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78-07 OrdinanceRECORD OF ORDINANCES Dayton Legal Blank, inc. Form No. 30043 Passed 20 Ordinance No. 78 -07 AN ORDINANCE AUTHORIZING THE CITY MANAGER TO ENTER INTO AN ECONOMIC DEVELOPMENT AGREEMENT WITH CENTER FOR RELIABLE ENERGY SYSTEMS, LLC (ORES) 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, Center for Reliable Energy Systems (CRES) 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 CRES 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 CRES to establish its operations and workforce within the City and to provide for the execution and delivery of that Economic Development Agreement with CRES; NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, Franklin, Union and Delaware Counties, Ohio, —�7— of the elected members concurring, that: Section 1 . The Economic Development Agreement by and between the City and CRES, in the form presently on file with the Clerk of Council, providing for, among other things, the provision of incentives to CRES in consideration for CRES'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 may be 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 Legal Blank, Inc. Form No. 30043 Ordinance No. 78 -07 Passed Page 2 20 Section 4 . This Ordinance shall be in full force and effect on the earliest date permitted by law. Signed: Mayor - Presiding Officer Attest: Cd Clerk of Council Passed: L"f p(j -G ✓ I , 2007 Effective: (Cc;f O lb ev —3 , 2007 I I 1 CITY OF DUBLIN Office of the City Manager 5200 Emerald Parkway, Dublin, Ohio 43017 Phone: 614 - 410 -4400 To: Members of Dublin City Council From: Jane S. Bramigam, City Manager Date: September 27, 2007 Memo Initiated By: Dana L. McDaniel, Deputy City Manager /Director of Economic Development Re: Ordinance 78 -07 — Economic Development Agreement with Center for Reliable Energy Systems, Inc. (ORES) Summary: At Council's last meeting, a concern was raised about whether supporting an EDA with CRES would influence or otherwise promote the building of energy infrastructures in frontier areas, such as in the arctic regions and deep water offshore areas. Staff further discussed this issue with Dr. Wang. Dr Wang assured staff that his research is focused on the safe transportation of energy products through pipelines. The focus and results of his research are to develop the federal codes for safety and regulatory compliance. He also provides consulting services to the energy industry — again, focused on compliance issues relative to design and product manufacturing. These regulatory codes and compliance efforts are intended to ensure the safe transport of energy products and, ultimately, the protection of the environment. Dr. Wang has no involvement in the decision- making process as to where energy products are obtained or where energy products are piped to and from. It is also important to keep in mind that the transport of energy products occurs throughout our country in populated areas and even through Dublin. Staff does not see any conflict with Council's green initiatives and related goal(s). Instead, Dr. Wang's efforts and expertise promote safety and environmental protection. Recommendation: Staff recommends approval of Ordinance 78 -07 at the second reading/public hearing on October 1. Passing this ordinance will support Council's goal relative to creating new entrepreneurial and/or technology businesses, resulting in additional knowledge -based job growth. Please contact Dana McDaniel or myself with any questions you may have. ORES Center for Reliable Energy Systems LLC 6059 Frantz Road, Suite 101 Dublin, Ohio 43017 614 - 808 -4872 Yong -Yi Wang, Ph.D. President (614) 419 -2366 E -mail: yongyi wanggcolumbus.a.com City of Dublin c/o Dana McDaniel Director of Economic Development 5800 Shier Rings Road Dublin, 01143016 September 27, 2007 Re: EDA with CRES The Honorable Mayor and City Council: I'd like to take this opportunity to express my sincere gratitude to the city council and the citizens of Dublin for the support CRES is receiving. As long -time residents of the city, my wife and our three boys are equally grateful and proud of our city. CRES provides advanced technology that ensures the safety and reliability of energy systems each of us depends on. CRES does not take positions on politically sensitive issues, such as drilling in environmentally sensitive areas. Our work helps to protect lives, properties, and the environment. Since its founding on June 20, 2007, CRES has received overwhelming support from the federal government and the energy industry. As an example, CRES will be working with the National Institute of Science and Technology (NIST), the Lincoln Electric Company (based in Cleveland), and Natural Resources Canada - Materials Technology Laboratory ( httn : / /www.nrcan.gc.ca/canmet -mtl on a major program supported by the US Department of Transportation, PRCI (Pipeline Research Council International), and a number of major energy companies. Further program information may be obtained at httn: / /nrin is. nhmsa.dot.gov /matiix/PriHome.rdm ?nri =225 and httn: / /nrin is. nhmsa.dot.gov /matiix/PriHome.rdm ?nri =226 By Friday, October 5, CRES will have three full -time staff members, including myself, all with Ph.D. and many years of experience in the areas of ORES' business focus. I again thank you for