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HomeMy WebLinkAboutRESOLUTION - 26-15 - 5/12/2015 - AGREEMENT - CASTLE CHEVROLETRESOLUTION NO. 26-15 A RESOLUTION AUTHORIZING THE MAYOR AND VILLAGE CLERK TO EXECUTE A COST RECOVERY AGREEMENT BETWEEN THE VILLAGE OF ELK GROVE VILLAGE AND CASTLE CHEVROLET NORTH, INC. NOW, THEREFORE, BE IT RESOLVED by the Mayor and Board of Trustees of the Village of Elk Grove Village, Counties of Cook and DuPage, State of Illinois as follows: Section 1: That the Mayor and Village Clerk be and are hereby authorized to sign the attached documents marked: COST RECOVERY AGREEMENT BETWEEN THE VILLAGE OF ELK GROVE VILLAGE AND CASTLE CHEVROLET NORTH, INC. Section 2: That this Resolution shall be in full force and effect from and after its passage and approval according to law. VOTE: AYES: 6 NAYS: 0 ABSENT: 0 PASSED this 12th day of May 2015. APPROVED this 12th day of May 2015. APPROVED: Mayor Craig B. Johnson Village of Elk Grove Village ATTEST: Judith M. Keegan, Village Clerk AuccmentGrtRcc,,veu'Ca,ticC'hevmlet COST RECOVERY AGREEMENT BETWEEN THE VILLAGE OF ELK GROVE VILLAGE AND CASTLE CHEVROLET NORTH, INC., This Agreement is entered into this 12`h day of May, 2015, by and between the Village of Elk Grove Village, an Illinois municipal corporation ("Village") and Castle Chevrolet North, Inc ("Castle"). WITNESSETH: WHEREAS, Castle Chevrolet North, Inc., an Illinois corporation, plans to take over operations of the existing Hoskins Chevrolet in the Village of Elk Grove Village, change its d/b/a name from Hoskins Chevrolet to Castle Chevrolet North, and sell and service new and used Chevy vehicles and Chevy and certain other used cars from the property commonly known as 175 N. Arlington Heights Road, Elk Grove Village, Illinois 60007 and bearing PIN 08-21-202- 042-0000 (the "Property"); and WHEREAS, Castle has projected sales at the Property to be approximately $40 million in its first full year of operation with increases in subsequent years; and WHEREAS, there will be substantial extraordinary expenses that are necessary for the development of this Property, including but not limited to, new lot lighting system, fagade improvements, pavement replacement, signage, fuel tank removal and remediation, roof repairs, Service Department improvements, and landscaping. NOW, THEREFORE, in consideration of the premises and of the mutual promises, agreements, covenants, and undertakings set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Incorporation of Preambles. The parties hereby incorporate the recitals contained in the preambles as provisions of this Agreement and find the same to be true and correct. 2. Definitions. a. Sales Tax or Sales Tax Revenue. For the purposes of this Agreement, the use of terms "Sales Tax" or "Sales Tax Revenue" shall mean any and all Retailers Occupation Taxes, Retailers Service Occupation Taxes, Retailers Use Tax, Retailers Service Use Tax, or any other "sales tax" (including, without limitations, a vehicle lease tax that is substituted for a portion of all of the foregoing) or successor tax that may be enacted by the State of Illinois or any governmental agency or body created under the laws of the State of Illinois and located within the State of Illinois which Village is able to verify by reference to the documents described in Section 5, infra, hereinafter being assessed, accruing or arising as a result of and received by the Village from the State of Illinois or such other governmental agency or body created as aforesaid. Castle Co,[ RcC,vcry Age cemcnl - I - 010/ 1 � b. Revenue Year. For the purposes of this Agreement, "Revenue Year" shall mean each twelve month period during the term hereof, commencing June 1, and ending May 31 of said calendar year. C. Non -Shareholder Contribution to Caul. A "Non -Shareholder Contribution to Capital" means the contributions by the Village to Castle in the form of Economic Incentives (as defined herein) based upon Municipal Sales Taxes (as defined herein) generated by Castle but which contributions to capital do not give the Village any equity or other interest in Castle. d. Economic Incentive. "Economic Incentive" shall be the Non -Shareholder Contribution to Capital payable to Castle pursuant to Section 4.b. of this Agreement. C. Municipal Sales Tax and Municipal Sales Tax Revenue. "Municipal Sales Tax" and "Municipal Sales Tax Revenue" refers to the Village's share of the Sales Tax Revenue generated from the Property that is actually received by the Village from the State of Illinois. 