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HomeMy WebLinkAbout6B1ECONOMIC DEVELOPMENT THIS ECONOMIC DEVELOI (this "MOU ") is made and entered into SOUTH BEND REDEVELOPMENT Department of Redevelopment (the "Co (the "Company "). WI WHEREAS, the Commission exis Section 36 -7 -14, as amended from time to WHEREAS, the Commission desire within the City of South Bend, Indiana (the WHEREAS, the Company op engineering and fabricating steel struct markets and presently has manufacturii Indiana, and corporate offices located in WHEREAS, the Company has al construct and equip a manufacturing fac consolidate therein the Company's pr Company's manufacturing resources (the WHEREAS, the Company will lc attached hereto and incorporated herein Economic Development Area in the City the Commission as an economic develop for purposes of tax increment finance ( "T WHEREAS, the Company also pi . in the City within ten (10) years of the corporate offices or through the construct the City; and WHEREAS, the Company expects phase consisting of a manufacturing facili result in a building investment of al Improvements"); and WHEREAS, the Company also pl within ten (10) years from the date hereof Real Estate or by making an addition to US.54209507.06 6a t� C) OF UNDERSTANDING MEMORANDUM OF UNDERSTANDING 20th day of June, 2014, by and between the SSION, the governing body of the South Bend "), and: NELLO INC., an Indiana corporation ESSETH: rid operates under the provisions of Indiana Code (the "Act "); and foster redevelopment and economic development Y`T and in the steel fabrication industry by designing, r the telecommunication, utility and wind energy lities located in Fort Worth, Texas, and Bremen, :v: and .hed the City regarding the Company's desire to cared in the City of a type and size necessary to manufacturing operations and to increase the ;ct "); and the Project on real property described at Exhibit A "Real Estate ") which is located within the Airport "Area') which Area was previously designated by area pursuant to the Act and as an allocation area and :o increase the size of its corporate offices located hereof either through expansion of its existing or acquisition of new corporate offices located in to the Project in two (2) phases with the first in one or more buildings that is expected to ;ly $14,500,000 (the "Phase I Building to expand the Phase I Building Improvements - ecting an additional building or buildings on the Phase I Building Improvements (the "Phase II Building Improvements') resulting in a b i ding or buildings located on the Real Estate having a total building investment of approximat $30,000,000 (such amount exclusive of personal property investment made by the Company ; and WHEREAS, the Company has rel resented that @ the completion of the Project will result in the retention of 40 jobs (represen ing the current number of employees at its facilities located in the City) (the "Existing Jobs" nd (ii) within ten (10) years of the date hereof, the Company will create 524 additional jobs at heilities of the Company located in the City; and WHEREAS, the Company has also represented that the Project will result new capital investment by the Company in the Company's assets located in the City of approximately $57,000,000 by and through the year 2025 d WHEREAS, the Company has re (u sted certain economic development assistance from the City in order to complete the Proj t as more fdlly set out herein with such assistance consisting of the acquisition of the equi ent by the: Commission as provided in Exhibit B attached hereto and incorporated herein (I h "Equipment ") which Equipment shall be located at the Real Estate in the Area; and WHEREAS, the Commission has eed to lease the Equipment to the Company for use by the Company at the Project and to nvey the ;Equipment to the Company upon the satisfaction of certain requirements herein r provided and in the Act; and WHEREAS, subject to this MOU pay for the Equipment, the Commission and Indiana law to annually appropria ($3,000,000) of Tax Increment Finance R three (3) successive years with the first y for the facilities to be initially constructed aggregate total not to exceed Nine Million WHEREAS, TIF Revenues are eitl the Allocation Fund for the Area (the ` Commission to make the appropriations re( WHEREAS, the Commission has a described herein to acquire and pay R requirements of Indiana law, and the Corn begin operations, thereby creating the prc terms and subject to the conditions set forth as more fully set forth herein, to provide moneys to all take such action as may be required by the Act the sum of Three Million and 00 /100 Dollars nues allocable to the Area (the "TIF Revenues") in beginning on the day the Company breaks ground the Real Estate (the "Groundbreaking Date ") for an 100 /100 Dollars ($9,000,000.00); and presently on deposit or expected to be deposited in Vocation Fund ") in an amount sufficient for the fired by this MOU; and eed to use its best efforts to take certain actions as r the Equipment pursuant to the Act and other y has agreed, in turn, to