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HomeMy WebLinkAboutOrdinance 74-13RECORD OF ORDINANCES Oayt -Legal Blank. I- 74 -13 Passed 20 For No. 30033 Ordinance No. AN ORDINANCE AUTHORIZING THE PROVISION OF CERTAIN INCENTIVES TO G -TEKT NORTH AMERICA CORPORATION TO INDUCE IT TO LOCATE AN OFFICE AND ASSOCIATED 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 development and create and preserve jobs and employment opportunities within the City; and WHEREAS, G -TEKT North America Corporation (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 on the economic development incentives provided in the proposed Economic Development Agreement (as described below), the Company is desirous of acquiring a facility within the City to locate an office and associated operations and workforce within the City in order to achieve the payroll Withholding targets set forth in the Economic Development Agreement; and WHEREAS, this Council has determined that it is necessary and appropriate and in the best interests of the City to provide for certain economic development incentives to the Company, as described in the proposed Economic Development Agreement; and WHEREAS, this Council has determined to offer the 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 acquire a facility and locate an office and associated operations and workforce, all within the City, which will result in the creation of new jobs and employment opportunities, thereby 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. NOW, FORE, BE IT ORDAINED by the Council of the City of Dublin, State of Ohio, of the elected members concurring, that: Section 1. 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 acquire a facility within the City for the location of an office and associated operations and workforce within the City, which will result in the creation of new jobs and employment opportunities, 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. The City Manager, for and in the name of this City, is hereby authorized to execute that Economic Development Agreement, provided further that the approval of changes thereto by that official, and their character as not being substantially adverse to the City, shall be evidenced conclusively by the execution thereof. This Council further authorizes the City Manager, 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 Director of Law, the Director of Finance, 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 3. This Council finds and determines that all formal actions of this Council and any of its committees concerning and relating to the passage of this Ordinance were RECORD OF ORDINANCES Dayton Legal Blank, Inc Ordinance No 7413 Page 2 of 2 Form No 30043 Passed , 26 taken in open meetings of this Council or committees, and that all deliberations of this Council and any of its committees that resulted in those formal actions were in meetings open to the public, all in compliance with the law including Section 121.22 of the Revised Code. Section 4. This Ordinance shall be in full force and effect on the earliest date permitted by law. Signed: Mayor - P si 'ng Officer Attest: Clerk of Council Passed: 2013 Effective: ftK 2013 I cityof Dublin Office of the City Manager 5200 Emerald Parkway • Dublin, OH 43017 -1090 Phone: 614 - 410 -4400 • Fax: 614- 410 -4490 To: Dublin City Council From: Marsha I. Grigsby, City Manager Date: August 22, 2013 Initiated By: Jeremiah Gracia, Economic Development Administrator Memo Re: Ordinance 74 -13 — Economic Development Agreement with G -TEKT North America Summary Staff has been in discussions with G -TEKT North America (G -TEKT) to assist them with establishing a North American research and development headquarters. The company's project plans include the creation of 77 new full -time positions in Dublin by the end of 2014. This expansion project is in competition with other localities in Central Ohio. G -TEKT Corporation is headquartered in Saitama, Japan and is the parent company for G -TEKT North America Corporation (G -NAC) in Ohio; Jefferson Industries Corporation (JIC) in West Jefferson, Ohio; Jefferson Southern Corporation (JSC) in Rockmart, Georgia; Austin Tri -Hawk Automotive, Inc. (ATA) in Austin, Indiana; G -TEKT America Corporation (G -TAC) in Canton, Michigan; and Jefferson Elora Corporation (JEC) in Ontario, Canada. G -TEKT North America was established in April 2013 to support North American automobile production. The proposed Dublin location will serve as an R &D facility for the design and development of parts and manufacturing equipment for related companies in North America. Due to increasing growth, the corporate expectation is for G -TEKT North America to be the dedicated global auto body frame component manufacturer with strong R &D capability. G -TEKT North America will rise to these customer expectations by increasing both the quality and the quantity of its technical strengths utilizing its high level of expertise and supporting supply systems on a global scale. The Economic Development Agreement proposed by Dublin to G -TEKT includes a $30,000 location grant tied directly to the purchase and renovation of a 30,000 SF facility in Dublin. In addition, the company has been offered a five -year, 12% Performance Incentive on withholdings collected (2014- 2018). The performance incentive is capped at $69,000 for the term of the agreement. In consideration, G -TEKT agrees to create 77 full -time jobs in Dublin by the end of 2014. The company must reach predetermined annual withholdings targets to qualify for these performance incentives. The City estimates it would net approximately $400,880 in income tax withholdings over the agreement's term, should the company grow according to expectations. Recommendation Staff recommends Council passage of Ordinance 74 -13 at the second reading /public hearing on September 9, 2013. Please contact Jeremiah Gracia with any questions. ECONOMIC DEVELOPMENT AGREEMENT THIS ECONOMIC DEVELOPMENT AGREEMENT (the `Agreement") is made and entered into this day of , 2013, 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 G -TEKT NORTH AMERICA CORPORATION, a corporation (the "Company" and together with the City, the `Parties "), 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 development and create and preserve jobs and 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 incentives provided in this Agreement, the Company desires to locate an office and associated operations and workforce within the City; and WHEREAS, pursuant to Ordinance No. -13 passed on , 2013 (the "Ordinance "), the City has determined to offer the economic development incentives described herein to induce the Company to acquire a facility within the City for the location of an office and associated operations and workforce within the City, which will result in the creation of new jobs and employment opportunities 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 these incentives in order to induce the Company to acquire a facility and locate its operations and workforce, all within the City; Now THEREFORE, the City and the Company covenant, agree and obligate themselves as follows: Section 1. Company's Agreement to Acquire a Facility and Locate Its Operations and Workforce Within the City In consideration for the economic development incentives to be provided by the City herein, the Company agrees that it will acquire a facility within the City for the location of an office and associated operations and workforce within the City, all consistent with the terms of this Agreement. The Company expects to create seventy -seven (77) new employee positions within the City by December 31, 2014. The average annual wage of these new employees is estimated to be Fifty -Seven Thousand Five Hundred and 00 /100 Dollars ($57,500.00), with total estimated payroll withholdings of approximately Four Hundred Seventy Thousand and 00/100 Dollars ($470,000.00) over the term of this Agreement. Squire Souders #880097v1: 08 -09 -2013 Section 2. Citv Agreement to Provide Incentives (a) General In consideration for the Company's agreement to acquire a facility within the City for the location of an office and associated operations and workforce within the City, the City agrees to provide economic development incentives to the Company in accordance with this Section. (b) Location Incentive (i) Incentive Pavment to the Company The Company agrees to acquire a facility within the City for the location of an office and associated operations and workforce within the City. In consideration of the Company's agreement to locate that office and create additional employment opportunities within the City, the City agrees to provide to the Company a Location Incentive (the "Location Incentive ") in the aggregate amount of Thirty Thousand and 00 /100 Dollars ($30,000.00), payable to the Company within thirty (30) days following the occurrence (to the City's reasonable satisfaction) of (A) the Company's acquisition of a facility located within the City and provision to the City of documentation in support thereof and (B) the issuance of a certificate of occupancy for the facility after any required improvements and /or renovations thereto are completed by the Company, which certificate will not be unreasonably withheld by the City. (ii) Forfeiture of Right to Receive Incentive Payments The Company agrees and acknowledges that the Location Incentive provided for in subsection 2(b) is being made by the City to the Company in consideration for the Company's agreement to acquire a facility within the City for the location of an office and associated operations and workforce within the City and to create additional employment opportunities, all within the City. The Company further agrees that if the requirements of subsection 2(b)(i) are not satisfied, the City shall not be obligated to remit the Location Incentive to the Company as required by this subsection 2(b). (c) Workforce Creation Incentive (i) Calculation of Actual Pavroll Withholding Taxes On or before March 15 of each of the years 2015 through 2019, the City shall calculate the actual payroll withholding taxes collected and received during the then preceding calendar year and in respect of that preceding calendar year by the City from all Employees (as defined below). For purposes of that calculation, the Company acknowledges and agrees that the total amount of actual payroll withholding taxes in respect of any calendar year shall be determined based solely upon the amount of payroll withholding tax payments actually received by the City from the Company during that calendar year. The Company agrees that the determination of whether to include in such calculation any amount received by the City in respect of any calendar year but following the conclusion of that calendar year, shall be solely within the discretion of the City. For purposes of this Section 2, `Employees" shall include only those individuals employed by the Company and working within the City. Squire Souders #880097v1: 08 -09 -2013 -2- (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. (iii) Annual Incentive Payments to the Company If the actual payroll withholding taxes collected and received by the City pursuant to subsection 2(c)(i) during