Ordinance 06-11RECORD OF ORDINANCES
Ordinance No
06 -11
Passed 20
AN ORDINANCE AUTHORIZING THE PROVISION OF CERTAIN
INCENTIVES TO ALCATEL- LUCENT USA INC. TO INDUCE IT
TO LOCATE AN OFFICE AND ASSOCIATED 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 development and provide
for the creation of employment opportunities within the City; and
WHEREAS, Alcatel- Lucent USA Inc. (the "Company ") recently performed a
comprehensive examination of its workforce needs, and based on the results of this
examination, and induced by and in reliance on the economic development incentives
provided in the proposed Economic Development Agreement (as described below), the
Company is desirous of leasing a facility within the City to locate an office and
associated operations and workforce within the City in order to achieve the payroll
withholding targets set forth in the Economic Development Agreement; and
WHEREAS, the Company has received a State of Ohio Job Creation Tax Credit (the
"JCTC") which was approved on December 6, 2010, providing for a sixty percent
(60 %) State tax credit for ten (10) years, beginning in 2011; and
WHEREAS, this Council has determined that it is necessary and appropriate and in the
best interests of the City to provide for certain economic development incentives to the
Company, as described in the proposed Economic Development Agreement; and
WHEREAS, this Council has determined to offer the 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
satisfy the local support component of the JCTC program, and to induce the Company
to lease a facility within the City and locate an office and associated operations and
workforce within the City, thereby improving 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.
NOW, THRE, BE IT ORDAINED by the Council of the City of Dublin, State
of Ohio, of the elected members concurring, that:
Section 1 . The Economic Development Agreement by and between the City and the
Company, in the form presently on file with the Clerk of Council, providing for, among
other things, the provision of certain economic development incentives to satisfy the
local support component of the JCTC program and in consideration for the Company's
agreement to lease a facility within the City for the location of an office and associated
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. The City Manager, for and in
the name of this City, is hereby authorized to execute that Economic Development
Agreement, provided further that the approval of changes thereto by that official, and
their character as not being substantially adverse to the City, shall be evidenced
conclusively by the execution thereof. This Council further authorizes the City
Manager, 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 Director of Law, the Director of Finance, the Clerk of Council, or other appropriate
RECORD OF ORDINANCES
Blank, Inc.
Ordinance No. -11
Form No.30043
fiat of 2 20
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 and
any of its committees concerning and relating to the passage of this Ordinance were
taken in open meetings of this Council or committees, and that all deliberations of this
Council and any of its committees that resulted in those formal actions were in meetings
open to the public, all in compliance with the law including Section 121.22 of the
Revised Code.
Section 4. This Ordinance shall be in full force and effect on the earliest date
permitted by law.
Signed:
&mo d aear%,�
Mayor - Presi on Officer
Attest:
Clerk of Council
Passed: 2011
Effective• 2011
CITY OF DUBLIN_
Office of the City Manager .
5200 Emerald Parkway • Dublin, OH 43017 -1090
Phone: 614 - 410 -4400 • Fax: 614 -410 -4490
To: Members of Dublin City Council
From: Marsha Grigsby, City Manager 'C`
Date: January 20, 2011
Initiated By: Colleen Gilger, Economic Development Administrator
•
Re: Ordinance 06 -11 -Authorizing an Economic Development Agreement with
Alcatel- Lucent
Summary
The Economic Development Agreement proposed by Economic Development to Alcatel -
Lucent includes a 5500,000 Location Grant payable in two equal installments of 5250,000 one
calendar year apart; access to two, dedicated optical fibers within the City -owned Dublink
system; and a 10 -year, 20% Performance Incentive on withholdings collected.
The Target Withholdings and Cap Payments have been slightly modified since the first reading
on January 10, 2011. The company, upon a more complex review of its payroll, determined
that over 100 employees regularly travel out of state for client meetings and were filing for
individual tax refunds based on "days out" from the home -base office. This would significantly
impact the company's ability to reach any of its original targets.
Therefore, staff has negotiated new Target Withholdings based on revised payroll projections
that are approximately 21.5 percent lower than the original proposal, and accordingly have
reduced the Cap Payments by 32 percent to limit the City's risk of future financial liability.
According to the new projections and revised Targets, the City estimates it would pay Alcatel -
Lucent approximately 51,576,760 in Performance Incentives and net approximately $6,307,039
in new withholdings over the agreement term, should the company grow according to
expectations.
Recommendation
Staff recommends Council passage of Ordinance 06 -11. Please contact Colleen Gilger
regarding any questions you may have.
