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HomeMy WebLinkAboutRes 07-99 02/16/1999 RESOLUTION NO. 7-99 A RESOLUTION AUTHORIZING THE EXECUTION OF AN AGREEMENT PROVIDING FOR THE PARTIAL ABATEMENT OF SALES TAXES FOR BEACON HOME DIRECT, INC. D/B/A SCOTTY'S HOME MARKET IN THE VILLAGE OF MOUNT PROSPECT, ILLINOIS WHEREAS, Beacon Home Direct, Inc., d/b/a Scotty's Home Market (hereinafter "Scotty's") desires to relocate its corporate offices and distribution facilities to the Village of Mount Prospect; and WHEREAS, Scotty's has represented to the Village that it will require a certain economic incentive to make the relocation economically workable; and WHEREAS, the President and Board of Trustees of the Village of Mount Prospect have determined that even if the economic incentive is granted, there will still be a substantial net economic benefit to the Village if this relocation to Mount Prospect is accomplished; and WHEREAS, it is in the overall best interest of the Village and its taxpayers to abate sales taxes with respect to Scotty's according to the Economic Incentive Agreement dated February 16, 1999 between the Village of Mount Prospect and Scotty's; BE IT THEREFORE RESOLVED, by the President and Board of Trustees of the Village of Mount Prospect, Cook County, Illinois, as follows: SECTION l: The Mayor be authorized to execute the Economic Incentive Agreement dated February 16, 1999, providing for the potential abatement of sales tax to Beacon Home Direct, Inc., d/b/a Scotty's Home Market. Scotty's Tax Abatement Page 2 of 2 SECTION 2: This Resolution shall be effective immediately upon its passage. ADOPTED this 16th day of February, 1999, pursuant to a roll call vote as follows: AYES: Clowes, Hoefert, Lohrstorfer, Nocchi, Wilks NAYS: None ABSENT: Farley APPROVED this 16th day of February, 1999. Timothy J. Corcoran, Mayor Pro Tem A'FI'EST: Velma W. Lowe, Village Clerk h\WIN~E$OL UTl\SCOTTY,tax.ebat e..d oc ECONOMIC INCENTIVE AGREEMENT Dated as of Februar~ 16, 1999 THIS ECONOMIC INCENTIVE AGREEMENT (this "Agreement") is made, entered into and dated to be effective as of this 16th day of February, 1999, by and between the VILLAGE OF MT. PROSPECT, a municipal corporation duly organized and existing under the laws of the State of Illinois, having its office at 100 S. Emerson Street, Mt. Prospect, Illinois 60056 (herein for convenience sometimes referred to as the "Village"); and BEACON HOME DIRECT, INC., a business corporation duly organized and existing under the laws of the State of Illinois, doing business under the assumed name SCOTTY'S HOME MARKET, having its office at 1150 Heather Court, Lake Zurich, Illinois 60047 (herein for convenience sometimes referred to as the "Company"); and WITNESSETH WHEREAS, the Company, subject to obtaining the incentives provided in this Agreement, intends to develop and relocate its business to certain real property (the "Property") located in the Village of Mt. Prospect, Illinois legally described as follows: Lots 1, 2 and 3 in Kensington Center Resubdivision Twenty-five in part of the Northeast 1/4 of Section 35, Township 42 North, Range 11, East of the Third Principal Meridian, according to the Plat thereof filed for record February 1, 1989 in the Office of the Registrar of Titles as Document LR3770802, in Cook County, Illinois Permanent Tax No.: 03-35-200-049-0000 03-35-200-050-0000 03-35-200-051-0000 WHEREAS, the Company desires to construct a one-story office, food processing and distribution facility containing approximately 90,000 square feet exclusive of mezzanine square footage (the "Project") on the Property; and WHEREAS, the Village has determined it to be essential to the economic and social welfare of the Village that the Village promote the economic vitality of the community by attracting new businesses to the Village and by assuring opportunities for development and sound and stable commercial growth; and Page 1 EconomicIncentiveAgreement 02/10/99 WHEREAS, the Village has authority pursuant to its home rule powers and 8-11-20 of the Municipal Code of the State of Illinois (65 ILCS 5/8-11-20) to enter into economic incentive agreements relating to the development or redevelopment of land within the corporate limits of the Village; and WHEREAS, the Village has determined that (i) the Property has remained vacant for at least one year, (ii) the Project is expected to create job opportunities within the Village, (iii) the Project will serve to further the development of adjacent areas, (iv) the Company meets high standards of creditworthiness and financial strength, (v) the Project will strengthen the commercial sector of the Village, (vi) the Project will enhance the tax base of the Village, and (vii) entering this Agreement is in the best interest of the Village; and WHEREAS, the Village has passed and approved a Resolution No. approving the execution of this Agreement, a copy of which is attached hereto and by reference made part hereof, marked Exhibit "A"; and WHEREAS, the Company has provided the Village with an estimate of the Additional Sales and Services Taxes, as hereinafter defined, to be generated during the term of the Agreement; and WHEREAS, in order to make it economically feasible for the Company to construct the Project and relocate its business to the Property, the Village has agreed to offer the economic incentives provided in this Agreement. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Village and the Company hereby agree as follows: ARTICLE I DEFINITIONS: CONSTRUCTION Section 1.1 Definitions. For purposes of this Agreement, words and terms used in this Agreement shall have the following meanings: "Additional Sales or Services Taxes" means the amount of Sales or Services Taxes from business conducted on the Property, and all improvements thereon, excluding Sales or Services Taxes resulting solely from the sale of goods or services to residences within the Village, received by the Village during each Qualifying Year in excess of the Base Year Sales or Services Taxes. "Annual Formula Amount" means the Class 6b Reduction for each Qualifying Year, but in no event shall more than fifty percent Page 2 EconomicIncenziveAgreement 02/10/99 (50%) of the Additional Sales or Services Taxes for such Qualifying Year actually be paid by the Village to the Company (the balance of the Annual Formula Amount for any such Qualifying Year which exceeds 50% of the Additional Sales or Services Taxes for such Qualifying Year being cumulatively applied to subsequent Qualifying Years). "Applicable Interest Rate" means the prime interest rate announced from time to time by The Northern Trust Company, Chicago, Illinois (its successors or assigns) provided, however, in no event shall such interest rate exceed ten percent (10%). "Base Year Sales or Services Taxes" means the amount of Sales or Services Taxes received by the Village for the calendar year preceding the date upon which the Project is substantially complete and the Company has commenced business operations from the Project; "Certificate of Substantial Completion" means AIA Document G- 704 Certificate of Substantial Completion or comparable documents executed by the Contractor and the Company with respect to the Improvements. "Class 6b Classification" means the incentive level of assessed valuation designed to encourage industrial development throughout Cook County, Illinois. Under the incentive provided by Class 6b Classification, properties receiving Class 6b will be assessed at sixteen percent (16%) of market value for the first eight (8) years following the date of substantial completion and initial assessment of new construction or substantial rehabilitation, twenty-three percent (23%) in the 9th year and thirty percent (30%) in the 10th year. "Class 6b Reduction" means for any Qualifying Year, the reduction in the amount of real estate taxes payable with respect to the Property resulting from the application of the then current tax rate and equalization factor to the reduced assessed valuation determined as though the Property was fully eligible for the Class 6b Classification. "Contractor" means the Contractor(s) selected by the Company for the construction of all or part of the Improvements. "Development" means the Company's proposal to develop the Project on the Property substantially in accordance with the site plan attached hereto as Exhibit "B" and by reference made a part hereof; provided, however, Company may, in its reasonable discretion, alter, amend or modify the site plan within the permitted boundaries identified on the site plan in order to further the Company's development objectives, as such objectives may change from time to time during the Term of this Agreement, provided further, that any such changes shall comply with all applicable laws of (or otherwise be approved by) the Village. Page 3 EconomicIncentiveAgreement 02/10/99 "Excusable Delay" means any and all causes beyond the control of the Company, including but not limited to acts of God, fire Or other casualty, strike, lockout or other labor dispute, weather conditions, shortages or unavailability of material, labor or utilities, vandalism or laws, failure of any third party to perform obligations, orders or regulations of any Court, governmental, civilian or military authority and the failure or inability of the Company to acquire any property, including the Property. "General Fund" means the general tax revenues received by the Village without regard to source. "Party" means each and every party to this Agreement, and their successors and assigns. "Qualifying Years~ means each twelve (12) month period following the execution of this Agreement in which Additional Sales or Service Taxes are received by the Village during the Term of the Agreement. "Sales or Services Taxes" means a privilege tax imposed on the gross sales and services or proceeds