HomeMy WebLinkAboutOrdinances - 23-45 - 08/21/2023 - Graham Enterprise Economic Incentive Agreement - Ringwood RoadTx:40319519
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Mail to:
McHenry City Clerk
333 S Green St
McHenry, IL 60050
miohnson@citVofmchenrV.org
Prepared By:
McHenry City Clerk
333 S Green St
McHenry, IL 60050
COVER SHEET
JOSEPH J. TIRIO
CLERK AND RECORDER
MCHENRY COUNTY, IL
2023ROO20855
08/23/2023 11:00:14 AM PAGES: 11
GIs FEE 24.00
RECORDING FEE 11.00
AUTOMATION FEE 8.00
An Ordinance Authorizing an Economic Incentive to Graham Enterprise, Inc. —
Ringwood Rd Site
Approved by McHenry City Council on August 21, 2023
McHenry County Recorder JOSEPH J. TIRIO # 2023R0020855
I
CITY OF MCHENRY
MCHENRY COUNTY
STATE OF ILLINOIS
Ordinance 23-45
An Ordinance Authorizing an Economic Incentive to Graham
Enterprise Inc. — Ringwood Rd Site
Passed by the
Mayor and City Council
Of the
City of McHenry
McHenry County
State of Illinois
August 21, 2023
Published in pamphlet form by authority of the Mayor and City Council of the City
of McHenry, -McHenry County, Illinois this 2211 day of August 2023
McHenry County Recorder JOSEPH J. TIRIO # 2023R0020855
ORDINANCE NO. ORD-
23-45
AN ORDINANCE
AUTHORIZING AN
ECONOMIC INCENTIVE TO
GRAHAM ENTERPRISE
INC.--RINGWOOD RD SITE
WHEREAS, the City of This space reserved for Recorder's use only.
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 City of McHenry hereby approves and authorizes the Mayor and
City Clerk to sign the Development and Economic Incentive Agreement —Ringwood Rd.
Site, with Graham Enterprise, Inc., a copy of which is attached hereto as Exhibit A.
SECTION 2: The 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 3: This Ordinance shall be in full force and effect from and after its
passage, approval, and publication in pamphlet form as provided by law.
APPROVED and ADOPTED this 21st day of August, 2023.
Voting Aye: Santi, Glab, McClatchey, Bassi, Strach, Koch, Miller
Voting Nay:
Absent:
ATTEST: or
Deputy City Clerk
McHenry County Recorder JOSEPH J. TIRIO # 2023R0020855
Exhibit "A"
Development and Economic
Incentive Agreement
Between the City of McHenry
and Graham Enterprise, Inc.
Ringwood Rd. Site
PREPARED BY/MAIL TO:
David W. McArdle
Zukowski, Rogers, Flood & McArdle
50 Virginia Street
Crystal Lake, IL 60014
This Development and Economic Incentive Agreement ("2023 Graham Agreement") is
made and entered into this 215t day of August, 2023 ("Effective Date"), by and between the City
of McHenry, 333 S. Green Street, McHenry County, Illinois, an Illinois ,home rule municipality
(`�City'� and Graham Enterprise, Inc., an Illinois corporation, LLC, 750 Bunker_ Court, Suite 100,
Vernon Hills, IL 60061 ("Owner" and such term is deemed to include Owner's affiliate, Red Crown
Investments, LLC-138) and any successors and assigns.
Recitals
A. On or about April 16, 2018, the City adopted Ordinance No.18-1867 authorizing
execution of a Development and Economic Incentive Agreement last signed by the City Mayor on
April 17, 2018 ("2018 Graham Agreement"). One of the parcels of land referenced in the 2018
Graham Agreement related to the Ringwood Road Site described as follows:
5520 W. Elm Street, McHenry with assigned Property Tax Identification Numbers: 09-28-
251-013, 09-28-251-015 and 09-28-251-018, and legally described as follows:
LOTS 1 AND 2 IN AMOCO M-2 SUBDIVISION, (E(CEPT THAT PORTION OF LOT 1 TAKEN BY
THE DEPARTMENT OF TRANSPORTATION IN CASE 02ED26 AND EXCEPT THAT PORTION OF
LOT 2 CONVEYED TO MCHENRY COMMUNITY CONSOLIDATED SCHOOL DISTRICT 15 BY
DEED RECORED AS DOCUMENT 2001R0001714) BEING A RESUBUDIVISIN OF LOTS 5 TO 9,
BOTH INCLUSIVE, IN A.M. KAUFMAN SUDISIVION OF PART OF THE WEST HALF OF THE
NORTHEAST % OF SECTION 28, TOWNSHIP 45 NORTH,, RANGE 8 EAST OF THE THIRD
PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT OF SAID AMOCO M-2 SUVISION
RECORDED SEPTEMBER 22, 1989 AS DOCUMENT 89RO31816 IN MCHENRY COUNTY,
ILLINOIS.
