Loading...
HomeMy WebLinkAboutResolution 2012-0032CITY OF WH EAT RIDG E, COLORADO RESO L UTION NO . 32 Series of 2012 TITLE: A RESOLU TION AUTHORIZING THE EXECU TI ON OF AN AGR EE MEN T A LLOWING KING SOOPERS, INC . TO PARTIC IPATE IN THE WHEAT RIDGE BUSINESS DEVELOPMENT ZONE PROGRAM FOR THE REBATE OF BUILDING USE TAX IN AN AMOUNT NOT TO EXCEED $100,000 IN ASSOCIATION WITH TH E REMOD EL OF THEIR FACILITY AT 38 TH AND SHERIDAN BOULEVARD 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 UProgram "), 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 i n the Program and a public hearing was posted and conducted ; and WHEREAS , Owner is the owner and operator of leased space and improvements thereon within the City and known as the "Owner," and is the operator of a grocery store serving residents of Wheat Ridge and surrounding communities; and WHER EAS , pursuant to Code Sec. 22-86 (b), the City Council has designated the rea l property leased by Owner as a "Wheat Ridge Business Development Zone "; and WHEREAS , Owner plans to construct tenant improvements totaling approximately $5 .8 million ; and WHEREAS , the project reta ins necessary neighborhood services and brings revenue to the City from surrounding communities -a true definition of economic development; and WHEREAS; the project Retains 50 plus full -time and 100 plus part-time jobs within the center, and WHEREAS; the project creates new revenue through permit fees, and use tax on furniture , fixtures and equipment; WHEREAS ; the project spurs reinvestment and remodeling of the entire existing center on this signature corridor , thus enhancing and preserving its economic viability in the City; and WHEREAS; the project extends the lease and King Soopers commitment to this shopping center and the City of Wheat Ridge to 2033 ; and WH EREAS , the Program allows the City to provide for t h e 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 (2)) to the extent allowed by an agreement with a business owner; and WHEREAS , cos t -sharing at the rate prescribed he rein will serve to aid t he expansion of Owner in that it will alleviate a portion of the costs associated with the expansion . NOW, THEREFORE , BE IT RESOLVED by the C ity Counc il of the City of Wh eat Ridge, Colorado , as follows : Agrees to execute an Agreement to Participate in the City of Wheat Ridge Business Development Zone Program wherein an amount not to exceed $100 ,000 of approved and audited building use tax will be abated to Dillon Companies, Inc., a Kansas Corporation dba King Soopers. \ ATTEST: AGRE EMENT TO PARTICIPATE IN THE C ITY OF WHEAT RIDGE B US I NESS D EVELOPMEN T 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 June 25 , 2012 , by and between the Di llon Companies, Inc., a Kansas Corporation (dba King Soopers), for the store located at 3817 Sheridan Blvd . in the City of Wheat Ridge , Co lorado, hereinafter referred to as the "Owner" and the C ITY OF WHEAT RIDGE, COLORADO, 7500 W . 291h Avenue, Wheat Ridge, Co lorado 80033 hereinafter referred to as the "City," collectively t he "Parties ," and each individual ly, as a "Party." WHEREAS , th e C ity has adopted as a portion of the Wheat Ri dge Code of Laws ("Code") Chapter 22 , Article I, Divis ion 5, "Business Developmen t Zone" (the "Program"), to encourage, in part. continued development and expansion of opportunities for employmen t in the private sector in the City; and WHEREAS , Owner has appl ied to participate in the Program and a public hearing was posted and conducted; a n d WHEREAS , Owner is the owner and operator of leas ed space within the City (the "Property") and is the operator o f a gro cery store serving residents o f Wheat Ridge and surrounding communit ies; and WHEREAS , pursuan t to Code Sec. 22-86 (b), the City Council has designated the Property as a "Wheat Ridge Business Development Zone"; and WHEREAS , Owner plans to construct tenant impr ovements totaling approximately $5 .8 on the Property, which improv ements are referred to herein as the "Project ;" and WHEREAS, Owner's tenant improv ements w ill lead to increased sales tax fo r the City of Wheat Ridge ; and WHEREAS , the project retains necessary neighborhood services and brings revenue to the City from surrounding communities -a true definition o f economic development: and WHEREAS; the Project retains 50 plus fu ll -time and I 00 plus part-time jobs within the shopping center where the Property is located , and WHEREAS ; the Project creates new revenue through permit fees , use tax on furniture, fixture s and equipment and incremental sales tax ; WHEREAS; the Project spurs reinvestment and remodeling of the ent ire existing center on thi s signature corridor, thus enhancing and preserving its economic viab il ity in the City; and WHEREAS ; the Project extend s the leas e and King Soopers' commitment to this shopping center and the C ity of Wheat Ridge to 2033 ; 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 (2)) to the extent aJiowed by an agreement with a business ovmer; and WHEREAS, cost-sharing as provided herein will serve to aid the Owner in that it will alleviate a portion of the costs associated with the Project. 