CITY OF DURUN-
Office of the City Manager
5200 Emerald Parkway • Dublin, OH 43017 -1090
Phone: 614410 -4400 • Fax: 614 - 410 -4490
To: Dublin City Council
From: Marsha Grigsby, City Manager
Date: January 6, 2011
Initiated By: Colleen Gilger, Economic Development Administrator
emo
Re: Ordinance 06 -11 - Authorizing an Economic Development Agreement with
Alcatel- Lucent
Summary
Staff has been in discussions with Alcatel- Lucent (ALU) regarding the relocation of its office
and associated workforce to a high - visibility office space along the I -270 corridor. A global
telecommunications equipment maker headquartered in France, Alcatel - Lucent's approximately
540 Central Ohio jobs are at risk of leaving the state. The company has decided to move its
information technology and testing operations from leased space on E. Broad Street and has been
considering various office locations in Illinois, New Jersey and/or Texas, in addition to Central
Ohio.
Earlier this month, the Ohio Department of Development approved $10 million worth of tax
credits redeemable over 10 years to help keep the jobs in Ohio. On behalf of the City of Dublin,
Economic Development submitted a letter of support, urging the agency to assist with the
retention of the company to Ohio.
Dublin remains in competition with other states, as the company owns multiple facilities with
excess capacity in places such as Naperville, IL. Dublin has been selected by the company as the
"finalist" location within Ohio as we to try to retain these 500+ jobs to the Central Ohio region.
Should City Council approve the Economic Development Agreement at its January 24 meeting,
staff hopes ALU will soon after announce their final location decision as Dublin's 5475 Rings
Road. The company has narrowed its search to the 120,000 -SF vacant North Tower of Atrium II
owned by Duke Realty. The facility will receive a significant construction upgrade, with the
build -out of a first -floor electronics laboratory, training area, five stories of office space and a
loading dock.
The Economic Development Agreement proposed by Economic Development to ALU includes a
$500,000 Location Grant payable in two equal installments of $250,000 one calendar year apart;
access to two, dedicated optical fibers within the City-owned DubLink system; and a 10 -year,
20% Performance Incentive on withholdings collected, which is capped at $2,750,000 for the
term of the agreement, in consideration of the company executing a lease and moving
approximately 540 jobs by the end of 2011 to Dublin. The company would have to reach
predetermined annual withholdings targets to qualify for performance incentives.
Memo re. Ordinance 06 -11 EDA with Alcatel -Lucent
January 6, 2011
Page 2 of 2
The City estimates it would pay ALU approximately $2,010,369 and net approximately
$3,041,474 in new withholdings over the agreement term, should ALU grow according to
expectations.
Because of the company's global presence and overseas headquarters location, some language in
the final EDA and fiber agreement documents may appear slightly different than the draft
documents being presented at first reading on January 10, 2011. The overall agreement terms,
payments, cap payouts and intent of the agreement will be maintained regardless of final format.
Recommendation
Staff recommends Council passage of Ordinance 06 -11 at the second reading/public hearing on
January 24, 2011. Please contact Colleen Gilger with any questions you may have.
ECONOMIC DEVELOPMENT AGREEMENT
THIS ECONOMIC DEVELOPMENT AGREEMENT (the `Agreement") is made and entered into this
day of , 2011, 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 ALCATEL - LUCENT USA INC. (the "Company"
and together with the City, the "Parties "), a Delaware 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, based on the results of the Company's recent comprehensive examination of
workforce needs, and induced by and in reliance on the economic development incentives provided
in this Agreement, the Company desires to locate an office and associated operations and workforce
within the City; and
WHEREAS, the Company has received a State of Ohio Job Creation Tax Credit (the "JCT(7")
which was approved on December 6, 2010, providing for a sixty percent (60 %) State tax credit for
ten (10) years, beginning in 2011; and
WHEREAS, pursuant to Ordinance No. 96 -11 passed on 1 2011
(the "Ordinance "), the City has determined to offer the economic development incentives described
herein to satisfy the local support component of the JCTC program, and to induce the Company to
lease afacility within the City for the location of an office and associated operations and workforce
within the City, which will result in the creation of new jobs 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 the Company have determined to enter into this Agreement to
provide these incentives in order to induce the Company to lease a facility within the City and
locate its operations and workforce within the City;
Now THEREFORE, the City and the Company covenant, agree and obligate themselves as
follows:
Section 1. Companv's Agreement to Lease a Facilitv and Locate Its Operations and
Workforce Within the City
(al In consideration for the economic development incentives to be provided by the City
herein, the Company agrees that it will lease afacility within the City for the location of an office and
ssD#773127v h - 9 -znn
associated operations and workforce within the City, all consistent with the terms of this Agreement.
