HomeMy WebLinkAboutStudy Session Agenda 08-26-13SPECIAL STUDY SESSION AGENDA
CITY COUNCIL MEETING
CITY OF WHEAT RIDGE, COLORADO
7500 W. 29th Ave.
Wheat Ridge CO
August 26. 2013
Upon adjournment of City Council Meeting
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PUBLIC COMMENT ON AGENDA ITEMS
APPROVAL OF AGENDA
1. Tax Incentives Request for Taste of Home Cooking
2. Tax Incentives Request for The Green Herb
,. ~A~
... ~ r City of • A~Wheat&_,dge ~OFFICE OF THE OlY MANAGER
TO:
THROUGH:
FROM:
DATE:
SUBJECT:
ISSUE
Memorandum
Mayor and City Council
Patrick Goff, City Manager~
Steve Art, Economic Development Manager
August 26 , 2013
Enhanced Sales Tax Incentive Program for 'A Taste of Home Cooking ' and
'Wine Not '
Should the City of Wheat Ridge enter into an Enhanced Sales Tax Incentive Program (ESTIP)
Agreement with A Taste ofHome Cooking, LLC and Wine Not, LLC? Staff is seeking guidance
from Council on the following:
1. Authorization to proceed with drafting of an agreement for City Council approval to enter
into an ESTIP with A Taste of Home Cooking and Wine Not; and
2 . Guidance on the percentage ofincentive(s), total amount ofincentive(s), and the time
period ofwhich agreement(s) would run.
THE PROJECT
In early 2013 , Robert 'Bob' Rotella purchased a building at 4101 and 4111 Kipling Street in
Wheat Ridge to remodel the site for a new sit-down restaurant, A Taste of Home Cooking. The
4111 address previously housed the Pauz Inn , a restaurant that ceased operations in 2008 while
the 4101 address contained the Mercedes restaurant which closed after a fire destroyed a large
portion of the facility in 2011.
In conjunction with A Taste of Home Cooking, the owner set up an additional LLC, Wine Not.
Wine Not will conduct the alcohol sales for the facility. For the remainder ofthis memo , both
entities will be referenced as A Taste of Home Cooking.
When completed , the approximately 10 ,000 square-foot restaurant will seat in excess of 150
customers. The restaurant will employ approximately 30 staff members and have a sit-down
component on the northern side and a take-out restaurant at the southern end , the site of the
previous Mercedes restaurant. All the food will be cooked to order on the premises by executive
chef Rob Rotella, Bob 's son. A Taste of Home Cooking will have a full-service bar, and will be
open 7 -days a week from 6 am to 9 pm on weekdays and until 1 0 pm on weekends.
SITE IMPROVEMENTS
A Taste of Home Cooking paid for and received a building permit in April 2013 and began
Study Session -A Taste of Home Cooking
August 26 , 2013
Page2
tenant improvements valued at approximately $600,000. The building is about 40 years old and
was in need of a major overhaul to bring it up to current standards that are compliant with
building codes . Besides the decor improvements to the interior and exterior of the structure, the
building required vast improvements to its plumbing, electrical , and mechanical systems . The
building is also laden with asbestos which was remediated in order to allow for decor
improvements.
The on-site parking lot has been refurbished and will provide approximately 40 parking spaces
with the required accessible spaces. The two existing restrooms have been upgraded and brought
into current compliance with accessibility regulations . In addition , ingress and egress
accessibility issues have been addressed.
The project will eliminate a blighted area along a busy stretch of roadway in Wheat Ridge and
provide a new public venue that creates new sales tax , employment for local residents , and avoid
leakage of sales to other communities.
Public or public-related improvements associated with this project include addressing
accessibility issues throughout the building, fa<;:ade enhancements , roofing repairs , fire doors ,
electrical , plumbing work, fire suppression system and parking lot improvements. Costs for these
public improvements are eligible for rebate under the ESTIP.
BACKGROUND
Chapter 22 of the Wheat Ridge Code of Laws established the ESTIP Program. The primary
purpose of the ESTIP is to encourage the establishment and/or substantial expansion of retail
sales tax generating businesses within the city. The ESTIP provides incentives through the
rebate of future sales tax increment.
In the past the Council has approved several ESTIP agreements with existing Wheat Ridge
businesses and non-profits as well as an existing business in a neighboring community looking
for an incentive to relocate to Wheat Ridge. Every project was unique but each was evaluated
for incentives against a set of criteria outlined in the Code of Laws .
The criteria for approval of an ESTIP agreement are as follows:
1. The amount of enhanced sales tax which can reasonably be anticipated to be derived by
the city through the expanded or new tax generating business;
2. The public benefits which are provided by the applicant through public works , public
improvements , additional employment for city residents ;
3 . The amount of city expenditures which may be deferred by the city based upon public
improvements to be completed by the applicant; and
4. The conformance of the applicant 's property or project with the comprehensive plan and
zoning ordinances of the city.
STAFF RECOMMENDATIONS:
Staff recommends a 50 % ESTIP for a period of 5-years or $73 ,694 , whichever occurs first.
Because the site has not generated any sale tax over the previous 12-months, the base level of
calculation for sales tax will be zero and all subsequent sales tax will be considered as enhanced .
Study Session -A Taste of Home Cooking
August 26 , 2013
Page 3
It is estimated the restaurant could produce as much as $40 ,000 in sales tax each year.
Staff recommends funding this project to the full requested amount for the following reasons:
1. The project meets the objectives of the Economic Development which is to add new
business and jobs to the community while revitalizing under-utilized facilities ; and
2. The project could be a catalyst for the redevelopment of adjacent properties along
Kipling; and.
3. The project site has been vacant for 2-years. This project will aide in eliminating blight
along the busy corridor; and
4. The project will provide dining options for the area business and residents; and
5 . The project will bring in new sales tax revenues and employment.
ATTACHMENTS:
1. ESTIP Agreement
AGREEMENT PURSUANT TO ENHANCED SALES TAX INCENTIVE PROGRAM
This Agreement Pursuant To Enhanced Sales Tax Incentive Program (this
"Agreement") is made and entered into as of the __ day of , 2013, by
and between A TASTE OF HOME COOKING LLC and WINE NOT, LLC, located at
4101 and 4111 Kipling Street, Wheat Ridge, CO 80033, hereinafter referred to as the
"Owner" and the CITY OF WHEAT RIDGE, COLORADO, hereinafter referred to as the
"City," collectively the "Parties," and each individually, as a "Party."
RECITALS:
Whereas, the City has adopted Chapter 22, Article 69 -84 of the Wheat Ridge
Code of Laws, entitled the Enhanced Sales Tax Incentive Program (the "ESTIP
Program"), a copy of which is attached hereto as Exhibit A, to encourage, in part, the
establishment of retail sales tax generating businesses within the City; and
Whereas, the Owner desires to participate in the ESTIP Program and to share in
the enhanced sales tax derived from the property described as a Restaurant, generally
located at 4101 and 4111 Kipling Street in Wheat Ridge, Colorado and more particularly
described in Exhibit B, attached hereto and incorporated by this reference (the
"Property"), for the installation of Public Improvements described in Exhibit C, attached
hereto and incorporated by this reference (the "Public Improvements") to the extent
allowed by this Agreement and the ESTIP Program.
Whereas, the owners have formed two separate limited liability corporations for
operations of the food service and the alcohol licensing both of which are owned and
operated by the same ownership group.
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants, promises, and agreements of each of the Parties hereto, to be kept and
prefonned by each of them, the Parties agree as follows:
1. Recitals. The Recitals set forth above are incorporated in this Agreement
by reference.
2. Term. The term of this Agreement shall commence on the first day of the
calendar month following the month in which the Owner receives their Certificate of
Occupancy on the Property and shall terminate in five (5) years, unless otherwise
provided in this Agreement (the "Term"). The Term of this Agreement shall
automatically renew for each additional one-year period to the extent required by Section
4( d) hereof.
3. Application of Citv Code. This Agreement is subject to the limitations of
the ESTIP Program, as found in the City of Wheat Ridge Code of Laws. In the event of
conflicts between this Agreement and the ESTIP Program, the ESTIP Program shall
control.
4. Qualification of Property for the ESTIP Program. The City agrees that
the Property qualifies for the ESTIP Program and the Public Improvements are
improvements for public and /or public related purposes that will stimulate the economy
of and within the City, provide employment opportunities for residents of this City and
others, expand the goods available for purchase and consumption by residents of the City,
and increase sales taxes collected by the City. The City finds the business is reasonably
likely to generate enhanced sales taxes of at least Two Hundred Thousand Dollars
($200,000) over the full term of thjs Agreement. The following provisions shall apply for
each year in which the ESTIP Program is in effect for the Property:
a. FIFTY percent (50 %) of the "Enhanced Sales Taxes" collected by the City and
derived from the Property shall be segregated by the City to be utilized for the
ESTJP Program herein establi shed and approved (the "Allocated Rev enues"). For
purposes of this Agreement "Enhanced Sales Taxes" shall have the mearung set
forth in the ESTJP Program at Section 22-75 of the Wheat Ridge Code of Laws .