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: l. Recitals. The Recitals set forth above are inco'l'orated in this Agreemen t by reference 2. Term. The term of this Agreement shaJI commence on June 25, 2012 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 express provision of this Agreement that this A&'Teement shall expire and be of no further force and effect upon the occurrence of the (I) payment of the maximum amount to be shared as set forth in Paragraph 7 or (2) 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: lease space property upon which to construct tenant improvements in the an1ount of over $5.8 million that will include interior and exterior improvements to the Owner site. The foregoing shall be collectively referred to herein as the "Project," and is more fully described below at Sections 4 and 7. 4 . Representations of Owner. Pursuant to Code Sec. 22-94, Owner hereby represents to the City the following: a. Improvements justifying Project approval. 1. Revitalization of land. The Project will invest an estimated $2.1 million in an interior and exterior remodel of the building with plans subject to approval by the City of Wheat Ridge Commuruty Development Department and $3.7 in furniture, fixtures and equipment. The Scope of Development is attached as Exhibit A. u. Estimated cost. The cost for the initial phase of the Project including the improvements described above is estimated to be approximately FIVE MILLION EIGHT HUNDRED THOUSAND DOLLARS ($5,800,000). 2 b. Expected incremental future tax revenue. Owner operates a for-profit corpor ation. It is anticipated the Project will directly generate futu re incremental sales and use tax revenue. Other indirect benefits to the community which have been identified by the Owner include: 1. Short-tenn positive impact during construction: Prior to the completion of the Project, the tenant impr ovement phase will employ additional personnel in the construction phase; 11. This Project may lead to exterior improvements by the owners and tenants of the remainder of the shopping center. u1. Retains necessary neighborhood services and brings revenue to the City from surrounding communities -a true definition of economic development; IV. Retains 50+ fu ll -time and I 00+ part-time jobs within the center; v. Creates new revenue through pennit fees and use tax on furniture, fixtures and equipment; v1. Extends the lease and King Soopers' commitment to this shopping cen ter and the City of Wheat Ridge to 2033. 5. P er sonal a gree men t; non-transf er a ble; 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 tenns of this Agreement do not run with the Owner's property interest in 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. A greement n ot t o co n stitute d e bt or obligation of the C ity 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 thjs Agreement to the contrary, all payment obligations of the City are expressly dependent and condi tion ed upon the continuing availabi lity of funds beyond the tenn of the City's current fisca l period ending upon the next succeeding December 3 I . Financial obligations of the City payable after the current fiscal year are contingent upon funds for that purpose being appropriated, budgeted, and othen.vise made available in accordance with ordinances and resolutions of the City and other applicable Jaw. 7. C os t -sharing 3 a. Estimated Eligible City Fees, Charges and Taxes. The following are estimates of the Eligible City Taxes which are the subject of the cost-sharing herein. • Eligible Use Tax: a. Approximately $3.12 million in equipment purchase to include items such as: refrigeration units , deli and meat cases, ovens , proofers, shelving, pallet jackets and other equipment to be used within the building remodel b. Approximately $610,000 in fixture purchases to incl ude items such as: lighting, decors , doors, sinks, air conditioning units, coupling towers and other fixtures to be used within the building remodel c . Approximately $2.1 mi11ion in building valuation for the interior and exterior of the building b. Expected Incremental Building Use Tax Revenue. The Expected Building Use Tax Revenue, as s uch tenn is defined in Code Sec. 22-87 (2) is projected to be approximately $102,600. c. Cost-sharing. Pursuant to Code Sec. 22-88, cost-sharing of the Eligible City Fees, Charges and Taxes, this Agreement shaJJ be limited to Building Use Tax Revenue. Notwiths tanding the foregoing , and in rel iance upon the representation of Owner of the benefits to the City of the Project, the City and Owner agree to Lhe cost-sharing for the Eligible City Fees, Charges and Taxes as foJlows: i. 100% of the Eligible City Building Use Taxes shaH be due and paid to the City by Owner for tenant improvements. 