127-03 Ordinance RECORD OF ORDINANCES
Dayton Legal Blank, Inc. Form No. 30043
~ Ordinance No. 127-~3 Passed 20
ORDINANCE AUTHORIZING THE PROVISI
ON OF CERT
AIN
INCENTIVES FOR PURP
OSES OF ENC
OURAGING THE
EXPANSION WITHIN THE CITY BY WENDY'S
INTERNATIONAL, INC., WHICH INCLUDE DECLARING
IMPROVEMENTS TO A CERTAIN PARCEL OF REAL
PROPERTY TO BE A PUBLIC PURPOSE, DESCRIBING THE
PUBLIC INFRASTRUCTURE IMPROVEMENTS TO BE
MADE TO BENEFIT THAT PARCEL, REQUIRING THE
OWNER THEREOF TO MAKE SERVICE PAYMENTS IN
LIEU OF TAXES, PROVIDING FOR THE FRANKLIN
COUNTY TREASURER TO DISTRIBUTE SERVICE
PAYMENTS TO THE DUBLIN CITY SCHOOL DISTRICT IN
THE AMOUNT THAT SCHOOL DISTRICT WOULD
OTHERWISE RECEIVE ABSENT THE EXEMPTION,
ESTABLISHING A MUNICIPAL PUBLIC IMPROVEMENT
TAX INCREMENT EQUIVALENT FUND FOR THE DEPOSIT
OF SUCH SERVICE PAYMENTS, AND AUTHORIZING THE
EXECUTION OF AN ECONOMIC DEVELOPMENT AND TAX
INCREMENT FINANCING AGREEMENT.
WHEREAS, consistent with the Economic Development Strategy (the "Strategy") approved
by Dublin City Council Resolution No. 07-94 adopted on June 20, 1994, this Council desires
to encourage commercial office development and provide for the creation of employment
opportunities within the City; and
WHEREAS, Wendy's International, Inc. ("Wendy's") has examined its workforce and
development needs within the City, and induced by and in reliance on the tax and economic
development incentives provided in this Ordinance and the Economic Development and Tax
Increment Financing Agreement authorized hereby, is desirous o f e xpanding i is W orld
Headquarters and its workforce within the City; and
WHEREAS, consistent with the Strategy, this Council finds that the provision of tax and
economic development incentives described in this Ordinance and the Economic
Development and Tax Increment Financing Agreement authorized hereby, will result in the
creation of approximately 50 new jobs and related employment opportunities in the City and
otherwise improve the economic welfare of the people of the City; and
WHEREAS, Wendy's now owns certain real property (as depicted on Exhibit A and referred
to herein as the "Property") in the City and proposes to renovate and expand its World
Headquarters on the Property (the "Project"); and
WHEREAS, Ohio Revised Code Sections 5709.40, 5709.42 and 5709.43 provide that this
Council may declare improvements to a parcel of real property located in the City to be a
public purpose, thereby exempting those improvements from real property taxation for a
period of time, specify public infrastructure improvements to be made to benefit that parcel,
provide for the making of service payments in lieu of taxes by the owner thereof, provide for
the distribution of the applicable portion of those service payments to the overlapping Dublin
" City School District and establish a municipal public improvement tax increment equivalent
fund into which such service payments shall be deposited; and
WHEREAS, the City has determined that it is necessary and appropriate and in the best
interests of the City to provide for service payments in lieu of taxes with respect to the
Property pursuant to Section 5709.42 of the Ohio Revised Code; and
WHEREAS, in reliance on the City's determination that the Project and the plan of economic
development incentives between Wendy's and the City are in furtherance of the Strategy,
RECORD OF ORDINANCES
Dayton Legal Blank, Inc. Form No. 30043
Ordinance No. 127-03 Passed Page 2 20
~ Wendy's contemplates making improvements to the Property, and the City expects to make
the ublic infrastructure im rovem
p ents described in Exhibit B hereto th
p at once made will
directly benefit the Property; and
WHEREAS, the City has determined that a portion of the service payments shall be paid to
the Dublin City School District in an amount equal to the real property taxes that the Dublin
Cit School Distric
t would have been
y aid if im rovements to the Pro
p p perty had not been
exempted from taxation pursuant to this Ordinance; and
WHEREAS, this Council finds and determines that notice of this proposed Ordinance has
been delivered to all affected school districts in accordance with Section 5709.83 ofthe Ohio
Revised Code and hereby ratifies the giving of that notice; and
WHEREAS, this Council has determined to provide tax and economic development
incentives, the terms of which are set forth in a substantially final form of the Economic
Development and Tax Increment Financing Agreement presently on file in the office of the
Clerk of Council, to induce Wendy's to further expand its operations and workforce within
the City, to create additional jobs and employment opportunities and to improve the economic
welfare of the people of the State of Ohio and the City, all as authorized in Article VIII,
Section 13 of the Ohio Constitution; and
WHEREAS, this Council finds that it is in the best interest of the City to provide tax and
economic development incentives to induce Wendy's to expand its operations and
workforce within the City and to provide for the execution and delivery of that Economic
Development and Tax Increment Financing Agreement with Wendy's;
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, Franklin,
Union and Delaware Counties, Ohio, that:
Section 1. Provision of Economic Development Incentives. The City hereby finds and
determines that the Project and the related tax and economic development incentives
described in the Economic Development and Tax Increment Financing Agreement are in
furtherance of the Strategy. The City further finds and determines that it is necessary and
appropriate and in the best interests of the City to provide those certain incentives to Wendy's
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. Tax Exem tp ion. Pursuant to and in accordance with the provisions of Ohio
Revised Code Section 5709.40, this Council hereby finds and determines that 100% of the
increase in assessed value of the Property subsequent to the effective date of this Ordinance
(which increase in assessed value is hereinafter referred to as the "Improvement" as defined in
Section 5709.40) is hereby declared to be a public purpose, and shall be exempt from taxation
for a period commencing with the first tax year that begins after the effective date of this
Ordinance and in which an Improvement first appears on the tax list and duplicate of real and
public utility property and ending on the earlier of (a) thirty (30) years after such exemption
commenced or (b) the date on which the City can no longer require service payments in lieu
of taxes, all in accordance with the requirements of Sections 5709.40 and 5709.42 of the Ohio
Revised Code.
