Loading...
3.7. SR 07-18-2011REQUEST FOR ACTION TO ITEM NUMBER Ci Council 3.7. AGENDA SECTION MEETING DATE PREPARED BY Consent July 18, 2011 Annie Deckert, Director of Economic Develo ment ITEM DESCRIPTION REVIEWED By Consider Resolution Authorizing Execution of an Amendment Tim Simon, Finance Director for Tax Abatement and Business Subsidy Agreement by and REVIEWED BY between the City of Elk River and Jacobs (Quality Label) Bob Thistle, Interim City Administrator ACTION REQUESTED Adopt Resolution authorizing execution of an Amendment for the Tax Abatement and Business Subsidy Agreement by and between the City of Elk River and Jon Jacobs (Quality Label). BACKGROUND/DISCUSSION On November 21, 2005, the City Council approved the execution of a Tax Agreement and Business Subsidy Agreement with Quality Label, Inc. Per the agreement, Quality Label was required to create 15 new jobs with a minimum hourly wage of $15.00 within two years of their expansion. Within two years of their expansion, Quality Label created 23 jobs which met wage requirements, fulfilling their job creation requirement. On June 30, 2011, Wisconsin Label Corporation purchased Quality Label's assets. Wisconsin Label Corporation is now the owner of the assets and will be operating the business from its current location. There will be no change in operations. The attached agreement reflects these changes. This agreement has been reviewed by Wisconsin Label and staff will be following up with a business retention and expansion visit with the new owners. Staff is recommending approval of the attached agreement. FINANCIAL IMPACT Because this is simply a matter of amending the assignor and assignee, there is no financial impact. Tax abatement payments will be made directly to Wisconsin label rather than Great Northern Bank. ATTACHMENTS Resolution No. 11-01 Amended Assignment and Assumption of Tax Abatement and Business Subsidy Agreement between Jon Jacobs and Wisconsin Label Corporation Action Motion by Second by Vote Follow Up C:\Users\jmiller\AppData\Local\Miaosoft\Windows\Temporary Internet Files\Content.0utlook\GWL3I79K\7-18-11 Council-Wisconsin Label.doc Extract of Minutes of Meeting of the City Council of the City of Elk River, Sherburne County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Elk River, Minnesota, was duly held in the City Hall in the Ciry of Elk River, on July 18, 2011, commencing at or after 6:30 P.M. The following members were present: and the following were absent: Member introduced the following resolution and moved its adoption: RESOLUTION NO. I I - RESOLUTION APPROVING AN ASSIGNMENT OF TAX ABATEMENT BE IT RESOLVED By the Ciry Council (the "City Council") of the City of Elk River, Sherburne County, Minnesota (the "City") as follows: Section 1. Background; Findings. (a) The City has entered into a Tax Abatement and Business Subsidy Agreement dated February 28, 2006 (the "Abatement Agreement"), with Jon Jacobs and on December 20, 2006 the City consented to the assignment of Jon Jacobs' interest in the Abatement Agreement to CPE Exchange 25613, LLC, a real estate holding company of which he is the sole member (together with Jon Jacobs, the "Assignor"). (b) The Assignor has, on June 30, 2011, conveyed that certain real property, legally described as Lot 2, Block 2, Elk River Business Park, Sherburne County, Minnesota (the "Tax Abatement Property"), to CPE Exchange 26404, LLC which has leased the Tax Abatement 388753v2 JSB EL185-13 Property to Wisconsin Label Corporation (the "Assignee") and the Assignee has acquired the assets of Quality Label and Barcoding Incorporated. (c) The Assignor and the Assignee have requested that the City consent to the assignment of the Assignor's rights and obligations under the Abatement Agreement to the Assignee pursuant to an Assignment and Assumption of Tax Abatement and Business Subsidy Agreement by and between the Assignor and the Assignee (the "Assignment and Assumption Agreement"). Section 2. Approval of Assigrunent. (a) The City hereby consents to the assignment of the Assignor's rights and obligations under the Abatement Agreement to the Assignee pursuant to the Assignment and Assumption Agreement. (b) The Assignment and Assumption Agreement is hereby approved in substantially the form submitted to the City. (c) The Mayor and the City Administrator are hereby authorized to execute the Consent and Agreement to the Assignment and Assumption Agreement on behalf of the City. The motion for the adoption of the foregoing resolution was duly seconded by Member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against: whereupon said resolution was declared duly passed and adopted. John J. Dietz, Mayor ATTEST: Tina Allard, City Clerk 388753v2 JSB EL185-13 STATE OF MINNESOTA ) COUNTY OF SHERBURNE ) SS. CITY OF ELK RIVER ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Elk River, Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council held on July 18, 2011, with the original thereof on file in my office and the same is a full, true and complete transcript therefrom insofar as the same relates to the approval of an assignment of tax abatement. WITNESS My hand as City Clerk and this .day of July, 2011. City Clerk City of Elk River, Minnesota 388753v2 JSB EL185-13 ASSIGNMENT AND ASSUMPTION OF TAX ABATEMENT AND BUSINESS SUBSIDY AGREEMENT THIS ASSIGNMENT AND ASSUMPTION OF