TO: Mayor & City Commissioners FROM: Ken Hibl, City Manager DATE: February 13, 2014 RE: Request for Industrial Facilities Exemption Robotic Welded Parts For the Agenda of February 17, 2014 AGENDA REPORT Background. Robotic Welded Parts, Incorporated has filed an application (copy att d) with the City of Clare for issuance of a twelve (12) year Industrial Facilities Exemption Certificate for abatement of personal property taxes for the cost of new manufacturing equipment valued at $232,875. The City Commission is asked to formally consider the tax abatement request of Robotic Welded Parts. In doing so, the Commission is required to hold a public hearing to receive public comment related to the requests. Upon conclusion of the public hearing, the Commission should deliberate the merits of the application and, if deemed appropriate by the Commission, act on the application by adoption of the separate Resolutions: one for the Exemption Certificate one for the related, requisite Agreement (copy att d) between the City of Clare and Robotic Welded Parts. Supporting documentation (application, receipts, etc.) for the application is attached. The requisite notice (copy of notice att d) for the public hearing has been accomplished, and taxing units have been notified (copies of notice letters att d) of the request. To date two of the taxing jurisdictions have responded stating they support issuance/have no objection to the requested exemption. We ve received no stated public objections. Issues & Questions Specified. Should the City Commission conduct a public hearing and consider the request for an Industrial Facilities Exemption Certificate from Robotic Welded Parts? Alternatives. 1. Hold the public hearing; approve the request for the Exemption Certificates; and approve the related Agreement. 2. Approve the application for a period of less than 12 years and/or less than 50%. 3. Disapprove the application. 4. Set the matter aside for consideration, deliberation, and decision at a subsequently scheduled Commission meeting. Financial Impact. Approval of the application will increase the personal property tax values of the City and potentially facilitate continued and future economic and industrial development for the City and the local community.
Recommendation. I recommend that the City Commission, by appropriate motion, conduct the requisite public hearing. Subsequent to the hearing, I recommend that the City Commission approve the application for the Exemption Certificates by adoption of Resolution 2014-015 (copy att d) and approve the related Agreement with Robotic Welded Parts by adoption of Resolution 2013-016(copy att d). Attachments. 1. Application w/supporting documents. 2. Agreement. 3. Public Notice. 4. Notice to Taxing Jurisdictions. 5. Response Letter from Taxing Jurisdictions. 6. Resolution 2014-015. 7. Resolution 2014-016. 2
AGREEMENT THIS AGREEMENT entered into upon the 17 th day of February 2014 by and between the City of Clare, a municipal corporation, and Robotic Welded Parts, a Michigan Corporation, shall govern the granting of Industrial Facilities Exemption Certificates for machinery and equipment purchases and for new building construction, by the City of Clare to JD Metalworks. WHEREAS, pursuant to P.A. 198 of 1974, MCL 207.551, et seq., after a duly noticed public hearing held on the 7th day of December, 2009, the Clare City Commission approved by resolution the establishment of an Industrial Development District, within which Robotic Welded Parts is housed and conducts its primary business; and WHEREAS, Robotic Welded Parts has filed an application for an Industrial Facilities Exemption Certificate with respect to machinery and equipment purchases and for construction of a new building addition for installation and construction, respectively, within said Industrial Development District and within ; and WHEREAS, before acting on said application, the Clare City Commission held a public hearing on February 17 th, 2014, at 6:00 p.m. at the City Hall of Clare, 202 West Fifth Street, Clare, Michigan, at which hearing the applicant, the assessor, a representative of the affected taxing units, and the affected real property owners were given written notice and were afforded an opportunity to be heard on said application; and WHEREAS, installation of said equipment and machinery and construction of said building addition had not begun earlier than six months before January 16, 2014, the date of acceptance of the application for the Industrial Facilities Exemption Certificates; and WHEREAS, no payment of any kind in excess of the fee allowed, as amended by Public Act 323 of 1996, has been made or promised in exchange for favorable consideration of said exemption certificate application. NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL EXCHANGE OF VALUABLE PROMISES CONSTITUTING A BARGAIN SUPPORTED BY ADEQUATE CONSIDERATION, IT IS AGREED THAT: 1. The cumulative minimum investment in machinery and equipment and purchases and in construction costs by Robotic Welded Parts shall be $232,875. 1
2. In any event in which Robotic Welded Parts moves from the site subject to the Industrial Facilities Exemption Certificate that occurs within twelve years of the granting of said Certificate, Robotic Welded Parts shall refund to the City of Clare the full amount of any tax abatements received thereunder. 