received from the Company's business and activities on the Property within the corporate limits of the Village, as provided by sales taxes and use taxes, if any, imposed by the State of Illinois or the Village under its authority, being one percent (1%) of food sales and one and one- half percent (1.5%) of non-food sales or services, each as supplemented and amended or substituted therefor. "Special Allocation Fund" means the separate fund accounts established by the Village for the deposit and disbursement of the Additional Sales or Services Taxes. "Term" means a term commencing with the full execution of the Agreement and ending upon the period following ten (10) Qualifying Years. "Total Amount" means the sum of the Class 6b Reductions for each of the Qualifying Years during the Term. Section 1.2 Construction. This Agreement, except where the context by clear implication shall otherwise require, shall be construed and applied as follows: (a) Definitions included both singular and plural; (b) Pronouns include both singular and plural and cover all genders; (c) Headings of section herein are solely for convenience or reference and do not constitute a part hereof and shall not affect the meaning, construction or effect hereof; and Page 4 EconomicIncentiveAgreement 02/10/99 (d) Ail exhibits attached to this Agreement shall be and are incorporated by reference. ARTICLE II REPRESENTATIONS AND WARRANTIES Sections 2.1 Representations and Warranties of the Village. In order to induce the Company to enter into this Agreement, the Village hereby represents and warrants to the Company as follows: (a) Organization and Standing. The Village is duly organized under the Constitution and laws of the State of Illinois. (b) Power and Authority. The Village has full power and authority to execute and deliver this Agreement and to perform all of its agreements, obligations and undertakings hereunder. (c) Authorization and Enforceability. The execution, delivery and performance of this Agreement have been duly and validly authorized by all necessary action on the part of the Village. This Agreement is a legal, valid and binding obligation of the Village, enforceable against the Village in accordance with its terms, except as enforcement hereof may be limited by applicable bankruptcy, reorganization, insolvency or similar laws affecting creditor's rights as may from time to time be in effect. (d) No Violation. Neither the execution nor the delivery of this Agreement nor the performance of the Village's agreements, obligations and undertakings hereunder will conflict with, violate or result in a breach of any of the terms, conditions, or provisions of any agreement, rule, regulation, statute, ordinance, judgment, decree, or other law by which the Village may be bound. (e) Governmental Consent and Approvals. No consent or approval by any other governmental authority is required in connection with the execution and delivery by the Village of Agreement or the performance by the Village of its obligations hereunder. Section 2.2 Representations and Warranties of the Company. In order to induce the Village to enter into this Agreement, the Company represents and warrants to the Village as follows: {a} Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Illinois. (b) Power and Authority. The Company has full power and authority to execute and deliver this Agreement and to perform all of its agreements, obligations and undertakings hereunder. Page 5 EconomicIncentiveAgreement 02/10/99 (c) Authorization and Enforceability. The execution, delivery and performance of this Agreement have been duly and validly authorized by all necessary actions by the Company. This Agreement is a legal, valid and binding agreement, obligation and undertaking of the Company, enforceable against the Company in accordance with its terms, except as enforcement hereof may be limited by applicable bankruptcy, reorganization, insolvency or similar laws affecting creditor's rights as may from time to time be in effect. (d) No Violation. Neither the execution nor the delivery or performance of this Agreement will conflict with, violate or result in a breach of any of the terms, conditions or provisions of, or constitute a default under, or (with or without the giving of notice or the passage of time or both) entitle any party to terminate or declare a default under any contract, agreement, lease, license or instrument or any rule, regulation, statute, ordinance, judicial decision, judgment, decree or other law to which the Company is a party or by which the Company or any of its assets may be found. (e) No Proceedings or Judgments. There is no claim, action or proceeding now pending, or to the best of its knowledge, threatened before any court, administrative or regulatory body, or governmental agency to which the Company is a party or which will, or could, prevent the Company's performance of its obligations under this Agreement. ARTICLE