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HomeMy Public PortalAboutResolutions-2015-056Tiffin/436989- 12/Dev. Agmt - Hold Hrg RESOLUTION 2015 -056 Resolution Approving Development Agreement with Big Country Seeds, Authorizing Annual Appropriation Tax Increment Payments and Pledging Certain Tax Increment Revenues to the Payment of the Agreement WHEREAS, the City of Tiffin, Iowa (the "City "), pursuant to and in strict compliance with all laws applicable to the City, and in particular the provisions of Chapter 403 of the Code of Iowa, has adopted an Urban Renewal Plan for the Tiffin Urban Renewal Area (the "Urban Renewal Area "); and WHEREAS, this City Council has adopted an ordinance providing for the division of taxes levied on taxable property in the Urban Renewal Area pursuant to Section 403.19 of the Code of Iowa and establishing the fund referred to in Subsection 2 of Section 403.19 of the Code of Iowa (the "Urban Renewal Tax Revenue Fund "), which fund and the portion of taxes referred to in that subsection may be irrevocably pledged by the City for the payment of the principal and interest on indebtedness incurred under the authority of Section 403.9 of the Code of Iowa to finance or refinance in whole or in part projects in the Urban Renewal Area; and WHEREAS, a certain development agreement (the "Agreement ") between the City and Big Country Seeds (the "Company ") has been prepared in connection with the expansion of the Company's warehousing facilities in the Urban Renewal Area (the "Big Country Seeds Project "); and WHEREAS, under the Agreement, the City would provide annual appropriation tax increment payments to the Company in a total amount not exceeding $102,000; and WHEREAS, this City Council, pursuant to Section 403.9 of the Code of Iowa, has published notice, has held a public hearing on the Agreement on April 22, 2015, and has otherwise complied with statutory requirements for the approval of the Agreement; and WHEREAS, Chapter 15A of the Code of Iowa ( "Chapter 15A ") declares that economic development is a public purpose for which a City may provide grants, loans, tax incentives, guarantees and other financial assistance to or for the benefit of private persons; and WHEREAS, Chapter 15A requires that before public funds are used for grants, loans, tax incentives or other financial assistance, a City Council must determine that a public purpose will reasonably be accomplished by the spending or use of those funds; and WHEREAS, Chapter 15A requires that in determining whether funds should be spent, a City Council must consider any or all of a series of factors; NOW, THEREFORE, It Is Resolved by the City Council of the City of Tiffin, Iowa, as follows: Section 1. Pursuant to the factors listed in Chapter 15A, the City Council hereby finds that: (a) The Big Country Seeds Project will add diversity and generate new opportunities for the Tiffin and Iowa economies; -3- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Tiffin /436989- 12 /Dev. Agmt - Hold Hrg (b) The Big Country Seeds Project will generate public gains and benefits, particularly in the creation of new jobs, which are warranted in comparison to the amount of the proposed financial incentives. Section 2. The City Council further finds that a public purpose will reasonably be accomplished by entering into the Agreement and providing the incremental property tax payments to the Company. Section 3. The Agreement is hereby approved and the Mayor and City Clerk are hereby authorized and directed to execute and deliver the Agreement on behalf of the City, in substantially the form and content in which the Agreement has been presented to this City Council, and such officers are also authorized to make such changes, modifications, additions or deletions as they, with the advice of bond counsel, may believe to be necessary, and to take such actions as may be necessary to carry out the provisions of the Agreement. Section 4. All payments by the City under the Agreement shall be subject to annual appropriation by the City Council, in the manner set out in the Agreement. As provided and required by Chapter 403 of the Code of Iowa, the City's obligations under the Agreement shall be payable solely from a subfund (the "Big Country Seeds Subfund ") which is hereby established, into which shall be paid that portion of the income and proceeds of the Urban Renewal Tax Revenue Fund attributable to property taxes derived from the property described as follows: Certain real property situated in the City of Tiffin, County of Johnson, State of Iowa legally described as follows: Section 5. The City hereby pledges to the payment of the Agreement the Big Country Seeds Subfund and the taxes referred to in Subsection 2 of Section 403.19 of the Code of Iowa to be paid into such Subfund, provided, however, that no payment will be made under the Agreement, unless and until monies from the Big Country Seeds Subfund are appropriated for such purpose by the City Council. Section 6. After its adoption, a copy of this resolution shall be filed in the office of the County Auditor of Johnson County to evidence the continuing pledging of Big Country Seeds Subfund and the portion of taxes to be paid into such Subfund and, pursuant to the direction of Section 403.19 of the Code of Iowa, the Auditor shall allocate the taxes in accordance therewith and in accordance with the tax allocation ordinance referred to in the preamble hereof. Section 7. All resolutions or parts thereof in conflict herewith are hereby repealed. -4- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Tiffin /436989- 12/Dev. Agmt - Hold Hrg Passed and approved this 22"d day of April 2015. Attest: City Clerk Mayor -5- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Tiffin /436989- 12 /Dev. Agmt - Hold Hrg • • • 0 • On