HomeMy WebLinkAboutOrdinances - ORD-19-1934 - 03/18/2019 - Bluestone Single Tenant Properties LLC CITY OF MCHENRY
MCHENRY COUNTY
STATE OF ILLINOIS
ORDINANCE NUMBER 0RD-19-1934
An Ordinance Authorizing the Mayor's Execution of an
Economic Incentive and Development Agreement between the
City of McHenry and Bluestone Single Tenant Properties LLC
Adopted by the
Mayor and City Council
Of the
City of McHenry
McHenry County
State of Illinois
March 18,2019
Published in pamphlet form by authority of the Mayor and City Council of the City
of McHenry,McHenry County,Illinois this 18th day of March 2019.
Department of
Economic Development
Douglas Martin,Director of Economic Development
McHenry Municipal Center
333 Green Street
McHenry,Illinois 60050
Phone: (815)363-2170
McHenryFax:(815)363-2173
wor dmartin@ci.mchenry.il.us
www.ci.mchenry.il.us
ORDINANCE NO. 19-1 3 L1
AN ORDINANCE AUTHORIZING THE MAYOR'S EXECUTION OF AN ECONOMIC INCENTIVE AND
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF MCHENRY AND BLUESTONE SINGLE
TENANT PROPERTIES LLC
WHEREAS, the City of McHenry, McHenry County, Illinois, is a home rule municipality as
contemplated under Article VII, Section 6, of the Constitution of the State of Illinois, and the
passage of this Ordinance constitutes an exercise of the City's home rule powers and functions
as granted in the Constitution of the State of Illinois.
NOW, THEREFORE, BE IT ORDAINED by the CITY COUNCIL of the CITY OF MCHENRY,
McHenry County, Illinois, as follows:
SECTION 1: The Development and Economic Incentive Agreement, bearing the date
of March 4, 2019 between the City of McHenry and Bluestone Single Tenant Properties LLC is
attached to this ordinance and incorporated herein by reference as Exhibit "A".
SECTION 2: The Mayor and City Clerk are hereby authorized to affix their signatures
as Mayor and City Clerk to said Agreement for the uses and purposes therein set forth.
SECTION 3: All Ordinance or parts thereof in conflict with the terms and provisions
hereof are hereby repealed to the extent of such conflict.
SECTION 4: This Ordinance shall be published in pamphlet form by and under the
authority of the corporate authorities of the City of McHenry, McHenry County, Illinois.
SECTION 5: This Ordinance shall be in full force and effect from and after its passage,
approval, and publication in pamphlet form as provided by law.
PASSED THIS DAY OF , 2019
AYES:
NAYS:
ABSTAINED:
6
Department of
Economic Development
y �^ Douglas Martin,Director of Economic Development
`. McHenry Municipal Center
333 Green Street
McHenry,Illinois 60050
Phone:(815)363-2170
McHenr Fax:(815)363-2173
dmartin@ci.mchenry.il.us
io www.ci.mchenry.il.us
ABSENT:
NOT VOTING:
APPROVED THIS DAY OF , 2019
MA 0 r
% TT ST:
CITY CLERK
7
Department of
Economic Development
Vol
Douglas Martin,Director of Economic Development
v McHenry Municipal Center
333 Green Street
McHenry,Illinois 60050
Phone:(815)363-2170
Mc-;Herr Fax:(815)363-2173
dmartin@ci.mchenry.il.us
www.ci.mchenry.il.us
Exhibit A
Development and Economic Incentive Agreement between the City of McHenry and
Bluestone Single Tenant Properties LLC
8
Department of
Economic Development
Douglas Martin,Director of Economic Development
McHenry Municipal Center
w i+ 333 Green Street
McHenry,Illinois 60050
Phone: (815)363-2170
McHeff Fax: (815)363-2173
dmartin@ci.mchenry.il.us
www.ci.mchenry.il.us
Development and Economic Incentive Agreement Between the
City of McHenry and RR McHenry LLC
This Economic Incentive Agreement ("Agreement") is made and entered into this 18tn
day of March, 2019 ("Effective Date"), by and between the City of McHenry, 333 S. Green
Street, McHenry County, Illinois, an Illinois home rule municipality ("City") and RR McHenry,
LLC, an Illinois Limited Liability Company, 399 Wall Street, Unit H, Glendale Heights, IL
60139("Contract Purchaser") and any successors and assigns.
