38-05 Ordinance RECORD OF ORDINANCES
Damson Leal Blank, Inc. Form No. 30043
Ordinance No. 3g-~S PG~ssed 20
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AUTHORIZING THE EXECUTION OF AN ECONOMIC
DEVELOPMENT AGREEMENT BETWEEN THE CITY
OF DUBLIN AND MORTGAGF. IT TO INDUCE THE
CREATION AND EXPANSION OF ITS OPERATIONS
AND WORKFORCE IN THE CITY OF DUBLIN.
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, Mortgage IT Holdings, Inc. ("Mortgage IT"), based on the results of its
recent comprehensive examination of workforce and facilities needs, and induced by
and in reliance on the economic development incentives provided in this Agreement,
is desirous of establishing operations and expanding its workforce in the City; and
WHEREAS, this Council has determined to offer certain economic development
incentives, the terms of which are set forth in a substantially final form of Economic
Development Agreement presently on file in the office of the Clerk of Council, to
induce Mortgage IT to establish and expand its operations and workforce to the City,
thereby creating additional jobs and employment opportunities and improving the
economic welfare of the people of the State of Ohio and the City, all pursuant to
Section 718.08 of the Ohio Revised Code anti Article VIII, Section 13 of the Ohio
Constitution; and
WHEREAS, this Council finds that it is in the best interest of the City to provide
these economic development incentives to induce Mortgage IT to establish its
operations and expand its workforce to the City and to provide for the execution and
delivery of that Economic Development Agreement with Mortgage IT;
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin,
Franklin, Union and Delaware Counties, Ohio, of the elected members
concurring, that:
Section 1. The City hereby finds and determines that the provision of certain
economic development incentives as described in the Economic Development
Agreement (as described below) is necessary and appropriate and in the best interests
of the City to provide for the creation of jobs and employment opportunities and to
improve the economic welfare of the people of the State of Ohio and the City, all as
authorized in Section 718.08 of the Ohio Revised Code and Article VIII, Section 13 of
the Ohio Constitution.
Section 2. The Economic Development Agreement by and between the City and
Mortgage IT, in the form presently on file with the Clerk of Council, providing for,
among other things, the provision of economic development incentives in
consideration for Mortgage IT's agreement to establish its operations and expand its
workforce in the City, is hereby approved and authorized with changes therein not
inconsistent with this Ordinance and not substantially adverse to this City and which
shall be approved by the City Manager and Director of Finance. The City Manager
and Director of Finance, for and in the name of this City, are hereby authorized to
execute that Economic Development Agreement, provided further that the approval of
changes thereto by those officials, and their character as not being substantially
adverse to the City, shall be evidenced conclusively by their execution thereof. This
Council further authorizes the City Manager and the Director of Finance, for and in
the name of the City, to execute any amendments to the Economic Development
RECORD OF ORDINANCES
Dayton Leal Blank, Ina Form No. 30043
Ordinance No. 38-OS Pissed Page ~ 20
Agreement, which amendments are not inconsistent with this Ordinance and not
substantially adverse to this City.
Section 3. This Council further hereby authorizes and directs the City Manager, the
Director of Finance, the Director of Law, the Clerk of Council, or other appropriate
officers of the City to prepare and sign all agreements and instruments and to take any
other actions as maybe appropriate to implement this Ordinance.
Section 4. This Council finds and determines that all formal actions of this Council
concerning and relating to the passage of this Ordinance were taken in an open
meeting of this Council and that all deliberations of this Council that resulted in those
formal actions were in meetings open to the public in compliance with the law.
Section 5. This Ordinance shall be in full force and effect on the earliest date
permitted by law.
Si ed:
Mayor -Presiding Officer
Attest:
~c.._ ~ _
Clerk of Council
Passed: ~J , 2005
Effective: f , 2005
I hereby certify that copies of this
Ordinance/Resolution were posted in the
City of Dublin in accordance with Section
731.25 of t~^h//e,,~~O--~~h-- io R/evised C--od///e.
