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60-06 Ordinance RECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 Ordinance No. 60-~~ Passed _ . 20 AN ORDINANCE AUTHORIZING THE PROVISIONS OF CERTAIN INCENTIVES FOR PURPOSES OF ENCOURAGING THE ESTABLISHMENT BY CRAWFORD HOYING LTD OF ITS OPERATIONS 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, Crawford Hoying Ltd. ("Crawford Hoying is desirous of establishing its 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 Crawford Hoying 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 Crawford Hoying to establish its operations and workforce within the City and to provide for the execution and delivery of that Economic Development Agreement with Crawford Hoying; NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, Franklin, Union and Delaware Counties, State of Ohio, of the elected members concurring, that: Section 1. The Economic Development Agreement by and between the City and Crawford Hoying, in the form presently on file with the Clerk of Council, providing for, among other things, the provision of incentives to Crawford Hoying in consideration for Crawford Hoying's agreement to establish its 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 RECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 Ordinance No. 6006 Passed Page 2 20 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 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: ~~Dbei' ~ , 2006 Effective: ~ l , 2006 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. D ty Clerk of Council, Dublin, Ohio Office of the City Manager 5200 Emerald Parkway, Dublin, Ohio 43016 Crl'Y OF DUBLIN Phone: 614-410-4400 • Fax: 614-410-4490 Memo To: Members of Dublin City Council _ From: Jane S. Brautigam, City Manager ~o.,,..~.~ rj . ~~o.,..+.~~ Date: September 12, 2006 Initiated By: Colleen M. Gilger, Acting Director of Economic Development Re: Ordinance 60-06 -Economic Development Agreement with Crawford Hoying Summary Staff has been in discussions with Crawford Hoying regarding the possibility of a Dublin location for its expanding corporate headquarters. The company has identified 555 Metro Place North for its corporate office, after outgrowing leased space in Columbus. Crawford Hoying is a comprehensive real estate company. Since 1997, it has brokered more than $250 million in real estate transactions and has accommodated more than 25,000 residents. The Crawford Hoying family of companies specializes in land identification, contract negotiation, finance procurement, property management, grounds maintenance, building construction, leasing, insurance and consulting. Ordinance 60-06 authorizes an Economic Development Agreement between the City and Crawford Hoying that includes a $15,000 Technology Grant for technology upgrades to the Metro II facility, and a two-year $12,500 Performance Incentive payable in two installments ($7,500 in 2008 and $5,000 in 2009) tied to the company meeting predetermined, annual job and payroll withholdings growth commitments. Crawford Hoying is committing to 35 employees upon move-in during November 2006, and the hiring of at least 10 employees with an average salary of $55,000 over the next two years, equating to an annual payroll of $2.6 million by 2009. Crawford Hoying is projected to pay approximately $206,300 in new withholding income tax revenues over the course of their five-year lease. Recommendation Staff recommends the Economic Development Agreement and Ordinance 60-06 be approved by City Council at the second reading/public hearing on October 2, 2006. ECONOMIC DEVELOPMENT AGREEMENT THIS ECONOMIC DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into this day of , 2006, by and between the CITY of DusLIN, 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 Crawford Hoying Ltd. ("Crawford Hoying'~ an Ohio corporation, 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 adapted 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, Crawford Hoying desires to locate its operations and initial workforce of approximately 35 fulltime employees within the City of Dublin in 2006, growing to 45 employees by 2008; and WHEREAS, pursuant to Ordinance No. 60-06 passed , 2006 (the "Ordinance"), the City has deternuned to offer economic development incenrives described herein to induce Crawford Hoying 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 WI~REAS, the City and Crawford Hoying have determined to enter into this Agreement to provide these incentives to induce Crawford Hoying to locate its operations and create its workforce within the City. Now, THEREFORE, the City and Crawford Hoying covenant agree and obligate themselves as follows: Section 1. Crawford Ho~g_A~reement to Create Jobs. Crawford Hoying agrees that it will establish its office at 555 Metro Place North ("Metro II'~ in the City of Dublin (the "Dublin Facility'. Crawford Hoying will occupy the Dublin Facility no later than November 30, 2006 and will employ at least 35 fulltime employees within the City of Dublin as part of its operations, growing that workforce with the addition of 10 employees by December 31, 2008. The average annual wage of these employees for the Agreement term is estimated to be approximately $55,000 with total estimated payroll withholdings of approximately $97,916. Crawford Hoying will lease its Dublin Facility for a minimum of five (5) years. Proof of such lease 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. -1- Section 2. City Agreement to Provide Incentives. (a) General. In consideration for Crawford Hoying's agreement to locate its operations' workforce and associated payroll within the City, the City agrees to provide economic development incentives to Crawford Hoying in accordance