73-02 OrdinanceRECORD OF ORDINANCES
Dayton Legal Blank, Inc. Form No. 30043
Ordinance No.
73-02 Passed 20
A-~r~
AN ORDINANCE AUTHORIZING THE EXECUTION AND DELIVERY
OF AN ECONOMIC DEVELOPMENT AGREEMENT BETWEEN THE
CITY OF DUBLIN AND PACER INTERNATIONAL, INC. TO INDUCE A
CONSOLIDATION OF ITS NATIONWIDE OPERATIONS TO THE
CITY IN ORDER TO INCREASE EMPLOYMENT WITHIN THE CITY.
WHEREAS, contingent on the passage of this Ordinance and the execution of the Economic
Development Agreement as an inducement therefor, Pacer International, Inc. ("Pacer") desires to
consolidate its nationwide operations to its facility, thereby relocating 105 jobs to the City located
in the City of Dublin, Ohio (the "City"); and
WHEREAS, the City, consistent with its economic development strategy, desires and intends to
induce Pacer to consolidate its nationwide operations to the City for the purpose of creating jobs
and employment opportunities and to improve the economic welfare of the people of the State of
Ohio and the City as authorized in Article VIII, Section 13, of the Ohio Constitution;
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, State of Ohio,
Jr of the elected members concurring, that:
Section 1. The City hereby finds and determines that it is necessary and appropriate and in the best
interests of the City to provide certain assistance to Pacer for the purpose of creating jobs and
employment opportunities and to improve the economic welfare of the people of the State of Ohio
and the City as authorized in Article VIII, Section 13, of the Ohio Constitution.
Section 2. To provide assistance to Pacer and thereby induce Pacer to complete the transactions
contemplated, the City Manager and the Director of Finance, for and in the name and on behalf of
the City, shall execute, acknowledge and deliver the Economic Development Agreement by and
among the City and Pacer in substantially the form thereof on file with the Clerk of Council. That
Agreement is approved with changes therein not inconsistent with this Ordinance and not
substantially adverse to the City and which are permitted by law, and shall be approved by the City
Manager and the Director of Finance, provided that the approval of those changes by such officers
and their character as not being substantially adverse to the City shall be evidenced conclusively by
their execution of those instruments.
Section 3. The City Manager (interim or otherwise) and the Director of Finance shall execute,
deliver and, if applicable, file for and in the name and on behalf of the City any other materials,
documents or certifications which are necessary or appropriate to consummate the transactions
contemplated in this Ordinance and the Economic Development Agreement.
Section 4. This Council finds and determines that all formal actions of this Council concerning or
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 take effect and be in force in accordance with Section 4.04 of the
Dublin City Charter.
Passed this ~0 ~~- day of ~A. , 2002
Signed:
Mayor -'residing Officer
Attest:
of Council
I hereby t£rtify that copies of this Ordirance!Resolution were postetl~i -tlte
City of Dublin in accordance yJitl3 Section 731.25 of the Q3l;io Revised C de.
~~;
~, i~=*c a# Council, Dublin. Ohin
Office of the City Manager
5200 Emerald Parkway -Dublin, Ohio 43017-1006
CITY OF DUBLIN Phone: 614-410-4400 -Fax: 614-410-4490 M e m O
To: Dublin City Council
From: Marsha Grigsby, Interim City Manager ~~
Date: May 2, 2002
Re: Ordinance No.73-02, Pacer Global Logistics
Initiated by: Michael H. Stevens, Director of Economic Development ~M~ //~
Ordinance No.73-02 is an ordinance to authorize the execution of an Economic Development
Agreement between the City and Pacer International, Inc.
The Economic Development Agreement authorizes the payment of an incentive to Pacer Global
Logistics, fka Rail Van, located at 6805 Perimeter Drive. The $200,000 incentive provided by the
State of Ohio Department of Development was part of a $400,000 Grant the City received in 2000.
