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HomeMy WebLinkAbout20101101 - VIII-B-2City Council Memorandum To: Mayor Hicks & City Councilmembers From:John Hinzman, Community Development Director Date:November 1, 2010 Item:Authorize Signature: Waive Certain Development Fees for HD Hudson Manufacturing Relocation. Council Action Requested: The City Council is asked to authorize signature of the attached agreement waiving certain development fees associatedwith the relocation of HD Hudson Manufacturing to the former th Intek Building located at 800 East 10Street. Background Information: As part of the Hudson Manufacturing purchase agreement, the City agreed to waive certain development fees related to Hudson’s acquisition of the former Intek Building at 800 East th 10Streetfor a period of two years from the date of closing. Fees include: Building Permit FeesPlan Review Fees Plan SurchargesWater Connection Fees Sewer Connection FeesEngineering Review Fees Site Plan Application and Review Fees Financial Impact: The total value of feesto be waived is estimated at $65,000. Advisory Commission Discussion: N\A Council Committee Discussion: N\A Attachments: Agreement City of Hastings 101 Fourth Street EastHastings, MN 55033-1955p:651-480-2350f:651-437-7082www.ci.hastings.mn.us AGREEMENT THIS AGREEMENT, made on or as of the _____ day of _____________, 2010, by and between the City of Hastings, Minnesota, a Minnesota Municipal Corporation under the laws of the State of Minnesota (hereinafter referred to as the "City"), and having its principal office at 101 4th Street East, Hastings, Minnesota 55033-1955, and H.D. Hudson Manufacturing Company, a Minnesota Corporation (hereinafter referred to rd as the "Company"), having its principal office at 23Floor, 500 North Michigan Avenue, Chicago, IL, 60611-3769. WITNESSETH: WHEREAS, the Company and the Hastings Economic Development and Redevelopment Authority (HEDRA) have entered into a Purchase Agreement dated as of _________________, 2010, (the “Contract”) pursuant to which the HEDRAhas agreed to purchase from the Company for redevelopment purposes real property located generally at 200 West Second Street in the City of Hastings, Dakota County, Minnesota and legally described on the attached Exhibit A (hereinafter the “Property”); and WHEREAS , the Property has been used for industrial and manufacturing purposes for over 100 years and the City and the HEDRA have identified the Property as being uniquely suited for mixed-use redevelopment within the City; and WHEREAS , upon sale of the Property, the Company is willing to relocate its th manufacturing business operations to a suitably zoned location at 800 –10Street East in the City of Hastings, Dakota County, Minnesota and legally described on the attached Exhibit B (hereinafter the “Relocation Site”); and WHEREAS, inorder to induce the Company to sell the Property to the HEDRA for redevelopment and to relocate its business operations to the Relocation Site, the City is willing to: (1) waive certain fees otherwise payable to the City and directly resulting from the Company’s relocation to, and improvements of, the Relocation Site (hereinafter the “Waived Fees”), and (2) not unreasonably delay any approvals required to be given by the City to enable the Company to use the RelocationSite for its manufacturing business operations (collectively the “City’s Obligations”); and WHEREAS, the City and the Company intend that the value of the Waived Fees shall be substantially less than $150,000 and shall not constitute a “business subsidy” as defined by MinnesotaStatutes, section 116J.993, subdivision 3; and WHEREAS, the obligations of the HEDRA and the Company to perform under the Contract are contingent upon the City and the Company executing an agreement, satisfactory to each, memorializing the City’s Obligations. 1 NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: ARTICLE I Definitions Section 1.1. Definitions.In this Agreement, unless a different meaning clearly appears from the context: "Act" means the Business Subsidy Act, MinnesotaStatutes,Sections 116J.993- .995. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "City" means the City of Hastings, Minnesota. “Company” means H.D. Hudson Manufacturing Company, a Minnesota Corporation. "Contract” means the Purchase Agreement between the HEDRA and the Company dated as of ___________________, 2010. "Improvements" means the construction activities to be undertaken by the Company to improve the Relocation Site, in its sole discretion, to make it more suitable for its manufacturing process. "Property" means the real property described on the attached Exhibit A. “Relocation Site” means the real property described on the attached Exhibit B. "State" means the State of Minnesota. ARTICLE II Waiver of Fees and Charges Section 2.1Obligations Contingent upon Closing of Related Transaction. The obligations of the City and the Company to perform hereunder are contingent upon the HEDRA and the Company successfully closing on the sale and purchase of the Property pursuant to the Contract and in the event the Contract is terminated for any reason, whatsoever, this Agreement and the obligations of the City and the Company hereunder 2 shall automatically terminate, the parties shall execute a written acknowledgement confirming this Agreement is terminated, and thereafter neither party shall have any further obligation to the other. Section 2.2Waiver of Fees and Charges. Subject to the HEDRA and the Company successfully closing on the sale and purchase of the Property pursuant to the Contract, the City shall waive certain fees and charges otherwise payable to the City and directly resulting from the Company’s relocation of its manufacturing operations to the Relocation Site and any demolition, construction, remodeling or other improvements of the Relocation Site deemed necessary, in the Company’s sole discretion, to make the Relocation Site more suitable for the Company’s manufacturing operations within two (2) years from the date the Company closes on its purchase of the Relocation Site. Such fees and charges shall include building permit fees, plan review fees, plan surcharges, water connection fees, sewer connection fees, engineering review fees, and site plan application and review fees. The City shall be under no obligation to waive fees or charges payable to the City after the period ending two (2) years after the date the Company closes on its purchase of the Relocation Site Section 2.3City Approvals.Subject to the HEDRA and the Company successfully closing on the sale and purchase of the Property pursuant to the Contract, the City shall not unreasonably delay any approvals required to be given by the City to enable the Company to use and improve the Relocation Site for its manufacturing business operations, provided that this Agreement shall not constitute a pre-approval of any permits or land use applications relating to the Relocation Site and nothing herein shall obligate the City to approve any permit or land use application that would, but for this Agreement, be denied by the City for any reason other than non-payment of fees and charges which are waived pursuant to this Agreement. ARTICLE III Business Subsidy Act; Additional Provisions Section 3.1.Business Subsidy Agreement. Pursuant to section 116J.993, subd. 3(1) of the Business Subsidy Act, Minnesota Statutes, sections 116J.993 to 116J.995, the financial assistance provided by the City does not constitute a “business subsidy” because it is in an amount under $150,000. However, the financial assistance provided by the City is subject to reporting requirements contained inMinnesota Statutes, section 116J.994(8)(b). Therefore, the parties agree as follows: (a)General Terms. The parties agree and represent to each other as follows: (i)The financial assistance provided to the Companyincludes the waiver of fees and charges pursuant to Section 2.2 herein; and 3 (ii)By providing financial assistance to the Company, the City is seeking to accomplish the public purpose of encouraging the redevelopment of the Property that is currently underutilized and thereby expanding the tax base of the City and State. (b)Reports.The Companymust submit to the City,upon request by the City, a report containing the following information that allows the City to submit the reports required by section 116J.994(8)(b) and (c) of the Business Subsidy Act: a.a description of the amount and use of the financial assistance and the total project budget, including a list all financial assistance by all grantors (as defined in the Act) for the project and the private sources of financial assistance; b.the date the project will be completed; c.the name and address of the parent corporation of the recipient, if any; and d.any other information requested by the Commissioner of the Department of Employment and Economic Development. Section 3.2.Employment and Wage Requirements. No wage and job goals are required by the Act and the Company shall not, by this Agreement, be obligated to create or retain jobs other than as provided in the Contract. Section 3.3.Continuing Obligation. All obligations of the Company to continue its manufacturing operations at the Relocation Site are incorporated in the Contract and nothing herein shall modify or amend those requirements. ARTICLE IV Default Section 4.1.Defaults Defined. It shall be a default under this Agreement if a party fails to comply with any term or provision of this Agreement, and fails to cure such failure within thirty (30) days after written notice to the party of the default, but only if the default has not been cured within said thirty (30) days. Section 4.2.Remedies on Default. If the City defaults in performing any of the City’s obligations under the terms of this Agreement, the Company’s sole and exclusive remedy shall be to sue for specific performance. If the Company defaults in performing any of the Company’s obligations under the terms of this Agreement, the City’s sole and exclusive remedy shall be to sue for specific performance. 