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HomeMy WebLinkAbout2013-073-08/20/2013-APPROVING AN AGREEMENT BETWEEN THE CITY AND CUSTOM BLENDING, INC., TO PROVIDE BUSINESS INVESTMENT AS RESOLUTION 2013-073 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROVING AN AGREEMENT BETWEEN THE CITY OF FORT COLLINS AND CUSTOM BLENDING, INC., TO PROVIDE BUSINESS INVESTMENT ASSISTANCE WHEREAS, Custom Blending, Inc., is a vanilla manufacturer located at 3461 Precision Drive in Fort Collins; and WHEREAS, Custom Blending has committed to expanding its facilities to include a new 34,000 square foot expansion to be fully completed and operational by the end of 2013 (the "Project"); and WHEREAS, the Project will consist of an expansion and remodel in addition to an investment in equipment; and WHEREAS,Custom Blending estimates that the total investment in the Project will be more than$6 million(including both construction costs and equipment purchases)and that the completion of the Project will result in the creation of approximately 16 net newjobs with an annual average salary between $45,000—$47,000; and WHEREAS, an independent economic impact analysis commissioned by the City has indicated that the Project will result in one-time construction activity that will support 46 workers in the area and generate$2.5 million in new earnings for these workers, and will generate total net tax revenues for the City and other taxing entities combined of approximately $780,000; and WHEREAS, according to the Economic Health Office, the Project will also help retain primary jobs in Fort Collins that might otherwise be lost to other sites in Northern Colorado and elsewhere; and WHEREAS,according to the Economic Health Office,the Project will bring vanilla extract manufacturing to the City that has previously occurred out-of-state; and WHEREAS, City staff has prepared for City Council's consideration a proposed agreement between the City and Custom Blending (the "Agreement"), which Agreement sets forth the terms and conditions upon which financial assistance will be provided to Custom Blending by the City and is attached as Exhibit "A"; and WHEREAS,based on Custom Blending's representations,the Project will be a high quality manufacturing facility that will be owned and operated by Custom Blending; will generate new primary jobs; and will have a reasonable expectation of long-term operations in the City; and WHEREAS, the City Council has determined that it is in the best interests of the City to provide a package of financial assistance for the Project consisting of two components: the rebate of new City use tax revenues generated by the Project and the rebate of City personal property tax on new Eligible Equipment installed as part of the Project. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby finds that providing financial assistance to Custom Blending, Inc., as described herein, is in the best interests of the City and serves the important public purposes of increasing employment within the City, stabilizing and improving the long-term tax base of the City, and promoting economic development within the City. Section 2. That the City Manager is hereby authorized to execute the Agreement on behalf of the City, in substantially the form contained in Exhibit "A" attached hereto and incorporated herein by this reference, together with such additional modifications and additions as the City Manager deems_necessary or appropriate, in consultation with the City Attorney, in order to protect the interests of the City or to further the purposes of the Agreement or this Resolution. Section 3. That the City Manager is hereby authorized to prepay in full or in part any rebate amounts due after December 31, 2015, to Custom Blending pursuant to the Agreement, provided that the City Manager determines that such prepayment or prepayments are justified in light of Custom Blending's employment target performance and the efficiency and convenience of such prepayments. Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 20th day of August A.D. 2013. (,PJ OF FORT•CO , or ATTEST: �� ' • . • O City Clerk • •060RP0 EXHIBIT A BUSINESS INVESTMENT AGREEMENT FOR ECONOMIC DEVELOPMENT RELATED TO CUSTOM BLENDING THIS AGREEMENT is entered into this day of 2013, effective as of June 8, 2012, by and between the City of Fort Collins, Colorado, a home rule municipal corporation (the "City'), and Custom Blending, Inc., a Colorado Corporation ("Custom Blending'). RECITALS e WHEREAS, Custom Blending is the owner of property located at 3461 Precision Drive in the City that is more fully described in Exhibit A and incorporated herein by this reference (the "Property"); and WHEREAS, Custom Blending has committed.to•expanding"`the.Property by to include a new 34,000 square foot expansion to be fully complet d+and operational by the end of 2013 (the "Project"); and WHEREAS, the Project will consist of`a4construction expansion and remodel in addition to an investment in