complete the Project and Iised jobs and the capital investment, all upon the erein; and NOW, THEREFORE, in consideral ic n of the foregoing and of the mutual covenants and agreements herein contained, and other p Dod and valuable consideration, the receipt and sufficiency of which are hereby acknowledge , the parties do hereby agree as follows: -2- US.54209507.06 1.01 Recitals Part of MOU. The G are material to this MOU and are he though they were fully set forth in this ARTICLE II. 2.01 Mutual Assistance. The parties al take such actions, including the execution and certifications (and, in the case of tl seeking any further approvals which ma necessary or appropriate, from time to tin MOU and to aid and assist each other in cA ARTICLE III. OF THE 3.01 Purchase of Equipment. The Con the Equipment pursuant to the Act and thi Company and subject to the terms of thi shall be ordered as quickly as possible Equipment shall be ordered within the ordered within the 2016 calendar year. expediently order the Equipment within Indiana law. The Company shall provit Commission in each period. The Commis faith with regard to the selection and pric Indiana law which the Commission is re( price of the Equipment for the purposes c includes the purchase price of the Equipmt 3.02 Equipment Lease Agreement. In Equipment, the Commission shall undertal the Company to enter into an equipmen hereto at Exhibit C (the "Equipment Lease the Equipment Lease upon the acquisition Year 2 Equipment and Year 3 Equipment such Year 2 Equipment and Year 3 Ec Commission and the Company shall enter and Year 3, respectively, to subject such ac Equipment Lease. The Equipment Lease Equipment by the Company from the Ci payment amount of One Dollar ($1.00) pet the Project, commences operations, achieve I. RECITALS and recitations set forth in the foregoing recitals orporated into and made a part of this MOU as 1.01. ASSISTANCE c, subject to further proceedings required by law, to id delivery of such documents, instruments, petitions Commission, the adoption of such resolutions and )e required, by the Act or Indiana law), as may be to carry out the terms, provisions and intent of this ying out said terms, provisions and intent. .TIONS AND COVENANTS AND THE COMPANY scion shall use its best commercial efforts to acquire quirements'ofIndiana law with the assistance of the IOU. Year 1 Equipment (as defined in Exhibit B llowing the execution of this Agreement; Year 2 5 calendar year; and Year 3 Equipment shall be Commission shall cooperate with the Company to ch timeframe consistent with the requirements of a specific list of equipment for purchase by the n and the Company shall cooperate together in good of the Equipment, subject to any requirements of -ed to follow with respect to such acquisition. The letermining the sum to be paid by the Commission only (the "Purchase Price"). tjunction with the Commission's acquisition of the EL disposition process to permit the Commission and mse agreement in substantially the form attached The Commission and the Company shall enter into 'the Year I Equipment. Upon the purchase of the the Commission and subsequent disposition of the 3ment by the Commission to the Company, the 'o an addendum to the Equipment Lease in Year 2 iional Equipment to the terms and conditions of the 11, among other things, provide for the lease of the mission for a term of ten (10) years, at a rental = upon the condition that the Company completes and maintains the desired employment levels as set U&5420507.0e 3 forth herein and permits the Company 10 exercise an option to purchase the Equipment and terminate the Equipment Lease with respect to the Year 1 Equipment, Year 2 Equipment or Year 3 Equipment upon satisfying the conditions set forth herein. In the event of a conflict between the terms of the Equipment Lease and tl is MOU, the terms of this MOU shall be relied upon exclusively to resolve the conflict. 103 Project Schedule. The Company i construction of the Phase I Building ImI Date; provided, however, should purchas adverse testing results (soil, environme represents that it shall promptly identify delay the completion of the Phase I Build the parties hereto to replace Exhibit A w expects that in the first year following t investment of $10,000,000 to acquire the Building Improvements thereon. The Coi of occupancy for the Phase I Building It Completion Date "). Should the Company Improvements on the Real Estate by the of occupancy for the Phase I Building Company shall be deemed to have defau default under (i) or (ii) of the preceding se obligation to place any remaining orders o MOU or the Equipment Lease, (ii) the C that has not been received (and the Comp, to Section 5.01 hereto), and (iii) the Co Purchase Price previously paid by the C( defau It. 3.04 Acknowledgement and Representa the Commission is agreeing to commit purchase of the Equipment upon the repr Project, that it will make a total capital inv City by the close of business on Decembe. will retain the Existing Jobs and create an with hourly wages per new employee of Date. The Company