III ZONING, LICENSES AND APPROVALS Section 3.1 Zoninq, Permits and Land Use. The Village shall cooperate with the Company in the Company's efforts to obtain zoning and subdivision sufficient for the development of the Development and the uses therein and shall assist the Company in obtaining any and all permits necessary to proceed with the development, including but not limited to parking and street requirements, curb cuts, building permits, sign permits and any other permit or requirement of any Federal, State or Local Agency. The Village covenants and agrees to cooperate with the Company with respect to the vacation of such streets, alleys and other public right-of ways within its jurisdiction as may be necessary for development of the Development in accordance with a final site plan prepared by the Company, provided that such site plan is in accordance with the laws of (or otherwise approved by) the Village. Section 3.2 Licenses and Certificates. The Village shall cooperate with the Company in the Company's efforts and shall assist the Company in obtaining any and all permits necessary to conduct its business on the Property, including but not limited to, occupancy permits {whether temporary or final), business licenses, Page 6 EconomicIncentiveAgreement 02/10/99 liquor licenses, vehicle licenses, and health department licenses or permits. Section 3.3 Real Estate Tax Assessment. The Village shall cooperate with the Company in the Company's efforts and shall assist the Company in applying for a Class 6b Classification, including but not limited to, enacting a resolution or ordinance supporting and consenting to the Company's application to the Cook County Assessor for such classification, and stating that such classification is necessary for development to occur on the Property. Section 3.6 Acquisition of Property. The Company and the Village acknowledge that the Company will endeavor to arrange and coordinate for the acquisition of the Property, either for its own account, or for the account of a developer or investor that intends to complete the Project and lease the Property to the Company. ARTICLE IV PAYMENT OF ECONOMIC INCENTIVES Section 4.1 Establishment of and Deposit into Special Allocation Fund. The Village acknowledges the existence of the Special Allocation Fund or a substantially similar governmental accounting fund. Upon receipt, and until such time as the Village has paid all amounts due and owing under this Agreement, including the Total Amount, the Village shall promptly deposit the funds necessary to pay the Annual Formula into the Special Allocation Fund. The Special Allocation Fund shall be applied first to pay the Annual Formula Amount for the then current Qualifying Year, and thereafter the accumulated but theretofore unpaid Annual Formula Amounts for preceding Qualifying Years. The Village agrees to pledge and apply the Additional Sales or Services Taxes, if any, in the Special Allocation Fund to the payment of the amounts due hereunder, and to otherwise maintain the Special Allocation Fund in accordance with this Agreement. The Village further agrees that the Village shall not further encumber or pledge any portion of the Additional Sales or Services Taxes, if any, during the term of this Agreement or take any actions in connection therewith inconsistent with the terms and conditions of this Agreement. Section 4.2 Payment. For each Qualifying Year, the Company shall, on a calendar quarterly basis, calculate the amount of the Annual Formula Amount attributable to such calendar quarter. The Village shall, within forty-five (45) days, following the Company's report of the amount of the portion of the Annual Formula Amount payable with respect to such calendar quarter, remit such amount to the Company. Section 4.3 Accounting. Upon the execution of this Agreement and for each Qualifying Year thereafter, the Company shall certify Page 7 EconomicIncentiveAgreement 02/10/99 to the Village the amount of the estimated Class 6b Reduction, including such supporting documentation as the Village may reasonably request. For the first Qualifying Year, the Class 6b Reduction shall be based upon sixteen percent (16%) of the costs to acquire the Property and complete the Project (including both hard and soft costs), and the latest known tax rate and equalization factor applicable to the Property, subject to readjustment based upon the Cook County Assessor's actual determination of the market value of the Property and the actual tax rate and equalization factor for such Qualifying year. Thereafter, the Class 6b Reduction shall be based upon the Cook County Assessor's determination of market value, tax rates and equalization factor for the preceding year, subject to readjustment based upon the Cook County Assessor's actual determination of the market value of the Property and the actual tax rate and equalization factor for such Qualifying year. Section 4.4 