3. In any event in which Robotic Welded Parts moves from the site subject of the Industrial Facilities Exemption Certificate to another site within the City of Clare that has been previously established or designated as an approved Industrial Development District or Industrial Rehabilitation District, the City shall favorably consider a request from Robotic Welded Parts to transfer said Certificates; however, Robotic Welded Parts shall be required to formally request said transfer, and the requisite process to facilitate said transfer, to include public notice and hearings and concurrence of affected taxing units, shall be complied with. 4. The City of Clare shall grant to Robotic Welded Parts Facilities Exemption Certificates as approved by the City Commission in duly authorized session on the 17th day of February 2014 by adoption of its Resolution 2014-015. This Agreement shall be binding not only upon Robotic Welded Parts and its affiliates, but also its successors and assigns; and the parties hereto agree for themselves, successors, and assigns to execute and deliver whatever instruments as may be necessary to carry out the purpose and intent of the Agreement. This Agreement may be executed in several counterparts, each of which so executed shall be deemed to be an original, and such counterparts shall together constitute and be one and the same instrument. The singular includes the plural and the masculine the feminine wherever used herein, unless the context indicates otherwise. No change or modification of this agreement shall be valid unless the same be in writing and signed by duly authorized representatives of all of the parties hereto. No provision of the contract may be waived except in a signed writing, duly authorized by the parties hereto. This Agreement shall be governed by the laws of the State of Michigan. If any provision or portion of this document shall be deemed invalid, the remaining agreement shall remain intact and enforceable as though the invalid portion had been omitted by the drafters. 2
IN WITNESS HEREOF, the parties have hereunto signed their names on the day date set forth below. Dated: February 17, 2014 CITY OF CLARE BY Jean McConnell, Mayor Pro Tem BY Diane Lyon, City Clerk ROBOTIC WELDED PARTS, INC. BY Scott Carter, President 3
RESOLUTION 2014-015 A RESOLUTION OF THE CLARE CITY COMMISSION APPROVING AN INDUSTRIAL FACILITIES EXEMPTION APPLICATION OF ROBOTIC WELDED PARTS, INCORPORATED. WHEREAS, Robotic Welded Parts, Inc. has submitted an application for an Industrial Facilities Exemption Certificates to the City of Clare for abatement of personal property taxes for equipment purchases; and WHEREAS, Robotic Welded Parts, Inc. is located within an established Industrial Development District within the City of Clare; and WHEREAS, the City notified, by certified mailings, all affected taxing units in respect to said application of Robotic Welded Parts, Inc.; and WHEREAS, the City properly noticed a public hearing to receive comment from all affected taxing units, and the public regarding said application of Robotic Welded Parts, Inc.; and WHEREAS, said public hearing was conducted by the Clare City Commission on the 17th day of February 2014; and WHEREAS, subsequent to said public hearing and due consideration of all pertinent matters related to said application of Robotic Welded Parts, Inc., the City Commission determined, in public session at a regularly scheduled City Commission meeting, that approval of said application to be the best interests of the City of Clare; and WHEREAS, the City Commission is aware that aggregate SEV of personal property exempt from ad valorem taxes within the City of Clare, after granting this certificate, will exceed 5% of an amount equal to the sum of the SEV of the unit, plus the SEV of personal property thus exempted. NOW THEREFORE BE IT RESOLVED THAT the City Commission of the City of Clare hereby approves the application of Robotic Welded Parts, Inc. for an Industrial Facilities Exemption Certificates for abatement of personal property valued at $232,875.00, said Certificates to remain in force and effect for a period of twelve years. BE IT FURTHER RESOLVED THAT said approval is bound by the terms of the executed Agreement between the City of Clare and Robotic Welded Parts, Inc. said Agreement outlining the conditions to be upheld during said abatement period. BE IT FURTHER RESOLVED THAT the City Commission declares that it finds and determines that the granting of the Industrial Facilities Exemption Certificates, considered together with the aggregate amount of certificates previously granted and currently in force under Act No. 198 of the Public Acts of 1974 and Act No. 255 of the Public Acts of 1978 shall not have the effect of substantially impeding the operation of the
City of Clare or impair the financial soundness of a taxing unit that levies ad valorem property taxes in the City of Clare. BE IT FURTHER RESOLVED THAT the City has verified that the new equipment acquired has been installed within buildings on property situated within the City of Clare s Industrial Development District and Plant Rehabilitation District, the boundaries of said districts being one and the same. BE IT FURTHER RESOLVED that the Industrial Facilities Exemption Certificates, when issued, shall be and remain in force and effect for a period of twelve (12) years in accordance with the terms of the agreement. ALL RESOLUTIONS AND PARTS OF RESOLUTIONS INSOFAR AS THEY CONFLICT WITH THE PROVISIONS OF THIS RESOLUTION BE AND THE SAME ARE HEREBY RESCINDED. The Resolution was introduced by Commissioner and supported by Commissioner. The Resolution declared adopted by the following roll call vote: YEAS: NAYS: ABSENT: Resolution approved for adoption on this 17th day of February 2014. Diane Lyon, City Clerk
RESOLUTION 2014-016 A RESOLUTION OF THE CLARE CITY COMMISSION APPROVING AN AGREEMENT BETWEEN ROBOTIC WELDED PARTS, INC. AND THE CITY OF CLARE. WHEREAS, Robotic Welded Parts, Inc. has submitted an application for an Industrial Facilities Exemption Certificates for abatement of personal property taxes; and WHEREAS, the City Commission approved said application; and WHEREAS, the approval of said application is contingent upon an Agreement being approved between the City of Clare and Robotic Welded Parts, Inc. outlining the terms of the tax abatements associated with approval of said Certificates. NOW THEREFORE BE IT RESOLVED THAT the City Commission of the City of Clare hereby approves the Agreement between the City of Clare and Robotic Welded Parts, Inc. stipulating the terms and conditions of the abatement of personal property tax for a period of twelve years and for a total amount of $232,875. ALL RESOLUTIONS AND PARTS OF RESOLUTIONS INSOFAR AS THEY CONFLICT WITH THE PROVISIONS OF THIS RESOLUTION BE AND THE SAME ARE HEREBY RESCINDED. The Resolution was introduced by Commissioner and supported by Commissioner. The Resolution declared adopted by the following roll call vote: YEAS: NAYS: ABSENT: Resolution approved for adoption on this 17 th day of February 2014. Diane Lyon, City Clerk