01-06 OrdinanceRECORD OF ORDINANCES
Dayton LeQxl Blank. Inc. Form No. 30043
Ordinance No. 01-06
Passed
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AN ORDINANCE AUTHORIZING THE
PROVISION OF CERTAIN INCENTIVES FOR
PURPOSES OF ENCOURAGING THE
ESTABLISHMENT BY JOHN DEERE COMPANY
OF ITS REGIONAL SALES OPERATION AND
WORKFORCE WITHIN THE CITY AND
AUTHORIZING THE EXECUTION OF AN
ECONOMIC DEVELOPMENT AGREEMENT.
WHEREAS, consistent with its Economic Development Strategy (the "Strategy")
approved by Dublin City Council Resolution No. 07-94 adopted on June 20, 1994, and
the updated strategy approved by Dublin City Council Resolution No. 30-04 adopted on
July 6, 2004, the City desires to encourage commercial office and retail development
and provide for the creation of employment opportunities within the City; and
WHEREAS, John Deere Columbus Sales Branch ("John Deere ") is desirous of
establishing its regional sales and marketing operations and workforce within the City in
consideration for the provision by the City of economic development incentives; and
WHEREAS, this Council has determined to offer 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 John Deere
to 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
WHEREAS, this Council finds that it is in the best interest of the City to provide those
economic development incentives to induce John Deere to establish its operations and
workforce within the City and to provide for the execution and delivery of that
Economic Development Agreement with John Deere;
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin,
Franklin, Union and Delaware Counties, Ohio, that:
Section 1. The Economic Development Agreement by and between the City and John
Deere, in the form presently on file with the Clerk of Council, providing for, among
other things, the provision of incentives to John Deere in consideration for John Deere's
agreement to establish its regional sales and marketing operations and workforce within
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 Agreement, which amendments are not
inconsistent with this Ordinance and not substantially adverse to this City.
Section 2. This Council further hereby authorizes and directs the City Manager, the
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 3. 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.
RECORD OF ORDINANCES
Dayton Le;'al Blank, Inc. Form No. 30(kl3
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01-06 Paget
Ordinance No. Passed . 20"
Section 4. This Ordinance shall be in full force and effect on the earliest date
permitted by law.
Signed:
Mayor -- Presiding Officer
Attest:
Clerk of Council
Passed: , 2006
Effective: ~v , 2006
I hereby certify that copies of this
Ordinance/~ were posted in the
City of Dublin in accordance with Section
731.25 of the Ohio Revised Code.
Duty Clerk of Council, Dublin, Ohio
CITY 4F DI?BLIN
Economic Development
5800 Shier Rings Road, Dublin, Ohio 43016-1236
Phone: 614-410-4600 • Fax: 614-761-6506
To: Members of Dublin City Council
From: Jane S. Brautigam, City Manager~~a,i,,,~ J
Date: December 28, 2005
Memo
Initiated By: Colleen M. Gilger, Acting Director of Economic Development
Re: Ordinance 01-06 -Economic Development Agreement with John Deere Company
Summary:
Staff has been in discussions with the John Deere Company, Columbus Sales Branch, ("John Deere"} regarding
the possibility of a Dublin location for its regional marketing and sales operation.
Deere & Company, founded in 1837 (collectively called John Deere}, has grown from aone-man blacksmith shop
into a worldwide corporation that today does business in more than 160 countries and employs over 46,000
people worldwide. John Deere consists of three equipment operations (agricultural, commercial and consumer,
and construction and forestry), credit operations, and four support operations (parts, power systeir>s, technology
services, and health care). It is one of the oldest industrial companies in the United States, and in 2003 was
included in Business Ethics magazine's list of "100 Best Corporate Citizens."
The company markets its products through a worldwide network of independent dealers supported by a
decentralized marketing organization. The John Deere Columbus Sales Branch is one of six in the U.S. The others
are located in Atlanta, Dallas, Reno, Kansas City, and Minneapolis.