The Company expects to create approximately five hundred forty (540) employee positions within
the City by December 31, 2011. The average annual wage of these employees is estimated to be
Eighty -Five Thousand and 00 /100 Dollars ($85,000.00), with total estimated payroll withholdings of
approximately Ten Million Fifty One Thousand Eight Hundred Forty -Four and 00 /100 Dollars
($10,051,844.00) over the term of this Agreement.
(bl The Company agrees that the City's obligations to remit payments pursuant to
Section 2 of this Agreement shall be contingent upon (aD the Company delivering to the City afully
executed copy of an agreement evidencing the Company's lease of a facility within the City for a
period of at least five (5) years and (bii ) the Company's satisfaction of the Actual Withholdings
requirements in Section 2.
Section 2. City Agreement to Provide Incentives
(a) General In consideration for the Company's agreement to lease a facility within the
City for the location of an office and associated operations and workforce within the City, and in
order to satisfy the local support component of the JCTC program, the City agrees to provide
economic development incentives to the Company in accordance with this Section.
(b) Location Incentive
(i) Incentive Payment to the Company The Company agrees to execute a lease
for a minimum term of five (5) years (the "Lease ") within the City for the location of an office
and associated operations and workforce within the City. In consideration of the Company's
agreement to execute the Lease and to locate that office and create additional employment
opportunities within the City, the City agrees to provide to the Company a Location Incentive
(the "Location Incentive ") in the aggregate amount of Five Hundred Thousand and 00 /100
Dollars ($500,000.00), payable to the Company in two installments as follows:
(A) Two Hundred Fifty Thousand and 00 /100 Dollars ($250,000.00)
within thirty (30) days following the occurrence (to the City's reasonable satisfaction)
of the Company's execution of the Lease and provision to the City of documentation
in support thereof, which will be subject to the reasonable approval of the City, and
(B) Two Hundred Fifty Thousand and 00 /100 Dollars ($250,000.00) no
later than the date which is one (1) year following the date on which the payment
described in Section 2(b)(i)(A) is required to be paid to the Company.
(ii) Forfeiture of Right to Receive Incentive Payments The Company agrees and
acknowledges that the T Re ati T npen ti ve p _ av id d r, f i ,...b ion 2 is being made b_
C,...... f of agrees that if the requirements of subsection 21(b) of this Agreement are not
ssD #»3127v I 63-19 -zo1J -2-
satisfied, the City shall not be obligated to remit the Location Incentive to the Company as
required by this subsection 2(b).
(c) Workforce Creation Incentive
(i) Calculation of Actual Pavroll Withholding Taxes On or before March 15 of
each of the years 2012 through 2021, the City shall calculate the actual payroll withholding
taxes collected and received during the preceding calendar year by the City from all
Employees (as defined below). For purposes of that calculation, the Company acknowledges
and agrees that the total amount of actual payroll withholding taxes for any calendar year shall
be determined based solely upon the amount of payroll withholding tax payments actually
received by the City from the Company during that calendar year. The Company agrees that
the determination of whether to include in such calculation any amount received by the City
in respect of any calendar year but following the conclusion of that calendar year, shall be
solely within the discretion of the City. For purposes of this Section 2, `Employees" shall
include only those individuals employed by the Company and ,. e,' f+g 444 t e 494- & om
whose salary, wage, commission or other compensation the Company is required to withhold
and pay to the City an amount equal to the applicable City income tax
(ii) Information Relating to Emplovees The Company agrees that, in accordance
with the Dublin City Code, the annual payroll reconciliation and related W -2 forms relating to
its Employees will be provided to the City prior to February 28 of each calendar year.