3. Name. Castle shall not include the name of a municipality other than Elk Grove Village in the name of the business operated on the Property or in any advertising thereof. 4. Economic Incentives. a. New Dealership. It is understood by the parties and declared by the Village that the operating of a newly renovated dealership selling new and used automobiles will generate such a substantial level of Sales Tax Revenue not ordinarily realized by a business use. Castle represents, warrants and covenants that it will comply in all respects with the Retailers Occupation Tax Act, as amended [35 ILCS 115/1 et, seq.] and the Service Occupation Tax Act, as amended [35 ILCS 120/1 et. seq.]. b. Commencement of Construction. Castle agrees to begin renovations and rehabilitation of the new dealership within seven (7) month of the date of this Agreement. Additionally, Castle agrees to have all construction related work completed by September 30, 2016. Should the renovations not be completed by September 30, 2016, the Economic Incentive shall cease and any Economic Incentive received shall be returned to the Village. C. Economic Incentive. The Village agrees to pay the Economic Incentive to Castle as stipulated herein. Provided, however, no Economic Incentive shall be paid to Castle until such time as Castle is operating an automobile dealership on the Property and new automobiles are being sold. The Economic Incentive shall be based upon the Municipal Sales Tax Revenue generated by Castle from the sale or lease of new motor vehicles, sales of used vehicles, any other vehicles sold or leased from any related motor vehicle franchise that may be granted to Castle and motor vehicle parts sold from the Property. The amount of the Economic Incentive payable to Castle is set forth on Exhibit `B", attached hereto and made a Castle Cost 2ecovery Agreement -2. US/05/ I5 pari hereof. Castle shall be eligible to receive the Economic Incentive until the end of Revenue Year 2027, subject to extension pursuant to Section 7 hereof. Each Non -Shareholder Contribution to Capital will be due and payable solely from proceeds of Municipal Sales Tax Revenues actually received by the Village from the State of Illinois. Economic Incentives shall be paid annually as further set forth herein only when annual sales at the Property generale the annual minimum of Municipal Sales Tax Revenue to the Village (the Threshold") as outlined below: Year Threshold 2015-2016 1st Year $100,000 2016-2017 Year $100,000 2017-2018 Year $175,000 2018-2019 Year 4 $175,000 2019-2020 Years $200,000 200-2021 Year 6 $200,000 2021-2022 Year $200,000 2022-2023 Year $225,000 2023-2024 Year $225,000 2024-2025 Year 10 $225,000 2025-2026 Year 11 $250,000 2026-2027 Year 12 $250,000 Should Castle receive a change in the Property's classification for real estate tax purposes to a Class 7B property tax classification under the Cook County Real Property Classification Ordinance, the Economic Incentive shall cease and any Economic Incentive received shall be returned to the Village. d. Payment. Within one hundred twenty (120) days after the end of May of each Revenue Year, the Village shall pay upon the receipt of records from the Illinois Department of Revenue, the applicable Economic Incentive to Castle pursuant to Exhibit `B" for the previous twelve (12) month period. Castle agrees to provide for the release of information from the State of Illinois Department of Revenue, as reasonably required by the Village, relating to the Municipal Sales Tax for the life of this Agreement. Castle agrees to also provide for the release of such information from any franchise or other parties operating at the Property. e. Termination of New Car Sales. Castle agrees that if at any time within three (3) years of the final payment to Castle, Castle shall permanently cease new car sales of Chevy vehicles on the Property for any reason other than condemnation, casualty or force majeure, or relocation to another site within the Village of Elk Grove Village and not thereafter replace sales of Chevy vehicles with sales of new automobiles that generate a similar amount of sales tax at the time of such cessation (within 10%) (except for Chevy new car sales relocation within the Village of Elk Grove Village in which case such 10% sales Castle Cost R,C.v cry Ag"ni.,a - 3 - U5/05/15 requirement shall not apply), then Castle shall be liable for and shall refund to the Village any and all monies theretofore received pursuant to this Agreement. Nothing herein shall prevent Castle from selling or otherwise transferring its dealership at the Property to a third party so long as such purchaser or transferee shall operate a similar