your support. Regards, Yong -Yi CRES Center for Reliable Energy Systems LLC 6059 Frantz Road, Suite 101 Dublin, Ohio 43017 614 - 808 -4872 Yong -Yi Wang, Ph.D. President (614) 419 -2366 E -mail: yongyi_wang @columbus.n.com About Yong -Yi Wang, CRES Dr. Wang moved to the Columbus area in 1991 after receiving my M.S. and Ph.D. from the Massachusetts Institute of Technology (MIT). He worked at the Edison Welding Institute on the west campus of OSU for seven years. In 1998 he became a founding member and officer of another business, Engineering Mechanics Corporation of Columbus (Emc He is known world wide as a leading authority in the reliability and structural integrity of energy systems. His work has been recognized by API (American Petroleum Institute), ASME (American Society of Mechanical Engineers), ISOPE (International Society of Polar Engineers), et al. He has been the invited speaker of many international forums and managed major projects for private industries and government agencies. A few examples maybe found onthe web. http://primis.phmsa.dot.gov/rd/rotgs/012506/35 Keynote Wang_pdf httn: / /www1.eere.energy. gov /indust, /r�pdfs /13cps_16945 advanced integration of multi-scale _mechanics.ndf httn: // www. intemationalvivelineconference. com/ ndfs/ IPCE2006ForumsPanelsPaners.ndf and httn: / /www.isope.org /ocean &polarupdates /2006 /October 6 Two New S mposia.htrn CrrY OF DUBLIN_ Office of the City Manager 5200 Emerald Parkway • Dublin, OH 43017 -1006 Phone: 614 - 410 -4400 • Fax: 614 - 410 -4490 TO: Members of Dublin City Council FROM: Jane S. Brautigam, City Manager Memo DATE: September 13, 2007 INITIATED BY: Dana L. McDaniel, Deputy City Manager /Director of Economic Development RE: Ordinance 78 -07 Economic Development Agreement —Center for Reliable Services Summary: Staff has been in discussions with the Center for Reliable Energy Systems, LLC (CRES) regarding the possibility of a Dublin location for its operations and workforce. CRES is a start-up company being formed by Dublin resident Yong -Yi Wang, Ph.D. CRES was formed in June of 2007 to explore the huge business opportunities in the energy industry worldwide. Dr. Wang has been working with the federal government and major multinational energy companies to conduct advanced research and apply the results of the research to codes and standards. These codes and standards are typically adopted in the Federal Registry and become laws for the energy industry. His code and development activities have focused on building energy infrastructures in frontier areas, such as in the arctic regions (e.g. Northern Alaska and Northern Canada) and deep water offshore areas (Gulf of Mexico and West Africa). Dr. Wang possesses experience in company formation and business development. He was a founding member of another business, Engineering Mechanics Corporation of Columbus (Emc2). He also is well known for his research and work associated with the Edison Welding Institute in Columbus. CRES is a start-up company and is in the process of finalizing contracts with the federal government and private industry with keen insight on future contracts. The business nature of CRES requires a very high level of technical and communication skills. Almost all technical staff members will have advanced degrees, at least at the Master's level, and most will have a doctorate degree. The average gross pay for all staff members is estimated to be $100,000 per year. CRES intends to grow to 25 employees by the end of 2011, with an estimated annual payroll of $2,500,000. CRES has finalized and provided staff a copy of its lease at 6059 Frantz Road. Ordinance No.78 -07 authorizes an Economic Development Agreement (attached) between the City and CRES that includes a three -year withholding incentive of 20 percent for 2008, 15 percent for 2009 and 10 percent for 2010 tied to the company meeting pre - determined job and payroll growth commitments. The City also offers a $2,500 Start-up Grant to CRES to help offset initial start-up costs such as technology setup. CRES will be provided this grant not more than thirty days after the effective date of the Agreement. Memo re Ord. 78 -07 EDA — Center for Reliable Services September 13, 2007 Page 2 of 2 Over the term of this agreement, CRES is estimated to receive at least $10,900, should it at a minimum meet each annual withholding target; while the City is estimated to net approximately $51,100 in new income tax withholdings. Please contact Dana McDaniel or myself with any questions you may have. Conclusion: Staff recommends City Council pass Ordinance 78 -07. Passing this Ordinance will support Council's goal relative to creating new entrepreneurial and/or technology businesses resulting in additional knowledge -based job growth. 78 -07 AN ORDINANCE AUTHORIZING THE CITY MANAGER TO ENTER INTO AN ECONOMIC DEVELOPMENT AGREEMENT WITH CENTER FOR RELIABLE ENERGY SYSTEMS, LLC (ORES) 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, Center for Reliable Energy Systems (CRES) 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 CRES 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 CRES to establish its operations and workforce within the City and to provide for the execution and delivery of that Economic Development Agreement with CRES; 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 Economic Development Agreement by and between the City and CRES, in the form presently on file with the Clerk of Council, providing for, among other things, the provision of incentives to CRES in consideration for CRES'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 may be 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. 