John Deere is finalizing its lease at 5440 Frantz Road (The Preserve II), and hopes to complete its sales and
marketing center move by February 2006. John Deere currently employs approximately 22 people in Central Ohio
with an average salary of $ 116,477, equating to an initial annual payroll of $2.56 million.
Ordinance No. 01-06 authorizes an Economic Development Agreement between the City and John Deere
Columbus Sales Branch that includes athree-year, 12 percent withholding-equivalent incentive tied to the
company meeting predetermined job and payroll growth coirimitments. The City also offers a $7,500 Location
Grant to John Deere to help offset moving costs. John Deere becomes eligible for this grant payment after six
months of occupancy at Preserve II. Additionally, the City will donate 25 Dublin 's .Journey history books (value:
$1,250) to the John Deere office.
Over the three-year term of this agreement, John Deere is estimated to receive at least $26,415 (+ the $ t,250 book
donation), should it at a minimum meet each annual withholding target; while the City is estimated to net
approximately $131,211 in new income tax withholdings.
Conclusion:
Staff recommends the Economic Development Agreement and Ordinance No. 01-06 be accepted by City Council
on January 23, 2006.
ECONOMIC DEVELOPMENT AGREEMENT
THIS ECONOMIC DEVELOPMI~TT AGRBEMLNT (the "Agreement") is made and entered into
this day of , 2006, by and between the CIS of DUBLIN, OHIO (the
"Gifu"), a municipal corporation duly organized and validly existing under the Constitution and
the taws of the State of Ohio (the "State") and its Charter, and John Deere Company, a Division of
Deere & Company ("John Deere ") a Delaware corporation, under the circumstances summarized
in the following recitals.
RECITais:
Wt-AREAS, 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 and retail development and provide for the retention and creation
of employment opportunities within the City; and
WHEREAS, John Deere desires to locate its regional sales operations and create a workforce
of approximately 22 fulltime employees by February 28, 2006 within the City of Dublin; and
WHEREAS, pursuant to Ordinance No. 01-06 passed January 23, 2006 (the "Ordinance"},
the City has determined to offer economic development incentives described herein to induce John
Deere to locate and establish its regional sales 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
WHEREAS, the City and John Deere have determined to enter into this Agreement to
provide these incentives to induce John Deere to locate its operations and create its workforce
within the City.
Now TI~ttFFOUE, the City and John Deere covenant agree and obligate themselves as
follows:
Section 1. John Deere Ag,~eement to Create Jobs. John Deere agrees that it will
establish its regional sales and marketing operation at 5440 Frantz Road {The Preserve II) in the
City of Dublin {the "Dublin Facility"). John Deere will occupy the Dublin Facility no later than
February 28, 2006 and will employ at least 22 fulltime employees within the City of Dublin as part
of its operations by December 31, 2006. The average annual wage of these employees for this
period is estimated to be $116,477 with total estimated payroll withholdings of approximately
$157,626 over the three-year agreement term.
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Section 2. City Agreement to Provide Incentives.
(a) General. In consideration for John Deere's agreement to locate its sales and
marketing center operation, workforce and associated payroll within the City, the City agrees to
provide economic development incentives to John Deere in accordance with this Section.
(b) Location Grant. In consideration of the agreement to locate its sales and
marketing center operations' workforce within the City, the City agrees to provide a grant to
John Deere in the amount of $7,500 (the "Location Grant"). The City will make payment of the
Location Grant to John Deere no earlier than six months after occupancy. Prior to making
payment of the Location Grant to John Deere, the City must receive proof of employment of at
least 22 full-time employees.
(c} Performance Incentive.
(i} Calculation of Actual Withholdings. On or before March 15 of each of the
years 2007 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 tazget withholdings for that preceding
calendar year (the "Target Withholdings"), 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 John Deere in the City of Dublin and working at the Dublin
Facility. John Deere agrees that, in accordance with the Dublin City Code, the annual
payroll reconciliation relating to the Employees will be provided to the City prior to
February 28 of each calendar year.
(ii) Payments to John Deere. If the Actual Withholdings (net of refunds paid to
employees by the City} 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
John Deere, solely from non-tax revenues, an amount equal to the product of (A) the Actual
Withholdings (net of refunds paid to employees by the City}, muhiplied by (B) an incentive
factor equal to twelve percent (12%) (the "Incentive Payments").