the then preceding calendar year and in respect of that preceding calendar year from all Employees, net of refunds (such amount being referred to as the Actual Withholdings'), equal or exceed the Target Withholdings (as defined in subsection 2(c)(iv)) for that 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 (as defined in subsection 2(e)), an amount equal to the product of (A) an amount equal to the Actual Withholdings, multiplied by (B) twelve percent (12 %) (with each such product being referred to as an Annual Incentive Payment'); provided, however, that (1) the City shall not be required pursuant to this subsection 2(c) to remit an Annual Incentive Payment to the Company in excess of the Annual Cap (as defined in subsection 2(c)(iv)) in any calendar year, and (2) the aggregate amount of all Annual Incentive Payments remitted pursuant to this subsection 2(c) by the City to the Company shall not exceed Sixty -Nine Thousand and 00 /100 Dollars ($69,000.00). (iv) Target Withholdings and Annual Cap The Target Withholdings and Annual Cap for each of the calendar years 2014 through 2018 shall be: Calendar Year Target Withholdings Annual Cap 2014 $ 88,504 $ 12,000 2015 91,159 13,000 2016 93,894 14,000 2017 96,711 15 2018 99,612 15,000 (v) Forfeiture of Right to Receive Workforce Creation Incentive Payment The Company agrees and acknowledges that Annual Incentive Payments provided for in subsection 2(c) are being made by the City to the Company in consideration for the Company's agreement to acquire a facility within the City for the location of an office and associated operations and workforce within the City and to create additional employment opportunities, all within the City. The Company further agrees that if the Target Withholdings requirement is not met for any given calendar year as set forth in subsection 2(c)(iv), the City shall not be obligated to make an Annual Incentive Payment to the Company for the calendar year in respect of which the Target Withholdings requirement was not satisfied. Failure to satisfy the Target Withholdings requirement in respect of any one calendar year does not prohibit the Company from receiving an Annual Incentive Payment for any subsequent calendar year in respect of which the Target Withholdings requirement is satisfied. Squire Souders #880097vl: 08 -09 -2013 - 3 - (d) Method of Payment The payments to be paid to the Company as provided 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. (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 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. For purpose of this Agreement, "nontax revenues" shall mean, all moneys of the City which are not moneys raised by taxation, to the extent available for such purposes, including, but not limited to the following: (i) grants from the United States of America and the State; (ii) payments in lieu of taxes now or hereafter authorized to be used for the purposes by State statute; (iii) fines and forfeitures which are deposited in the City's General Fund; (iv) fees deposited in the City's General Fund from properly imposed licenses and permits; (v) investment earnings on the City's General Fund and which are credited to the City's General Fund; (vi) investment earnings of other funds of the City that are credited to the City's General Fund; (vii) proceeds from the sale of assets which are deposited in the City's General Fund; (viii) rental income which is deposited in the City's General Fund; and (ix) gifts and donations. Section 3. Miscellaneous. (a) Assignment This Agreement may not be assigned without the prior written consent of all non - assigning Parties. (b) Binding Effect The provisions of this Agreement shall be binding upon the successors or assigns of the Parties. (c) 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. (d) Day for Performance Wherever herein there is a day or time period established for performance and such day or the expiration of such time period is a Saturday, Sunday or legal holiday, then such time for performance shall be automatically extended to the next business day. (e) Economic Development Assistance Certification The Company has made no false statements to the City in the process of obtaining approval of the incentives described in this Agreement. If any representative of the Company has knowingly made a false statement to the City Squire Souders #880097v1: 08 -09 -2013 -4- to obtain the incentives described in this Agreement, the Company shall be required to immediately return all benefits received under this Agreement pursuant Ohio Revised Code Section 9.66(C)(2) and shall be ineligible for any future economic development assistance from the State, any State agency or a political subdivision pursuant to Ohio Revised Code Section 9.66(C)(1). The Company acknowledges that any person who provides a false statement to secure economic development assistance may be guilty of falsification, a misdemeanor of the first degree, pursuant to Ohio Revised Code Section 2921.13(F)(1), which is punishable by a fine of not more than $1,000 and/or a term of imprisonment of not more than six months (f) Entire Agreement This Agreement constitutes the entire Agreement between the Parties on the subject matter hereof and supersedes all prior negotiations, agreements and understandings, both written and oral, between the Parties with respect to such subject matter. This Agreement may not be amended, waived or discharged except in an instrument in writing executed by the Parties. (g) Events of Default and Remedies Except as otherwise provided in this Agreement, in the event of any default in or breach of