(iii) Incentive Payments to the Company If the actual payroll withholding taxes
collected and received by the City during the then preceding calendar year from all
Employees, net of refunds (such amount being referred to as the `Actual Withholdings'),
meet or exceed the Target Withholdings (as defined in subsection 2(c)(iv)) for that preceding
calendar year, the City shall, on or before April 15 of the then current calendar year, pay to the
Company, solely from nomax revenues (as defined in subsection 2(e)), an amount equal to
the product of (A) an amount equal to the Actual Withholdings, multiplied by (B) twenty
percent (20 %) (with each such product being referred to as an Annual Incentive Payment");
provided, however, that (1) the City shall not be required pursuant to this subsection 2(c) to
remit an Annual Incentive Payment to the Company in excess of the Annual Cap (as defined
in subsection 2(c)(iv)) in any calendar year, and (2) the aggregate amount of all Annual
Incentive Payments remitted pursuant to this subsection 2(c) by the City to the Company shall
not exceed Twe Million Ne-N t E:igjnt Hundred Seventy -Five Thousand and 00 /100
Dollars 1 875.000.00
(remainder ofpage intentionally left blank)
ssp #»3127v I c:1a9 -zo1J - 3 -
(iv) Target Withholdings and Annual Cap The Target Withholdings and Annual
Cap for each of the calendar years 2011 through 2020 shall be:
Calen
2011-
2012
2013
2014
2015
2016
2017
2018
2019
2020
Target Withholdings
$ 919,000** 720,000
936,3 H0734,400
93308 749.088
94189 764.070
nn�4.
779351
' , "'� 540794,938
1 "'7810.837
1,054493827.054
r',"0 38843,595
� -5860.467
Annual Cap
$-150,000
X30,000175,000
^ ^�0 000175.000
^ `0,000175.000
— 2-5 0,000175.000
—3.A9,999
—300,000
X00,000
X00:000
X00:000 200.000
* Each Target Withholdings is ealsol renresents an amount for the entire corresnondir�
calendar year The 2011 Target Withholdings ^ ^ a SSUffl i ng ,.r antfaf r
assumes a facility occupancy date- of January 1.2011. The 2011 Target Withholdings will
be p"or"ted t O ,...a W4 on a nro rata basis to reflect the actual date of
facility occupancy.
(v) Forfeiture of Right to Receive Workforce Creation Incentive Payment The
Company agrees and acknowledges that Annual Incentive Payments provided for in
subsection 2(c) are being made by the City to the Company in consideration for the
Company's agreement to
.:.: a ll ;_ar.:.. 414. C4 satisfy the requirements of subsection 1(bl of this
Agreement. The Company further agrees that if the Target Withholdings requirement is not
met for any given calendar year as set forth in subsection 2(c)(iv), the City shall not be
obligated to make any Annual Incentive Payment to the Company for the calendar year in
respect of which the Target Withholdings requirement was not satisfied. Failure to meet the
Target Withholdings requirement in respect of any one calendar year does not prohibit the
Company from receiving an Annual Incentive Payment for any subsequent calendar year in
respect of which the Target Withholdings requirement is satisfied.
(d) Method of Payment The payments to be paid to the Company as provided in this
Section 2 shall be made by the City to the Company by electronic funds transfer or by such other
manner as is mutually agreed to by the City and the Company.
(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 the Company 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
ssD #»3127v I c:3a9 -2011 -4-
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. For purpose of this Agreement, "nontax revenues" shall mean, all moneys of
the City which are not moneys raised by taxation, to the extent available for such purposes,
including, but not limited to the following: (i) grants from the United States of America and the
State; (ii) payments in lieu of taxes now or hereafter authorized to be used for the purposes by State
statute; (iii) fines and forfeitures which are deposited in the City's General Fund; (iv) fees
deposited in the City's General Fund from properly imposed licenses and permits; (v) investment
earnings on the City's General Fund and which are credited to the City's General Fund; (vi)
investment earnings of other funds of the City that are credited to the City's General Fund; (vii)
proceeds from the sale of assets which are deposited in the City's General Fund; (viii) rental
income which is deposited in the City's General Fund; and (ix) gifts and donations.
Section 3. Miscellaneous.
(a) Assignment This Agreement may not be assigned without the prior written consent
of all non - assigning Parties.
(b) Binding Effect The provisions of this Agreement shall be binding upon the
successors or assigns of the Parties.
(c) 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.
(d) Day for Performance Wherever herein there is a day or time period established for
performance and such day or the expiration of such time period is a Saturday, Sunday or legal holiday,
then such time for performance shall be automatically extended to the next business day.
(e) Entire Agreement This Agreement embodies the entire agreement and
understanding of the Parties relating to the subject matter herein and therein and may not be amended,
waived or discharged except in an instrument in writing executed by the Parties.