(iii) Withholdings and Incentive Payments. With respect to the Actual
Withholdings collected during each of the calendar years 2006 thru 2009, 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:
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Calendar Year Target Withholdings (1) Base Incentive Payment (2) Ma~cimum Payment
2006 $51,250
2007 $52,531
2008 $53,845
2009 N/A
N/A
$6,150 (12% of 2006)
$6,304 (12% of 2007)
$6,461 (12% of 2008)
NIA
$10,000
$10,000
$10,000
(1) Assumes 22 FTEs and a 2.5% annual payroll growth through 2008.
(2) Base Incentive payment equals 12% of actual withholdings for respective calendar year.
The payments provided for in this Section 2 shall be made by the City to John Deere by
electronic funds transfer or by such other manner as is mutually agreed to by the City and John
Deere. Performance incentive maximum payment caps are set as indicated in the table above in
Section 2{c)(iii). The total maximum payment cap associated with the Agreement (including both
the grant payment and three annual performance payments) is $37,500.
(d} Additional Incentives. The City and John Deere agree that John Deere will be
entitled to twenty-five (25) copies of Dublin 's Journey, Dublin's published history book, upon
occupancy of the Dublin Facility. This additional incentive from the City to John Deere is valued
at $1,250.
(e) Forfeiture of Incentive Payment. John Deere 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 John Deere for the year in which the Target Withholdings was not met.
Failure to meet the Target Withholdings in any one incentive year does not prohibit John Deere
from receiving an Incentive Payment for any subsequent year in which the Target Withholdings is
met, and not including the bonus years. No financial obligation is incurred by John Deere for
failure to meet the Target Withholdings set forth in Section 2{c)(iii).
(fl City's Obligation to Make Payments Not Debt Payments Limited to Non-tax Revenues.
Notwithstanding anything to the contrary herein, the obligations of the City pursuant to this
Agreement shall not be a general obligation debt or bonded indebtedness, or a pledge of the
general credit or taxes levied by the City, and John Deere shall have no right to have excises or
taxes levied by the City, the State or any other political subdivision of the State for the
performance of any obligations of the City herein. Consistent with Section 13 of Article VIII,
Ohio Constitution, any payments or advances required to be made by the City pursuant to this
Section 2 shall be payable solely from the City's non-tax revenues. Further, since Ohio law
limits the City to appropriating monies for such expenditures only on an annual basis, the
obligation of the City to make payments pursuant to this Section 2 shall be subject to annual
appropriations by the City Council and certification by the Director of Finance of the City as to
the availability of such non-tax revenues.
(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%).
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Section 3. Miscellaneous.
(a) Notices. Except as otherwise specifically set forth in this Agreement, all notices,
demands, requests, consents or approvals given, required or pernvtted 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: 5800 Shier Rings Road
Dublin, Ohio 43016-7295
Attention: Economic Development Director
{ii) John Deere at:
Attention:
The parties, by notice given hereunder, may designate any further or different addresses to which
subsequern notices; certificates, requests or other communications shall be sent.
(b) Extern 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 John Deere in other than his or
her official capacity. No official executing or approving the City's or John Deere'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 John
Deere and its successors and assigns.
(d) Recitals. The City and John Deere acknowledge and agree that the facts and
circurr~tances as described in the Recitals hereto are an integral part of this Agreemern and as such
are incorporated herein by reference.
(e) Amendments. This Agreement may only be amended by written instrument executed
by the City and John Deere.
(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
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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) Cautions. The captions and headings in this Agreement are for convenience only and in
no way define, limit or descrbe 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 clairr~s,
counterclaims, disputes and other matters in question between the City, its agerrts and employees,
and John Deere, 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
John Deere 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 John Deere 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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IN WITNESS WHEREOF, the City and John Deere 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
John Deere Company
By:
Printed:
Title:
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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 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: , 2006
Marsha I. Grigsby
Deputy City Manager/Director of Finance
City of Dublin, Ohio
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