equipment; and;/` WHEREAS, Custom B�lenn iinng estimates that tthat the total investment in the Project will be more than $6 million(including both construction and equipment purchases) and that ti the completion of the Project will result in the cre tion of approximately 16 net new jobs earning with an annual average alary 15etw en $45,000 — $47,000, and that will provide significant /I `, 1')" economic benefit to1he community at large; and WHEREAS;-the`City's Economic Health Office has concluded that the Project will generate an increase m1tax.e enue for the City, including approximately (i) $ 203,000 in sales and use;tax after rebates; and (ii) $12,400 in new personal property tax in the first ten years; and WHEREAS, 'according to the Economic Health Office, the Project will prevent primary jobs froii,leaving Fort Collins to other sites in Northern Colorado and elsewhere; and WHEREAS, according to the Economic Health Office, the Project will bring vanilla extract manufacturing to the City that has previously occurred out-of-state; and WHEREAS, Custom Blending has requested that the City enter into a business investment agreement for economic development related to the Project; and WHEREAS, based on Custom Blending's representations that the Project will (i) be a high quality manufacturing facility that will be owned and operated by Custom Blending, (ii) generate new primary jobs, and (iii) have a reasonable expectation of long-term operations in the City; and WHEREAS, in order to encourage the Project, the City Council has determined, through the adoption of Resolution 2013-XXX on August 20, 2013, that it is in the best interests of the City to provide a package of financial assistance for the Project consisting of two components: the rebate of new City use tax revenues generated by the Project and the rebate of City personal property tax on new Eligible Equipment installed as part of the Project; and WHEREAS, the City Council has further determined, through` the adoption of 11 Resolution 2013-XXX that providing the financial assistance described in this Agreement to Custom Blending will serve the important public purposes of maintainingand increasing employment in the City, stabilizing and improving the long term tax base of the City, and providing additional economic development benefits to the City. ,y'" /ay� NOW, THEREFORE, in consideration of the promises contained in this Agreement, and other good and valuable consideration, the receipt, and adequacy of which is hereby acknowledged, the parties hereto agree as follows. "' ' 1n 4- �w SECTION 1. DEFINITIONS 1 Application for Use Tax Rebate mean s the application process for a use tax rebate using forms provided by the City. l ` 1S,/'JY <\\ \\ 1 J Custom Blending means Custom Blending, Inc;}.aColorado Corporation. Building Expansion me ns tl at building located at 3461 Precision Drive. ` V Certificate of Occupancy has the+'same meaning as set forth in the City of Fort Collins Land Use Code. -414 Charter means the Home RuleGCharter of the City. V:` Citdmeans th'eCityaof F6A Collins, Colorado, a home rule municipal corporation. Code means the Code of the City of Fort Collins. County Assessor means the Larimer County Assessor. Development Agreement means that agreement required when plans, profiles and specification have been approved by the City pursuant to the Land Use Code. Eligible Equipment means new manufacturing equipment and electronic equipment that is installed or delivered to the Property and incorporated between August 20, 2013 and December 31, 2014, that the installation of which is necessary allow for operation of the Manufacturing Facility. All equipment must be newly installed and located within Custom Blending's facilities 2 at 3461 Precision Drive, in Fort Collins, Colorado within the time period required in this Agreement. Employment Target means employment by Custom Blending of no fewer than 51 full-time employees at its Facility as of December 31, 2015. Facility means the approximately 34,000 square foot Building Expansion facility to be developed, constructed and installed beginning in 2013 and to be fully completed and operational in 2013. Land Use Code means the Fort Collins Land Use Code. (l,' ,, Manufacturing Equipment Use Tax Rebate Program or Program means the program for ry- generally available limited rebate of use taxes for manufacturing equipment, as"described in Chapter 8 of the Code. Project means Custom Blending's Building Expans on`by the development of approximately 34,000 square feet for use as an Manufacturing-Facilit ursuant to'' g permit building as h'� P, may be issued by the City for the same, and shall"i..nclude co.. nstruction as well as acquisition and installation of the Eligible Equipment. �+.delf t{+ � ' �, Project Personal Property meansr=the investmentsi, ini,'Eligible Equipment and leasehold improvements made by Custom,Blend hg.'as part of�the Project. Use Tax Rebate means the rebate obiise tax s'to)Custom Blending described in Section 3 of this Agreement. The Use Tax,Rebate;as"described herein is intended to be in lieu of, and not a duplication of, the M'ufachiring Equjpme t Use Tax Rebate Program, which Program Custom Blending agrees it is not entitled:fo,participate in for the Eligible Equipment. Failure to execute this agreement„rdoesl not exclud'e'�Custom Blending from receiving rebates from the Manufacturing LJse Tax Rebate.Program. 