in this Section 2 shall be made by electronic funds transfer or by such other manner as is mutually agreed to by the City and the Company. (e) Additional Incentives. The City and the Company agree that if the Company exceeds its job expansion targets described herein, the City and the Company may enter in negotiations for additional incentives not otherwise provided by this Agreement. (~ Forfeiture of Incentive Payment. The Company agrees and acknowledges that the Incentive Payment provided for in Section 2(a) is being made by the City to the Company in consideration for the Company's agreement to expand its workforce within the City and extend its lease of the Company Facility through at least December 31, 2011. The Company further agrees that if the Target Withholding is not met for any given year, as set forth in Section 2(d) above, the Company shall pay a Company Incentive Repayment to the City for the year in which the Target Withholding was not met. Failure to meet the Target Withholding in any one incentive year does not prohibit the Company from retain the applicable portion of the Incentive Payment for any subsequent year in which the Target Withholding is met. (g) City's Obligation to Make Payment Not Debt; Payment 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 the Company 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 payment pursuant to this Section 2 shall be subject to an annual appropriation by the City Council and certification by the Director of Finance of the City as to the availability of such non-tax revenues. 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 -3- 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: City of Dublin, Ohio 5800 Shier Rings Road Dublin, Ohio 43016-7295 Attention: Director of Economic Development (ii) the Company at: Xcelerate Media, Inc. 25 West Bridge Street Dublin, OH 43 017 Attention: Bob Mahaffey, 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 the Company in other than his or her official capacity. No official executing or approving the City's or the Company'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 the Company and its successors and assigns. (d) Recitals. The City and the Company 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 the Company. (~ 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. -4- (g) Severabili 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 (111) 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) Ca tions. 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 the Company, 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 the Company and the City in this Agreement shall survive the execution and delivery of this Agreement. (k) Limitation on Remedies. Notwithstanding any clause or provision of this Agreement to the contrary, in no event shall City or the Company 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. -5- IN WITNESS WHEREOF, the City and the Company have caused this Agreement to be executed in their respective names by their duly authorized representatives, all as of the date first written a ove. Approved as to Form: By: CITY OF DUBLIN, OHIO By: Printed: Jane Brautigam Title: City Manager .. By: Printed: Marsha I. Grigsby Title: Director of Finance Printed: Stephen J. Smith Title: Director of Law XCELERATE MEDIA, 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 during the year 2007 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: , 2007 Marsha I. Grigsby Director of Finance City of Dublin, Ohio -7-