HomeMy WebLinkAboutReso 167-09 Reimb Sales Tax Scarlt CtRESOLUTION NO. 167-09
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
APPROVING AN AGREEMENT FOR REIMBURSEMENT OF SALES AND USE TAX
REVENUE WITH 6450 MOTORS LLC RELATING TO IMPROVEMENTS TO BE PERFORMED
ON A PROPERTY LOCATED AT 6015 SCARLETT COURT
WHEREAS, the current worldwide economic slowdown has negatively impacted the City
of Dublin's revenues; and
WHEREAS, for decades, state and local governments have used economic development
incentives to attract or retain jobs and/or improve the local tax base; and
WHEREAS, on January 6, 2009, the City Council of the City of Dublin adopted
Resolution No. 9-09, establishing a Sales Tax Reimbursement Program ("the Program")
intended to attract new businesses to the City; and
WHEREAS, the Program established certain conditions under which the City may agree
to enter into an agreement to reimburse property owners and businesses for costs they incur in
making certain internal and external building improvements, as well as site improvements
provided that certain conditions are met; and
WHEREAS, 6450 Motors LLC ("the Tenant") leases certain real property located at 6015
Scarlett Court ("the Property"), located in the City for the establishment of a new Hyundai
dealership; and
WHEREAS, the Tenant wishes to perform certain interior and exterior improvements, and
to avail itself of the benefits of the Program by entering into an agreement with the City to
receive reimbursement from the City to be paid out of sales tax revenue generated; and
WHEREAS, the City Council finds that it is in the public interest to enter into this
agreement because the City and its residents will benefit from increased revenue received from
both sales tax revenue that it may not otherwise receive, and from the increase in the property
taxes owed by the Owner due to the increased value of the property from the improvements;
and
WHEREAS, the City Council finds that it is in the public interest to enter into this
agreement because the City and its residents will benefit from the aesthetic improvements to the
neighborhood that will occur due to the exterior improvements to be made to the structure; and
WHEREAS, the City Council further finds that the City and its residents may also benefit
from the creation of new jobs in the City by the Tenant.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin
approves the Sales Tax Reimbursement Agreement (attached as Exhibit A and titled
"Agreement For Reimbursement Of Sales And Use Tax Revenue Between The City Of Dublin
and 6450 Motors, LLC.
Page.:1. of 2:.
BE IT FURTHER RESOLVED that the City Manager is authorized to execute the
agreement substantially in the form attached hereto and to undertake such further action as may
be necessary and desirable to carry out the intent of this resolution.
PASSED, APPROVED AND ADOPTED this 17th day of November, 2009, by the
following vote:
AYES: Councilmembers Biddle, Hart, Hildenbrand, Scholz, and Mayor Sbranti
NOES: None
ABSENT: None
ABSTAIN: None
~~
Mayor
ATTEST:
~ ~~~~
City Clerk
Rena 16Z-09, Adopted 1?-1:7-09, iter~t$::i.;, Page 2 Of ;2.. ..'_ .
AGREEMENT FOR REIMBURSEMENT OF SALES AND USE TAX REVENUE
BETWEEN THE CITY OF DUBLIN AND 6450 MOTORS, LLC.
THIS AGREEMENT is made and entered into this _ day of , 2009, by and between
the City of Dublin ("City"), a municipal corporation, and 6450 Motors, LLC. ("Tenant"), collectively referred to as
"the Parties."