Section 3. .Payment of Service Payments. As provided in Ohio Revised Code Section
5709.42, the owner of the Property is hereby required to, and shall make, service payments in
lieu of taxes with respect to the Improvements allocable thereto to the Treasurer of Franklin
County, Ohio (the "County Treasurer") on or before the final dates for payment of real
property taxes. Each service payment in lieu of taxes shall be charged and collected in the
same manner and in the same amount as the real property taxes that would have been charged
and payable against that Property if it were not exempt from taxation pursuant to Section 2.
RECORD OF ORDINANCES
Dayton Legal Blank, Inc. Form No. 30043
_ -
Ordinance No. 127-03 Passed Page 3 20
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- - - - -
_
-
- - - -
Any late payments shall be subject to penalty and bear interest at the then current rate
established under Ohio Revised Code Sections 323.121(B)(1) and 5703.47, as the same may
be am
ended from time to time or an
successor rov' '
isions thereto as th
y p e same may be
amended from time to time (the payment of penalties and interest are collectively referred to
herein with the service a ents in lieu of taxes as the "Service Pa "
ments .The rvi
p ym Se ce
y
Payments, and any other payments in respect of the Property which are received by the
County Treasurer in connection with the reduction required by Ohio Revised Section 319.302,
as the same maybe amended from time to time, or any successor provisions thereto as the
same maybe amended from time to time (the "Property Tax Rollback Payments"), shall be
allocated and distributed in accordance with Section 4 of this Ordinance.
Section 4. Distribution of Payments to School District and City. Pursuant to Ohio
Revised C ode S ections 5 709.40 a nd 5 709.42, t he C ounty T reasurer s hall distribute the
Service Payments and the Property Tax Rollback Payments as follows:
(i) to the Dublin City School District, an amount equal to the amounts the Dublin
City School District would otherwise receive as real property tax payments
(including the applicable portion of any Property Tax Rollback Payments) derived
from the Improvement related to the Property absent the passage of this Ordinance,
(ii) to the City, all remaining amounts for further deposit into the Fund.
All distributions required under this Section 4 shall be made at the same time and in the same
manner as real property tax distributions.
Section 5. Creation of TIF Fund. This Council hereby establishes pursuant to and in
accordance with the provisions of Ohio Revised Code Section 5709.43, the Shamrock
Boulevard P roj ect M unicipal P ublic I mprovement T ax I ncrement E quivalent F and (the
"Fund"). The Fund shall be maintained in the custody of the City and shall receive all
distributions required to be made to the City pursuant to Section 4. Those Service Payments
and Property Tax Rollback Payments received by the City with respect to the Improvements
on the Property and so deposited pursuant to law as provided in Ohio Revised Code Section
5709.42, shall be used solely for the purposes authorized in Ohio Revised Code Sections
5709.40, 5709.42 and 5709.43. The Fund shall remain in existence so long as such Service
Payments and Property Tax Rollback Payments are collected and used for the aforesaid
purposes, after which time said Fund shall be dissolved and any surplus funds remaining
therein transferred to the City's General Fund, all in accordance with Ohio Revised Code
Section 5709.43.
Section 6. Public Infrastructure Improvements. The public infrastructure improvements
set forth in Exhibit B hereto and to be made by the City are hereby designated as those public
infrastructure improvements that directly benefit, or that once made will directly benefit, the
TIF Area (the "Infrastructure Improvements").
Section 7. Economic Development and Tax Increment Financing_ Agreement. The
Economic Development and Tax Increment Financing Agreement in the form presently on
file with the Clerk of Council providing for, among other things, the provision of certain
incentives to Wendy's and the payment of such Service Payments, 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 and
Tax Increment Financing 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 her execution thereof. This Council further hereby authorizes and
directs the City Manager, the Clerk of Council, the Director of Law, the Director of Finance,
or other appropriate officers of the City, to make such arrangements as are necessary and
proper for collection of said Service Payments from the owners of Property.
RECORD OF ORDINANCES
Dayton Legal Blank, Inc. Form No. 30043
Ordinance No. 127-03 Passed Page 4 20
Section 8. Further Authorizations. This Council further hereby authorizes and directs the
Cit Mana er the Clerk of Council the Di
y g rector of Law the Director of Finance or other
,
a ro riate officers of the it
pp p C y to prepare and sign all agreements and instruments and to take
any other actions as maybe appropriate to implement this Ordinance.