facility that generates retail sales in an amount similar to the Castle retail operation and provided that such purchaser or transferee shall have expressly assumed the obligations of Castle hereunder. f Right to Collect Funds Due. If any money due from Castle to the Village pursuant to this Agreement is not received or paid to the Village by Castle within thirty (30) days after a demand for such payment, then such money, together with interest and costs of collection, including legal fees and administrative expenses, shall become a lien upon all portions of the Property, and the Village shall have the right to collect such amount, with interest and costs, including legal fees and administrative expenses. Such lien shall be subordinate to any first mortgage now or hereafter placed upon the Property; provided, however, that such subordination shall apply only to charges that have become due and payable prior to a sale or transfer of the Property pursuant to a decree of foreclosure or any other proceeding in lieu of foreclosure. Such sale or transfer shall not relieve the Property from liability for any charges thereafter becoming due, nor from the lien of any subsequent charge. g. During renovations of the property, Castle shall comply with the provisions of the Illinois Prevailing Hourly Wage Rate Act. 5. Sales Tax Reports. Concurrent with the filing of any and all reports with the Illinois Department of Revenue or any successor agency, Castle shall furnish to the Village, upon request, copies of any and all sales tax returns, sales tax reports, amendments, proof of payment or any other sales tax information filed with the State of Illinois or other applicable governmental entity. Such documents shall be sent to the attention of the Director of Finance for the Village. To the extent permitted by law, the Village shall maintain the confidentiality of the information contained in such reports. In addition, prior to any payments to Castle pursuant to this Agreement, Castle shall provide the State of Illinois with properly executed authorizations granting the Village the right to access the sales tax records of Castle. Castle acknowledges and agrees that the provisions of this Agreement shall be a matter of public record, as shall any and all payments made by the Village to Castle pursuant to this Agreement. Castle further covenants and agrees, that upon the request of the Village, Castle shall furnish such consents or waivers as may be required by the Illinois Department of Revenue, including but not limited to, a Consent to Disclosure Statement in form and content satisfactory to the State in order to release the above-described sales tax information to the Village. Castle agrees and acknowledges that any disbursements of the Village made pursuant to this Agreement can only be made from and to the extent of the data submitted to the State in accordance with this Section. Castle agrees to make the obligations contained in this Section a part of any contract to sell any portion of the Property. 6. Reimbursement Mechanism. The Village shall remit in full to Castle the pro rata share of the Economic Incentive to which Castle is entitled as determined in Section 4, supra. The Village shall be liable to Castle for disbursement of monies hereunder only to the extent of Castle Cost Recovery Agreement - 4 - 05105115 the Sales Tax Revenue generated by Castle and actually received by the Village from the Illinois Department of Revenue or other applicable governmental agency or body; provided, however, the Village reserves the right to make such earlier and/or additional payments in such amounts and at such times as the Village, in its sole discretion, deems appropriate. Any Municipal Sales Tax Revenue due the Village pursuant to this Agreement shall be reduced by an amount equal to all collection fees imposed upon the Village by the State of Illinois or the Illinois Department of Revenue or other applicable governmental agency or body, for collection of Sales Tax Revenue generated by the Property, from which such reduced amount shall be calculated the amounts due Castle hereunder. 