AMENDED & RESTATED LOCAL ECONOMIC DEVELOPMENT PARTICIPATION AGREEMENT

Transcription

1 AMENDED & RESTATED LOCAL ECONOMIC DEVELOPMENT PARTICIPATION AGREEMENT THIS AMENDED AND RESTATED LOCAL ECONOMIC DEVELOPMENT PARTICIPATION AGREEMENT (the Agreement ) is entered into this fifth day of August 2016, by and between the CITY OF RIO RANCHO (the City ), a political subdivision of the State of New Mexico (the State ), and Safelite Solutions LLC (the Company ). WHEREAS, the purpose of the Local Economic Development Act (LEDA), N.M.S.A , et. seq. (the Act ), is to provide public support for economic development to foster, promote and enhance local economic development efforts; and WHEREAS, the City anticipates receiving an appropriation of funds (the Appropriation ) allocated from the State to convey these funds to the benefit of the Company; and WHEREAS, the City will act as fiscal agent for the State s appropriation supporting the Project (the State s contribution ) and will use the funds appropriated by the State, pursuant to (D) of the Act, to convey the funds to the Company by the State based on terms set forth herein; and WHEREAS, the City has duly passed Ordinance No , the Local Economic Development Plan (the Plan ), pursuant to the Act, approving an economic development plan for the City and authorizing the City to provide public support and consider applications for economic development assistance; and WHEREAS, the Plan authorizes the City to provide to a qualifying entity direct or indirect assistance with priority to entities that represent and commit to the creation of new jobs and the likely spin-off effect of recurring municipal revenue stream; and WHEREAS, of the Act requires that a project participation agreement, at a minimum, shall set out (1) the contributions made by each party; (2) the security provided by the qualifying entity to the local government; (3) a schedule for the project development and completion; and (4) provisions for performance review and actions to be taken if performance is unsatisfactory; and WHEREAS, of the Act requires that a local government establish a separate account for monies dedicated or pledged for funding or financing economic development projects; and WHEREAS, the State and the City are parties to an Intergovernmental Agreement, in which each party agrees to make certain contributions towards an Economic Development Project, as defined herein; and WHEREAS, the Company has submitted to the City an application in the form attached to this Agreement as Exhibit A (the Application ) proposing that, in exchange for certain LEDA assistance described below, the Company will undertake and complete certain project elements, which are set forth in this Agreement (collectively, the Project ); WHEREAS, the obligations and conditions required by this Agreement between the City and Company will be used to satisfy only the requirements and obligations of this Agreement and will not be attributable to any other agreements; Safelite Solutions LLC - LEDA PPA - Page 1 of 7

2 WHEREAS, the City has adopted Ordinance No. (the Project Ordinance ) (i) finding that the Company is a qualifying entity as defined in N.M.S.A. 1978, (G) (2007); (ii) approving the Company Application for assistance with the Project pursuant to the LEDA Ordinance, which Application proposed that the City direct $3,100,000 in State contribution to finance certain statutorily eligible expenses of the Project consisting of rent payments; and (iii) approving this Agreement; and WHEREAS, the Company s application clearly demonstrates that the Company, by completing the Project, will be making a substantive contribution to the community, as required by the LEDA Ordinance; NOW THEREFORE, in consideration of these premises and the agreements by the parties set forth herein, the Company and the City further agree as follows: 1. Goals and Objectives. The objective is to create and support an economic development project that fosters, promotes and enhances local economic development efforts. The goal is that the project will provide jobs and career opportunities that will benefit the community and contribute to its long-term economic growth and sustainability. 2. Company Contribution. The Company will occupy approximately 94,000 square feet of space located at 4300 Sprint Blvd NE, Rio Rancho, NM, (the Facility ) through an agreement with CALL, LLC, a legal entity of the landlord and owned by WP Carey, Inc. ( Lessor ) for a period not less than ten (10) years, shall operate an inbound contact center at the Facility, and shall hire and maintain employees as contemplated by this Agreement, in accordance with the schedule and terms and conditions set forth in this Agreement. The Company will undertake and complete certain project elements, which are as follows: a. occupy by January 30, 2017 approximately 94,000 square feet of space at the Facility through an agreement with the Lessor for a period not less than ten-(10) years; b. create, hire and maintain 600 jobs by the end of the period from the effective date of this Agreement to December 31, 2019 with an agreed upon hiring schedule, described further herein; c. make a $5 million capital investment over the four-(4) year period from the effective date of this Agreement to December 31, 2020 with an agreed upon capital investment plan; d. initiate operation, including hiring and training, no later than January 30, 2017; and e. have provided a project schedule in the Application, which shall include detailed project timelines for hiring and capital investment; The Company will also provide a in the form of a performance bond or letter of credit to the City as security for the Company s obligations, in the principal amount of the State contribution, as set forth in section 9 of this agreement. 3. The State Contribution; Procedure for Disbursement of the State Contribution. The City anticipates that the $3,100,000 State contribution will be delivered by the State to the City for disbursement to the Company, upon enactment of the Safelite Solutions LLC LEDA Ordinance, and execution of these documents and the intergovernmental agreement between the State and the City, after which time the City will request transfer of the State funds. Upon receipt, the City will place the State contribution into a separate account established in connection with the Project, as required by law. The City will only disburse the Safelite Solutions LLC - LEDA PPA - Page 2 of 7