Annual Appropriation. Notwithstanding any provisions herein to the contrary, funding of the Special Allocation Fund is subject to the annual appropriation by the Village Board of Trustees. The Village covenants to use it best efforts, including but not limited to the responsible financial officer including in the annual budget proposals submitted to the Village Board of Trustees, a request or requests for the necessary appropriation of Sales or Services Taxes to the Special Allocation Fund. ARTICLE V OFFSET AGAINST ECONOMIC INCENTIVES Section 5.1. Purpose. The purpose of this Agreement is to make available to the Company the same economic incentive to development of the Project and relocation of its business within the Village as if the Development were to fully qualify for the Class 6b Classification and the Company would be entitled to the maximum Class 6b Reduction. Section 5.2. Application for Class 6b Classification. The Company shall use its best efforts to apply for and obtain qualification of the Project for an assessment for real estate tax purposes under the Class 6b Classification. Section 5.3. Offset. The Village shall be entitled to offsets against amounts otherwise payable to the Company hereunder in amounts equal to the actual Class 6b Reductions realized by the Company resulting from the full or partial determination of the eligibility of the Property for Class 6b Classification. Page 8 EconomicIncentiveAgreement 02/10/99 ARTICLE VI DEFAULTS AND REMEDIES Section 6.1 Defaults; Rights to Cure. Failure or delay by either Party to timely perform any term or provision of this Agreement shall constitute a default under this Agreement. The Party who so fails or delays must, upon receipt of written notice of the existence of such default, immediately commence to cure, correct or remedy such default and thereafter proceed with diligence to cure such default. The Party claiming such default shall give written notice of the alleged default to the Party alleged to be in default specifying the default complained of. Except as otherwise expressly herein provided and except as required to protect against immediate, irreparable harm, the Party asserting a default may not institute proceedings against the other Party until thirty (30) days after having given such notice. If such default is cured within such thirty (30) day period, the default shall not be deemed to constitute a breach of this Agreement. If the default is one which cannot reasonably be cured within the thirty (30) day cure period, and the defaulting party is exercising due diligence to cure such default, such period shall be extended for such time as is reasonably necessary for the cur±ng of the same, so long as there is diligent proceeding to cure such default. If such default is cured within such extended period, the default shall not be deemed to constitute a breach of this Agreement. However, a default not cured as provided above shall constitute a breach of this Agreement. Except as otherwise expressly provided in this Agreement, any failure or delay by either Party in asserting any of its rights or remedies as to any default or alleged default or breach shall not operate as a waiver of any such default er breach or any rights or remedies it may have as a result of such default or breach. Section 6.2 Remedies. The non-defaulting party may prove against the defaulting party all remedies available at law or in equity. ARTICLE VII MISCELLANEOUS PROVISIONS Section 7.1 Entire Contract and Amendments. This Agreement (together with the Exhibits attached hereto) is the entire contract between the Village and the Company relating to the subject matter hereof, supersedes all prior and contemporaneous negotiations, understandings and agreements, written or oral, between the Village and the Company, and may not be modified or amended except by a written instrument executed by both of the Parties. Page 9 EconomicIncentiveAgreement 02/10/99 Section 7.2 Third Parties. Nothing in this Agreement, whether expressed or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any other person other than the Village and the Company and their respective successors and assigns, nor is anything in this Agreement intended to relieve or discharge the obligation or liability of any third persons to either the Village or the Company, nor shall any provision give any third parties any rights of subrogation or action over or against either the Village or the Company. This Agreement is not intended to and does not create any third party beneficiary rights whatsoever. Section 7.3 Counterparts. Any number of counterparts of this Agreement may be executed and delivered and each shall be considered an original and together they shall constitute one agreement. Section 7.4 Waiver. Any Party to this Agreement may elect to waive any right or remedy it may enjoy hereunder, provided that no such waiver shall be deemed to exist unless such waiver is