Section 9. Notification of Passage. Pursuant to Ohio Revised Code Section 5709.40, the
Clerk of this Council is hereby directed to deliver a copy of this Ordinance to the Director of
the Department of Development of the State of Ohio within fifteen days after its passage. On
or before March 31 of each year that the exemption set forth in Section 2 hereof remains in
effect, the Clerk or other authorized officer of this City shall prepare and submit to the
Director of the Department of Development of the State of Ohio the status report required
under Section 5709.40(G) of the Ohio Revised Code.
Section 10. Open Meetings. 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 11. Effective Date. This Ordinance shall be in full force and effect on the earliest
date permitted bylaw.
Signed:
Presiding Officer
Attest:
Clerk of Council
j~
Passed: w . r~ , 2003
i
/r
Effective: ~ ~ , 2004
I hereby certify that copies of this
Ordinance/Resolution were posted in the
City of Dublin in accordance with Section
731.25 of the Ohio Revised Code.
uty Clerk of Council, Dublin, Ohio
EXHIBIT A
DESCRIPTION OF TIF AREA
The following real estate situated in the City of Dublin, County of Franklin and State of
Ohio, as depicted as follows:
Tax Parcel No. 273008805
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EXHIBIT B
DESCRIPTION OF INFRASTRUCTURE IMPROVEMENTS
The Infrastructure Improvements will include, but not be limited to:
• extension of Shamrock Boulevard from a point 650 feet north of its present northern
terminus, as reflected in the City's Thoroughfare Plan.
• any necessary adjustments and alterations to the infrastructure of existing sections
of Shamrock Boulevard or Village Parkway as needed to accommodate the
Roadway Extension and the further extension of Shamrock Boulevard.
• any necessary excavating, grading, paving, constructing and installing curbs and
gutters, public utilities which include water mains, sanitary sewers, and storm
sewers, street lighting, sidewalks, bikeways, landscaping, traffic signalization, and
also including design and other related costs, any interests in real property,
erosion and sediment control measures, grading and other related work, survey
work, soil engineering and construction staking, and in each case, all other costs
and improvements necessary and appurtenant thereto, all of which will directly
benefit, or that once made will directly benefit, the Property.
B-1
Office of the City Mana er
5200 Emerald Parkway • Dubin, OH 43017
Phone: 614-410-4400 • Fax: 614-410-4490
CITY OF DLBLIN
Memo
To: Members of the Dublin City Council
From: Jane S. Brautigam, City ManagerL,!~~-~- 5. ~,~.~..w~.~~~,,,,.,.;
Date: November 10, 2003
Initiated By: Michael Stevens, Director of Economic Development
Re: Ordinance No. 127-03, '
Wendy's International, Inc. -Economic Development and Tax
Increment Financing Agreement
Summary:
Ordinance No. 127-03 authorizes the execution of an Economic Development/Tax Increment Financing
(TIF) Agreement with Wendy's International, Inc. for the purpose of encouraging the company to expand
operations and workforce within the City of Dublin.
The attached Economic Development/TIF Agreement (the Agreement) provides for annual incentive
payments for a period of 5 years based on Wendy's future growth in Dublin. The Agreement will provide
Wendy's with an economic incentive to renovate and expand its corporate headquarters. The renovation
and expansion will result in Wendy's increasing the number of employees at its headquarters by creating
approximately 50 new jobs during the term of the incentive. It is estimated that the average annual wage of
the new employees will be $75,000.
The annual incentive payments will be based upon a percentage (the incentive factor) of the actual payroll
withholdings in excess of the target payroll withholdings. The incentive factor will be 34% for the term of
the agreement. The target payroll withholdings will be determined by using 2003's actual payroll
withholdings and increasing it annually by 2.5%.
The aggregate amount of payments made by the City of Dublin to Wendy's during the term of the
agreement will not exceed $400,000.
Due to its expansion, Wendy's is required by a previous zoning commitment to extend Shamrock
Boulevard 650 feet to its present northern property line and fund 50% of the costs, estimated to be
$220,000. Through joint efforts, Wendy's and the City were able to obtain a Roadwork Development (629)
Account Grant in the amount of $500,000 from the State of Ohio to be applied towards the cost of the
extension of Shamrock Boulevard to Village Parkway. As a result of the 629 grant, the attached
agreement provides for the reduction of Wendy's financial obligation (to an amount not less than zero
dollars) toward the extension of Shamrock Boulevard.
The 629 grant money will not fund the entire cost of the Shamrock Boulevard extension to Village
Parkway; therefore, the attached agreement also provides for the creation of a "non-school" TIF district for
Wendy's headquarters site.
The expansion and renovation of Wendy's existing facility will result in an increase in the property value
and the creation of the TIF will generate service payments based on the increased value. We are estimating
that approximately $85,000 in service payments will be generated per year. In obtaining the 629 grant and
utilizing a TIF, the City has found alternative funding sources to continue to implement its thoroughfare
plan as approved in the 1997 Community Plan.
Recommendation:
Staff continues to use innovative approaches to encourage job growth and to fund infrastructure projects.
Staff recommends that City Council approve Ordinance No. 127-03 at its December 15, 2003 meeting.
