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HomeMy Public PortalAbout5b Economic Incentive Agreement TemplateDRAFT AGREEMENT FOR CERTAIN ECONOMIC INDUCEMENTS AND INCENTIVES THIS AGREEMENT FOR CERTAIN ECONOMIC INDUCEMENTS AND INCENTIVES ("Agreement") is executed effective as of ("Effective Date"), by and between the TOWN OF FRASER, COLORADO, a Colorado municipal corporation ("Town"), and (hereinafter referred to as "Owner", whether one or more). RECITALS: A. The Town has adopted the Fraser Economic Development Policy to encourage, in part, the establishment and expansion of new retail sales tax generating businesses within the Town of Fraser and to further other public purposes. B. Owner is the owner of the property located at , Fraser, Colorado ("Property"), which is further described in Exhibit A hereto, incorporated herein by this reference as if set forth fully. Owner intends to undertake new commercial real estate and business development on said Property, generally described as follows (the "Proposed Development"): [Insert description of proposed development] C. In order to facilitate such Proposed Development, Owner desires to obtain the benefits of certain incentives pursuant to the Fraser Economic Development Policy, as set forth below. The Town finds and determines that such incentives will facilitate the Proposed Development, which will generate additional sales tax revenues and otherwise serve the public interest. D. It is an appropriate and lawful function of Colorado municipalities to encourage economic vitality through economic inducements and incentives. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Town and Owner agree as follows: 1. The foregoing Recitals are fully incorporated herein by this reference with the same force and effect as though restated below. Page 1 of 6 2. Determination of Public Benefit, Reliance of the Town. a. The Town maintains certain guidelines for evaluating the public benefit of commercial development within its corporate limits, and the value of providing economic inducements and incentives to encourage and sustain such development. In reliance upon certain data and information provided to the Town by Owner, the Town has determined that construction and operation of the Proposed Development satisfies such guidelines and will be of substantial economic benefit to the Town. b. Owner has provided the Town with certain intormation and representations upon which the Town has relied in determining future tax revenue generation from commercial activity presently taking place and anticipated to take place in the foreseeable future within the Property. By entering into this Agreement, the Town is relying on Owner's representations in good faith. 3. Agreed Incentives and Inducements. In light of the foregoing, the Town agrees to the following incentives and inducements upon the terms and conditions set forth below [include applicable and delete inapplicable provisions]. These incentives shall only apply to the building and improvements included as part of the Proposed Development, construction of which is commenced and completed within the time lines specified in Subsection 4.a. below, together with the subdivided lot or parcel on which such building and improvements are located. a. Fee Rebate. Owner will pay the applicable permit and review fees for the Proposed Development, but the Town agrees to rebate a portion of those fees equal to $1.00 per square foot of new usable commercial space constructed as part of the Proposed Development, payable upon issuance of the certificate of occupancy for such space. b. Use Tax Waiver. The Town agrees waive payment of the Town's 4% building and construction use tax that is otherwise payable on building and construction materials used or consumed within the Town as provided in the Fraser Municipal Code. Such waiver shall be limited the building and constriction materials used or consumed in the construction of the improvements included as part of the Proposed Development. c. Sales Tax Rebate. The Town will reimburse Owner for certain Town sales taxes generated by the retail business operations conducted on the Property. Such rebate shall be in an amount equal to 100% of the Town's 4% municipal sales tax (excluding the additional 1% sales tax for transit) collected for the period of five (5) years from the date of this Agreement and 50% of such sales taxes collected during the subsequent five (5) year period. Such rebates shall be made on an annual or other periodic basis, as determined by the Town, based on sales tax returns submitted to the State and reported to the Town. Owner hereby voluntarily waives its right to confidentiality as provided in State statutes and the Fraser Municipal Code and consents to disclosure of sales and use tax information specific to taxable activity Agreement For Certain Economic Inducements and Incentives Page 2 of 6 taking place on the Property during the entire period for which such rebates