1 � SECTION 2.v REPRESENTATIONS AND COVENANTS 2.1. TNeCity represents and covenants that: 4 ` J� 2.1.1 ;Th fe City is a home rule municipal corporation of the State of Colorado. 2.1.2. There is no litigation or administrative proceeding pending or, to the knowledge of the City, threatened, seeking to question the authority of the City to enter into or perform this Agreement. 2.1.3. The City reasonably believes that it has the authority to enter into the Agreement, and, assuming such authority, the City Council has properly and regularly authorized the City to enter into the Agreement. 3 2.2. Custom Blending represents and covenants that: 2.2.1. Custom Blending is a corporation, duly organized and validly existing under the laws of the State of Colorado, is authorized to do business in the State of Colorado, is not in violation of any provisions of its organizational documents or, to its knowledge, the laws of the State of Colorado. 2.2.2.. Custom Blending has the power and legal right to enter into the Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action, which Agreement will be enforceable against Custom Blending in accordance with its terms. 2.2.3. The consummation of transaction contemplated``-:by this Agreement will not violate any provision of the governing documents of Custom Blending or, to its knowledge, constitute a default or result,iletbreach of any term or provision of any contract or agreement to which,Custom Blending is a party or by which it is bound. 2.2.4. To its knowledge, there is no,litigaiion, proceeding, or investigation contesting the power of authority of Custom Blending with respect to the Project or this Agreement, and Custom Blending—is`uriaw re of that any such litigation, proceeding, or investigation haslieenp threatened. 2.2.5. In redevelopingsthe.Propeity;�Custoin"Blending will comply with all applicable zoning and',land use'require"merits and other applicable federal, state, county, and City statutes, rules; regulations and ordinances. 2.2.6. Custom Blending intends to operate, or cause to operate, in Building Expansion a new, Manufacturing Facility through December 31,2021. 2.2.7 Custom�Blending;,will cooperate with the City in taking reasonable actions to J% defend against any litigation brought by a third party concerning the Project or this Agreement. SECTION 3. PAYMENT AND REIMBURSEMENT OF USE TAXES 3.1. Custom Blending shall pay to the City all use taxes due from Custom Blending for its Eligible Equipment investment associated with the Project to develop and equip the Manufacturing Facility. 4 3.2. To the extent permitted by the constitution and laws of the State of Colorado and the Charter, including but not limited to, applicable prohibitions on multiple fiscal year obligations and the condition all obligations be contingent upon the appropriation of funds sufficient and intended therefore by the City Council of the City, in its sole discretion, the City agrees to rebate the following amounts to Custom Blending up to seventy-five percent (75%) of City use taxes paid by Custom Blending for the Eligible Equipment for the period beginning August 20, 2013 and ending December 31, 2014, as described in Section 3.3 (the "Use Tax Rebate"), subject to a limit on the total use tax rebate amount for the Project, of Thirty-One Thousand, One Hundred Thirty Dollars ($31,130) (the "Maximum Use Tax Reimbursement"). Custom+Blending shall not be eligible for a Use Tax Rebate for any use tax paid on any Eligible Equipment,,unless it has accurately designated and identified the Eligible Equipment on a separate schedule"as part of the use tax submission for such Eligible Equipment. 3.3. The Use Tax Rebates here under shall be conditioned upon the fu11 payment by Custom Blending to the City of all use taxes due and owing from Custom'Blending, provided that all applicable conditions are met. If Custom Blending,has,not paid any`,,se taxes owed to the City l4 6�. due to a good faith dispute as to whether such use tax"is,due, and such dispute has not been resolved by the time Company requests a UsC,,Tax Rebate'hereunder, or if Custom Blending otherwise fails to pay any use taxes owed\o the,City when "due and such use taxes remain unpaid at the time the Company requests a(UserTax,Rebate hereunder, then the City may reduce the requested Use Tax Rebate by the amount in dispute until resolution of the dispute, payment of the use tax or payment under,protest of the;use tax, as the case may be. 3.4. Custom Blending shall apply;for the'Use,Tax Rebate in accordance with the provisions hereafter set