Recitals
A. The property which is the subject of this Agreement consists of 7.45 acres, more
or less, and is located at the northwest corner of Illinois Route 120 and Chapel Hill Road
("Subject Property"), excluding the Riverside Chocolate Factory parcel and consists of with
associated PINS: 09-36-200-028, 09-25-479-041, and 09-25-479-016, legally described as
follows:
PART OF THE SOUTHEAST QUARTER OF SECTION 25 AND THE NORTHEAST QUARTER OF
SECTION 36, ALL IN TOWNSHIP 45 NORTH, RANGE 8 EAST OF THE THIRD PRINCIPAL
MERIDIAN, CITY OF MCHENRY, MCHENRY COUNTY, ILLINOIS.
B. The City is a home rule municipality and as such has the authority, pursuant to
Article VII, Section 6(a) of the Constitution of the State of Illinois of 1970, to adopt ordinances
and to promulgate rules and regulations that pertain to its government and affairs.
C. In recognition of the importance to sustaining a high-quality of life for businesses
and residents, it's the City's desire to facilitate a successful business environment and assist in
enhancing the long-term viability of existing and proposed businesses. The Contract Purchaser
intends to invest a capital cost exceeding $15,000,000 and is proposing to construct an
approximately 5,500 square-foot convenience store and fueling center, state-of-the-art car
wash and an additional 8,400 square-feet of in-line space for retail and restaurant tenants with
associated drive-in establishment.
D. The Contract Purchaser is also proposing to 1) extend the City's water main more
than one-half mile from its current terminus on Adams Drive east to Chapel Hill Road; 2) install
underground detention vaults and retaining walls to detain stormwater on the Subject Property
in order to accommodate as much retail, service and restaurant uses on the Subject Property as
9
Department of
Economic Development
Douglas Martin,Director of Economic Development
v . McHenry Municipal Center
333 Green Street
McHenry,Illinois 60050
Phone:(815)363-2170
Mmenr Fax:(815)363-2173
dmartin@ci.mchenry.il.us
www.ci.mchenry.il.us
possible; 3) construct deceleration lanes on Illinois Route 120 and Chapel Hill Road; 4) finance
the improvement and locating parking improvements on the Subject Property for Riverside
Chocolate Factory (approximately $100,000 construction cost); and 5) purchase and install a
new City of McHenry Gateway Sign in an amount not-to-exceed $20,000 which may include any
combination of design, purchase of material and/or installation costs of a new City of McHenry
Gateway Sign at a mutually agreeable location. ("Site Improvements"). The site Improvements
are detailed and attached hereto and incorporated herein as Exhibit "A."
E. Included as part of the Site Improvements the Contract Purchaser is required to
undertake extensive on and off-site infrastructure improvements specified in numbers 1-3 of
recital D, above, with an estimated total construction cost of $1,751,000 ("Extraordinary
Development Costs"). The Extraordinary Development Costs are outlined and described on a
letter from Troy Paionk, P.E. Project Manager with Manhard Consulting, LTD. dated September
20, 2016 to Mike MacKinnon attached hereto and incorporated herein as Exhibit "B". The
Contract Purchaser has indicated to the City that, but for the commitment and agreement of
the City being made herein, they cannot undertake the Site Improvements and Extraordinary
Development Costs to the Subject Property.
F. It is essential to the economic and social welfare of the City that it promotes the
economic vitality of the community by assuring opportunities for development and
redevelopment and sound and stable commercial growth within the corporate limits of the
City.