11. Upon receipt thereof of aU owed use tax , the City shall refund 100% of such Eligible City Building Use Taxes back to the Owner in one payment of $100,000, subject to review and approval by the City of properly documented expenditures for eligible improvements as described at Paragraph I 2. iii. In no event shall the City be obligated to refund more than $1 00 ,000 of eligib le City Building Use Tax revenues received by it. 8. Lega l c hallen ge In the event of legal challenge to the Program as applied to Owner, any costs scheduled to be share-d-back to Owner shal1 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 bas occurred pursuant to Code Sec. 22-93 (c) whereby the City Council has found 4 by a ~ majority vote that such waiver is in the public's interest and will provide a substantial benefit to the City. l 0. 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 shal l never be a joint venture in an y private entity or activity which participates in the Program, and the City shall never be liable or responsible for any debt or ob ligation of any participant, including the Owner, in the Program. 11. Use of funds Pursuant to Code Sec. 22-89, Owner expressly acknowledges and agrees !bat any El igible Use Tax , Fees, and Charges refunded to the Own er 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 enumera ted Pursuant to Code Sec. 22-90, the uses to which the Eligible Use Tax, Fees, and Charges may be put by the Owner shall be strictly limited to those wh ich are app roved by the City Council and which relate directly to the Project within the City, which Project is anticipated to directly generate more municipal sales and use tax revenues for the City in the future. Uses hereby expressly approved by City Council are as follows: • Building materials for the interior and exterior improvements to the King Soopers located at the northwest comer of Sheridan Bou levard and 381h A venue in Wheat Ridge; 13. No cove n ant to construc t or to op erate The intent of this Agreement is to provide for Owner's participation in the P rogram, in the event that Owner completes the Project. Notwithstanding any provision in this Agreement to the contrary, Owner shall have no obligation under this Agreement to complete the Project or operate the Project once completed or otherwise. In the event Owner fails to complete the Project, this Agreement may be terminated at the option of the City. 14. R em edi es 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. 5 15. Termination In the event Owner fails to comply with one or more of the terms of this Agreement , 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 harmless from any damage, liability or cost (includi ng reasonable attorneys' fees and cost of defense) to the extent caused by the Owner's negligent acts, errors or omissions in the performance 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 h old 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 ob ligations 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 Governrnentallmrnunity Act, C.R.S. §§ 24-10-101, et. seq. or any other Jaw. 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 s haring 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 Abrreement by a court of competent jurisdiction in a final , non-appealable judgment, the Parties s ha11 utilize their best, good faith effo rt s 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 eiilier Party. 18. Governing law; venue 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. 19. Notices All notices required o r pennjtted under this Agreement shall be in writing and shall be hand delivered or sent by certified mail, return receipt requested, postage prepaid, to be 6 EXHIBIT A SCOPE O F DEVELOPMENT Qualifying Public fmprovement Costs J(jng Soopers' public improvements are designed to provide a greater product selection to benefit the community as well as exterior improvements to enhance the property. The interior remodel will accommodate the expansions and additions of meat and seafood , organic produce, prepared foods, deli offerings, health and beauty, dairy with organic offerings, and additiona l departments (floral, baby and a branded cafe/coffee option). In addition, J(jng Soopers public improvements include paint and facade upgrades to the exterior of the store. King Soopers estimates the public improvements investment breakdown to be as fo l lows: • Approximately $3 .12 million in equipment purchase to incJude items such as: refrigeration units, deli and meat cases , ovens, proofers , shelving, pallet jackets and other equipment to be used within the building remodel • Approximately $6 I 0,000 in fixture purchases to incJude items such as: lighting, decors, doors, sinks, air conditioni ng units. coupling towers and other fixtures to be used within the building remodel • Approximately $2.1 mill ion in building valuation for the interior and exterior of the building J(jng Soopers believes that the public improvement upgrades to this specific store will better serve the existing loyal customer base in the Wheat Ridge area, attract and entice new shoppers to this store and the shopping center, and provide public ben efit to the community. These improvements are projected to be complete by June 2013. With the public improvements. J(jng Soopers estimates that they can maintain thei r loyal customer base as well as add to that customer base in subsequent years, bringing new revenue to the City and sustaining the economic viability of the site. 9