2
Office of the City Mana er
5200 Emerald Parkway • Dubin, OH 43017
Phone: 614-410-4400 • Fax: 614-410-4490 " Y
CITY OF DUBLIN
Memo
To: Members of the Dublin City Council
From: Jane S. Brautigam, City Manager
Date: November 5, 2003
Initiated By: Michael H. Stevens, Director of Economic Development
Re: Economic Development Update
Summary:
The Division of Economic Development continues to work with local companies to encourage job retention
and growth. In addition, staff is working with business prospects that are considering the relocation of
operations to Dublin. In our ongoing efforts to communicate economic development activities to City
Council, I wanted to provide an update on the following companies that will have economic development
agreements before City Council in the immediate future.
Wendy's International, Inc.
As City Council may recall from previous correspondence (see attached October 8, 2003 Wendy's
International Memo) staff has been discussing an economic development incentive with Wendy's
International to encourage the expansion of its existing headquarters by 16,000 square feet. The expansion
would result in the creation of 50 new full-time jobs in Dublin at an average wage of $75,000. Staff has
placed on the November 17, 2003 City Council agenda an ordinance that would approve the Economic
Development/Tax Increment Finance Agreement with Wendy's International. The ordinance will be held
over for a second reading on December 15, 2003. The November 17, 2003 City Council agenda also
includes a resolution to accept a Roadwork Development (629) Account Grant from the State of Ohio for
$500,000. The 629 funding would go towards the extension of Shamrock Boulevard.
Compensation Consultants, Inc.
Compensation Consultant's Inc. (CCI) is considering the relocation of its headquarters from Columbus to
Dublin. CCI is a third party administrator that manages worker's compensation claims for employers. CCI
provides service to 10,000 companies in Ohio and does business in West Virginia, Kentucky and Indiana.
CCI would relocate 140 jobs, with an annual payroll of $6 million, and lease approximately 25,000 square
feet in the 5500 Glendon Court building, which has been vacant for the past year. CCI is one of the
companies in the Prospect Portfolio that has been included in the past two monthly Economic Development
Updates. Staff is finalizing negotiations with CCI regarding afive-year, $180,000 maximum economic
development incentive that would be based upon a percentage of actual income tax withholdings revenue.
The Economic Development Agreement will be on the November 17, 2003 City Council Agenda for a first
reading.
Core Source
Staff has met with a representative of Core Source to discuss the company's possible relocation from
Westerville. Core Source is a leading provider of full service; national health benefits programs and is a
subsidiary of Trustmark Insurance Company. Core Source is considering the relocation of 145 full time
equivalent employees to Dublin with an average annual income of $33,800. The company is looking to
enter into aseven-year lease and would relocate in May of 2004. In order to encourage Core Source's
relocation, staff has offered afive-year economic development incentive that would be based upon a
percentage of actual income tax withholdings revenue. It is estimated that the incentive payments would be
approximately $25,000 per year with a maximum payment of $200,000 over the five-year period. Staff will
continue to keep City Council updated on our discussions with Core Source. It is anticipated that an
Economic Development Agreement will be placed before City Council during the first quarter of 2004 if
Core Source executives decide to relocate operations to Dublin.
Conclusion:
The Division of Economic Development will continue to pursue job growth, retention and expansion in order
to help increase income tax revenues for the City. The City's innovative approach to crafting specific incentive
packages to particular companies will continue to attract interest from companies considering relocating as
well as encourage the expansion of existing businesses.
2
Office of the City Mana~er
5200 Emerald Parkway • Dub in, OH 43017
Phone: 614-410-4400 • Fax: 614-410-4490
CITI OF DUBLIN
Memo
To: Members of the Dublin City Council
From: Jane S. Brautigam, City Manager
Date: September 17, 2003
Initiated By: Michael Stevens, Director of Economic Development
Re: Economic Development Update-Wendy's International, Inc.
Summary:
In recent years Wendy's International, Inc. has expanded its business. Wendy's has built a portfolio of
quality restaurants, with Wendy's Old Fashioned Hamburgers and Tim Hortons as the foundation of the
company. Last year Wendy's completed its acquisition of Baja Fresh Mexican Grill and invested in two
leading fast-casual restaurant chains, Cafe Express and Pasta Pomodoro. As a result of this significant
growth, Wendy's is considering renovating, upgrading and expanding its corporate headquarters.
Staff has been contacted by Wendy's to discuss the following issues:
1). The company's application for financial assistance from the State.
2). Expansion incentives available from the City of Dublin.
3). Recent changes to the State's tax law.
Wendy's has applied for a Job Creation Tax Credit (JCTC) from the State. The Ohio Tax Credit Authority
will hear Wendy's application on September 29, 2003. In addition, Wendy's is pursuing Roadwork
Development Account (629) funds from the State. The 629 money will be received by the City to use for
public infrastructure improvements that benefit Wendy's expansion. The City also will need to submit a
request for the 629 money and if a preliminary commitment is approved by the State, legislation accepting
the grant money will need to be passed by the City. Specifically, the City will use the money to extend
Shamrock Boulevard from its existing terminus to Village Parkway as reflected in the City's Thoroughfare
Plan (attached). The City has received money from the 629 account in the past as part of the State's effort to
retain Pacer Global Logistics (fka Rail Van) in Ohio.
As a part of the JCTC application, Wendy's has committed to create 50 new full-time jobs over the next
three years. The estimated average wage for the new full-time jobs is $75,000. Staff has been discussing
potential incentives with the company to encourage the headquarters renovation and future job growth in
Dublin.
