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HomeMy WebLinkAboutResolution # 3874.1 - development agreement ; east half of lot number 46 in jones second addition3g~~ DEVELOPMENT AGREEMENT This DEVELOPMENT AGREEMENT ("Agreement") is made and entered into this 25th day of November , 2008, by and between the City of Canton, an Illinois municipal corporation, ("the City"), and White Oak Tap, Inc., an Illinois business corporation, duly organized and existing under and by virtue of the laws of the State of Illinois and duly authorized to transact business in the State of Illinois ("White Oak's" or "the Developer"). WITNESSETH: WHEREAS, the Developer owns the following described real estate: The East Half of Lot Number Forty-six (46) in Jones' Second Addition to the City of Canton, situated in Fulton County, Illinois; PIN: 09-08-27-415-020 COMMON ADDRESS: 48 White Court, Canton, Illinois 61520; and WHEREAS, the Developer desires to construct or is in the process of constructing on said real estate a new tavern; and WHEREAS, the above described real estate lies within the boundaries of the downtown Tax Increment Finance ("TIF") district of the City; and WHEREAS, the City has determined that to promote redevelopment, eliminate blight and expand the tax base of the City, to provide for job creation and retention, and to improve the quality of development of the downtown TIF district, it is necessary and desirable for the City and the Developer to enter into this Agreement; and WHEREAS, prudent fiscal management by the City requires that the above described real estate be developed substantially as presented by the Developer to the City and in the time frame presented by the Developer to the City; and WHEREAS, the City and the Developer desire to set forth in this Agreement their understanding. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties do hereby freely and voluntarily agree as follows: 1. Preambles. The City and the Developer hereby agree that the recitals contained in the preambles of this Agreement are true and correct and do incorporate them into this Agreement by this reference. 2. Definitions. All terms used in this Agreement and not otherwise defined shall have the following meanings, unless the text expressly or by necessary implication requires otherwise: a. "City Council" means the City Council of the City; b. "Minimum Project Improvements" means the baseline of project construction/ improvements required for the Project to reach the minimum assessed value required by this Agreement; c. "Municipal Development Costs" means costs incurred directly by the City in connection with the Project, which are described in Section 4.1 below; d. The "Property" means the following described real estate: The East Half of Lot Number Forty-six (46) in Jones' Second Addition to the City of Canton, situated in Fulton County, Illinois; PIN: 09-08-27-415-020 COMMON ADDRESS: 48 White Court, Canton, Illinois 61520; e. "TIF Act" means Section 5/11-74.4-1 et seq. of Chapter 65 of the Illinois Compiled Statutes, as amended from time to time; f. "Tax Increment" means that portion of the real property taxes generated with respect to the Property, which is remitted to the City as tax increment, pursuant to the TIF Act; and g. "Minimum Property Improvements" means the baseline of improvements required for the Property to reach its minimum assessed value. 3. Findings and Determinations. The City finds and determines as follows: a. The private development of the Property is consistent with the public purposes, plans and objectives of the City; b. The construction of a new tavern would make accomplishment of the City's and the TIF Act's public purpose objectives more likely; and 2 c. The construction of a tavern is consistent with the overall objectives of the City and would increase the City's tax base and generally enhance the quality of this area of the City. 4.1. Representations by the City. The City makes the following representations as the basis for the undertaking on its part: a. The City is a public body corporate and politic duly organized and existing under the laws of the State of Illinois; b. The City proposes to provide assistance to the Developer in accordance with the provisions of this Agreement; c. The activities of the City are undertaken for the purposes defined in the TIF Act; d. The parties signing below on behalf of the City have been fully authorized to execute this Agreement on behalf of the City; e. The City shall commit the municipal funds necessary to perform its obligations under this Agreement and to construct any and all improvements it has agreed to make. These funds may be obtained by the issuance of municipal bonds or by other means; f. The City shall perform the following tasks: i. Cause to be funded and performed, the repair and/or construction of sidewalks immediately adjacent to the project area along Pine Street and White Court; and ii. Cause to be funded and performed, the installation of at least one (1) street lamp, in like character to those that surround Jones Park. g. The City acknowledges that the Developer is not located within the City of Canton/Fulton County Enterprise Zone and as such, is not entitled to state incentives