Ud//7
THAT PART OF LOT 2 IN AMOCO M-2 SUBDIVISION, BEING A SUBDIVISION OF PART OF THE
WEST HALF OF NORTHEAST % OF SECTION 28, TOWNSHIP 45 NORTH, RANGE 8 EAST OF
THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT THEREOF RECORDED AS
DOCUMENT NO. 1989R0031816, DESCRIBED ASFOLLOWS.-
McHenry County Recorder JOSEPH J. TIRIO # 2023R0020855
BEGINNING A T THE SOUTHEAST CORNER OF SAID LOT 2, THENCE NORTHWESTERL Y 306.20
FEET ALONG THE SOUTHERL Y LINE OF SAID LOT 2, BEING A CURVE TO THE RIGHT HA VING
A RADIUS OF 3759.80 FEET, A CHORD BEARING OF NORTH 69 DEGREES 39 MINUTES 33
SECONDS WEST, A DISTANCE OF 306.12 FEET TO THE SOUTHEAST CORNER OF LANDS
DESCRIBED IN DOCUMENT NO. 2009R0023311, THENCE NORTH 00 DEGREES 30 MINUTES
47 SECONDS EAST ALONG THE EAST LINE THEREOF, 253.04 FEET TO THE NORTHEAST
CORNER THEREOF; THENCE NORTH 65 DEGREES 21 MINUTES 22 SECONDS WEST ALONG
THE NORTHERL Y LINE THEREOF, 318.44 FEET TO THE WEST LINE OF SAID LOT 2; THENCE
NORTH 00 DEGREES 33 MINUTES 56 SECOND EAST ALONG SAID WEST LINE, 46.79 FEET TO
A LINE 136.14 FEET SOUTH OF AND PARALLEL WITH THE NORTH LINE OF SAID LOT 2;
THENCE SOUTH 72 DEGREES 53 MINUTES 20 SECONDS EAST ALONG SAID PARALLEL LINE,
604.24 FEET TO THE EAST LINE THEREOF THENCE SOUTH 00 DEGREES 35 MINUTES 48
SECONDS WEST ALONG SAID EAST LINE, 361.24 FEET TO THE PLACE OF BEGINNING, IN
MCHENRY, ILLINOIS. -
(herein referenced as "Ringwood Road Site" or "Subject Property'
B. It is the intent of the parties to provide the Owner with an economic incentive to
develop the Ringwood Road Site pursuant to the terms of this 2023 Graham Agreement and not pursuant
to the 2018 Graham Agreement.
C. No later than December 31, 2024, subject to force majeure, the Owner shall construct
on the Subject Property, and have received a City -issued occupancy permit, for a new convenience store
of not less than 6,057 square feet, auto canopy, commercial canopy, landscaping, and fueling station
("Site Improvements'.
D. 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.,
E. To make it economically feasible for the Owner to agree to successfully
accomplish the, Site Improvements to the Subject Property the City agrees to share with the Owner a
portion of the Base Sales Tax and Home Rule Sales Tax generated by the Owner at the Subject Property
in an amount not -to -exceed $500,000, in total.
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 Owner,
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 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 the Owner, 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 the Owner Base
Sales Tax and Home Rule Sales Tax as set forth in this Agreement.
McHenry County Recorder JOSEPH J. TIRIO # 2023R0020855
"Commencement Date" means the first February 1 or August 1 in the year
following the Owner completing all Ringwood Road Site Improvements, including
receiving a Certificate of Occupancy, and is the first date the City shall pay a Sales
Tax Incentive Payment, as defined herein, to the Owner 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 total amount paid by the City
hereunder as of December 31, 2033 or after the maximum total amount payable by the City
hereunder if paid, not -to -exceed $500,000, which ever event occurs first.
"Sales Tax Incentive" means the payments by the 'City set forth in this
Agreement.