The State's modified tax language has changed the way certain businesses define income. The change was
made extremely late in the budget process, without committee discussion, in an effort to balance the State's
budget and only impacts businesses that operate franchises. As a result, Wendy's has estimated its annual
effective tax rate will increase to 37.25%, increasing its annual tax liabilities by approximately $3.2 million.
Wendy's Update Memo page 2
The impact of the modified tax language on businesses operating franchises could mean less job growth
throughout the State and specifically loss of existing jobs in Dublin. Staff has contacted individuals at the
State Department of Taxation in an effort to better understand the issues and express the City's concerns. In
our most recent conversation, it is our understanding there may be a solution in progress. City Council
members maybe asked to contact our State legislators in the future to support legislation clarifying the tax
language and mitigating the impact to companies such as Wendy's.
Conclusion:
Wendy's International, Inc. is a community leader that has called Dublin home for many years. Staff is
working to encourage Wendy's to continue its job growth in Dublin and will continue to discuss incentive
options with the company. Staff will continue to keep City Council updated on our discussions with Wendy's.
attachment: City's Thoroughfare Plan
Office of the City Mana er
5200 Emerald Parkway • Dubin, OH 43017
Phone: 614-410-4400 • Fax: 614-410-4490
f,ITl' OF DIIBLIN
Memo
To: Members of the Dublin City Council
From: Jane S. Brautigam, City Manager
Date: October 8, 2003
Initiated By: Michael H. Stevens, Director of Economic Development
Re: Wendy's International, Inc.
Summary:
On September 29, 2003 Wendy's International received a Job Creation Tax Credit (JCTC) from the State of
Ohio. Wendy's has committed to creating 50 new full-time jobs in Dublin over the next three years at an
average annual wage of $75,000. Wendy's plans to make significant technological upgrades to its existing
headquarters building and add 15,000 square feet of space. In addition to the JCTC the State verbally has
committed to provide a minimum of $400,000 from its Roadwork Development Account (629) Fund to go
towards the extension of Shamrock Boulevard.
As mentioned in the September 17, 2003 Economic Development Update (attached) staff has been
discussing local incentive options with a Wendy's representative to encourage future job growth in our
community. At this time the incentive under discussion is a five-year, $400,000 maximum incentive that
will be based upon a percentage of actual income tax withholding revenues over a set "target" for income tax
withholdings. Also, due to the 629 funding from the State, the City would release Wendy's from its
commitment to pay for its portion of the Shamrock Boulevard extension, estimated at approximately
$220,000. The final component of the proposed economic development agreement would be a TIF on
Wendy's expansion that would generate additional funding for the Shamrock Boulevard extension, which
has an estimated total cost of $2,040,000.
Conclusion:
Job growth and alternative funding sources for infrastructure improvements continue to be priorities for
staff. The Wendy's expansion provides opportunities to accomplish both. Squires, Sanders and Dempsey,
the City's bond counsel, is drafting an Economic Development Agreement that will be made available to
City Council in its final draft form. Staff hopes to finalize the agreement with Wendy's in the near future
and have legislation before City Council in November.
ECONOMIC DEVELOPMENT AND
TAX INCREMENT FINANCING AGREEMENT
THIS ECONOMIC DEVELOPMENT AND TAX INCREMENT FINANCING AGREEMENT (the
"Agreement") is made and entered into this 16th day of January, 2004, by and between the CITY of
DUBLIN, OH[o (the "City"), a municipal corporation duly organized and validly existing under the
Constitution and the laws of the State of (~hi~ tthe ~`.crnro"1 ~n~ ~.ts Charter, and WENDY'S
INTERNATIONAL, INC., an Ohio corporatic ors located in Dublin, Ohio
("Wendy's"), under the circumstances sm ~ \'I' itals.
WHEREAS, consistent with its Ecc ~ (the "Strategy") approved
by Dublin City Council Resolution No. 1994, the City desires to
encourage commercial office developl~.~~~~ a~~u ~iuviue for the creation of employment
opportunities within the City; and
WHEREAS, Wendy's is the owner of certain real property located in the City (which property
is depicted in Exhibit A attached hereto and referred to herein as the "Property"), on which,
Wendy's world headquarters is currently located (the "World Headquarters"); and
WHEREAS, based on the results of Wendy's examination of workforce and development
needs, and induced by and in reliance on the tax and economic development incentives provided in
this Agreement, Wendy's is desirous of expanding its World Headquarters and its workforce
within the City; and
WHEREAS, the City has agreed to provide tax and economic development incentives to
induce Wendy's to renovate and expand its World Headquarters by upgrading their existing facility
and equipment and constructing a 16,000 square foot expansion thereto (which expansion is
described in Exhibit B attached hereto and referred to herein as the "Project,"), which Project is
expected to result in the creation of approximately 50 new jobs; and
WHEREAS, in connection with the Project, the City and Wendy's have heretofore
determined, as required by a previous zoning commitment, that (i) Shamrock Boulevard will
need to be extended 650 feet from its present northern terminus (the "Roadway Extension"), (ii)
fifty percent (50%) of the cost of that Roadway Extension shall be paid by Wendy's, to the
extent provided herein; and (iii) the Roadway Extension will benefit the Property; and
WHEREAS, Wendy's and the City have made application for a grant (the "629 Grant")
from the State to be applied towards the cost of the Roadway Extension and to the extent that the
City receives the 629 Grant, the portion of the cost of the Roadway Extension to be paid by
Wendy's shall be reduced; and
WHEREAS, the City and Wendy's have further determined, that certain additional public
infrastructure improvements (all as more fully described in Exhibit C and referred to herein as
~~~~~f