commonly associated with location inside such an area. However, the Developer is located within the downtown "TIF" district and pursuant to 65 ILCS 5/11-74.4-4(j) shall be reimbursed twenty percent (20%) of the TIF Tax Increment for the life of the TIF; h. The City acknowledges that the Developer now holds a Class A tavern liquor license issued by the City for the Developer's current location. The City agrees that the Developer's new tavern, which is adjacent to the Developer's current location, will be covered by the same Class A tavern liquor license; and i. The City acknowledges that but for the representations and the obligations of the City, the Developer would not enter into this Agreement. The City further acknowledges that the failure of the City to undertake and complete its obligations under this Agreement could cause the Developer irreparable injury. 4.2. Representations and Warranties by the Developer. The Developer represents and warrants as follows: a. The Developer has full authority to execute and perform this Agreement; b. The Developer's proposed Project would not occur but for the assistance and inducements being provided by the City; c. Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated by the parties, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented or limited by, conflicts with, or results in the breach of, the terms, conditions or provisions of any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing; d. The Developer shall cause to be funded, developed and constructed a new tavern with a fair market value of Two Hundred Thousand Dollars ($200,000.00) with an estimated assessed value of Sixty-six Thousand Six Hundred Sixty-seven Dollars ($66,667.00); e. The Developer shall ensure that the Property will be assessed for real estate taxes; f. The Developer shall, subject to unavoidable delays including extreme weather, promptly commence and diligently pursue and complete the Project, including the Minimum Project Improvements, within twelve (12) months from the effective date of this Agreement; and g. The Developer shall construct the Project, including the Minimum Project Improvements, in compliance with all codes and applicable rules and laws in force and effect within the City of Canton and State of Illinois. 4.3. Documents to be Delivered by the City. Upon execution of this Agreement, the City shall deliver to the Developer an opinion of counsel for the City that includes the following: a. The City is a municipal corporation and political subdivision duly organized and existing under the laws of the State of Illinois; 4 b. All official proceedings of the City necessary to enter into, and consummate the transactions contemplated by, this Agreement have been taken in accordance with law; c. All of the documents required to be executed, delivered or acknowledged by the City have been duly and validly authorized, executed and delivered and are enforceable against the City in accordance with their terms, except to the extent that enforcement shall be limited or affected by any bankruptcy proceedings or similar debtor relief law and except that certain remedies may not be available under Illinois law; and d. The execution and delivery of this Agreement did not, and the consummation of the transactions contemplated under this Agreement and the execution and delivery of the documents required to be executed, delivered or acknowledged by the Developer will not, violate any provision of the City's charter or any applicable statute, rule, regulation, judgment, order or decree of the State of Illinois or court having jurisdiction over the City or its properties. 4.4. Documents to be Delivered by the Developer. Upon execution of this Agreement, the Developer shall deliver to the City each of the following: a. A copy of the Developer's Articles of Incorporation, the resolutions adopted by the Developer to the extent required by law, authorizing and approving the execution and performance of this Agreement, certified by an officer of the Developer; b. Certificate of Good Standing for the Developer issued by the Illinois Secretary of State not earlier than ninety (90) days prior to the date of this Agreement; c. Such other certificates, opinions, consents, instruments, agreements, documents, and other papers as are required under this Agreement; and d. Upon execution of this Agreement, the Developer shall deliver to the City an opinion of the Developer's legal counsel that includes the following: i. The Developer is an Illinois corporation, duly organized and existing under the laws of the State of Illinois; ii. All required proceedings of the Developer necessary to consummate the transactions contemplated by this Agreement have been taken in accordance with law; iii. All of the documents required to be executed, delivered or acknowledged by the Developer have been duly and validly authorized, executed and delivered by the Developer and are enforceable against it in accordance with their terms, except to 5 the extent that enforcement shall be limited or affected by any bankruptcy proceedings or similar debtor relief law and except that certain remedies may not be available under Illinois law; and iv. The execution and delivery of this Agreement did not, and the consummation of the transactions contemplated under this Agreement, and the execution and delivery of the documents required to be executed, delivered or acknowledged by the Developer will not, violate any provision of the Developer's Articles of Incorporation or bylaws or any applicable statute, rule, regulation, judgment, order or decree of the State of Illinois or court having jurisdiction over the Developer or its properties. 