The total amount of "Enhanced Sales Tax " that shall be rebated for the term of
this Agreement shall not exceed to total cost of public improvements ($73 ,694) as
detailed in Exhibit C.
b. The amount of Enhanced Sales Taxes shall be calculated as follows: the actual
amount of sales taxe s collected on the Property during the period for 12-months
preceding the issuance of a certificate of occupancy by the City of Wheat Ridge
(the "base amount"). The excess of collections in each such year above the base
amount shall be the Enhanced Sales Taxes for that year.
c. The Owner shall share in the Enhanced Sales Taxes derived from the Property
and the business located thereon as provided herein.
d . Enhanced Sales Taxes from the Property shall be shared and the Allocated
Revenues shall be disbursed to the Owner on an annual basis with sales taxes
collected on and after the Commencement Date. The maximum period of time
that this Agreement shall be in effect shall be for FIVE (5) years , commencing on
the Commencement Date .
The Term will be automatically extended for one year for up to FOUR (4)
additional one (1) year periods.
e. This Agreement is a personal agreement between the City and the Owner and
does not run with the Owner's property interest in the land . The obligations ,
benefits and /or the provisions of this Agreement may not be assigned in whole or
in part without the express authorization of the City Council , acting in its sole and
exclusive discretion and no third party shall be entitled to rely upon or enforce
any provisions hereon. Notwithstanding the foregoing , Owner may assign its
interests in this Agreement to an affiliate or to a successor by consolidation . For
the purposes of this Paragraph , an affiliate means an entity which controls , is
controlled by, or is under common control with the Owner. This Agreement shall
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never constitute a debt or obligation of the City within any constitutional or
statutory provision .
f. Any Enhanced Sales Taxes subject to the Agreement shall be escrowed in the
event there is a legal challenge to the ESTIP Program or to the approval of this
Agreement.
g. At the end of the Term of this Agreement as provided for herein , any monies
segregated by the City which have not been expended as hereunder provided may
be transferred to another account of the City or used in a manner determined by
the City in its sole discretion , excluding any amounts escrowed under Paragraph
4.fabove.
h. The Owner shall be deemed the "owner or proprietor" of the Property for the
purposes of this Agreement and the ESTIP Program , whether or not the Owner
owns all or any portion of the Property at any relevant time , since the Owner is
coordinating the installation of the Public Improvements.
5. City's Budget Process. Each year, the City Manager shall include in a
budget presented to the City Council pursuant to Chapter X, Sec. 10.2 of the Wheat
Ridge Home Rule City Charter, the appropriation of the Allocated Revenues for payment
to the Owner as provided in this Agreement. Nothing in this Agreement shall be
construed as obligating the City Council to appropriate the Allocated Revenues in any
fiscal year.
6. No Debt or Pecuniarv Liabilitv. Notwithstanding anything in the
Agreement to the contrary, the Agreement is specifically subject to annual appropriation
of sufficient funds to pay the Allocated Revenue as provided in the ESTIP Program. No
multiple year fiscal obligation is created hereby. The decision of the City Council not to
appropriate funds in any given year shall not affect , impair or invalidate any of the
remaining provisions of this Agreement. None of the obligations of the City hereunder
shall be payable from any source other than Enhanced Sales Taxes.
7. Subordination. Notwithstanding anything in this Agreement to the
contrary, the Owner shall have no right , claim , lien, or priority, in or to the City's sales
tax revenue that would be superior to or on parity with the rights , claims , or liens of the
holders of any sales tax revenue that would be bonds , notes , certificates , or debentures
payable from or secured by any sales taxes , outstanding as of the Effective Date of this
Agreement. All rights of the Owner are , and at all time shall be, subordinate and inferior
to the rights , claims and liens of the holders of any and all such sales tax revenue bonds,
notes , certificates , or debentures , issued by the City and payable from or secured by any
sales taxes .
8. No Covenant to Construct or to Open. The intent of this Agreement is
to provide for Owner 's participation in the ESTIP Program , in the event that Owner
constructs the Public Impro vements . Notwithstanding any provision in this Agreement to
the contrary, Owner shall have no obligation under this Agreement to construct the Public
3
Improvements , and in that event, the City shall have no obligation to share any of the
Enhanced Sales taxes with Owner.
9. Remedies. The Owner waives any constitutional claims against the City
arising out of a breach of this Agreement. The Owner's remedies against the City under
this Agreement are limited to breach of contract claims . In no event shall the Owner be
entitled to a claim , nor shall the City be liable for , any special , exemplary, punitive or
consequential damages of any kind , including economic damages or lost profits .
10. Severability. It is understood and agreed by the Parties that if any part ,
term or provision of this Agreement is held by the courts to be illegal or in conflict with
any law of the State of Colorado , the validity of the remaining p01tions or provisions
shall not be affected , the rights and obligations of the Parties shall be construed and
enforced as if the Agreement did not contain the particular part, term or provision held to
be invalid , and the Parties shall cooperate to cure any legal defects in the Agreement or
the ESTIP . Should the allocation of the Enhanced Sales Tax , or the payment of the
Allocated Revenues be judicially adjudged illegal , invalid or unenforceable under the
present or future laws effective during the Tenn of this Agreement by a court of
competent jurisdiction in a final , non-appealable judgment, the Parties shall utilize their
best, good faith efforts to restructure this Agreement or enter into a new agreement
consistent with the purposes of this Agreement. Should the Pa1ties be unsuccessful in
their efforts , the Agreement shall terminate without penalty or recourse to the City.
11. Governing Law. The laws of the State of Colorado shall govern the
validity, performance and enforcement of this Agreement. Should either Party institute
legal suit or action for enforcement of any obligation contained herein , it is agreed that
venue of such suit or action shall be proper and exclusive in the district court for
Jefferson County, Colorado.
12. Notices. All notices required or pennitted under this Agreement shall be
in writing and shall be hand delivered or sent by certified mail , return receipt requested ,
postage prepaid , to be addressed to the Parties set forth below . All notices so given shall
be considered effective upon the earlier of the actual receipt or seventy-two (72) hours
after deposit in the United States Mail with the proper address. Either Party by notice so
given may change the address to which future notices shall be sent:
Notice to the City:
Copy to:
City Manager
City of Wheat Ridge
7500 W. 29th Avenue
Wheat Ridge, CO 80033
City Attorney
City of Wheat Ridge
7500 W. 29th Avenue
Wheat Ridge, CO 80033
4
Notice to the Owner: Taste of Home Cooking, LLC and Wine Not , LLC
3280 Yarrow Court
Wheat Ridge, CO 80033
13. Entire Agreement-Amendments. This Agreement embodies the whole
agreement of the Parties. There are no promises , tenns , conditions , or obligations other
than those contained herein and this Agreement shall supersede all previous
communications, representations or agreements , either verbal or written, between the
Parties hereto. This Agreement may be amended only by written agreement between the
Owner and the City acting pursuant to City Council authorization.
14. Effective Date. This Agreement shall be effective and binding upon the
Parties upon the date first set forth above. Notwithstanding any provision of this
Agreement which may be interpreted to the contrary , in the event that Owner does not
acquire title to the Property and construct and make improvements to the Property on or
before October 1, 2013 , then upon notice by the Owner to the City, this Agreement shall
terminate and both Parties shall be relieved of all liability hereunder.
IN WITNESS WHEREOF , Owner and City have each caused this Agreement to be
executed by the authorized Parties .
State of Colorado
County of ___ _
)
) ss .
)
OWNER
A Taste of Home Cooking
Owner
The foregoing Agreement was acknowledged before me this _day of _____ ,
20_, by as [title] of
_________________ ,Inc.
WITNESS MY HAND AND OFFICAL SEAL.
My Commission expires: _______ _
Notary Public
CITY OF WHEAT RIDGE
By: __________ __
Name : Jerry DiTullio
Title: Mayor
5
ATTEST:
Name: Janelle Shaver
Title: City Clerk
State of Colorado )
) ss.
County of Jefferson )
The foregoing Agreement was acknowledged before me this __ day of ____ _
20_, by Jeny DiTullio as Mayor and Janelle Shaver as City Clerk , respectively, of the
City of Wheat Ridge , Colorado.
WITNESS MY HAND AND OFFICAL SEAL.
My Commission expires: _______ _
Notary Public
6
EXHIBIT A
Ordinance 2001-08
The Enhanced Sales Tax Incentive Program
{The "ESTIP Program")
Sec. 22-73. -Program established.
There is hereby established within the city an enhanced sales tax incentive
program.
(Ord. No. 1988-758, § 1(24-1), 5-23-88; Ord. No. 1272 , § 1, 12-9-02)
Sec. 22-74.-Purpose.
The purpose of the enhanced sales tax incentive program created by this division
is to encourage the establishment and/or substantial expansion of retail sales tax
generating businesses within the city , thereby stimulating the economy of and within the
city , thereby providing employment for residents of the city and others, thereby further
expanding the goods available for purchase and consumption by residents of the city, and
further increasing the sales taxes collected by the city, which increased sales tax
collections will enable the city to provide expanded and improved municipal services to
and for the benefit of the residents of the city, while at the same time providing public or
public-related improvements at no cost , or at deferred cost , to the city and its taxpayers
and residents.
