HomeMy WebLinkAbout1466 Velociti Compliance Incentive Agreement BILL NO. 2016-020 ORDINANCE NO.ILI((.P
AN ORDINANCE AUTHORIZING THE CITY TO ENTER INTO A COMPLIANCE INCENTIVE
AGREEMENT
WHEREAS, pursuant to the Real Property Tax Increment Allocation Redevelopment Act,
I Sections 99.800 — 99.865, Revised Statutes of Missouri, as amended ("TIF Act"), the City of
Riverside, Missouri ("City") after recommendation by the Tax Increment Financing Commission
of Riverside, Missouri ("TIF Commission"), approved the L-385 Levee Redevelopment Plan, as
amended ("Redevelopment Plan"); and
WHEREAS, the Redevelopment Plan, includes approximately 700 acres of developable
property known as the ("Area"), and which was last amended through passage of Resolution
No. 2007-05-01 on May 23, 2007; and
WHEREAS, the City seeks certain information from Velociti Inc., ("Company") related to
jobs created and maintained as well as confirmation of certain compensation and benefits paid
to the employees of the Company in its relocation to the City; and
WHEREAS, the City and the Company desire to enter into the Compliance Incentive
Agreement, attached hereto as Exhibit A and incorporated herein, to provide additional incentive
to the Company to develop job growth within the Riverside Horizons Area, subject to the terms
and conditions of such Agreement; and
WHEREAS, the City has determined that the development the Riverside Horizons Area
and submission of certain reports of such information sought, fulfills a public purpose and will
facilitate the growth and development of the City and the Riverside Horizons Area, improve the
environment of the City, increase the assessed valuation of the real estate situated within the
City, increase the revenues realized by the City, foster increased economic activity within the
City, increase employment opportunities within the City, enable the City to direct the
development of the Area, and otherwise be in the best interests of the City by furthering the
health, safety, and welfare of its residents and taxpayers.
NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF ALDERMEN OF THE
CITY OF RIVERSIDE, MISSOURI AS FOLLOWS:
SECTION 1. APPROVAL OF COMPLIANCE INCENTIVE AGREEMENT. The
Compliance Incentive Agreement, attached hereto as Exhibit A and incorporated herein, is
hereby approved in substantially the form, and the City is hereby authorized to enter into,
execute and deliver such document to Velociti.
SECTION 2. AUTHORITY GRANTED. The Mayor, the City Administrator, the City
Attorney, and other appropriate City officials are hereby authorized to take any and all actions
as may be deemed necessary or convenient to carry out and comply with this Ordinance and to
execute and deliver for and on behalf of the City, the attached Compliance Incentive Agreement
("Exhibit A") substantially in the same form as herein authorized.
SECTION 3. SEVERABILITY CLAUSE. The provisions of this ordinance are
severable and if any provision hereof is declared invalid, unconstitutional, or unenforceable,
such determination shall not affect the validity of the remainder of this ordinance.
WA 8076324.1
SECTION 4. EFFECTIVE DATE. This ordinance shall be in full force and effect from
and after the date of its passage and approval.
BE IT REMEMBERED that the above was read two times by heading only, passed and
approved by a majority of the Board of Aldermen and APPROVED by the Mayor of the City of
Riverside Missouri this 7th day of June, 2016.
i -
ayI or Kathleen L. Rose
•
•
ATTES _. .'
Rpbin Kincaid, ity Clerk
•
•
' a
[ Approved as to form:
ednar, Spe Counsel to the City
7 2 WA 8076324.1
1
EXHIBIT A
COMPLIANCE INCENTIVE AGREEMENT
(remainder of page intentionally left blank)
)
3 WA 8076324.1
AGREEMENT
THIS COMPLIANCE INCENTIVE AGREEMENT (`Agreement") is made and entered
into as of this � day of June, 2016 ('Effective Date"), by and between the CITY OF
RIVERSIDE, MISSOURI, a city and political subdivision duly organized and existing under
the Constitution and laws of the State of Missouri (`City"), and VELOCITI Inc., a corporation
duly organized and existing under the laws of the State of Nevada (`Company"). Collectively
City and Company are referred to hereafter as the "Parties".
