[2024-21 Contract TIF Reimbursement Star West Exhibit A.pdf] EXHIBIT A Draft 2/22/24 DEVELOPMENT AND TIF REIMBURSEMENT AGREEMENT (Great Northern Mall Project) THIS DEVELOPMENT AND TIF REIMBURSEMENT AGREEMENT (“Agreement”) is made and entered into effective as of the __ day of , 2024 (the “Effective Date”), by and between THE CITY OF NORTH OLMSTED, OHIO, an Ohio municipal corporation, having a mailing address of 5200 Dover Center Road, North Olmsted, Ohio 44070 (the “City”) and Star West Great Northern LLC, an Ohio Limited Liability Company, having a mailing address of 5100 Great Northern Boulevard, North Olmsted OHIO, 44070 (the “Company ’), under the following circumstances: RECITALS: A. The Company desires to demolish a certain blighted property (the “Project Site’’) and construct a 7,900 square foot restaurant with an estimated value of $4,500,000 million and further desires, as a result of the project to hire 100 employees with an annual payroll of $1,600,000 as further depicted and described on Exhibit A] (the “Project’). B. The City under the authority of Section 5709.41 of the Ohio Revised Code, adopted Ordinance No. 2023-132 (the “TIF Ordinance”) to exempt 100% of the incremental assessed value of the Project from real property taxes (the “TIF Exemptions”) for a period of up to 30 years (with the parcels comprising the real property component of the Project being referred to herein as the “Parcels” and, each individually as a “Parce/’”) as part of a tax increment financing plan to generate revenue for the development of the Project (the “TIF Revenue”). The TIF Ordinance shall provide that the North Olmsted City School District and the Polaris Career Center (collectively, the “School District”) shall receive statutory service payments in an amount equal to the amount each school district would otherwise have received as real property tax payments derived from the improvement to the Parcels if the improvement had not been exempt from taxation pursuant to the TIF Ordinance. All TIF Revenue received by the City and not required to be paid to the school districts as compensation is hereinafter referred to as the “Net TIF Revenue”. C. The City under the authority of Section 3735.65, et. seq. of the Ohio Revised Code, expects to adopt an ordinance (the “CRA Ordinance”) to exempt 75% of the incremental assessed value of the improvement component of the Project from real property taxes (the “CRA Exemption”) for a period of 15 years. The CRA Exemption will take priority over the TIF Exemptions. D. The City has determined that the Project is in the best interest of the City, is in aid of industry and commerce, furthers the health, safety and welfare of its residents, and will facilitate commercial development in the City, all of which are expected to create and preserve jobs and employment opportunities in the City and enhance City tax revenues. E. The parties desire to enter into this Agreement to reflect certain agreements between them with respect to the Project generally, and to the improvements to be made by each of them, all pursuant and subject to the terms and conditions contained in this Agreement. NOW, THEREFORE, for and in consideration of the mutual agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by both parties hereto, the City and the Company agree to the foregoing and as follows: Section 1. Company Obligation to Complete Project Consistent with City Approvals. The Company shall prepare, in consultation with the City, design and construction plans for the Project (the “Design Plan’). In consideration for the TIF Exemption and the CRA Exemption, the City shall have the right to approve or deny the Design Plan, in its sole discretion. Once the City has approved the Design Plan, the Company agrees to pay for and complete the Project. The Company is responsible for ensuring the provision, through contractors or otherwise, of all traffic control devices, flaggers and police officers required to properly and safely maintain traffic during the construction of the Project. All traffic control devices must be furnished, erected, maintained and removed in accordance with the Ohio Department of Transportation’s “Ohio Manual of Uniform Traffic Control Devices” related to construction operations. Section 2. Net TIF Revenue; Prevailing Wages. The City and the Company acknowledge that successful completion of the Project requires tax increment financing to reimburse the Company for certain costs of the Project. In order to assist the Company in the demolition of the existing building, and upon completion of the Project (as evidenced by issuance of all certificates of occupancy), the City shall pay to, or at the direction of the Company, the Net TIF Revenue in an amount equal