(Ord. No. 1988-758, § 1(24-2), 5-23-88; Ord. No. 1272 , § 1, 12-9-02)
Sec. 22-75. -Definitions.
The following words , terms and phrases , when used in this division, shall have
the meanings ascribed to them in this section, except where the context clearly indicates a
different meaning:
Enhanced sales tax shall mean the amount of sales tax collected by the city over
and above a base amount negotiated by, and agreed upon by, the applicant and the city,
and which amount is approved by the city council , which base amount shall never be
lower than the amount of sales taxes collected by the city at the property in question in
the previous twelve (12) months plus a reasonable and agreed upon percentage of
anticipated increase in sales taxes , or, in the case of a newly established business , an
amount which represents the good faith determination by the applicant and the city as to
the amount of sales taxes which could be generated from the new business without the
participation by applicant in the ESTIP created under this division.
ESTIP means the enhanced sales tax incentive program created under this
division.
7
Owner or proprietor shall mean the record owner or operator of an individual
business, or, in the case of a shopping center, the owner of the real property upon which
more than one (1) business is operated, provided that the owner (whether an individual,
corporation, partnership or other entity) is the owner or Jess or of the individual
businesses operated thereon.
(Ord. No . 1988-758, ,\r; 1(24-3). 5-23-88; Ord. No . 1272, § 1, 12-9-02)
Sec. 22-76. -Participation.
Participation in ESTlP shall be based upon approval by the city council
exercising its legislative discretion in good faith. Any owner or proprietor of a newly
established or proposed retail sales tax generating business or location, or the owner or
proprietor of an existing retail sales tax generating business or location which wishes to
expand substantially, may apply to the city for inclusion within the ESTlP prov ided that
the new or expanded business is reasonably likely to generate enhanced sales taxes of at
least five thousand dollars ($5 ,000 .00) in the first year of operation.
(Ord. No. 1988-758, § 1(24-4). 5-23-88: Ord. No . 1990-854, § 1, 11-26-90; Ord. No .
1272. § 1, 12-9-02)
Sec . 22 -77.-Approval of agreement; use offunds genera ll y.
Approval by the city council of an agreement implementing this ESTlP shall
entitle the successful applicant to share in enhanced sales taxes derived from applicant's
property or business in an amount which shall not in any event exceed the enhanced sales
taxes ; provided , however, that applicant may use such amounts only for public and/or
public-related purposes such as those specified herein and which are expressly approved
by the city council at the time of consideration of the application. The time period in
which the enhanced sales taxes may be shared shall not conunence w1til all public or
public-related improvements are completed, and shall be limited by the city council , in its
discretion, to a specified time , or until a specified amount is reached.
(Ord. No. 1988-758, § 1(24-5), 5-23-88: Ord. No . 2002-1240, ,{; 1, 1-28-02: Ord. No .
1272, § 1, 12-9-02)
Sec . 22 -7 8.-Uses enumer ated.
The uses to which the shared enhanced sales taxes may be put by an applicant
shall be strictly limited to those which are public or public-related in nature. For the
purposes of this division , public or public-related purposes shall mean public
improvements , including but not limited to streets , sidewalks , curbs , gutters, pedestrian
malls , street lights, drainage facilities , landscaping, decorative structures, statuaries ,
fountains , identification signs , traffic safety devices , bicycle paths , off-street parking
facilities , benches, restrooms , infonnation booths , public meeting facilities , and all
necessary , incidental , and appurtenant structures and improvements, together with the
8
relocation and improvement of existing utility lines, and any other improvements of a
similar nature which are specifically approved by the city council upon the city council's
finding that said improvement are public or public-related improvements, and that such
improvements shall enhance the competitive position of the applicant within the Denver
metropolitan area marketplace.
(Ord. No. 1988-758, § 1(24-6), 5-23-88: Ord. No. 1272, § 1, 12-9-02)
Sec. 22-79. -Increments, sharing of funds.
The base figure for sales taxes shall be divided into twelve (12) monthly
increments, which increments are subject to agreement between the parties, and approval
by the city council, and which increments shall be reasonably related to the average
monthly performance of the business or property in question, or similar businesses in the
area (i.e. adjust for seasonal variations). If in any month the agreed upon figure is not met
by applicant so as to create enhanced sales tax for that month, no funds shall be shared
with applicant for that month, and no increment shall be shared until that deficit, and any
other cumulative deficit, has been met, so that at the end of any twelve-month cycle,
funds in excess of those enhanced sales taxes agreed to be shared shall not have been
shared with any applicant.
(Ord. No. 1988-758, § 1(24-7), 5-23-88: Ord. No. 1272, § 1, 12-9-02)
Sec. 22-80. -Revenues restricted.
It is an overriding consideration and determination of the city council that
existing sources of city sales tax revenues shall not be used, impaired, or otherwise
affected by this enhanced sales tax incentive program. Therefore, it is hereby
conclusively determined that only enhanced sales taxes generated by the properties
described in an application shall be subject to division under this ESTIP. It shall be the
affirmative duty of the treasurer to collect and hold all such enhanced sales taxes in a
separate account apart from the sales taxes generated by and collected from the other
sales tax generating uses and businesses within the city and to provide an accounting
system which accomplishes the overriding purpose of this section. It is conclusively
stated by the city council that this division would not be adopted or implemented but for
the provisions of this section.
(Ord. No . 1988-758, § 1(24-8), 5-23-88,· Ord. No. 1272, § 1, 12-9-02)
Sec. 22-81. -Capital improvement fund.
The one (1) percent of sales and use taxes earmarked for the capital improvement
fund may be utilized in this ESTIP for public improvements so long as the same are
within the meaning of the phrase capital improvements as defined in the voter approved
sales tax referendun1 previously held within the city, and provided that the same are
found and determined by the city council to be capital improvements which could be
9
provided by the city from the capital improvement fund but for the provision of such
improvements by the applicant; provided, however, that such use of capital improvement
funds as part of this ESTIP shall be limited to the amount agreed pursuant to section 22-
83 hereof; provided further, however, that nothing contained herein shall limit the city
council in the determination to appropriate additional capital improvement funds for
capital improvements affecting the property in question as a part of the city's regular
appropriation and budget process.
(Ord. No. 1988-758, ,{I 1(24-9). 5-23-88: Ord. No. 1272, -~' 1. 12-9-02)
Sec. 22-82. -Criteria for approval of application.
Approval of an application for inclusion in this ESTIP shall be given by the city
council, at a public hearing held as a portion of a regularly scheduled city council
meeting, based upon the following criteria:
(1)
(2)
(3)
(4)
(5)
(6)
The amount of enhanced sales taxes which are reasonably to be
anticipated to be derived by the city through the expanded or new retail
sales tax generating business;
The public benefits which are provided by the applicant through public
works, public improvements, additional employment for city residents,
etc;
The amount of expenditures which may be deferred by the city based
upon public improvements to be completed by the applicant;
The confom1ance of the applicant's property or project with the
comprehensive plan and zoning ordinances of the city;
The agreement required by section 22-83 having been reached , which
agreement shall contain and conform to all requirements of section 22-83
Approval shall be by motion adopted by a majority of the entire city
council.
(Ord. No. 1988-758, § 1(24-10}, 5-23-88; Ord. No. 1272, § 1. 12-9-02)
Sec. 22-83 . -Agreement required.
Each application for approval submitted to the city council shall be subject to
approval by the council solely on its own merits. Approval of an application shall require
10
that an agreement be executed by the owner and the city, which agreement shall, at a
minimum, contain:
{1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
A list of those public or public-related improvements which justify
applicant's approval, and the amount which shall be spent on such
improvements;
The maximum amount of enhanced sales taxes to be shared, and the
maximum time during which the agreement shall continue, it being
expressly understood that any such agreement shall expire and be of no
further force and effect upon the occurrence of the earlier to be reached
of the maximum time of the agreement (whether or not the maximum
amount to be shared has been reached) or the maximum amount to be
shared (whether or not the maximum time set forth has expired);
A statement that this is a personal agreement which is not transferable
and which does not run with the land;
That this agreement shall never constitute a debt or obligation of the city
within any constitutional or statutory provision;
The base amount which is agreed upon by month, and the fact that if, in
any month as specified, sales taxes received from the property do not at
least equal such amount, that there shall be no sharing of funds for such
month;
The base amow1t shall be agreed upon which shall consider the historic
level of sales at the property in question, or a similar property within the
area in the event of a new business, and a reasonable allowance for
increased sales due to the improvements and upgrades completed as a
result of inclusion within tllis program;
A provision that any enhanced sales taxes subject to sharing shall be
escrowed in the e~ent there is a legal challenge to this enhanced sales tax
incentive program or the approval of any application therefor;
An affirmative statement that the obligations, benefits, and/or provisions
of this agreement may not be assigned in whole or in any part without the
II
(9)
expressed authorization of the city council, and further that no third party
shall be entitled to rely upon or enforce any provision hereof;
Any other provisions agreed upon by the parties and approved by the city
council .