The Agreement calls for Pacer to add approximately 105 jobs that will be in addition to the 577
relocated to the City in 2001. Pacer is required to generate payroll withholding taxes of $1,000,000
over the next three years. If Pacer fails to meet this requirement, it will have to repay the City the
difference between $1,000,000 minus the actual amount of payroll taxes, not to exceed $200,000.
While the City does not typically provide the conduit for the State's incentive, this is not a unique
agreement. An economic development agreement with LCI that is similar in nature was passed by
City Council in 1997.
Additional background information was provided prior to the last City Council meeting as an
economic development update. If you have any questions, please contact Mike Stevens at 410-4619.
ECONOMIC DEVELOPMENT AGREEMENT
This Economic Development Agreement (the "Agreement"), is made and entered into as
of this day of , 2002, between the CITY OF DUBLIN, OHIO (the "City"), a
municipal corporation organized and existing under the constitution and the laws of the State of
Ohio and its Charter, and PACER INTERNATIONAL, INC. ("Pacer"), a Tennessee corporation
affiliates of which have offices located in Dublin, Ohio. As used herein, references to Pacer
include any wholly-owned or controlled subsidiary or affiliate to which Pacer may assign all or
any portion of its rights under this Agreement pursuant to Section 4(d). The City and Pacer may
be referenced herein individually as a ``Party" and collectively as the "Parties".
RECITALS:
WHEREAS, pursuant to Dublin City Council Ordinance No. 128-99 passed on
December 13, 1999, the City and Ruscilli Development Co, LTD. entered into the Perimeter
West Tax Increment Financing and Economic Development Agreement on February 24, 2000,
(the "Ruscilli Rail Van Project Agreement"), providing for the funding and construction of
certain infrastructure improvements to be located in the Perimeter West area in support of certain
private improvement to be made in that area; and
WHEREAS, among the private improvements referred to in the Ruscilli Rail Van Project
Agreement, is the Rail Van LLC (DBA as Pacer Global Logistics). facility located in the
Perimeter West area; and
WHEREAS, in exchange for Rail Van LLC's commitment to relocate 524 jobs to the
City, the Ohio Department of Development agreed to provide, through the City, and the City
thereby agreed, to provide Rail Van LLC and Rail Van, Inc. (its sole member), a grant of
$200,000 to assist with relocation expenses (the "Grant"); and
WHEREAS, subsequent to the execution and delivery of the Ruscilli Rail Van Project
Agreement, Pacer acquired all outstanding shares of Rail Van, Inc.; and
WHEREAS, on or about December 31, 2001, Pacer Global Logistics, Inc., an Ohio
corporation, assumed the obligations of Rail Van LLC pursuant to a statutory merger; and
WHEREAS, subsequent to completion of the Ruscilli Van Project, Pacer relocated
approximately 577 jobs to the City (53 more jobs than were originally committed by Rail Van
LLC and Rail Van, Inc.) in reliance upon the Grant previously agreed upon; and
WHEREAS, Pacer is now considering (i) guaranteeing the obligations of Rail Van LLC
under the lease at the facility located in the Perimeter West Area and (ii) further consolidation of
certain of its nationwide operations consisting of an integrated portfolio of transportation and
logistics companies throughout the United States to its facility located in the Perimeter West area
within the City, thereby relocating, based on current plans, approximately 52 additional jobs to
the City as additional consideration for the payment by the City of the Grant; and
WHEREAS, the City has determined that it is necessary and appropriate and in the best
interests of the City to provide assistance to Pacer for the purpose of relocating jobs and
employment opportunities and to improve the economic welfare of the people of the State of
Ohio and the City as authorized in Article VIII, Section 13 of the Ohio Constitution, and the City
has therefore determined to provide or advance from its non-tax revenues a portion (equal to
$200,000) of the cost to Pacer and/or its affiliates of training, consolidation and/or relocating
expenses, all for the purpose of inducing Pacer to relocate approximately 105 jobs to the City
after January 2000; and
WHEREAS, pursuant to Ordinance No. 73-02 passed May 6, 2002, the City has
determined to offer economic development incentives on the terms of the Grant described herein
to induce Pacer to consolidate certain of its nationwide operations within the City and thereby
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 Pacer have determined to enter into this Agreement to provide
these incentives to induce that consolidation by Pacer of certain of its nationwide logistics and
intermodal operations and relocate certain jobs in the City as set forth herein;
NOW, THEREFORE, the City and Pacer covenant, agree and obligate themselves as
follows:
Section 1. Pacer Agreement to Consolidate Operations and Relocate Jobs. In
consideration for the economic development incentives to be provided by the City herein, Pacer
agrees to consolidate certain of its nationwide operations to the City, thereby relocating to the
City after January 2000 at least 105 additional jobs with an annual payroll of approximately $3.5
million.