G. In order to make it economically feasible for the Contract Purchaser to agree to
successfully accomplish the Site Improvements, including $1,751,020 in Extraordinary
Development Costs, to the Subject Property the City agrees to share with the Contract
Purchaser a portion of the Base Sales Tax and Home Rule Sales Tax generated by the Contract
Purchaser at the Subject Property in an amount not-to-exceed $1,000,000.
H. Definitions. The following definitions shall apply to terms used in this
Agreement:
"Base Sales Taxes" means the retailers occupation taxes and service occupation
taxes received by the City, generated solely at the Subject Property and by the
Contract Purchaser, from the State of Illinois pursuant to the Service Tax Act (35
ILCS 115/1 et seq.), the Retailers Occupation Tax Act (35 ILCS 120/1 et seq.), and
10
Department of
,.^... Economic Development
v `"^ Douglas Martin,Director of Economic Development
McHenry Municipal Center
333 Green Street
McHenry,Illinois 60050
Phone: (815)363-2170
McHenr Fax:(815)363-2173
dmartin@ci.mchenry.il.us
www.ci.mchenry.il.us
the State Finance Act (30 ILCS 105/6z-18) (as amended), and any taxes that are
enacted and imposed as replacements thereto.
"Home Rule Sales Tax" means the home rule retailers occupation taxes received
by the City, generated solely at the Subject Property and by Contract Purchaser,
from the State of Illinois pursuant to the Home rule Municipal Retailers'
Occupation Tax Act (65 ILCS 5/8-11-1.1) (as said Act may be amended), and any
taxes that may be enacted and imposed as replacements thereto.
"City's Payment Obligation" means the City's Obligation to pay Contract
Purchaser Base Sales Tax and Home Rule Sales Tax as set forth in herein.
"The Commencement Date" means December 31 following the Contract
Purchaser receiving a Certificate of Occupancy (full or temporary certificate of
occupancy) for any portion of the Subject Property and is the first date the City
shall pay a Sales Tax Incentive Payment, as defined herein, to the Contract
Purchaser.in accordance with the terms of this Agreement.
"Event of Default" means a default under this Agreement which remains
uncured.
"Gross Receipts" means as defined in the Retailer's Occupation Tax Act (35 ILCS
120/1 et seq.).
"IDOR"means the Illinois Department of Revenue.
"Maximum Total Payment Obligation" shall mean the maximum total amount
payable by the City hereunder not-to-exceed $1,000,000.
"Permanent Closure" shall mean the proposed fueling station proposed to be
located on Lot 1 of the Subject Property remains either vacant or unoccupied for
a period of twelve (12) or more consecutive months after Contract Purchaser
completes the Site Improvements ("Permanent Closure").
"Sales Tax Incentive" means the payment by the City set forth in this
Agreement.
11
Department of
Economic Development
v `�^ Douglas Martin,Director of Economic Development
ram^. McHenry Municipal Center
333 Green Street
McHenry,Illinois 60050
Phone:(815)363-2170
MCHe�'LL�y' Fax:(815)363-2173
dmartin@ci.mchenry.il.us
www.ci.mchenry.il.us
"Sales Tax Incentive Payment" expressed as a percentage of Base Sales Tax and
Home Rule Sales Tax generated by the Contract Purchaser at the Subject
Property.
"Sales Tax Incentive Year" means the preceding twelve-months of the calendar
year.
"Table One" includes the sales tax incentive year and sales tax incentive
payment as defined herein.
I. The parties agree that the Base Sales Tax and Home Rule Sales Tax being shared
hereunder shall only be that Base Sales Tax and Home Rule Sales Tax generated in the future by
the Contract Purchaser not-to-exceed the Maximum Total Payment Obligation.
Now therefore, in consideration of the promises and agreements made herein, the
adequacy and sufficiency of which is acknowledged by the parties hereto, it is agreed as
follows:
1. Authority. This Agreement is made and entered into pursuant to the City's
home rule powers and functions as granted in the Constitution of the State of Illinois.