RECITALS
WHEREAS, the City Council of the City of Dublin adopted Resolution No. 9-09 on January 6, 2009,
which Resolution established a Sales Tax Reimbursement Program ("Program") for a period of two years; and
WHEREAS, the Program authorizes the City of Dublin to enter into agreements with businesses in
certain circumstances, wherein the City agrees to reimburse the business for the actual costs of certain pre-
approved improvements to business properties. The reimbursement is made in annual payments over five
years or until the business has recouped its actual expenses for the improvements, whichever comes first. The
annual payment is capped at fifty percent (50%) of the sales and use tax revenue (hereafter "sales tax")
generated by the business in the preceding year; and
WHEREAS, provided certain circumstances are met, the Program allows Tenants to recover, over time,
a portion of the costs of interior, exterior and site improvements made to their property through a partial
reimbursement from the City of sales tax generated from the property; and
WHEREAS, Tenant leases certain real property located at 6015 Scarlett Court (APNs: 941-0550-032-
02 and 941-0550-032-03), ("the Property"), located in the City; and
WHEREAS, the space to be occupied by Tenant has a total area of seventy-five thousand (75,000)
square feet or less, and Tenant has furnished the City with documentation establishing that Tenant is expected
to have at least ten million dollars ($10,000,000) in annual retail sales transactions attributable to operations
conducted at the Property, which would result in at least one hundred thousand dollars ($100,000) of sales tax
for the City each year; and
WHEREAS, Tenant intends to improve two buildings it will be using for its operations. These
improvements include new electrical, ceiling and lighting, new bathrooms, a showroom area, a conference
room, several offices, as well as exterior and facade improvements to both structures. The cost of
improvements at 6015 Scarlett Court are estimated to be $670,000.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual advantages to be derived therefrom, and in
consideration of the mutual covenants herein contained, it is agreed by and between the Parties hereto as
follows:
1. DEFINITIONS
1.1 "Exterior Improvements" means all improvements made to the exterior of the physical
structure of the building identified in Exhibit A of this Agreement
1.2 "Improvements" means all Exterior Improvements and Interior Improvements identified in
Exhibit A.
1.3 "Interior Improvements" means all improvements made to the interior space to be occupied
by the Tenant and identified in Exhibit A of this Agreement.
TENANT'S DUTIES UNDER THIS AGREEMENT
2.1 Tenant wishes to perform certain Improvements substantially as described in Exhibit A of
this Agreement .
2.2 Prior to commencement of construction of the Improvements or any portion thereof,
Tenant shall submit to City all plans, specifications and cost estimates for the
Improvements for City review and approval. Nothing in this Agreement shall affect the
need for Tenant to obtain any approvals from the City for the Improvements as required by
any City rules, regulations, ordinances or resolutions.
2.3 Following City approval of the plans, specifications and cost estimates pursuant to Section
3.1, and in the event that Tenant desires to modify the specifications for any of the
Improvements or if change orders are required, Tenant shall submit the modifications,
change orders and any revisions to the originally approved cost estimates to City for
approval. Failure to do so shall relieve the City of any obligation to pay for any
Improvements not constructed as originally approved.
2.4 Tenant shall provide the City with all bills and evidence of payment for the Improvements,
in a form acceptable to City within thirty (30) days of Tenant's final payment for the
Improvements. A form acceptable to the City could include a summary of the original
estimate and final amount paid to each vendor. This summary would also require copies
of receipts and paid invoices as an attachment to the summary.
2.5 The actual cost of the Improvements, approved by City pursuant to Section 3.1 of this
Agreement, shall constitute the Eligible Compensation Amount.
2.6 A representative of the City shall have the right, at the City's sole discretion, to inspect all
Improvement work performed to ensure that said work was performed substantially as
approved by the City pursuant to Section 3.1 of this Agreement. This right of inspection
shall be in addition to any inspection performed by City staff as required or permitted by
any other City rules, regulations, ordinances or resolutions.
2.7 Tenant shall file with the State Board of Equalization a separate sales tax return
encompassing sales tax data relating to sales made at the Property only, regardless of any
other sales activity conducted at other locations within the City. Beginning with the first full
quarter in which Tenant pays sales taxes on its operations at the Property, and for every
subsequent quarter, Tenant shall provide City with copies of all sales tax returns filed with
the State Board of Equalization for a period of five (5) years. For example, if Tenant
begins operations in February of a given year, the first sales tax return submitted to the
City shall be for the period from April through June of that year. Tenant shall provide City
with quarterly returns within thirty (30) days of submitting each return to the Board of
Equalization.
Said submission of quarterly sales tax returns shall end when City has made its final
payment to Tenant pursuant to this Agreement.
2.8 Tenant shall provide City with a total of twenty (20) consecutive quarterly returns, covering
sales taxes paid over a total of five (5) consecutive twelve month periods. Each such
twelve month period constitute a Reporting Year. Thus, if the first sales tax return
submitted pursuant to Section 2.7 encompasses the period from April through June of a
given year, the first Reporting Year shall run from April of that year through March of the
following year, after which the second Reporting Year shall commence.