Section 2. City Agreement to Provide Incentives.
(a) General: In consideration for Pacer's agreement to consolidate certain of its
nationwide operations to the City after January 2000 to provide at least 105 additional jobs to the
City, not later than June 30, 2002, the City shall provide or advance to Pacer, solely from the
City's non-tax revenues, a portion (equal to $200,000) of the cost of its training, consolidation
and relocation expenses payable within 14 days upon the execution and delivery of this
Agreement by the Parties.
(b) City's Obligation to Make Payments Not Debt; Payments Limited to Nontax
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 Pacer 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
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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 nontax 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 nontax revenues.
Section 3. Payroll Covenant; Repayment. Pacer currently anticipates that the
approximately 105 jobs will have been relocated to the City by June 30, 2002, and will thereafter
maintain in the City at all times through at least three years (the "Calculation Period")
employment of a sufficient payroll to generate income tax revenues paid in the form of payroll
withholding taxes in the aggregate to the City (the "Payroll Taxes") of not less than $1.0 million
(the "Withholdings Requirement") for the Calculation Period. For purposes of this Section 3, the
parties shall assume that the City's Payroll Tax rate is not less than 2% (in the event that the
City's tax rate is decreased over such Calculation Period).
If the withholdings for City Payroll Taxes from employees of Pacer and its affiliates,
subsidiaries and associated companies located in the City are less than the Withholdings
Requirement for the Calculation Period, Pacer shall repay to the City an amount equal to the
difference between:
(a) Withholdings Requirement minus
(b) the actual amount of Payroll Taxes paid to the City during that Calculation
Period, using the assumptions in this Section 3;
provided, however, that notwithstanding any other provision of this Agreement the maximum
repayment by Pacer to the City under this Section 3 shall not exceed $200,000.
The City shall calculate the repayment amount due from Pacer, if any, under this Section
3 and notify Pacer in writing. Such repayment shall be made by Pacer to the City on or before
thirty (30) days after Pacer receives that written notice from the City.
Section 4. Miscellaneous.
(a) Force Majeure. Notwithstanding the foregoing, if, by reason of Force Majeure,
Pacer is unable to perform or observe any agreement, term or condition hereof, Pacer shall not
be deemed in default or liable for any payments during the continuance of such inability and the
time for performance of any of Pacer's obligations delayed by such disability shall be
suspended until the disability is alleviated. However, Pacer shall promptly give notice to the
City of the existence of an event of Force Majeure and shall use its best efforts to remove the
effects thereof; provided that the settlement of strikes or other industrial disturbances shall be
entirely within its discretion.
The term Force Majeure shall mean, without limitation, the following:
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(i) acts of God; strikes, lockouts or other industrial disturbances; acts of
terrorists or other public enemies; orders or restraints of any kind of the government of
the United States of America or of the State or any of their departments, agencies,
political subdivisions (other than discretionary acts of the City and any entity under the
direct legal control of the City) or officials, or any civil or military authority;
insurrections; civil disturbances; riots; epidemics; landslides; lightning; earthquakes;
fires; hurricanes; tornados; storms; droughts; floods; arrests; restraint of government and
people; explosions; breakage, malfunction or accident to facilities, machinery,
transmission pipes or canals; partial or entire failure of utilities; shortages of labor,
materials, supplies or transportation; or
(ii) any cause, circumstance or event not reasonably within the control of the
City or Pacer, as applicable.
