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HomeMy WebLinkAbout32-07 OrdinanceRECORD OF ORDINANCES Daylon Legal Blank. In, 32 -07 Ordinance No. Passed i AN ORDINANCE AUTHORIZING THE PROVISION OF ECONOMIC DEVELOPMENT INCENTIVES TO BMI FEDERAL CREDIT UNION TO INDUCE THE RETENTION OF ITS CURRENT WORKFORCE IN THE CITY AND THE RELOCATION OF ITS MAIN OFFICE AND ASSOCIATED WORKFORCE WITHIN THE CITY OF DUBLIN, AND AUTHORIZING THE EXECUTION OF AN ECONOMIC DEVELOPMENT AGREEMENT. I oiin No 10041 20 WHEREAS, consistent with its Economic Development 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, BMI Federal Credit Union (the "Company ") recently performed a comprehensive examination of its workforce needs, and based on the results of this examination, and induced by and in reliance upon the economic development incentive provided in the proposed Economic Development Agreement, the Company is desirous of retaining its current workforce in the City and relocating its main office and associated workforce to the City in order 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 an Economic Development Agreement presently on file in the office of the Clerk of Council, to induce the Company to retain its current workforce in the City and to relocate its main office and associated workforce to the City, thereby creating additional jobs and employment opportunities and improving 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 these economic development incentives to induce the Company to retain its current workforce in the City and to relocate its main office and associated workforce to 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 ouncil 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 the economic development incentive, as described in the Economic Development Agreement (as 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 certain economic development incentives in consideration for the Company's agreement to retain its current workforce in the City and to relocate its main office and associated workforce to 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, RECORD OF ORDINANCES Dayton Legal Blank, Inc Ordinance No. 32 -07 Passed Form No 30043 Page 2 .20 �l 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 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 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. Section 5 . This Ordinance shall be in full force and effect on the earliest date permitted by law. Mayor - Presiding Officer Attest: -- Clerk of Council Passed: 0 , 2007 Effective: (1 , 2007 i1 CITY OF KRLiN Office of the City Manager 5200 Emerald Parkway, Dublin, Ohio 43016 Phone: 614 -410 -4400 • Fax: 614- 410 -4490 Memo To: Members of Dublin City Council From: Jane S. Brautigam, City Manager Date: May 31, 2007 Initiated By: Colleen M. Gilger, Economic Development Administrator Re: Ordinance 32 -07— Economic Development Agreement with BMI Federal Credit Union Summary Staff has been in discussions with BMI Federal Credit Union regarding its desire to construct and own a new headquarters facility. Over the last three years, several sites were identified within Central Ohio for its new facility and banking branch. In 1936, a group of Battelle Memorial Institute employees applied to the Federal Farm Credit Administration to form a credit union. Its mission would be to serve its members by providing loans at rates lower than those of other credit grantors and paying higher interest on savings. Credit Unions are different from any other financial institution as they are founded on democratic, cooperative principles. Credit Unions are not - for - profit and are owned and directed by the members they serve. Members elect, and may be elected to, the credit union's board of directors, with each member having one vote. Today, BMI Federal Credit Union serves the employees of Battelle in Central Ohio and 26 Battelle offices across the United States. It also serves over 200 other companies with offices across the country. BMI presently employs 60 full -time employees at its headquarters location in Columbus, in addition to seven branch employees currently in Dublin. The annual payroll of those employees combined is approximately $2.6 million. For consideration of the economic development incentive to be provided by the City, BMI agrees that it will construct and own a Dublin facility (on Emerald Parkway, south of Innovation Drive) and locate approximately 60 new jobs to Dublin. Ordinance 32 -07 authorizes an Economic Development Agreement (EDA) between the City and BMI that provides for a $10,000 Facility Acquisition Grant and a four -year, 20 percent performance incentive. The EDA will require BMI to reach predetermined annual payroll withholdings tied to its job and payroll growth commitments in order to receive incentive payments. The City could make annual payments to BMI in a minimum four -year aggregate amount of $44,734 should all targets be achieved. This portion of the incentive is capped at $65,000. BMI expects to add over $273,904 in new payroll withholding income tax revenue over the term of the agreement. Recommendation Staff recommends the Economic Development Agreement and Ordinance 32 -07 be approved by City Council at the second reading/public hearing on June 18, 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 BMI FEDERAL CREDIT UNION (the "Company"), an Ohio corporation with its main office currently located at 760 Kinnear Road, Columbus Ohio, and a branch office located at 6680 Perimeter Loop Road 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, 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 its current workforce in the City and relocating its main office and associated workforce to the City; and WHEREAS, pursuant to Ordinance No. -07 passed 1 2007 (the "Ordinance "), the City has determined to offer the economic development incentive described herein to induce the Company to retain its current workforce in the City and to relocate its main office and associated