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2007-402 "___1...1.:_- ".".".., ..".". Resolution 2007 - 402 A Resolution Approving a TIF Development Agreement with MGD FUND III, llC for the Redevelopment of Properties at 22 S. Jackson St. and Authorizing the City Manager to Sell a Parcel of land to MGD FUND III, LLC for a Purchase price of $18,000 WHEREAS, the Common Council have authorized the use of Tax Increment Financing ("TIF") Districts and TIF Development agreements when the Council adopted amended Council Policy Statement No. 61 (Economic Development Policy) on the 13th day of November, 2006; and, WHEREAS, the Common Council of the City of Janesville lawfully created Tax Increment Finance (TIF) District No. 24 on the 24th day of July 2002, which TIF District was duly reviewed and approved by all necessary boards and commissions; and, WHEREAS, MGD FUND III, LLC. ("MGD"), is a Wisconsin limited liability company conducting its principal business at 462 Midland Road, Janesville, Wisconsin 53545, desires to purchase certain real property owned by the CITY located at 22 South Jackson Street in the City of Janesville, County of Rock, State of Wisconsin 53545 and construct an 8,000 sf commercial office building, thereby revitalizing and redeveloping the CITY's downtown, helping eliminate blight, increasing the value of said real and personal property, adding to the CITY's tax base, and otherwise benefiting the health, welfare, peace and good order of the CITY, its downtown and the overall community; and, WHEREAS, in order to facilitate the planned renovation project, MGD and the CITY have negotiated a TIF Development Agreement ("Agreement") that is consistent with the goals of TIF No. 24; and, WHEREAS, said Agreement, which is attached hereto and incorporated herein by reference as if fully set forth verbatim, sets forth the terms and conditions of the planned renovation project and provides for MGD's full repayment of the CITY's TIF development costs in a manner and within a time allowed by Wisconsin law; and WHEREAS, under the terms of the Agreement, the CITY shall sell in fee simple the eastern one- half of the property located at 22 South Jackson Street to MGD for a purchase price of Eighteen Thousand and 00/100 Dollars ($18,000.00); and WHEREAS, the Janesville Plan Commission reviewed the proposed purchase, acquisition and sale of properties related to the planned project and found such sale of property to be consistent with CITY plans, but did not comment on the financial aspects of any specific transaction; and WHEREAS, the Common Council of the City of Janesville find that both the approval of said Agreement and the CITY's sale of the eastern one-half of the property located at 22 South Jackson Street are both in the best interest of and benefit to the City, its good order, its citizens, and the overall community; and WHEREAS, various Wisconsin's laws including, but not limited to, Wis. Stats. !i!i 62.11 (5), 62.22(1),66.0101, and 66.1105 jointly and severally empower the Common Council and the City to enter into this purchase and related Agreement. D""....""I.....;""... ...1..... """7 A"" Resolution No. 2007-402 Page 2 NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of Janesville that: 1. Each of the above recitals and findings is reiterated and incorporated herein by reference as if fully set forth verbatim; and 2. The attached Agreement by and between the City and MGD FUND III, LLC is hereby approved; the City Administration may enter into said Agreement on behalf of the City; and 3. The City's sale of the eastern one-half of the real property located at 22 South Jackson Street to MGD FUND III, LLC is authorized and approved in accord with the terms and conditions set forth said Agreement; the City Administration may effectuate said surplus land sale on behalf of the City. BE IT FURTHER RESOLVED, that the City Manager, on behalf of the City of Janesville, is hereby authorized to negotiate, draft, modify, review, enter into and amend the Agreement and all other related documents, papers and agreements; to take whatever other actions; and to make whatever other changes, modifications and amendments to the sale(s) and/or purchase(s) authorized herein that the City Manager may, from time to time, deem necessary and/or desirable to effectuate the intent of this Resolution. ADOPTED: May 29, 2007 Motion by: Williams Second by: Loaschiuo: Council member Aye Nay Pass Absent Brunner X DeGarmo X Loasching X Steeber X Truman X Wellnitz X Williams X APPROVED: .~c:~ Steven E. Sheiffer, City Man er ATTEST: APPROVED AS TO FORV C/4 . City Attorney Proposed by: City Manager Prepared by: Economic Development Director and City Attorney Resolutions/MDG Fund 3 Resolution Sale and CC Memo.doc Summary of TIF Development Agreement By and Between City of Janesville and MGD FUND III, LLC I. Parties A. City of Janesville B. MGD FUND III, LLC II. Description of Property III. Purpose of Agreement IV. The Agreement A. The City shall: 1) Prepare a survey of the property after land purchase and sale. Cost to be shared 50/50. 2) Upon financial review, sell the eastern Y, of 22 S. Jackson St. for $18,000. 3) Construct new public parking lot on western Y, of 22 S. Jackson St. 4) Reimburse MGD for $130,500 in development costs. B. MGD shall: 1) Reimburse City of 50% of cost of survey. 2) Provide financial information about project for City to review and approve. 3) Purchase the eastern Y, of 22 S. Jackson St. to the City for $18,000. 4) Obtain approval of site plan and building elevations from City Site Plan Review Coordinator and Janesville Historic Commission. 5) Complete construction of new office building at 22 Jackson St. with an estimated value of $900,000 by December 31, 2007 6) Guarantee to annually pay to the City a property tax payment ranging from $16,051 in 2008 (payable in 2009) to $17,804 in 2018 (payable in 2019). C. As long as City's TIF costs have not been repaid: 1) MGD cannot allow property to become tax exempt. 2) MGD cannot sell the property without the City's approval and without the buyer accepting the TIF guarantees. D. MGD contingencies to be satisfied or waived by June 30, 2007 1) Receipt of Phase One environmental audit at MGD's expense. 2) Receipt of plan approvals and permits. 2) Project financing with acceptable terms. 3) Binding leases for the renovated building. E. City not obligated to TIF Agreement until all MGD contingencies are met. F. MGD can repay City TIF investment at any time. If this is done, then restrictions on sale and tax exempt uses in Section IV.C. are removed.