(b) Agreement Binding; No Personal Liability. All covenants, obligations and
agreements of the City 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 Pacer in other than their official capacity, and neither the members of the
City Council nor any official executing this Agreement on behalf of the City or any present or
future member, officer, agent or employee of the City or Pacer shall be liable personally by
reason of the covenants, obligations or agreements of the City or Pacer contained in this
Agreement.
(c) Severability. In case any section or provisions of this Agreement, or any
agreement, obligation, act or action, or part thereof, made, assumed, entered into, done or taken
under this Agreement, or any application thereof, is held to be illegal or invalid for any reason, or
is inoperable at any time, that illegality, invalidity or inoperability shall not affect the remainder
of this Agreement or any other section or provision of this Agreement or any other agreement,
obligation, act or action, or part thereof, made, assumed, entered into, done or taken under this
Agreement, all of which shall be construed and enforced at the time as if the illegal, invalid or
inoperable portion were not contained therein. Any illegality, invalidity or inoperability shall not
affect any legal, valid and operable section, which shall be deemed to be effective, operative,
made, assumed, entered into, done or taken in the manner and to the full extent permitted by law
from time to time.
(d) Assignments. Except as provided in the second paragraph of this Section, Pacer
agrees not to assign this Agreement without the prior written consent of the City, which consent
shall not be unreasonably withheld.
Pacer shall not be required to obtain the consent of the City with respect to any
assignment of the Agreement directly to an affiliate or subsidiary of Pacer. However, Pacer shall
give notice of the foregoing assignment not less than ten (10) days prior to the effective date
thereof. for the purposes of this Section 4, an affiliate or subsidiary shall mean a corporation or
entity which shall be directly or indirectly controlled, under the control of, or be under common
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control with Pacer. For purposes hereof, "control" shall be deemed to mean ownership of more
than fifty percent (50%) of the outstanding voting stock of a corporation or other majority equity
and controlling interest is not a corporation.
(e) Successors. This Agreement shall be binding upon Pacer and its beneficiaries,
successors and assigns.
(f) Amendments. This Agreement may only be amended by written instrument
executed by both of the Parties to this Agreement.
(g) Notices. All notices, requests or other communications hereunder shall be
sufficiently given and shall be deemed given when mailed by registered or certified mail, postage
prepaid, addressed to:
(i) To Pacer at: Pacer International, Inc.
1340 Treat Blvd.
Walnut Creek, California 94596
Attention: Lawrence C. Yarberry
(ii) To the City at: Department of Development
City of Dublin
5800 Shier-Rings Road
Dublin, Ohio 43017
Attention: Director of Economic Development
Pacer and the City may, subsequent to the provision of proper notice, designate any further,
different or more specific addresses to which mailing shall be sent.
(h) Counterparts. This Agreement may be signed in one or more counterparts or
duplicate signature pages with the same force and effect as if all required signatures were
contained in a single original instrument. Any one or more of such counterparts or duplicate
signature pages may be removed from any one or more original copies of this Agreement and
annexed to other counterparts or duplicate signature pages to form a completely executed
original instrument.
(THIS SECTION INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF, the City and Pacer have caused this Agreement to be executed
in their respective names by their duly authorized representatives, all as of the date first written
above.
Approved as to Form:
By:
CITY OF DUBLIN, OHIO
By:
Printed:
Title: Interim City Manager
By:
Printed:
Title: Director of Finance
Printed: Stephen J. Smith
Title: Director of Law
PACER INTERNATIONAL, INC.
By:
Printed:
Title:
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CERTIFICATE
As the Director of Finance of the City of Dublin, I certify that the money required to meet
the obligations of the City of Dublin during the year 2002 under the attached Agreement has
been lawfully appropriated by the Council of the City for those purposes and is 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 of the Revised Code.
Dated: , 2002
Director of Finance
City of Dublin, Ohio
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