workforce to the City 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 the Company have determined to enter into this Agreement to provide this incentive in order to induce the Company to retain its current workforce in the City and to relocate its main office and associated workforce to the City; Now THEREFORE, the City and the Company covenant agree and obligate themselves as follows: Section 1. The Companv's Agreement to Retain Current Workforce in the Citv and to Relocate to the New Facility The Company presently employs seven (7) employees at its branch office located at 6680 Perimeter Loop Road in the City. The aggregate annual payroll of those employees is approximately $140,000. For consideration of the economic development incentives to be provided by the City herein, the Company agrees that it will retain its current workforce of seven (7) employees at its branch office in the City. The Company also employs sixty (60) employees at its current main office located at 760 Kinnear Road, Columbus Ohio 43212. The aggregate annual payroll of those employees is approximately $2,500,000. For consideration of the economic development incentive to be provided by the City herein, the Company agrees that it will relocate its main office and associated workforce of sixty (60) employees to the City upon its acquisition of a new facility located along Emerald Parkway just south of Innovation Drive (the `New Facility"). Section 2. Citv Agreement to Provide Incentives (a) General In consideration for the Company's agreement to retain its current workforce in the City and to relocate its main office operations and associated workforce to the City, the City agrees to provide economic development incentives to the Company in accordance with this Section. (b) Facility Acquisition Grant The Company will acquire the New Facility to support the relocation of its main office and associated workforce to the City. In consideration of that agreement to acquire the New Facility and to relocate its main office and associated workforce within the City, the City agrees to provide a grant in the amount of $10,000 to the Company to be used for the purpose of acquiring the New Facility (the "Facility Acquisition Grant"), which Facility Acquisition Grant shall be paid to the Company within 30 days of the City's receipt of the Company's first withholdings payment to the City tied to the employment at the New Facility. (c) Workforce Relocation Incentive (i) Calculation of Actual Withholdings On or before March 15 of each of the years 2009 thru 2012 the City shall calculate the actual payroll withholding taxes collected during the preceding calendar year by the City from all Employees. For purposes of this Section 2, `Employees" shall include only those individuals employed by the Company working at the New Facility located within the City. (ii) Information Relating to Employees The Company agrees that, in accordance with the Dublin City Code, the annual payroll reconciliation and related W -2 forms relating to its Employees will be provided to the City prior to February 28 of each calendar year. (d) Incentive Payments to the Company If the actual payroll withholding taxes collected during the then preceding calendar year by the City from all employees, net of refunds ("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 the Company, solely from nontax revenues, an amount equal to the product of (A) an amount equal to the Actual Withholdings, multiplied by (B) the Incentive Factor (as defined below) ("Incentive Paymem"). -2- (e) Withholdings and Incentive Payments With respect to the Actual Withholdings collected during each of the calendar years 2008 through 2011 inclusive, the Incentive Factor shall be twenty percent (20 %). The Target Withholdings for each of the calendar years 2008 through 2011 shall be: Calendar Year Target Withholdings 2008 $51,894 2009 $54,489 2010 $57,213 2011 $60,074 The payments provided for in this Section 2 shall be made by the City to the Company by electronic funds transfer or by such other manner as is mutually agreed to by the City and the Company. There is no maximum annual Incentive Payment, however the total maximum payment cap associated with this Agreement (including the Facility Acquisition Grant payment and the four annual Incentive Payments) is $75,000. (f) Forfeiture of Incentive Payment(s) The Company agrees and acknowledges that Incentive Payments provided for in Section 2(d) are being made by the City to the Company in consideration for the Company's agreement to retain its current workforce in the City and to relocate its main office and associated workforce to the City. 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 City shall not be obligated to make any incentive payment to the Company 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 receiving an Incentive Payment for any subsequent year in which the Target Withholding is met. (g) 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 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 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. (h) Applicable City 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 if hand - 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: City of Dublin, Ohio 5800 Shier Rings Road Dublin, Ohio 43016 -7295 Attention: Economic Development Director (ii) the Company at BMI Federal Credit Union 760 Kinnear Road Columbus, Ohio 43212 Attention: Sharon Custer, 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. -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 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. 0) 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) 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 above. CITY OF DUBLIN, OHIO Printed: Jane Brautigam Title: Citv Manager Approved as to Form: C Printed: Stephen J. Smith Title: Director of Law BMI FEDERAL CREDIT UNION 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: 2007 Marsha I. Grigsby Director of Finance City of Dublin, Ohio -7-