7. Casualty/Extension of Term. If the operations of Castle at the Property shall cease due to casualty or force majeure, then, in each case, provided the conditions set forth in Section 15 hereof have not been satisfied, the term of this Agreement shall be automatically extended for a period equal to the period commencing on the date of said casualty, or the date said force majeure commences (as applicable), through the date of final completion of the reconstruction of the damage thereby caused to the Property or the date of cessation of said force majeure (if applicable), and the payment obligations of the Village hereunder shall, with respect to the Sales Tax Revenue generated by Castle during said extended term, continue for said period. Provided Castle is not in default hereunder, the Village shall continue to make any and all disbursements during any period of reconstruction or force majeure referred to hereinabove to which Castle would otherwise be entitled hereunder for said period. Additionally, the Threshold for a particular Revenue Year in which such casualty or force majeure occurs will be recalculated and reduced in an equitable manner proportionate to the number of days of such Revenue Year Castle is unable to operate at the Property as a result thereof. 8. Mutual Assistance. Castle and the Village agree to do all things practicable and reasonable to carry out the terms and provisions of this Agreement and to aid and assist each other in carrying out the terms hereof. 9. Default Remedies. Except as otherwise provided in this Agreement, in the event of any default or breach of this Agreement or any terms or conditions by any party hereto, such party shall, upon written notice from the non -defaulting party, proceed promptly to cure or remedy such default or breach within sixty (60) days after receipt of such notice. If any such default is incapable of being cured within said sixty (60) day period, and the defaulting party commences to cure the default within said sixty (60) day period and proceed with due diligence, then such party shall not be deemed to be in default under this Agreement. Notwithstanding the foregoing, with respect to the obligations of the Village pursuant to Section 4, supra, the Village shall have five (5) business days after receipt of notice to cure or remedy a default. In case any action hereunder is not taken or not diligently pursued or the default or breach shall not be cured or remedied within the above periods, the aggrieved party may institute such proceedings as may be necessary or desirable in its opinion to cure and remedy such default or breach, including, but not limited to, an action to restrain any such default or breach of its obligations, an action to compel specific performance by the party in default or breach of its obligations, an action to recover damages against any party liable pursuant to the provisions hereof, or any action at law or in equity and shall have the right to receive all costs and expenses including, but not limited to, reasonable attorneys' fees. Except as otherwise set forth in this Agreement, the rights and remedies of the parties to this Agreement, whether provided by law or this Agreement, shall be Castle Cost Recovery Agreement - 5 - O5/05/15 cumulative and the exercise by any party of any one or more such remedies shall not preclude the exercise by it at the same time or different times of any other remedies for the same default or breach by any other party. Unless prohibited by law, any delay by any party in instituting or prosecuting any actions or proceedings or asserting its rights under this Agreement shall not operate as a waiver of such rights in any way, it being the intent of this provision that such party should not be constrained so as to avoid the risk of being deprived of or limited in the exercise of the remedies provided in this Agreement because of the default involved. No waiver made by any party with respect to any specific default by any other party under this Agreement shall be construed as a waiver of rights with respect to any other default by the defaulting party under this Agreement or with respect to the particular default except to the extent specifically waived in writing or otherwise prohibited by law. 10. Entire Agreement. This Agreement sets forth all the promises, inducements, agreements, conditions and understandings between Castle and the Village relative to the subject matter hereof, and there are no promises, agreements, conditions or understandings, either oral or written, express or implied, between them, other than those herein set forth. 11. Term of Agreement. The term of this Agreement shall take effect upon June 1, 2015 and continue thereafter for a period of twelve (12) years (May 31, 2027). 12. Expiration Date. This Agreement shall expire (the "Expiration Date") after three (3) years (the length of time referenced in Section 4.d. of this Agreement) after the date of May 31, 2027, subject to extension as provided in Section 7, supra. 13. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Illinois. 