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HomeMy WebLinkAboutOrdinances - ORD-15-1765 - 12/07/2015 - EXECUTION OF ECON. INCENTIVE AGREEMENT W/SUNNYSIDEORDINANCE NO. 154765 AN ORDINANCE AUTHORIZING THE MAYOR'S EXECUTION OF AN ECONOMIC INCENTIVE AGREEMENT BETWEEN THE CITY OF MCHENRY AND SUNNYSIDE AUTO FINANCE COMPANY This space reserved for Recorder's arse only. 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 Economic Incentive Agreement, bearing the date of December 7, 2015, between the City of McHenry and Sunnyside Auto Finance Company 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 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 SECTION 3: All Ordinance or parts thereof in conflict with the terms and provisions hereof are hereby repealed to the extent of such conflict.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 AND APPROVED THIS 7th day of DECEMBER 2015. Voting Aye: Voting Nay: Not Voting: Abstaining: Absent:None ATTEST: Condon, Peterson, Wimmer, Curry, Schaefer, Glab, Santi None None None Clerk �1� Mayor ECONOMIC INCENTIVE AGREEMENT BETWEEN CITY OF MCHENRY AND SUNNYSIDE AUTO FINANCE COMPANY A. This Economic Incentive Agreement ("Agreement") is made and entered into this 7" day of December, 2015 ("Effective pate"), by and between the City of McHenry ("City"), an Illinois home rule municipality ("City") and Sunnyside Company, a. Division of Sunnyside Auto Finance Co., an Illinois: corporation ("Sunnyside). B. In recognition of the importance of a successful business environment to the City's tax base, the. City desires to enhance the long-term, viability of the area on Illinois Route 120 between Meadow Lane and Ringwood Road through the "West Illinois Route.120 Corridor Enhancement initiative C. Sunnyside currently operates Dodge, Chrysler and Ram automobile dealerships under Illinois. Account ID No. (Sales Tax Number)1732 ("Business") at the following addresses in the City, with associated PINS, ("Subject Property") and legally described on attached Exhibit A. North Side of Elm Street (west to east): South Side of Elm Street (west to east):. 09-21-302-007 (4820 W. Elm) 09-27-302-008 (4820 W. Elm) 09-27-302-009 (4820 W. Elm) .09-21-302-010 (4820 W. EIm) 09-27-302-011(4810 W. Elm) 09-27-302-012 (4810 W. Elm) 09-27-802-013 (4810 W. Elm) 09-27-302-014 (4808 W. Elm) 09-27-303-013 (4815 W. Elm) 09-27=30.3-014 (4811 W. Elm); 09-27-303=015 (4807 W. Elm) D. The Subject Property lies within the west Illinois Route 120 corridor and is therefore eligible to participate in the West Illinois Route 120 Corridor Enhancement Initiative. E. Sunnyside intends to acquire a Jeep franchise in 2015-2016 adding it to its Business and conducting all Business sales at. the Subject Property. 3 F. The City and Sunnyside desire to enter into this Agreement to foster the long- term use of the Subject Property in a manner that will. enhance the West Illinois Route 120: Corridor Enhancement initiative. G. In order to: accommodate Sunnyside's jeep dealership acquisition, Sunnyside also intends to undertake substantial improvements to the Subject. Property at a significant expense to Sunnyside, including but not limited to: demolition, building addition, site preparation. and paving, and build out expenses as further described on the attached submittal by Sunnyside marked as Exhibit B ("Improvements to the Subject. Property"). in order to make it economically feasible for Sunnyside to agree to successfully accomplish the Improvements to the Subject Property and incur the. aforementioned Improvements the City has agreed to share a portion of the Sales Tax, as defined herein, generated by Sunnyside at the Subject Property in an amount not -to -exceed $300,000. ("Sales Tax Incentive") for labor and equipment purchases included on attached Exhibit "B." DEFINITIONS "Base Sates Taxes" means the retailers occupation taxes and service occupation taxes received by the City, generated solely at the Subject Property and by Sunnyside, 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/&z 18) (as amended), and any taxes that are enacted and imposed as replacements thereto. "City Payment. Obligation" means the City's obligation to pay Sunnyside Sales Tax as set forth in Paragraph Three and in accordance with the schedule outlined in Table One. "The Commencement Date" means December 31, 2017 and is the first date the .City shall pay a Sales Tax Incentive Annual Payment; as defined herein; to Sunnyside as set forth in Paragraphs Three and in accordance with the schedule outlined in Table One. "Event of Default" means a default under this Agreement which remains uncured as set forth in Paragraph Sixteen. 