2. Agreement to Pay. The City agrees to pay a Sales Tax Incentive to the Contract
Purchaser in an amount outlined below. The City's Payment Obligation shall continue for so
long as the Contract Purchaser is generating and the City is receiving Base Sales Taxes and
Home Rules Sales Taxes as defined herein. The Contract Purchaser also acknowledges the Sales
Tax Incentive shall be utilized solely for reimbursement for actual costs incurred for equipment,
material and labor costs directly associated with construction of the Site Improvements. The
City's Payment Obligation shall not exceed the Maximum Total Payment Obligation.
3. Waiver of Recapture from Extension of City Watermain. The Contract
Purchaser hereby waives any and all right or claim to recapture for any expense associated with
the Site Improvements from any benefitted property owner.
4. Evidence of Equipment, Material Cost and/or Labor Expenditure. The Contract
Purchaser acknowledges that, prior to any Sales Tax Incentive payment distribution, the
Contract purchaser shall provide the City evidence of the expenditure for which reimbursement
is being sought including the following information: Paid invoice(s), which includes an
12
Department of
Economic Development
Douglas Martin,Director of Economic Development
v McHenry Municipal Center
333 Green Street
McHenry,Illinois 60050
Phone:(815)363-2170
McHeff Fax: (815)363-2173
dmartin@ci.mchenry.il.us
www.ci.mchenry.il.us
itemization of each equipment, material and/or labor expenditure to the extent reasonably
available to the Contract Purchaser; date when labor, equipment and/or material purchase was
completed and/or purchased; company from which labor, equipment and/or material purchase
was completed and/or purchased including name, address and federal tax identification
number, a reference on the paid invoice(s) indicating the location of the Subject Property and a
sworn affidavit from Contract Purchaser detailing the equipment, material and/or labor costs
incurred.
5. Limitation of City Responsibilities. Other than the Sales Tax Incentive agreed to
be made pursuant to this Agreement, the City shall have no obligation to incur any expenses or
share any revenue associated with the Contract Purchaser.
6. Sales Tax Incentive. Commencing on the Commencement Date, the City shall
pay, a Sales Tax Incentive three (3) times each calendar year in March, July, and November, in
the form of a Sales Tax Rebate, to the Contract Purchaser. The Sales Tax Incentive Payment
shall be 50% of the Base Sales Tax and Home Rule Sales Tax collected by the City relating to the
Subject Property during any payment period until the Maximum Total Payment Obligation is
met; thereafter, the City shall retain 100% of the Base Sales Taxes and Home Rule Sales Taxes
generates by the Subject Property. The Sales Tax Incentive payment shall be paid by the City to
the Contract Purchaser following calculation of the amount due but not later than sixty (60)
days after the Contract Purchaser produces to the City the Contract Purchaser's Sales Tax
Reports. Provided, however, no Sales Tax Incentive Payment shall be paid to the Contract
Purchaser until such time the Contract Purchaser fully completes all of the Site Improvements,
and a certificate of occupancy permit is issued ("Occupancy Permit")to the Contract Purchaser.
7. Sales Tax Reports/Accounting. Not less than sixty (60) days prior to each
schedule payment as described in Section 6, the Contract Purchaser shall provide the City with
a statement, accompanied by a summary of the Gross Receipts for such Sales Tax Incentive
Year, in a form reasonably acceptable to the City, signed by one of its officers, which shall set
forth the dollar amount of Sales Tax generated by the Subject Property and paid to the State of
Illinois for the benefit of the City during the prior Sales Tax Incentive Year. This information will
be used by the City in calculating the Sales Tax Incentive Payment due hereunder. The term
"Gross Receipts," as used herein, shall have the same meaning as that which is ascribed to it in
the Retailer's Occupation Tax Act. The Contract Purchaser shall maintain and have available for
inspection by the City copies of any all sales tax return, sales tax reports, amendments, proof of
payment or any other Sales Tax Information filed with the State of Illinois or other appropriate
13
Department of
Economic Development
4 '"^ Douglas Martin,Director of Economic Development
McHenry Municipal Center
333 Green Street
McHenry,Illinois 60050
Phone:(815)363-2170
ma
W,cUen, Fax:(815)363-2173
dmartin@ci.mchenry.il.us
www.ci.mchenry.il.us
governmental entity, which documents are being held available for the City for purposes of
identifying Sales Tax Revenue collected pursuant to this Agreement. The City shall use its best
efforts to obtain such Sales Tax Information directly from the IDOR or the State of Illinois.