motion and vote the meeting adjourned. Attest: City Clerk Mayor -6- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Tiffin/436989- 12/Dev. Agmt - Hold Hrg STATE OF IOWA COUNTY OF JOHNSON SS: CITY OF TIFFIN I, the undersigned, Clerk of the City of Tiffin, hereby certify that the foregoing is a true and correct copy of the minutes of the Council of the City relating to holding a public hearing and adopting a resolution to approve a Development Agreement. WITNESS MY HAND this 22 day of April, 2015. City Clerk -7- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Tiffin /436989- 12 /Dev. Agmt - Hold Hrg STATE OF IOWA SS: COUNTY OF JOHNSON I, the undersigned, County Auditor of Johnson County, in the State of Iowa, do hereby certify that on the day of , 2015, the City Clerk of the City of Tiffin filed in my office a certified copy of a resolution of the City shown to have been adopted by the City Council and approved by the Mayor thereof on April 22, 2015, entitled: "Resolution Approving Development Agreement with Big Country Seeds, Authorizing Annual Appropriation Tax Increment Payments and Pledging Certain Tax Increment Revenues to the Payment of the Agreement ", and that I have duly placed the copy of the resolution on file in my records. WITNESS MY HAND this day of County Auditor 2015. -8- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Tiffin/436989- 12/Dev. Agmt - Hold Hrg HOLD HEARING ON AND APPROVE DEVELOPMENT AGREEMENT AND TAX INCREMENT PAYMENTS (Big Country Seeds) 436989 -12 Tiffin, Iowa April 22, 2015 A meeting of the City Council of the City of Tiffin, Iowa, was held at seven o'clock p.m., on April 22, 2015, at the, Tiffin, Iowa, pursuant to the rules of the Council. The Mayor presided and the roll was called, showing members present and absent as follows: Present: Peggy Upton Jim Bartels Al Havens Joan Kahler. Absent: Mike Ryan The City Council investigated and found that notice of the intention of the Council to conduct a public hearing on a Development Agreement between the City and the Big Country Seeds in connection with the expansion of its warehousing facilities in the Urban Renewal Area, which Agreement provides for certain financial incentives in the form of annual appropriation, incremental property tax payments in a total amount not exceeding $102,000, had been published according to law and as directed by the Council and that this is the time and place at which the Council shall receive oral or written objections from any resident or property owner of the City. All written objections, statements, and evidence heretofore filed were reported to the Council, and all oral objections, statements, and all other exhibits presented were considered. The following named persons presented oral objections, statements, or evidence as summarized below; filed written objections or statements, copies of which are attached hereto; or presented other exhibits, copies of which are attached hereto: (Here list all persons presenting written or oral statements or evidence and summarize each presentation.) There being no further objections or comments, the Mayor announced that the hearing was closed. -1- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Tiffin /436989- 12 /Dev. Agmt - Hold Hrg Council Member Kahler introduced the resolution next hereinafter set out and moved its adoption, seconded by Council Member Havens and after due consideration thereof by the Council, the Mayor put the question upon the adoption of said resolution, and the roll being called, the following named Council Members voted: Ayes: Upton Bartels Havens, Kahler. Nays: NONE Whereupon, the Mayor declared said resolution duly adopted, as follows: -2- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA DEVELOPMENT AGREEMENT This Agreement is entered into between the City of Tiffin, Iowa (the "City ") and Big Country Properties, LLC (the "Company ") as of the ZZ day of r e` , 2015 (the "Commencement Date "). WHEREAS, the City has established the Tiffin Urban Renewal Area (the "Urban Renewal Area "), and has adopted a tax increment ordinance for the Urban Renewal Area; and WHEREAS, the Company has proposed to undertake the expansion of its facilities on certain real property (the "Property") situated at 1050 Greenfield Drive in the Urban Renewal Area (the "Project "), such Property being more specifically described on Exhibit A hereto; and WHEREAS, the base valuation of the Property, as of January 1, 2015, for purposes of Section 403.19 of the Code of Iowa is $150,300.00 (the "Base Valuation "); and WHEREAS, the Company has requested that the City provide financial assistance in the form of incremental property tax payments to be used by the Company in paying the costs of constructing and maintaining the Project; and WHEREAS, Chapter 15A of the Code of Iowa authorizes cities to provide grants, loans, guarantees, tax incentives and other financial assistance to or for the benefit of private persons; NOW THEREFORE, the parties hereto agree as follows: A. Company's Covenants 1. Project. The Company agrees to construct the Project on the Property Property and to cause the completion of said Project by no later than January 1, 2016. Furthermore, the Company agrees to invest not less than $1,200,000.00 of private funds into the undertaking of the Project. In addition, the Company agrees to maintain and use the Project as part of its commercial warehousing business throughout the Term, as hereinafter defined, of this Agreement. 2. Property Taxes. The Company agrees to make timely payment of all Property taxes as they come due with respect to the Property with the completed Project thereon throughout the Term, as hereinafter defined, and to submit a receipt or cancelled check in evidence of each such payment. 