represents that it Exhibit D. presents that it will acquire the Real Estate and begin wements on the Real Estate by the Groundbreaking of the Real Estate prove impracticable as a result of al or other relevant testing results), the Company A purchase other real estate in the Area so as not to g Improvements (and this MOU shall be amended by 1 the correct real estate description). The Company Groundbreaking Date, it will have made a capital ;a] Estate and have begun construction of the Phase I )any represents that it expects to receive a certificate >rovemems on or before July 1, 2016 (the "Phase I ) not initiate the construction of the Phase I Building oundbreaking Date and (ii) not obtain the certificate tprovements by the Phase I Completion Date, the d under the terms of this MOU. In the event of a ence, (i) the Commission shall be released from any 3quipment for the benefit of the Company under this emission shall terminate any orders for Equipment y shall be responsible for any related costs pursuant pany agrees to reimburse the Commission for the tmission for any Equipment received prior to such Ions of Company. The Company acknowledges that 9,000,000 of TTF Revenues from the Area for the sentations of the Company that it will complete the stment of at least $57,000,000 in assets located in the 31, 2025 (the "Project Completion Date ") and that it additional 524 jobs at its facilities located in the City t least $16.00 on or before the Project Completion xpects the new jobs to be created as set forth at 3.05 Reporting Obligations. On or before January 31 of each year (the "Annual Reporting Date ") commencing with the January 31 Mowing the Phase I Completion Date, the Company shall report the number of total jobs at its cilities located in the City as of the close of business on December 31 of the next preceding year 3.06 Grant of an Option to Purchase. Equipment Lease an option to purchase Commission shall provide to the Company in the Equipment or portions of the Equipment for $1.00 4 Us.54209507.06 1 upon the Company meeting certain Project as set forth herein. 3.07 Exercise of Option to Purchase. Equipment or portions of the Equipment, 0) upon completion of seventy percent (7 by the Company's architect, the Compar Year I Equipment having a Purchase Pric the Company of certificate ofoccupanc; of at least 20 full -time employees, the remainder of the Year 1 Equipment for $ of occupancy for the Phase II Building It purchase the Year 2 Equipment for $1.00 and sustained that level of employment retaining the Existing Jobs, the Compa Equipment for One Dollar ($1.00). In it jobs in addition to retaining the Existing J price for the Year 3 Equipment shall be th( 3.08. Employment Obligation Default. completion of the Project, failure of the Exhibit D at hourly wages set forth h Obligation ") shall he deemed a default u Company does not achieve creation of 5: Completion Date, the Company shall Completion Date equal to the sum of (i) i money determined as follows: Three Mill by a number which represents the diffe Company prior to the Project Completio create prior to the Project Completion Dal 3.09. Phase II Building Improvements D Building Improvements prior to the Proje enter into a new Equipment Lease on the similar to the form set forth at Exhibit C pt (5) years and the Company shall pay a ($200,000). Upon the conclusion of the purchase the Year 2 Equipment for One Dc MW 4.01 Actions. The Commission reI to the Company's performance of its such action(s) as may be required and US.54209507.06 with respect to the Project and employment at the 'he Company may exercise an option to purchase the and the Equipment Lease shall so provide, as follows: 1%) of the Phase I Building Improvements as certified y may exercise an option to purchase one -half of the Of up to $1,500,000 for $1.00 (ii) upon the receipt by for the Phase I Building Improvements and the hiring Company may exercise an option to purchase the .00; (iii) upon receipt by the Company of a certificate provements,11ic Company may exercise an option to and (iv) upon the Company having created 524 jobs for two (2) Annual Reporting Dates in addition to y may exercise an option to purchase the Year 3 event that the Company shall not have created 524 ,bs prior to the Project Completion Date, the purchase Default Amount as defined in Section 3.08 below. )wring the term of the Equipment Lease and following 'ompany to create the number of jobs as set forth at ,in and retain the Existing Jobs (the "Employment ler this MOU and under the Equipment Lease. If the jobs and retain the Existing Jobs prior to the Project ay a penalty to the Commission on the Project ie Million Dollars ($1,000,000) and (ii) an amount of n Dollars ($3,000,000) divided by 524 and multiplied ,nce in the number of jobs actually created by the Date and the 524 jobs that the Company expects to as represented herein (the "Penalty Amount'). fault. If the Company does not complete the Phase II :t Completion Date, the Company agrees that it will Project Completion Date for the Year 2 Equipment wided the term of such Equipment Lease shall be five annual rental of Two Hundred Thousand Dollars term of such Equipment Lease, the Company may Ilar ($1.00). IV. AUTHORITY and warrants that it has taken or will take (subject mts and obligations hereunder and applicable law) iry to enable the Commission to execute this MOU -5- and to carry out fully and perform the kept and performed as provided by the , covenants, duties and obligations on its part to be and provisions hereof. 