4 "Gross Receipts" means as defined in the Retailer's Occupation Tax Act (H ILCS 120%1 et seq.). `'IDOR" means the Illinois Department of Revenue; "Maximum Total Payment Obligation" shall mean the maximum total amount paid to Sunnyside pursuant to this Agreement, as set forth in Paragraph J. "Sales Tax Incentive" means the payment set forth in Paragraph Three and in accordance with the Sales Tax Incentive Annual Payment outlined in -Table One. "Sales Tax Incentive Annual Payment" expressed as a percentage of Base .Sales Tax above the Threshold Amount outlined in Table One. "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 annual payment as defined herein. H. Sunnyside has indicated to the City that, but for the commitment and agreement of the City being made herein, Sunnyside would not have undertaken and will not undertake the Improvements. I, 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 sound and stable commercial growth within the corporate limits of the City. J. In order to make it economically feasible for Sunnyside to agree to continue to successfully operate the Business, the City has agreed to share a portion of the Base Sales Tax 5 generated by Sunnyside within the corporate limits of the City, not -to -exceed $300,000. ('Maximum Total Payment Obligation"). K.. The parties hereto agree that the average Base Sales Tax generated by the Business in the past four (4) years is. $66,212 ("Threshold Amount") and that the Base Sales Tax being shared hereunder shall only be that Base Sales Tax generated in the future by Sunnyside in excess of this Threshold Amount not to exceed the Maximum Total Payment Obligation. NOW, THEREFORE, BASED ON THE CONSIDERATION STATED HEREIN, THE ADEQUACY AND SUFFICIENCY OF WHICH IS ACKNOWLEDGED BY THE PARTIES HERETO, IT IS AGREED AS FOLLOWS: 1. Incorporation of Recitals., The Parties incorporate each of the above recitals into this Agreement as if set forth in their entirety in this Section 1. 2. Authority. This Agreement is made and entered into pursuant to the City's home rule powers and functions as granted in the Constitution if the State of Illinois. 3. Agreement to Pay. The City agrees to pay a Sales Tax Incentive to Sunnyside in an amount outlined in Table One below. The City's payment obligation shall continue for so long as. Sunnyside is generating and the City is receiving Base Sales Taxes above the Threshold Amount. as defined herein, Sunnyside also acknowledges the Sales Tax Incentive shall be utilized solely for reimbursement to Sunnyside for the purchase' of Equipment and Labor included on Exhibit "B" not exceeding the Maximum Total Payment Obligation. 4. Evidence of Equipment Purchase. and/or Labor Expenditure. Sunnyside acknowledges that prior to any Sales Tax Incentive payment distribution Sunnyside shall provide the City evidence of the. expenditure for which reimbursement is being sought including the following information: Paid invoice(s), which includes an itemization of each Equipment and/or Labor expenditure; date of Equipment purchase and/or when Labor was completed; company from M which Equipment was purchased from or labor was completed including name, address and federal tax identification number; a reference on the paid invoice indicating the Equipment's purchase for use on the Subject Property and/or Labor performed on the Subject Property; as well as a sworn affidavit of purchase and/or Labor which was completed, by an officer of Sunnyside including name, address and title and/or position within the Sunnyside organization; signed and notarized. in accordance with Paragraph Eleven herein and 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 Improvements. 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 expense or share any revenue associated with Sunnyside, the Business, the Subject Property or acquisition of the Jeep dealership. 6. Sales Tax Incentive. Commencing on December 31, 2017 and on the anniversary of December 31 every year thereafter, not -to -exceed the Maximum Total Payment Obligation, the City shall be obligated to pay an economic incentive, in the form of a Sales Tax Incentive, to Sunnyside, in accordance with Table One, below ("Sales Tax Incentive"). The Incentive Payment shall be paid by the City to Sunnyside following calculation of the amount due but not later than ninety (90) days after Sunnyside produces to the City its Annual Sale Tax Reports, below. Provided, however, no Sales Tax Incentive Payment -shall be paid to Sunnyside until such time as Sunnyside completes the Improvements. outlined on attached Exhibit "B," an occupancy permit is issued ("Occupancy Permit") and. Sunnyside has established the Jeep franchise and new Jeep automobiles are being sold from the Subject Property. TABLE ONE Sales Incentive Year Sales Tax Incentive Annual Payment 7 Year 1(Decemb.er 31, 2017) 75% above ($66,212) Year 2 (December 31, 2018) 75% above ($66,212) Year 3 (December31, 2019) 75% above ($66,212) Year (Deceinb&31, 2020)_ 50% above ($66,212) Ye,ar5 (December3l,2021) 50% above ($66,212) Year 6 (December 31, 2022) 50% above ($66,212) Year 7 (December 31, 2023) 50% above ($66,212) Year 8 (December 31, 2024) 50% above ($66,212) Year 9 (December 31, 2025) 50% above ($66,212) Year 10 (December 31, 2026) 50% above ($66,212) Year 11(December 31, 2027) 50% above ($66,212) Year 12 (December 31, 2028) 25% above ($66,212) Year 