RECITALS
WHEREAS, the City seeks certain information from the Company related to the number
of jobs created and maintained, as well as, ongoing confirmation of compensation paid and
benefits provided to the employees of the Company since its relocation to the City; and
WHEREAS, the Company's Riverside facility is located at 4780 NW 41" Street #500,
Riverside, Missouri (`Riverside Facility"); and
WHEREAS, City desires to provide additional incentive to the Company to create New
Jobs (as defined in Section 3 below) at the Riverside Facility, subject to the terms and conditions
of this Agreement; and
WHEREAS, the City desires to ensure the filing of certain reports confirming the
creation and maintenance of New Jobs at the Riverside Facility by the Company, and that the
Company submits certain reports required by the State of Missouri, or the City to satisfy the
requirements of any state or local incentive programs related to the Riverside Facility.
WHEREAS, the City believes that this Agreement fulfills a public purpose and will
further the growth of the City, facilitate the development of the Riverside Facility, improve the
environment of the City, support an increase in the assessed valuation of the real estate situated
within the City, increase the tax revenues realized by the City, foster increased economic activity
within the City, increase employment opportunities within the City, better enable the City to
direct the development within the City, and otherwise be in the best interests of the City by
furthering the health, safety, and welfare of its residents and taxpayers.
AGREEMENT
Now, therefore, in consideration of the premises and promises contained herein and other
good and valuable consideration, the adequacy and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
1. Recitals Incorporated Herein. The Recitals set forth above in this Agreement
are incorporated into and made a part of this Agreement as if fully set forth in this Section 1.
2. Exhibits Incorporated. The Exhibit referenced in this Agreement is
incorporated into and made a part of this Agreement as if fully set forth in this Section 2.
WA 8252956.1
3. Definitions. As used in this Agreement, certain words and terms shall have the
meanings as set forth below.
(a) "Base" means the amount of payroll taxes paid, the base payroll and/or the
number of employees employed, by the Company at the end of the State of Missouri's fiscal
year ending June 30, 2011, which the parties agree was $0.00;
(b) "Certification" means that certain documentation required by the City to be
provided by the Company, including an annual report of the number of jobs, total payroll,
and such other information as is required by the City in the form attached hereto as Exhibit
A to this Agreement, all of which is to document the Company's Payroll, and which form
may be reasonably amended from time to time by the City to meet the requirements of the
State and local incentive programs;
(c) "Commencement of Operations" means the starting date for the Company's
first new employee at the Riverside Facility;
(d) "Company" means Velociti Inc., a public corporation organized for profit,
registered to do business in Missouri and who is the owner and/or operator of the Riverside
Facility and who offers health insurance to all full-time employees of all facilities located in
this state, and pays at least fifty percent of such insurance premiums, and creates a New
Investment;
(f) "Full-Time Employee" means an employee of the Company that is scheduled to
work an average of at least thirty-five hours per week for a twelve-month period, and one for
which the Company offers health insurance and pays at least fifty percent of such insurance
premiums;
(g) "New Investment" means the purchase or leasing of new tangible assets placed
in operation within Riverside Horizons, which are directly related to the New Jobs;
(h) "New Job" means the number of Full-Time Employees located at the Riverside
Facility that exceeds the facility's Base employment. An employee that spends less than fifty
percent of the employee's work time at the facility is still considered to be located at a facility
if the employee receives his or her directions and control from that facility, is on the facility's
payroll, one hundred percent of the employee's income from such employment is Missouri
income;
(i) "New Payroll" means the aggregate amount of annual taxable wages paid to the
Full-Time Employees, excluding owners, located at the Riverside Facility that exceeds the
Riverside Facility's Base Payroll;
(j) "Notice of Intent" means the form previously submitted to the City and State of
Missouri which stated the Company's intent to hire new employees in Missouri and the City;
(k) "Qualified Payroll" means the annual New Payroll for which the Company has
provided Certification to the City;
2 WA 8252956.1
(1) "Riverside Facility" means the building used by the Company in the Horizons
Business Park at which the new jobs and new investment is located;
(m) "Riverside Facility Base Employment" means Zero for the purpose of this
Agreement, ;
(n) "Riverside Facility Base Payroll" means the total amount of taxable wages paid
by the Company to full-time employees of the Company located at the Riverside Facility in
the twelve months prior to the Notice of Intent, not including the payroll of the owners of the
Company, unless the Company is participating in an employee stock ownership plan;
(o) "Incentive Period" means the time period that the incentive is provided to the
Company;
(p) "Total Payroll" means the total amount of taxable wages of Full Time
Employees located at the Riverside Facility.