"Sales Tax Incentive Payment" expressed as a percentage of Base Sales Tax and
Home Rule Sales Tax generated by the Owner at the Subject Property, during the
Sales Tax Incentive years.
"Sales Tax Incentive Year" means the preceding twelve -months of the calendar year.
G. 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
Owner not -to -exceed the Maximum Total Payment Obligation.
H. The City is a home rule municipality and as such is applying that authority, pursuant to
Article VII, Section 6(a) of the Constitution of the State of Illinois of 1970, to adopt this ordinance
pertaining to its government and affairs.
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. Recitals Incorporated. All of the above referenced recitals are incorporated as
agreement between the parties herein as if fully recited.
2. 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.
3. Site Improvements. The Owner shall make the Site Improvement.in the timeframe
described in the Recitals to this 2023 Graham Agreement, subject to force majeure as hereinafter
provided. Time is of the essence. The Owner is considering the construction of an 8,298 square foot
car wash at the Subject Property and shall have the sole discretion whether to do such additional
construction.
4. Removal of Ringwood Road Site from 2018 Graham Agreement. The parties
hereto agree that the building structure at the Ringwood Road Site on the Subject Property was
demolished and removed as required in the 2018 Graham Agreement. However, any other obligations
of the City or the Owner under the 2018 Graham Agreement relating to the Ringwood Road Site are
3
McHenry County Recorder JOSEPH J. TIRIO # 2023R0020855
hereby fully amended -and restated in this 2023 Graham Agreement, provided (a) the failure of the
Owner to timely complete the Ringwood Road Site Improvements or Office Building Site Improvements
as required in Section 3 of the 2018 Graham Agreement shall not terminate the 2018 Graham
Agreement, and (b) the failure of the Owner to have timely caused the Ringwood Road Site to reopen
as required in Section 3 of the 2018 Graham Agreement shall not terminate the 2018 Graham
Agreement. Other than as provided in this Section, the 2018 Graham Agreement is unchanged.
5. Agreement to Pay/Term of Agreement/Use of Funds. Commencing on the
Commencement Date, the City agrees to pay a Sales Tax Incentive to the Owner in an amount outlined
below. The City's Payment Obligation shall continue for so long as the Owner is generating, and the City
is receiving, Base Sales Taxes and Home Rule Sales Taxes derived from the Subject Property. Provided,
however, the City's Payment Obligation hereunder shall expire on the earlier to,occur of the following
events: (a) December, 31, 2033; (b) upon City's payment of the Maximum Total Payment Obligation; or
(c) any of the Site Improvements not being timely completed in strict compliance with paragraph 3,
above, subject to force majeure as hereinafter provided. Time is of the essence; provided, however, in
the eventlof any failure by the Owner to perform due to unforeseen circumstances or causes beyond
such parry's reasonable control, including acts of God, war, terrorism, riot, embargoes, acts of civil or
military authorities, fire, flood or accident, or inability to secure raw materials or labor based upon lack of
supply, the time for performance by the Owner shall be extended by the time period of anysuch delay.
This Agreement shall remain in effect for enforcement and accounting purposes following the expiration
of the Term. The Owner 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
.the Site ImprovementsrAfter the City's Maximum Payment Obligation is met, the City shall retain 1000%
of the Base Sales Taxes and Home Rule Sales Taxes generated by the Subject Property.
The Sales Tax Incentive shall be paid by the City on December 315t annually in the form of a Sales Tax
Incentive Payment, to the Owner. The Sales Tax Incentive Payment shall be equal to 50% of the Base
Sales Tax and Home Rule Sales Tax collected by the City relating to the Subject Property_ in excess of
$2,000 per month.
6. Evidence of Equipment, Material Cost and/or Labor Expenditure. The Owner
acknowledges that, prior to any Sales Tax Incentive payment distribution, the Owner shall provide the
City with evidence of the Site Improvement expenditures for which reimbursement is being sought
including the following information: Paid invoice(s), which includes an itemization of each
equipment, material and/or labor expenditure to the extent reasonably available to the Owner;
approximate dates 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 the
Owner detailing the equipment, material and/or labor costs incurred.
7. 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 Owner.