4.02 Powers. The Commission represei its and warrants that it has full and lawful right, power and authority, under currently applicable aw, to execute and deliver and perform its obligations under this MOU, and that, subject to the conditions described herein, all of the foregoing have been or will be duly and validly authorized and approved by all necessary proceedings, findings and actions. 4.03 Authorized Parties. Whenever documents and instruments, any suppl consent of the Commission or the Co agree or to take some action at the re( request shall be given (unless oth Commission by the President of the G by any officer of the Company so auth such agreement, request, demand, app parties hereto shall have any complaint ARTICLE V 5.01 Indemnity; No Joint Venture or Pa such the Company covenants and agree indemnify and save the Commission, o harmless of, from and against, any and a resulting directly or indirectly from or rela damages, demands, expenses or liabilities or omission of the Indemnitees. However. creating either a joint venture or partne Company. 5.02 Notice of Claim for Indemnity. If a. any matter which may give rise to a c Commission shall within fifteen (15) day; shorter period of time as may be required 1 time has been extended by consent of the writing. The Company shall have the ril defense of any such claim with counsel of However, unless and until the Company a Paragraph, the Commission shall defend Company) in any manner it may reasonabl with the Commission in such defense. covered by this Paragraph without the pri shall not be unreasonably withheld, condR provide the notice to the Company require hereunder. U5.54209507.06 r the provisions of this MOU or any other related :al agreement, request, demand, approval, notice or y is required, or any of such parties is required to of another party, such approval or such consent or e provided herein or prohibited by law) for the scion or his written designee, and for the Company I; and any person shall be authorized to act on any notice or consent or other action and none of the st the otheras a result of any such action taken. PROVISIONS tnership. The Project is a private development and as s, at the expense of the Company, to pay and to rid its officers and employees (the "Indemnitees ") claims, damages, demands, expenses and liabilities ed to this MOU or the Equipment, unless such claims, arise by reason of the negligent or other wrongful act nothing contained in this MOU shall be construed as ship relationship between the Commission and the iy person shall notify the Commission with respect to him for indemnification against the Company, the after receiving notice of such claim (or within such ly law to respond to such claim, unless such period of parties to the action), notify the Company thereof in ht at any time to assume and thereafter conduct the its choice reasonably satisfactory to the Commission, ssumes the defense of such claim as provided in this against the claim (at the cost and expense of the y deem appropriate and the Company shall cooperate Neither party may settle or compromise any claim )r written consent of the other party, which consent Toned or delayed. The failure of the Commission to I herein shall not relieve the Company from liability 5.03 Time of Essence. Time is of t reasonable effort to expedite the subject herein) and acknowledge that the succe cooperation. 5.04 Force Majeure. Notwithstanding liable for its failure to perform any of its which its performance is delayed by cc control of such party, including, without war, embargo, riot, communicable diseas acts or intervention of government (19 performing party shall exercise all reaso hereunder. Any deadline imposed by thi event of Force Majeure plus the time re therefrom. 5.05 Breach. Before any failure of any MOU shall be deemed to he a breach of ti writing, the party alleged to have fai performance. No breach of this MOU commenced to the reasonable satisfaction receipt of such notice. If after said notic( breaching party may seek any remedy ava performance. essence of this MOU. The parties shall make every itters hereof (subject to anytime limitations described hl performance of this MOU requires their continued ny other provision of the MOU, neither party shall be )bligations urider this Agreement during any period in tditions, in whole or in part, beyond the reasonable limitation, acts of god, fire, wind, earthquake, flood, : outbreak, public health emergency, terrorism or the orce Majeure"), provided, however, that the non- able efforts to resume and maintain its performance Agreement shall be extended by the duration of the luired by the party affected by the same to recover arty of this MOU to perform its obligations under this s MOU, the party claiming such failure shall notify, in ;d to perform such obligation and shall demand iay be found to have occurred if performance has if the complaining party within thirty (30) days of the the breaching party fails to cure the breach, the non- able at law or equity, including the remedy of specific 5.06 Amendment. This MOU, and any 1xhibits attached hereto, may be amended only by the mutual consent of the parties, by the adopi ion of a resolution of the Commission approving said amendment, as provided by law, and by the execution of said amendment by the parties or their successors in interest. 