(Ord. No. 1988-758. § 1(24-11). 5-23-88: Ord. No . 1272, § 1. 12-9-02)
S ec. 22-84. -J oin t venture ; liabili ty.
The city council has enacted this ESTIP as a joint benefit to the public at large
and to private owners for the purposes of providing the city with increased sales tax
revenues generated upon and by properties improved as a result of tlus program ; public
improvements being completed by private owners through no debt obligation being
incurred on the part of the city, and allowing applicants an opportunity to improve
properties which generate sales activities , wluch improvements make those properties
more competitive in the marketplace and further provide to the applicant additional
contingent sources of revenues for upgrading such properties. The city council
specifically finds and determines that creation of this ESTIP is consistent with the city's
powers as a home rule municipal corporation, and that exercise of such powers in the
manner set forth herein is in furtherance of the public health , safety and welfare .
Notwithstanding any provision hereof, the city shall never be a joint venture in any
private entity or activity which participates in tlus ESTIP , and the city shall never be
liable or responsible for any debt or obligation of any participant in ESTIP .
(Ord. No. 1988-758. § 1(24-12), 5-23-88: Ord. No. 1272, ,{I/, 12-9-02)
12
EXHIB ITB
Legal Description of the Property
5 . The Land referred to in tWs Commitment Is described as foUows :
LOT 1. GREEN VAUEY SUBDMSION,
EXCEPT THAT PARCEL CONVEYED TO THE DEPARTMENT OF mGHWAYS IN PEED RECORDED
NOVEMBER 10. 1969 IN BOOK 2144 AT PAGE 166 .
COUNIY OF JEFFERSON . STATE OF COLORADO.
13
EXHIBIT C
Qualifying Public Improvement Costs
Public improvements totally $73,694 include:
• Interior remodel for safety improvements in the facility to include:
o Fire suppression improvements -$9,148
o Ingress and egress modifications -$4 ,654
o Fire coded doors -$1,400
o Electrical Modifications per Code -$2 ,142
o Accessible restroom facilities/Plumbing-$25 ,339
o Accessibility ramps -$1 ,700
• Exterior Improvements for improved public access include:
o Roof repairs-$5,974
o New Paint and wall repairs-$8 ,337
o Parking lot improvements to increase public parking opportunities -
$15 ,000
14
,.~·#
.. # r City of • .. ~Wheat&_dge ~OFFICE OF THE 01Y MANAGER
TO:
THROUGH:
FROM:
DATE:
SUBJECT:
ISSUE
Memorandum
Mayor and City Council
Patrick Goff, City Manager r;;S
Steve Art , Economic Development Manager
August 26 , 2013
Enhanced Sales Tax Incentive and Business Development Zone Programs for
The Green Herb
Should the City of Wheat Ridge enter into an Enhanced Sales Tax Incentive Program (ESTIP)
Agreement and /or a Business Development Zone (BDZ) Program Agreement with Musel
Masster, LLC (The Green Herb)? Staff is seeking guidance from Council on the following:
I. Authorization to proceed with drafting an agreement for City Council approval to enter
into an ESTIP and/or BDZ Agreement with The Green Herb; and
2. Guidance on the percentage ofincentive(s), total amount ofincentive(s), and the time
period ofwhich agreement(s) would run.
THE PROJECT
The Green Herb 's owners have been looking to purchase property in Wheat Ridge to construct a
pennanent site for their business , a retailer and wholesaler of nutritional supplements . They
currently lease space on the 1-70 Frontage Road North . In 2011 , they located a potential parcel
along the south side of 1-70 frontage in which to construct a new facility , but due to some site
constraints they abandoned those plans and began looking for another alternative. In 2012 they
located another lot at 4565 Kipling Street for their new office, retail and production facility.
The Green Herb worked with staff of Community Development and Public Works on site
improvements for this odd shaped lot which has a 100-foot wide frontage on Kipling Street and
parcel depth of approximately 450-feet. This site configuration has previously made it difficult
to develop. At the same time , The Green Herb emailed staff requesting inclusion into the ESTIP
and BDZ programs .
The parcel had previously been considered for mini-storage which came under heavy protest
from the adjoining residential neighbors and was denied by Planning Commission. Since that
time , the site has garnered no interest from other developers due to the minimum frontage on
Kipling.
Study Session -The Green Herb
August 26 , 2013
Page 2
In late 2012 the site was purchased by The Green Herb and in February 2013 a building permit
was issued for construction of a new building. Staffworked with The Green Herb's architect
team for a building that met the requirements of all city codes . The Green Herb is in
construction of an 8,242 square foot building on the site that meets the requirements of the City's
architectural and streetscape design manuals. Upon completion, The Green Herb will transfer
their entire existing facility to the new site and anticipates hiring an additional 4-6 new
employees , bringing their total to approximately 20.
The new construction has a valuation of $750 ,000 which will increase the property tax valuation
and revenue to the city through additional property taxes. Total building use tax and pennit fees
paid on the Project were $27 ,171 through a building permit issued on February 22 , 2013.
Incremental sales tax is estimated at $5 ,000 in year one of operation and increasing yearly.
BACKGROUND
Chapter 22 of the Wheat Ridge Code of Laws established the ESTIP and the BDZ Program. The
primary purpose of the ESTIP is to encourage the establishment and/or substantial expansion of
retail sales tax generating businesses within the city. While the primary purpose of the BDZ
Program is to provide incentives for new development or revitalization to overcome conditions
ofunemployment, underemployment, net outmigration of the population, diminution of tax
re v enues , chronic economic distress and deterioration ofbusiness districts and public
infrastructure . The ESTIP provides incentives through the rebate of future sales tax increment
while the BDZ prov ides incenti v es through the rebate of use tax on furniture and fixtures
associated with the initial development or redevelopment project, use tax on building mate1ials ,
building permit fees and zoning fees.
In the past the Council has approved several ESTIP and BDZ agreements with existing Wheat
Ridge businesses , non-profits , and businesses looking for an incentive to relocate to Wheat
Ridge. Every project was unique but each was e valuated for incentives against a set of criteria
outlined in the Code of Laws .
The criteria for approval ofboth an ESTIP and a BDZ agreement are as follows:
1. The amount of enhanced sales tax (and use tax for a BDZ agreement) which can
reasonably be anticipated to be derived by the city through the expanded or new tax
generating business ;
2 . The public benefits which are provided by the applicant through public works , public
improvements , additional employment for city residents ;
3. The amount of city expenditures which may be deferred by the city based upon public
improvements to be completed by the applicant; and
4. The confonnance of the applicant's property or project with the comprehensive plan and
zoning ordinances of the city.
On May 14 , 2012 , City Council adopted Resolution 24-2012 which established the entire
incorporated City of Wheat Ridge as a Business Development Zone. The Resolution also
stipulated that the BDZ Program would be used as an economic development incentive to target
businesses that will enhance the City 's sales and use tax base and create jobs to include, but not
limited to , the following:
Study Session -The Green Herb
August 26, 2013
Page 3
a. Niche and Specialty retail -gardening, landscaping, and produce retailers; outdoor
lifestyle and recreation retailers; full service, sit-down restaurants; furniture, hardware
and clothing stores.
b. Primary employers -medical-related facilities and supporting services to complement
Exempla Lutheran hospital , and clean energy and biotechnology companies to locate in
the Clear Creek Crossing or TOD area.
STAFF RECOMMENDATIONS:
Staff recommends a 50% ESTIP for a period of 3-years, with no cap on the total amount of
incremental sales tax that can be rebated back to The Green Herb. The estimated incremental
sales tax rebate over the 3-year period is $7,500.
Staff also recommends a 100% rebate of the building use tax to the Green Herb in the amount of
$13 ,500 upon completion ofthe Project and audit by City staff.
Staff recommends funding this Project for the following reasons:
1. The Project meets the objectives of the City's economic development goals by providing
new development and jobs in the City of Wheat Ridge; and
2 . The Project could be a catalyst for the redevelopment of adjacent properties along the
Kipling corridor; and
3. The Project site has been difficult to develop due to the odd site layout and configuration;
and
4. The Project will generate enhanced sales and use tax revenues and increased
employment.
ATTACHMENTS:
1. Proposed ESTIP Agreement with The Green Herb
2. Proposed BDZ Agreement with The Green Herb
AGREEMENT PURSUANT TO ENHANCED SALES TAX INCENTIVE PROGRAM
This Agreement Pursuant To Enhanced Sales Tax Incentive Program (thi s
"Agreement ") is made and entered into as of the __ day of , 2013 , by
and between MUSEL MASSTER , LLC located at 4565 Kipling Street, Wheat Ridge, CO
80033 , hereinafter referred to as the "Owner'' and the CITY OF WHEAT RIDGE ,
COLORADO, hereinafter referred to as the "City," collectively the "Parties ," and each
individually, as a "Party."