(f) Events of Default and Remedies Except as otherwise provided in this Agreement, in
the event of any default in or breach of this Agreement, or any of its terms or conditions, by any Party
hereto, such defaulting Party shall, upon written notice from any non - defaulting Party, proceed
immediately to cure or remedy such default or breach, and, in any event, within thirty (30) days after
receipt of such notice. In the event such default or breach is of such nature that it cannot be cured or
remedied within said thirty (30) day period, then in such event the defaulting Party shall upon written
notice from any non - defaulting Party commence its actions to cure or remedy said breach within said
thirty (30) day period, and proceed diligently thereafter to cure or remedy said breach. In case such
action is not taken or not diligently pursued, or the default or breach shall not be cured or remedied
within a reasonable time, the aggrieved non - defaulting Party may institute such proceedings as may
be necessary or desirable in its opinion to cure and remedy such default or breach, including, but not
limited to, proceedings to compel specific performance by the defaulting Party.
ssp #»31zw I c:1a9 -zo1J - 5 -
(g) Executed Counterparts This Agreement may be executed in several counterparts,
each of which shall be deemed to constitute an original, but all of which together shall constitute but
one and the same instrument. It shall not be necessary in proving this Agreement to produce or
account for more than one of those counterparts.
(h) Extent of Covenants: No Personal Liability All covenants, obligations and
agreements of the Parties contained in this Agreement shall be effective to the extent authorized and
permitted by applicable law. No such covenant, obligation or agreement shall be deemed to be a
covenant, obligation or agreement of any present or future member, officer, agent or employee of the
City or the Company other than in his or her official capacity, and neither the members of the
legislative body of the City nor any official executing this Agreement shall be liable personally under
this Agreement or be subject to any personal liability or accountability by reason of the execution
thereof or by reason of the covenants, obligations or agreements of the City and the Company
contained in this Agreement.
(i) Governing Law 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 the Company, 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) Legal Authority The Parties respectively represent and covenant that each is legally
empowered to execute, deliver and perform this Agreement and to enter into and carry out the
transactions contemplated by this Agreement. The Parties further respectively represent and
covenant that this Agreement has, by proper action, been duly authorized, executed and delivered by
the Parties and all steps necessary to be taken by the Parties have been taken to constitute this
Agreement, and the covenants and agreements of the Parties contemplated herein, as a valid and
binding obligation of the Parties, enforceable in accordance with its terms.
(k) Limit on Liability Notwithstanding any clause or provision of this Agreement to the
contrary, in no event shall City or the Company 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 ofnaQe intentionally left blank
l
ssD #»3127v I c:1a9 -zo1J -6-
(1) 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
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) the Company at: Alcatel - Lucent USA Inc.
Dublin, Ohio 430117
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
(m) Recitals The Parties 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.
(n) Severability If any provision of this Agreement, or any covenant, obligation or
agreement contained herein is determined by a court to be invalid or unenforceable, that
determination shall not affect any other provision, covenant, obligation or agreement, each of which
shall be construed and enforced as if the invalid or unenforceable portion were not contained herein.
That invalidity or unenforceability shall not affect any valid and enforceable application thereof, and
each such provision, covenant, obligation or agreement shall be deemed to be effective, operative,
made, entered into or taken in the manner and to the full extent permitted by law.
(o) Survival of Representations and Warranties All representations and warranties of the
Parties in this Agreement shall survive the execution and delivery of this Agreement.
(remainder of page intentionally left blank— signature page follows)
ssD #»3127v I 63-19 -zo1J -7-
IN WITNESS WHEREOF, the City and the Company 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: Marshal. Grigsby
Title: Citv Manager
Approved as to Form:
Printed: Stephen J. Smith
Title: Director of Law
ALCATEL- LUCENT USA INC.
