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HomeMy WebLinkAboutResolution 2013-0035CITY OF WHEAT RIDGE, COLORADO RESOLUTION NO. 35 Series of 2013 TITLE: A RESOLUTION AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH MUSCLE MASSTER (THE GREEN HERB) FOR PARTICIPATION IN THE ENHANCED SALES TAX INCENTIVE PROGRAM (ESTIP) REBATING 50% OF THE ENHANCED SALES TAX FOR A PERIOD OF THREE YEARS FOR THE CONSTRUCTION OF A NEW BUILDING AT 4565 KIPLING STREET WHEREAS , the City has adopted as a portion of the Wheat Ridge Code of Laws ("Code") Chapter 22 , Division 4 , "Enhanced Sales Tax Incentive Program " (the Program) to encourage , in part, continued development and expansion of opportunities for employment in the private sector in the City ; and WHEREAS , Muscle Masster (The Green Herb ) has applied to participate in the Program and a public hearing was posted and conducted ; and WHEREAS , The Green Herb is the owner and operator of a development site that will serve residents of Wheat Ridge and surrounding communities ; WHEREAS , Owner plans to construct public improvements of approximately $158 ,567 and a total project budget of approximately $750,000; and WHEREAS , the project enhances services to the neighborhood and neighboring communities and brings revenue to the City from surrounding communities-a true definition of economic development; and WHEREAS ; the project creates up to 6 new jobs and a total employee base over 20 ,and WHEREAS ; the project spurs reinvestment through remodeling and new construction of a blighted structure , thus enhancing and preserving its economic viability in the City; and WHEREAS , cost-sharing at the rate prescribed herein will serve to aid the Owner in that it will alleviate a portion of the public improvement costs associated with the expansion . NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Wheat Ridge, Colorado, as follows: An Agreement to participate in the City of Wheat Ridge Enhanced Sales Tax Incentive Program with Muscle Masster is hereby approved wherein an amount of 50 % of enhanced sales tax generated for a period of three years , in an amount estimated at $7,500 , will be rebated to Muscle Masster. ATIEST: AGREEM ENT P URSLANT T O ENH ANCED SALES TAX I NCENTI VE P ROG RAM This Agreement Pursuant To Enhanced Sales Tax Incentive Program (this .. Agreement'') is made and entered into as of the 9th day of September, 2013 , by and between MUSCLE MASSTER. LLC located at 4565 Kipling Street, Wheat Ridge, CO 80033. hereinafter referred to as the "Owner'' and the C ITY OF WHEAT RIDGE. COLORADO, hereinafter referred to as the --City ," collectively the ·'Parties.'' and each individually, as a '·Party.'' RECI TAL S: Whereas, the City has adopted Chapter 22, Article 69 -84 of the Wheat Ridge Code of Laws , enti tled the Enhanced Sales Tax Incentive Program (the "ESTIP Program "), a copy of which is attached hereto as E xhibit A, to encourage, in part , the establishment of retail sales tax ge nerat ing busi nesses with in 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 E xhibit B. attached hereto and incorporated by this reference (the ·'Property"), fo r the installation of Public Improvements described in Exhibit C , attached he reto and incorporated by this reference (the ·'Public Improvements") to the extent a ll owed 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 prefor med by each of them, the Parties agr ee as fo ll ows: 1. Recita ls. The Recitals set forth above are incorporated in this Agreement by reference. 2. Term. The term of this Agreement shall commence o n the fi rst d ay of the calendar month fo llowin g the month in which the Owner rece ives th e ir Certi fi cate of Occupancy on the Property and s hall terminate in three (3 ) years , un less otherwise provided in this Agreement (the --Term'} The Term of th is Agreement shall automatically renew for each additional one year period to the extent requi red by Section 4( d) hereof. 3. Application of C ity C ode. 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 E STIP Program. The City agrees that the Property qualifies for the ESTIP Program and the Public Improvem ents are improvements for public and/or pub lic related purposes that will stimu late the economy of and within the City , provide employment opportunities for residents of this City and others , expand th e goods available for p urchase and consumptio n 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 term 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 shaJJ 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 ESTLP 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. 2 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 Lmprovements. 