13 (December 31, 2029) 25% above($66,212) Year 14 (December 31, 2030) 2.5% above ($66,212) Year'15 (December8l, 2031) 25% above ($66,212) Year 16(December 3l,2032) 25%above ($66,21:2) Year 17 (December 31, 2033) 25% above ($66,212) Year 18 (December 31, 2034) 25% above ($66,212) Year 19 (December 31, 2035) 25% above ($66,212) Year 26 (December 31, 2036) 25% above ($66,212) 7. Sales Tax Reports/Accounting. Within ninety (90) days after the end of the twelfth month of each Sales- Incentive Year, Sunnyside 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 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 Annual 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. Sunnyside shall maintain and have available for inspection by City copies of any and all sales tax returns, 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 Sales Tax Revenue collected pursuant to this Agreement. The City shall use its best efforts to obtain such Sales Tax Information directly from the Illinois Department of Revenue 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 Sunnyside, the Lease and Sales Tax information received by the City, but shall be permitted to disclose such information and documents to employees and consultants as the City (except for any consultant that has a° financial interest in° any motor vehicle dealership within the Chicago metropolitan area, which consultant shall not be retained), in its sole discretion, deems appropriate in order to monitor compliance and audit_ this Agreement. Sunnyside understands and agrees that the provisions of this Agreement and any and all payments to Sunnyside pursuant to this Agreement are public records. Sunnyside 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 Illinois Department of Revenue to allow the Illinois Department of Revenue to furnish to the City Sales Tax Information concerning automobile sales and leases. at Business. 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 ("FOIA") and 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 that such disclosure is required by law. The City shall give Sunnyside prompt notice of any request that is made under the FOIA to disclose the Sales Tax information described above. 9. Mutual Assistance. The City and Sunnyside agree to do all things necessary or appropriate to carry out the terms and provisions of this Agreement and to aid and assist each other in carrying out the terms hereof. 10. Provisions Concerning Limitation on Debt. The receipt, or anticipated receipt, of Sale Tax Revenue, either directly or indirectly, from Sunnyside, as provided earlier in this Agreement, shall be a condition precedent to any obligation of the City to rebate money to Sunnyside. E 11. Performance of the Work. 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 Improvements. Note that the prevailing rate of wages is revised by the Illinois Department of Labor and are available on the Department's official website. 1.2. No Interest: Limited Obligations. No interest shall be due on the obligations set forth in this Agreement. Sunnyside acknowledges that: (a) the City shall not be required to make any payments of the Sales Tax Incentive to Sunnyside unless Sunnyside has then delivered, to the City the IDQR 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 Taxes the City receives from the IDQR which are attributable to the gross sales generated at the Subject Property; (c) the sole source of Sunnyside's entitlement to payment of the Sales Tax Incentive shall be based upon the aforesaid Base Sales Taxes; (d) the City's Payment Obligation shall not be construed as general obligation of the City; and (e) Sunnyside bears all risk of non-payment resulting from the permanent closure of Sunnyside and the inability of Sunnyside to re-lease/sell the Subject Property to a Successor Tenant. For purposes of this Agreement, Sunnyside shall be deemed to have closed permanently if it is closed and the. Subject Property remains either vacant or unoccupied by a Successor Tenant for a period of twelve (12) or more consecutive months ("Permanent Closure"). 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 Maximum Total Payment to Sunnyside; (b) the Permanent Closure of Sunnyside prior to Sunnyside's receipt of the Maximum Total Payment; or (c) the end of the twentieth revenue year (December 31, 2036). This Agreement shall remain in effect for enforcement and accounting purposes following the expiration of the Term. 10 14; Assignment.. Sunnyside may assign this Agreement and its right to receive the Sales Tax Incentive to a third party upon notice to the City. Upon notice_ of an assignment, the City shall make. all payments due hereunder and send all reports called for herein solely to said assignee. 1S. Miscellaneous. This Agreement shall be binding upon and inure to the benefit of the Parties, on Sunnyside's successors and assigns (unless Sunnyside and such successors and assigns agree otherwise in writing), and on successor corporate authorities of the City. 