Ma
Printed:
Title:
SSA #»3127v I c:1a9 -zo1J - 8-
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: .2011
Director of Finance
City of Dublin, Ohio
ssD #»a127v I c:1a9 -2011 -9-
Document comparison by Workshare Professional on Friday, January 21, 2011 9:24:58
AM
Input:
Document 1 ID
file: / /C: /Documents and Settings /cfranzmann /Desktop /Old
Insertions
draft EDA - Alcatel Lucent draft for council.DOCX
Description
Old draft EDA - Alcatel Lucent for council
Document 2 ID
file: / /C: /Documents and Settings /cfranzmann /Desktop /New
Moved to
draft ALU EDA - 1- 19- 11.DOCX
Description
New draft ALU EDA - 1 -19 -11
Rendering set
Istandard
nd:
Style change
Format change
Inserted cell
Deleted cell
Moved cell
Split /Merged cell
Padding cell
Statistics:
Count
Insertions
43
Deletions
40
Moved from
0
Moved to
0
Style change
0
Format changed
0
Total changes
83
ECONOMIC DEVELOPMENT AGREEMENT
THIS ECONOMIC DEVELOPMENT AGREEMENT (the `Agreement") is made and entered into
this day of , 2011, 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 ALCATEL - LUCENT USA INC. (the "Company"
and together with the City, the Parties "), a Delaware 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, based on the results of the Company's recent comprehensive examination of
workforce needs, and induced by and in reliance on the economic development incentives provided
in this Agreement, the Company desires to locate an office and associated operations and
workforce within the City; and
WHEREAS, the Company has received a State of Ohio Job Creation Tax Credit (the
JCTC ") which was approved on December 6, 2010, providing for a sixty percent (60 %) State tax
credit for ten (10) years, beginning in 2011; and
WHEREAS, pursuant to Ordinance No. -11 passed on , 2011 (the
"Ordinance "), the City has determined to offer the economic development incentives described
herein to satisfy the local support component of the JCTC program, and to induce the Company to
lease afacility within the City for the location of an office and associated operations and workforce
within the City, which will result in the creation of new jobs 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 the Company have determined to enter into this Agreement to
provide these incentives in order to induce the Company to lease a facility within the City and
locate its operations and workforce within the City;
Now THEREFORE, the City and the Company covenant, agree and obligate themselves as
follows:
Section 1. Companv's Agreement to Lease a Facilitv and Locate Its Operations and
Workforce Within the City
(a) In consideration for the economic development incentives to be provided by the City
herein, the Company agrees that it will lease a facility within the City for the location of an office
SSD #773127v6 1-19-2011
and associated operations and workforce within the City, all consistent with the terms of this
Agreement. The Company expects to create approximately five hundred forty (540) employee
positions within the City by December 31, 2011. The average annual wage of these employees is
estimated to be Eighty -Five Thousand and 00 /100 Dollars ($85,000.00), with total estimated payroll
withholdings of approximately Ten Million Fifty One Thousand Eight Hundred Forty -Four and
00 /100 Dollars ($10,051,844.00) over the term of this Agreement.
(b) The Company agrees that the City's obligations to remit payments pursuant to
Section 2 of this Agreement shall be contingent upon (i) the Company delivering to the City a fully
executed copy of an agreement evidencing the Company's lease of a facility within the City for a
period of at least five (5) years and (ii) the Company's satisfaction of the Actual Withholdings
requirements in Section 2.
Section 2. Citv Agreement to Provide Incentives
(a) General In consideration for the Company's agreement to lease afacility within the
City for the location of an office and associated operations and workforce within the City, and in
order to satisfy the local support component of the JCTC program, the City agrees to provide
economic development incentives to the Company in accordance with this Section.
(b) Location Incentive
(i) Incentive Pavment to the Comnany The Company agrees to execute a lease
for a minimum term of five (5) years (the "Lease ") within the City for the location of an
office and associated operations and workforce within the City. In consideration of the
Company's agreement to execute the Lease and to locate that office and create additional
employment opportunities within the City, the City agrees to provide to the Company a
Location Incentive (the "Location Incentive ") in the aggregate amount of Five Hundred
Thousand and 00 /100 Dollars ($500,000.00), payable to the Company in two installments as
follows:
(A) Two Hundred Fifty Thousand and 00 /100 Dollars ($250,000.00)
within thirty (30) days following the occurrence (to the City's reasonable
satisfaction) of the Company's execution of the Lease and provision to the City of
documentation in support thereof, which will be subject to the reasonable approval
of the City, and
(B) Two Hundred Fifty Thousand and 00 /100 Dollars ($250,000.00) no
later than the date which is one (1) year following the date on which the payment
described in Section 2(b)(i)(A) is required to be paid to the Company.
(ii) Forfeiture of Right to Receive Incentive Payments The Company agrees
and acknowledges that if the requirements of subsection 1(b) of this Agreement are not
satisfied, the City shall not be obligated to remit the Location Incentive to the Company as
required by this subsection 2(b).
ssD #773127v6 1-19-2011 -2-
(c) Workforce Creation Incentive
(i) Calculation of Actual Payroll Withholding Taxes On or before March 15 of
each of the years 2012 through 2021, the City shall calculate the actual payroll withholding
taxes collected and received during the preceding calendar year by the City from all
Employees (as defined below). For purposes of that calculation, the Company
acknowledges and agrees that the total amount of actual payroll withholding taxes for any
calendar year shall be determined based solely upon the amount of payroll withholding tax
payments actually received by the City from the Company during that calendar year. The
Company agrees that the determination of whether to include in such calculation any
amount received by the City in respect of any calendar year but following the conclusion of
that calendar year, shall be solely within the discretion of the City. For purposes of this
Section 2, `Employees" shall include only those individuals employed by the Company and
from whose salary, wage, commission or other compensation the Company is required to
withhold and pay to the City an amount equal to the applicable City income tax.