8. Confidentiality of Financial Information. To the extent permitted by law, the
City shall endeavor to maintain the confidentiality of the information contained in any financial
reports submitted by the Contract Purchaser, the Sales Tax information received by the City,
but shall be permitted to disclose such information and documents to employees and
consultants of the City as the City in its sole discretion, deems appropriate in order to monitor
compliance and audit this Agreement. The Contract Purchaser understands and agrees that the
provisions of this Agreement and any and all payments to the Contract Purchaser pursuant to
this Agreement are public records. The Contract Purchaser also agrees to execute any consent
form requested by the City and furnish such additional consent, powers of attorney or waivers
as may be required by the IDOR to allow the IDOR to furnish to the City Sales Tax Information
transacted by the Contract Purchaser at the Subject Property.
The City agrees to utilize Sales Tax Information obtained by it pursuant to the
terms of this Agreement solely for the purpose of effectuating the provisions of this Agreement.
To the extent permitted by the Illinois Freedom of Information Act and any other relevant laws,
the City shall endeavor to keep such information confidential. The foregoing, however, shall
not preclude the City from disclosing such information to the extent it is mandated to do so by
court order or to the extent it makes a good faith determination such disclosure is required by
law.
9. Provisions Concerning Limitation on Debt. The receipt, or anticipated receipt,
of Sales Tax Revenue, either directly or indirectly, from the Contract Purchaser's Site
Improvements on the Subject Property, as provided earlier in this Agreement, shall be a
condition precedent to any obligation of the City to rebate money to the Contract Purchaser.
10. Prevailing Wages to be Paid. Pursuant to 820 ILCS 130/0.01 et seq., not less that
the prevailing rate of wages as found by the City or determined by a court on review shall be
paid to all laborers, workers and mechanics performing work under the contract relating to the
Site Improvements on the Subject Property. Note that the prevailing rate of wages is revised by
the Illinois Department of Labor and are available on the Department's official website.
14
Department of
�..r. Economic Development
Douglas Martin,Director of Economic Development
4 McHenry Municipal Center
333 Green Street
McHenry,Illinois 60050
Phone:(815)363-2170
McHenr Fax:(815)363-2173
dmartin@ci.mchenry.il.us
www.ci.mchenry.il.us
11. Issuance of Liquor Licenses. Subject to compliance with all applicable City
ordinances, following approval of this Agreement, the City shall issue three liquor licenses for
the Subject Property available for the convenience store, any restaurants and/or a game cafe
located on the Subject Property. Each liquor license shall be of a class which qualifies each
occupant,from a liquor license standpoint,to apply for State video gaming licenses.
12. No Interest; Limited Obligations. No interest shall be due on the obligations set
forth in this Agreement. The Contract Purchaser acknowledges that: (a) the City shall not be
required to make any payments of the Sales Tax Incentive to the Contract Purchaser unless they
have then been delivered, to the City the IDOR form Authorization to Release Sales Tax
Information to Local Governments that is needed to facilitate the City's Payment Obligation; (b)
the City's Payment Obligation is a limited obligation of the City payable solely out of the Base
Sales Tax and Home Rule Sales Tax the City receives from the IDOR which are attributable to the
gross sales generated at the Subject Property after the completion of the Site Improvements by
the Contract Purchaser; (c) the sole source of the Contract Purchaser's entitlement to payment
of the Sales Tax Incentive shall be the aforesaid Base Sales Tax and Home Rule Sales Tax; (d)the
City's Payment Obligation shall not be construed as general obligation of the City; and (e) the
Contract Purchaser bears all risk of non-payment resulting from the permanent closure of the
Contract Purchaser's business operation at the Subject Property.