in writing. No such waiver shall obligate the waiver of any other right or remedy hereunder, or shall be deemed to constitute a waiver of other rights and remedies provided pursuant to this Agreement. Section 7.5 Cooperation and Further Assurances. The Village and the Company each covenants and agrees that each wilt do, execute, acknowledge and deliver or cause to be done, executed and delivered such agreements, instruments and documents supplemental hereto and such further acts, instruments, pledges and transfers as may be reasonably required for the conveying, transferring, pledging, assigning and confirming unto the Village or the Company or other appropriate persons all and singular the rights, property and revenues covenanted, agreed conveyed, assigned, transferred and pledged under or in respect of this Agreement. Section 7.6 Severability. If any section, subsection, term or provision of this Agreement or the application thereof to any party or circumstance shall, to any extent, be invalid or unenforceable, the remainder of such section, subsection, term or provision of this Agreement or the application to same to parties or circumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby. Section 7.7 Notices. All notices, demands, requests, consents, approvals or other communications or instruments required or otherwise given under this Agreement shall be in writing and shall be executed by the party or an officer, agent or attorney of the party, and shall be deemed to have been effective as of the date of actual delivery, if delivered personally or by telecoramunication actually received, or as of the third (3rd) day from and including the date of posting, if mailed by registered or Page 1 0 EconomicIncentiveAgreement 02/10/99 certified mail, return receipt requested, with postage prepaid, addressed as follows (unless another address is provided in writing): To the Company: Scotty's Home Market 1150 Heather Court Lake Zurich, Illinois 60047 Attn: Chief Financial Officer With a copy to: John T. Huntington McBride Baker & Coles One MidAmerica Plaza Suite 1000 Oakbrook Terrace, Illinois 60181 To the Village: Village of Mt. Prospect 100 S. Emerson Street Mt. Prospect, Illinois 60056 Attn.: Community Develop. Director With a copy to: Everette M. Hill, Jr., Esq. Klein Thorpe & Jenkins, Ltd. 20 N. Wacker Drive Suite 1660 Chicago, Illinois 60606 Section 7.8 Successors in Interest. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective authorized successors and assigns; Section 7.9 No Joint Venture, Agency or Partnership Created. Nothing in this Agreement nor any actions of the Parties to this Agreement shall be construed by the Parties or any third person to create the relationship of a partnership, agency, or joint venture between or among such parties. Section 7.10 State Law. This Agreement shall be construed and interpreted under the internal laws of the State of Illinois. Section 7.11 Costs and Expenses. If either Party defaults in the performance of its obligations hereunder, the Parties agree that the defaulting Party shall pay the non-defaulting Party's reasonable costs of enforcing the defaulting Party's obligations under this Agreement, including but not limited to attorneys, fees and expenses. Section 7.12 No Personal Liability of Officials of Village. No covenant or agreement contained in this Agreement shall be deemed to be the covenant or agreement of any official, officer, agent, employee or attorney of the Village, in his or her individual capaVillage, and neither the mermbers of the Board of Aldermen nor any official of the Village shall be liable personally Page 1 1 EconomicIncentiveAgreement 02/10/99 under this Agreement or be subject to any personal liability or accountability by reason of the execution, delivery and performance of this Agreement. Section 7.13 Repealer. To the extent that any ordinance, resolution, rule, order or provision of the Village's Code of Ordinances is in conflict with the provisions of this Agreement, the provisions of this Agreement shall be controlling. Section 7.14 Assignment. This Agreement may be assigned by the Company, including without limitation, as collateral for any loan(s) for the Development or pursuant to a sale or transfer of the Property and/or Development. Any such assignment shall be subject to the consent to the Village which will not be unreasonably withheld or delayed. IN WITNESS WHEREOF, the Village and the Company have caused this Agreement to be executed by their duly authorized officers as of the date set forth above. VILLAGE OF MT. PROSPECT By: (SEAL) Title: Mayor Pro Tem Print Name: Timothy J. C0rc0ran Attest: Velma W. L0we , Village Clerk Fv~t~ Nq]]~ .]~ , Village Attorney BEACON HOME DIRECT, INC. By: Page 1 2 EconomicIncentiveAgreement 02/10/99 EXHIBIT A [Resolution Approving Agreement] Page 1 3 EconomicIncentiveAgreement 02/10/99 EXHIBIT B [Site Plan] Page 1 4 EconomicIncentiveAgreement 02/10/99