(ii) Information Relating to Employees The Company agrees that, in
accordance with the Dublin City Code, the annual payroll reconciliation and related W -2
forms relating to its Employees will be provided to the City prior to February 28 of each
calendar year.
(iii) Incentive Payments to the Company If the actual payroll withholding taxes
collected and received by the City during the then preceding calendar year from all
Employees, net of refunds (such amount being referred to as the Actual Withholdings'),
meet or exceed the Target Withholdings (as defined in subsection 2(c)(iv)) for that
preceding calendar year, the City shall, on or before April 15 of the then current calendar
year, pay to the Company, solely from nontax revenues (as defined in subsection 2(e)), an
amount equal to the product of (A) an amount equal to the Actual Withholdings, multiplied
by (B) twenty percent (20 %) (with each such product being referred to as an `Annual
Incentive Payment'); provided, however, that (1) the City shall not be required pursuant to
this subsection 2(c) to remit an Annual Incentive Payment to the Company in excess of the
Annual Cap (as defined in subsection 2(c)(iv)) in any calendar year, and (2) the aggregate
amount of all Annual Incentive Payments remitted pursuant to this subsection 2(c) by the
City to the Company shall not exceed One Million Eight Hundred Seventy -Five Thousand
and 00 /100 Dollars ($1,875,000.00).
(remainder o(page intentionally left blank)
SSD #773127v6 1-19-2011 - 3 -
(iv) Target Withholdings and Annual Can The Target Withholdings and Annual
Cap for each of the calendar years 2011 through 2020 shall be:
Calendar Year
Target Withholdings
Annual Cap
2011
$720,000
$175,000
2012
734,400
175,000
2013
749,088
175,000
2014
764,070
175,000
2015
779,351
175,000
2016
794,938
200,000
2017
810,837
200,000
2018
827,054
200,000
2019
843,595
200,000
2020
860,467
200,000
* Each Target Withholdings represents an amount for the entire corresponding calendar year The
2011 Target Withholdings assumes a facility occupancy date of January 1, 2011. The 2011 Target
Withholdings will be reduced on a pro rata basis to reflect the actual date of facility occupancy.
(v) Forfeiture of Right to Receive Workforce Creation Incentive Payment The
Company agrees and acknowledges that Annual Incentive Payments provided for in
subsection 2(c) are being made by the City to the Company in consideration for the
Company's agreement to satisfy the requirements of subsection 1(b) of this Agreement. The
Company further agrees that if the Target Withholdings requirement is not met for any
given calendar year as set forth in subsection 2(c)(iv), the City shall not be obligated to
make any Annual Incentive Payment to the Company for the calendar year in respect of
which the Target Withholdings requirement was not satisfied. Failure to meet the Target
Withholdings requirement in respect of any one calendar year does not prohibit the
Company from receiving an Annual Incentive Payment for any subsequent calendar year in
respect of which the Target Withholdings requirement is satisfied.
(d) Method of Payment The payments to be paid to the Company as provided in this
Section 2 shall be made by the City to the Company by electronic funds transfer or by such other
manner as is mutually agreed to by the City and the Company.
(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 the Company 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. For purpose of this Agreement, "nontax revenues"
ssD #773127v6 1-19-2011 -4-
shall mean, all moneys of the City which are not moneys raised by taxation, to the extent
available for such purposes, including, but not limited to the following: (i) grants from the
United States of America and the State; (ii) payments in lieu of taxes now or hereafter authorized
to be used for the purposes by State statute; (iii) fines and forfeitures which are deposited in the
City's General Fund; (iv) fees deposited in the City's General Fund from properly imposed
licenses and permits; (v) investment earnings on the City's General Fund and which are credited
to the City's General Fund; (vi) investment earnings of other funds of the City that are credited
to the City's General Fund; (vii) proceeds from the sale of assets which are deposited in the
City's General Fund; (viii) rental income which is deposited in the City's General Fund; and (ix)
gifts and donations.
Section 3. Miscellaneous.
(a) Assignment This Agreement may not be assigned without the prior written consent
of all non - assigning Parties.