RECITALS:
Whereas , the City has adopted Chapter 22 , Article 69 -84 of the Wheat Ridge
Code of Laws , entitled the Enhanced Sales Tax Incentive Program (the "ESTIP
Program "), a copy of which is attached hereto as Exhibit A, to encourage , in part , the
establishment of retail sales tax generating businesses within the City; and
Whereas , the Owner desires to participate in the ESTIP Program and to share in
the enhanced sales tax derived from the property, generally located at 4565 Kipling Street
in Wheat Ridge , Colorado and more particularly described in Exhibit B , attached hereto
and incorporated by this reference (the "Property"), for the installation of Public
Improvements described in Exhibit C , attached hereto and incorporated by this reference
(the "Public Improvements") to the extent allowed by this Agreement and the ESTIP
Program.
NOW , THEREFORE , in consideration of the foregoing premises and the
covenants , promises , and agreements of each of the Parties hereto , to be kept and
preformed b y each of them , the Parties agree as follows:
1. Recitals . The Recitals set forth above are incorporated in this Agreement
by reference.
2. Term. The term of this Agreement shall commence on the first day of the
calendar month following the month in which the Owner receives their Certificate of
Occupancy on the Property and shall terminate in three (3) years , unless otherwise
provided in this Agreement (the "Term"). The Term of this Agreement shall
automatically renew for each additional one year period to the extent required by Section
4( d) hereof.
3. Application of City Code. This Agreement is subject to the limitations of
the ESTIP Program, as found in the City of Wheat Ridge Code of Laws . In the event of
conflicts between this Agreement and the ESTIP Program , the ESTIP Program shall
control.
4. Qualification of Property for the ESTIP Program. The City agrees that
the Property qualifies for the ESTIP Program and the Public Impro vements are
improvements for public and /or public related purposes that will stimulate the economy
of and within the City, provide employment opportunities for residents of this City and
others, expand the goods available for purchase and consumption by residents of the City,
and increase sales taxes collected by the City. The City finds the business is reasonably
likely to generate enhanced sales taxes of at least Fifteen Thousand Dollars ($15,000)
over the full tenn of this Agreement. The following provisions shall apply for each year
in which the ESTIP Program is in effect for the Property:
a. FIFTY percent (50%) of the "Enhanced Sales Taxes" collected by the City and
derived from the Property shall be segregated by the City to be utilized for the
ESTIP Program herein established and approved (the "Allocated Revenues"). For
purposes of this Agreement "Enhanced Sales Taxes" shall have the meaning set
forth in the ESTIP Program at Section 22-75 of the Wheat Ridge Code of Laws.
b. The amount of Enhanced Sales Taxes shall be calculated as follows: the actual
amount of sales taxes collected on the Property during the period for 12-months
proceeding the issuance of a certificate of occupancy by the City of Wheat Ridge
(the "base amount"). The excess of collections in each such year above the base
amount shall be the Enhanced Sales Taxes for that year.
c. The Owner shall share in the Enhanced Sales Taxes derived from the Property
and the business located thereon as provided herein.
d. Enhanced Sales Taxes from the Property shall be shared and the Allocated
Revenues shall be disbursed to the Owner on an annual basis with sales taxes
collected on and after the Commencement Date. The maximum period of time
that this Agreement shall be in effect shall be THREE (3) years, commencing on
the Commencement Date. The Term will be automatically extended for one year
for up to TWO (2) additional one ( 1) year periods.
e. This Agreement is a personal agreement between the City and the Owner and
does not run with the Owner's property interest in the land. The obligations,
benefits and/or the provisions of this Agreement may not be assigned in whole or
in part without the express authorization of the City Council , acting in its sole and
exclusive discretion and no third party shall be entitled to rely upon or enforce
any provisions hereon. Notwithstanding the foregoing, Owner may assign its
interests in this Agreement to an affiliate or to a successor by consolidation. For
the purposes of this Paragraph, an affiliate means an entity which controls, is
controlled by, or is under common control with the Owner. This Agreement shall
never constitute a debt or obligation of the City within any constitutional or
statutory provision.
f. Any Enhanced Sales Taxes subject to the Agreement shall be escrowed in the
event there is a legal challenge to the ESTIP Program or to the approval of this
Agreement.
g. At the end of the Term of this Agreement as provided for herein, any monies
segregated by the City which have not been expended as hereunder provided may
be transferred to another account of the City or used in a manner detennined by
2
the City in its sole discretion , excluding any amounts escrowed under Paragraph
4.fabove.
h. The Owner shall be deemed the "owner or proprietor" of the Property for the
purposes of this Agreement and the ESTIP Program , whether or not the Owner
owns all or any portion of the Property at any relevant time , since the Owner is
coordinating the installation of the Public Improvements.
5. City's Budget Process. Each year, the City Manager shall include in a
budget presented to the City Council pursuant to Chapter X, Sec. 10 .2 of the Wheat
Ridge Home Rule City Charter, the appropriation of the Allocated Revenues for payment
to the Owner as provided in this Agreement. Nothing in this Agreement shall be
construed as obligating the City Council to appropriate the Allocated Revenues in any
fiscal year.
6. No Debt or Pecuniary Liability. Notwithstanding anything in the
Agreement to the contrary, the Agreement is specifically subject to atmual appropriation
of sufficient funds to pay the Allocated Revenue as provided in the ESTIP Program. No
multiple year fiscal obligation is created hereby. The decision of the City Council not to
appropriate funds in any given year shall not affect, impair or invalidate any of the
remaining provisions of this Agreement. None of the obligations of the City hereunder
shall be payable from any source other than Enhanced Sales Taxes.
7. Subordination. Notwithstanding anything in this Agreement to the
contrary, the Owner shall have no right , claim , lien, or priority, in or to the City 's sales
tax revenue that would be superior to or on parity with the rights , claims , or liens of the
holders of any sales tax revenue that would be bonds , notes , certificates, or debentures
payable from or secured by any sales taxes , outstanding as of the Effective Date of this
Agreement. All rights of the Owner are , and at all time shall be, subordinate and inferior
to the rights , claims and liens of the holders of any and all such sales tax revenue bonds ,
notes , certificates, or debentures, issued by the City and payable from or secured by any
sales taxes.
8. No Covenant to Construct or to Open. The intent of this Agreement is
to provide for Owner's participation in the ESTIP Program, in the event that Owner
constructs the Public Improvements. Notwithstanding any provision in this Agreement to
the contrary, Owner shall have no obligation under this Agreement to construct the Public
Improvements , and in that event, the City shall have no obligation to share any of the
Enhanced Sales taxes with Owner.
9. Remedies. The Owner waives any constitutional claims against the City
arising out of a breach of this Agreement. The Owner 's remedies against the City under
this Agreement are limited to breach of contract claims . In no event shall the Owner be
entitled to a claim , nor shall the City be liable for , any special , exemplary, punitive or
consequential damages of any kind , including economic damages or lost profits.
3
10. Severability. It is understood and agreed by the Parties that if any part,
tenn or provision of this Agreement is held by the courts to be illegal or in conflict with
any law of the State of Colorado , the validity of the remaining portions or provisions
shall not be affected , the rights and obligations of the Parties shall be construed and
enforced as if the Agreement did not contain the particular part, tenn or provision held to
be invalid , and the Pa1ties shall cooperate to cure any legal defects in the Agreement or
the ESTIP. Should the allocation of the Enhanced Sales Tax , or the payment of the
Allocated Revenues be judicially adjudged illegal , invalid or unenfo'rceable under the
present or future laws effective during the Tenn of this Agreement by a court of
competent jurisdiction in a final , non-appealable judgment, the Parties shall utilize their
best, good faith efforts to restructure this Agreement or enter into a new agreement
consistent with the purposes of this Agreement. Should the Parties be unsuccessful in
their efforts , the Agreement shall terminate without penalty or recourse to the City.
11. Governing Law. The laws of the State of Colorado shall govem the
validity, perfonnance and enforcement of this Agreement. Should either Party institute
legal suit or action for enforcement of any obligation contained herein , it is agreed that
venue of such suit or action shall be proper and exclusive in the district court for
Jefferson County, Colorado.
12. Notices. All notices required or permitted under this Agreement shall be
in writing and shall be hand delivered or sent by certified mail , retum receipt requested ,
postage prepaid , to be addressed to the Parties set forth below. All notices so given shall
be considered effective upon the earlier of the actual receipt or seventy-two (72) hours
after deposit in the United States Mail with the proper address. Either Party by notice so
given may change the address to which future notices shall be sent:
Notice to the City:
Copy to :
Notice to the Owner:
City Manager
City of Wheat Ridge
7500 W . 29th Avenue
Wheat Ridge , CO 80033
City Attomey
City of Wheat Ridge
7500 W . 29th Avenue
Wheat Ridge , CO 80033
Musel Masster, LLC
3280 Yarrow Court
Wheat Ridge , CO 80033
13. Entire Agreement-Amendments. This Agreement embodies the whole
agreement of the Parties. There are no promises, terms , conditions , or obligations other
than those contained herein and this Agreement shall supersede all previous
communications , representations or agreements , either verbal or written , between the
4
Parties hereto. This Agreement may be amended only by written agreement between the
Owner and the City acting pursuant to City Council authorization.