14. Supplemental Agreement. The parties agree to cooperate in order to execute such supplemental agreements, memoranda and similar documents as may be necessary to implement the terms of this Agreement. 15. Force Majeure. Performance by any party hereunder shall not be deemed to be in default where delay or defaults are due to war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, respective governmental laws and regulations, epidemics, quarantine, restrictions, freight embargos or lack of transportation. An extension of time for any such cause shall be for the period of the delay, which period shall commence to run from the time of the commencement of the cause, provided that written notice by the party claiming such extension is sent to the other party not more than twenty (20) days after the commencement of the cause or more than twenty (20) days after the party claiming such extension could have first reasonably recognized the commencement of the cause, whichever is later. 16. Notices. Any notice, request, demand or other communication made in connection with this Agreement shall be in writing and shall be deemed to have been duly given on the date of delivery, if delivered to the persons identified below in person, or on the day of delivery to an overnight courier service for overnight delivery, or on the day of deposit with the US Postal Service if mailed by certified mail, postage prepaid, return receipt requested, addressed as follows: Castle Cost Recovery Agreement - 6 - 05/05/15 If to the Village: Village of Elk Grove Village Attn: Village Clerk 901 Wellington Avenue Elk Grove Village, IL 60007 Phone: (847) 357-4040 Fax: (847) 357-4008 If to Castle: Castle Chevrolet 400 E. Roosevelt Road Villa Park, IL 60181 Phone: (866) 507-0896 Fax: With a copy to: 17. Severability. If any provision, condition, covenant or other clause, sentence or phrase of this Agreement is held invalid by a court of competent jurisdiction, such provision shall be deemed to be excised and the invalidity thereof shall not affect any other provision, condition, covenant or other clause, sentence or phrase contained herein. Notwithstanding the foregoing, if any such invalid provision goes to the essence of this Agreement so that the purpose of this Agreement cannot be fulfilled, then this Agreement shall terminate as of the date of such judgment. 18. Village Approval. A certified copy of the ordinance adopting this Agreement and authorizing and directing the Village to execute this Agreement, shall be provided to Castle. 19. Amendments; Recordation. This Agreement may be amended from time to time with the written consent of the parties hereto. The parties shall cause a memorandum of this Agreement to be recorded with the Cook County Recorder. 20. Representations, Warranties and Covenants. a. Castle represents, warrants and covenants, as of the date of this Agreement, and throughout the term of this Agreement, as follows: (i) Castle is, or will be at the time of the performance of this Agreement with respect to its new d/b/a Castle Chevrolet North, duly organized, validly existing, qualified to do business in Illinois; (ii) Except as set forth above, Castle has the right, power and authority to enter into, execute, deliver and perform this Agreement; (iii) Except as set forth above, the execution, delivery and performance by Castle of this Agreement has been duly authorized by all necessary corporate action, and does not and will not violate its by-laws as amended Casde Cost Recovery Agreement - 7 - 05/05/1, and supplemented, any applicable provision of law, or constitute a breach of, default under or require any third party consent under any agreement, instrument or documents to which Castle is a party or by which Castle is now or may become bound. b. The Village of Elk Grove Village, an Illinois municipal corporation, represents, warrants and covenants, as of the date of this Agreement as follows: (i) It is a "home rule unit" pursuant to Article VII, Section b of the Illinois Constitution of 1970; (ii) It has the right, power and authority to enter into, execute, deliver and perform this Agreement. 21. Joint and Several Liability. The obligations of those parties collectively defined as Castle shall be and are joint and several. 