to the lesser of (a) 50% of the certified cost of the demolition project and (b) $250,000. The total construction cost of the demolition project shall be certified to the City by the Company within ninety (90) days following issuance of a certificate of occupancy for the Project. The City’s obligation to make payments to the Company pursuant to this Section terminates if the Project is not completed by December 31, 2025. Completion of the Project shall be evidenced by the issuance of certificates of occupancy for all portions of the Project. The Company agrees to make improvements to the Great Northern Mall in further of attracting new tenants and creating and retaining job opportunities in a dollar amount equal to the amount of Net TIF Revenue paid or to be paid by the City to the Company under this Agreement. If the Company fails to make such investment within 24 months of receiving the Net TIF Revenue, then the Company shall refund the amount of Net TIF Revenue received to the City within 30 days of written demand by the City for the refund. The foregoing obligation is a minimum service payment obligation under Section 5709.91 of the Ohio Revised Code. If the Company does not timely refund the amount due, then the City may certify such overdue amount, plus interest and collection expenses equal to 10% of the amount due, to the County Fiscal Officer for collection on the tax list for the Project parcel. The City may at its option record this Agreement against the Project parcel. It is expressly understood and agreed by the City and the Company that prevailing wages are required to be paid under all construction contracts for the Projects if and to the extent required by law. The City’s Engineer shall serve as prevailing wage coordinator for the Project and the Developer will be required to submit or cause to be submitted appropriate documentation certifying prevailing wage to the City’s prevailing wage coordinator prior to or at the time reimbursement is requested under this Section. The Company and the City will take all actions and pay all amounts necessary to comply with the requirements of Ohio Revised Code Chapter 4115 to the extent that they apply to the Project. Section 3. Job Creation and Payroll Information. The Company represents that the Project will create jobs and employment opportunities within the City. Company will provide to City all documentation requested by the City to validate and confirm Project and payroll information in support of any grant applications or as otherwise may be needed by the City in relation to the Project. The City may withhold payments of Net TIF Revenues to the Company until the Company has provided all requested information for each year of the TIF Exemption or CRA Exemption. Section 4. Indemnification. Notwithstanding anything in this Agreement to the contrary, as a material inducement to the City to enter into this Agreement, the Company covenants and agrees that the Company shall defend, indemnify and hold the City, its council members and employees (collectively, the “Indemnified Parties’) harmless from and against any and all actions, suits, claims, losses, costs (including without limitation reasonable attorneys’ fees), demands, judgments, liability and damages (collectively, “Claims’) suffered or incurred by or asserted against the Indemnified Parties, or any of them, as a result of or arising from any injury, death or loss or damage to property to the extent caused by the acts or omissions of the Company, its agents, employees, contractors, subcontractors, licensees, invitees or anyone else acting at the request of the Company in connection with the performance of the Company’s obligations under this Agreement or the due diligence, development, construction and operation of the Project, including, without limitation, any claims stemming from the release of any hazardous substances or the violation of any environmental laws. Notwithstanding anything set forth herein to the contrary, the indemnification obligations of the Company in this Section will survive the termination of this Agreement and closing. Section 5. City Income Taxes. Company will withhold and pay, will require all contractors to withhold and pay, and will require all contractors to require all subcontractors to withhold and pay, all City income taxes due or payable with respect to wages, salaries, commissions and any other income subject to the provisions of the City’s Code of Ordinances. The Company shall use its best efforts to require its contractors and their subcontractors to staff construction work on the Project such that all construction workers will be subject to City income taxes. Section 6. Non-Discriminatory Hiring Policy. The Company agrees to comply