4. Term and Company's Duties. The City hereby offers the Company, and the
Company hereby accepts, the terms and conditions set forth in this Agreement.
4.1 Initial Term. This Agreement will commence on the Effective Date and will
terminate in year 2018 (employment year 2017), unless this Agreement is renewed or
terminated under the provisions of this Section 4.
4.2 Renewal Term. Following the Initial Term, the Agreement may be extended for
one(1) year upon the mutual written agreement of the Parties.
4.3 Termination. The City may immediately terminate this Agreement and the
Company's rights hereunder without further notice or liability to the Company upon the
occurrence of any of the following"for-cause" events:
a. The Company relocates all or a substantial number of employees from its
Riverside Facility the number of which shall be memorialized with a written
addendum signed by the parties to this agreement;
b. The Company applies for or consents to the appointment of a receiver, trustee
or liquidator or for all or a substantial part of the Company's assets;
c. The Company files a voluntary petition in bankruptcy;
d. The Company admits in writing to the City its inability to pay its debts as they
become due;
e. The Company makes a general assignment of its assets for the benefit of its
creditors;
f. The Company files a petition or an answer seeking reorganization or
arrangement with creditors or to take advantage of any insolvency law;
3 WA 8252956.1
g. An order,judgment or decree is entered by any court of competent jurisdiction
on the application of a creditor adjudicating the Company as bankrupt or
insolvent or approving a petition seeking reorganization of the Company or
appointing a receiver, trustee or liquidator for the Company for all or a
substantial part of the Company's assets, and such order, judgment or decree
continues in effect for more than sixty(60) days; and
h. The Company commits a misdemeanor involving moral turpitude or any
felony.
In the event that City terminates this Agreement, City shall have no liability to the Company;
provided, however, that no termination of this Agreement shall affect any amounts otherwise
payable to the Company hereunder prior to the termination. No failure by City to assert its
rights to terminate "for cause" shall constitute a waiver of City's rights or remedies with
respect to such event or any subsequent occurrence of any of the foregoing.
4.4 The Company's Obligations. The Company shall submit certification no less
than quarterly or otherwise determined by the Company and the City.
4.5 Independent Contractor. The Parties intend that the Company's legal status
with respect to City shall be that of independent contractor. The Parties expressly disclaim
any intent to create an agency relationship between the City and the Company. Accordingly,
the Company shall be an independent contractor with respect to their rights, duties and
obligations under this Agreement.
5. Payments. The Company shall receive, as payment for satisfying the Company's
reporting obligations in Section 4.4, in accordance with Section 5.1 below, at the Riverside
Facility which creates New Payroll in excess of the Base annually.
5.1 Subject to Section 5.2 below, in consideration of the Commencement of
Operations and compliance with Section 4.4 above, upon execution of this Agreement, the
Company shall receive a payment of One Hundred Thirty Four Thousand One Hundred
Twenty Five Dollars and Thirty Nine Cents ($134,125.39) as an incentive to execute this
Agreement. In addition, the Company shall receive, no later than September 30, 2016, and
no later than September 30 of the next two calendar years, an amount equal to the ratio of
$6,000 per $1,000,000.00 of the Qualified Payroll of the immediately preceding calendar
year payment is due respectively in years 2016, 2017 and 2018.
5.2 All payments made by the City to the Company pursuant to Section 5.1 above
shall be subject to the following conditions:
a. All payments made by the City are subject to annual appropriation;
b. All payments made by the City are subject to submission by the Company of
Certification of its payroll to the Missouri Department of Economic
Development and the City as required by the State or City;
4 WA 8252956.1
c. The Company acknowledges that other companies may enter into similar
agreements with the City ("Qualified Companies"), and the cap described in
Exhibit A (the "Cap") shall mean the maximum amount of funds that may be
available to be paid to all Qualified Companies. The Company further
understands and acknowledges that in no event shall the Company be entitled
to any payments described in this Agreement in excess of the Cap or in excess
of the Company's prorata share of such Cap based upon the number of
companies and incentives available in the applicable calendar year.