5. Certificate of Compliance. When a final Certificate of Occupancy has been issued for the Project Area, the Developer shall apply to the City for a Certificate of Compliance, which, when issued, shall be recorded in the Office of the Recorder of Deeds of Fulton County, Illinois, and may be relied on by third parties as evidence that the requirements of those sections of this Agreement have been satisfied. Such certificate shall not be unreasonably withheld by the City. 6. Continuing Obli ations. Notwithstanding the issuance of the Certificate of Compliance identified in Paragraph 5 above, the following obligations of the Developer shall be continuing obligations under this Agreement: a. Obligation to Maintain Property in Good Condition. The Developer and its successors and assigns shall maintain the improvements in the Project Area in good condition and shall operate the improvements in compliance with the terms of this Agreement, with all local, state and federal laws and regulations, and with any and all covenants placed upon the Project Area. The Developer shall indemnify and hold the City harmless from any and all liability resulting from the Developer's breach of any local, state or federal law or regulation; b. Sale or Lease of Project. No portion of the Project Area may be sold or leased to any party without the prior written consent of the City until the completion of construction of the entire Project; c. Warranty of Entity; Non-transferability. The City has entered into this Agreement with the Developer on the basis of the identity of the parties who own the Developer and on the strength of their experience. Therefore, as a material consideration to this Agreement, the Developer may not transfer interest in the Project, in the Project Area or a majority interest in the Developer without the prior written consent of the City, which shall not be unreasonably withheld, for a period of six (6) months following completion of construction. Any transfer by the Developer of any interest in this Agreement or the transfer of any interest in the Developer, or material amendment to the Developer's bylaws or operating agreement, without first securing the written consent of the City, shall be considered an event of default. In any event, any permitted transferee of the Project or Project Area must agree to be bound by the terms of this Agreement; 6 d. Taxation of Project. The Developer agrees that the Project shall be assessed at its full assessed value ofSixty-six Thousand Six Hundred Sixty-seven Dollars ($66,667.00) by January 1, 2010. The Developer further agrees that, if the assessed value does not reach Sixty-six Thousand Six Hundred Sixty-seven Dollars ($66,667.00) within that time, the Developer will file a Complaint with the Office of the Tax Assessor of Fulton County, seeking an increase in assessed value to Sixty-six Thousand Six Hundred Sixty-seven Dollars ($66,667.00). In the alternative, the Developer agrees that, if it fails to file a Complaint to increase the assessed value to Sixty-six Thousand Six Hundred Sixty-seven Dollars ($66,667.00) within the allotted time and the City files such a Complaint, the Developer will not protest; and e. Taxable Entity. The Developer warrants that the Project Area shall not be sold to an entity that is exempt from real estate taxation, without the prior written consent of the City, during the existence of the TIF (which shall expire in the year 2027), which consent may be conditioned upon the execution by the proposed new owner or occupant of an agreement to make payments in lieu of taxes. 7. Events of Default. The following shall be Events of Default under this Agreement and the term Event of Default shall mean, whenever it is used in this Agreement, any one or more of the following events (described in Sections 7.1-7.3): 7.1. Failure by the Developer to cause substantial and material completion of the Project to occur pursuant to the terms, conditions and limitations of this Agreement shall constitute an Event of Default. 7.2. Failure by the Developer to observe or perform any covenant, condition, obligation or agreement that it is required by this Agreement to observe or perform shall constitute an Event of Default. 7.3. Failure by the City to observe or perform any covenant, condition, obligation or agreement that it is required by this Agreement to observe or perform shall constitute an Event of Default. 7.4. Remedies on Default. Whenever any Event of Default referred to in this Section occurs and is continuing, the non-defaulting party shall have available to it any remedy allowed by law or in equity. 