TAX ABATEMENT AND BUSINESS SUBSIDY AGREEMENT (this "Agreement") dated as of the day of July, 2011, is made and entered into by and among JON JACOBS, an adult resident of Minnesota and CPE EXCHANGE 25613, LLC, a Minnesota limited liability company (collectively, "Assignor"), and WISCONSIN LABEL CORPORATION, a Wisconsin corporation ("Assignee"). WITNESSETH: WHEREAS, Assignor is the Developer under that certain Tax Abatement and Business Subsidy Agreement dated February 28, 2006 (the "Abatement Agreement"), by and between Assignor, as Developer, the City of Elk River, Minnesota a Minnesota municipal corporation ("City"); and WHEREAS, Assignor has, on June 30, 2011, conveyed that certain real property, legally described as Lot 2, Block 2, Elk River Business Park, Sherburne County, Minnesota (the "Tax Abatement Property"), to CPE Exchange 26404, LLC which has which has leased the Tax Abatement Property to Wisconsin Label Corporation (the "Assignee") and the Assignee has acquired the assets of Quality Label and Barcoding Incorporated; and WHEREAS, the Tax Abatement Property is subject to the Abatement; and WHEREAS, Assignor desires to assign its obligations, rights and interest in, to and under the Abatement Agreement to Assignee as of the date hereof (the "Transfer Date"), and Assignee desires to accept the assignment thereof and assume Assignor's obligations under the Abatement Agreement from and after the Transfer Date, all as more particularly hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements contained herein, Assignor and Assignee hereby covenant and agree as follows: 1. Any capitalized term used herein and not otherwise defined herein shall have the meaning ascribed to such term in the Abatement Agreement. 2. As of the Transfer Date, Assignor does hereby grant, transfer, and assign to Assignee all of Assignor's rights, title and interest in, to and under the Abatement Agreement. 3. Assignor hereby agrees to indemnify and defend Assignee, its successors and assigns, and its and their employees, agents, members, managers and officers (collectively the "Assignee Indemnified Parties") against, and hold the Assignee Indemnified Parties harmless from, any and all cost, liability, loss, damage or expense, 388743v2 JSB EL185-13 including, without limitation, reasonable attorneys' fees and expenses (collectively, "Losses and Liabilities"), arising out of or in any way related to a failure by Assignor, its successors or assigns to keep and perform, or a default by Assignor, its successors or assigns under, any of the covenants, obligations and agreements to be performed by the Developer under the Abatement Agreement prior to the Transfer Date. 4. Assignee, as of the Transfer Date, hereby accepts the foregoing assignment, and assumes and agrees to faithfully abide by, perform, and discharge each and every term, covenant, and condition of the Contract applicable to the "Developer," (the "Assumed Obligations") and to be fully bound by all of the foregoing. Assignee hereby agrees to indemnify and defend Assignor, its successors and assigns, and its and their employees, agents, partners and officers (collectively the "Assignor Indemnified Parties") against, and hold the Assignor Indemnified Parties harmless from, any and all Losses and Liabilities arising out of or in any way related to a failure by Assignee, its successors or assigns to keep and perform, or a default by Assignee, its successors or assigns under, any of the Assumed Obligations. 5. Assignor hereby warrants and represents to Assignee as follows: (a) The Abatement Agreement has not been modified or amended and is full force and effect as of the date hereof; and (b) To Assignor's knowledge, there is no Event of Default in existence under the Abatement Agreement, nor is there in existence any state of facts or circumstances which, with the giving of notice or lapse of time or both, would constitute an Event of Default under the Abatement Agreement. 6. Assignor will not enter into any modification or amendment of the Abatement Agreement that would adversely affect the rights and interest of Assignee thereunder or the Assumed Obligations unless such modification or amendment is entered into by Assignee. Assignor will not enter into any agreement terminating the Abatement Agreement without the prior written consent of Assignee. 7. Assignor shall give and deliver a copy of any notice, demand or other communication which Assignor gives or delivers to, or receives from, City under the Abatement Agreement, and that relates to or may affect the rights and interest of Assignee under the Abatement Agreement or the Assumed Obligations, to Assignee in the manner set forth in Section 5.3 of the Abatement Agreement, addressed or delivered personally to Assignee as follows: Wisconsin Label Corporation 2571 S. Hemlock Road Green Bay, WI 54229 Attn: or at such other address as Assignee may, from time to time, designate by written notice to Assignor given or delivered in the manner set forth in Section 5.3 of the Abatement 2 388743v2 JSB EL185-13 Agreement. Assignee shall give and deliver a copy of any notice, demand or other communication which Assignee gives or delivers to, or receives from, City under the Abatement Agreement, and that relates to or may affect the rights and interest of Assignor under the Abatement Agreement, delivered personally to Assignor or given or delivered in the manner set forth in Section 5.3 of the Abatement Agreement to Assignor pursuant to the notice address set forth therein, or at such other address as Assignor may, from time to time, designate by written notice to Assignee. 