[A6~CLlf1 I~~/
D ty Clerk of Council, Dublin, Ohio
Office of the City Mana er
5200 Emerald Parkway • Dubin, 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 Manager~~,~ s
Date: July 23, 2005
Re: ORD 38-OS -Economic Development Agreement -MortgageIT Holdings, Inc.
Initiated by: Dana McDaniel, Deputy City Manager /Director of Economic Development
Colleen Gilger, Economic Development Specialist~~
Summary:
Attached for your review is an Economic Development Agreement with MortgageIT Holdings, Inc, for the purpose
of encouraging the location and expansion of their corporate operations within the City of Dublin. MortgageIT is a
self-administered, self-advised real estate investment trust. It originates primarily conventional, conforming single-
family residential mortgage loans.
MortgageIT plans to establish its headquarters at Metro Center, where by 2011 it will house 59 employees. Total
annual payroll is expected to exceed $5.25 million by that time. MortgageIT agrees that it will establish its operations
in Dublin no later December 31, 2005; and grow its initial workforce to approximately 27 employees and grow its
payroll to $2,051,757 no later than December 31, 2006. MortgageIT' estimates that the initial average annual wage of
those 27 employees will be approximately $76,000.
The attached Economic Development Agreement will provide MortgageIT with (1) a 25% Job Growth/Performance
Incentive tied to creating at least 44 new jobs by December 31, 2008, (2) A Technology Grant of $4,533 to be used
for wiring upgrades to its leased space, and (3) a two-year, 20% extension of the performance incentive should it, by
December 31, 2010, commit to a five-year lease extension through 2015, or show proof of acquiring a facility
within Dublin.
The City is proposing a Job Growth/Performance Incentive, and would offer to pay to MortgageIT an amount equal
to its Actual Withholdings, multiplied by an Incentive Factor (25 percent) for afour-year period (2005-2008),
should the company meet or exceed predetermined withholding targets.
Should MortgageIT achieve all predetermined annual targets tied to job growth as set forth in the Agreement, the
company could potentially receive a total incentive worth $50,923. Including the two-year extension, should it
materialize, MortgageIT could potentially receive an incentive worth $86,707. The total aggregate payment to
MortgageIT is capped at $120,533. Over the term of this agreement, the City is estimated to net approximately
$134,635 in new income tax withholdings. Including the "bonus years" should MortgageIT qualify, the City is
expected to net $277,770.
The Agreement does not contain any non-financial incentives.
Recommendation:
Staff continues to pursue new job growth initiatives within the community. Using incentives to encourage
establishing new operations and workforce to our community and local economy will result in additional income tax
revenue. Staff recommends the Economic Development Agreement and Ordinance No. 38-05 be accepted by City
Council on August 15, 2005.
MortgageIT EDA draft 1, July 23, 2005
ECONOMIC DEVELOPMENT AGREEMENT
THIS ECONOMIC DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into
this day of , 2005, by and between the CITY of DUBLIN, OHIO (the "City"), a
municipal corporation duly organized and validly existing under the Constitution and the laws of
the State of Ohio (the "State") and its Charter, and MortgageIT Holdings, Inc. ("MortgageIT") a
New York corporation, under the circumstances summarized in the following recitals.
RECITALS:
WIIEREAS, consistent with its Economic Development 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
WxEREAS, MortgageIT desires to locate its regional operations and create a workforce of
59 employees by 2011 within the City of Dublin; and
WxEREAS, the City has determined to offer economic development incentives described
herein to induce MortgageIT to locate and establish its operations and workforce within the City to
create jobs and employment opportunities and to improve the economic welfare of the people of
the State of Ohio and the City, all as authorized in Article VIII, Section 13 of the Ohio
Constitution; and
WxEREAS, the City and MortgageIT have determined to enter into this Agreement to
provide these incentives to induce MortgageIT to locate its operations and create its workforce
within the City.