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 Sunnyside: Sunnyside Company 4810 W. Elm Street McHenry, IL 60050 Attention: Robert Dietrich/Brian Larie 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 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 com'irienced 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 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. 11 18. Oniv Agreement. This Agreement sets forth all the promises, Inducements; agreements, conditions and understandings between Sunnyside 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 City Date 12 Sunnyside Company, a Division of Sunnyside Auto Finance Co. By Robert L. Dietrich, President Date 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 (W) 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 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. 18. Only Agreement. This Agreement sets forth all the promises, inducements, agreements, conditions and understandings between Sunnyside 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 Y_ _z_n Sus n E. Low, Mayor Attest Janice C.1or's, Cl y Clerk Sunnyside Company, a Division of Sunnyside Auto Finance Co. Robert L. Diedrich, its President r EX. A-9 -4 - Exhibit A Legal Description oftie Subject Property North Side of Elm Street! Lots 5, 6, 7, 8; 9,10,.11 and 12; 09-27-302-007-014 (1.38 acres) South Side of Elm Street: Lots B, 14 and 15; 09-27-303-013 thru 015 (.83 acres) Exhibit "B" Improvements to the Subject Property 1) Exterior a) The entire outside area. (customer parking, employee parking, driveway, and vehicle display) replaced with the new pavement b) The fascia facing Route 120 was replaced with new header, all new entrance with grand arch, and all new signage (Sunnyside, Chrysler, Dodge, Jeep, Ram). The entire exterior of the building was painted. c) Entire property had the lighting replaced with new efficient LED lighting, which is also more directed to the lot and away from neighbor properties. d) Expansion to the building for a new service department drive up, service writer area, and service bays. 2) Interior a) The new vehicle showroom more than doubled in size allowing more vehicles to be displayed. The new are showroom was completely remodeled with new walls, doors, ceiling, lighting, and the b) The entire building had all the lights. replaced with efficient LED lights, and installed light sensors and motion sensors to reduce electric usage when light is not needed. c) Restrooms were remodeled with new fixtures, tile, and cabinets d) A new service write up. area and accessory display were installed e) A new central air and heat system was installed for showroom, service write up, and all offices f) New welcome desk for customers to be greeted g) New fire alarm system was installed h) All finance and business offices were remodeled with new carpet, lights, and paint i) New designated children play area off the customer waiting area which makes it more friendly for parents to view their children while more peaceful for our customers without children .3) Jeep Franchise to sell new Jeep vehicles CONTRACTOR'S APPLICATION for PAYMENT TO: Sunnyside Company 4810 West Elm Street McHenry, if 60050 FROM CONTRACTOR, Wm. Tonyan & Sons, Inc. 1400 South Route 31 McHenry, If 60060 CONTRACT FOR: PROJECT: HUTS 15-067 Sunnyside Company New Building yiA ARCHITECT: Gillespie Design Group 6307 Business Parkway Suite 101 Ringwood, IL 60072 PAGE 1 OF 4 PAGES Application No::: 6 Application Date: 11/03/2016 Period To: 10131/2016 Contract Date: 3/17/2016 Architect Project#: Distribution to: OWNER ARCHITECT CONTRACTOR CONSTRUCTION MGR 1. Original, Contract Sum 1,262,486.00 2. Change Order Summary ADDITIONS DEDUCTIONS Total changes appproved in 0.00 0.00 previous months by Olvner Total approved this Month 0.00 0.00 TOTALS 0.00 0.00 Net Change by Change Orders 0.00 3. CONTRACT SUM TO DATE (Line 1+ - 2) 1,262,486.00 4. TOTAL COMPLETED & STORED TO DATE (Column G on CAP703) 1,126,034.00 5. RETAINAGE: a.10.00 % of Completed Work 70,993.90 (Columns 0 + E on CAP703) b. 0.00 % of Stored Material 0.00 (Column F on CAP703) Total Retainage (Line 5a + 5b or Total in Column I of CAP703) 70,993.90 6. TOTAL EARNED LESS RETAINAGE (Line 4less Line 5 Total) 1,056,040.10 7. LESS PREVIOUS CERTIFICATES FOR PAYMENT (Lina 13 from prior Certificate) 983,585.50 8. CURRENT PAYMENT DUE 71,454.60 9. BALANCE TO FINISH, INCLUDING RETAINAGE (Line 3 less Line 6) 207,445.90 Contractor Certificatlo ARCHITECT'S CERTIFICATION: The Architect`s signature here certifies that, based on their own observations, the Contract Documents and the information contained herein, this document ccurately reflects the work completed in this Application for Payment. (Signature) he Architect also certifies the Contractor is entitled to the amount certified Date:11/03/20 6 St aof. I for payment. County of.. AMOUNT CERTIFIED: McHenry Date: Subscribed and sworn to before me this 3rd day of November 2016 Notary Public: Donna J. 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