forth. The amount of Use,Tax Rebate payable by the City and the time when such rebate shall be paid are he eimafte'r set forth:' 3.4.1. In order to be eligible for any Use Tax Rebate hereunder, Custom Blending shall y subinit=an,Application for Use Tax Rebate for rebate of City use taxes paid on r Eligible en any such Application (and each such Application for Use >' Tax Rebate submitted pursuant to this Section 3.3) must identify each item of )\Eligible Equipment in a manner consistent with, and corresponding to, the manner in which such item of Eligible Equipment was designated and identified ` in connection with the payment of use taxes for said item. 5 3.4.2. No later than March 31, 2013 Custom Blending shall submit an Application for Use Tax Rebate for rebate of City use taxes paid on Eligible Equipment purchased between August 20, 2013 and December 31, 2014. The related Use Tax Rebate to Custom Blending for 2013 use taxes hereunder (the "Total Rebate Payment") will be paid over a period of three (3) years, with the initial installment of thirty-three and one-third percent (33.3%) of the total amount of the Total Rebate Payment due and payable no later than June 30, 2014, with a second installment of the same amount due and payable no later than June 30, 2015, and with a final installment equal to thirty-three and'one-third percent (33.3%) of the Total Rebate Payment due and payable no latenthan'June.30, 2016. `.� n✓�sir f'(J`;v' 3.4.3. The parties acknowledge that the intended effect of this Agreement is to increase net employment by Custom Blending at thelmployment Target level. In addition to the specific requirements for netinew,jobs described below in Section 3.4.5, Custom Blending agrees to maintain' rno fewer than substantially the same number of employees within its Fort;Collins facility(excluding the new jobs as contemplated hereunder) as Custom Blending employed in Fort Collins as of June 30, 2013, which, for the purposes of=this Agreement, shall be deemed to have been thirty-five (35) employee's.,;If this level has not been maintained at the time of any payment of Use'Tax Rebate hereunder, the City will reduce the Total Rebate Payment amount due in a manner proportional to the difference between w � the then current Fort`Collins empto ' ent;and the initial employment level of 35. 3.4.4. In the event that the. City d t rmines that Custom Blending has not met the Employment Target`,the,City may reduce the amount of any Use Tax Rebate installment',to be pai&.,during the period of such non-compliance by the percentage of sho tfall from the Employment Target. 3.5. The City,;in;,itslsole discretion, may pre-pay all or any portion of the Use Tax Rebate, ' -',' without penalty. R i' 7��,s ,-.U' 3.6./ Custom Blending assumes the entire risk that the Project will be unable to begin operations and pay use tax on Eligible Equipment by December 31, 2014, so as to qualify for the Maximum Use Tax:Reimbursement, and further assumes all risk associated with legal contingencies`limiting the City's obligation to make any payments in future fiscal years and conditioning alPfuture fiscal year obligations on the City's discretionary appropriation of funds therefor. 3.7. It is not the parties' intent that Custom Blending be paid or entitled to any interest or penalty on use taxes paid by Custom Blending, or any penalty or interest on Use Tax Rebate payments delayed or withheld by the City. 6 3.8. In addition to limit of the Maximum Use Tax Reimbursement, the parties further acknowledge and agree that the Use Tax Rebate for.any Eligible Equipment will not at any time be allowed to exceed the amount of City use tax actually paid to the City on such Eligible Equipment. Custom Blending further acknowledges and agrees that the City is in no way responsible for the amount of City use tax actually paid or collected for the Eligible Equipment or any other equipment or corporeal property of Custom Blending. 3.9. The parties agree that the provisions of this Agreement do not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation or provision. The commitment of the City to pay the Use Tax Rebate undei'it liis°Agreement is from year to year only and does not constitute a mandatory payment obligation'of the!City in any fiscal year beyond the present fiscal year. This Agreement does not directly or indirectly obligate the City to make any payment of a Use Tax Rebate beyond those for which funds have been appropriated as of the date of this Agreement. The.City,Manager (or any other officer or employee at the time charged with the res onsibili o"f,formulatin budget proposals) shall g P tY ,. , g g P P ) make a good faith effort to include in the budget' proposals and'^appropriation ordinances proposed to the City Council, in each year prior to sex iration of this Agreement, amounts sufficient to meet the City's commit ments:__hereundei'.,,subject to the conditions and contingencies set forth herein. Notwithstanding ,the ''foregbing, the parties expressly acknowledge that the decision as to whether to appropriate such amounts is in the discretion of the City Council. ' F SECTION 4. PAYMENT AND REBATE OF,,PERSONAL PROPERTY TAXES 4.1. Custom Blending shall pay to`the City all personal property taxes due from Custom Blending Project Pe sonal Property associated with the Project and Building Expansion to develop and equip the Manufacturing Facility. 