Now TIIEREEORE, the City and MortgageIT covenant agree and obligate themselves as
follows:
Section 1. MortgageIT Agreement to Create Jobs. MortgageIT agrees that it will
establish its operations at in the City of Dublin. MortgageIT will occupy
the Dublin facility no later than October 1, 2005 and will employ and at least 19 fulltime employees
within the City of Dublin as part of its operations by December 31, 2005. The average annual wage
of these employees for this period is estimated to be $71,500 with total estimated payroll
withholdings of approximately $450,000 over asix-and-a-half-year period. MortgageIT will lease
its Dublin facility. Proof of such purchase will be presented to the City of Dublin as soon as
practical after execution and prior to receiving any incentive from the City of Dublin.
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MortgageIT EDA draft 1, July 23, 2005
Section 2. Cit~greement to Provide Incentives.
(a) General. In consideration for MortgageIT's agreement to locate its operations'
workforce and associated payroll within the City, the City agrees to provide economic
development incentives to MortgageIT in accordance with this Section.
(b) Technolog.
/property Grant. MortgageIT will update needed equipment and property
as a result of its move to the Dublin facility. In consideration of that agreement to
update such equipment and otherwise locate its workforce within the City, the City
agrees to provide a grant to MortgageIT in i:he amount of $4,533. The City will
execute the payment to MortgageIT within 30 days of its occupancy of the facility but
no earlier than October 1, 2005, and upon proof of an executed five-year lease term.
(c) Performance Incentive.
(i) Calculation of Actual Withholdings. On or before March 15 of each of the
years 2006 thru 2009 the City shall determine whether the actual payroll withholding
taxes collected during the preceding calendar year by the City from all Employees (the
"Actual Withholdings") meet or exceed the Target Withholdings for that preceding
calendar year, all in accordance with the schedule set forth in subparagraph (iii) below.
For purposes of this Section 2, "Employees" shall include all individuals employed by
MortgageIT in the City of Dublin and working at the Dublin facility. MortgageIT agrees
that, in accordance with the Dublin City Code, the annual payroll reconciliation relating
to MortgageIT' Employees will be provided to the City prior to February 28 of each
calendar year.
(ii) Payments to MortgageIT. If the Actual Withholdings meets or exceeds the
Target Withholdings for the preceding calendar year, the City shall, on or
before April 15 of the then current calendar year, pay to MortgageIT, solely
from non-tax revenues, an amount equal to the product of (1) an amount
equal to the Actual Withholdings (net of refunds paid to employees by the
City), multiplied by (2) the incentive factor (25%) as set forth by the
schedule in subparagraph (iii) below.
(iii) Withholdings and Incentive Payments. With respect to the Actual
Withholdings collected during each of the calendar years 2005 thru 2008
(four years), inclusive, the Target Withholdings and Incentive Payment to be
paid in respect of each of those calendar years shall be paid in accordance
with the following schedule:
Remainder o,~p~ge intentionally left blank
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MortgageIT EDA draft 1, July 23, 2005
Calendar Year Target Withholdings (1) Base Incentive Payment (2)
2005 (prorated Sept. -Dec.) $9,067 $4,533 Grant Payment
2006 $41,035 $2,267 (25% of 2005)
2007 $56,283 $10,259 (25% of 2006)
2008 $74,640 $14,071 (25% of 2007)
2009 $84,431 $18,660 (25% of 2008)
2010 $94,488 $16,886 (20% of 2009)
2011 $ N/A $18,898 (20% of 2010)
(1) Assumes 2.5% annual payroll growth and additional employees at 5% growth/year
(2) Base Incentive payment equals 25% of actual withholdings for respective calendar year
and 20% for the two-year possibly bonus
( )Indicates bonus years, targets and payments if criteria are met.
The payments provided for in this Section 2 shall be made by the City to MortgageIT by
electronic funds transfer or by such other manner as is mutually agreed to by the City and
MortgageIT. Payment caps are set at $6000 in 2006, $15,000 in 2007, $20,000 in 2008 and $25,000
in 2009. The maximum cap on payments associated with the Agreement is $70,533; and increases
in potential payment to $120,533 if including the two additional bonus years.
