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65-04 Ordinance RECORD OF ORDINANCES Davton Legal Blank. Inc. Form No. 30043 Ordinance No. 65-04 Passed 2Q AN ORDINANCE AUTHORIZING THE PROVISION OF CERTAIN INCENTIVES FOR PURPOSES OF ENCOURAGING HIDAKA USA, INC. TO EXPAND ITS WORKFORCE WITHIN THE CITY, 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 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 provide for the creation of employment opportunities within the City; and WHEREAS, Hidaka USA, Inc. ("Hidaka") 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 of expanding 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 20 new jobs and related employment opportunities in the City and otherwise improve the economic welfare of the people of the City; and WHEREAS, Hidaka now owns certain real property (as depicted on EXHIBIT A and referred to herein as the "Property") in the City and proposes to expand its workforce within the City ("Workforce Expansion"); 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 Workforce Expansion and the plan of economic development incentives between Hidaka and the City are in furtherance of the Strategy, Hidaka contemplates expanding its workforce, and the City RECORD OF ORDINANCES Da ton Lega] Blank, lnc. Form No 30043 Ordinance No. 65-04 Pag 20 Passed expects to make the public infrastructure improvements described in EXHIBIT B hereto, that 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 City School District would have been paid if improvements to the Property 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 of the 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 Hidaka to further expand its 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 Hidaka to expand and workforce within the City and to provide for the execution and delivery of that Economic Development and Tax Increment Financing Agreement with Hidaka; 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 Workforce Expansion 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 described in the form of the Economic Development and Tax Increment Financing Agreement to Hidaka 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 Exemption. 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 RECORD OF ORDINANCES Da ton Leoal Blank Inc Form No 30043 Ordinance No. 65-04 Pag~ 3 Passed been charged and payable against that Property if it were not exempt from taxation pursuant to Section 2. 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 interest are collectively referred to herein with the service payments in lieu of taxes as the "Service Payments"). The Service 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 may be amended from time to time, or any successor provisions thereto as the same may be 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 Code Sections 5709.40 and 5709.42, the County Treasurer shall distribute the Service Payments and the Property Tax Rollback Payments as follows: a. 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, b. 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 Shier Rings Road Municipal Public Improvement Tax Increment Equivalent Fund (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 (EXHIBIT C) in the form presently on file with the Clerk of Council providing for, among other things, the provision of certain incentives to Hidaka 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 and Director of Finance. The City Manager and Director of Finance, for and in the name of this City, are hereby authorized to execute that Economic Development and Tax Increment Financing Agreement, provided further that the approval of changes RECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 Ordinance No. 6$04 Passed Pag 20 thereto by those officials, and their character as not being substantially adverse to the City, shall be evidenced conclusively by their execution thereof. This Council further 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 the property. Section 8. Further Authorizations. 