01 �r 7 4.2. To the extent permitted by the constitution and laws of the State of Colorado and the Charter, including but not limited to, applicable prohibitions on multiple fiscal year obligations and the condition all obligations be contingent upon the appropriation of funds sufficient and intended therefore by the City Council of the City, in its sole discretion, the City agrees to rebate to Custom Blending a portion of the City personal property taxes paid for the Project Personal Property under the terms and conditions set forth in Section 4.3 below (the "Personal Property Tax Rebate"). If, as presently contemplated by the parties, the contingencies and requirements described in this Agreement are satisfied as to each of the seven (7) payments provided for therein, and subject to the legal limitations as noted above, the City will-rebate to Custom Blending up to the amount shown on the Payment Schedule defined belo'W'of City personal property taxes actually paid for the Project Personal Property in the increments and for,the ftime periods described therein, subject to a limit on the total amount of Personal Property Tax Rebate to be paid by the City of Twelve Thousand Three Hundred'',N ety-Five Dollars-($12,395) in total, and a limit on each annual payment of Two Thousand Seven Hundred Fifty-Four Dollars �r ($2,754). The parties acknowledge that the intended effect of this•Agreement is to increase net employment by Custom Blending at the level described as the Employment Target. In addition to the specific requirements for net new jobs described below in Section 4.3, Custom Blending a• agrees to maintain no fewer than substantially the same'mi er of employees within its Fort Collins facility (excluding the new jobs as contemplated"heieunder) as Custom Blending employed in Fort Collins as of June 30, 2013�twhich;lfor the ypur'- oses of this Agreement, shall be deemed to have been thirty-five (35) employees.. f this level has not been maintained at the time of any payment of Personal Property Tax Rebate hereu°°rider, the City will reduce the Personal \,4 1, Property Tax Rebate amount due`in a manner proportional to the difference between the then current Fort Collins employment and the initial'emp'loyment level of 35. 4.3. The paymentsebf Personal'Propeity,Tax Rebates referenced in Section 4.2 above will be made by the City to"Custom Blending as follows: 4.3.1.'�Custom'Blending has supplied a 7 year schedule of estimated personal property taxes tosbe paid,in calendar years 2015 through 2022 for the Project Personal Property,.( Payment Schedule") associated with the Project as described in this ;Agreement; attached hereto as Exhibit B and incorporated herein by this reference. This Payment Schedule also provides the basis for a schedule of 4'`^,persoill I property tax rebate payments. .t, 8 4.3.2. At its option, Custom Blending may, no later than December 31, 2014, submit one updated 7 year schedule of estimated personal property taxes to be paid in calendar years 2015 through 2022 for Project Personal Property installed during the Project ("Revised Payment Schedule"), subject to the City's review and written approval, in its reasonable discretion. If a Revised Payment Schedule has been approved, it shall upon approval become the operative schedule for the purposes of this Agreement, and shall thenceforth replace the Payment Schedule originally attached hereto. If no such Revised Payment Schedule is submitted and approved by December 31, 2014, then no revision to the Pa}'ment Schedule shall be made, except as otherwise provided in this Agreement. `. 4.3.3. Custom Blending shall apply for each annual rebate payment u"sing a form to be provided by the City. The annual Personal Property Tax Rebate contemplated by this Section will be paid by December 31 of°each year, with the first such annual payment scheduled for 2015, as set forth.intthe Payment Schedule. 4.3.4. Custom Blending expressly agrees that no portion of the Personal Property Tax Rebate will be paid if, at the timelspecifiedtfo', ayment, the City determines that .ei Custom Blending has not received aDCertificate"of Occupancy for the Project on or before December 31`,",,2013, ard 'thereafter continuously operated the Manufacturing Facility`as described in this,Agreement. �. 