14. Effective Date. This Agreement shall be effective and binding upon the
Parties upon the date first set forth above . Notwithstanding any provision of this
Agreement which may be interpreted to the contrary, in the event that Owner does not
acquire title to the Property and construct and make improvements to the Property on or
before March 31 , 2014 , then upon notice by the Owner to the City, this Agreement shall
terminate and both Parties shall be relieved of all liability hereunder.
IN WITNESS WHEREOF, Owner and City have each caused this Agreement to be
executed by the authorized Parties .
State of Colorado
County of ____ _
)
) ss.
)
OWNER
Muse) Masster, LLC
Owner
The foregoing Agreement was acknowledged before me this _ day of ______ ,
20 , by as [title] of
_________________ ,Inc.
WITNESS MY HAND AND OFFICAL SEAL.
My Commission expires: _______ _
Notary Public
5
ATTEST:
Name: Janelle Shaver
Title: City Clerk
State of Colorado )
) ss.
County of Jefferson )
CITY OF WHEAT RID GE
By: __________________ _
Name: Jerry DiTullio
Title: Mayor
The foregoing Agreement was acknowledged before me this ___ day of ________ _
20_, by Jerry DiTullio as Mayor and Janelle Shaver as City Clerk, respectivel y, of the
City of Wheat Ridge, Colorado.
WITNESS MY HAND AND OFFICAL SEAL.
My Commission expires: ______________ _
Notary Public
6
EXHIBIT A
Ordinance 2001-08
The Enhanced Sales Tax Incentive Program
(The "ESTIP Program")
Sec. 22-73. -Program established.
There is hereby established within the city an enhanced sales tax incentive
program.
(Ord. No. 1988-758, § 1(24-1). 5-23-88; Ord. No. 1272, § 1, 12-9-02)
Sec. 22-74.-Purpose.
The purpose of the enhanced sales tax incentive program created by this division
is to encourage the establishment and/or substantial expansion of retail sales tax
generating businesses within the city, thereby stimulating the economy of and within the
city, thereby providing employment for residents of the city and others , thereby further
expanding the goods available for purchase and consumption by residents of the city, and
further increasing the sales taxes collected by the city, which increased sales tax
collections will enable the city to provide expanded and improved municipal services to
and for the benefit of the residents of the city, while at the same tin1e providing public or
public-related improvements at no cost, or at deferred cost, to the city and its taxpayers
and residents.
(Ord. No. 1988-758, § 1(24-2), 5-23-88; Ord. No. 1272, § 1. 12-9-02)
Sec. 22-75. -Definitions.
The following words , terms and phrases, when used in this division , shall have
the meanings ascribed to them in this section, except where the context clearly indicates a
different meaning:
Enhan ced sales tax shall mean the amount of sales tax collected by the city over
and above a base amount negotiated by, and agreed upon by, the applicant and the city,
and which amount is approved by the city council , which base amount shall never be
lower than the amount of sales taxes collected by the city at the property in question in
the previous twelve (12) months plus a reasonable and agreed upon percentage of
anticipated increase in sales taxes, or, in the case of a newly established business , an
amount which represents the good faith detennination by the applicant and the city as to
the amount of sales taxes which could be generated from the new business without the
participation by applicant in the ESTIP created under this division.
ESTJP means the enhanced sales tax incentive program created under this
division.
7
Ow n er or proprietor shall mean the record owner or operator of an individual
business , or, in the case of a shopping center, the owner of the real property upon which
more than one (1) business is operated , provided that the owner (whether an individual ,
corporation, partnership or other entity) is the owner or less or of the individual
businesses operated thereon.
(Ord. No. 1988-758, § 1(24-3}, 5-23-88: Ord. No. 1272, §I. 12-9-02)
Sec. 22-7 6. -Participation.
Participation in ESTIP shall be based upon approval by the city council
exercising its legislati v e discretion in good faith. Any owner or proprietor of a newly
establi s hed or proposed retail sales tax generating business or location , or the owner or
proprietor of an existing retail sales tax generating business or location which wishes to
expand substantially, may apply to the city for inclusion within the ESTIP provided that
the new or expanded business is reasonably likely to generate enhanced sales taxes of at
least five thousand dollars ($5 ,000 .00) in the first year of operation .
(Ord. No. 1988-758, .~· 1(24-4), 5-23-88: Ord. No. 1990-854, _,~·I, 11-26-90: Ord. No.
1272, §I, 12-9-02)
Sec. 22-77. -Approval of agreement; use of funds generally.
Approval by the city council of an agreement implementing this ESTIP shall
entitle the successful applicant to share in enhanced sales taxes derived from applicant's
property or business in an amount whjch shall not in any event exceed the enhanced sales
taxes ; provided , however, that applicant may use such amounts only for public and/or
public-related purposes such as those specified herein and which are expressly approved
by the city council at the time of consideration of the application . The time period in
which the enhanced sales taxes may be shared shall not commence until all public or
public-related improvements are completed , and shall be lirruted by the city council , in its
discretion, to a specified time , or until a s pecified amount is reached .
(Ord. No. 1988-758. ·'' 1(24-5), 5-23-88: On/ No. 2002-1240. _,,.I, 1-28-02: On/. No.
12 72, § 1' 12-9-02)
Sec . 22 -7 8. -Uses enumerated.
The uses to which the shared enhanced sales taxes may be put by an applicant
shall be strictly limited to those which are public or public-related in nature. For the
purposes of this division , public or public-related purposes shall mean public
improvements , including but not limited to streets , sidewalks , curbs , gutters , pedestrian
malls , street lights , drainage facilities , landscaping, decorative structures , statuaries ,
fountains , identification signs , traffic safety devices , bicycle paths , off-street parking
facilities , benches , restrooms , information booths , public meeting facilities , and all
necessary, incidental , and appurtenant structures and improvements, together with the
8
relocation and improvement of existing utility lines , and any other improvements of a
similar nature which are specifically approved by the city council upon the city council's
finding that said improvement are public or public-related improvements , and that such
improvements shaH enhance the competitive position of the applicant within the Denver
metropolitan area marketplace .
(Ord. No. 1988-758, § 1(24-6}, 5-23-88; Ord. No. 1272, § 1, 12-9-02)
Sec. 22-79.-Increments, sharing of funds.
The base figure for sales taxes shall be divided into twelve (12) monthly
increments , which increments are subject to agreement between the parties , and approval
by the city council , and which increments shall be reasonably related to the average
monthly performance of the business or property in question, or similar businesses in the
area (i.e . adjust for seasonal variations). If in any month the agreed upon figure is not met
by applicant so as to create enhanced sales tax for that month , no funds shall be shared
with applicant for that month, and no increment shall be shared until that deficit , and any
other cumulative deficit, has been met , so that at the end of any twelve-month cycle,
funds in excess of those enhanced sales taxes agreed to be shared shall not have been
shared with any applicant.
(Ord. No. 1988-758, § 1(24-7). 5-23-88; Ord. No. 1272, ,, 1. 12-9-02)
Sec. 22-80. -Revenues restricted.
It is an ov erriding consideration and determination of the city council that
existing sources of city sales tax revenues shall not be used , impaired , or otherwise
affected by this enhanced sales tax incentive program. Therefore, it is hereby
conclusively determined that only enhanced sales taxes generated by the properties
described in an application shall be subject to division under this ESTIP . It shall be the
affrrmative duty of the treasurer to collect and hold all such enhanced sales taxes in a
separate accow1t apart from the sales taxes generated by and collected from the other
sales tax generating uses and businesses within the city and to provide an accounting
system which accomplishes the overriding purpose of this section. It is conclusively
stated by the city council that this division would not be adopted or implemented but for
the provisions of this section .
(Ord. No. 1988-758, ,\r; 1(24-8), 5-23-88; Ord. No. 1272, § 1, 12-9-02)
Sec. 22-81. -Capital improvement fund.
The one (1) percent of sales and use taxes earmarked for the capital improvement
fund may be utilized in tllis ESTIP for public improvements so long as the same are
within the meaning of the phrase capital improvements as defined in the voter approved
sales tax referendum prev iou sly held within the city, and provided that the same are
found and determined by the city council to be capital in1provements which could be
9
provided by the city from the capital improvement fund but for the provision of such
improvements by the applicant; provided, however, that such use of capital improvement
funds as part of this ESTIP shall be limited to the amount agreed pursuant to section 22-
83 hereof; provided further , however, that nothing contained herein shall limit the city
council in the determination to appropriate additional capital improvement funds for
capital improvements affecting the property in question as a part of the city's regular
appropriation and budget process.
(Ord. No. 1988-758. § 1 (24-9). 5-23-88; Ord. No. 1272. §I. I 2-9-02)
Sec. 22 -82. -Criteria for approval of application.
Approval of an application for inclusion in this E STIP shall be gi ven by the city
council , at a public hearing held as a portion of a regularly scheduled city council
meeting , based upon the following criteria :
(1)
(2)
(3)
(4)
(5)
(6)
The amount of enhanced sales taxes which are reasonably to be
anticipated to be deri ved by the city through the expanded or new retail
sales tax generating business ;
The public benefit s which are prov ided by the applicant through public
works , public improvement s , additional employment for city residents ,
etc;
The amount of expenditures which may be deferred by the city based
upon public improvements to be completed by the applicant ;
The conformance of the applicant's property or project with the
comprehensive plan and zoning ordinances of the city;
The a greement required by section 22-83 having been reached , which
agreement shall contain and conform to all requirements of section 22-83
Approval shall be by motion adopted by a majority of the entire city
council.