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 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 by law. Signed: Presiding Officer Attest: Clerk of Council Passed: 0 , 2004 Effective: ~"o ~ O , 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. De Clerk of Council, Dublin, Ohio Office of the City Manager 5200 Emerald Parkway • Dublin, OH 43017 Phone: 614-410-4400 • Fax: 614-410-4490 CITY OF DUBLIN Memo To: Members of the Dublin City Council From: Jane S. Brautigam, City Managel~~,s, ~~,~zw+~ Date: September 2, 2004 Re: Ordinance No. 65-04 -Hidaka USA, Inc. Initiated by: Colleen M. Gilger, Interim Director of Economic Development ~~~~y , Summary: Ordinance No.65-04 authorizes the execution of an Economic Development Agreement with Hidaka USA, Inc., for the purpose of encouraging the retention and expansion of their corporate operations within the City of Dublin. Hidaka USA is a Honda supplier and manufacturer headquartered in Dublin for nearly 15 years. Hidaka's headquarters currently is located on Shier Rings Road, and their desire is to expand their existing facility for the third time in six years, adding approximately 11,000 square feet and 20 new employees. As Council is aware from previous correspondence regarding this project (see attached memos from August 27 and June 10), the attached Economic Development Agreement will provide Hidaka with (1) a Performance Incentive to create the 20 new jobs, (2) a Workforce Training Grant to offset training costs tied to the company's pursuit of ISO certification, and (3) an Equipment Grant to help offset the cost of new equipment needed once its expansion is complete. The City's proposed Workforce Training Grant to Hidaka totals $20,000 over five years. The City will award the incentive to Hidaka in five annual payments of $4,000 assuming ISO certification is achieved by December 31, 2005. The City's proposed Equipment Grant to Hidaka totals $25,000 over 5 years. The City will award the incentive to Hidaka in five annual payments of $5,000 assuming an occupancy permit for the expansion is granted by the end of 2005. The City also is proposing a Job Growth Incentive, and would offer to pay to Hidaka an amount equal to its Actual Withholdings minus predetermined Target Withholdings, multiplied by an Incentive Factor (20 percent) for afive-year period not to exceed $10,000. City staff also plans to create a Tax Increment Financing District in regard to Hidaka's expansion that is tied to public infrastructure improvements in the area, specifically the future widening of Shier Rings Road from Avery Road to Emerald Parkway and the extension of a bike path along Shier Rings Road. The advantage of the City's proposed financial incentive is a direct benefit to Hidaka and requires no involvement from the local school district, nor does it adversely impact the local school district. The Agreement does not contain any non-financial incentives. Recommendation: Staff recommends that City Council approve Ordinance No. 65-04 at its September 20, 2004 meeting. ORD. 65-04 EXHIBIT A EXHIBIT A PROPERTY The following real estate situated in the City of Dublin, County of Franklin and State of Ohio, as bounded and described as follows: Tax Parcels No. 273005320 The Project is expected to include an expansion of approximately 11,204 square feet to an existing industrial facility. ' R wEfi-L-"RD I ~ ~ II 1~ ' Q~ _j 1 r' y - - - - - - - - - - - - - - - - - - 1~ ~ ' / 9 % 1 / e o - i z iQ a p a 8 It'-= . i s o 0 o Im it a n ~ 6 I Ff I~ ViIER=RIN69'RD 1~ !n 1 _I . - to 1 ~ ~ ~ ~ . 1 ~ dl 1. I ~ o II e e1 ~ C a B. - o I ~ oo~N ~ _ . _ n " ~ ~ iii - ~ IIIIIK~~ , i ~ - ~ :dam ~ ORD. 65-04 EXHIBIT B EXHIBIT B PUBLIC IMPROVEMENTS The Public Improvements include but are not limited to: • The construction of a community bike path along Shier Rings Road, • The widening of Shier Rings Road from Avery Road to Emerald Parkway, and by constructing and installing curbs and gutters, public utilities which include water mains, sanitary sewer, and storm sewer, burial of utility lines, street lighting, sidewalks, bikeways, and landscaping, traffic signalization, and including design and other related costs, any right-of--way acquisition, 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. -12- ORD. 65-04 EXHIBIT C ECONOMIC DEVELOPMENT AND TAX INCREMENT FINANCING AGREEMENT THIS ECONOMIC DEVELOPMENT AND TAX INCREMENT FINANCING AGREEMENT (the "Agreement") is made and entered into this day of , 2004, by and between the CITY OF DUBLIN, OLIO (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 HIDAxA USA, INC. ("Hidaka") an Ohio corporation with its offices located in Dublin, Ohio, 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 provide for the creation of employment opportunities within the City; and WHEREAS, Hidaka 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, the Hidaka offices are currently located (the "Hidaka Oj~ces"); and WHEREAS, based on the results of Hidaka's recent comprehensive examination of workforce needs, and induced by and in reliance on the economic development incentives provided in this Agreement, Hidaka is desirous of expanding its existing workforce within the City (which workforce expansion is referred to herein as the "Workforce Expansion,"), which Workforce Expansion is expected to result in the