2.9 In the event that Tenant learns or is notified that the sales taxes it has paid were
incorrectly allocated between City and any other taxing entity for any quarter for which
Tenant has provided City with sales information pursuant to Section 2.7 of this Agreement,
Tenant shall promptly notify City of the error within thirty (30) days of such notification.
2.10 In the event that City determines, pursuant to Section 3.9 of this Agreement, that it
overpaid Tenant due to a miscalculation or misallocation of sales tax payments, and if City
is not obligated to make any additional payments to Tenant pursuant to this Agreement,
Tenant shall pay to City the amount City overpaid within thirty (30) days of notification by
City of the overpayment.
2.11 Tenant hereby acknowledges and agrees that the City may, as required by law, disclose to
third parties confidential information contained in or derived from the sales tax returns
submitted to City pursuant to Section 2.7 of this Agreement. Such information includes,
but is not limited to, the amount of any payments made to Tenant pursuant to Section 3.3
of this Agreement.
3. CITY'S DUTIES UNDER THIS AGREEMENT
3.1 Upon receipt of the plans, specifications and cost estimates, for the Improvements
pursuant to Section 2,2 of this Agreement, or upon submission of revised specifications for
any of the Improvements, change orders or any revisions to the originally approved cost
estimates pursuant to Section 2.3, City shall review said materials to determine the extent
to which they represent work that is consistent with the intent of the Program. City shall
inform Tenant in writing either that the Improvements have been approved, or that they
have been approved with exceptions, which exceptions shall also be in writing,
3.2 Upon receipt of evidence of payment for the Improvements pursuant to Section 2.4 of this
Agreement, City shall provide Tenant with a written determination of the maximum amount
that may be paid to Tenant under this Agreement.
3.3 City shall verify the accuracy of all sales tax returns submitted to City pursuant to Section
2.7 of this Agreement, Within one hundred twenty (120) days after receipt of the final
sales tax return of each Reporting Year, as that term is defined in Section 2.8 of this
Agreement, the City shall pay Tenant an amount equal to fifty percent (50%) of the sales
tax paid by Tenant in the preceding Reporting Year, subject to the provisions of Sections
3.4, 3.5, 3.6, 3.7 and 3.8 of this Agreement.
3.4 Should Tenant fail to timely submit its sales tax returns to City, City shall be under no
obligation to make any payment to Tenant for that year.
3.5 In no event shall City make any payment to Tenant for any Reporting Year in which the
total sales tax paid by Tenant relating to sales on the Property is less than one hundred
thousand dollars ($100,000).
3.6 At no time shall the cumulative amount of City's payments be more than the maximum
amount that may be paid to Tenant determined pursuant to Section 3.2 of this Agreement.
3.7 In no event shall City be obligated to pay Tenant based on sales tax generated more than
five (5) years after the first quarter Tenant submits its sales tax return pursuant to Section
2.7 of this Agreement.
3.8 In the event that Tenant vacates the Property or ceases to conduct business at the
Property before submitting sales tax returns encompassing five (5) consecutive years,
City's obligation to pay Tenant shall be based only on the amount of sales tax generated
by Tenant while occupying the Property.
3.9 If, pursuant to Section 2.9 of this Agreement, Tenant informs City that its sales tax
payments were incorrectly allocated to the City, or if the City otherwise learns that Tenant's
sales tax payments were incorrectly allocated to the City, and if the result of the incorrect
allocation is that City paid Tenant more or less than it would have been required to pay
pursuant to Section 3.3 of this Agreement, City shall determine the amount of overpayment
or underpayment.
If the City is obligated to make any subsequent annual payment to Tenant pursuant to this
Agreement, City shall adjust the subsequent payment to reflect any overpayment or
underpayment it may have made for the period in question.
If City is not obligated to make any additional payments to Tenant pursuant to this
Agreement, but has determined that it underpaid Tenant, City shall pay Tenant the amount
it underpaid, provided that the sum total of payments to Tenant do not then exceed the
Eligible Compensation Amount. This payment shall be made within thirty (30) of City's
discovery of the amount of the underpayment.
