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