3. Operational Certification The Company agrees to submit documentation to the satisfaction of the City by no later than each November 1 during the Term, as hereinafter defined, demonstrating that the Project is being used as part of the Company's ongoing business operations. 4. Property Tax Payment Certification Furthermore, the Company agrees to certify to the City by no later than November 1 of each year, commencing November 1, 2015, an amount (the "Company's Estimate ") equal to the estimated Incremental Property Tax Revenues r anticipated to be paid in the fiscal year immediately following such certification with respect to the taxable valuation of the Property. In submitting each such Company's estimate, the Company will complete and submit the worksheet attached hereto as Exhibit B. The City reserves the right to review and request revisions to each such Company's Estimate to ensure the accuracy of the figures submitted. For purposes of this Agreement, Incremental Property Tax Revenues are calculated by: (1) determining the consolidated property tax levy (city, county, school, etc.) then in effect with respect to taxation of the Property; (2) subtracting (a) the debt service levies of all taxing jurisdictions, (b) the school district instructional support and physical plant and equipment levies and (c) any other levies which may be exempted from such calculation by action of the Iowa General Assembly; and (3) multiplying the resulting modified consolidated levy rate times any incremental growth in the taxable valuation of the Property, as shown on the property tax rolls of Johnson County, above and beyond the Base Valuation. Upon request, the City staff shall provide reasonable assistance to the Company in completing the worksheet required under this Section A.4. 5. Remedies. The Company hereby acknowledges that failure to comply with the requirements of this Section A, will result in the City having the right to withhold Payments under Section B of this Agreement at its sole discretion, until such time as the Company has demonstrated, to the satisfaction of the City, that it has cured such non - compliance. 6. Legal and Administrative Costs. Amended by action of the City Council, April 22, 2015 tdl . The Ge r - ,.,�,,, o he Gjt) for the legal - and-a=-minis ra :: _ ----- inouffed by the City in aft aiith thi Renewal Area, :provided, howe er- giat such amounA shall ne exeeed $4,000. The GenlpanY G - �, -- + + or +s or receipts - sts The City of Tiff shall e N a reimbursed for legal fees from the first proceeds. B. City's Oblizations 1. Payments. In recognition of the Company's obligations set out above, the City agrees to make six semi- annual economic development tax increment payments (the "Payments ") to the Company during the term of this Agreement, pursuant to Chapters 15A and 403 of the Code of Iowa, provided however that the aggregate, total amount of the Payments shall not exceed $102,000 (the "Maximum Payment Total "), and all Payments under this Agreement shall be subject to annual appropriation by the City Council, as provided hereunder. The Payments shall not constitute general obligations of the City, but shall be made solely and only from Incremental Property Tax Revenues received by the City from the Johnson County Treasurer attributable to the taxable valuation of the Property. This Agreement assumes that the taxable value of the Project will go on the property tax rolls as of January 1, 2016. Accordingly, the Payments will be made on December 1 and June 1 of each fiscal year, beginning on December 1, 2017 and continuing to, and including, June 1, -2- 2020, or until such earlier date upon which total Payments equal to the Maximum Payment Total have been made. -3- 2. Security and Annual Appropriation. Each Payment shall be subject to annual appropriation by the City Council. Prior to December 1 of each year during the Term of this Agreement, the City Council of the City shall consider the question of obligating for appropriation to the funding of the Payments due in the following fiscal year, an amount of Incremental Property Tax Revenues to be collected in the following fiscal year equal to or less than the most recently submitted Company's Estimate (the "Appropriated Amount "). In any given fiscal year, if the City Council determines to not obligate the then - considered Appropriated Amount, then the City will be under no obligation to fund the Payments scheduled to become due in the following fiscal year, and the Company will have no rights whatsoever to compel the City to make such Payments or to seek damages relative thereto or to compel the funding of such Payments in future fiscal years. A determination by the City Council to not obligate funds for any particular fiscal year's Payments shall not render this Agreement null and void, and the Company shall make the next succeeding submission of the Company's Estimate as called for in Section A.4 above, provided however that no Payment shall be made after June 1, 2020. 3. Payment Amounts. Each Payment shall be in an amount equal to the corresponding Appropriated Amount (for example, for the Payments due on December 1, 2018 and on June 1, 2019, the aggregate amount of such Payments would be determined by the Appropriated Amount determined for certification by December 1, 2017), provided, however, that each Payments shall not exceed the amount of Incremental Property Tax Revenues received by the City from the Johnson County Treasurer attributable to the taxable valuation of the Property. 4. Certification of Payment Obligation. In any given fiscal year, if the City Council determines to obligate the then - considered Appropriated Amount, as set forth in Section B.2 above, then the City Clerk will certify by December 1 of each such year to the Johnson County Auditor an amount equal to the most recently obligated Appropriated Amount. M