78 -07 Page 2 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: 2007 Effective: .2007 ECONOMIC DEVELOPMENT AGREEMENT THIS ECONOMIC DEVELOPMENT AGREEMENT (the `Agreement") is made and entered into this day of , 2006, 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 Center for Reliable Energy Systems, LLC ( "CRES ") a Dublin 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 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, CRES desires to locate its offices at 6059 Frantz Road and create a workforce of approximately 25 fulltime employees over the next five years within the City of Dublin; and WHEREAS, pursuant to Ordinance No.78 -07 passed October 1, 2007 (the "Ordinance "), the City has determined to offer economic development incentives described herein to induce CRES 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 WHEREAS, the City and CRES have determined to enter into this Agreement to provide these incentives to induce CRES to locate its operations and create its workforce within the City. Now THEREFORE, the City and CRES covenant agree and obligate themselves as follows: Section 1. CRES Agreement to Create Jobs CRES agrees that it will establish its operations at 6059 Frantz Road in the City of Dublin (the "Dublin Facility'). CRES will occupy the Dublin Facility no later than October 30, 2007 and will employ at least 15 fulltime employees within the City of Dublin as part of its operations by December 31, 2010. The average annual wage of these employees for this period is estimated to be $100,000 with total estimated payroll withholdings of approximately $62,000 over the term of this agreement. -I- Section 2. Citv Agreement to Provide Incentives (a) General In consideration for CRES'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 CRES in accordance with this Section. (b) Start-up Grant In consideration of the agreement to locate its operations' workforce within the City, the City agrees to provide a grant to CRES in the amount of $2,500 (the "Start -up Grant'). The City will make payment of the Start-up Grant to CRES upon proof of a signed lease for the Dublin facility or thirty days after the effective date of this Agreement, whichever is later. (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 target 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 CRES in the City of Dublin and working at the Dublin Facility. CRES 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 CRES 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 CRES, 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), multiplied by (B) an incentive factor equal to twenty percent (20 %) for 2008, fifteen percent (15 %) for 2009 and ten percent (10 %) for 2010 (the "Incentive Payments "). (iii) Withholdings and Incentive Payments With respect to the Actual Withholdings collected during each of the calendar years 2008 thru 2010, 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 (1) 2008 $12,000 2009 $20,000 2010 $30,000 2011 N/A Base Incentive Payment (2) N/A $2,400 (20% of 2008) $3,000 (15% of 2009) $3,000 (10% of 2010) The payments provided for in this Section 2 shall be made by the City to CRES by electronic funds transfer or by such other manner as is mutually agreed to by the City and CRES. 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 $8,400. (d) Forfeiture of Incentive Payment CRES 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 CRES 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 CRES 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 CRES for failure to meet the Target 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 CRES 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 year under this Section 2, the City's payroll tax rate shall be assumed to be two percent ( %). 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 if hand - 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 -3- 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) CRES at: 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 CRES in other than his or her official capacity. No official executing or approving the City's or CRES'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 CRES and its successors and assigns. (d) Recitals The City and CRES 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 CRES. (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 CRES, 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. 0) Survival of Representations and Warranties All representations and warranties of CRES 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 CRES 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. -5- IN WITNESS WHEREOF, the City and CRES 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 MM Printed: Jane Brautigam Title: City Manager Approved as to Form: C Printed: Stephen J. Smith Title: Director of Law Center for Reliable Energy Systems, LLC C 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: 1 2007 Marsha I. Grigsby Deputy City Manager /Director of Finance City of Dublin, Ohio 7-