8. Sales Tax Reports/Accounting. The Sales Tax Incentive Payment shall be paid by
the City to the Owner following the City's calculation of the amount due for'the most recently ended
Sales Tax Payment Period, but not later than fifteen days (15) after the City receives the sales tax
report from the IDOR (this report is generally received within forty-five (45) days of the end of each
Sales Tax Payment Period). 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 Owner shall maintain
McHenry County Recorder JOSEPH J. TIRIO # 2023R0020855
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 governmental entity; which documents are being held available for the City
for purposes of identifying Base Sales Tax and Home Rule Sales Tax Revenue collected pursuant to
this Agreement. The City shall use its best efforts to promptly obtain such Sales Tax Information
directly from the IDOR or the State of Illinois.
9. 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 Owner and 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 Owner understands and agrees that the provisi,ons of this Agreement and any and
all payments to the Owner pursuant to this Agreement are public records. The Owner 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 Owner at the Subject Property. k
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.
10. Provisions Concerning Limitation on Debt. The receipt, or anticipated receipt, of
Base Sales Tax and Home Rule Sales Tax Revenue, either directly or indirectly, from the Owner'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 Owner.
11. Prevailing Wages to be Paid. Pursuant to 820 ILCS 130/0.01 et seq., not less than
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.
12. Special Use and Liquor Licenses. The City will support the efforts to gain a liquor
license at the Ringwood Road Site: In addition, the Owner intends to apply for a State Video Gaming
License, based on the qualifications of site size and diesel island requirements.
13. No Interest; Limited Obligations. No interest shall be due on the obligations set
forth in this Agreement. The Owner acknowledges that (a) the City shall not be required to make any
payments of the Sales Tax Incentive to the Owner 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 .Owner; (c) the sole source of the Owner'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 Owner bears all risk of non-payment resulting from the permanent closure of
the Owner's business operation at the Subject Property.
McHenry County Recorder JOSEPH J. TIRIO # 2023R0020855
t
14. Transfer of PropertyAssignment. If at any time'after the Effective pate the Owner
transfers the Subject Property to a third party or changes the corporate ownership/membership of the
Graham Enterprise, Inc., the City shall have the right to hold any Payment Obligation due and owing in
escrow until the Owner and transferee or -new ownership jointly notify the City in writing regarding who is
entitled to the remaining payments and who is responsible for performing each of the Owner's obligations
in this Agreement, with sufficient documentation evidencing that the proposed transferee has agreed
and accepted such obligations. In no other event shall the Owner assign this Agreement, in whole or in
part, or any of its rights or obligations under this Agreement, without the prior express written approval
of the City, which approval may be withheld in the sole and unfettered discretion of the City.
15., Notice. 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 mall or via a nationally -
recognized private carrier (such as Fed Ex or UPS), as follows:
If to the Owner: Graham Enterprise;, Inc.
150 Bunker Court, Suite. 100
Vernon Hills, IL 60061
Attention: John C. Graham
If to the City: City of McHenry
333 S. Green Street
McHenry, IL 60050
Attention: City Administrator
16. 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.
17. Enforcement. Any action to enforce this Agreement shall only be filed in the Twenty-
Second_Judiaal 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.
18. Recording. The parties understand and agree that this Agreement or a memorandum
of this Agreement may be recorded with the McHenry County Recorder of Deeds.
19. Only agreement, - This Agreement sets forth all- the. promises,. inducements,
agreements, conditions and understandings between .the Owner 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.
City of McHenry
Gi
By; 13
Way7lYft, M. or . Date
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6
207,3
McHenry County Recorder JOSEPH J. TIRIO # 2023R0020855
CERTIFICATION
I, Monte Johnson, do hereby certify that I am the duly appointed; acting and qualified
Deputy City Clerk of the City of McHenry, McHenry County, Illinois, and that as such Clerk, I am
the keeper of the records of the Mayor and Aldermen of said City of McHenry.
I do hereby further certify that on August 21, 2023, the McHenry City Council held a
regular meeting that was duly held with all notice and agenda posting requirements.
I do further certify that The City Council approved the Mayor's execution of an Economic
Incentive Agreement to Graham Enterprise Inc. — Ringwood Site. Attached is a true and correct
copy of the agreement.
Given under my hand and seal this 23,d day of August, 2023.
Monte Johnson, Deputy City Clerk
City of McHenry
McHenry County, Illinois
McHenry County Recorder JOSEPH J. TIRIO # 2023R0020855
0
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McHenry County Recorder JOSEPH J. TIRIO # 2023R0020855
Date