creation of approximately 20 new jobs; and WHEREAS, the City, by passage of Ordinance No. 65-04 on September 20, 2004 (the "TIF Ordinance") pursuant to and in accordance with Ohio Revised Code Sections 5709.40, 5709.42 and 5709.43 (collectively, the "Act"), has determined that it is necessary and appropriate and in the best interests of the City to (i) provide certain economic incentives to Hidaka 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, (ii) create a tax increment financing area, pursuant to Sections 5709.40 through 5709.43 of the Ohio Revised Code, which area shall include the Property, and identify certain public infrastructure improvements (all as more fully described in Exhibit B and referred to herein as the "Public Improvements") which will directly benefit the Property, (iii) declare that 100% of the increase in assessed value of the Property subsequent to the effective date of the TIF Ordinance 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 a Public 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 (iv) provide for Hidaka, 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 Public Improvements or for distribution to the Dublin City School District; and WxEREAS, 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 Hidaka have determined to enter into this Agreement to provide these incentives to induce Hidaka's creation of jobs 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 Hidaka to proceed with the project, the parties hereto agree and obligate themselves as follows: Section 1. Hidaka's A~-eement to Expand Jobs. Hidaka presently employs approximately 40 employees at its site located at 5761 Shier-Rings Road in the City. The aggregate annual payroll of those employees is approximately $2.1 million. In consideration of the economic development incentives to be provided by the City herein, Hidaka agrees that it intends to create approximately 20 new jobs at the 5761 Shier Rings Road location no later than September 30, 2007. Section 2. City Agreement to Provide Incentives. (a) General. In consideration for Hidaka's agreement to expand its workforce and associated payroll within the City, the City agrees to provide economic development incentives to Hidaka in accordance with this Section. (b) Workforce Expansion Incentive. (i) Payments to Hidaka. If the Actual Withholdings [defined herein as the actual payroll withholding taxes collected during the preceding calendar year by the City from all employees, net of refundsJ, 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 Hidaka, solely from Nontax Revenues [as defined in Section 2(i)J, an amount equal to the product of (A) an amount equal to the Actual Withholdings minus the Target Withholdings, multiplied by (B) the Incentive Factor (as defined below). (ii) Withholdings and Incentive Payments. With respect to the Actual Withholdings collected during each of the calendar years 2005 through 2009, inclusive, the Incentive Factor shall be twenty percent (20%). The Target Withholdings for each of those calendar years shall be: -2- Calendar Year Target Withholdings 2005 $43,050 2006 $44,126 2007 $45,230 2008 $46,360 2009 $47,519 (iii) Maximum Workforce Expansion Incentive Pa ments. In no event shall the aggregate amount of payments made by the City to Hidaka pursuant to this Section 2(b) during the term of this Agreement exceed Ten Thousand Dollars ($10,000). (c) Workforce Training,_Incentive Payments. To further induce the creation of new jobs by Hidaka, the City agrees to make additional incentive payments to Hidaka for the purpose of workforce training in accordance with the standards set by International Organization for Standardization ("ISO") certification. The payments, which shall be paid by the City solely from Nontax Revenues, shall be paid in respect of the calendar years, in the amounts and by the payment dates identified in the following table: Job Training Calendar Year Incentive Payment Payment Date 2005 $4,000 April 15, 2006 2006 $4,000 April 15, 2007 2007 $4,000 April 15, 2008 2008 $4,000 April 15, 2009 2009 $4,000 April 15, 2010 (d) Equipment Grant Incentive Payments. To further induce the creation of new jobs, and to help offset the cost of purchasing new equipment by Hidaka, the City agrees to provide Hidaka with equipment grant incentive payments for the purchase of new equipment by Hidaka to be used at its location within the City. The payments, which shall be paid by the City solely from Nontax Revenues, shall be paid in respect of the calendar years, in the amounts and by the payment dates identified in the following table: Calendar Year Equipment Grant Payment Date 2005 $5,000 April 15, 2006 2006 $5,000 April 15, 2007 2007 $5,000 April 15, 2008 2008 $5,000 April 15, 2009 2009 $5,000 April 15, 2010 (e) Deficiency Carry forward Amounts. If and to the extent the amount of Nontax Revenues are insufficient in a particular calendar year for appropriation and payment to Hidaka, the City will make payment to Hidaka in the amount of Nontax Revenues available for -3- appropriation and payment to Hidaka. The difference between the amount required to be paid by the City to Hidaka pursuant to this Section 2 and the amount actually paid (referred to herein as a "Deficiency Carryforward Amount") shall be carried forward to the next succeeding calendar year and paid to Hidaka 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 Hidaka all Deficiency Carryforward Amounts required to be paid to Hidaka in accordance with this Section 2; provided, however, the aggregate of all payments to Hidaka pursuant to this Agreement shall not exceed the Maximum Payment Amount (as defined below). (fj Method of Payment. The payments provided for in this Section 2 shall be made by electronic funds transfer or by such other manner as is mutually agreed to by the City and Hidaka. (g) Maximum Economic Development Incentive Payments. In no event shall the aggregate amount of payments made by the City to Hidaka pursuant to this Section 2 during the term of this Agreement exceed Fifty-Five Thousand Dollars ($55,000) (the "Maximum Payment Amount' (h) Forfeiture of Incentive and Grant Payments. (i) Hidaka agrees and acknowledges that if Hidaka does not receive ISO workforce training certification by December 31, 2005, or a later date as agreed to by Hidaka and the City, the City will no longer be obligated to make any part of any annual payment to Hidaka, which Hidaka would otherwise receive under the workforce training incentive, as provided for in Section 2(c). (ii) Hidaka agrees and acknowledges that if Hidaka does not receive conditional occupancy permit in the new facility by December 31, 2005, the City will no longer be obligated to make any part of any annual payment to Hidaka, which Hidaka would otherwise receive under the equipment grant, as provided for in this Section 2. (i) 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 Hidaka 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 revenues which are not derived from taxation (the "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. (j) Applicable City Payroll Tax Rate. For purposes of calculating the Actual Withholdings in each calendar year under this Section 2, the City's payroll tax rate shall be assumed to be two percent (2%). -4- Section 3. Covenant to Make Payments in Lieu of Taxes. Hidaka, 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 the Service Payments (as defined below), 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 maybe amended from time to time, or any successor provisions thereto as the same maybe amended from time to time (the payment of penalties and interest are collectively referred to herein with the payments in lieu of taxes as the "Service Payments"). Such Service Payments against the Public Improvements 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. Each semiannual Service Payment against the Public Improvements shall be in the same amount as the real property taxes that would have been charged and payable (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. Hidaka, 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 100% of the increase in assessed value of the Property subsequent to the effective date of the TIF and Service Payments with respect to the Public Improvements, whether pursuant to Ohio Revised Code Section 5709.42, the TIF Ordinance, this Agreement or any other applicable law. Section 4. Public Improvements. In consideration for the City's agreement to construct the Public Improvements, Hidaka agrees to expand its workforce within the City. Hidaka has heretofore agreed to reimburse the City for the cost of constructing a bike path on the Property. In consideration of Hidaka's agreement to expand its workforce within the City, the City has agreed to finance and construct or cause the construction of the Public Improvements, which Public Improvements shall include the construction of the bike path on the Property that Hidaka had heretofore agreed to finance and construct, and the widening of Shier Rings Road from Avery Road to Emerald Parkway. The City shall design, finance and construct the bike path (with a length equivalent to the entire frontage of the property) at a mutually agreeable location, to be agreed upon by City staff and the property owner. Upon this Agreement's execution and adoption, the former