4 Section 4.3.Costs of Enforcement. Whenever any default occurs under this Agreement and either party shall employ attorneys or incur other expenses for the collection of payments due or for the enforcement of performance or observance of any obligation or agreement on the part of the defaulting party under this Agreement, the defaulting party shall be liable to the non-defaulting party for the reasonable fees of such attorneys and such other expenses so incurred; provided, that the defaulting party shall only be obligated to make such reimbursement if the non-defaulting party prevails in such collection or enforcement action. ARTICLE V Miscellaneous Section 5.1.Provisions of Agreement Not Affected. This Agreement is not intended to modify or limit in any way the terms of the Contract. Section 5.2. Titles of Articles and Sections.Any titles of the several parts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 5.3. Modifications.This Agreement may be modified solely through written amendments hereto executed by the Company and the City. The Company and the City agree that if the Act is amended by the State legislature so as to modify any requirements that this Agreement must contain, the Company and the City will amend this Agreement to reflect such amendment to the law. Section 5.4. Counterparts.This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 5.5. Judicial Interpretation.Should any provision of this Agreement require judicial interpretation, the court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that a document is to be construed more strictly against the party who itself or through its agent or attorney prepared the same, it being agreed that the agents and attorneys of both parties have participated in the preparation hereof. The City and the Company agree that this Agreement is intended to satisfy the requirements of the Act, which is incorporated herein and made a part hereof by reference. In the event that any provision of this Agreement conflicts with the terms of the Act, the terms of the Act shall govern. IN WITNESS WHEREOF , the City has caused this Agreement to be duly executed in its name and behalf, and the Company has caused this Agreement to be duly executed in its name and behalf, on or as of the date first above written. 5 CITY OF HASTINGS By___________________________ Paul J. Hicks, Mayor By____________________________ Melanie Mesko Lee, City Clerk H.D. Hudson Manufacturing Company, a Minnesota Corporation By__________________________________ Robert C. Hudson III Its President STATE OF MINNESOTA) )SS. COUNTY OF __________) The foregoing instrument was acknowledged before me this day of , 2010, by Paul J. Hicks and Melanie Mesko Lee, the Mayor and City Clerk of the City of Hastings, a Minnesota Municipal Corporation under the laws of the state of Minnesota. ________________________ Notary Public STATE OF MINNESOTA) )SS. COUNTY OF ___________) The foregoing instrument was acknowledged before me this day of , 2010, by Robert C. Hudson III, the President of H.D. Hudson Manufacturing Company, a Minnesota corporation, on behalf of the corporation. ______________________________ Notary Public 6 EXHIBIT A Legal Description-Hudson Manufacturing Site Lots 1, 2, 3, 4, 5, 6, 7 and the South ninety-eight and five sixths (98 5/6ths) feet of Lot 8, n Block 5; and Lots 1, 2, 3, 4,5, 6, 7, 8 and 9, in Block 6 all in the Town now City of Hastings, Dakota County, Minnesota, together with the vacated alley lying in said Blocks 5 and 6 and together with that part of vacated Eddy Street lying between the extensions of the North and South lines of said Blocks 5 and 6, EXCEPT FOR That part of Lots 1, 2, 3, 4, 7, 8 and the vacated alley, Block 5, and Lots 1, 2, 3, 4 and 5, Block 6, Town of Hastings, shown as Parcel 26 on Minnesota Department of Transportation Right of Way Numbered 19-145 as the same on file and of record in the office of the County Recorder in and for Dakota County, Minnesota 7 EXHIBIT B Legal Description-Relocation Site Lot 1, Block 1, Profile Addition, according to the recorded plat thereof, and situated in Dakota County, Minnesota 1632034v2 8