the "Public Improvements"), may be constructed by the City and which will benefit the Property;
and
WHEREAS, the City has determined that it is necessary and appropriate and in the best
interests of the City to (i) provide certain economic incentives to Wendy's for its expansion project
for the purpose of creating and preserving 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 (ii) provide for Wendy's, and its successors and assigns,
to make service payments in lieu of taxes with respect to the Property to pay costs of the
construction of the Roadway Extension and the Public Improvements or for distribution to the
Dublin City School District, all pursuant to and in accordance with Ohio Revised Code Sections
5709.40, 5709.42 and 5709.43 (collectively, the "Act"), and the City, by its Ordinance No. 127-
03 passed December I5, 2003 (the "TIF Ordinance"), has declared that 100% of the increase in
assessed value of the Property subsequent to the effective date of the TIF Ordinance (including
but not limited to any portion of that increase in assessed value resulting from Wendy's
construction of the Project and other improvements) is a public purpose and declared to be
exempt from taxation for a period commencing with the first tax year that begins after the effective
date of the TIF Ordinance and in which an Improvement first appears on the tax list and duplicate
of real and public utility property and ending on the earlier of (a) thirty (30) years after such
exemption commenced or (b) the date on which the City can no longer require service payments in
lieu of taxes, all in accordance with the requirements of the Act; and
WHEREAS, prior to the passage of the TIF Ordinance, the City provided notice of the
proposed passage of the TIF Ordinance to any affected school districts as required by Ohio
Revised Code Sections 5709.40 and 5709.83; and
WHEREAS, the City and Wendy's have determined to enter into this Agreement to provide
these incentives to induce that expansion by Wendy's of its operations within the City and to
provide for the collection of such payments in lieu of taxes;
Now, THEREFORE, in consideration of the premises and covenants contained herein, and
to induce Wendy's to proceed with the Project, the parties hereto agree and obligate themselves
as follows:
Section 1. Wendy's Agreement to Renovate and Expand its World Headquarters and
Create Employment Opportunities. In consideration of the economic development incentives to
be provided by the City herein, Wendy's agrees that it will renovate and expand its World
Headquarters beginning in the year 2004, and also estimates the approximate number of
Wendy's employees at the World Headquarters will increase by 50 by calendar year 2008.
Section 2. City's Agreement to Provide Incentives.
(a) General. In consideration for Wendy's agreement to renovate and expand its
World Headquarters and workforce and to increase the level of Wendy's employment and
associated payroll at the World Headquarters, the City agrees to provide economic development
incentives to Wendy's in accordance with this Section.
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(b) Calculation of Actual Withholdings. On or before March 15 of each of the years
2005 through and including 2009, the City shall determine whether the payroll withholding taxes
collected during the preceding calendar year by the City from all Employees (the "Actual
Withholdings") exceed the Target Withholdings for that preceding calendar year, all in
accordance with the schedules set forth below. For purposes of this Section 2, "Employees" shall
include all individuals employed by Wendy's and working at the World Headquarters. Wendy's
agrees that, in accordance with the Dublin City Code, the annual payroll reconciliation relating to
Wendy's Employees will be provided to the City on or before February 28 of each calendar year.
(c) Payments to Wend. If the Actual Withholdings 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 Wendy's, solely from nontax revenues, an amount equal to the
product of (i) an amount equal to the Actual Withholdings (net of refunds) minus the Target
Withholdings, multiplied by (ii) the Incentive Factor (as defined below for each applicable year).
The payments provided for in this Section shall be made by the City to Wendy's by such manner
as is mutually agreed to by the City and Wendy's. With respect to the Actual Withholdings
collected during each of the calendar years 2004 through 2008, the Incentive Factor shall be
thirty-four percent (34%). The Target Withholdings for each of those calendar years shall be
calculated as follows:
Calendar Year Target Withholdings
2004 Calendar Year 2004 Actual Withholdings multiplied by 1.025
2005 Calendar Year 2004 Target Withholdings multiplied by 1.025
2006 Calendar Year 2005 Target Withholdings multiplied by 1.025
2007 Calendar Year 2006 Target Withholdings multiplied by 1.025
2008 Calendar Year 2007 Target Withholdings multiplied by 1.025
(d) Ci '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 Section 2 shall not be a general obligation debt or bonded indebtedness, or a pledge of the
general credit or taxes levied by the City, and Wendy's 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 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.
(e) Deficiency Carryforward Amounts. If and to the extent the amount of nontax
revenues are insufficient in a particular calendar year for appropriation and payment to Wendy's,
the City will make payment to Wendy's in the amount of nontax revenues available for
appropriation and payment to Wendy's. The difference between the amount required to be paid by
the City to Wendy's pursuant to this Section 2 and the amount actually paid (referred to herein as a
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i.
"Deficiency Carryforward Amount") shall be carried forward to the next succeeding calendar year
and paid to Wendy's in addition to any other payment for that succeeding year required by this
Section 2. This Agreement shall not terminate until the City has paid to Wendy's all Deficiency
Carryforward Amounts required to be paid to Wendy's in accordance with this Section 2; provided,
however, the aggregate of all payments to Wendy's pursuant to this Agreement shall not exceed the
Maximum Payment Amount (as defined below).