The Company shall not be entitled to payments in the event the Company fails to meet the
requirements described in this Section 5.
6. General Provisions
6.1 Power of the City. Notwithstanding anything set forth in this Agreement to the
contrary, no provision contained herein shall in any manner diminish or usurp the inherent
rights and powers of the City to act in its capacity as a public body. All financial obligations
of the City pursuant to this Agreement shall be subject to future appropriation in accordance
with applicable local, state and federal laws and requirements. Further, nothing herein shall
relieve the Company from complying with all applicable local, state and federal laws and
requirements.
6.2 Time. Time is of the essence in this Agreement. The Parties will make every
reasonable effort to expedite the subject matters hereof and acknowledge that the successful
performance of this Agreement requires their continued cooperation.
6.3 Sovereign Immunity. Nothing in this Agreement shall constitute or be construed
as a waiver of the City's governmental or official immunity of its officers or employees from
liability or suit pursuant to Section 537.600 RSMo.
6.4 Authorized Employees. The Company acknowledges that Section 285.530,
RSMo, prohibits any business entity or employer from knowingly employing, hiring for
employment, or continuing to employ an unauthorized alien to perforin work within the State
of Missouri. The Company therefore covenants that they are not knowingly in violation of
subsection 1 of Section 285.530, RSMo, and that they will not knowingly employ, hire for
employment, or continue to employ any unauthorized aliens to perforin work at the Riverside
Facility which is the subject of this Agreement, and that its employees are lawfully eligible to
work in the United States. The Company will execute an Immigration Law Compliance
Affidavit in a form satisfactory to the City and will cause any person or entity performing
work at the Riverside Facility to confirm compliance with Section 285.530(1) and execute an
Immigration Law Compliance Affidavit.
6.5 Binding Effect; Successors/Assigns. This Agreement shall be binding on and
shall inure to the benefit of the parties named herein and their permitted successors and
assigns. The rights, duties and obligations of the Company under this Agreement may not be
assigned.
5 WA 8252956.1
6.6 Notices. All notices, demands, consents, approvals, certificates and other
communications required by this Agreement to be given by any party hereunder shall be in
writing and shall be hand delivered or sent by United States first class mail, postage prepaid,
addressed to the appropriate party at its address set forth below, or at such other address as
such party shall have last designated by notice to the other. Notices, demands, consents,
approvals, certificates and other communications shall be deemed given when delivered or
three days after mailing; provided, however, that if any such notice or other communication
shall also be sent before 5:00 p.m. Central Time, on any Business Day by telecopy or fax
machine, such notice shall be deemed given at the time and on the date of machine
transmittal and if sent after 5:00 p.m. Central Time, then on the next Business Day if the
sending party receives a written send verification on its machines and forwards a copy
thereof with its mailed or courier delivered notice or communication.
In the case of the Company, to:
Michael Kahn or his designee
Velociti Inc.
Corporate Headquarters
7200 West 132nd Street, Suite 270
Overland Park, KS 66213
Facsimile: 913-233-7221
In the case of the City, to:
City of Riverside
City Hall
2950 NW Vivion Road
Riverside, Missouri 64150
Attention: City Administrator
Facsimile: 816-746-8349
With a copy to:
City of Riverside
City Hall
2950 NW Vivion Road
Riverside, Missouri 64150
Attention: City Attorney
Facsimile: 816-746-8349
6.7 Conflict of Interest. No member of the Board of Aldermen or any branch of the
City's government who has any power of review or approval of any of the Company's
undertakings, or of the City's contracting for goods or services for the Riverside Horizons
Area, shall participate in any decisions relating thereto which affect that member's personal
interests or the interests of any corporation or partnership in which that member is directly or
indirectly interested. Any person having such interest shall immediately, upon knowledge of
such possible conflict, disclose, in writing, to the Board of Aldermen the nature of such
6 WA 8252956.1
interest and seek a determination by the Board of Aldermen with respect to such interest and,
in the meantime, shall not participate in any actions or discussions relating to the activities
herein proscribed.