are to be made, and Owner specifically consents to public discussion and analysis of such information before Town governmental and administrative bodies. In the event all or a part of the business premises are leased to a tenant business operator, Owner agrees to obtain and provide to the Town the tenant's written waiver of confidentiality and consent to disclosure of the tenants sales tax information, as a condition to the rebate of sales taxes paid by such tenant. All rebates shall be paid to the Owner, and the Town is not responsible for any agreement Owner may enter into with a tenant regarding such rebates. d. Property Tax Rebate. The Town will reimburse Owner for the increase in Town ad valorem real and personal property taxes collected by the Town for the five-year period following the date of this Agreement. The increase in such taxes, and the amount to be reimbursed, shall be measured by the difference between the amount of real and personal property taxes collected by the Town with respect to the lot or parcel on which the commercial improvements are constructed and any business personal property used in connection therewith for the tax year preceding the year of the Effective Date of this Agreement (the "Base Year"), and the amount of such taxes collected for each of the succeeding five (5) tax years. Annually, after payment of the property taxes for which a rebate is due hereunder, the Owner shall make written application to the Town for such rebate, which shall include copies of the tax bills reflecting the amount of taxes attributable to the Town's levies for the Base Year and the year for which the rebate is requested and proof of payment of such taxes. The reimbursement shall be paid within 90 days after the Town's receipt of such application and after verification of the rebate amount due. e. Deferral of Plant Investment Fees. The Town agrees to allow the deferred payment of water and wastewater plant investment fees, which are normally payable at the time of issuance of a building permit. Owner will be allowed to pay such plant investment fees in three (3) equal annual installments, without interest, with the first installment payable on or before the date that is one (1) year after the issuance of the certificate of occupancy for the commercial improvements to be constructed as part of the Proposed Development, and with subsequent annual installments payable on or before each anniversary date thereafter. f. Service Fee Waiver/Deferral. The Town agrees to waive payment of service fees for water and wastewater service until the issuance of a certificate of occupancy for any of the improvements included in the Proposed Development, or until three (3) years after the date of this Agreement, whichever comes first. 4. Conditions; Enforcement. a. Commencement and Completion of Improvements. This Agreement is entered into upon the conditions that Owner shall commence construction of the commercial improvements included in the Proposed Development prior to January 1, 2019, and shall complete such improvements and obtain the issuance Agreement For Certain Economic Inducements and incentives Page 3 of 6 of a certificate of occupancy therefore, not later than two (2) years after commencement of construction. If either of these conditions is not satisfied by the specified date, the Town may terminate this Agreement by giving written notice to Owner. In the event of such termination, Owner shall be responsible of payment of all fees, taxes and other charges due, which otherwise have been or would be waived, rebated or deferred pursuant to Section 3 hereof b. Length of Operation. The incentives provided herein contemplate that the new business will continue operations for a period of time to accomplish the public purposes for which such incentives are intended. In addition, the incentives are intended to facilitate creation of a new business within the Town, not a relocation of an existing business. At a minimum, Owner shall operate the proposed retail business, or a similar new sales tax generating business on the Property for a period of ten (10) years from the issuance of a certificate of occupancy for the proposed improvements. If, at any time prior to that date, Owner decides to terminate its retail sales tax generating business operations on the Property, or if the premises are to be used for the relocation of another existing retail business, Owner shall provide the Town with written notice of its decision no later than thirty (30) days prior to the actual termination or transfer of operations. In that event, and within thirty (30) days following written demand by the Town, Owner shall repay to the Town an amount equal to ten percent (10%) of the aggregate amount of all rebates and waivers of fees and/or taxes actually provided to Owner pursuant to this Agreement, multiplied by the total number of calendar years remaining in said 10 -year period. c. Lien. In the event that Owner fails to repay