4.3.5. The City may,reduce the amount of'any Personal Property Tax Rebate paid IV during any period'non-compliance with any of the following requirements, by the percentage of shortfall-from frill compliance with each such requirement: a . ,/', ',�� (a) Custom Blending shall have actually paid to the City personal property taxes 'r equal to or greaierrthan two (2) times the combined total of all Personal Rroperty,.Tax Rebates scheduled to be paid by the City to Custom Blending .'L . ,... , for that year under the Agreement; (b) Custom Blending shall have maintained no fewer than 35 full-time jobs in i aM• Fort Collins for the payment made to Custom Blending in 2015, and, for all subsequent payments, shall meet the Employment Target. 4.4. The City-reserves the right to modify the Payment Schedule in the event that material change to the:City's mill levy or personal property tax assessment methodology would make the Payment Schedule provided herein inconsistent with the parties' intent that the Personal Property Tax Rebate not exceed fifty percent (50%) of the amount of personal property tax actually collected by the City for the Eligible Equipment installed and operating as part of the Facility. 9 4.5. The parties agree that the City may, at its option, require Custom Blending to make available to the City all documents that verify the purchase of Project Personal Property installed in Manufacturing Building whether or not as part of the Project, including the County Assessor's certification of value. The City agrees that, except as otherwise provided by law or applicable court order, such documents constitute privileged information and confidential financial data within the meaning of the Colorado Open Records Act, and, to the extent permitted by law, the City will deny the right of inspection of such documents to any third party without the consent of Custom Blending. 4.6. The City, in its sole discretion, may pre-pay all or any portion of theLPer"sonal Property Tax Rebate,without penalty. Tr�"�� ? 4.7. Custom Blending assumes the entire risk that the Project will be unable.to begin and maintain operations at the levels sufficient to generate the,level of personal property tax v identified above, and the risk that all or any portion of the�Personal.Property Tax Rebate maybe forfeited unless the requirements of this Agreement have beeri'�satisfied. Custom Blending further assumes all risk 'associated with legal contingencies limiting.the City's obligation to make any payments in future fiscal years and,cor?ditio ng'`all future fiscal year obligations on s v v the City's discretionary appropriation of funds therefor. w j1 N, i 4.8. It is not the parties intent that,Custori''Blending be paid or entitled to any interest or penalty on personal property taxes paid,or a y penalty or interest on Personal Property Tax Rebate payments delayed or withheld by the•.City. 2 Y� r,rP 4.9. The parties agree'I,that the ',.provisions of this Agreement do not constitute an indebtedness of the City witfiin�the meaning of any constitutional or statutory limitation or provision. The commitment of the City to pay the Personal Property Tax Rebate described in this Agreement' is from year to'year only and does not constitute a mandatory payment obligation of the City,in;any fiscal year beyond the present fiscal year. This Agreement does not directly or-indirectly obligate .the City to make any payment of any Personal Property Tax Rebaterbeyond those for which funds have been appropriated as of the date this Agreement. The!City Manager (or an'y'other officer or employee at the time charged with the responsibility of formulating budget proposals) shall make a good faith effort to include in the budget proposals and, appropriation ordinances proposed to the City Council, in each year prior to expiration of'tr:his Agreement, amounts sufficient to meet the City's commitments hereunder, subject to the conditions and contingencies set forth herein. Notwithstanding the foregoing, the parties expressly acknowledge that the decision as to whether to appropriate such amounts is in the discretion of the City Council. SECTION 5. RECORDS AND AUDITS 5.1. Custom Blending must keep true, accurate and complete records of all equipment installed and operated in Manufacturing Facility and identifying and document all equipment 10 and Project Personal Property installed or operated in the Manufacturing Facility, whether or not as part of the Project, which records will be available for inspection by the City without unreasonable delay and without City expense. Custom Blending agrees that the City has the right, through its duly authorized agents or representatives, to examine all such records upon ten (10) days notice at all reasonable times, for the purpose of determining the accuracy and propriety of the financial representations which have been made by Custom Blending as well as the right to inspect and inventory the Project Personal Property in or as with the Manufacturing Facility in order to confirm that the same is in place and in use as required in connection with any rebate hereunder. This right of review and inspection-.terminates upon termination of the later of the City's payments of Use Tax Rebate as provided,in Section 3 of this Agreement and the payments of Personal Property Tax Revenues as provide din'Section 4 of this Agreement. In the event that the City becomes the custodian of any such records which iek:de. may contain trade secrets or confidential or proprietary inforlmation, and arel'sofmarked, the City will, to the extent permitted by law, protect the confidentiality of such information and deny any request for inspection of such records. 