6.8 Choice of Law. This Agreement shall be taken and deemed to have been fully
executed, made by the parties in, and governed by the laws of State of Missouri for all
purposes and intents without regard to conflict of law statutes.
6.9 Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall constitute one and the same instrument.
6.10 Severability. In the event any tern or provision of this Agreement is held to be
unenforceable by a court of competent jurisdiction, the remainder shall continue in full force
and effect, to the extent the remainder can be given effect without the invalid provision.
6.11 Representatives Not Personally Liable. No elected or appointed official, agent,
employee or representative of the City shall be personally liable to the Company in the event
of any default or breach by any party under this Agreement, or for any amount which may
become due to any party or on any obligations under the terms of this Agreement.
6.12 Attorney's Fees. The City, on the one hand, and the Company, on the other
hand, each shall be responsible for the fees and expenses of their respective legal counsel
incurred in connection with this Agreement and the transactions contemplated hereunder;
provided, however, in any dispute arising out of or relating to this Agreement, the prevailing
party in any legal proceeding shall recover from the non-prevailing party the prevailing
party's reasonable attorney's fees.
6.13 Entire Agreement; Amendment. It is agreed and understood by the Parties that
this Agreement embodies the entire understanding and represents the full and final agreement
among the Parties with respect to the subject matter hereof and supersede any and all prior
commitments, agreements, discussions, representations, and understandings, whether written
or oral, relating to the subject matter hereof; that this Agreement may not be contradicted or
varied by evidence of prior or contemporaneous written or oral agreements or discussions of
the Parties, or subsequent oral agreements or discussions of the Parties; that there are no oral
agreements among the Parties, and no representations, agreements or promises not set forth
herein have been made. Without limiting the foregoing, the Company acknowledges that: (i)
no promise or commitment has been made to them by or on behalf of the City other than as
set forth in this Agreement; and (ii) except as otherwise expressly provided herein, this
Agreement supersedes and replaces any and all proposals, letters of intent and approval and
commitment letters relating to the subject matter hereof, none of which shall be considered a
part of this Agreement unless expressly incorporated into this Agreement. This Agreement
shall be amended only in writing and effective when signed by the Parties.
(The remainder of this page is intentionally left blank.)
7 WA 8252956.1
IN WITNESS WHEREOF, the City and the Company have caused this Agreement to be
executed in their respective names as of the date first above written.
APPROVED AS TO FORM
1
C' y ttomey
"CITY" CITY OF IVERSIDE, MISSOURI
By:
Kathleen L. Rose, Mayor
(SEAL)
Attest:
T,
Robin Kincaid, City Clerk
STATE OF MISSOURI )
) SS.
COUNTY OF PLATTE )
On thisZ day of June, 2016, before me appeared Kathleen L. Rose, to me personally
known, who,being by me duly sworn, did say that she is the Mayor of the CITY OF
RIVERSIDE, MISSOURI, a political subdivision of the State of Missouri, and that the seal
affixed to the foregoing instrument is the seal of said City, and said instrument was signed and
sealed in behalf of said City by authority of its Board of Aldermen, and said individual
acknowledged said instrument to be the free act and deed of said City.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal in
the County and State aforesaid, the day and year first above written.
0"WA''•*24', HOBWLNWMO
My rn
*- M"8,2019
SFAL i M*A Carib
CamNedon8189B0881 Notary Public
My Commission Expires-v,,,,,-/g,
8 WA 8252956.1
"COMPANY"
By:
Name: Michael L. Kahn
Title: CEO
STATE OF KANSAS )
) SS.
COUNTY OF JOHNSON _ )
On this 8th day of June, 2016, before me appeared Michael L. Kahn, to me personally
known, who, being by me duly sworn, did say that he is the CEO of Velociti Inc. and that he is
authorized to sign the instrument on behalf of said company by authority of its members, and
acknowledged to me that he executed the within instrument as said company's free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal in
the County and State aforesaid, the day and year first above written.
MAD A
Notary Public
My Commission Expires:
.•M 04 2&jJ(j ea
9 WA 8252956.1
EXHIBIT A
CALENDAR FUNDS AVAILABLE
YEAR FOR ALL COMPANIES
2016 $678,274.00
2017 $745,858.00
2018 $756,675.00
10 WA 8252956.1