5. C ity's Budget Process. Each year, the City Manager shall include in a budget presented to the City CoWlcil pursuant to Chapter X, Sec. l 0.2 of the Wheat Ridge Home Rule City Charter. the appropriation of the Allocated Revenues for payment to the Owner as p rovided 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 th e Agreement to the contrary, the Agreement is specifica ll y 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 shaiJ 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 ho ld ers 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 th is Agreement to construct the Public Im provements, 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 constitut ional 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. ln no event shall the Owner be entitled to a claim, nor shall the City be liable for, any special, exemplary, punitive o r consequential damages of any kind, including economic damages or lost profits. 3 10. Severab ility. 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 v.ith 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 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 Term of this Agreement by a court of competent jurisdiction in a ftnal, 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 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 shal l 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, 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: City Manager Ci~~ofVVheatRjdge 7500 W. 29lh Avenue Wheat Ridge, CO 80033 City Attorney City of Wheat Ridge 7500 W. 29th Avenue Wheat Ridge, CO 80033 Muscle 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 Parties hereto. This Agreement may be amended only by written agreement between the 4 0Nn6' cr'ld the City a:;ting purruCilt to City Council a.rthorizaion. 14. Effoctjye Date. This Agreema1t mal be effoct1ve Cl1d bind1ng upon the Pa1ies upon the date first set forth cbove. NotwithstCilding CllY provison of this Agreemmt which may be i nterprctoo to the oontray, in the eva1t that (}!mer does not a::qui re title to the Property Cl1d oonstruct Cl1d mci<e i mprovema1ts to the Property on or bEt ore Ma-ch 31 , 2014, therl upon notice by the 0wn6' to the City , this AgreernEJlt S"lal termr ncie a1d both Pa11 es S'la I be rel1 eved of all 11 ci:>ll i ty hera.Jnder . IN WITNESS WHEREOF, 0Nrtfr a1d City have arll ccum this Agreema1t to be a<EnJted by the a.rthon zoo Pa1i es. Stcie of Col ora:lo County of ~ e.,~\e{ ~o\'- Thefor~ng_!gr~t 'f~cd<nowledgoo beforemethis _fi_ day of Sco\: ~\\Je\. 20_ll. by , '>INZ~ _Vh_r> 'i as , :>c....v 1/\ ~ [t1tle] of t Al, •• 4 '\'fl.'s r I .111-a > .::. T.-.... L ld C: . Inc. WITNESS MY HAND AND OFFICAL SEAL. My Commi5Son expires: ~-"l_c.. \ S" Not cr-y 5 ATTEST: e: Janelle Shaver tle: City Clerk State of Colorado ) ) ss . County of Jefferson ) T ~ The foregoing Agreement was acknowledged before me this 10~ day of~. , 2012., by Jerry DiTullio as Mayor and Janelle Shaver as City Clerk, respectiVl)l, of the City of Wheat Ridge, Colorado. WITNESS MY HAND AND OF~AL SEAL. My Commission expires: IO 7-z_ 8 J L( 6 EXHIBIT A Ordinance 2001-08 The Enhanced Sales Tax In centive Program (The "ESTI P Program") S«. 22-73. -Program established. There is hereby established within the city an enhanced sales ta\. incentive program . (Ord. No. 1988-758. § 1(24-1), 5-23-88, Ord No.1272. §I. 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 cit). thereb} stimulating the economy of and within the city, the reby providing employment for residents of the city and others, thereb) further expanding the goods available for purchase and consumption by residents of the city, and further increasing the sale s taxes collected by the city, which in creased 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. fOrd. No 1988-~58, § 1(2-1-2), 5-13-88. Ord Vo. 1272. § I, 12-9-02) Sec. 22-75. -Definitions. The following words, tenns and phrases, when used in this division. sha ll have the meanings ascribed to them in thi s section, except where the context clearly indicates a different meaning: Enhanced sales lax 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 s hall 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 represen ts 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. ESTIP means the enhanced sales tax incentive program created under this division. 7 Owner or proprietor shall mean the record 0\\-llCr or operator of an individuaJ business, or, in the case of a shopping center. the o~ ner of the real property upon \\hich more than o ne (I) 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 .Vo 1988-758. § 1{24-3). 