3 State contribution, if and when it is received, and only in the manner described in this Agreement. The City will disburse the subsequent State Contributions as each subsequent hiring target is achieved. Disbursements shall be paid on a reimbursement basis and the Company, Inc. shall incur the initial expense of eligible Land, Building, Infrastructure related capital expenditures and/or lease payments and, in turn, submit requests for reimbursement to the City. 4. The City Contribution. The City will provide expedited plan review and priority building inspections for tenant improvements. As fiscal agent, the City will provide hiring targets contained herein to be used for eligible capital investment and/or lease abatement reimbursement as directed by the State. The City will account for receipts and disbursements of the State contribution and will provide financial documentation to the State pertaining to said contribution. The City will comply with all applicable State laws, regulations, policies, guidelines and requirements with respect to the acceptance and disbursement of the State contribution. 5. Deposit of Funds. As required by the LEDA Ordinance, the City will deposit the proceeds of the State contribution into a clearly identified separate account, which shall be subject to an annual independent audit. 6. Time Commitment. The Company will take occupancy and begin operations at the Facility by January 30, 2017 and will continue to operate an inbound contact center in the Facility through at least December 31, 2025 in a manner contemplated by this Agreement. 7. Use of State Contribution. The Company may use the LEDA Award for eligible Land, Building and Infrastructure expenditures as well as lease abatement at a reimbursement rate of 75% of the actual incurred lease payments, consistent with the Company s LEDA Application. The LEDA Award may not be used for Fixture, Furniture and Equipment (FFE) expenditures. The LEDA Award will be paid on a reimbursement basis upon incurring eligible expenditures. When requesting reimbursement, the Company shall include sufficient documentation to substantiate the eligible expenditures. 8. Job Commitment and Clawbacks.. a. The Company will create, hire and maintain 600 jobs by the end of the period from the effective date of this Agreement to December 31, A job for this purpose will mean an employment position that consists of at least 32 paid hours of work per week and provides employee with a full range of benefits offered to other similarly situated Company employees. Part-time, temporary and contracted workers/employees will not be considered jobs for the purpose of fulfilling this provision.: If the Company adds jobs for the Project, and total Project employment is subsequently reduced, no new positions will be counted toward such hiring targets until the Company again achieves the highest level of Project employment of the current target year. The Company shall have 180 days to cure any shortfall in meeting the current hiring target, after which time the Company shall pay the City a Clawback penalty determined below, and the City may foreclose the security provided by the Company pursuant to Section 9 in order to satisfy any such unpaid Clawback obligation of The Company. The following hiring target Safelite Solutions LLC - LEDA PPA - Page 3 of 7

4 schedule shall be used to determine compliance with this Agreement and the amount of the Clawback penalty: i. Period one (1), beginning the effective date of this agreement ending December 31, 2017, the Company will hire and maintain 200 qualified employees. The City will exercise 100% clawback if the hiring target is not reached. ii. Period two (2), beginning January 1, 2018 ending December 31, 2018, the Company will hire an additional 200 qualified employees, bringing the total number of qualified employees to 400. The City will exercise 100% clawback if the cumulative hiring target is not reached. iii. Period three (3) beginning January 1, 2019 ending December 31, 2019, the Company will hire an additional 200 qualified employees, bringing the total number of qualified employees to 600. The City will exercise 100% clawback if the cumulative hiring target is not reached. b. Company shall submit a quarterly employment report in the form of an affidavit signed by an officer of the Company and Schedule A of the Company s ES-903A report to the New Mexico Department of Workforce Solutions. See Exhibit C. The City or the State may request, at any time, documents that verify or demonstrate the number of employees currently, or previously employed by the Company, while this Agreement is in effect, and the Company agrees to provide such documents. c. In the event that the Company falls below hiring targets as defined by the hiring schedule, the Company shall notify the City in writing prior to the next reimbursement made by the City and reimbursements shall be suspended until the hiring target for the current target year is achieved and sustained for 90 days. Suspension of the City s reimbursement shall not subject to the Company s 180-day right to cure. d. The Company shall be subject to a Clawback penalty if it fails to meet the hiring targets set forth below in this Section 8. The City may exercise the Clawback when the Company has failed to achieve and maintain such hiring targets for any consecutive 90 day period beginning December 31, 2017, during the term of this Agreement. The Clawback provisions of this Section 8 (together with calling on the security provided pursuant to Section 9 to secure the Company s Clawback obligations), shall be the sole and exclusive remedy of the City for any breach of this Agreement by The Company. The Clawback penalty shall be equal to the product of the percentage hiring shortfall, multiplied by the total State contribution paid to the Company as of that time. For purposes of this subsection, the percentage hiring shortfall shall be the quotient of (i) number of Project jobs required for the period under subsection a, minus the number Project jobs actually employed at that time, divided by (ii) the number of Project jobs required for the period under subsection a, above. See Exhibit B (Example Clawback Calculations). 9. Security. As security for the faithful performance and payment of all of Company s obligations under this Agreement, the Company shall furnish the City, and maintain during the entire term of this Agreement, a performance bond or letter of credit in the principal amount of one hundred percent (100%) of the State s contribution. Failure to meet Safelite Solutions LLC - LEDA PPA - Page 4 of 7