bike path agreement between Hidaka and the City of Dublin as stated in the Planning and Zoning Commission's Record of Action on January 10, 2002 and the October 16, 1995 letter from city staff to Hidaka (and referenced in Exhibit C) becomes null and void. Hidaka and the City agree that the City will apply a portion of the Service Payments towards the extension of the bike path on the Property, thereby releasing Hidaka from its previous obligation to pay the City for the construction of the bike path. Section 5. Exemption Application. Hidaka further agrees for itself and any subsequent owners of the Property that: -5- (a) Preparation of Exemption Applications. It will assist and cooperate with the City in the preparation and filing by either Hidaka, or at the City's discretion, the City, of all necessary applications and supporting documents to obtain the exemption from real property taxation for the Public Improvements authorized by the Act and the City to enable the City to collect Service Payments thereunder, (b) Filing~of Exemption Applications. The City is authorized hereby to file any application necessary to exempt the Public Improvements from taxation as provided in the TIF Ordinance, (c) Subsequent Exemptions. No other exemption shall be granted for the Public Improvements unless the City provides prior written consent to such subsequent exemption, and (d) Notice Filing. If the City files any exemption application as authorized herein, the City shall, upon approval of the exemption of the Public Improvements as authorized in the TIF Ordinance, file a notice (the "Notice") with the County Recorder of Franklin County, Ohio which notice shall identify the Property and Hidaka and state that the Property, regardless of future use or ownership, will remain liable for any Service Payments required by the exemption granted by the TIF Ordinance until the terms of the exemption have been satisfied, unless the City consents to a subsequent exemption and relinquishes its right to collect part or all of the Service Payments. Section 6. Tax Increment Equivalent Fund. The City and Hidaka acknowledge the creation, pursuant to the TIF Ordinance, of the Municipal Public Improvement Tax Increment Equivalent Fund (the "Fund") to be maintained in the custody of the City. The City and Hidaka 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 3, with all such Service Payments and Property Tax Rollback Payments being used to finance or pay the costs of the Public Improvements. Any incidental surplus remaining in the Fund shall be disposed of as provided in Section 5709.43(D) of the Revised Code. Section 7. Release. Upon satisfaction of Hidaka's obligations to make the Service Payments, 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 (such period being referred to herein as the "term " of this Agreement), the City shall, upon the request of Hidaka, or its successors and assigns in interest to the Property, execute an instrument in recordable form evidencing such termination. Section 8. Estoppel Certificate. Upon request of Hidaka or any successors or assigns in interest to the Property, the City shall execute and deliver to Hidaka, 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 Hidaka or that successor or assign is not in default under any of the terms, covenants or conditions of the Agreement, or, if Hidaka or the successor or assign is in default, specifying same; and (c) such other matters as Hidaka or the successor or assign reasonably requests. -6- Section 9. Representations of Parties. Hidaka 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 2004. Section 10. Information Reporting. Hidaka shall cooperate in all reasonable ways with and provide necessary and reasonable information to the designated Tax Incentive Review Council (the "TIRO") to enable the TIRC to review and determine annually during the term of this Agreement, the compliance of Hidaka with the terms of this Agreement. Any information supplied by Hidaka shall be provided solely for the purpose of monitoring its compliance with this Agreement. Section 11. Miscellaneous. (a) Notices. Except as otherwise specifically set forth in this Agreement, all notices, demands, requests, consents or approvals given, required or permitted to be given hereunder shall be in writing and shall be deemed sufficiently given if actually received or ifhand-delivered or sent by 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) Hidaka at: Hidaka USA, Inc. 5761 Shier Rings Road Dublin, Ohio 43016 Attention: Mr. Yosihiro Hidaka 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 Hidaka in other than his or her official capacity. No official executing or approving the City's or Hidaka participation in this -7- 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 Hidaka and its successors and assigns. (d) Recitals. The City and Hidaka 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 Hidaka. (f j 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) CaQtions. 