with, and will only hire contractors who agree to comply with, the City’s nondiscriminatory hiring policy adopted pursuant to Section 5709.832 of the Ohio Revised Code to ensure that recipients of tax exemptions practice nondiscriminatory hiring in their operations. In furtherance of that policy, the Company agrees that it will not deny any individual employment solely on the basis of race, religion, sex, disability, color, national origin or ancestry. This Section does not require compliance with Federal Executive Order No. 11246. Section 7. Assignment by Company. Company may not assign this Agreement without the prior written consent of the City. Any purported assignment made in violation of this Section shall be void. Section 8. Amendment. This Agreement may be amended or modified by the parties only in writing, signed by both parties to the Agreement. Any purported amendment made in violation of this Section shall be void. Section 9. Entire Agreement. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements, and undertakings of every kind and nature between the parties with respect to the subject matter of this Agreement. The parties hereto acknowledge and agree that this Agreement is the product of an extensive and thorough, arm’s length negotiation and that each party has been given the opportunity to independently review the Agreement with legal counsel, and that each party has the requisite experience and sophistication to negotiate, understand, interpret and agree to the particular language of the provisions of this Agreement. Accordingly, in the event of an ambiguity in or dispute regarding the interpretation of this Agreement, this Agreement may not be interpreted or construed against the party preparing it, and instead other rules of interpretation and construction must be utilized. Section 10. Notices. All payments and notices under this Agreement must be hand- delivered (with receipt acknowledged) or sent by the first class U.S. mail, postage prepaid, and are deemed delivered when so delivered or mailed to the respective addresses first set forth above. Either party may change its address for receiving payments or notices by giving written notice of such change to the other party. Section 11. | Severability of Provisions. The invalidity of any provision of this Agreement does not affect the other provisions of this Agreement, and this Agreement is to be construed in all respects as if any invalid portions were omitted. Section 12. Liability Limitations; No Debt. No member, official, or employee of the City or any of the City’s boards or commissions shall be personally liable to Company or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to Company or successor or on any obligation under the terms of this Agreement. The City’s obligations under this Agreement do not constitute debt of the City within the meaning of the Ohio Constitution, and the Company and any of its successors or assigns have no right to have taxes levied by the City or a claim on the City’s general fund to satisfy any claims against the City under this Agreement. Any claims against or liabilities on the part of the City under this Agreement shall be satisfied solely from Net TIF Revenues. In no case shall the City be liable for any consequential, indirect or punitive damages, or lost profits. Section 13. No Partnership. This Agreement does not and may not be construed to create a partnership or joint venture between the City and Company. Section 14. Governing Law. This Agreement shall be governed by the laws of the State of Ohio. Section 15. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same Agreement. Counterparts executed or transmitted by facsimile or electronic means (such as DocuSign counterparts or e-mailed .pdfs) are deemed to be original counterparts or signatures. Section 16. | Obligation to File Tax Exemption Forms. The Company, in its capacity as owner of the Parcels and upon the passing into effect of the TIF Ordinance and CRA Ordinance, shall prepare, execute, and file, in a timely fashion, such applications, documents, and other information with the appropriate officials of the State of Ohio and Cuyahoga County, or other public body as may be required to initially effect the TIF Exemption and CRA Exemption. [Signatures begin on follow page] Executed the year and date set forth in the first paragraph hereof. STAR WEST GREAT NORTHERN, LLC By: Its: STATE OF OHIO ) ) SS: COUNTY OF CUYAHOGA _) BEFORE ME, a Notary Public in and for said County and State, personally appeared the above named STAR WEST GREAT NORTHERN LLC _ by , its , who acknowledged that he or she did sign the foregoing instrument and the same is his or her free act and deed as such officer and the free act and