8. Assignee expressly represents, for the benefit of the City, that it is a corporation duly organized and in good standing under the laws of the State of Wisconsin, is not in violation of any provisions of its organizational documents or (to the best of its knowledge) the laws of the State of Minnesota, is duly authorized to transact business within the State of Minnesota, has power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its governing body. 9. The Assignor hereby irrevocably authorizes and directs the City to pay exclusively to the Assignee, from and after the date hereof, all sums due under the Abatement Agreement, subject to the terms thereof; and to the extent such sums are paid to the Assignee, the Assignor agrees that the City shall have no further liability to the Assignor for the same. The Assignor acknowledges that the City's rights and remedies against the Developer under the Abatement Agreement are unaffected by this Assignment. 10. Assignor and Assignee agree that neither this Assignment nor the Abatement Agreement shall be amended or changed in any way without prior written approval of the City 1 1. This Assignment shall be binding on and inure to the benefit of the parties hereto and their successors and assigns and shall further be for the benefit and reliance of the City. 12. This Assignment shall be governed by and construed in accordance with the laws of the State of Minnesota. 13. This Assignment may be executed in counterparts, which counterparts when considered together shall constitute a single, binding, valid and enforceable agreement. [Signature pages follow] 3 388743v2 JSB EL185-13 IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this Assignment and Assumption of Tax Abatement and Business Subsidy Agreement as of the date first above written. ASSIGNOR: JON JACOBS, adult resident of Minnesota AND CPE EXCHANGE 25613, LLC, a Minnesota limited liability company By: Jon Jacobs Its: President and Sole Member 388743v2 JSB EL185-13 ASSIGNEE: WISCONSIN LABEL CORPORATION, a Wisconsin corporation By: Its: 388743v2 JSB EL185-13 CONSENT AND AGREEMENT The undersigned, City of Elk River, Minnesota, a Minnesota municipal corporation ("City"), hereby (i) consents, in accordance with Section 3.6 of the Abatement Agreement, to (A) the transfer of the Tax Abatement Property (as defined in the foregoing Assignment and Assumption of Tax Abatement and Business Subsidy Agreement) (the "Assignment and Assumption") by the Assignor named therein (the "Assignor") to the Assignee named therein (the "Assignee"), and (B) the execution and delivery by the Assignor and the Assignee of the Assignment and Assumption, and the terms and provisions thereof; (ii) agrees that in the event of any inconsistency between the terms and provisions of the Assignment and Assumption and the terms and provisions of the Abatement Agreement (as defined in the Assignment and Assumption), the terms and provisions of the Assignment and Assumption shall control; (iii) releases Assignor from all the Assumed Obligations as defined in the Assignment and Assumption; (iv) warrants, represents and certifies to the Assignee as follows: (A) The Abatement Agreement has not been modified or amended and is in full force and effect as of the date hereof; and (B) To the knowledge of the undersigned, there is no Event of Default in existence, nor is there in existence any state of facts or circumstances which, with the giving of notice or lapse of time or both, would constitute an Event of Default under the Abatement Agreement. City further covenants and agrees to and for the benefit of the Assignee as follows: (C) City will not enter into any modification or amendment of the Abatement Agreement that would affect the rights and interest of the Assignee under the Abatement Agreement or the Assumed Obligations (as defined in the Assignment and Assumption) unless such modification or amendment is entered into by Assignee. City will not enter into any agreement terminating the Abatement Agreement without the prior written consent of Assignee, unless such termination does not affect the rights and interests of the Assignee. (D) If the City delivers any notice, demand or other communication to the Developer under the Abatement Agreement that relates to or may affect the rights and interest of the Assignee under the Abatement Agreement or the Assumed Obligations, the City will deliver a copy of such notice, demand or communication to the Assignee in the manner set forth in Section 5.3 of the Abatement Agreement, addressed or delivered personally to the Assignee as follows: Wisconsin Label Corporation 2571 S. Hemlock Road Green Bay, WI 54229 Attn: 388743v2 JSB EL185-13 or at such other address as the Assignee may, from time to time, designate by written notice to City given or delivered in the manner set forth in Section 5.3 of the Abatement Agreement. 388743v2 JSB EL185-13 7 IN WITNESS WHEREOF, City has caused this Consent and Agreement to be duly executed as of this day of July, 2011. CITY OF ELK RIVER, MINNESOTA By: Its Mayor By: Its City Administrator 388743v2 JSB EL185-13