any rebates, taxes and fees within the time provided for herein, the Town shall have and may enforce a lien upon the Property and all of the tangible personal property of or used by Owner on the Property, for payment of all such sums owed, together with all costs of collection, including reasonable attorney fees. Such lien shall have priority over other liens or claims of whatever kind or nature, except any liens for the nonpayment of property taxes and State sales and use taxes, and may be foreclosed in the same manner as a mechanics lien under the laws of State of Colorado. In addition to said lien, the Town shall have all other rights and remedies granted to it by state and local law for the collection of unpaid taxes and fees. 5. Miscellaneous. a. TABOR. Nothing herein shall be deemed a multiple -fiscal year obligation in violation of the limitations set forth in Article X, Section 20 of the Colorado Constitution. All sums payable hereunder by the Town in any future fiscal year shall be subject to legal availability and annual appropriation. b. Subsequent legislation, constitutional limits. The Town shall not be required to reimburse Owner in the event that subsequent legislation adopted by the State of Colorado makes such reimbursement unlawful, or in the event a court of Agreement For Certain Economic Inducements and Incentives Page 4 of 6 competent jurisdiction declares any portion of this Agreement or legislation authorizing payment under this Agreement to invalid or unconstitutional. c. Compliance With Title 31, Article 15, Part 9, C.R.S. In connection with providing these incentives, the Town agrees to comply with any obligations imposed pursuant to Section 31-15-903, including the notification requirements of sub -section (4) thereof. d. Assignment. Owner shall not assign or subcontract with respect to any of its rights, benefits, obligations or duties under this Agreement except upon prior written consent and approval of the Town. In the event of a sale of the Property, the Town will approve an assignment to the new owner, provided the Owner is not then in default hereunder and the new owner expressly assumes the Owner's obligations hereunder in writing. e. Entire Agreement. This writing constitutes the entire agreement between the parties with respect to its subject matter, and supersedes any prior written or oral communication, negotiations, agreements, representations and understandings between them with respect to its subject matter. f. Modification. This Agreement may not be modified, enlarged or altered, except in writing, signed by both parties. g. No Third Party Beneficiaries. No person not a signatory hereto shall have any right to seek enforcement or declaration of status under this Agreement. No third parry beneficiaries are intended. h. Attorney fees, costs of litigation. In the event of litigation between the parties arising out of this Agreement, and in which the Town shall prevail, in addition to any judgment for damages or declaratory relief, Owner shall pay all costs incurred by the Town, including attorney fees, expert witness fees and other costs of suit. i. Venue. This Agreement shall be governed by and construed in accordance with the law of the State of Colorado. Venue for all purposes shall be deemed proper in the District Court of Grand County, Colorado. j. No Waiver. A waiver by either party of a breach of any of the provisions of this Agreement shall not constitute a continuing waiver or a waiver of any subsequent breach of the same or another provision of this Agreement. k. Severability. If any part, term or provision of this Agreement is held by the courts to be illegal or otherwise unenforceable, such illegality or unenforceability shall not affect the validity of any other part, term of provision, and the rights of the parties shall be construed as if the part, term or provision in question was never part of this Agreement. Agreement For Certain Economic Inducements and incentives Page 5 of 6 Covenant Running with the Land. This Agreement shall be deemed to run with the Property and, upon its execution by the parties, shall be recorded by the Town with the Grand County Clerk and Recorder. Upon execution by the parties, this Agreement shall be binding upon the parties, their respective successors and permitted assigns. In witness whereof, the parties have executed this Agreement as of the Effective Date. TOWN: The Town of Fraser, Colorado, a Colorado municipal corporation Philip Vandernail, Mayor ATTEST: Antoinette McVeigh, Town Clerk (SEAL) STATE OF COLORADO) )ss. COUNTY OF GRAND ) OWNER: The foregoing instrument was acknowledged before me on the day of , 2017, by Philip Vandernail, as Mayor, and Antoinette McVeigh, as Town Clerk, of The Town of Fraser, Colorado, a Colorado municipal corporation. Witness my hand and official seal. My Commission expires: (SEAL) Notary Public [INSERT NOTARY FOR OWNER] Agreement For Certain Economic Inducements and Incentives Page 6 of 6