13. Term. This Agreement shall be in full force and effect for a Term commencing on
the Effective Date of this Agreement and ending on the earlier to occur of: (a) the City's
payment to the Contract Purchaser of the Maximum Total Payment Obligation; (b) the
Permanent Closure of the fueling station prior to the City's payment to the Contract Purchaser
of the Maximum Total Payment Obligation of the City; (c)the end of the 20th Sales Tax Incentive
Year or (d) Site Improvements to the Subject Property are not completed and a certificate of
occupancy issued by December 31, 2019. This Agreement shall remain in effect for
enforcement and accounting purposes following the expiration of the Term.
15
Department of
r'"r�'^•NO& Economic Development
Douglas Martin,Director of Economic Development
McHenry Municipal Center
333 Green Street
McHenry,Illinois 60050
McHyy��yy�� Phone: (815)363-2170
e Fax:(815)363-2173
dmartin@ci.mchenry.il.us
www.ci.mchenry.il.us
14. Miscellaneous. This Agreement shall be binding upon and inure to the benefit of
the Parties. Any notices required or contemplated by this Agreement shall be sent by certified
mail or via a nationally-recognized private carrier(such as Fed Ex or UPS), as follows:
If to Contract Purchaser: RR McHenry, LLC, an Illinois limited liability company
399 Wall Street Unit H
Glendale Heights, IL 60139
If to the City: City of McHenry
333 S. Green Street
McHenry, IL 60050
Attention: City Administrator
With a copy to: David W. McArdle
Zukowski, Rogers, Flood & McArdle
50 Virginia Street
Crystal Lake, Illinois 60014
15. Default. In the event of a claimed default under this Agreement, the non-
defaulting party shall provide notice of default to the defaulting party. No legal action may be
commenced with respect to a claimed default until thirty (30) days after said notice has passed,
during which time the claimed defaulting party may cure the claimed default. This Agreement
shall be governed by Illinois law without regard to its rules regarding conflicts of law.
16. Enforcement. Any action to enforce this Agreement shall only be filed in the
Twenty-Second Judicial Circuit, McHenry County, Illinois. The party who prevails in any such
action shall be entitled to recover its reasonable attorney's fees from the other party.
17. Only Agreement. This Agreement sets forth all the promises, inducements,
agreements, conditions and understandings between the Contract Purchaser and the City
relative to the Sales Tax Incentive and there are no other promises, agreements, conditions or
understandings, oral or written, express or implied, between them relative thereto. This
Agreement may only be amended by way of a written instrument that is signed by both Parties.
16
Department of
Economic Development
4 OR Douglas Martin,Director of Economic Development
McHenry Municipal Center
333 Green Street
McHenry,Illinois 60050
Phone:(815)363-2170
McHenry Fax:(815)363-2173
dmartin@ci.mchenry.il.us
www.ci.mchenry.il.us
City of McHenry Contract Purchaser: RR McHenry LLC
By: By:
Wayne .J t, , ayor Date
r
� 4
Attest:'I Attest:
ebra Meadows, Deputy City Clerk
Z:\M\McHenryCityof\EconomicfncentiveAgmtRickyRockets.doc
17
Department of Community&
R Economic Development
-� McHenry Municipal Center
333 Green Street
McHenry, Illinois 60050
McHerir Phone: (815) 363-2170
Fax: (815) 363-2173
www.ci.mchenry.il.us
Exhibit "A"
Site Improvements
Department of Community&
Economic Development
~"••► .� McHenry Municipal Center
333 Green Street
McHenry, Illinois 60050
MCHeur Phone: (815) 363-2170
Fax: (815) 363-2173
www.ci.mchenry.il.us
Exhibit "B"
Extraordinary Development Costs