5.2. The City will keep, or cause to be kept, true haccurate andkcomplete records of all calculations relating to the Use Tax Rebate; the`.Personal-Property Tax Rebate and such other calculations, allocations and payments required byfthis Agreement, and will make such records available for inspection by Custom Bley ding upomten'(10);days notice at all reasonable times, to the extent permitted by law. M 1 5�9 SECTION 6. RESTRICTIONS ON ASSIGNMENT' \ r 6.1. The qualifications`of Cust'rri;,,Ble d hg to accomplish the objectives of the City hereunder are of par 'cular"concern to :the City. Therefore, no voluntary or involuntary successor in mterest of Custom Blending shall acquire any rights or powers under this Agreement except as expressly set or herein and Custom Blending will not assign all or any part of this Agreement except either: j61.1 r�with the prior written approval of the City, through its City Council, in its sole .discretion; or l , 7 6'1.2,, as collateral to a lender in connection with the financing of the Project. 6.2. Custom Blending must notify the City within fifteen (15) days of any and all changes whatsoever in the identity of the parties in control of Custom Blending, or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. SECTION 7. EVENTS OF DEFAULT;REMEDIES 7.1. Default or an event of default by Custom Blending mean one or more of the following events: 11 7.1.1. Any representation or warranty made in this Agreement by Custom Blending was materially inaccurate when made or shall prove to be materially inaccurate; 7.1.2. Custom Blending assigns or attempts to assign this Agreement in violation of Section 6 of this Agreement; or 7.1.3. Custom Blending fails to substantially observe or perform any other material covenant, obligation or agreement required under this Agreement. 7.2. In order to exercise any remedy for default hereunder, upon the occurrence of any event of default, the City shall provide written notice to Custom Blending. Custom Bl3ingrmust immediately proceed to cure or remedy such default, and in any event, sucl''default"shall be cured within thirty (30) days after receipt of the notice, or,such longer time as,the City and Custom Blending agree in writing. Upon the failure of Custom Blending to sor'cure any such default, the City shall have all remedies available to it, in law`orin equity, excluding specific performance. 7.3. Default or an event of default by the-City,,shall mean one or more of the following events: •'1 -`^j' i 7.3.1. Any representation or•warranty,'�made in this Agreement by the City was ,WWyi'N, v. materially inaccurate when made;or shall'provev .t°onI`be materially inaccurate;or 7.3.2. perform any nonmonetary;.materi% al covenant, obligation or agreement required of it under this Agreement. ti-r A I�� 7.4. Upon the occurrence*bfrany event o'f default, Custom Blending will provide written notice to the City. The City must-immediately proceed to cure or remedy such default, and in any event, such'aefault shall be cured%within thirty (30) days after receipt of the notice, or such longer time as the City; nd Custom?Blending agree in writing. Upon the failure of the City to so cure any,such default, Custom Blending will have all remedies available to it, in law or in equity excluding specific performance. SECTION 8' NOTICES \ r. , mow,' AV 8.1. All notices required or permitted hereunder shall be in writing and shall be effective upon mailing deposited in the United States Mail, postage prepaid, and addressed to the intended recipient as follows. Any party can change its address by written notice to the other given in accordance with this Section. 8.1.1. City of Fort Collins: City of Fort Collins Attention: City Manager 300 LaPorte Avenue, PO Box 580 Fort Collins, CO 80522-0580 12 8.1.2. With a copy to: City of Fort Collins Attention: City Attorney 300 LaPorte Avenue, PO Box 580 Fort Collins, CO 80522-0580 8.1.3. Custom Blending: Custom Blending, Inc. Attention: General Counsel 3461 Precision Drive \ Fort Collins, CO 80528 \ r 8.1.4. With a copy to: [Need a new name] ,l Custom Blending, Inc 3461 Precision Drive,r'^ 1✓ Fort Collins, CO 80528 SECTION 9. MISCELLANEOUS 9.1. Binding Effect. This Agreement inures to_the benefit of and is binding upon the City and Custom Blending and Custom Blending's assignees permitted pursuant to Section 6 of this Agreement, if any. 9.2. No Third Party Beneficiaries The City, is notpbligated or liable under the terms of this Agreement to any person or entity not a partyhereto except any assignee permitted pursuant to Section 6 of this Agreement,, Further,'.the Cityyis not bound by any contracts or conditions that Custom Blending may;negotiate ti iith third parties related to the Project. 