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 Hidaka, 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 Hidaka and the City in this Agreement shall survive the execution and delivery of this Agreement. (Signature Pages to Follow) -8- IN WITNESS WHEREOF, the City and Hidaka 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 By: Printed: Jane Brauti~am Title: CityMana~er By: Printed: Marsha I. Grigsby Title: Deputy City Mana~er/Director of Finance Approved as to Form: By: Printed: Stephen J. Smith Title: Director of Law HIDAKA USA, INC. By: Printed: Title: -9- 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: , 2004 Marsha I. Grigsby Deputy City Manager/Director ofFinance City of Dublin, Ohio -10- EXHIBIT A PROPERTY The following real estate situated in the City of Dublin, County of Franklin and State of Ohio, as bounded and described as follows: Tax Parcels No. 273005320 The Project is expected to include an expansion of approximately 11,204 square feet to an existing industrial facility. ` ~.S r q~ ~ ~ o ~REBs IF I~~--mss •I I 1 D 1~ ~ a - 1"'' , -~t ~ 1~ ~ e I.A % ~ z • i r--J , e I~ II ° r • ~ ' I • ° -F11ERzRING.S.RD"-=~~_ ~ S I - ~ '-+~~-s , I :y MIER=RINp9~ft0 I I~ < ~ ~ bl I i . - ~ _ _ ~ I , I a P _ ~ ~ B 1 a ~ ` ~ ~ -11- EXHIBIT B PUBLIC IMPROVEMENTS The Public Improvements include but are not limited to: • The construction of a community bike path along Shier Rings Road, • The widening of Shier Rings Road from Avery Road to Emerald Parkway, and by constructing and installing curbs and gutters, public utilities which include water mains, sanitary sewer, and storm sewer, burial of utility lines, street lighting, sidewalks, bikeways, and landscaping, traffic signalization, and including design and other related costs, any right-of--way acquisition, 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. -12- EXHIBIT C The former bike path agreement between Hidaka and the City of Dublin as stated in the Planning and Zoning Commission's Record of Action on January 10, 2002 and the October 16, 1995 letter of correspondence from City of Dublin Development Review Specialist Dave Marshall to Mr. Nyikes, Hidaka are attached: -13- Aug. 3. 2004 12: 16PlN ~ H i dika USA, Inc. ~ No. 2695 P. 4 CITY OF Di~BLIti SBDO Shier Rings Rocd pu61i~ OH 43D1a-1296 Foe 619n61-L506 Hidaka USA 1J.n=. 5761 Shier Rings -Road Dublin, Ohio 43017 Attn: Mr. Paul Nyilces October 16, 1995 Re: Zoning campliatbae for condirional occupancy 5761 Shirr Rings Read Dcaz Mr. NyilrES: i, ~ ~ : ~ - ' . , r . , 1 The purpose `tif [hls~~letr<u~ is ~fo.sut~':arize tie" items 'regate+d fat zoning comp~l~anee as art of . P rho conditional occupancy you aze,eoeking for~?rnu nevr addition. 1) DEDICATION OF RIGHT OF wAY - The Re~rd of Actiwn for the Dub1m Planning `and 7.cani~ Com~ussion (dated July 6, 1995} Condition ~2 calls for the dedication of right of way along Shier-Rings Road by genexat warramy dad to the centerline. The following items ate regtzire~ to satisfy this condition: A) A graphic e~ibit or drawing showing the land to be dedicated B) A legal description of same C7 A genera] warramy daed The exhiibit and legal description should be prepared anti stamped by an Ohio liccnee~d professioz~i surveyor. Obviottely, this informatioa will take some time to p~repatE. Therefore I world asY that you provide a lettar stat~g that you~will provide tht necessary docume~tion ~a the City of Dublin within suty (60) days of any occupancy being issued.. All documents including the lobar of lnt~ent, shortzId be sent to the attentiarn of Mr. randy Bowman; Assistant City Bng~er. If your attorney or surveyor have at~y questions, picase them contact ~tandy_ . 2) ~CONSTRUCTTt7N OF >#II~~.PATH - Co ~ _ . edition ~i of the previwsly me~ion~ad record o~,~ctioa calls for the coon of an 8'-0 b1`kt path along the South side of Shier-Rings along ~ west frontage of your site. Thew ~ been a great deal of 08/03/04 TUE 12:18 [T%/RX NO 8128] rTVr.rr,tr~~tT1 v:ocT Cn7n TQC CTC Y~'.i AT:C7 AII.T. ~(1/$Z/AO Y ~ Aug. 3. 