5 obligations under this Agreement and/or failure to reach required hiring targets for more than 180 consecutive days, will result in violation of the terms and conditions of this Agreement. Such violation will require that the City foreclose on the security and will only occur after the cure period has been exhausted. Once the Company achieves and maintains the aforesaid hiring targets over a three-(3) year period starting the effective date of this Agreement through December 31, 2019, the Company is entitled to a reduction of the security collateral based on the percentage of 600 jobs actually created. By way of example, if at the end of period one, the Company has maintained an employment level of 211 jobs, consistent with the definition of a job in section 8, the security collateral amount would be reduced as follows: Original Security Amount: $ 3,100,000 Number of Eligible Jobs Created at end of year: 211 Final Job Creation Target: 600 Job Creation Percentage Attained: % = 211 / 600 Reduction in Security: $11,090,177 = $3,100,000* % New Security Amount: $ 2,009,823 Furthermore, the final release of any remaining collateral may occur after week 48 from the date the total job number of 600 was attained. Said request shall be made in writing and accompanied by documentation comprising the reports required under Section 8.b, demonstrating such employment. In that event, the City s consent to such release of the Company s performance bond shall not be unreasonably withheld. 10. Fees. The Company will promptly pay or reimburse the City for reasonable third-party expenses incurred by the City in connection with this Agreement and Project, and thirdparty expenses may be offset against or reimbursed from the State contribution. Although the City does not anticipate incurring significant third-party expenses during the term of this Agreement, such expenses could include, without limitation, legal fees for outside counsel in the event of any proposed amendment to this Agreement or any necessary enforcement action with respect to this Agreement. In advance of incurring any expenses, City will endeavor to notify Company of such anticipated expenses. Notification shall be consistent with Section 14 Notices as outlined in this Agreement. 11. Annual Reporting Requirement, Performance Review and Termination. As required by the LEDA Ordinance, the Project will be subject to an annual performance review conducted by City staff. The review will evaluate whether the Project is meeting the requirements set forth in this Agreement and shall be made available to the State. If the requirements are not being met, the City may terminate this assistance to the Project by passage of an ordinance which terminates this Agreement and specifies the disposition of all obligations of the Project. In addition, in accordance with LEDA, the City may enact an ordinance terminating the LEDA Ordinance and dissolving or terminating any or all Projects. In the event that the City terminates the LEDA Ordinance or this Agreement, the City will specify the disposition Safelite Solutions LLC - LEDA PPA - Page 5 of 7

6 of all obligations of the Project after satisfying this Agreement and all rights of the parties arising under this Agreement through the date of such termination. 12. Effective Date. This Agreement will be effective on the date it is fully executed and shall terminate June 30, 2021, or when otherwise terminated by ordinance. 13. Liability. No party shall be responsible for liability incurred as a result of the other party s acts or omissions. Any liability incurred in connection with this Agreement is subject to the immunities and limitations of the New Mexico Tort Claims Act. Nothing in this Agreement constitutes a waiver of any party s right to seek judicial relief. 14. Notice. All notices or other written communications, including requests for disbursement, that are required or permitted to be given pursuant to this Agreement must be in writing and delivered personally, by a recognized courier service, by recognized overnight delivery service, by electronic mail, or by registered or certified mail, postage prepaid, to the parties at the addresses shown in the signature block of this Agreement. If notice is mailed it will be deemed received on the earlier or actual receipt or on the third business day following the date of mailing. If a notice is hand-delivered or sent by overnight delivery service, it will be deemed received upon actual delivery. A party may change its notice address by written notice to the other party to this Agreement. 15. Amendments. This Agreement shall not be altered, changed or amended, except by instrument in writing executed by all of the Parties hereto. 16. Governing Law. This Agreement shall be governed by the laws of the State of New Mexico. IN WITNESS WHEROF, the Parties have executed this Agreement effective as of the last date of signature below. CITY OF RIO RANCHO, NEW MEXICO Keith Riesberg, City Manager Date Address for Notice: City of Rio Rancho Attn: City Manager s Office/Economic Development 3200 Civic Center Circle Rio Rancho, NM (505) Approved as to form: Safelite Solutions LLC - LEDA PPA - Page 6 of 7

7 Ken Tager, Acting City Attorney Date Safelite Solutions LLC Randy Randolph Vice President of Real Estate and Market Development Date Address for Notice: Safelite Solutions LLC Attn: Randy Randolph 7400 Safelite Way Columbus, OH Exhibits Exhibit A Exhibit B Exhibit C Exhibit D Application for LEDA Assistance Clawback Sample Calculation Wages and Benefits Reporting Officer Affidavit and Schedule A of the Company s ES- 903A report to the New Mexico Department of Workforce Solutions Security Safelite Solutions LLC - LEDA PPA - Page 7 of 7