(d) Additional Incentives. The City and MortgageIT agree that MortgageIT will be
entitled to two additional years of incentive payments in 2009 and 2010, with payments in 2010
and 2011, equal to twenty percent (20%) of actual withholdings if MortgageIT at a minimum
signs afive-year lease extension or acquires a facility in Dublin by January 1, 2010, and submits
proof of lease extension or building acquisition. This annual "extraordinary performance bonus
payment" will be capped at $25,000 annually, and will not exceed $50,000 over the term of the
Agreement.
(e) Forfeiture of Incentive Payment. MortgageIT agrees that if the Target Withholdings is
not met, as set forth in 2(c)(iii) above for any given year, the City is not obligated to make any
incentive payment to MortgageIT for the year in which the target(s) was not met. Failure to meet
the Target Withholdings in any one incentive year does not prohibit MortgageIT from receiving an
Incentive Payment for any subsequent year in which the Target Withholdings is met.
(f) Cit~bligation to Make Payments Not Debt• Payments Limited to Non-tax Revenues.
Notwithstanding anything to the contrary herein, the obligations of the City pursuant to this
Agreement shall not be a general obligation debt or banded indebtedness, or a pledge of the
general credit or taxes levied by the City, and MortgageIT shall have no right to have excises or
taxes levied by the City, the State or any other political subdivision of the State for the
performance of any obligations of the City herein. Consistent with Section 13 of Article VIII,
Ohio Constitution, any payments or advances required to be made by the City pursuant to this
Section 2 shall be payable solely from the City's non-tax revenues. Further, since Ohio law
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MortgageIT EDA draft 1, July 23, 2005
limits the City to appropriating monies for such expenditures only on an annual basis, the
obligation of the City to make payments pursuant to this Section 2 shall be subject to annual
appropriations by the City Council and certification by the Director of Finance of the City as to
the availability of such non-tax revenues.
(g) 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%).
Section 3. Miscellaneous.
(a) Notices. Except as otherwise specifically set forth in this Agreement, all notices,
demands, requests, consents or approvals given, required or permitted to be given hereunder shall be
in writing and shall be deemed sufficiently given if actually received or 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) MortgageIT at:
Dublin, OH
Attention:
The parties, by notice given hereunder, may designate any further or different addresses to which
subsequent notices; certificates, requests or other communications shall be sent.
(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 MortgageIT in other than his or
her official capacity. No official executing or approving the City's or MortgageIT' 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
MortgageIT and its successors and assigns.
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MortgageIT EDA draft 1, July 23, 2005
(d) Recitals. The City and MortgageIT 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 MortgageIT.
(f) Executed Counterparts. This Agreement maybe 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 MortgageIT, 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
MortgageIT and the City in this Agreement shall survive the execution and delivery of this
Agreement.
(k) Notwithstanding any clause or provision of this Agreement to the contrary, in no
event shall City or MortgageIT be liable to each other for punitive, special, consequential, or
indirect damages of any type and regardless of whether such damages are claimed under
contract, tort (including negligence and strict liability) or any other theory of law.
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MortgageIT EDA draft 1, July 23, 2005
IN WETNESS WxExEOF, the City and MortgageIT 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 Brautigam
Title: City Manager
Approved as to Form:
By:
Printed: Stephen J. Smith
Title: Director of Law
MORTGAGEIT
By:
Printed:
Title:
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MortgageIT EDA draft 1, July 23, 2005
FISCAL OFFICER'S CERTIFICATE
The undersigned, Director of Finance of the City under the foregoing Agreement, certifies
hereby that the moneys required to meet the obligations of the City under the foregoing Agreement
have been appropriated lawfully for that purpose, and are in the Treasury of the City or in the
process of collection to the credit of an appropriate fund, free from any previous encumbrances.
This Certificate is given in compliance with Sections 5705.41 and 5705.44, Ohio Revised Code.
Dated: , 2005
Marsha I. Grigsby
Deputy City Manager/Director of Finance
City of Dublin, Ohio
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