2004 12,19Pb1 Hida'-~ USA, Inc. No. 2895 P. j . October 16, 1995 Paul Nyikrs Page 2 discussion about the exact location of the bik~c path and Maly Bearden Ilan advised me that Hidaka is currently wailing for bet m provide draft casement language for considozation_ Because of these factors; constructiAn of the bike path has bees delayed. Tn lieu of a cash deposit for ffic consatiction of 600' of 8'-0 wide asphalt bilve path, the City will accept a letter of credit or a pelf an~-P ~ ~r ~ of $18.UQ0 az your company's discnrtion. While my orig)na1 guess of $1000.40 obviously fell far short of the a>>~tval estimated cost. Tlie letter of credit or performance bond should be a much less expensive alterpativo tv a cash deposit for tl~ full amount. 3) SGRE'BNjNG OF NEW OVERHEAD DQORS - Tn order to increase ~ screeniD of the new overhead doors from off sire, please reIocsto the threes 6'-0 high evergzeen trees on the west ma~md of the aetvica area to the south maund_ T,he trots should be spaced oppoasite tha new doors to impmvr fhe acrecning effect. While nD bond ~v71 be zegonr+ed in addition frn this work, it should be cousidetzci part of all lst~rs of credit or performance bonds. Completion of theso three items will satisfy all requizrments for Zoning Compliance far this site. If you have a~ gtust9Ana, please fuel free to call at mime, Sincerely, Dave MatsttalI Development R~ view Specialist cc: Building DcpA,~,P.,r Mary Bearden Project f le 08/03/04 TUE 12:18 (TX/RX NO 9128] G G ~i~ R1~i PLANNING AND ZONING COMMISSION RECORD OF ACTION JANUARY 10, 2002 ~ ~r.r .-(;1'1'1' !IF Ul BLIP Division o{ Planning FE8 2 8 2002 5800 Shier-Rings Road Dublin, Ohio 43016-1236 - Phone/1D0: 614410-4600 Fax: 614-161-6566 Web Site: www.dubGn.oh.us The Planning and Zoning Commission took the following action at this meeting: 2. Conditional Use - 01-128CU - 5761 Shier-Rings Road -Hidaka, USA Location: 22.265 acres located on the south side of Shier-Rings Road, approximately 600 feet east of Wilcox Road. Existing Zoning: RI, Restricted Industrial District. Request: Review and approval of a conditional use under the provisions of Section 153.031. Proposed Use: A 19,714 square foot expansion of an existing 51,773 square foot metal stamping and research facility, and a 10,000 square foot expansion to an existing 10,000 square foot warehouse structure. Applicant: Yoshihiro Hidaka, 5761 Shier-Rings Road, Dublin, Ohio 43016-1233; represented by Dublin Building Systems, c/o Christopher John, PO Box 370, Dublin, Ohio 43017. Staff Contact: Chad D. viusvn, Senior Planner" MOTION: To approve this conditional use because this expansion fits with the existing area character, has a low impact, and provides a necessary bikepath link along Shier-Rings Road, with five conditions: 1) That the owner: complete construction of a bikepath (with a length equivalent to the entire frontage of the property) at a mutually agreeable location, to be agreed upon by staff and the owner, upon completion of an engineering study by the City; 2) That any dead, dying, or missing landscaping be replaced on site by September 1, 2002; 3) That the plan be revised to meet Code with regard to parking and setback requirements, unless otherwise approved by the Board of Zoning Appeals; 4) That the screening of the service areas, mechanical units, and overhead doors meet Code requirements, subject to staff approval; and Page 1 of 2 PLANNING AND ZONING COMMISSION RECORD OF ACTION JANUARY 14, 2002 2. Conditional Use - 01-128CU - 5761 Shier-Rings Road -Hidaka, USA (Continued) 5) That any new exterior lighting conform to the Dublin Lighting Guidelines. * Yoshihiro Hidaka and Bill Mullett, Dublin Building Systems; agreed to the above conditions. VOTE: 5-0. RESULT: This conditional use was approved_ STAFF CERTIFICATION Barbara M. Clarke Planning Director Page 2 of 2 Office of the City Manager 5200 Emerald Parkway • Dublin, OH 43017 Phone: 614-410-4400 • Fax: 614-410-4490 CITY OF DUBL[tV Memo To: Members of the Dublin City Council From: Jane S. Brautigam, City Manager Date: August 27, 2004 Re: Economic Development Agreement -Hidaka USA, Inc. Initiated by: Colleen M. Gilger, Interim Director of Economic Development Summary: Attached for your review is a draft Economic Development Agreement with Hidaka USA, Inc., for the purpose of encouraging the retention and expansion of their corporate operations within the City of Dublin. Hidaka USA is a Honda supplier and manufacturer headquartered in Dublin for nearly 15 years. Hidaka's headquarters currently is located on Shier Rings Road, and their desire is to expand their existing facility for the third time in six years, adding approximately 11,000 square feet. and 20 new employees. The attached Economic Development Agreement will provide Hidaka with (1) a Performance Incentive to create the 20 new jobs, (2) a Workforce Training Grant to offset training costs tied to the company's pursuit of ISO certification, and (3) an Equipment Grant to help offset the cost of new equipment needed