9.3. Interpretation,!Iurisdiction and'Venue. This Agreement is being executed and delivered and'i"s'intetided,to be performed in the State of Colorado, and the laws of Colorado, excluding'.its conflicts'of'laws,principles, govern the validity, construction, enforcement and interpretation of this Agreement. Exclusive jurisdiction and venue for resolution of any dispute arising•hereunder will bek,in the Larimer County, Colorado District Court. 9.4. Eritire-Agreement. This Agreement embodies the whole agreement of the parties concerning financial assistance by the City for the Project. Although it is anticipated there will be at least one other agreement governing general development issues related to the Project, there are no promises, terms, conditions, or obligations other than those contained herein exist with respect to the financial assistance package. This Agreement supersedes all provisions, communications, representations, or agreement, either verbal or written, between the parties with respect to the financial assistance package. 13 9.5. Waiver of Breach. Any waiver of any requirement or obligation hereunder must be in writing to be effective. Any waiver by either party to this Agreement of any term or provision of this Agreement will be narrowly construed, and will not operate or be construed as a subsequent or continuing waiver of said term or provision. 9.6. Article and Section Captions.The captions of the articles and sections of this Agreement are set forth only for the convenience and reference of the parties and are not intended in any way to define, limit, or describe the scope or intent of this Agreement. 9.7. City and Custom Blending Not Partners. Notwithstanding any language,,_,in this Agreement, the City is not a member, partner, or joint venturer of Custom'Blend ng;;,and the City shall not be responsible for any debt or liability of Custom,Blending or its contractors or agents. Custom Blending is not responsible for any debt or liability of ttie.,.Gity or their contractors or agents. 9.8. Severability. If any portion or portions of tl is,Agreement•are determined to be illegal m or unenforceable, the remainder of this Agreement willinot be affected,thereby and will remain in full force and effect as if such illegal or unenforceable portion or portions did not exist. If all . ,t Y \ or any portion of the payments required by the ter'ms_of this Agreement are determined, by a court of competent jurisdiction in a final,non-appealable judgment, to be contrary to public policy or otherwise precluded, and'if the decision of ,such court clearly indicates how the payments may be made differently and in•a mann6nthat is legal, valid and enforceable, then the Parties will utilize their reasonable, best,,�good faith efforts to promptly restructure and/or amend this Agreement in cco ardance wlti such court decision, or to enter into a new agreement, to assure, to;,,th`e,�extent;leg ally permissible, that all payments are made to Custom .11 Blending as contemplated by.j sAgreement 9.9. Originals' This Agreement maybe simultaneously executed in any number of counterparts;'each of which will be deemed original but all of which constitute one and the same Agreement. ,l 7 ,' ' E+ 9.10 ° 1oint Diaft. The parties agree they drafted this Agreement jointly with each having the advice"of legal counsel and an equal opportunity to contribute to its content. r; 14 IN WITNESS WHEREOF, the City and Custom Blending have executed this Agreement as of the date first above written. CITY OF FORT COLLINS, COLORADO a municipal corporation By: Darin A. Atteberry, Cit 'Manager Attest: ` City Clerk or't sr Approved as to form: G; l Deputy City Attorney CUSTOM BLENDING, INC. a Colorado.corporation By "y",Name and fitle Attest: `,, Corporate;Secretary r, CORPORATE`.SEAL r A , 15 EXHIBIT A PROPERTY DESCRIPTION: LOT 2,HARMONY TECHNOLOGY PARK 3RD, FTC(20080034504) 1 kc f•( ,r.p a 16 Exhibit B Custom Blending Personal Property Tax Rebate Estimate Eligible Assessed Payable Actual Value Assessment Assessed County Tax Paid Rebate-I Max Ending Year Year Starting Rate Value City Mill City Taxes Fee to City Rate Rebate Depreciation Value �2014 2015 1,978,561 29% 573,783 0.009797 5,621 2% 5,509 50°k) 2,154 '`�-'141;665 1,836,896 2015 2016 1,836,8% 29% 532,700 0,009797 5,219 2%-' 5,114 50% 2,551 282,538 1,554,357 2016 2017 1,554,357 29% 450,764 0.009797 4,416 /2%, 41328 501 2,164 282,538 1,271,819 2017 2018 1,271,819 29% 368,827 029797 3,613. 2%' 3,541 50%! 1,771 282,538 989,280 2018 2019 989,280 29% 286,891 0.009797 ,,2,811,., 2% 275,4'�y, 501% 1,377 282,538 706,742 2019 2020 706,742 29% 204,955 0.009797 2,008` , x,2% 1,968) ' 50%1, 984 282,538 424,203 2020 2021 424,203 29% 123,019 0.009797 '1;205 2%., 1,181 50%� 591 282,538 141,665 2021 2022 141,665 29% 41,083�0009797 2%` r 394 50°%1 1971 141,665 12,395 � y ✓J \mA 17