(b) Binding Effect The provisions of this Agreement shall be binding upon the
successors or assigns of the Parties.
(c) 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.
(d) Day for Performance Wherever herein there is a day or time period established for
performance and such day or the expiration of such time period is a Saturday, Sunday or legal
holiday, then such time for performance shall be automatically extended to the next business day.
(e) Entire Agreement This Agreement embodies the entire agreement and
understanding of the Parties relating to the subject matter herein and therein and may not be
amended, waived or discharged except in an instrument in writing executed by the Parties.
(f) Events of Default and Remedies Except as otherwise provided in this Agreement,
in the event of any default in or breach of this Agreement, or any of its terms or conditions, by any
Party hereto, such defaulting Party shall, upon written notice from any non - defaulting Party,
proceed immediately to cure or remedy such default or breach, and, in any event, within thirty (30)
days after receipt of such notice. In the event such default or breach is of such nature that it cannot
be cured or remedied within said thirty (30) day period, then in such event the defaulting Party shall
upon written notice from any non - defaulting Party commence its actions to cure or remedy said
breach within said thirty (30) day period, and proceed diligently thereafter to cure or remedy said
breach. In case such action is not taken or not diligently pursued, or the default or breach shall not
be cured or remedied within a reasonable time, the aggrieved non - defaulting Party may institute
such proceedings as may be necessary or desirable in its opinion to cure and remedy such default or
breach, including, but not limited to, proceedings to compel specific performance by the defaulting
Party.
SSD #773127v6 1-19-2011 - 5 -
(g) Executed Counterparts This Agreement may be executed in several counterparts,
each of which shall be deemed to constitute an original, but all of which together shall constitute but
one and the same instrument It shall not be necessary in proving this Agreement to produce or
account for more than one of those counterparts.
(h) Extent of Covenants; No Personal Liability All covenants, obligations and
agreements of the Parties contained in this Agreement shall be effective to the extent authorized and
permitted by applicable law. No such covenant, obligation or agreement shall be deemed to be a
covenant, obligation or agreement of any present or future member, officer, agent or employee of
the City or the Company other than in his or her official capacity, and neither the members of the
legislative body of the City nor any official executing this Agreement shall be liable personally
under this Agreement or be subject to any personal liability or accountability by reason of the
execution thereof or by reason of the covenants, obligations or agreements of the City and the
Company contained in this Agreement.
(i) Governing Law 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 the Company, 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) Legal Authority The Parties respectively represent and covenant that each is legally
empowered to execute, deliver and perform this Agreement and to enter into and carry out the
transactions contemplated by this Agreement. The Parties further respectively represent and
covenant that this Agreement has, by proper action, been duly authorized, executed and delivered by
the Parties and all steps necessary to be taken by the Parties have been taken to constitute this
Agreement, and the covenants and agreements of the Parties contemplated herein, as a valid and
binding obligation of the Parties, enforceable in accordance with its terms.
(k) Limit on Liability Notwithstanding any clause or provision of this Agreement to
the contrary, in no event shall City or the Company 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 ofpage intentionally left blank)
SSD #773127v6 1-19-2011 -6-
(1) 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
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) the Company at: Alcatel- Lucent USA Inc.
Dublin, Ohio 430117
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.
(m) Recitals The Parties 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.
(n) Severability If any provision of this Agreement, or any covenant, obligation or
agreement contained herein is determined by a court to be invalid or unenforceable, that
determination shall not affect any other provision, covenant, obligation or agreement, each of which
shall be construed and enforced as if the invalid or unenforceable portion were not contained herein.
That invalidity or unenforceability shall not affect any valid and enforceable application thereof, and
each such provision, covenant, obligation or agreement shall be deemed to be effective, operative,
made, entered into or taken in the manner and to the full extent permitted by law.
(o) Survival of Representations and Warranties All representations and warranties of
the Parties in this Agreement shall survive the execution and delivery of this Agreement.
(remainder of page intentionally left blank— signature page follows)
ssD #773127v6 1-19-2011 -7-
IN WITNESS WHEREOF, the City and the Company 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
Printed: Marsha I. Grigsbv
Title: Citv Manager
Approved as to Form:
C
Printed: Stephen J. Smith
Title: Director of Law
ALCATEL- LUCENT USA INC.
LIM
Printed:
Title:
SSD #773127v6 1-19-2011 - 8-
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: .2011
Director of Finance
City of Dublin, Ohio
SSD #773127v6 1-19-2011 -9-