22. Change in the Law. a. The Village and Castle acknowledge and agree that the Village's obligation to pay the Economic Incentive to Castle is predicated on existing State law, including, without limitation, the Retailer's Occupation Tax Act, the Retailer's Occupation Use Tax Act and the Retailer's Service Occupation Tax Act. The Village and Castle further acknowledge that the General Assembly of the State of Illinois has, from time to time, considered proposals to modify or eliminate the distribution of Sales Taxes to Illinois municipalities. The Village and Castle desire in paragraph b. of this Section to make express provision for the effect of any such change upon the operation of this Agreement. b. In the event that the State of Illinois amends or repeals the Retailer's Occupation Tax Act or makes any other promulgation, enactment or change in law ("Change in Law") that eliminates the distribution of Sales Taxes to the Village, or otherwise alters the distribution formula in a manner that prevents the Village and Castle from determining with a reasonable degree of certainty the precise amount of the Municipal Sales Tax, the provisions of this Agreement with regard to Municipal Sales Tax generated from the Property on or after the effective date of the Change in Law shall be modified, including the provision of 4b. If the Change in Law results in replacement taxes for the Sales Taxes, directly or indirectly resulting from the gross receipts of Castle as contemplated hereunder, then, for purposes of this Agreement, such replacement taxes shall be defined as Sales Taxes, subject in all respects to the Village's authority under state law to provide for economic incentives based upon such replacement taxes, as contemplated herein. 23. Limited Liability of Corporate Authorities. The parties hereto acknowledge and agree that the individuals who are members of the group constituting the corporate authorities of the Village are entering into this Agreement in their corporate capacities as members of such group and shall have no personal liability in their individual capacities. Castle Cost Recovery Agreement - 8 - 01105i) 5 IN WITNESS WHEREOF, the parties have executed this Agreement as of the year and date first above written. VILLAGE OF ELK GROVE VILLAGE an Illinois Municipal Corporation By: Mayor ATTEST: By: Village Clerk Castle Chevrolet North, Inc., an Illinois corporation, d/b/a Castle Chevrolet North By: Its: ATTEST: Its: Date Date Date Date Code Cost Recovery Agreemem - 9 - 05/05/15 STATE OF ILLINOIS ) ) SS COUNTY OF COOK) I, the undersigned, a Notary Public in and for said County, in the State aforesaid, DO HEREBY CERTIFY that Craig B. Johnson, personally known to me to be the Mayor of the Village of Elk Grove Village, Cook County, Illinois, and Judith M. Keegan, personally known to me to be the Clerk of the Village of Elk Grove Village, Cook County, Illinois, and personally known to me to be the same persons whose names are subscribed to the foregoing instrument, appeared before me this day in person and severally acknowledged that as such Mayor and Clerk of said Village of Elk Grove Village, caused the corporate seal of said corporation to be affixed thereto, as their free and voluntary act, and as the free and voluntary act and deed of said corporation, for the uses and purposes therein set forth. Given under my hand and seal this day of 2015. Notary Public STATE OF ILLINOIS ) ) SS COUNTY OF ) I, the undersigned, a Notary Public in and for said County, in the State aforesaid, DO HEREBY CERTIFY that personally known to me to be the of and personally known to me to be the same persons whose names are subscribed to the foregoing instrument, appeared before me this day in person and severally acknowledged that as such of caused the corporate seal of said corporation to be affixed thereto, as their. free and voluntary act, and as the free and voluntary act and deed of said corporation, for the uses and purposes therein set forth. Given under my hand and seal this _ day of Notary Public STATE OF ILLINOIS ) ) SS COUNTY OF ) 2015. Cade Cost Recovery Agreement - 10- 05/05/15 EXHIBIT "A" SITE MAP Castle Cost Itccoven A_memnn - I I - 0510VI5 Year Pavment Period EXI3IBIT "B" Annual Threshold Percent of Municipal Sales Tax Revenue to be Rebated to Castle * 1 June 1, 2015 —May 31, 2016 $100,000 100% 2 June 1, 2016—May 31, 2017 $100,000 75% 3 June 1, 2017—May 31, 2018 $175,000 50% 4 June 1, 2018 — May 31, 2019 $175,000 50% 5 June 1, 2019 — May 31, 2020 $200,000 50% 6 June 1, 2020 — May 31, 2021 $200,000 30% 7 June 1, 2021 — May 31, 2022 $200,000 30% 8 June 1, 2022 — May 31, 2023 $225,000 30% 9 June 1, 2023 — May 31, 2024 $225,000 30% 10 June 1, 2024 — May 31, 2025 $225,000 30% 11 June 1, 2025 — May 31, 2026 $250,000 15% 12 June 1, 2026 — May 31, 2027 $250,000 15% •:• Rebate applies after the annual threshold above has been paid to Elk Grove Village (as noted or amended in 4.c). Castle Cast Rccovcr, Agreement 05.'051!5