once its expansion is complete. The City's proposed Workforce Training Grant to Hidaka totals $20,000 over five years. The City will award the incentive to Hidaka in five annual payments of $4,000 assuming ISO certification is achieved by December 31, 2005. The City's proposed Equipment Grant to Hidaka totals $25,000. over 5 years. The City will award the incentive to Hidaka in five annual payments of $5,000 assuming an occupancy permit for its expansion is granted by the end of 2005. The City also is proposing a Job Growth Incentive, and would offer to pay to Hidaka an amount equal to its Actual Withholdings minus predetermined Target Withholdings, multiplied by an Incentive Factor (20 percent) for afive-year period not to exceed $10,000. City staff also plans to create a Tax Increment Financing District in regard to Hidaka's expansion that is tied to public infrastructure improvements in the area, specifically the future widening of Shier Rings Road from Avery Road to Emerald Parkway and the extension of a bike path along Shier Rings Road. The advantage of the City's proposed financial incentive is a direct benefit to Hidaka and requires no involvement from the local school district, nor does it adversely impact the local school district. The Agreement does not contain any non-financial incentives. Recommendation: Staff continues to pursue retention and job growth within the community. Using incentives to retain longstanding Dublin-based companies like Hidaka USA, Inc. will result in additional income tax revenue. Staff recommends that City Council review the attached draft agreement and direct comments and questions to staff. Staff plans to recommend to City Council the agreement's acceptance on September 20, 2004. ~ Division of Economic Development 5800 Shier-Rings Road, Dublin, Ohio 43016-1236 CITY nF DUBLIN phone: 614-410-4600, Fax: 614-761-6506 Memo To: Members of Dublin City Council From: Jane S. Brautigam, City Manager Date: June 10, 2004 Initiated By: Michael H. Stevens, Director of Economic Development Colleen M. Gilger, Economic Development Specialist Re: Economic Development Update Summary Economic Development Strategy Update Status: Attached, please find the final draft report of the Economic Development Strategy Update for your review. Curtiss Williams, the consultant for the Economic Development Strategy Update, will be attending the June 21, 2004 City Council meeting to present the final recommendations and report and answer your questions. "Company A" Relocation Project Status: Staff is working with a Dublin company considering the relocation of their corporate offices from outgrown leased spaced to owner-occupied space. Currently, the building(s) being considered for purchase has been vacant for several years. Staff is preparing a proposal to this company that would provide a relocation grant and a performance incentive to encourage the retention and expansion of the company within Dublin. The grant would provide a portion of the incentive upon the company taking occupancy of its facility and the remainder in 2 to 3 years. The agreement would include a section that would require the company to repay the initial grant payment if certain payroll targets are not met. The proposed relocation grant incentive is similar in nature the agreement the City made with C.C. Technologies, and offers the money that would be awarded up front. The performance incentive (a percentage of actual payroll withholdings) would be provided annually for afive-year window provided the company meets certain payroll targets. Staff is comfortable with this structure because the company is considering the purchase of a facility that would accommodate long-term growth in Dublin. "Company B" Expansion Project Status: Staff is working with a Dublin company considering an expansion of their existing facility and the addition of approximately 15 to 20 new employees. The company has inquired about the availability of City funds for financial assistance during their proposed growth. Staff is in the early draft stages of drafting an Economic Development Agreement. The City's proposed incentive would be for afive-year period, based upon a percentage of actual income tax withholdings revenue. The agreement also may provide afive-year, 50% municipal corporate income tax credit. The company also is seeking funds from the State of Ohio. Conclusion: Information only. Staff strongly believes it is important to encourage job growth within our community and will continue to pursue innovative approaches to assist in local company retention and expansion. Staff will continue to keep City Council informed regarding the status of these projects.