(f) Maximum Economic Development Incentive Payments. In no event shall the
aggregate amount of payments made by the City to Wendy's pursuant to this Section 2 during the
term of this Agreement exceed Four Hundred Thousand Dollars ($400,000) (the "Maximum
Payment Amount").
(g) Applicable Ciy 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%).
Section 3. Roadway Extension.
(a) General. In connection with the expansion of Wendy's World Headquarters,
Shamrock Boulevard is required to be extended 650 feet from its present northern terminus. The
City and Wendy's agree that the present estimated cost of the Roadway Extension is $440,000.
(b) Wender Payment of a Portion of the Cost. The City and Wendy's agree that the
City will proceed in a timely manner with the construction of the Roadway Extension and upon
completion of the Roadway Extension, provide a certificate of cost Wendy's setting for the final,
actual costs of such Roadway Extension, together with any supporting documentation as may be
reasonably requested by Wendy's. Within thirty (30) days of receipt of such certification Wendy's
shall make payment to the City in an amount equal to fifty percent (50%) of the actual costs;
provided, however, such amount maybe reduced in accordance with Section 3(c).
(c) 629 Funds and Reduction of Wendy's Portion. Wendy's and the City agrees to
make application to the State for a grant from the State's Roadwork Development (629) Account,
which grant monies would be applied towards the costs of the extension of Shamrock Boulevard to
Village Parkway. The City agrees that the portion of the costs of the Roadway Extension to be paid
by Wendy's shall be reduced (to an amount not less that zero dollars) by the amount of the 629
Grant received by the City.
Section 4. Covenant to Make Pay_
ments in Lieu of Taxes. Wendy's, for itself and any
successors in interest to the Property, or any part thereof or interest therein, hereby agrees that the
then current owner shall make for the Property semiannual service payments in lieu of taxes with
respect to the "Improvement" (including the Project), as that term is used and defined in the Act,
pursuant to and in accordance with the requirements of the Act, and pursuant to the TIF Ordinance
and any subsequent amendments or supplements thereto. Any late payments shall be subject to
penalty and bear interest at the then current rate established under Ohio Revised Code Sections
323.121(B)(1) and 5703.47, as the same may be amended from time to time, or any successor
provisions thereto as the same may be amended from time to time (the payment of penalties and
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cu~'~'`/
interest are collectively referred to herein with the payments in lieu of taxes as the "Service
Payments"). Such Service Payments shall be made semiannually to the County Treasurer of
Franklin County, Ohio (or to the Treasurer's designated agent for collection of the Service
Payments) on or before the date on which real property taxes would otherwise be due and payable
for the Improvement. Each semiannual payment shall be in the same amount as the real property
taxes that would have been charged and payable against the Improvement (after credit for any other
available payments received by the City under Ohio Revised Code Section 319.302 as the same
may be amended from time to time, or any successor provisions thereto as the same may be
amended from time to time, herein the "Property Tax Rollback Payments") had an exemption from
taxation not been granted, and otherwise shall be in accordance with the requirements of the Act.
The Service Payments and Property Tax Rollback Payments shall be distributed in accordance with
the TIF Ordinance.
Wendy's, and its successors and assigns in interest to the Property, shall not, under any
circumstances, be required for any tax year to pay both real property taxes with respect to the
Improvement and payments in lieu of taxes with respect to the Improvement, whether pursuant to
Ohio Revised Code Section 5709.42, the TIF Ordinance, this Agreement or any other applicable
law.
It is intended and agreed, and it shall be so provided by Wendy's in a declaration filed and
of record in the office of the County Recorder of Franklin County, Ohio (the "Declaration"), and in
any future deed from Wendy's conveying the Property or any part thereof, that the covenants
provided in this Section shall be covenants running with the land and that they shall, in any event
and without regard to technical classification or designation, legal or otherwise, be binding to the
fullest extent permitted by law and equity for the benefit and in favor of and enforceable by the City
whether or not this Agreement remains in effect or whether or not such provision is included by
Wendy's in any succeeding deed to Wendy's successors and assigns in interest to the Property. It is
further intended and agreed that these agreements and covenants shall remain in effect for the full
period of exemption permitted in accordance with the requirements of the Act and the City's TIF
Ordinance enacted pursuant thereto. Wendy's and its successors and assigns in interest to the
Property shall only be responsible for making Service Payments which become due and payable
during their respective periods of ownership.
Such covenants running with the land in the Declaration shall have priority over any
mortgage or other lien on the Property, and Wendy's shall cause any and all holders of mortgages or
other liens existing on the Property (if any) as of the time of recording of the Declaration, to
subordinate such lien to the covenants running with the land provided in the Declaration.
Section 5. Exemption Application. Wendy's further agrees for itself and its successors
and assigns in interest to the Property to assist and cooperate with the City in the preparation and
filing by the City of all necessary applications and supporting documents to obtain the exemption
from real property taxation for the Improvement authorized by the Act and the City, and to enable
the City to collect Service Payments thereunder, and Wendy's shall cooperate with the City in
connection with the preparation and filing of the initial and any further applications required to
accomplish that purpose. The City shall make the initial application no later than December 31,
2005, unless the City determines a later date is permissible.