If City is not obligated to make any additional payments to Tenant pursuant to this
Agreement, but has determined that it overpaid Tenant, Tenant shall pay City the amount
City overpaid in compliance with Section 2.10 of this Agreement.
4. Indemnification
Tenant shall defend City, its officers, employees and officials, against any claims or actions
(including declaratory or injunctive relief) concerning Tenant's construction of the Improvements,
including any Right-of-Way Improvements, and shall indemnify and hold City harmless from any
damages, charges, fees or penalties that may be awarded or imposed against City and/or Tenant
in connection with, or on account of, Tenant's construction of the Improvements, including any
Right-of-Way Improvements, and/or City's failure to enforce or comply with any applicable laws.
Amendments to Agreement
No part of this Agreement shall be altered or amended without written agreement of the signatory
Parties.
5. Assignment
The rights and obligations of the Parties under this agreement are not assignable and shall not be
delegated without the prior written approval of the other Party.
6. Exhibits.
The following Exhibit is attached hereto and incorporated as if fully set forth herein:
Exhibit A: Description of Improvements.
IN WITNESS WHEREOF, the Parties execute this agreement hereto on the day and the year first written
above.
APPROVED AS TO FORM AND CONTENT:
By:
John D. Bakker, City Attorney, City of Dublin
ADOPTED BY:
CITY OF Dublin, a Municipal Corporation
By:
Date:
Joni Pattillo, City Manager
6450 Motors, LLC., a California Corporation
By:
Date:
Its:
1320607.1
EXHIBITA
Description of Improvements
6015 Scarlett Court -Tenant Improvement Valuation - $670,000 (per the City's Building Division)
• Adding new restrooms
• New wall finishes
• New lighting
• New ceiling
• Expanding the showroom
• Removal of walls
• Exterior modifications, including paint
S»~C41~1D AMENDMENT TU
PCS SITI; A~~EEIVII~N'T
THIS SECOND AIwIEN1~MENT TC1 PCS SITE AGREEMENT (the "Second
Amendment") is entered into this day of , 2i1~9, by and betwee[r THE
CITY OF DtJBLII~I, a rrrunicipal corporation, with a mailing address of i I6U0 Shannon Avenue,
Dublin, Califarrua {hereinafter referred to as "Caesar" crr "(?wrier"} artd ST+C FTVE LLC, a
Delaware trrtited liability campany, by and throw its Attorney In Fact, Gicrbal Signal
Acquisitions III LLC, a Ielaware limited liability cpmparry, with its principal offices locates] at
20t~Q Corporate Drive, Canonsburg,. Pennsylvania I53i7 (hereinafter referred. to as "Lessee" or
ItE3CITALS
V-jHEREAS, Lessor and Sprint Sp~tru L,,P., a Delaware limited partnership ("Original.
.Lessee") entered into a PCS Site Agreement dated Npvemk~er ~, 2t~pl (tlrc "Original
Agreement"} wlterei~y Original Lessee leased certain real property, together with access and
utility easements, Ideated in Alameda Ct~unty, California from Lessor (the "Site"), all located.
within certain real. property owned by Lessor ("Leesor's Property"); and
WHEREAS, the Original Agreement was arnerrded by that certain undated First
Ame»drnerrt to PCS Site Agreerxrent dated February 6, 2Q44 (hereinafter the Original Agreement
and all subsequent amendments are ccallectively referred to ss the "Agreerrrezrt")~ and
WlE-IEItEAS, STC Fine LLC is currently the Lessee under the Agreement as successor in
interest. to the Original Lessee; acrd
WHEREAS, Lessor and Lessee desire tcs amend. the Agreement orr the terms azrd
conditions contained herein.
NQW THEItEFOR.E, for good and valuable consideration, the receipt and sutTiciency of
which are acknowledged, Cess+~r and Lessee agree as fallo~vs:
SltC ~1ArtIC; QU~Itt1
Rl~$aflCSS (.)it 11 .}f' $$d)+$4'~ 1
Exhibit A
1. Recitals: Defined Terms. Tl~e parties acknowledge the accuracy o~ the foregoing
recitals. Any capitalized terms not defnned herein shall have the meanings ascribed tc them an
the Agreement,
2, consent to Global Signal Sublease. The parties acknowledge that pursant tc a
sublease the ``Sublease'~~, Lessee will sublease its entire interest in the Agreement to Global
Signal Acquisitions III LLC ("GSA") and. GSA will then. lease back tt~ Lessee (andlor one or
more of its afl-iliates~ a portion of the Site {collectively, the "Lease and Lease Back.