(Ore/. No. 1988-758. ,, .. ; 1(24-10). 5-23-88; Ord. No. 1272, § 1. 12-9-02)
Sec. 22-83. -Agreement required.
Each application for approval submitted to the city council shall be subject to
appro val by the council solely on it s own me rits. Approv al of an application shall require
10
that an agreement be executed by the owner and the city, which agreement shall, at a
minimum, contain:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
A list of those public or public-related improvements which justify
applicant's approval , and the amount which shall be spent on such
improvements;
The maximum amount of enhanced sales taxes to be shared , and the
maximum time during which the agreement shall continue, it being
expressly understood that any such agreement shall expire and be of no
further force and effect upon the occurrence of the earlier to be reached
of the maximum time of the agreement (whether or not the maximwn
amount to be shared has been reached) or the maximum amount to be
shared (whether or not the maximum time set forth has expired);
A statement that this is a personal agreement which is not transferable
and which does not run with the land ;
That this agreement shall never constitute a debt or obligation of the city
within any constitutional or statutory provision;
The base amount which is agreed upon by month , and the fact that if, in
any month as specified , sales taxes received from the property do not at
least equal such amount, that there shall be no sharing of funds for such
month;
The base amount shall be agreed upon which shall consider the historic
level of sales at the property in question, or a similar property within the
area in the event of a new business, and a reasonable allowance for
increased sales due to the improvements and upgrades completed as a
result of inclusion within this program;
A provision that any enhanced sales taxes subject to sharing shall be
escrowed in the event there is a legal challenge to this enhanced sales tax
incentive program or the approval of any application therefor;
An a f firmative statement that the obligations, benefits, and/or provisions
of this agreement may not be assigned in whole or in any part without the
II
(9)
expressed authorization of the city council, and further that no third party
shall be entitled to rely upon or enforce any provision hereof;
Any other provisions agreed upon by the parties and approved by the city
council.
(Ord. No. 1988-758, § 1(24-ll), 5-23-88: Ord. No. 1272, ·'' 1, 12-9-02)
Sec. 22-8 4 .-Joint ve ntu re; li a bility .
The city council has enacted this ESTIP as a joint benefit to the public at large
and to private owners for the purposes of providing the city with increased sales tax
revenues generated upon and by properties improved as a result of this program ; public
improvements being completed by private owners through no debt obligation being
incurred on the part of the city, and allowing applicants an opportunity to improve
properties which generate sales activities , which improvements make those propetties
more competitive in the marketplace and further provide to the applicant additional
contingent sources of revenues for upgrading such properties. The city council
specifically finds and determines that creation of this ESTIP is consistent with the city's
powers as a home rule municipal corporation, and that exercise of such powers in the
manner set forth herein is in furtherance of the public health , safety and welfare .
Notwithstanding any prov ision hereof, the city shall never be a joint venture in any
private entity or activity which participates in this ESTIP , and the city shall never be
liable or responsible for any debt or obligation of any participant in ESTIP.
(Ord. No. 1988-758. -~ 1(24-12), 5-23-88: Ord. No. 1272, § 1. 12-9-02)
12
EXHIBITB
Legal Description ofthe Property
13
EXHIBIT C
Qualifying Public Improvement Costs
New construction on a blighted lot on Kipling Street. Public Improvements include:
• New public parking lot with striping and drainage for water quality and area
drainage assistance. Includes asphalt, excavation for drainage, impervious pavers
-$110,877
• Public curb gutter and sidewalk with drainage aiding adjoining businesses -
$24 ,310
• Landscaping aiding in carbon dioxide exchange and creating a greener
environment-$23 ,380
14
AGREEMENT TO PARTICIPATE IN THE
CITY OF WHEAT RIDGE BUSINESS DEVELOPMENT ZONE PROGRAM
This Agreement to Participate in the City of Wheat Ridge Business Development Zone
Program (this "Agreement") is made and entered into as of the __ day of , 2013, by
and between MUSEL MASSTER, LLC, located at 4565 Kipling Street, hereinafter referred to as
the "Owner" and the CITY OF WHEAT RIDGE, COLORADO, 7500 W. 291h Avenue, Wheat
Ridge, Colorado 80033 hereinafter referred to as the "City," collectively the "Parties," and each
individually, as a "Party."
WHEREAS, the City has adopted as a portion of the Wheat Ridge Code of Laws
("Code") Chapter 22, Article I, Division 5, "Business Development Zone" (the "Program"), to
encourage, in part, continued development and expansion of opportunities for employment in the
private sector in the City; and
WHEREAS, Owner has applied to participate in the Program; and
WHEREAS, Owner is the owner and operator of a business within the City known as the
"Musel Masster, LLC, dba The Green Herb," which is a retail outlet center offering herbal
supplements and chiropractic services; and
WHEREAS, Owner plans to construct a new building with an estimated project valuation
of$750,000 on property located at 4565 Kipling Street; and
WHEREAS, pursuant to Code Sec. 22-86 (b), the City Council has designated the real
property owned by Musel Masster, LLC as a "Wheat Ridge Business Development Zone"; and
WHEREAS, Owner's construction plans will lead to increased employment from their
current 16-employees to approximately 20-22 employees; and
WHERAS, increased employment will lead to other indirect spending and sales tax
generation by those employees in other local establishments; and
WHEREAS, the Program allows the City to provide for the sharing of certain categories
of fees, taxes and other business development-related charges for new development within the
business development district ("Eligible City Fees, Charges and Taxes" as defined in Code Sec.
22-87 (1 )) to the extent allowed by an agreement with a business owner; and
WHEREAS, cost-sharing at the rate prescribed herein will serve to aid the expansion of
Muse] Masster, LLC in that it will alleviate a portion of the costs associated with the expansion.
NOW, THEREFORE, in consideration of the foregoing, and the covenants, promises, and
agreements of each of the Parties hereto, to be kept and preformed by each of them, the Parties
agree as follows:
1. Recitals. The Recitals set forth above are incorporated in this Agreement by reference
2 . Term.
The tenn of this Agreement shall commence on , 2013 and shall terminate upon
full refund by the City to Owner of eligible City fees , charges and taxes as set forth in Paragraph
7 (the "Term"). Notwithstanding the foregoing , it is an expressed provision of this Agreement
that this Agreement shall expire and be of no further force and effect upon the occurrence of the
earlier to occur of: (1) expiration of the Tenn or (2) payment of the maximum amount to be
shared as set forth in Paragraph 7 (whether or not the Tenn has expired), or (3) determination by
the City of Owner's default, as provided in Paragraphs 13 or 15.
3. The Project.
The project proposed by the Owner through which it desires to participate in the Program
consists of the following , generally:
The Green Herb is an existing Wheat Ridge retail , service and manufacturing company
and has been in operation in Wheat Ridge since 1994. The Green Herb currently leases space at
11465 I-70 Frontage. The Green Herb specializes in providing vitamins and healthy alternatives
to traditional medicine that include chiropractic and massage services. The project consists of the
construction of a new retail , warehousing, and office building measuring approximately 8,242
square feet which will contain a retail component, office space for the chiropractic and massage
services, manufacturing, shipping and office space. The project will include public
improvements including new curb , gutter, sidewalk , drainage improvements for the site and
surrounding areas , and landscaping to improve the visual aspect of the corridor. The project has
a valuation of$750,000 . The foregoing shall be collectively referred to herein as the "Project".
4 . Representations of Owner. Pursuant to Code Sec. 22-94 , Owner hereby represents to
the City the following:
a. Improvements justifying Project approval. An estimated $750,000 of new construction
and improvements will be invested into the property. Of this amount, $177,595 is
considered public or public-related improvements as detailed in Exhibit A .
b. Expected incremental future tax revenue . Estimated Incremental future sales and use tax
revenue will include the following :
1. Incremental Sales Tax of $5 ,000 is anticipated to be generated in year one of
operation and increase year-to-year.
11. Use Tax of $13 ,500 has been paid to the City of Wheat Ridge for a building
permit issued on February 2 , 2013.
111. Short-term positive impact during construction: Prior to the completion of the
Project , the construction and tenant improvement phases will employ additional
personnel.
2
tv. Long-term positive impact by addition of staff: With new facilities and an ability
to increase services , Owner will employ more pennanent staff. Specifically, it is
estimated that an additional 4-6 full-time permanent staff will be added to
Owner's headquarters.
v. An indirect benefit will be an increase in the number of visitors to the City as
customers of this new business who may shop at other City businesses as well as
opportunities for Wheat Ridge businesses to provide industrial and office products
to the Owner, likely contributing to the City 's tax base.