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Section 6. Tax Increment Equivalent Fund. The City and Wendy's acknowledge the
creation, pursuant to the TIF Ordinance, of the Shamrock Boulevard Tax Increment Equivalent
Fund (the "Fund") to be maintained in the custody of the City. The City and Wendy's agree that
the Fund shall receive all Service Payments and Property Tax Rollback Payments payable to the
City in respect of the Property as described in Section 1, with all such Service Payments and
Property Tax Rollback Payments being used to finance or pay the costs of (a) the Roadway
Extension not otherwise paid by Wendy's or the 629 Grant and (b) the Public Improvements not
otherwise paid by the 629 Grant. Any incidental surplus remaining in the Fund shall be disposed
of as provided in Section 5709.43(D) of the Revised Code.
Section 7. Construction of ProLct Public Improvements; Issuance of Securities. In
consideration for the City's agreement to construct the Public Improvements, Wendy's agrees to
construct, or cause the construction of, the Project. In consideration for Wendy's agreement to
construct the Project, the City agrees to construct, or cause to be constructed, the Public
Improvements.
Section 8. Release. Upon satisfaction of Wendy's obligations under this Agreement
and termination of Wendy's obligations to make the Service Payments, the City shall, upon the
request of Wendy's, or its successors and assigns in interest to the Property, execute an instrument
in recordable form evidencing such termination and releasing the covenants running with the land
set forth in the Declaration.
Section 9. Estoppel Certificate. Upon request of Wendy's or any successors or assigns
in interest to the Property, the City shall execute and deliver to Wendy's, any such successor and
assign or any proposed purchaser, mortgagee or lessee of the Property, a certificate stating: (a) that
the Agreement is in full force and effect, if the same is true; (b) that Wendy's or that successor or
assign is not in default under any of the terms, covenants or conditions of the Agreement, or, if
Wendy's or the successor or assign is in default, specifying same; and (c) such other matters as
Wendy's or the successor or assign reasonably requests.
Section 10. Representations of Parties. Wendy's hereby represents that it is the owner in
fee simple of the Property and has full power and authority to enter into this Agreement and carry
out its terms. The City hereby represents that the TIF Ordinance was passed by the City Council on
December I5, 2003.
Section 11. Information Reporting. Wendy's shall cooperate in all reasonable ways
with and provide necessary and reasonable information to the designated Tax Incentive Review
Council (the "TIRG") to enable the TIRC to review and determine annually during the term of
this Agreement, the compliance of Wendy's with the terms of this Agreement. Any information
supplied by Wendy's shall be provided solely for the purpose of monitoring its compliance with
this Agreement.
Section 12. 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
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in writing and shall be deemed sufficiently given if actually received or ifhand-delivered or sent by
recognized, overnight delivery service or by certified mail, postage prepaid and return receipt
requested, addressed to the other party at the address set forth in this Agreement or any addendum
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) Wendy's at:
Wendy's International, Inc.
4288 W. Dublin-Granville Rd.
Dublin, Ohio 43017
Attention: Everett Gallagher, Senior Vice President-Enterprise Tax
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 Wendy's in other than his or her
official capacity. No official executing or approving the City's or Wendy'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
Wendy's and its successors and assigns.
(d) Recitals. The City and Wendy's 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 Wendy's.
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(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 Wendy's, 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
Wendy's and the City in this Agreement shall survive the execution and delivery of this Agreement.
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~i
Itv WITNESS WHEREOF, the City and Wendy's 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
S ~ _ - _ -
Printed: Jane Brautigam
Title: Cit Mana er
Printed: Marsha I. Grigsby
Title: Director of Finance
Approved as to Form:
Printed: Stephen J. Smith
Title: Director of Law
WENDY'S INTERNATIONAL, INC.
By: ~~.4.~,`~ ; ~a lam" 1
Printed: ~ J `=''z-}~ ~ ~ „r`
Title: ~ e~: t`. ~ . L~ ~i `5 ~ aQ a ~ n -4-~ r ~ 5c
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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 2004 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::
~a.,~.. , 2004
Director of Finance
City of Dublin, Ohio
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EXHIBIT A
DESCRIPTION OF TIF AREA
The following real estate situated in the City of Dublin, County of Franklin and State of
Ohio, as bounded and described as follows:
Tax Parcel No. 273008805
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EXHIBIT B
PROJECT
The Project is expected to include a 16,000 square foot expansion and renovation of the
Wendy's International corporate headquarters, which is to include space for offices and other
uses, as well as associated parking and landscaping improvements, and other related
improvements.
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i
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EXHIBIT C
PUBLIC IMPROVEMENTS
The Public Improvements will include, but not be limited to:
• extension of Shamrock Boulevard from a point 650 feet north of its present northern
terminus, as reflected in the City's Thoroughfare Plan.
• any necessary adjustments and alterations to the infrastructure of existing sections
of Shamrock Boulevard or Village Parkway as needed to accommodate the
Roadway Extension and the further extension of Shamrock Boulevard.
• any necessary excavating, grading, paving, constructing and installing curbs and
gutters, public utilities which include water mains, sanitary sewers, and storm
sewers, street lighting, sidewalks, bikeways, landscaping, traffic signalization, and
also including design and other related costs, any interests in real property,
erosion and sediment control measures, grading and other related work, survey
work, soil engineering and construction staking, and in each case, all other costs
and improvements necessary and appurtenant thereto, all of which will directly
benefit, or that once made will directly benefit, the Property.
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c