deed of said corporation and his or hers personally as such officer. IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this __ day of , 2024. No oath or affirmation was given in connection with the foregoing notarial act, Notary Public City of North Olmsted, Ohio Approved as to Form: By: City Law Director Nicole Dailey Jones, Mayor STATE OF OHIO ) ) Ss: COUNTY OF CUYAHOGA _ ) BEFORE ME, a Notary Public in and for said County and State, personally appeared the above named CITY OF NORTH OLMSTED, OHIO by Nicole Dailey Jones, its Mayor, who acknowledged that she did sign the foregoing instrument and the same is her free act and deed as such officer and the free act and deed of said city and her personally as such officer. IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this ___ day of , 2024. No oath or affirmation was given in connection with the foregoing notarial act. Notary Public CERTIFICATE The undersigned, fiscal officer of the City of North Olmsted, Ohio, hereby certifies that the money required to meet the obligations of the City under the Agreement during calendar year 2024, if any, has been lawfully appropriated by City Council for the purposes mentioned and is in the treasury of the City or in the process of collection to the credit of an appropriate fund, free from any previous encumbrances. This Certificate is given in compliance with Sections 5705.41 and 5705.44, Ohio Revised Code. Director of Finance Dated: __, 2024 EXHIBIT A [Project Site and Project Depiction to be attached] --- [2024-21 Contract TIF Reimbursement Star West.pdf] CITY OF NORTH OLMSTED ORDINANCE NO. 2024 – 21 By: Mayor Jones AN ORDINANCE AUTHORIZING THE MAYOR TO ENTER INTO A DEVELOPMENT AND TIF REIMBURSEMENT AGREEMENT WITH STAR WEST GREAT NORTHERN LLC. WHEREAS, in accordance with R.C. 3735.65, et seq., the City of North Olmsted has negotiated with Star West Great Northern, LLC, ( “Company”) to enter into a Development and TIF Reimbursement Agreement for the purposes of the development, redevelopment and construction of improvements at 5100 Great Northern Mall, North Olmsted, Ohio 44070, commonly known as Great Northern Mall, specifically incentives to induce the demolition of a blighted structure and the construction of a new 7,900 square foot restaurant (“Project); and WHEREAS, the Project has an estimated value of $4,500,000.00 million and expects to hire 100 employees with an annual payroll estimated at $1,600,000.00 million; and WHEREAS, this Council, enabled by R. C. 5709.41, adopted Ord. No. 2023-132 (“TIF Ordinance”) in order to provide for economic incentives known as Tax Increment Financing (“TIF”), to authorize exemption of up to 100% of the incremental assessed value of a designated Project from real property taxes for a period of time of up to 30 years, thereby generating revenue for development of the said Project; and WHEREAS, on February 27, 2024, the Community Development Corporation met to review and recommend approval of the Development and TIF Reimbursement Agreement, the terms and conditions of which are incorporated herein and a copy of which is attached as Exhibit “A”; and WHEREAS, it is the desire of this Council to authorize the Mayor to enter into the Development and TIF Reimbursement Agreement with the Company for the purpose of authorizing the use of net TIF revenue on the development of the Project in consideration of and to provide economic incentives toward improvements at Great Northern Mall and to further authorize the Mayor to execute the attached TIF Reimbursement Agreement and other documents required to meet statutory requirements. NOW THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF NORTH OLMSTED, CUYAHOGA COUNTY, AND STATE OF OHIO: SECTION 1: That the Mayor be and she is hereby authorized to enter into a Development and TIR Reimbursement Agreement, a copy of which is attached hereto and marked as Exhibit "A," with Star West Great Northern LLC. Said Agreement shall be substantially in the form of the Agreement marked as Exhibit “A" with only such changes therein as are not substantially adverse to the City and which are approved by the Director of Law. SECTION 2: That this Ordinance shall take effect and be in force from and after the earliest date provided for by law. 2 PASSED: ________________________ First Reading: _______________ Second Reading: _______________ Third Reading: _______________ Committee: __________________ ATTEST: _______________________________ __________________________ BEATRICE TAYLOR LOUIS J. BROSSARD Clerk of Council President of Council APPROVED: _____________________ APPROVED AS TO LEGAL FORM: _______________________________ /s/ Michael R. Gareau, Jr. ______ MAYOR NICOLE DAILEY JONES MICHAEL R. GAREAU, JR. Director of Law