5. Personal agreement; non-transferable; no third party beneficiaries
The cost-sharing of Eligible City Fees , Charges and Taxes as approved herein shall
constitute a personal agreement between the City and Owner. The terms of this Agreement do
not run with the land. The obligations , benefits and/or provisions of this Agreement may not be
assigned in whole or in any part without the express authorization of the City Council. No third
party shall be entitled to rely upon or enforce any provision hereof.
6. Agreement not to constitute debt or obligation of the City
Nothing herein shall be construed to constitute a debt or obligation of the City.
Notwithstanding any other provision of this Agreement to the contrary, the Parties understand
and acknowledge that the City is subject to Article X , § 20 of the Colorado Constitution
("TABOR"). This Agreement does not create a multi-fiscal year direct or indirect debt or
obligation within the meaning of TABOR and , therefore, notwithstanding anything in this
Agreement to the contrary, all payment obligations of the City are expressly dependent and
conditioned upon the continuing availability of funds beyond the term ofthe City 's current fiscal
period. Financial obligations of the City payable after the current fiscal year are contingent upon
funds for that purpose being appropriated , budgeted , and otherwise made available in accordance
with ordinances and resolutions of the City and other applicable law.
7. Cost-sharing
Pursuant to Code Sec. 22-88 , cost-sharing of the Eligible City Fees, Charges and Taxes may be
granted up to the expected incremental future sales and use tax revenue to be generated by the
Project during the agreed to time period. It is anticipated that the building use tax revenue
received from the Project will be $13 ,500 and incremental sales tax revenue during the term of
this Agreement will be $15 ,000 for a total of$28,500.
a . Estimated Eligible City Fees, Charges and Taxes. The following are estimates of the
eligible City fees , charges and taxes for this Project:
1. Engineering Review Fee:
11. Permit Fee:
iii. Plan Review Fee :
I V . Sidewalk Fee:
v. Building Use Tax :
$800.00
$5087.05
$3 ,306.58
$4 ,477.28
$13 ,500.00
3
b. Cost-sharing. In reliance upon the representation of Owner of the benefits to the City of
the Project, the City and Owner agree to the cost-sharing for the Eligible City Fees ,
Charges and Taxes as follows:
Upon receipt thereof, the City shall refund I 00% of such eligible building use tax
back to the Owner in one equal payment. In no event shall the City be obligated to
refund more than I 00% of eligible building use tax received by it.
8. Legal challenge
In the event of legal challenge to the Program as applied to Owner, any costs scheduled
to be shared-back to Owner shall be escrowed until resolution of the dispute.
9. Waiver of Code requirements
To the extent any requirements of Code Sees. 22-85 through 22-96 have been waived ,
such waiver has occurred pursuant to Code Sec. 22-93 (c) whereby the City Council has found
by a % majority vote that such waiver is in the public's interest and will provide a substantial
benefit to the City.
10. No joint venture
Pursuant to Code Sec. 22-95 , nothing herein shall be construed to create a joint venture
between the City and Owner. Notwithstanding any provision hereof, the City shall never be a
joint venture in any private entity or activity which participates in the Program, and the City shall
never be liable or responsible for any debt or obligation of any participant, including the Owner,
in the Program.
11. Use of funds
Pursuant to Code Sec. 22-89 , Owner expressly acknowledges and agrees that any eligible
City fees , charges and taxes refunded to the Owner under this Agreement, up to the amount
agreed upon by the City Council pursuant to this Agreement may only be used for the purpose of
the Project , as described in Paragraph 12 , on Owner's Property within the underlying Business
Development Zone.
12. Uses enumerated
Pursuant to Code Sec. 22-90 , the uses to which the eligible City fees , charges and taxes
may be put by the Owner shall be strictly limited to those which are approved by the City
Council and which relate directly to the Project within the City, which Project is anticipated to
indirectly generate more municipal sales and use tax revenues for the City in the future. Uses
hereby expressly approved by City Council are detailed in Exhibit A.
13. No Covenant to construct or to operate
The intent of this Agreement is to provide for Owner's pm1icipation in the Program , in
the event that Owner completes the Project. Notwithstanding a11y provision in this Agreement to
4
the contrary, Owner shall have no obligation under this Agreement to complete the Project. In
the event Owner fails to complete the Project, this Agreement may be tenninated at the option of
the City.
14. Remedies
The Owner waives any constitutional claims against the City arising out of a breach of
this Agreement. The Owner's remedies against the City under this Agreement are limited to
breach of contract claims. In no event shall the City be liable for any form of damages , including
without limitation: exemplary, punitive or consequential damages , including economic damages
and lost profits.
15. Termination
In the event Owner fails to comply with one or more of the terms of this Agreement, the
City may, in its sole discretion, terminate this Agreement.
16. Indemnification
To the fullest extent permitted by law , Owner agrees to indemnify and hold the City
ham1less from any damage, liability or cost (including reasonable attorneys ' fees and cost of
defense) to the extent caused by the Owner's negligent acts , errors or omissions in the
perfonnance of this Agreement and those of its sub-contractors , sub-consultants or anyone for
whom the Owner is legally liable . To the extent permitted by the Colorado Constitution and
statutes , the City agrees to indemnify and hold the Owner harmless from any damage, liability or
cost (including reasonable attorneys ' fees and costs of defense) to the extent caused by the City 's
negligent acts , errors or omissions arising from this Agreement. These defense and
indemnification obligations shall survive the expiration or tennination of this Agreement. The
Parties acknowledge that the provisions of this Paragraph are not intended to waive or alter any
of the rights and defenses afforded to the City under the common law , the Colorado
Governmental Immunity Act, C.R.S. §§ 24-10-101 , et. seq. or any other law.
17. Severability
If any part, term or provision of this Agreement or the Program is held by a court of
competent jurisdiction to be illegal or in conflict with any law of the State of Colorado , the
validity of the remaining portions or provisions shall not be affected , the rights and obligations of
the Parties shall be construed and enforced as if the Agreement did not contain the particular
part, term or provision held to be invalid , and the Parties shall cooperate to cure any legal defects
in the Agreement or the Program. Should the sharing of eligible City fees , charges and taxes
pursuant to this Agreement be judicially adjudged illegal , invalid or unenforceable under the
present or future laws effective during the Term of this Agreement by a court of competent
jurisdiction in a final , non-appealable judgment, the Parties shall utilize their best, good faith
efforts to restructure this Agreement or enter into a new agreement consistent with the purposes
of this Agreement. Should the Parties be unsuccessful in their efforts , the Agreement shall
terminate without penalty or recourse to either Party.
5
18. Governing law; ven ue
The laws of the State of Colorado shall govern the validity, perfonnance and enforcement
of this Agreement. Should either Party institute legal suit or action for enforcement of any
obligation contained herein , it is agreed that venue of such suit or action shall be proper and
exclusive in the district court for Jefferson County, Colorado.
19. N oti ces
All notices required or permitted under this Agreement shall be in writing and shall be
hand delivered or sent by certified mail , return receipt requested , postage prepaid , to be
addressed to the Parties set forth below. All notices so given shall be considered effective upon
the earlier of the actual receipt or seventy-two (72) hours after deposit in the United States Mail
with the proper address . Either Party by notice so given may change the address to which future
notices shall be sent:
Notice to the City:
Copy to:
Notice to the Owner:
Copy to:
20. E nt ire agreemen t-amen dme nts
City Manager
City of Wheat Ridge
7500 W. 29th Ave.
Wheat Ridge, CO 80033
City Attorney
City of Wheat Ridge
7500 W. 29 th Ave.
Wheat Ridge, CO 80033
Wheat Ridge, CO 80033
[INSERT CONTACT]
Address
This Agreement embodies the whole agreement of the Parties. There are no promises ,
tenns , conditions , or obligations other than those contained herein , and this Agreement shall
supersede all previous communications, representations or agreements , either verbal or written ,
between the Parties hereto . This Agreement may be amended only by written agreement
between the Owner and the City acting pursuant to City Council authorization .
6
21. Effective date
This Agreement shall be effective and binding upon the Parties upon the date first set
forth above.
IN WITNESS WHEREOF, Owner and City have each caused this Agreement to be
executed by their authorized representatives.
State of Colorado
County of Jefferson
)
)
)
OWNER
By: ----------------
Name: --------------
Title: --------------
ss.
The foregoing Agreement was acknowledged before me this _ day of __________ , 2011 , by
Tom Phillips , as President of Muse! Masster, LLC.
WITNESS MY HAND AND OFFICIAL SEAL.
My Commission expires: ______________ _
NOTARY PUBLIC
7
ATTEST:
Name: Janelle Shaver
Title: City Clerk
CITY OF WHEAT RIDGE
By: __________________ __
Name: Jerry DiTullio
Title: Mayor
Approved as to Form
Gerald E. Dahl , City Attorney
8
EXHIBIT A
Qualifying Public Improvement Costs
Public Improvements include:
• New public parking lot with striping and drainage for water quality and area drainage
assistance . Includes asphalt, excavation for drainage, impervious pavers -$110 ,877
• Public curb gutter and sidewalk with drainage aiding adjoining businesses -$24 ,31 0
• Landscaping aiding in carbon dioxide exchange and creating a greener environment -
$23 ,380
9