Transactions"). In c+~nsideration fQr the Rent Adjustment and Payment reflected in sections 3
and 4 of this Amendment, Lessor hereby cflns~ents tc the Lease and Lease Back Transactions and
further acknowledges that it will require nt~ addztir~nal payments under the ,Agreement for the
Lease and. Lease back 'Trarasactiozrs or atherwise in connectaon with the above consents,
3, Rent Ad,~ustment, Effective upon full execution of this Second Amendment, the
mantlaly rent shall increase by an amount equal to Qne Hundred Dollars and Q/l ~ Dollars
~$l OO.OQJmtsnth). hallowing such increase, the rnc~nthly rent shall cantinue to adjust pursuant to
the terms of the Lease.. Upon full execution, the parties agree the Base Rent due rndntlily will be
~1,335,~5, and, on July lz ~.Olfl, the Base Rent would be adjusted upward a minirnurn of 3°/~
pursuant to the terms of s~abdavision fib} of section ~ of the Agreement.
~. ~cnsderation. In con$adez~tavn for amending the Agreement, Lessee wall pay
Lesser Six Thousand ar~d f}t3f10[? Dollars ~$6,Q04_~0) within sixty days of full exeGUtian cf this
Second Arr~et~dment.
5, katification.
(a) Lesser and. Lessee agree that Lessee is the current Lessee under the
Areemer~tz the Agreement is in full. farce and effectf as it may have been previously amended
and as amended herein, and the Agreement captains the entire agreement between Lesser and
Lessee with respect to the 'Site.
{b) Lessor and Lessee agree that any and all actions or inactions that hive
occurred €~r should have occurred. prior to the date of this Second. Amendment are apprctived and
5atc idamc, C)ub3ira 7
Baseness Unit #~~ %8tJ~99
Exhibit A
ratified by the parties and the parties agree that no breaches or defaults exist as of the date crf this
Second Amendment.
(c) lessor represents and warrants that Lessor is duly authorized and has the
full psjwer, right. acrd authority to enter into this Second Amendment. and to perform all cif its
obligations under the Agreement as arrrendecl,
~_ I~otiees. see°s notice address a,s stated in Section: b ~,f the Agreement is
arner~ded as fi~ll+aws;
LSE'S ISRIA-Y C~i'~TACT STC Five LLC
c/c~ Crawn castle USA tnc.
~. Blake Hawk, General Counsel
Atm: Real Estate impartment
4t~0 Corporate Drive
Canonsburg, FA 15317
7. Fterrrainder of Agreerner~t 'Unaffected. fibs balance of the Areek~nerrt is hereby
amended to reflect the purprkse oaf this Sec+an Amcndmenta The parties hereto a+cnvw~edge that
except as expressly nx®dilied hereby, the Agreement remains unnaodi~ed and in full farce and
eft'~t. In the event o1` arty convict or irrcnnsister~cy l~tween the terms of this Second
Amendment atxd tine Agreerrrent, the terms of this Sec+and ..Amendment sh~kll control. Unless
otherwise expressly defined herein, the terms in this 'Second Amendment shall have the same
meanings assigned. to such terms in the .~,greemertt< 'his Second Amendment may be executed
simultaneously or in eaunterparts, each o€ which shall be deemed an original, but all. of which.
together shall constitute one and the same agreement>
Signature pages follvw~
StiEe ~artte: tautlkia3
(3tesiness Uotki k: 8%iA8'~
Exhibit A
This Second Amendment is executed by Lessor as of the date first r~~ritt~en ahor~e.
~SSQI~:
CITY OF 13LJ~LIh~, a rt~unicipal carporatiat~
By:
Print. Narn,e:
Title:
(L,essee Execution Fagg Follows]
Site-Name: Dublin
IItasi~si Unit#: 884W99
Exhibit A