this Agreement, or any of its terms or conditions, by any Party hereto, such defaulting Party shall, upon written notice from any non - defaulting Party, proceed immediately to cure or remedy such default or breach, and, in any event, within thirty (30) days after receipt of such notice. In the event such default or breach is of such nature that it cannot be cured or remedied within said thirty (30) day period, then in such event the defaulting Party shall upon written notice from any non - defaulting Party commence its actions to cure or remedy said breach within said thirty (30) day period, and proceed diligently thereafter to cure or remedy said breach. In case such action is not taken or not diligently pursued, or the default or breach shall not be cured or remedied within a reasonable time, the aggrieved non - defaulting Party may institute such proceedings as may be necessary or desirable in its opinion to cure and remedy such default or breach, including, but not limited to, proceedings to compel specific performance by the defaulting Party. (h) Executed Counterparts This Agreement may be executed in several counterparts, each of which shall be deemed to constitute an original, but all of which together shall constitute but one and the same instrument It shall not be necessary in proving this Agreement to produce or account for more than one of those counterparts. (i) Extent of Covenants: No Personal Liability All covenants, obligations and agreements of the Parties contained in this Agreement shall be effective to the extent authorized and permitted by applicable law. No such covenant, obligation or agreement shall be deemed to be a covenant, obligation or agreement of any present or future member, officer, agent or employee of the City or the Company other than in his or her official capacity, and neither the members of the legislative body of the City nor any official executing this Agreement shall be liable personally under this Agreement or be subject to any personal liability or accountability by reason of the execution thereof or by reason of the covenants, obligations or agreements of the City and the Company contained in this Agreement. 0) Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio without regard to its principles of conflicts of laws. All claims, Squire Souders #880097v1: 08 -09 -2013 - 5 - 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. (k) Legal Authority The Parties respectively represent and covenant that each is legally empowered to execute, deliver and perform this Agreement and to enter into and carry out the transactions contemplated by this Agreement. The Parties further respectively represent and covenant that this Agreement has, by proper action, been duly authorized, executed and delivered by the Parties and all steps necessary to be taken by the Parties have been taken to constitute this Agreement, and the covenants and agreements of the Parties contemplated herein, as a valid and binding obligation of the Parties, enforceable in accordance with its terms. (1) Limit on Liability 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. (m) 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: G -TEKT North America Corporation Dublin, Ohio 4301 Attention: 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. (n) No Waiver No right or remedy herein conferred upon or reserved to any Party is intended to be exclusive of any other right or remedy, and each and every right or remedy shall be cumulative and in addition to any other right or remedy given hereunder, or now or hereafter legally existing upon the occurrence of any event of default hereunder. The failure of any Party to insist at anytime upon the strict observance or performance of any of the provisions of this Agreement or to exercise any right or remedy as provided in this Agreement shall not impair any such right or Squire Souders #880097v1: 08 -09 -2013 -6- remedy or be construed as a waiver or relinquishment thereof. Every right and remedy given by this Agreement to the Parties hereto may be exercised from time to time and as often as may be deemed expedient by the parties hereto, as the case may be. (o) Recitals The Parties 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. (p) Severability If any provision of this Agreement, or any covenant, obligation or agreement contained herein is determined by a court to be invalid or unenforceable, that determination shall not affect any other provision, covenant, obligation or agreement, each of which shall be construed and enforced as if the invalid or unenforceable portion were not contained herein. That invalidity or unenforceability shall not affect any valid and enforceable application thereof, and each such provision, covenant, obligation or agreement shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law. (q) Survival of Representations and Warranties All representations and warranties of the Parties in this Agreement shall survive the execution and delivery of this Agreement. (remainder ofpage intentionally left blank — signature page follows) Squire Souders #880097v1: 08 -09 -2013 -7- 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: Marshal. Grigsbv Title: Citv Manager Approved as to Form: C Printed: Stephen J. Smith Title: Director of Law G -TEKT NORTH AMERICA CORPORATION Printed: Title: Squire Souders #880097v1: 08 -09 -2013 - 8- 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 during Fiscal Year 2013 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: .2013 Angel L. Mumma Director of Finance /Deputy City Manager City of Dublin, Ohio Squire Souders #880097v1: 08 -09 -2013 -9-