5.07 No Other Agreements. Except otherwise 'expressly provided herein, this MOU supersedes all prior agreements, negotiatio sand discussions relative to the subject matter hereof and is a full integration of the agreement o the parties. 5.08 Severability. If any provision, covenant, agreement or portion of this MOU or its application to any person, entity or proper y, is held invalid, such invalidity shall not affect the application or validity of any other provisions, covenants, agreements or portions of this MOU and, to that end, any provisions, covenants agreements or portions of this MOU are declared to be severable. 5.09 Indiana Law. This MOU shall be Indiana. US.54209507.06 in accordance with the laws of the State of 5.10 Notices. All notices and reque: other shall be deemed sufficiently made To the Company: N6110 Corporation 211 W. Washington, Suite 2000 South Bend, IN 46601 Attn: President With a copy to: Botkin & Hall, LLP 105 E. Jefferson Blvd., Suite 400 South Bend, IN 46601 Attn: Thomas S. Botkin, Esq. To the Commission: South Bend Redevelopment Commission 1400 S City - County Building 227 West Jefferson Boulevard South Bend, Indiana 46601 With a copy to: Office of Corporation Counsel 227 W. Jefferson Boulevard, Suite 12005 South Bend, Indiana 46601 Attn: Cristal Brisco or at such other addresses as the parties delivery, courier, or by registered mail, Mailed notices shall be deemed effective effective when delivered. required pursuant to this MOU by either party to the delivered: ry indicate in writing to the other either by personal im receipt requested, with proof of delivery thereof the third day after mailing; all other notices shall be 5.11 Counterparts. This MOU may be eecuted in several counterparts, each of which shall be an original and all of which shall constiti to but one and the same agreement. Any telecopied version of a manually executed original sh 11 be deemed a manually executed original. 5.12 Authority. The undersigned persons executing and delivering this Agreement on behalf of each of the parties represent and certify i hat they are the duly authorized officers of such party and have been fully empowered to execute and deliver this Agreement on behalf of such party and that all necessary action to execute and deliver this Agreement has been taken by such Party. 5.13 Consent or Approval. Except approval of any party is required, such c delayed. otherwise provided herein, whenever consent or it or approval shall not be unreasonably withheld or -g US.54309507.06 5.14 Accounting Principles. All fir using generally accepted accounting determinations required by this MOU shall be made Jew US.54209507.06 _ 9 �k IN WITNESS WHEREOF, the written above. CITY OF SOUTH BEND, DEPARTMENT OF REDFVFT,OPn TI—In—W Mm on it e South Bend Redevelopment Comm: ATTEST: ime ame an r! e South Bend Redevelopment Commis NELLO,'N . B Daniel Ianello, Preside t ECONOMIC have each executed this MOU as of the date first Page to )R.4NDI - 10- US.54209507.06 OF UNDERSTANDING) Exhibit A j 'state Description uss4209507.06 IkIwI YEAR 1 EQUIPMENT The Year I Equipment shall consist of determined by the Company, which equ installed on or about the Real Estate Purchase Price of THREE MILLION D Commission and the Company. YEAR 2 EQUIPMENT Exhibit B List e or more items of equipment having specifications .ient is usefiil to promote the objects of the MOU, is connection I,with the Project and has an aggregate ,LARS ($3,000,000) unless otherwise agreed by the The Year 2 Equipment shall consist of one or more items of equipment having specifications determined by the Company, which equipment is useful to promote the objects of the MOU, is installed on or about the Real Estate it connection with the Project and has an aggregate Purchase Price of THREE MILLION D LLARS ($3,000,000) unless otherwise agreed by the Commission and the Company. YEAR 3 EQUIPMENT The Year 3 Equipment shall consist of determined by the Company, which equi installed on or about the Real Estate Purchase Price of THREE MILLION D, Commission and the Company. US.54209507.05 e or more items of equipment having specifications tent is useful to promote the objects of the MOU, is connection with the Project and has an aggregate ,LARS ($3,000,000) unless otherwise agreed by the C Form of Eghipment Lease Agreement US.54209507.06 m Employment' US.54209507.06 '