7.5. No Remedy Exclusive. No remedy is intended to be exclusive of any other available remedy or remedies, but each and every remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or existing at law, in equity or by statute. The delay or failure to exercise any right or power accruing upon any default shall not impair the non-defaulting party from later exercising the right or power, nor shall it be construed as a waiver of the right or power, but the parties may exercise any right or power from time to time and as often as they may deem expedient. 7 7.6. No Implied Waiver. In the event any breach of this Agreement by either party shall be waived by the other party, that waiver shall be limited to the particular breach waived and shall not be deemed to waive any other concurrent, previous or subsequent breach of this Agreement. 7.7. Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of Default occurs and the Non-Defaulting party employs attorneys or incurs other expenses to enforce any obligation or agreement of the Defaulting party, the Defaulting party shall, on demand by the Non- Defaultingparty, pay the Non-Defaulting party's reasonable attorney's fees and other expenses. 7.8. Release of Liability. The Developer and the City agree that each party shall be responsible for its own actions, the actions of its employees and the actions of parties directly under its control and shall not be responsible or liable for the actions of the other party, its employees or others directly under the other party's control. If one party is determined to be liable to the other, it shall not be liable for consequential damages, such as lost profits or loss of use, but may be held liable only for actual damages, attorneys' fees and costs of litigation, where applicable. 7.9. Unavoidable Delays. In addition to specific provisions of this Agreement, performance by any party shall not be deemed to be in default where delays or defaults are caused directly by war, insurrection, strikes, lock-outs, riots, floods, earthquakes, fires, casualties, acts of the public enemy, epidemics, quarantine restrictions or freight embargoes (together, Unavoidable Delays). An extension of time for completion resulting from Unavoidable Delay shall only be for the period that action is actually prevented by the Unavoidable Delay. Times of performance under this Agreement may also be extended in writing by the parties. 8. Miscellaneous. 8.1. Conflicts of Interest. No member of the governing body or other official of the City shall have any direct financial interest in this Agreement, the Project or the Project Area, or any contract, agreement or other transaction contemplated to occur or be undertaken with respect to this Agreement, the Project or the Project Area, nor shall any member of the governing body or other official participate in any decision relating to the Agreement that directly affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly interested. No member, official or employee of the City shall be personally liable to the City in the event of any default or breach by the Developer or successor or on any obligations under the terms of this Agreement. 8.2. Headings. Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. 8 8.3. Notices. Any notice required by this Agreement shall be given in writing, signed by the party giving notice, personally delivered or mailed by certified or registered mail, return receipt requested, to the parties' respective addresses as follows: To the City: City of Canton 2 North Main Street Canton, Illinois 61520 Attention: Mayor With a copy to: City of Canton 2 North Main Street Canton, Illinois 61520 Attention: City Attorney To the Developer: White Oak Tap, Inc. c/o Randall S. Oaks and William B. Oaks 46 White Court Canton, Illinois 61520 Notice shall be deemed delivered (a) in the case of personal delivery, on the date when personally delivered, or (b) in the case of certified or registered mail, on the date when deposited in the United States mail with sufficient postage to effect such delivery. 9. Entire Agreement. This document contains the entire agreement between the Developer and the City with respect to the matters set forth, and it shall inure to the benefit of and shall bind the parties, their respective heirs, executors, successors or assigns. This Agreement maybe modified only by a writing signed by all parties. 10. Governing Law. This Agreement shall be construed in accordance with the laws of the State of Illinois. The parties agree that disputes under this Agreement shall be decided in the courts of the County of Fulton or the United States District Court for the Central District of Illinois, and the parties consent to that jurisdiction. 11. Amendments. This Agreement may only be amended in writing, signed by the City and the Developer. Notwithstanding the above, by approving this Agreement, the City designates the Mayor to act as its agent, to approve modifications to this Agreement. 12. Termination. Unless otherwise terminated as provided above, this Agreement shall terminate automatically upon the completion of all obligations contained within it. 9 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. ATTEST: Nancy S. ites, City Clerk ATTEST: William B. Oaks, Secretary CITY OF CANTON ~~~~ By: /~ Kevin R. Meade, Mayor WHITE OAK TAP, INC. By: ~ ~ ~~p~~ ~ ~;~A Randall S. Oaks, President 10