5-13-88: Ord. \'o 1272. §I. 12-9-02) Sec. 22-76. -Participation. Partici pation in ESTIP shaJI 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 retai l 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 live thousand dollars ($5,000.00) in the first year of operati on . (Qrd No 1988-758. § 1(24-4), 5-23-88. Ord. No 1990-854. §I. I 1-26-90. Ord. No. I 272. § I. I 2-9-01) Sec. 22-77. -Approval of agreement; use of funds generally. Approval by the city council of an agreement implementing this ESTfP shall entitle the successfu l 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 onl) for public and/or public-related purposes such as those s pecified 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-re lated improvements are completed, and s hall 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{2-1-5). 5-23-88. Ord Vo. 2002-12-10, §I. 1-28-02; Ord. No. 1272. §I, 12-9-02) Sec. 22-78. -Uses enumerated. The uses to which the shared enhanced sa le s 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 nece ssary, incidental, and appurtenant structures and improve ments, together with the 8 relocation and improvement of existing utilit) lines. and any other improvements of a similar narure which are specificall) approved b) 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 competiti\e position of the applicant within the Denver metropolitan area marketplace . (Qrd No. 1988-i 58. § 1(24-6). 5-23-88. Ord. No. 1272. § 1. 12-9-02) Sec. 22-79. -Increments, sharing of funds. The base figure for sale s taxes s hall be divided into twelve ( 12) monthly increments, which increments are subject to agreement be£Ween 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 t\\elve-month cycle. funds in excess of those enhanced sales taxes agreed to be shared shall not have been shared with any applicant. (Ord No. 1988-158. § 1(24-7). 5-23-88: Ord. No. 1272. §I. 12-9-02) Sec. 22-80.-Revenues restricted. It is an overriding consideration and determination of the city council that existing sources of city sa les tax revenues shall not be used , impaired, or o th erwise 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 thi s ESTIP. It shall be the affirmative duty of the treasurer to collect and hold all such enhanced sale s 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{2 -1-8) 5-23-88· Ord. No. 1272. §I . 12-9-02) Sec. 22-81. -Capital improvement fund. The one (I) percent of sales and use taxes earmarked for the capitaJ 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 referendum 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. 1 988 -75 8. § 1(2 4-9). 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 ESTlP shall be given by the city council. at a public hearing held as a portion of a re gularly scheduled city council meeting, based upon the following criteria: (I) (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 confo rmance 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 shaU 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. 1988-75 8, § 1(2 4-10), 5-23-88; Ord. No. 12 72. § 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 that an agreement be executed by the owner and the c ity, which agreement shall , at a minimum, contain: 10 (I) (2) (3) (4) (5) (6) (7) (8) (9) A Jist 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 nm with the land; That this agreement shall never constitute a debt or obligation of the city within any constitutional o r 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 pro perty do not at least equal such amount, that there shall be no sharing of funds for s uch month; The base amount shall be agreed upon which shall consider the historic level of sales at the property in question, or a sim ilar 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 affirmative statement that the obligations, benefits, and/or provisions of this agreement may not be assigned in whole or in any part without the expressed authorization of the city council, and further that no third party shall be entitled to rel y upon or enforce any provision hereof; l I Any other provisions agreed upon by the parties and approved by the city council. (Ord. No. 1988-758, § 1(2-J-11). 5-23-88, Ord No. 12 72. §I , 12-9-02) Sec. 22-84.-Joint venture; liability. 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 properties more competitive in the marketplace and further provi de 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 this ESTIP, and the city shall never be liable or responsible for any debt or obligat ion of any participant in ESTIP. (Qrd. No.1988-758. § 1(24-12). 5-23-88; Ord. No./272. § 1.12-9-02) 12 EXHIBIT B Legal Description of the Property 4565 Kipling St. E 1/2, El/2, NE l /4, Sec 21, T3S, R69W, ofthe 6th P.M., City of Wheal Ridge, County of Jefferson, State of Colorado. 13 EXHIBITC 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 envirorunent-$23,380 14