with this Section. (b) Technology & Location Grant. Crawford Hoying 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 operations' workforce within the City, the City agrees to provide a grant to Crawford Hoying in the amount of $15,000 (the "Grant"). Prior to making the Grant payment to Crawford Hoying, the City must receive an executed copy of a lease agreement providing for a lease to Crawford Hoying of the Dublin Facility for a term of not less than five (5) years, proof of employment of at least 35 full-time employees within the City by November 30, 2006. The Grant also is payable no sooner than April 30, 2007. At its sole discretion, and prior to the payment of the Grant, the City may request any reasonable documentation with respect to how Crawford Hoying intends to use the Grant, to ensure that the Grant achieves the purpose for which it has been granted under this Agreement. (c) Performance. (i) Calculation of Actual Withholdings. On or before March 15 of the years 2008 and 2009 the City shall determine whether the actual payroll withholding taxes collected during the preceding calendaz years 2007 and 2008, net of refunds, by the City from all Employees (the "Actual Withholdings") meet or exceed the tazget withholdings for that preceding calendaz yeaz (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 Crawford Hoying Ltd. and the following affiliates: Brackett Builders Inc.; Champion Insurance Services LLC; Champion Services LLC; Crawford Communities Inc.; Crawford Hoying Management Inc.; Crawford Hoying Smith Real Estate Services; Mazatage LLC; and The Team Sales Company LLC, within the City of Dublin and working at the Dublin Facility. Crawford Hoying 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 yeaz. (ii) Payments to Crawford Hoyin~. If the Actual Withholdings meets or exceeds the Tazget Withholdings for the preceding calendar yeaz, the City shall, on or before April 15 of the then current calendar year, pay to Crawford Hoying, solely from non-tax revenues, the amounts listed in Section 2c(iii) below. (iii) Withholdings and Incentive Payments. With respect to the Actual Withholdings collected during the calendar years 2007 and 2008, 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: -2- Calendar Year Target Withholdings Incentive Payment 2007 $39,655 N/A 2008 $51,845 $7,500 2009 N/A $5,000 The payments provided for in this Section 2 shall be made by the City to Crawford Hoying by electronic funds transfer or by such other manner as is mutually agreed to by the City and Crawford Hoying. Performance incentive maximum payment caps are set as indicated in the table above in Section 2(c)(iii). The total maximum payment associated with the Agreement (including the grant payment and two annual performance payments) is $27,500. (d) Forfeiture of Incentive Payment and Repayment of Grant. Crawford Hoying agrees that if the Tazget 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 Crawford Hoying for the year in which the Target Witholdings was not met. Failure to meet the Target Withholdings in any one incentive yeaz does not prohibit Crawford Hoying from receiving an Incentive Payment for any subsequent year in which the Tazget Withholdings is met. No financial obligation is incurred by Crawford Hoying for failure to meet the Tazget Withholdings set forth in Section 2(c)(iii). (e) 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 Crawford Hoying 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. (f) Applicable City Payroll Tax Rate. For purposes of calculating the Actual Withholdings in each calendar yeaz 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 iri 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 -3- 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) Crawford Hoying at: 555 Metro Place North Dublin, OH 43017 Attention: John Gleason '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. (h) 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 Crawford Hoying in other than his or her official capacity. No official executing or approving the City's or Crawford. Hoying'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 Crawford Hoying and its successors and assigns. (d) Recitals. The City and Crawford Hoying 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 Crawford Hoying. (f) Executed Counterparts. This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute but one and the same agreement. It shall not be necessary in proving this Agreement to produce or account for more than one of those counterparts. (g) Severability. In case any section or provision of this Agreement, or any covenant, agreement, obligation or action, or part thereof, made, assumed, entered into or taken, or any application thereof, is held to be illegal or invalid for any reason, (i) that illegality or invalidity shall not affect the remainder hereof or thereof, any other section or provision hereof, or any other covenant, agreement, obligation or action, or 4- 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 RBG, 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 Crawford Hoying 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 Crawford Hoying 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. Remainder of Page Intentionally Left Blank. -5- Itv WITNESS WxExEOF, the City and Crawford Hoying have caused this Agreement to be executes in their respective names by their duly authorized representatives, all as of the date first written above. CITY OF DUBLIN, OHIO By: Printed: Jane S. Brautigam Title: City Manager Approved as to Form: By: Printed: Stephen J. Smith Title: Director of Law Crawford Hoying Ltd. By: Printed: Title: -6- 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 ofFinance City of Dublin, Ohio -7-